1.1 Introduction
Human resource management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them (Dessler, 2019). Effective HRM practices contribute significantly to the bottom line of profit-making organizations. For instance, recruitment and selection processes that focus on hiring top talent can lead to increased productivity and innovation (Wright & McMahan, 2011). Moreover, strategic workforce planning ensures that organizations have the right people in the right positions, thereby reducing turnover costs and enhancing employee retention (Becker et al., 2001). Human Resource Management (HRM) and strategic planning are integral components of organizational success, particularly in profit-making entities. The effective management of human capital not only ensures the smooth functioning of operations but also plays a pivotal role in driving profitability and sustainable growth.
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, Limitation of the study and Definition of terms.
1.2 Background of Study
Human Resource Management (HRM) and strategic planning are critical elements in the success of profit-making organizations. Understanding the background and context of their roles provides insight into the dynamics shaping modern businesses. This background study delves into the historical evolution and theoretical foundations of HRM and strategic planning within profit-making entities, setting the stage for a comprehensive analysis of their contemporary significance. According to Budhwar and Debrah (2013), the concept of HRM has undergone significant evolution over time. Historically, HRM emerged as a response to the industrial revolution, emphasizing personnel administration and labor relations (Budhwar and Debrah, 2013).
HRM is a product of the human relations movement of the early 20th century, when researchers began documenting ways of creating business value through the strategic management of the workforce, (Wikipedia 2004). HRM is concerned with managing people within the employer-employee relationship. Specifically, it involves the performance of people in achieving the organization’s objectives and the satisfaction of personal employee needs. HRM can be a major contributor to the success of the enterprise. HRM has been regarded in various industries as one of the most critical elements of business success.
The successful implementation of HRM functions are elements for improving personal, team and organizational performance, Dainty, Belout and Gauvreau, (2004). A number of authors state that the basic functions of HRM include planning, job design devising position descriptions, employee selection/recruitment, employee training, performance appraisal systems, reward systems, employee relationships and employee’s health and safety according to Druker et al., (2003).
Human resource management has a significant influence in the QS firms. Although construction technologies and management techniques have advanced rapidly, project managers still need to pay more attention to people management. Human resources still account for the majority of costs in most construction projects (Loosemore et al., 2003). International construction projects normally require a longer time span and more parties are involved (Chan and Tse, 2003).
Human Resource issues have positive and adverse implications for construction industries in all countries (Ofori, 2003). HRM is also a significant aspect of the whole planning and project management process in construction projects, in particular international construction projects that involve foreign firms as collaborators or competitors (Bon and Crosthwaite, 2000; Mawhinney, 2001).
The complex international construction climate, caused by increased global price competitiveness, development of technologies, changing industry and employment legislation, and changing workforce composition has prompted project managers to utilize their employees more effectively to gain competitive advantage and project success. In recent years there has been a widespread realization that improvement of HRM performance is a critical element to achieving improvement in efficiency, productivity and cost effectiveness in the construction industry. Howes and Tah (2003) describe how the situational model of HRM, the staff performance model of HRM and the socio-technical model of HRM are being implemented in the construction industry.
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Role of Human Resource Management and Planning on Profit Making Organisation.
1.3 Statement of Problems
Investigation revealed that profit-making organizations often struggle to attract and retain top talent in today's competitive labor market (Breaugh & Starke, 2000). High turnover rates not only disrupt operations but also incur significant costs associated with recruitment, training, and lost productivity (Mobley et al., 2009). Furthermore, ineffective recruitment practices may result in hiring mismatches, leading to decreased employee engagement and performance (Boudreau & Ramstad, 2006).
Furthermore, the rapid pace of technological change presents both opportunities and challenges for profit-making organizations in managing their human resources effectively (Bolton et al., 2018). While advancements in HRM technology offer potential efficiencies in recruitment, training, and performance management, organizations must navigate issues related to data privacy, cybersecurity, and digital skills gaps (Strohmeier, 2013). Additionally, the automation of routine tasks may necessitate workforce reskilling and restructuring to remain competitive (Bessen, 2016).
Addressing these challenges requires a multifaceted approach that encompasses talent management, strategic alignment, technological adaptation, and diversity initiatives. By proactively addressing these issues, profit-making organizations can enhance the role of HRM and planning in driving profitability, innovation, and sustainable growth.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the Role of Human Resource Management (HRM) and Planning on Profit Making Organisation using Zenith Bank, Auchi as a case study. In achieving this aim, the following specific objectives were laid out as follows:
- To identify the challenges and barriers faced by profit-making organizations in implementing effective HRM practices and strategic planning;
- To assess the alignment of HRM practices with strategic objectives and its influence on organizational performance;
- To analyze the role of strategic planning in driving long-term profitability and growth in profit-making organizations;
- To examine the relationship between HRM practices and organizational profitability in profit-making organizations; and
- To explore best practices and recommendations for optimizing the role of HRM and planning in enhancing organizational profitability and sustainability.
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:
- What is the relationship between HRM practices and organizational profitability in profit-making organizations?
- What is the alignment of HRM practices with strategic objectives and its influence on organizational performance?
- What is the role of strategic planning in driving long-term profitability and growth in profit-making organizations?
- What are the challenges and barriers faced by profit-making organizations in implementing effective HRM practices and strategic planning?
- What are the best practices for optimizing the role of HRM and planning in enhancing organizational profitability and sustainability?
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.
Hypothesis One
- H0: There is no significant relationship between the alignment of HRM practices with organizational strategy and organizational profitability.
- H1: There is a significant relationship between the alignment of HRM practices with organizational strategy and organizational profitability.
Hypothesis Two
- H0: Effective talent management practices negatively impact organizational profitability by attracting, retaining, and developing top talent.
- H1: Effective talent management practices positively impact organizational profitability by attracting, retaining, and developing top talent.
1.7 Significance of Study
The findings of this research on the role of human resource management (HRM) and planning in profit-making organizations holds significant importance for several reasons:
- Strategic Alignment: Effective HRM ensures that the organization's human capital is aligned with its strategic goals. Understanding how HR planning contributes to this alignment helps in achieving organizational objectives efficiently.
- Talent Acquisition and Retention: HRM practices directly impact the recruitment, selection, and retention of employees. Researching this area helps identify best practices for attracting and retaining top talent, which is crucial for the success of profit-making organizations.
- Employee Productivity and Engagement: Engaged and motivated employees tend to be more productive, leading to increased profitability. Investigating HRM's role in fostering employee engagement and productivity sheds light on methods to enhance workforce performance.
- Cost Optimization: Effective HR planning can help in optimizing costs associated with recruitment, training, and employee turnover. Understanding how HR strategies impact the bottom line aids in developing cost-effective approaches to human resource management.
- Adaptability and Innovation: In rapidly changing business environments, organizations need to be agile and innovative. HRM plays a vital role in developing a workforce that is adaptable and innovative. Researching this area helps in identifying strategies to nurture a culture of innovation and flexibility within the organization.
- Legal and Ethical Compliance: HRM practices must comply with legal and ethical standards. Studying the role of HRM in ensuring compliance helps in mitigating legal risks and maintaining the organization's reputation.
Furthermore, studying the role of HRM in ensuring compliance helps in mitigating legal risks and maintaining the organization's reputation. It also provides valuable insights into how human capital can be effectively managed to achieve sustainable profitability and competitive advantage.
1.8 Scope of the Study
The scope of the research is focused on the Role of Human Resource Management and Planning on Profit Making Organisation using Zenith Bank, Auchi 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 Definition of Terms
Human Resource Management (HRM):
HRM refers to the strategic and operational management of an organization's workforce, encompassing activities such as recruitment, selection, training, performance evaluation, and employee relations (Dessler, 2019). HRM aims to maximize employee productivity, engagement, and satisfaction while aligning human capital with organizational goals and objectives.
Strategic Planning:
Strategic planning involves the process of setting long-term goals, identifying resources, and developing strategies to achieve organizational objectives (Armstrong, 2017). It entails analyzing internal and external environments, anticipating future trends, and formulating action plans to maintain or enhance the organization's competitive position.
Profit-Making Organization:
A profit-making organization is a business entity whose primary objective is to generate financial returns for its shareholders or owners. These organizations operate in various sectors, including manufacturing, services, finance, and technology, with the goal of maximizing profits through revenue generation, cost management, and strategic investments.
Talent Acquisition:
Talent acquisition refers to the process of identifying, attracting, and hiring individuals with the skills, qualifications, and attributes necessary to fulfill organizational roles and responsibilities (Boudreau & Ramstad, 2006). It encompasses activities such as job posting, candidate sourcing, interviewing, and on boarding.
Strategic Alignment:
Strategic alignment involves ensuring that HRM practices, policies, and initiatives are closely integrated with and supportive of the organization's overall strategic objectives and priorities (Schuler & Jackson, 1987). It requires alignment at both the organizational and individual levels to optimize human capital contributions to organizational success.
