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ROLE OF HUMAN RESOURCE IN ORGANIZATIONAL PERFORMANCE

ROLE OF HUMAN RESOURCE IN ORGANIZATIONAL PERFORMANCE

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ROLE OF HUMAN RESOURCE IN ORGANIZATIONAL PERFORMANCE

ABSTRACT

The study looked at the relationship between human resource management and the performance of microfinance banks in Lagos State. The study looked at three microfinance institutions in Lagos State: Reliance Microfinance Bank, Lapo Microfinance Bank, and VFD Microfinance Bank.

It was determined that human resource management is a strategic approach to the effective administration of personnel in an organisation, with the goal of improving organisational performance.

Four human resource methods were evaluated. Recruitment and selection are designed to improve the fit between workers, organisations, teams, and job requirements. Three hypotheses were reviewed: contingency, AMO, and resource-based theories.

The study used primary data. The data were analysed using descriptive statistics and correlation analysis.

Employees unanimously agreed that their organisation performed exceptionally well in terms of profitability, market share, staff performance, and customer happiness. Respondents also typically believed that their organization’s human resource practices are effective.

More crucially, the results are summarised as follows: There is a significant relationship between recruitment and selection and profitability of microfinance banks in Lagos State (r=0.812; p<0.05),

training and development and market share of microfinance banks (r=0.782; p<0.05), compensation structure and customer satisfaction of microfinance banks in Lagos State (r=0.834; p<0.05), and performance.

The study shows that human resource management has a favourable and significant impact on organisational performance. The study recommended that microfinance banks should pursue strategic and purposeful human resource management strategies that will improve the quality of human resource-employees in their respective organisations;

the management leadership of selected microfinance banks should see investment in human capital as the only channel to improving employee performance and productivity; microfinance banks should articulate their human resource strategies clearly,

Human resource strategies should be taken seriously by ensuring that human resource policies are clearly communicated, that only trained personnel manage human resource concerns, and that employees fully understand the procedures.

Chapter one

INTRODUCTION

1.1 Background for the Study

Human resource management is concerned with the supervision and control of people in order to improve organisational performance. Human resource management include techniques such as human resource planning, recruitment and selection, training and development, compensation management, and performance evaluation (Osibanjo, Kehinde, & Abiodun 2012).

According to Benjamin and Anthony (2014), human resource management techniques are recognised as the fundamental component of organisational procedure.

As a result, organisations require wise, instructed, skilled, devoted, and assiduous workers to lay the groundwork for improving organisational performance.

Human resource management generally refers to activities that oversee, counsel, instruct, and empower people in order to improve their competence, maximise their potential, and encourage organisational goals (Khan & Kamar, 2016).

Organisational performance is a metric that assesses how successfully an organisation meets its objectives. Caliskan and Nemli (2010) define organisational performance as the quality of administration, progress of administration, employee satisfaction, and representative relationships.

According to the literature on the issue, human components of the organisation are those capable of learning, changing, improving, and providing the innovative push that, when legitimately awakened, can ensure the organization’s long-term survival (Danlami, 2012).

Based on this, human resources have been identified as both profitable and advantageous. people resources investigated the procedures used by an organisation to manage its people resources and how they effect a variety of organisational outcomes.

Human resource management methods are responsible for organisational success in terms of personnel selection and training, rewards and compensation, and incidental benefits, required aptitudes to sustain the system, and performance evaluation.

Human resource management can be defined as a critical, coordinated, and recognised approach to employee occupation, growth, and development. It is founded on a strong, plausible premise derived from behavioural sciences as well as key management, human capital, and mechanical connections theories.

Human resource management refers to the approaches, strategies, and frameworks that influence employee behaviour, mental states, and performance (Fahad & Nadeem, 2015). Parallel to the realisation that human resources are critical to an organisation, human resource management capacity is rising in the organisational pecking order.

Human resource management aims to ensure that the organisation attracts and retains the talented, conferred, and appropriate workforce required for improved performance.

Contemporary organisations are continuously under pressure to improve service delivery and productivity. The precariousness of the external environment, combined with the quick rate of technology improvement, necessitates the development of novel methods for boosting overall business performance while maintaining a competitive advantage over rival enterprises.

People are recognised as the primary drivers of competitive advantage, and good manpower management is more crucial than ever. In the twenty-first century, the work of good human resource management has expanded beyond the human resources department of a single organisation.

Senior managers, line managers, and human resources experts are now responsible for exploring and exploiting the potential of people in an organisation to achieve optimal performance.

However, organisations face the difficulty of providing an optimal opportunity for varied human resource strategies to demonstrate their potential to contribute to organisational success and, in particular, to improve the performance of human resources (workers).

Human resources in organisations in this century are viewed as a critical component in the enhancement and maintenance of employee performance (Bowen, 2014). Human resource practices are thought to influence employees’ knowledge, skills, attitudes, abilities, and behaviour, which in turn affects an organization’s performance.

According to research, the human factor is a key asset for organisations to acquire a competitive advantage in their business. Further research has shown that human resources have a significant impact on both employee and organisational success.

1.2 Statement of the Problem

Most Nigerian private and public organisations employ inappropriate human resource practices (Onyeama, 2014). Most Nigerian organisations demonstrate fairness in their human resource management procedures.

The high incidence of staff turnover and low employee retention in Nigerian organisations could be ascribed to poor human resource management methods.

Cases of impartiality and nepotism in the recruitment and selection process, poor remuneration, bias in performance appraisal review, management’s little or no interest in their staff’s advancement, rigid work arrangements, and non-involvement of employees in decision-making processes all confirm the unhealthy human resource practices in most Nigerian organisations.

Unhealthy human resource practices demotivate employees, resulting in decreased productivity and, as a result, poor organisational performance, as it is widely held that employees are the lifeblood of any organisation.

The effect of human resource management strategies on organisational performance has been extensively studied. Numerous research from both developing and developed countries found that human resource management techniques have a significant impact on organisational performance (Fadugba, 2008; Onyema, 2014; Naftal, 2015; Khan and Kamal, 2016).

Almost all studies on the subject focused on manufacturing firms, energy firms, government organisations, telecommunications companies, construction firms, and deposit money banks.

The literature contains few studies on the textile industry, microfinance banking sector, real estate enterprises, agro-allied industry, educational sector, and health sector.

Because institutional elements and human resource practices differ among sectors, it is critical to do research in these unexplored areas to assess whether findings will support established outcomes.

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