1.0 Introduction
1.1 Background of Study
Historically, HRM was primarily concerned with administrative functions such as payroll, benefits administration, and compliance with labor laws. However, the role of HRM has transformed dramatically. As noted by Ulrich and Dulebohn (2015), modern HRM now encompasses strategic activities that align human resource practices with organizational goals to drive performance and achieve competitive advantage. This shift reflects a broader understanding that human capital is a critical asset that can significantly influence organizational outcomes. The emergence of strategic HRM underscores the importance of aligning HR practices with overall business strategy. According to Wright and Snape (2005), effective HRM involves the integration of HR policies and practices with organizational objectives to enhance performance and achieve strategic goals. This approach highlights the need for HR departments to move beyond traditional administrative roles and engage in activities that contribute to organizational success.
Human Resources Management (HRM) refers to the strategic approach to managing an organization's most valuable asset its people. It involves recruiting, training, managing performance, and developing employees to align with organizational goals and enhance overall performance (Armstrong, 2020). Effective HRM practices are designed to maximize employee contributions and support organizational success. According to Wright and McMahan (2011), HRM encompasses various practices, including recruitment, training and development, performance management, and employee engagement, all of which contribute to enhancing organizational effectiveness. Strategic HRM aligns these practices with organizational goals, ensuring that the workforce is equipped to meet both current and future challenges.
The importance of employee engagement and development in driving organizational performance has been increasingly recognized. Research by Harter, Schmidt, and Hayes (2002) highlights that employee engagement is a key driver of performance, with engaged employees contributing to higher productivity and better organizational outcomes. Effective HRM practices that foster employee engagement and development are therefore critical for enhancing overall organizational performance.
Armstrong (2010) described Human Resource Management as a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations. It has a strong conceptual basis drawn from the behavioral sciences and from strategic management, human capital and industrial relations theories. This foundation has been built with the help of a multitude of research projects (Armstrong, 2010). A human resource practice is considered the most critical for organizational performance. However, Human Resource Management is described as a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations.
According to Noe (2011) human resource management is critical to the success of organizations because human capital has certain qualities that make it valuable. In terms of business strategy, an organization can succeed if it has a sustainable competitive advantage (Noe (2011). Employees are one of the most important assets of an organization as they contribute to its growth and success (Danish and Usman, 2010). Malik et al., (2010) concluded that in the era characterized by rapid and continuous change, knowledge capital must be retained in order for organizations to be productive and responsive to the needs of their stakeholders. Research literature has shown that effective application of some human resources management (HRM) practices enables organization employees to be committed to their work for good performance of the bank (Shahzad, Bashir, & Ramay 2008).
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the effective human resources management as a tool for organizational performance.
1.2 Statement of Problems
Investigation revealed that one major problem is the inadequate alignment between HRM practices and organizational strategy. According to Schuler and Jackson (1987), organizations often fail to integrate HRM practices with their strategic objectives, resulting in a disconnect between HR initiatives and business outcomes. This misalignment can hinder the ability of HRM to contribute to organizational performance and limit the effectiveness of HR interventions.
Additionally, many organizations face challenges in fostering employee engagement and motivation. According to Harter et al., (2002), employee engagement is a crucial driver of performance, but organizations often struggle to implement HR practices that effectively engage and motivate employees. Low levels of engagement can lead to reduced productivity, higher turnover rates, and diminished organizational performance.
Furthermore, there is a challenge in ensuring that HRM practices are inclusive and equitable. Effective HRM requires addressing diversity and inclusion issues to create a supportive and fair work environment. Research by Nishii and Mayer (2009) suggests that organizations often struggle with implementing inclusive HR practices that promote fairness and equal opportunities, which can affect employee satisfaction and organizational performance. It is against the backdrop that this study seeks to address these problems by evaluating the effective human resources management as a tool for organizational performance.
1.3 Aim and Objectives of Study
The aim of the study is to examine the effective human resources management as a tool for organizational performance. In achieving this aim, the following specific objectives were laid out as follows:
- To investigate the role of performance management systems in enhancing employee productivity, engagement, and overall organizational performance;
- To evaluate how the adoption and utilization of HR technologies and data analytics contribute to improving HRM practices and organizational performance;
- To explore the relationship between employee engagement and motivation and their effects on organizational performance;
- To examine the alignment of human resources management practices with organizational strategy; and
- To provide recommendations for organizations to optimize their HRM practices based on the findings of the study, with the aim of improving overall organizational performance.
1.4 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- How well are HRM practices aligned with organizational strategies, and what is the impact of this alignment on organizational performance?
- What is the effectiveness of performance management systems in improving employee productivity, engagement, and overall organizational performance?
- How do employee engagement and motivation influence organizational performance, and which HRM practices are most effective in fostering high levels of engagement?
- What role does technology play in enhancing HRM practices, and how does the adoption of HR technologies and data analytics contribute to better organizational performance?
- How do inclusive and equitable HRM practices affect employee satisfaction and performance, and what are the best practices for promoting diversity and fairness within organizations?
- What recommendations can be made for optimizing HRM practices to improve overall organizational performance based on the study’s findings?
1.5 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H01: Effective alignment of HRM practices with organizational strategy positively influences organizational performance.
- H02: Higher levels of employee engagement and motivation are positively associated with improved organizational performance.
- H03: The adoption and effective utilization of HR technologies and data analytics are positively correlated with enhanced HRM practices and organizational performance.
- H04: Inclusive and equitable HRM practices contribute to higher employee satisfaction and better overall organizational performance.
- H05: Organizations that optimize their HRM practices based on strategic insights and best practices will achieve higher levels of organizational performance compared to those with less optimized HRM practices.
1.6 Significance of Study
The significance of "Effective Human Resources Management as a Tool for Organizational Performance" for various stakeholders is substantial.
- For senior management, the study will provide insights into how aligning HRM practices with organizational strategy will enhance overall performance and contribute to achieving business objectives. By understanding the strategic value of HRM, senior leaders will be better equipped to implement effective HR practices that drive organizational success.
- For HR professionals, the study will offer valuable guidance on optimizing performance management systems and employee engagement strategies. This will enable HR practitioners to develop and execute more effective HRM practices that improve employee productivity and satisfaction, ultimately leading to better organizational outcomes.
- For employees, the study will highlight the benefits of well-implemented HRM practices, such as improved performance management and greater focus on employee engagement. As a result, employees will experience a more supportive work environment, increased job satisfaction, and enhanced opportunities for career development.
- For investors and shareholders, the study will demonstrate how effective HRM practices contribute to organizational performance and financial success. This will provide evidence of the positive impact of strategic HRM on company performance, potentially influencing investment decisions and shareholder value.
- For policymakers and industry regulators, the study will offer insights into the role of HRM in promoting best practices and fostering a competitive business environment. This will inform the development of policies and regulations that support effective HRM practices and contribute to overall economic growth and workforce development.
1.7 Scope of the Study
The scope of the research is focused on the effective human resources management as a tool for organizational performance using Eco bank (Nigeria) Plc as a case study.
1.8 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- 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).
1.9 Definition of Terms
In the context of "Effective Human Resources Management as a Tool for Organizational Performance," several key terms are defined to clarify their relevance and application:
Human Resources Management (HRM): HRM refers to the strategic approach to managing an organization's most valuable asset its people. It involves recruiting, training, managing performance, and developing employees to align with organizational goals and enhance overall performance (Armstrong, 2020). Effective HRM practices are designed to maximize employee contributions and support organizational success.
Organizational Performance: Organizational performance encompasses various measures of how well an organization achieves its goals and objectives. It includes financial metrics such as profitability and revenue growth, as well as non-financial aspects such as employee satisfaction, productivity, and operational efficiency (Kaplan & Norton, 1992). High organizational performance reflects the successful implementation of strategies and effective management practices.
Strategic HRM: Strategic HRM refers to the integration of HRM practices with organizational strategy to achieve long-term goals and competitive advantage. This approach emphasizes aligning HR activities with business objectives to drive performance and create value (Schuler & Jackson, 1987). Strategic HRM focuses on leveraging human capital to support overall business strategy.
Performance Management System: A performance management system is a set of processes and tools used to evaluate and enhance employee performance. It includes setting performance goals, providing feedback, conducting appraisals, and implementing development plans (Aguinis, 2013). Effective performance management systems are crucial for improving employee productivity and achieving organizational goals.
Employee Engagement: Employee engagement refers to the level of commitment, enthusiasm, and emotional investment employees have towards their work and the organization. High levels of engagement are associated with increased job satisfaction, higher productivity, and lower turnover rates (Harter, Schmidt, & Hayes, 2002). Engaged employees are more likely to contribute positively to organizational performance.
HR Technologies: HR technologies encompass various tools and systems used to support HR functions, including recruitment software, performance management systems, and data analytics platforms. These technologies facilitate the efficient management of HR processes and provide insights into employee behavior and organizational performance (Brewster, Chung, & Sparrow, 2016).
Diversity and Inclusion: Diversity refers to the presence of a wide range of different demographic and cultural backgrounds within an organization, while inclusion involves creating a work environment where all employees feel valued and respected. Effective diversity and inclusion practices contribute to a positive organizational culture and improved employee satisfaction (Nishii & Mayer, 2009).
