Influence Of Human Resource Management Practices On Employees’ Productivity In The Banking Industry (A Study Of Zenith Bank Plc. Kaduna)

Project and Seminar Material for Human Resource Management (HRM)

Influence Of Human Resource Management Practices On Employees’ Productivity In The Banking Industry (A Study Of Zenith Bank Plc. Kaduna)


Abstract


This study was carried out to investigate the influence of human resource management practices on employees’ productivity in the banking industry using Zenith Bank PLC. Kaduna as a case study. The study was embarked on to specifically determine how Recruitment and selection practices affects employee effectiveness in Zenith Bank PLC. Kaduna, assess the effect of performance appraisal on employee performance in Eco bank (Nigeria) plc, evaluate the influence of compensation plan on Employee Motivation in Zenith Bank PLC. Kaduna, and investigate how training and development programs affects organizational commitment in Zenith Bank PLC. Kaduna. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprised of staff of Zenith Bank PLC. Kaduna state. In determining the sample size, the researcher conveniently selected 148 respondents and 141 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables, while the hypotheses were tested using chi-square statistical tool. The result of the findings reveals that the techniques used in HRM have a statistically significant impact on employee productivity. Therefore, the importance of proper staffing cannot be replaced, hence, firms should not jeopardize the standards and bases for employment due to either familiarity or bribery, else the implication will be beyond immediate control. To mention but a few.


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organization of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Answering Research Questions
  • 4.3 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • REFERENCES
  • APPENDIX

Chapter One


Introduction

1.1 Background of the Study

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).
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).

Organizational performance (OP) is an indicator which measures how well an enterprise achieves their objectives (Hamon, 2003). Organizational performance is concerned with product or service quality, product or service innovation, employee attraction, employee retention, customer satisfaction, management/employee relation and employee relation (Delaney and Huselid, 1996). Human resources have been identified to be both valuable and a source of competitive advantage (Legge, 1995). According to Bontis (1999), the human elements of the organization are those that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long-term survival of the organization. Delery (1998) observed that the methods used by an organization to manage its human resources can have a substantial impact on many organizationally relevant outcomes.

When organizations face challenges such as an economy recession, it depend thoroughly trained professionals who react quickly to changes in the environment and create strategies for success. Human resource management (HRM) is responsible for carefully selecting and training people with the necessary skills to pursue the strategy effectively. Some external factors can be predicted; others, such as the collapse of large banks and insurance companies, can seemingly come out of nowhere (Robbins, 2010).

According to Noe (2011) human resource management is critical to the success of organizations because human capital has certain qualities that make it valuable. In terms of business strategy, an organization can succeed if it has a sustainable competitive advantage (is better than competitors at something and can hold that advantage over a sustained period of time). Therefore, we can conclude that organizations need the kind of resources that will give them such an advantage.

Employees are one of the most important assets of an organization as they contribute to its growth and success (Danish and Usman, 2010). Malik, Nawab, Naeem, and Danish (2010) concluded that in the era characterized by rapid and continuous change, knowledge capital must be retained in order for organizations to be productive and responsive to the needs of their stakeholders. Likewise, banks as fianacial institutions need to attract, retain and develop their employees. Banks need employees who are well trained and motivated so that they are committed to their work of conducting research and training for the development of the nations (Lew, 2009). Research literature has shown that effective application of some human resources management (HRM) practices enables organization employees to be committed to their work for good performance of the bank ( Shahzad, Bashir, & Ramay 2008).
Implementation of appropriate HRM practices for banks employees will promote university performance as Lew (2009) noted that employees play a strategic role in improving ratings in key areas like proper customer financial management. Realizing the importance of promoting banks’ performance, many banks are embarking into strategizing its HRM (Sirat, 2005). For this to materialize, it is significant that the country’s financial institution improve their world class bank ranking by attracting and retaining excellent and experience staff.

One of the sectors which will play an important role is banking sector especially the commercial bank. The nation needs more human resources capable of performing different activities both in public and private sectors. Subsequently, the commercial bank are expected to properly management customers’ money. Malik et al. (2010) training and development of well-qualified human resources will depend on the performance of the bank subjected to effective implementation of different bundles of HRM practices such as selection, compensation, information sharing, participative decision making, job definition, training, career planning and performance management among others.

Little empirical research has been conducted to examine the effects of HRM practices on commercial bank performance in Nigeria. In order to effectively investigate whether human resources are capable of contributing to competitive advantage, it is pragmatic to examine HRM practices in as many settings as possible. Therefore, this study is to examine the influence of human resource management practices on employees’ productivity in the banking industry with a particular focus on Zenith Bank PLC. Kaduna State.


1.2 Statement of the Problem

HRM is extremely important for banks especially because banking is a service industry (Mathivanan, 2013). Banking industry viewed from personnel angle has its peculiarities. It is a labor intensive industry and efficiency of employees has got a bearing on the quality of services offered. This being the case, it should have been natural that professionalization of personnel management should have gained better priority but unfortunately personnel management happened to be the most neglected aspect of banks management (Mathivanan, 2013). However, there are also significant risks which should be carefully managed in the human resource area. These risks include the consequences of recruiting the wrong people; inadequately training and developing them; losing them prematurely; instilling misguided motivation; and failing to consider future human resource capability needs. Therefore, the bank, like most organizations with key dependency on the skills, experience, and judgment of its staff, should maintain structures and policies to identify and manage these risks (Suarez 2009), as this could have significant effect on the organizational performance.

Recruitment and selection practices in the Nigerian banking industry is characterized by internal job posting, where employees are recruited and selected based on who they know in the bank. There is a tendency to prefer recruits who come through known contacts within the system. This doesn’t give room for the best person to be selected for the job. Internal job posting is prevalent in Nigeria. A large number of organizations fill vacancies at middle and senior levels from existing employee pool, significant importance is not attached to the process of succession planning. People not deserving them are given the opportunity, this may be because of family ties, political influence or just merely being the favorite of the boss. The effectiveness of human resource practices, particularly employee recruitment and selection procedures, performance appraisals, compensation management, and employee training and development often have a direct bearing on organizational performance. Contributing to this assertion, Boohene et al (2011) present that, the result of effectively managing human resources is an enhanced ability to attract and retain qualified employees who are motivated to perform. According to them, the benefits of having the right employees motivated to perform include greater efficiency, high service quality, employee commitment, and more rapid acceptance and implementation of corporate strategy. Recruiting unqualified people for the job will definitely have an effect on their effectiveness on the job.

Performance appraisal has attracted a great deal of attention, due to the under-performance of several banks which led to the winding down of some banks. Annual performance appraisals enable management to monitor the standards, to agree on the expectations and objectives, and to delegate the responsibilities and tasks. The effect of the economic recession on the Nigerian economy has pushed banks to find ways to increase its level of employee productivity and maintain competitive advantage in the industry. The performance of a bank is largely dependent on the performance of its employees. And the only way to continually have the best hands on the job is through the implementation of effective performance appraisal systems.

Similarly, Remuneration/ Reward has been found to play motivational role and include but not limited to pay strategies such as performance related pay, production based pay, skill based pay, knowledge based pay and base pay Brown (1989). Compensation is a very important aspect of HRM in Nigeria where employees are commonly low paid with little or no fringe benefits, this in turn affects the employee’s motivation to work. Employees are usually not properly motivated to put in their best performance due to the low level of compensation for their effort, poor compensation demotivates employees and they seldom not go beyond the required organizational target or go the extra mile on their job.

It is evident in organizations today that managers focus more on output rather than developing and training their employees with skills so as to be more productive and satisfied (Gazioglu & Tansel, 2006; Barrows & Wesson, 2000). With this development in the sector, staff that lacks proper training in the evolving competitive landscape are redundant with their old knowledge and skill being obsolete. (Osibanjo, Kehinde & Abiodun, 2012). Obsolete skills and knowledge needs to be brushed up through proper training and development. The most important concern of the employers is to make the employees to contribute their very best toward the organizational objectives attainment. Training though accepted as a vital part of any administrative functions is still carried out in an ad-hoc way which wastes a considerable proportion of money without identifying the need for such exercise. Many companies do not regard Human resources development as a professional activity and in many cases training officers are employees sent to colleges without any serious thought being given to the real training needs of a company. (Akujuru & Enyioko, 2015). Dessler (2003) sums up how training and development influences organization performance by arguing that developing human capital through continuing training may increase the productive output from each employee either through improvement in skill level or through improvement in morale and job satisfaction. An employee properly trained with the right skills for the job will be more committed to the job being trained for, this in the long run improves the organizational performance.

The effect of Human Resource Management (HRM) practices on organizational performance has been a widely researched area. Result of studies, from developed countries to developing countries; have been time and again showing that HR practices have significant effect on organizational performance. But unluckily, very insufficient numbers of studies have been conducted to check the effectiveness of existing and currently implemented HRM practices in Nigerian banks. The main aim of this study is to fill this existing gap by exploring the effect of HRM practices on organizational performance of Eco bank (Nigeria) Plc. as well as examining whether influence of human resource management practices on employees’ productivity in the banking industry using Zenith Bank PLC. Kaduna as a case study


1.3 Objectives of the Study

The main objective of this study is to examine the effect of human resource management (HRM) practices on employees performance of Zenith Bank PLC. Kaduna.

The specific objectives are to:

  1. Determine how Recruitment and selection practices affects employee effectiveness in Zenith Bank PLC. Kaduna.
  2. Assess the effect of performance appraisal on employee performance in Eco bank (Nigeria) plc.
  3. Evaluate the influence of compensation plan on Employee Motivation in Zenith Bank PLC. Kaduna.
  4. Investigate how training and development programs affects organizational commitment in Zenith Bank PLC. Kaduna.

1.4 Research Questions

The study will be guided by the following questions;

  1. Does recruitment and selection practices affect employee effectiveness in Zenith Bank PLC. Kaduna?
  2. Does performance appraisal affect employee performance in Zenith Bank PLC. Kaduna?
  3. Does compensation plan influence employee motivation in Zenith Bank PLC. Kaduna?
  4. Does training and development programs affect employees productivity in Zenith Bank PLC. Kaduna?

1.5 Research Hypothesis

Ho: Techniques used in HRM have no statistically significant impact on employee performance.

Ha: Techniques used in HRM have a statistically significant impact on employee productivity.


1.6 Significance of the 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 Zenith Bank PLC. Kaduna. 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.


1.7 Scope of the Study

This study focuses on the influence of human resource management practices on employees’ productivity in the banking industry. Examining the effectiveness of these practices on the bank employees. For the purpose of this study we will adopt the descriptive survey research design method and primary data will be collected so as to carry out our analysis. The study will be carried out at Zenith Bank PLC. Kaduna.


1.8 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.


1.9 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.

Recruitment:

This is the process of identifying that the organization needs to employ someone up to the point at which application forms for the post have arrived at the organization.

Selection:

This consists of the processes involved in choosing from applicants a suitable candidate to fill a position.

Training and Development:

This is a function concerned with organizational activity aimed at bettering the job performance of individuals and groups in organizational settings.

Job Security:

This is an assurance that an individual will keep his or her job without the risk of becoming unemployed. He/she will have continuity in employment and it may be from the terms of a contract of employment, collective bargaining agreement, or labor legislation that prevents arbitrary termination.

Effectiveness:

The degree to which objectives are achieved and the extent to which targeted problems are solved. In contrast to efficiency, effectiveness is determined without reference to costs.

Efficiency:

This is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste.

Performance:

The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed.

Human Resource:

This is a single person or employee within your organization. Human Resources is also the organizational function that deals with the people and issues related to people such as compensation, hiring, performance management, and training.

Personnel Management:

This is an administrative function of an organization that exists to provide the personnel needed for organizational activities and to manage the general employee-employer relationship.


1.10 Organization of the Studies

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the influence of human resource management practices on employees’ productivity in the banking industry using Zenith Bank PLC. Kaduna as a case study.The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the influence of human resource management practices on employees’ productivity in the banking industry using Zenith Bank PLC. Kaduna as a case study. The study is was specifically carried out to determine how Recruitment and selection practices affects employee effectiveness in Zenith Bank PLC. Kaduna, assess the effect of performance appraisal on employee performance in Eco bank (Nigeria) plc, evaluate the influence of compensation plan on Employee Motivation in Zenith Bank PLC. Kaduna, and investigate how training and development programs affects organizational commitment in Zenith Bank PLC. Kaduna.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 141 responses were validated from the enrolled participants where all respondent are staff of Zenith Bank PLC. Kaduna state.


5.3 Conclusion

Based on the findings of this study, the researcher concluded that;

  1. Recruitment and selection practices affects employee effectiveness in Zenith Bank PLC. Kaduna.
  2. Performance appraisal affects employee performance in Zenith Bank PLC. Kaduna.
  3. Compensation plan influence employee motivation in Zenith Bank PLC. Kaduna.
  4. Training and development programs affects employees productivity in Zenith Bank PLC. Kaduna.

5.4 Recommendations

The researcher made the following recommendations:

  1. Organizations should ensure that the company’s compensation system must include policies, procedures and rules that provide clear and unambiguous determination and administration of workers compensation.
  2. Firms should also ensure that performance appraisal is properly carried out with proper rates, and fairness should be core culture.
  3. Undeniably, the importance of proper staffing cannot be replaced, hence, firms should not jeopardize the standards and bases for employment due to either familiarity or bribery, else the implication will be beyond immediate control.
  4. Staff training as a determinant of staff development and organizational success, should be prioritized in manufacturing companies.
  5. Improvement in the implementation of HR practices may further be achieved through benchmarking and identifying best-practices in the banking industry particularly on recruitment and selection, and employee relations.
  6. Training and development, and compensation and benefits should remain at state of having impact on employee performances

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