THE ROLE OF HUMAN RESOURCE IN ORGANIZATIONAL PERFORMANCE

Abstract: The study examined the relationship between human resource management and organizational performance of microfinance banks in Lagos State. The study surveyed three microfinance banks in Lagos State namely Reliance Microfinance Bank, Lapo Microfinance Bank and VFD Microfinance Bank. It was established that human resource management is a strategic approach to the effective management of employees in an organization, so they could boost the performance of an organization. Four human resource practices were reviewed. Recruitment and selection is aimed to improve the fit between employees, organization, team and work requirement.

The study made use of primary data. Descriptive statistics and correlation analysis were used to analyze the data.

The findings showed that employees unanimously agreed that their organization performed remarkably well with respect to profitability, market share, employee performance and customer satisfaction. Also, respondents generally agreed that human resource practices are well carried out in their organization. More importantly, the findings are outlined as follows: There is substantial relationship between recruitment and selection and profitability of microfinance banks in Lagos State (x=0.812; p<0.05).; There is robust relationship between training and development and market share of microfinance banks in Lagos State (x=0.782; p<0.05).; There is significant relationship between compensation structure and customer satisfaction of microfinance banks in Lagos State (x=0.834; p<0.05).; There is strong relationship between performance appraisal and employee performance of microfinance banks in Lagos State (x=0.904; p<0.05).

The study concludes that human resource management has positive and strong connection with organizational performance. The study recommended tat; Microfinance banks should pursue strategic and purposive human resource management strategies that will improve the quality of human resource- employees, in their respective organizations; The management leadership of selected microfinance banks should see investment on human capital as the only channel to improving the performance and productivity of employees; Microfinance banks should articulate their human resource strategies clearly, if possible explicitly in codified form. Human resource strategies should be given the seriousness it deserves by ensuring that human resource policies are well-enunciated, only trained professionals should handle human resource issues and that procedure should be fully understood by employees.