1.1 Introduction
Human Resource Management can be described 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.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
Human resource management (HRM) is the policies, practices, and systems that influence employees’ behavior, attitudes, and performance. Many companies refer to HRM as involving people practices. There are several important HRM practices that should support the organization’s business strategy: analyzing work and designing jobs, determining how many employees with specific knowledge and skills are needed (human resource planning), attracting potential employees (recruiting), choosing employees (selection), teaching employees how to perform their jobs and preparing them for the future (training and development), evaluating their performance (performance management), rewarding employees (compensation), and creating a positive work environment (employee relations). An organization performs best when all of these practices are managed well. At companies with effective HRM, employees and customers tend to be more satisfied, and the companies tend to be more innovative, have greater productivity, and develop a more favorable reputation in the community (Raymond, 2011).
Organizations are seeking to create much competition between them, taking more market, more customers, more sales, etc. Rapid changes stemming from globalization, advancement of information systems and other factors have caused higher competition among corporate organizations. Many organizations are driven by the market to set their goals in their performance. Some of the goals are: cost reduction, achieving sales levels, increasing the number of customers, increasing the market percentage, improving productivity and quality, innovative products (Gerhart, 2007).
Strategic management of employees requires managers to dedicate time, money and attention to staff training and development. This increases workers value and enhances their capacity for continuous improvement. Human Resource Management Strategies (HRMS) implies a managerial orientation that ensures that human resources are utilized in such a way that its add value to the organization by giving it competitive advantages thus leading to the attainment of organizational goals, vision, and mission (Guest, 2011).
The notion of Human Resource Management Strategies (HRMS) evolved in the 1990s with an amplified prominence on a proactive, integrative and value-driven approach to human resource management that focuses on issues such as the fit between human resource management practices and organizational strategic goals, the incorporation of human resource management in the organizational strategic management, the participation of human resource role in senior management teams, the devolvement of human resource practices to line managers and taking of strategic approach to employee compensation, selection, performance appraisal and the value that is added to the organizational performance by human resource management (Boxalletal. 2007).
The increasing significance of people to organizational success has been observed to have corresponded with the rise of Human Resource Management strategy as a field of study on a global scale (Iwaugwu, 2004). Since its emergence, Human Resource Management Strategy (HRMS) has been the focus of debate over whether it exists in reality or it is merely rhetoric. Previous studies have shown that human resource management practices have the ability to create firms that are more productive, flexible, and competent than their rivals through the application of policies and practices that concentrate on recruiting, selecting, training skilled employees and directing their best efforts to cooperate within the resource bundle of the organization (Inyang, 2010).
Previous studies have shown that human resources management practices are important to enhanced corporate performance in the modern competitive society. Globally, the transformation of systems, structures, and processes in public services has been well acknowledged over the past 20 years (Kiiru, 2015). The key rationale of these changes has been to improve the cost-effectiveness, efficiency and performance of corporate organizations. Government-owned entities have therefore been under immense pressure to follow private sector managerial practices such as performance management, customer orientation, and a heightened strategic focus (Duke and Udono, 2012).
According to Milkovish and Budreau (2004), most of the works on Human Resource Management and performance have been undertaken in the manufacturing sector mainly in the US and recently in the last decade in UK and as such may not be suitable to explain the relationship in a developing economy, thus, it is very difficult to generalize findings from one sector to other sectors. Furthermore, there is a great need for additional evidence to support the HRM-performance relationship and show exactly how the different strategies affect one another (Sunil, 2003).
Therefore, in First Bank Nigeria Plc where the research was carried out, the activities that was conducted is to examine the impact of strategic human resources management in the banking industry.
1.3 Statement of Problems
Investigation revealed the challenges confronting management of most organization today is how to make their workers become efficient and competence. This issue has led most organization to employ strategies by which to motivate their work force. The rapid technological growth and increased competition have forced commercial banks in Nigeria to aggressively compete for employees in order to remain competitive.
This trend has created a lot of interest on the effect of Human Relation Management strategies on performance through training, and development, motivation which are a continuous effort designed to improve employees’ competence and performance. The recent trend of globalized competitive business era focuses on formulation and execution of human resources management strategies practices and its significant effect on the financial performance of the organization.
1.4 Aim and Objectives of Study
The aim of the study is to examine the impact of strategic human resources management in the banking industry. In achieving this aim, the following specific objectives were laid out as follows:
- To determine how Recruitment and selection practices affect employee effectiveness in First Bank PLC.
- To assess the effect of performance appraisal on employee performance in First Bank PLC.
- To evaluate the influence of compensation plan on Employee Motivation in First Bank Nigeria Plc.
- To investigate how training and development programs affect organizational commitment in First Bank PLC.
1.5 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 does recruitment and selection practices affects employee effectiveness in First Bank PLC?
- What are the effects of performance appraisal on employee performance in First Bank PLC?
- How does compensation plan influence employee motivation in First Bank Nigeria Plc?
- How do training and development programs affect organizational commitment in First Bank PLC?
1.6 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: Recruitment and Selection practices do not affect employee effectiveness in First Bank PLC.
- H02: Performance appraisal has no significant effect on employee performance in First Bank PLC.
- H03: Compensation plan by management has no significant influence on employee motivation in First Bank PLC.
- H04: Training and development programs do not affect organizational commitment in First Bank PLC.
1.7 Significance of Study
This study will contributes to the literature by critically examining the effectiveness of existing Human Resource Management (HRM) practices that are currently in place at First Bank PLC. such as recruitment and selection, performance appraisal, compensation plan and training and development, and what effects they have on the employee, as this will ultimately determine the bank’s performance.
The management of financial institutions especially the banking sector will definitely find the recommendations and findings of this work relevant and useful in charting a new course for improved organizational performance, through the utilization of HR tools for human resources management and development.
The study will be relevant to the government in terms of formulating and implementation of policies concerning the banking sectors of Nigeria. The study will be useful to those who will carry out studies in related areas in future. It will serve as a reference material to them. Even, the findings can provide the bases for further studies.
1.8 Scope of Study
The scope of the research is focused on the impact of strategic human resources management in the banking industry using First Bank Nigeria Plc as a case study.
1.9 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.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- 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).
1.10 Operational Definitions of Terms
Performance appraisal (PA): also referred to as a performance review, performance evaluation, (career) development discussion, or employee appraisal is the method by which the job performance of an employee is documented and evaluated.
Employee compensation plan: collectively refers to all the components in addition to the manner in which the compensation is paid and for what purpose employees receive case bonuses, salary increases and incentives.
