THE IMPACT OF HUMAN RESOURCES MANAGEMENT ON PRODUCTIVITY OF AN ORGANIZATION

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY: The management of people within the organization has become an increasingly recognized important focus for researchers and practitioner over the past 20 years. Organizations are becoming more aware of important role human resource play in the success of their organizations to achieve financial performance. As a result, organizations are becoming more employee-centrist by focusing on enhancing employees’ engagement and organizational commitment. It is important for organization to adopt human resources management (HRM) system that optimizes workforce as it enables organization to achieve competitive advantage in today’s global market economy that provides wider access to technology, finance and other resources. Pfeffer (1994) stated that firms have increasingly recognized the potential for their people to be a source of competitive advantage. Creating competitive advantage through people requires careful attention to the practices that best leverage these assets. According to Nishii, (2008) scholars generally agree that appropriately designed, Human resources management practices can enhance organizational performance. Related theories suggesting and supporting assumption holds that the practices of Human Resources Management influences employees attitudes and behaviours. Human Resource Management is an invisible asset in an organisation. It creates value when embedded in the operational system that enhances organisational performance and ability to deal with turbulent environment. Effective HRM assists in developing human resources into high quality and efficient workforce thus enabling the organisation to obtain a competitive advantage through their people. In contrast, inefficient workforce can increase labour cost and decrease organisation productivity. However, in order to remain competitive, grow and diversify, an organisation must ensure that its employees are qualified, placed in appropriate position, properly trained, managed effectively and committed to the firm’s success. The goal of HRM is to maximize employees contribution in order to achieve optimal productivity and effectiveness while simultaneously attaining individual objective (such as having a challenging job) and obtaining recognition) and societal objectives (such as legal compliance and demonstrating social responsibility).
Human resource dimensions or practices (training, recruitment, reward system performance appraisal etc) have considerable impact on the performance of organizations and these contribute to the affirmative link between human resource management and organizational performance (Osman, 2012). Training is a flexible way to develop an employee as it consists of both formal and informal ways to enhance the effectiveness and efficiency of employees (Ellstrom, 2011). Job security increases employees’ honesty, keeps employees committed to the organization and provides security to valuable information as well (Raji and Jackson, 2011). Reward system is imposed on organization to evaluate reward and organization reward employees on the basis to get value by elaborating what they have spent and what they have got (Armstrong, 2011). Employee performance can be evaluated by the evaluation of task and reward system. Employee performance is one that is affected by the knowledge transfer that helps employee to develop their understanding of networking as well as focusing on the organizational performance. Organizational performance is related to organizational justice which allows employees to get committed to task assigned to him or her. HRM dimensions greatly influences the employees attitude which in turn affects employees’ performance. If HRM system works effectively, then increase in the organizational performance will be seen (Snape and Redman, 2010). Competitive advantage is viewed as a source of competitive advantage is a must for any organization and employees are always viewed as source of competitive advantage for any organization (Barney, 1991; Pfeffer, 1994). So, human resource management must be made in such a way that can utilize employees in the best possible way to increase performance of organizations.

​​​​​​​STATEMENT OF THE PROBLEM

Research problem is an intellectual stimulus calling for an answer in the form of scientific inquiry. From experience over the years, with the role of human resource management in the achievement of organizational goal in Nigeria compared to other organizations of the world. It has been observed that human resource management in Nigeria have not performed well to support the efficiency and growth of the nation. Any management that is keen on training its personnel is usually faced with the problem of cost/benefit analysis. It is very easy to work cost but it is difficult to put value on the asset. It is therefore pertinent to list the problems associated with training human resource in the organization.
It has been observed that the problem facing business and increasingly number of workers are being faced with poor condition of service including remuneration. Furthermore, the foreign exchange problem has added a new dimension to the range of problem facing business organization. The overall effect of the problem is that most business organization can no longer afford to offer the employees good remuneration and adequate compensation for their labour. This is a situation that brought about ineffectiveness of human resource in the achievement of organizational goals. Presently, Nigeria economy is experiencing some economic difficulties which have resulted in retirements, retrenchments, lay-offs, mergers and acquisitions and dismissal of employees.

Furthermore, prominent among the reasons why organizations perform poorly in most organization in Nigeria is the problem of fund. Thus, this is the reason for the introduction of two schemes and programmes by the federal Government through the CBN which are geared towards improving the accessibility and availability of credit to the companies in order to make them more vibrant. Even the funds cannot manage themselves without the human resource.

At this point, the problem this study seeks to address is to find out the impact of HRM and how it has facilitated the growth and achievement of organizational goals.

​​​​​​​OBJECTIVES OF THE STUDY

The primary objective of the study is as follows:

1. To determine the relationship between recruitment and selection on employees’ turnover.
2. To examine the influence of reward system on job satisfaction.
3. To find out the effect of training and development on profitability
4. To determine the impact of performance appraisal on employee’s productivity.

RESEARCH QUESTIONS

The following questions have been prepared for the study

1. Does recruitment and selection have effect on employees’ turnover?
2. Does reward system play a role on job satisfaction?
3. Is there any association between training and development on profitability?
4. Is there a relationship between performance appraisal and employee’s productivity

1.5     RESEARCH HYPOTHESIS

Ho1: Reward system negatively influences Job satisfaction
Ho2: Performance appraisal cannot directly determine employee’s productivity.

1.6     SCOPE OF THE STUDY

The study will determine the relationship between recruitment and selection on employees’ turnover. The study will also examine the influence of reward system on job satisfaction. The study will further  find out the effect of training and development on profitability. Lastly the study will  determine the impact of performance appraisal on employee’s productivity. Hence the study will be delimited to Nigeria Tobacco company ltd Lagos.

1.7 SIGNIFICANCE OF THE STUDY

Some organizations neglect the importance of Human resource, while some organization do not make provision for this crucial part of organization; therefore, this study will be helpful to organizations who currently have not adopted the idea of human resource management. It will also be helpful to organizations who have an ineffective human resources, as it would expose the activities and the various positive changes an effective human resource management can provide. Furthermore, the findings provided in this study can be useful for further studies.

1.8 DEFINITION OF TERMS

Human resource: Human resources are the people who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with "human resources", although human capital typically refers to a more narrow view (i.e., the knowledge the individuals embody and economic growth).

Management: Management (or managing) is the administration of an organization, whether it be a business, a not-for-profit organization, or government body.

Organization: An organization or organization is an entity comprising multiple people, such as an institution or an association, that has a collective goal and is linked to an external environment.