THE SIGNIFICANCE OF HUMAN RESOURCE MANAGEMENT IN ENHANCING ORGANISATIONAL PERFORMANCE

Abstract: This study investigated the correlation between human resource management practises and the overall performance of microfinance banks located in Lagos State. The research conducted a survey on three microfinance banks located in Lagos State, specifically Reliance Microfinance Bank, Lapo Microfinance Bank, and VFD Microfinance Bank. Human resource management has been recognised as a strategic approach to effectively managing personnel inside an organisation, with the aim of enhancing organisational performance. A comprehensive analysis was conducted on four distinct human resource practises. The purpose of recruitment and selection is to enhance the alignment between employees, the organisation, teams, and job demands.

The research utilised primary data. The data was analysed using descriptive statistics and correlation analysis. The results indicated that the employees were in complete agreement with the exceptional success of their organisation in terms of profitability, market share, staff performance, and customer happiness. Furthermore, the participants usually reached a consensus that the implementation of human resource practises within their respective organisations is executed effectively. The study's findings can be summarised as follows: There exists a significant correlation between recruitment and selection practises and the profitability of microfinance banks in Lagos State (x=0.812; p<0.05). Additionally, there is a robust relationship between training and development initiatives and the market share of microfinance banks in Lagos State (x=0.782; p<0.05). Furthermore, a significant correlation is observed between the compensation structure and customer satisfaction levels of microfinance banks in Lagos State (x=0.834; p<0.05). Lastly, a strong relationship is identified between performance appraisal systems and employee performance within microfinance banks in Lagos State (x=0.904; p<0.05). The study's findings indicate a significant and robust correlation between human resource management and organisational performance. The study suggests that microfinance banks should adopt strategic and purposeful human resource management techniques to enhance the competence and effectiveness of their personnel inside their organisations. The management leadership of chosen microfinance institutions should recognise that investing in human capital is the sole means of enhancing the performance and productivity of staff. It is imperative for microfinance institutions to clearly explain their human resource strategies, preferably in a formalised manner. The importance of human resource strategies should be duly recognised, emphasising the need for clear articulation of human resource policies, exclusive involvement of skilled professionals in handling human resource matters, and ensuring staff possess a comprehensive understanding of established procedures.