THE EFFECT OF HUMAN RESOURCE MANAGEMENT ON THE OVERALL PERFORMANCE OF A FIRM (A CASE STUDY OF ZENITH BANK PLC, V.I. LAGOS STATE)

CHAPTER ONE

INTRODUCTION

1. 1. BACKGROUND OF THE STUDY

Human Resource Management is an indispensable function for the both the private and public sector organizations. The process deals with several operational objectives such as recruitment, providing proper training to the employee, selection of the employee, assessment of the employee, motivating and maintaining a proper relationship with the employee and maintaining welfare and health for the employees in the organization through laws created by the concerned state and country. The human resource management is a process through which the organization utilizes their limited skilled workforce. The main intension is make effective utilization of the existing human resource for the organization. Apart from this, human resource management works in the diverse area like conducting of jobs, planning the employee's needs and recruitment, determination of wages and salaries, resolving the disputes and creating better working and safety environment for the employees (Bowen & Ostroff, 2004). The organization uses their human resource management for the proper utilization of their resources. Furthermore, the department plays an important role in the overall development of the employees for encouraging personal and career growth. Alternatively, it helps in improving professional skills and knowledge of the employees. Human resource management provides quality work life for the employees. Therefore, the significance of the Human resource management with respect to the organizational performance is evident. Large number of organizations has established their human resource management department and they understand its need in today’s world of business (Cooke, 2005). The role of the higher performance work practices in the realm of the Human resource management is important. Although literature provide evidence that the Human resource management is crucial for organizational enactment, the impact of effective human resource management on organizational performance is relatively less discussed area in the literature. Moreover, little research is available in Nigerian perspective which sheds light on the role of the higher performance practices on the performance of the Nigerian organization. The higher performance work practices are human resource work practices that aimed at influencing and enhancing the organizational and employee performance. Therefore, the present study has also focused on the investigation of the impact of the higher performance work practices on the organizational performance of the Nigerian firms. For that purpose, the bundle of higher performance work practices was evaluated. These higher performance work practices are feedback, performance appraisal, employee suggestion systems and affective job description and specification (Francis, 2015). The one of the core objective of the human resource management in the organization is to provide quality work life for the employees. The quality of work life can be defined as the activities through which the employees dignity and growth in the organization is developed. It helps the employees to work together in the organization and the actions, changes, and improvements which are necessary for the achievement of goals and improving the quality of life and improving the effectiveness of the organization. In the recent times, the organizational are not only focusing on employees for the work related aspects but also focuses on the holistic well-being of an employee. It is the fact that, if the employees life can't be compartmentalized and the disturbance in the life of the employee will disturb the professional life. Hence, the human resource management works for the overall development of the employee by reducing their stress and creating a healthy atmosphere in the workplace(Bowen & Ostroff, 2004). The impact of these higher performance work practices will be evaluated on organizational performance on important grounds which are creativity and innovation, core employee retention, customer satisfaction and organizational productivity (Kaufman, 2011). These grounds are considered very important for the organizational performance. Nigerian organizations are also focusing on the implantation of the HR departments in their organization and to change with the changing nature of the business environment. There is need to boost the organizational performance with the implantation of the higher performance work practices in the organization. Present study is quite significant in that regard. The study will enhance the literature on the higher performance HR work practice in local government perspective. The academicians and the researchers will also be in position to get benefit and understand from the study results. The study will evaluate the whether there is positive and significant relationship between performance appraisals and core employee retention in Nigerian’s organizations. Moreover whether there is positive and significant relationship between job descriptions and specifications and organizational productivity in Nigerian’s organizations. The study will also evaluate the impact of the performance appraisal on core employee retention in Nigerian’s organizations and the impact of affective job descriptions and specifications on organizational productivity in Nigerian organizations. The focus of this research is to develop a conceptual framework with appropriate and valid support from existing literature regarding recruitment, training and development, and learning, the three elements of HRM.

1.2 STATEMENT OF PROBLEM                                      

Human Resource Management has made significant inroads into the Nigerian corporate world. It is common to see large organisations in Nigeria set up a whole department for the sole purpose of managing human resources and hire experts in the field to be in charge of HRM. The enormous benefits of properly managing human resource cannot be over emphasised. However, the majority of the banks in Nigeria can be attributed to the non-existence of HRM specialists or HRM departments. Research has established significantly a positive relationship between an organisation’s HRM practices and performance. Most of these banks do not realise the impact of properly managing its human resource and therefore leave policies in the hands of line managers and board of directors who are non-HRM experts to implement or enforce strategies, policies, processes, programmes and practices. The value of properly managing human resources is lost to such banks. Human Resource Management is extremely important for banks especially because banking is a service industry. Management of people and management of risk are two key challenges facing banks. How you manage the people and how you manage the risks determines your success in the banking business. Efficient risk management may not be possible without efficient and skilled manpower. Banking has been and will always be a "People Business". Though pricing is important, there may be other valid reasons why people select and stay with a particular bank. Nigerian Banks must try to distinguish themselves by creating their own niches or images, especially in transparent situations with a high level of competitiveness. In coming times, the very survival of the banks would depend on customer satisfaction. Those who do not meet the customer expectations will find survival difficult. Banks must articulate and emphasize the core values to attract and retain certain customer segments. Values such as "sound", "reliable", "innovative", "close", "socially responsible", "Nigerian", etc. need to be emphasized through concrete actions on the ground and it would be the bank’s human resource that would deliver this. Human Resource Management has sank into oblivion to most of the banks in the Nigeria and it is about time banks saw the role and impact of HRM on performance and worked towards properly managing their manpower. It is in the face of this existing state that the researcher wishes to establish the impact of HRM on organisational performance and how rural banks can, through appropriate HRM practices improve performance.

1.3 AIMS OF THE STUDY

The major purpose of this study is to examine the effect of human resource management on the overall performance of a firm. Other general objectives of the study are:

1. To examine how human resource management practices contribute to firm performance.
2. To examine the perceptions of employees on HR practices, policies and programmes of Zenith banks.
3. To examine the impact of human resource management on the performance of Zenith Banks.
4. To examine factors affecting human resource development in an organization.
5. To examine the relationship between human resource management and organizational performance.
6. To examine the problems encountered during the process of human resource management.

1.4 RESEARCH QUESTIONS

1. How do human resource management practices contribute to firm performance?
2. How is the perception of employees on HR practices, policies and programmes of Zenith banks?
3. What is the impact of human resource management on the performance of Zenith Banks?
4. What are the factors affecting human resource development in an organization?
5. What is the relationship between human resource management and organizational performance?
6. What are the problems encountered during the process of human resource management?

1.5 RESEARCH HYPOTHESES

Hypothesis 1

H0:  There is no significant impact of human resource management on the performance of Zenith Banks.

H1: There is a significant impact of human resource management on the performance of Zenith Banks.

Hypothesis 2

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

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

1.6 SIGNIFICANCE OF THE STUDY

Human Resource Management is the backbone of any organization or firm. Human Resource Management plays a vital role in the productivity of the organizations in Nigeria. The research work will be significance in the following ways:

1. The findings of this research will serve as a guide in the productivity of other organizations through their human resource.

2. The findings of this study will enable for proper management of human resource which will lead to effective customer value and productivity in organizational management.

3. It will also enhance government, private sector and general public participation contribution in addressing this human resource management in organizations in Nigeria.

4. The study will enable me to contribute my own views and ideas on managing human resource and productivity in organizations of Nigeria.

5. The study will be of immense help to other people and students who might wish to carry out other researches in the field.

1.7    SCOPE OF THE STUDY 

The study is based on the effect of human resource management on the overall performance of a firm (A case study of Zenith bank Plc in V.I Lagos state).

1.8 LIMITATION OF 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.

1.9 DEFINITION OF TERMS

Human Resource Management:  Is the way organizations manage their staff and help them to develop (McCourt & Eldridge 2015) in order to be able to execute organizations’ missions and goals successfully.

Human Resource: Are those inherent and special traits as skills, creative abilities, experience, talents, energy, knowledge competence, belief etc. that a person possesses which are needed and put to use by a person or a group of people to achieve set goals and objectives (Stewart, 2011).

Firm: According to Stewart (2011) “Firms or organizations are set up to achieve purposes that individuals to achieve on their own organization they provide a means of working with others to achieve goal….like to determine by whoever is in the best position to influence them… A key characteristic of organization is their complexity”. Individuals in organization, depend on each other’s effort through interactions and which enable them work to words the realization of common goal. Laid down structures however fashion out how they relate to others. It can also be define as a group of people identified with shared interest or purposes, example business or school.