The Evaluation of Human Resources of Commercial Banks
CHAPTER ONE
Research Objective
To determine the influence of Human Resource Management Practices on the Financial Performance of Commercial Banks in Kenya.
CHAPTER TWO
LITERATURE REVIEW
Introduction
Recently, the dominant focus on Human Resource Management literature has been to demonstrate the importance of effectively managing human resources of organizations. Management scholars and practitioners alike have become increasingly interested in learning more about human resource practices to enhance employee and organization performance (Boselie et al. 2001; (Den Harrtog and Verburg 2004; Pfeffer 1994). In particular, the last ten years have an increasing research interest in the human resource management – performance relationship, although the focus of the research is in the developed world as well as manufacturing industry.
The increased probability of having to manage in an international situation demands the conduct of more comparative human resource management research (Boxall 1995; Budhwar and Debrah, 2001; Budhwar and Sparrow 2002). Firms can develop strategic capability and for attaining this, the strategic goal will be to create firms, which are more intelligent and flexible than their competitors. The human resource management function has emerged as one of the most important areas of organizational practice. It has not been developed in isolation but rather in the context of industrial change and economic development. The uniqueness of human resource requires a totally different type of attention from management. The human resource function has the characteristics that provide the greatest challenges as well as opportunities.
Human Resource ManagementPractices
There are a number of HRM practices that could be tested in connection with employee performance. Teseema & Soeters (2006) have studied eight HRM practices and their relationship with perceived employee performance. These eight practices include recruitment and selection, placement, training, compensation, employee evaluation, promotion, grievance procedure and pension or social security. Various human resource practices, which are perceived to affect the organizational performance in terms of employee productivity have been identified and selected on the basis of their relevance to the banking sector. This study examines the relationship between seven human resource practices and Organizational performance. These are: human resource planning, recruitment and selection, performance management, reward systems, training & development, career planning and employee relations.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter describes the overall approaches that were employed in the study. These include description of the research design, population, sample and sampling techniques, data and data collection procedures and analysis.
Research Design
The study used the descriptive research design involving a survey. A descriptive survey is appropriate for this study because data was collected from several organizations. In addition, comparative data analysis was used.
CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION
Introduction
This chapter explains the processes, techniques and procedures adopted to analyze, present and interpret data gathered using the questionnaires. The chapter elaborates quantitative data analysis, cross tabulation tables, percentages and means scores on the influence of Human Resource Management Practices on the Financial Performance of Commercial Banks in Kenya.
CHAPTER FIVE
SUMMARY, DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
Introduction
This chapter discusses the major findings on influence of Human Resource Management Practices on the Financial Performance of Commercial Banks in Kenya.
Summary
The study aimed to determine the influence of Human Resource Management Practices on the Financial Performance of Commercial Banks in Kenya. The study draws findings on the major human resource management practices that included; human resource planning, recruitment and selection, reward management, training and development, career planning and employees relations.
Discussion
Human ResourcePlanning
The study found out that most respondents agreed to a less extent that their respective banks had been undertaking strategic HRM planning for more than 10 years and this was a clear indication that most banks human resource planning programs were not extended to a longer perspective and hence failed to continuously strengthen the organization human resource needs. Application of short term human resource plans hindered realization of increased banks financial performance since human resource planning programs covering a longer period helps to produce new skills, to upgrade existing ones and to engage in organizational transformation, manage uncertainties and risks created by major changes in environmental factors in the medium to long term. These findings concurred with Skinner (2006) that it is pertinent also that a longer term perspective (at least three years and extending perhaps to five years for some types of occupation) is adopted within the model since this length of period is required to produce new skills, to upgrade existing ones and to engage in organizational transformation. The adoption of such a perspective is necessary to manage uncertainties and risks created by major changes in environmental factors in the medium to long term.
Conclusions
Human Resource Planning is key HRM practice that ensures commercial banks have the right number and types of staff, at the right places, capable of performing their tasks effectively and efficiently. Undertaking of regular HRP programs helps banks to manage labour risks associated with high staff turnover rates and changes in both internal and external organizational environments. HRP helps banks to achieve its overall financial performance objectives by maintaining an optimum and flexible workforce at all times in the organization. HRP is done at different levels corporate, intermediate, and operations levels and for short-term activities.
Recommendations
Human ResourcePlanning
To ensure that human resource planning helps in improving the financial performance of commercial banks, the human resource management should embrace strategic human resource planning programs that are linked with the overall banks strategy. Human resource plans should cover a longer period of more than 10 years to help to produce new skills, to upgrade existing ones and to engage in organizational transformation, manage uncertainties and risks created by major changes in environmental factors in the medium to long term. The banks should carry out human resource planning by conducting, human resource demand and supply forecasting, human resource planning objectives, design of human resource planning programs and evaluation of human resource planning programs.
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