THE IMPACT OF HUMAN RESOURCE PRACTICE ON ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF KAAF UNIVERSITY COLLEGE GHANA)

CHAPTER ONE

1.1. BACKGROUND OF THE STUDY

INTRODUCTION

Organizational performance is the overall growth of an organization (Drucker, 2011). Human resource is a vital asset in any establishment. It is necessary for the organizations to manage their employees effectively and efficiently. Human resources play a vital role in any organization. It, thus, requires the considerable attention of the management so that employees can work up to their full potential (Ahmad & Schroeder, 2013). Human Resource means individuals or staff or workforce within the boundary of an organization they are responsible for performing the tasks assigned to them and they aim to meet the organization objectives and make the profit. Human resource can provide a sustainable competitive advantage by giving them different practices (Huselid, 2011). A company's success depends upon the people who are working in the organization. Human resource is seen as very important asset in any organization (Vlachos, Tsamakos, Vrechopoulos, & Avramidis, 2009). In any organization, the employees must be treated as a valuable asset; the organization's mission will be achieved in a better way if their skills would be developed. In the presence of the competitive environment, the success of any organization depends upon the capabilities and the caliber of their Human Resource and their programs and practices (Rehman, 2011). If there are no human resource management practices, then company always face the difficulties and not able to perform in the competitive society. Company current and potential human resources are essential considerations in the development and for the execution of its strategic business plan (Huselid, 2011). Human resources include individuals, staff or workforce within or even outside the boundary of an organization who are responsible for performing the tasks assigned to them. The main aim of an organization's human resource team is to help the organization in achieving its objectives. Human resource helps the organization in making sustainable competitive advantage (Huselid, 2011). Human capital, at times, is irreplaceable (Awan & Sarfraz, 2013). Despite this enormous importance of human capital, organizations don't pay attention to their employees. An organization should consider its employees’ valuable asset as employees contribution to the organization will help the organization in achieving its vision and mission. The abilities  and skills of human resources enables the organization in surviving in the competitive environment (Rehman, 2011). The effectiveness of even highly skilled employees will be less if they are not motivated to perform. However, HRM practices can affect employee motivation by encouraging them to work both harder and smarter (Huselid, 2011). The employee involvement motivates the employees it boost the employees in an organization (Syed & Yan, 2012). Likewise, Lew (2009) noted that employees play a strategic role in improving ratings in key areas like the process and product quality, the reputation of the organization and in maintaining relations with society. Dissatisfied employees may cause problems for the organization (Syed, Yan, 2012). Human Resource Management involves the efficient and effective utilization of human capital of the organization. Human resources management policies and practices may help or refrain employees in carrying out their roles (Ngo, Foley, Loi, & Zhang, 2011). In the last two decades. The issue of the impact of HRM on the organizational performance received the considerable attention of researchers (Huselid, 2010). Past studies showed that employee participation is positively related to performance, satisfaction, and productivity of an employee (Pfeffer, 2011). Employee satisfaction has always been an important issue for organizations (Bhatti & Qureshi, 2010). Few practices (in fact, few organizations) have made job satisfaction a top priority, (Bhatti, Qureshi, 2010). Human resource management practices include training, performance appraisal, employee participation, job definition and compensation shows a positive impact on employee job satisfaction and organizational performance. Previous empirical research has mostly investigated the effects of HRM practices on financial performance and some on efficiency and employee turnover (Ahmad, Schroeder, 2013). Human resource management practices provide the organizations a sustainable source of competitive advantage (Barney, 2011). Human resource practices mean the process or the functions that used to manage the employees and it directed the firm toward the development (Lado & Wilson, 2010). Employee's performance depends on how efficiently firm manages them by using their operations. The performance of the employees is the output of the performance of the workers it efficiently enhances the organization operations (Hameed & Waheed, 2011). The increasing contribution of universities for national economies and other partnering nations made it an essential sector for research and analysis. Despite this growing importance, universities are facing problems in attracting and retaining talented people. It requires an appraisal of HRM policies of an organization. From HRM point of view, considerable attention was given to the issue of the influence of HRM practices on employees' compensation and selection (Becker & Gerhart, 2011). In tertiary education sector, the link between job satisfaction and with organizational performance is not explored very much (Bhatti, Qureshi, 2010). During the last decade, the Human Resource Management field has shifted from a micro focus (Fey, Björkman, & Pavlovskaya, 2015). However, we chose best-suited practices like training, performance appraisal, employee participation job definition and compensation as independent variables (Amin, Khairuzzaman Wan Ismail, Zaleha Abdul Rasid, & Daverson Andrew Selemani, 2014). If the employee would satisfy, then it enhances the organizational performance. Today the employees are facing many challenges in the organization if organization workers are not satisfied, then it is not possible to increase the productivity level of the organization.

1.2 STATEMENT OF THE PROBLEM

Impact of Human Resource Management practices on organizational performance has been a widely researched area. Result of studies, from developed countries to developing countries; have been time and again showing that HR practices have significant impact on organizational performance. But unluckily, very insufficient numbers of studies have been conducted in this area context of Nigeria and other developing countries. To augment the contemporary knowledge base of HR practices of developing countries, this study has been undertaken. This study assessed the impact of human resource management on organizational performance and investigates impact of Kaaf University’s four human resource practices (recruitment & selection, training & development, compensation and performance appraisal) on organization performance. Although, it was accepted that HRM is positively related to organizational performance. There is a great need for additional evidence to support the HRM-performance relationship from different contexts. The observations of the researcher in Kaaf University, teaching and non-teaching staff criticize about they are not satisfied with their wellbeing in terms of compensation i.e. wages and benefits. There are no sufficient salary and reward. Due to these motives top quality performers (employees) of public organizations have been moved to other private, non-governmental organization and other countries. There is no significant work in public organizations in the context of human resource management and the reason is that top management never realize the needs and demands of their employees. As a result to develop a better understanding the research is carried to know the benefits to practice the HR and evaluating the losses if don’t.

1.3 OBJECTIVES OF THE STUDY

The general objective of this work therefore is to investigate the impact of human resource practice on organizational performance.

The specific objectives of the study are:

1. To examine the general human resource practices, policies and programs available in organizations.
2. To examine the importance of Human Resource practices and its contribution in the performance of the organization and employees collectively.
3.  To examine the impact of properly managed human resources on the organizational performance.
4. To examine perceptions of employees on human resource practices, policies and programs of Kaaf University College.
5. To examine the relationship between human resource practices and organizational performance.
6. To suggest ways of enhancing human resource management practices in Kaaf University College so that they can move towards strengthening its Performance.

Research questions

1. What are the general human resource practices, policies and programs available in organizations?
2. What are the importance of Human Resource practices and its contribution in the performance of the organization and employees collectively?
3. What is the impact of properly managed human resources on the organizational performance?
4. What are the perceptions of employees on human resource practices, policies and programs of Kaaf University College?
5. What is the relationship between human resource practices and organizational performance?
6. What are ways of enhancing human resource management practices in Kaaf University College so that they can move towards strengthening its Performance?

1.5 RESEARCH HYPOTHESES

Hypothesis 1

H0: There is no significant impact of properly managed human resources on the organizational performance.

H1: There is a significant impact of properly managed human resources on the organizational performance.

Hypothesis 2

H0: There is no significant relationship between human resource practices and organizational performance.

H1: There is a significant relationship between human resource practices and organizational performance.

Significance of the study

The study would be of benefit as Kaaf university will need employees with special skills and abilities, right attitudes and behaviours to enhance their performance and profitability. Organizational performance culminating into effectiveness, efficiency, success and development depend on the optimal utilisation of human resource. it will not be possible for the kaaf university college to sustain performance unless human resource management is given prime importance. The study would also be of immense benefit to students, researchers and scholars who are interested in developing further studies on the subject matter.

SCOPE AND LIMITATION OF THE STUDY

The study is restricted to impact of human resource practice on organizational performance, Case study of Kaff University College Ghana.

LIMITATION OF THE STUDY

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

DEFINITION OF TERMS

Human resource: The personnel of a business or organization, regarded as a significant asset in terms of skills and abilities, the department of a business or organization that deals with the hiring, administration, and training of staff

Organization: An organized group of people with a particular purpose, such as a business or government department.

Performance: the action or process of performing a task or function

Organizational performance:  Organizational performance means the organization sales growth, market share growth, financial growth and the overall growth of an organization