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"The Effect of Human Resource Management Practices on Corporate

Performance: A Study of Graphic Communications Group Limited"


- A Critical Review.

Pasan De Silva

1. Introduction
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This critically reviews the article, "The Effect of Human Resource Management Practices on
Corporate Performance: A Study of Graphic Communications Group Limited" authored by
Rosemond Boohene & Ernesticia Lartey Asuinura.
The study attempts explore whether effective human resource management practices
influence the performance of the organization. Authors have based their study around Graphic
Communications Group Limited known as GCGL, which is a state-owned media
organization in Ghana. While conducting a research around a single case study brings its own
limitations like inability to generalize the findings, it also has its own strengths like allowing
the authors to identify the most appropriate case for their study.
Since GCGL is media organisation owned by the state of Ghana and not a government
subvention, it is supposed to generate sufficient funds to operate profitably, and return 30% of
its profit annually to the government as dividends. Prior to 2003, company barely broke even
and following the corporate restructuring in 2003, company revised its HR policies and laidoff incompetent and unqualified employees while attracting skilled and qualified employees.
Following the re-structuring company has turned in to a profit making entity and has
continued to grow its profits.
The research ultimately establishes that according to the perception of GCGLs work force,
effective recruitment and selection practices and effective performance appraisal effects
positively on corporate performance, while the results fails to conclude effective rewards and
benefits management and effective training and development positively influence
performance of the corporate.
Within the article, authors have provided adequate literature to discuss the current knowledge
established around the overall theme 'HRM practices and corporate performance' as well as
individual hypothesis.

2. Discussion
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Human resources have always played a key role in bringing competitive advantage to an
organization. Skilled employees drive an organization towards its success. Even though
human resources are not explicitly included in a firm's balance sheet, it can be perceived as
one of the most important resource of an organisation. Effective utilization of the human
resources is also important as well as attracting, retaining and rewarding them to ensure the
optimum contribution of the workforce to attain the corporate objectives.
When a particular company has the most suitable employees adequately motivated to perform
each duty, it results in better quality products, improved profit margins and less operational
costs ultimately leading to a profitable organization which delights the end consumers.
The quality of employee recruitment and selection procedures is a critical differentiator
between average organization and a super performer. A lot of operational costs and training
and development costs can be minimized by searching for the most suitable candidate and
attracting them. It is important to have clear qualification and skill criteria's. Best employees
will improve the organization by driving it towards innovation and cost efficiencies. Selection
practices must be carefully defined and should be made available to those who make
selection decisions.
Effective performance appraisal systems should ensure that the employees clearly identifies
exactly what is required from them and has a clear idea on which measurements will be used
to measure his/her performance. An effective appraisal system will regularly assess and
inform employees regarding their potential and also the areas where they can improve
themselves which will lead to continuous development of individual resources. A good
appraisal system can form the basis for fair and transparent financial rewards and carrier
progression. In advance notification regarding their appraisal, clearly communicating that this
is the annual performance appraisal, providing examples pointing out exceptional, average
and poor performance can be the qualities of an effective appraisal system. Properly designed
appraisal system can serve an organization as an effective motivational tool.
Effective rewards and benefits management discusses about how to reward employees fairly
consistently and according to organizational values. An Ideal rewards and benefits system
should ensure organizational objective attainment by rewarding the desired behaviours of
employees and guiding them through the correct path which will lead to the benefit of both
individual stakeholders and company as a whole. Reward management should be strategic in
the long term while setting values to different behaviours of people and their achievements.
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Organizations should also be mindful regarding the competitor reward systems and average
market rates and should ensure sufficiently competitive rewards.
Training and development within an organization ensures that employees attain and grow on
the skills required to perform their duties and jobs well and promote learning to encourage
self-development. Training involves an organization investing in individual to enable better
performance and to discover the best use of the natural abilities. Apart from devising the
employees with required skills to perform current tasks, training and development has to be
mindful of the skills required in future to perform the duties in a more efficient and effective
manner and train employees accordingly while keeping the skills up to date. This will have to
ensure that organization maintains competitive efficiency levels comparative to firm's
competitors. Ultimate objective of Training and development is to help people grow so that
people will contribute to the organizational objective attainments in an improved manner
resulting in a win-win situation.
Through this study authors attempt to investigate whether effective Human Resource
Management Practices as above leads to better corporate performance using the case of
GCGL.

3. Methodology
A deductive methodology has been utilized by the authors where four different hypotheses
have been established and collected data are analysed using quantitative methodologies to
confirm or reject individual hypothesis.
Authors have used survey method to generate primary data for the research. Simple random
sampling has been used to select a sample of 100 employees. However exclusion of the
employees outside the head office when forming the sample can be seen as a limitation of this
study. Self-administered questionnaires have been used to collect responses from the
participants without disturbing their work. Responses have been recorded using a five point
Likert scale. While Likert scale questionnaires can be easy to understand and allows the
participant to take a neutral approach, one disadvantage of the structured questionnaire
approach is that it can be restrictive on the amount of information collected and allows only a
certain number of choices for the participants.

In order to analyse collected primary data, authors have used quantitative analytical
methodologies using SPSS as the primary tool. t test has been used to test the hypothesis and
verify the relationship between human resource management practices and corporate
performance.

4. Results
Graphic Communications Group Limited (GCGL) being a state owned media organization in
a developing economy like Ghana, the case can be perceived as a unique one. Due to this,
findings of this research may not be valid to any organization. However, the results can be
relatable to other state owned entities within developing countries.
Data analysis includes percentage analysis and t test method using SPSS. Percentage analysis
brings insights such as 29% of the participants were female while 71% were males. This is
representative of gender distribution within the workforce in Ghana in general. Another
noticeable figure is that 41% of the respondents have been employed for less than five years
with GCGL while 24% have been employed for between 6-10 years. This is a good indicator
as to how young the workforce of GCGL is. Organization had undergone the HR
restructuring 8 years prior to the survey.
T tests have been individually used to test the hypothesis. Hypothesis one has tested whether
effective recruitment and selection practices have positive effects on corporate performance
while the hypothesis two raised the question whether effective performance appraisal effects
positively on corporate performance. With respect to these two hypotheses, t test has returned
positive figures 8.252 and 7.790 while the probability value in both cases has been 0.000
which is considerably lower than the specified Alpha value 0.05. Thus testing confirms above
two hypotheses and it is possible to conclude that in order to improve organizational
performance firms should attract and employ best possible candidates for available vacancies
and at the same time firms should conduct effective performance appraisals to get the
maximum contribution of the workforce to attain corporate objectives.
Authors have mistakenly indicated the t value for the 3rd hypotheses as positive 1.042 in Table
1 whereas it should be negative -1.042.

Third and fourth hypotheses were effective rewards & benefits management and appropriate
& timely training & development yields positive results on corporate's financial performance.
However, both the t test has returned negative values -1.042 and -0.650 together with
probability values of 0.300 and 0.517 which is greater than the alpha value 0.05. This rejects
both third and fourth hypothesis above. Hence the study does not support the ideas that
effective rewards and benefits and effective training and development influences corporate
financial performance in a positive manner. Authors have explained these results appending
to the idea that specifically in public organizations promotions are based on the length of
service and not explicitly on produced level of output. Hence the workforces tend to support
the idea that rewards and benefits management and effective training do not induce positive
financial results on corporate performance.
Further in conclusion authors continue to state that Effective recruitment and Appraisal
systems of GCGL explains the recent improvements in its financial performance and
recommends that GCGL should ensure that it continues to improve its HR policy while
maintaining its fair recruitment and selection processes and effective appraisal procedures.