THE ROLE OF HUMAN RESOURCE MANAGEMENT ON THE PERFORMANCE OF AN

ORGANISATION: A CASE STUDY OF SELECTED RURAL BANKS IN

NSUUBE-KAUGA PARISH-MUKONO DISTRICT

BY

NAMBOOWA RACHEAL

15/U/15098/MSE/PE

A RESEARCH REPORT SUBMITTED TO SCHOOL OF MANAGEMENT AND

ENTREPRENUERSHIP IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF A DEGREE BACHELOR’ OF MANAGEMENT
SCIENCE OF KYAMBOGO UNIVERSITY

SEPTEMBER, 2018
 DECLARATION

I Namboowa Racheal do hereby declare that this research report is entirely my own and has never
been submitted to any other University or Institution of higher learning for any award.

Signature ………………………… Date: ……………………

NAMBOOWA RACHEAL

i
 APPROVAL

This is to certify that this research report by Namboowa Racheal was under my supervision and is
ready for submission.

Signature: ………………………… Date: …………………….

SUPERVISOR

ii
 DEDICATION

I dedicate this report to my beloved parents for their great work in bringing me up in this world,
for nurturing me and for the continued support financially, morally and spiritually, May God bless
you all.

iii
 ACKNOWLEDGEMENTS

This research report has been made possible by the Grace and love of God who provided me with
the wisdom, good health and courage to accomplish the study. Glory and praise be to him.

I wish to extend my heartfelt gratitude to my supervisor for the professional and academic
guidance that enabled me complete the research work.

I also extend my gratitude to my discussion group members who gave me all the academic and
material support at their discretion during the course of my study. Thank you indeed for the trust
and cooperation you placed in me that enabled me to succeed

I also extend my appreciation to the entire rural Banks in Nsube-Kauga for the conducive and
hospitable environment they showed to me throughout my entire research study. I thank them for
the time they spared for me during the data collection process more so the respondents who
willingly answered my questionnaires in time.

Last but not least; I sincerely thank all those who made great contribution to my life especially my
lecturers, my friends for the Guidance and cooperation they always rendered to me during the time
of study’ May God bless you abundantly!

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 TABLE OF CONTENTS
DECLARATION.................................................................................................................................i

APPROVAL........................................................................................................................................ii

DEDICATION...................................................................................................................................iii

ACKNOWLEDGEMENTS...............................................................................................................iv

LIST OF TABLES AND FIGURES...............................................................................................viii

ABSTRACT.......................................................................................................................................ix

CHAPTER ONE.................................................................................................................................1

INTRODUCTION...............................................................................................................................1

1.1 Backgrounds to the Study.............................................................................................................1

1.2 Statement of the Problem..............................................................................................................3

1.3 Main objective of the study...........................................................................................................4

1.4 Objectives of the study..................................................................................................................4

1.5 Research Questions.......................................................................................................................4

1.6 Scope of the study.........................................................................................................................5

1.7 Significance of the study...............................................................................................................5

CHAPTER TWO................................................................................................................................6

LITERATURE REVIEW...................................................................................................................6

2.0 Introduction...................................................................................................................................6

2.1 The Human Resource practices, policies and programmes of these rural banks.........................6

2.1.1 Recruitment and Selection.........................................................................................................9

2.1.2 Training and Development......................................................................................................10

2.1.3 Compensation...........................................................................................................................11

2.1.4 Appraisal/Performance Management......................................................................................11

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2.1.5 Employment Security...............................................................................................................12

2.1.6 Employee Voice (Involvement and Participation)..................................................................13

2.1.7 Information Sharing and Knowledge Management.................................................................13

2.1.8 Job design.................................................................................................................................14

2.1.9 Career Planning........................................................................................................................15

2.1 Perceptions of employees on Human Resource practices, policies and programmes of these
rural banks.........................................................................................................................................17

2.3 Role of properly managing human resources on the organizational performance of selected
rural banks.........................................................................................................................................19

CHAPTER THREE...........................................................................................................................21

METHODOLOGY............................................................................................................................21

3.0 Introduction.................................................................................................................................21

3.1 Research Design..........................................................................................................................21

3.2 Study population.........................................................................................................................21

3.3 Sample Size.................................................................................................................................21

3.4 Sample selection..........................................................................................................................22

3.5 Source of data..............................................................................................................................22

3.5.1 Primary source.........................................................................................................................22

3.5.2 Secondary source.....................................................................................................................22

3.6 Data collection methods..............................................................................................................23

3.6.1 Questionnaires..........................................................................................................................23

3.6.2. Interview guide.......................................................................................................................23

3.6.3 Observation..............................................................................................................................23

3.7 Reliability and validity................................................................................................................23

3.8 Research Procedure.....................................................................................................................24

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3.9 Data Processing, Presentation and Analysis...............................................................................24

3.9.1 Data Analysis and Management..............................................................................................24

3.9.2 Data Processing........................................................................................................................24

3.9.3 Data Presentation.....................................................................................................................25

3.10 Ethical Consideration................................................................................................................25

CHAPTER FOUR.............................................................................................................................26

DATA PRESENTATION, ANALYSIS AND INTERPRETATION..............................................26

4.0 Introduction.................................................................................................................................26

4.1 Personal Characteristics..............................................................................................................26

4.1.1 Gender of the respondents.......................................................................................................26

4.1.2 Age bracket of the respondents................................................................................................27

4.1.3 Marital status of the respondents.............................................................................................28

4.1.4 Length of time in employment.................................................................................................29

4.1.5 Highest Levels of education.....................................................................................................29

4.2 Human Resource practices, policies and programmes of these rural banks..............................30

4.2.1 Number of employees in the organisation...............................................................................30

4.2.2 Responses on recruitment and Selection as an HRM Practice................................................31

4.2.3 Responses on Compensation (Pay) and Rewards as an HRM Practice..................................32

CHAPTER FIVE...............................................................................................................................34

CONCLUSION AND RECOMMENDATIONS.............................................................................34

5.1 Conclusion...................................................................................................................................34

5.2 Recommendations.......................................................................................................................34

References.........................................................................................................................................35

APPENDIX I : QUESTIONNAIRE.................................................................................................38

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LIST OF TABLES AND FIGURES

Table 4.1 Gender of the respondents................................................................................................26

Table 4.2 Age bracket of the respondents.........................................................................................26

Figure 4.1: Showing the marital status of respondents.....................................................................27

Table 4.3: Length of time in employment........................................................................................28

Table 4.4: Respondent’s level of education......................................................................................28

Table 4.5: Number of employees in the organisation.......................................................................29

Table 4.6: Responses on recruitment and Selection as an HRM Practice........................................30

Table 4.7: Responses on Compensation (Pay) and Rewards as an HRM Practice..........................31

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 ABSTRACT

This study evaluated the perceptions of employees towards Human Resource Management
practices of rural banks and to establish the role of such practices on organizational performance.
Three research objectives were used and these were; to find out the Human Resource practices,
policies and programmes of these rural banks; to find out the perceptions of employees on Human
Resource practices, policies and programmes of these rural banks and to find out the role of
properly managing human resources on the organizational performance of selected rural banks.
The research was based on both the qualitative and quantitative research designs and a sample of
50 respondents were selected for this study.

From the findings, data indicated that most of the rural Banks selected, employee between 6-29
employees Additionally all the respondents agreed that their Bank has a department dedicated to
Human Resource. Respondents agreed that Appointments in this organisation is based on merit,
Applicants are fully informed about the qualifications required to perform the job before being
hired. It was revealed that, Advertisements are used by the bank to recruit, there is formal
induction, orientation and familiarization process designed to help new recruits understand the
organisation, respondents strongly agreed that Pay for performance improves performance. All the
respondents who involved in the study strongly agreed that Compensation packages encourage
employees to achieve organisation’s objectives and that Employees are recognized and rewarded
appropriately in this organisation

The study concluded that, Human resource management practices heavily impact on the
performance of an organisation right from entry processes of recruitment, selection and training or
placement, among others to the stage of laying off, promoting, or firing employees. When only
some HRM practices are used, the organization is left wanting. The study recommended that, the
government should desist from appointing employees and instead takes on the more productive
form of recruitment criteria based solely on the job analysis and that guidance is extended to the
mid-level and small organizations in Uganda where there are no HRM practices put in place and
serious issues such as recruitment are based on whether or not you are known or the family you
come from and which part of the country is your origin.

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 CHAPTER ONE

INTRODUCTION

1.1 Backgrounds to the Study

In the last ten years, organisations especially in Africa have been hit with the undisputable fact
that the creation of competitive advantage lies in people. Organisations have increasingly
recognized the potential for their people to be a source of competitive advantage. Not too long
ago, so called HR functions was the preserve of Personnel Managers’ whose duties were to recruit
and select, appraise, promote and demote. These superficial duties could be performed by any
manager, it therefore never seemed necessary to employ an expert in the form of a human resource
manager let alone create a whole department dedicated to Human Resource Management. Little
attention was paid to human resource management issues and its impact on organizational
performance. The emphasis on traditions and socio-cultural issues injected an element of
subjectivity in „personnel manager’ functions such as recruitment and selection, performance
appraisal, promotion, demotion, and compensation.

In today’s competitive and rapidly changing business world, organisations especially in the service
industry need to ensure maximum utilization of their resources to their own advantage; a necessity
for organizational survival. Studies have shown that organisations can create and sustain
competitive position through management of non-substitutable, rare, valuable, and inimitable
internal resources (Barney, 1991). Human Resource Management has transcended from policies
that gather dust to practices that produce results. Human resource management practices has the
ability to create organisations that are more intelligent, flexible and competent than their rivals
through the application of policies and practices that concentrate on recruiting, selecting, training
skilled employees and directing their best efforts to cooperate within the resource bundle of the
organisation. This can potentially consolidate organisation performance and create competitive
advantage as a result of the historical sensitivity of human resources and the social complex of
policies and practices that rivals may not be able to imitate or replicate their diversity and depth.

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Lately, organisations are focused on achieving superior performance through the best use of
talented human resources as a strategic asset. Human Resource Management policies or strategies
must now be aligned to business strategies for organizational success. No matter the amount of
technology and mechanization developed, human resource remains the singular most important
resource of any success-oriented organisation. After all, successful businesses are built on the
strengths of exceptional people. Human Resource Management has now gained significance
academically and business wise and can therefore not be relegated to the background or left in the
hands of non-experts. Attention must be paid to the human resources organisations spent
considerable time and resources to select.

Armstrong (2009) defines Human Resource Management (HRM) as a strategic and coherent
approach to the management of an organization’s most valued assets; that is, the people working
there who individually and collectively contribute to the achievement of its objectives. Moreover,
Human resource management practices can be defined as a set of organizational activities that
aims at managing a pool of human capital and ensuring that this capital is employed towards the
achievement of organizational objectives (Wright and Boswell, 2002). The adoption of certain
bundles of human resource management practices has the ability to positively influence
organisation performance by creating powerful connections or to detract from performance when
certain combinations of practices are inadvertently placed in the mix (Wagar and Rondeau, 2006).
So if we think human resource management as just the services any manager may provide in
recruiting and selecting, appraising, training and compensating employees, then we rather would
have to take the backseat for those who understand the influence Human Resource Management
has on corporate performance to take the centre stage. Research has recorded a positive
relationship between human resource management practices and corporate performance. Thus in
order to stimulate corporate performance, management is required to develop skilled and talented
employees who are capable of performing their jobs successfully (Klein, 2004).

Achieving better corporate performance requires successful, effective and efficient exploit of
organisation resources and competencies in order to create and sustain competitive position locally
and globally. Human Resource Management policies on selection, training and development,
performance appraisal, compensation, promotion, incentives, work design, participation,

2
involvement, communication, employment security, etc must be formulated and implemented by
Human Resource Management specialist with the help of line managers to achieve the following
outcomes: competence, cooperation with management, cooperation among employees, motivation,
commitment, satisfaction, retention, presence, etc. In fact, Ahmad and Schroeder (2003) found a
positive influence of human resource management practices (information sharing, extensive
training, selective hiring, compensation and incentives, status differences, employment security,
and decentralization and use of teams) on organizational performance as operational performance
(quality, cost reduction, flexibility, deliverability and commitment). In furtherance of this
assertion, Sang (2005) also found a positive influence of human resource management practices
(namely, human resource planning, staffing, incentives, appraisal, training, team work, employee
participation, status difference, employment security) on organisation performance.

For businesses to survive, Human Resource Management should be given its rightful place of
relevance in any organisation and not left in the hands of line managers who neither have the
expertise nor the time and space to carry out the enormous functions of a human resource
manager.

1.2 Statement of the Problem

Human Resource Management as a function has made significant inroads into the Ugandan
corporate world. It is common to see large organisations in Uganda set up a whole department for
the sole purpose of managing human resources and hire experts in the field to be in charge of
Human Resource Management. The enormous benefits of properly managing human resource
cannot be over emphasised. However, the majority of the rural banks in Uganda are yet to catch
the Human Resource Management cold. Inappropriate Human Resource Management policies and
practices of some of these banks can be attributed to the non-existence of Human Resource
Management specialists or Human Resource Management departments. Research has established
significantly a positive relationship between an organisation’s Human Resource Management
practices and performance. Most of these banks do not realize the impact of properly managing its
human resource and therefore leave policies in the hands of line managers and board of directors
who are non- Human Resource Management experts to implement or enforce strategies, policies,

3
processes, programmes and practices. Banking has been and will always be a "People Business".
Though pricing is important, there may be other valid reasons why people select and stay with a
particular bank. Human Resource Management has sank into oblivion to most of the rural banks
and it is about time rural banks saw the role and impact of Human Resource Management on
performance and worked towards properly managing their manpower. It was in the face of this
existing state that the researcher wishes to establish the role of Human Resource Management on
organizational performance and how rural banks can, through appropriate Human Resource
Management practices improve performance.

1.3 Main objective of the study

The primary aim of this study was to evaluate the perceptions of employees towards Human
Resource Management practices of rural banks and to establish the role of such practices on
organizational performance.

1.4 Objectives of the study

To find out the Human Resource practices, policies and programmes of these rural banks

To find out the perceptions of employees on Human Resource practices, policies and programmes
of these rural banks.

To find out the role of properly managing human resources on the organizational performance of
selected rural banks.

1.5 Research Questions

What are the general Human Resource practices existing in the selected rural banks?

What are the perceptions of employees and managers about Human Resource practices of the
selected rural banks?

To what extent do these practices influence the achievement of organizational goals?

4
1.6 Scope of the study

The study was focused on the role of Human Resource Management on performance of an
organisation. Specifically, the study was limited on the general Human Resource practices,
policies and programmes of these rural banks, the perceptions of employees on Human Resource
practices, policies and programmes of these rural banks and the role of properly managing human
resources on the organizational performance of selected rural banks.

Additionally, the study was carried out in the selected rural banks in Nsuube-Kauga parish. That is
FINCA-Uganda and Eco Bank.

1.7 Significance of the study

It is a recognized fact that Human Resource occupies a unique and sensitive position in the
banking industry; therefore, a study of this nature will help the selected rural banks to appreciate
the role of Human Resource Management on organizational performance.

It will also provide insights into adopting the “best fit” practices as strategic response for rural
banks in the near future. The larger community stands to benefit since the improved performance
of rural banks will enhance the living standard of mostly the majority informal sector that deals
with them and contribute significantly to the growth of the Ugandan economy.

The academic significance of this work is to add to existing theories on Human Resource
Management, serve as reference to those engaged in other related studies and create the leeway for
another to further research into Human Resource Management and organizational performance.

5
 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter reviews previous works done by researchers in the field of HRM. What is known as
literature review in research does not only provide knowledge on what has been done on an area of
study but the strengths and weaknesses that could propel a meaningful and insightful study. This
chapter casts more light on the concepts of HRM, various bundles of HR practices, contentions
surrounding theories, models and previous findings. It ends with the HR practices that have been
found to impact greatly on organisational performance of especially the service industry.

2.1 The Human Resource practices, policies and programmes of these rural banks

The concept of Human Resource Management was first defined by Bakke (1966) who said that the
general type of activity in any function of management is to use resources effectively for an
organisational objective. The function which is related to the understanding, maintenance,
development, effective employment and integration of the potential in the resource of „people’ I
shall call simply the human resources function. However, HRM emerged fully fledged later when
the Michigan „matching model’ (Fombrun et al, 1984) and what (Boxall 1992) calls the Harvard
framework developed by Beer et al (1984) made statements on the HRM concept revealing the
need to take HRM beyond just selection and compensation to broader issues that demand more
comprehensive and more strategic perspective to an organisation’s human resources. The
matching model of HRM held that HR systems and the organisation structure should be managed
in a way that is congruent with organisational strategy and further explained that there is a human
resource cycle that consists of four generic processes or functions that are performed in all
organisations; selection, appraisal, rewards and development. The Harvard framework is based on
their belief the problems of historical personnel can only be solved when general managers
develop a viewpoint of how they wish to see employees involved in and developed by the
enterprise and of what HRM policies and practices may achieve those goals. Without either a
central philosophy or a strategic vision which can be provided only by general managers – HRM
6
is likely to remain a set of independent activities, each guided by its own practice tradition. This
called for the need to have a long-term perspective in managing people and consideration of
people as potential assets rather than merely a variable cost.

As Armstrong (1987) puts it HRM is regarded by some personnel managers as just a set of initials
or old wine in new bottles. It could indeed be no more and no less than another name for personnel
management, but as usually perceived, at least it has the virtue of emphasizing the virtue of
treating people as a key resource, the management of which is the direct concern of top
management as part of the strategic planning processes of the enterprise. Although there is nothing
new in the idea, insufficient attention has been paid to it in many organisations.

Human resource management (HRM) has the key role in the today’s competitive work
environment. The style and management of human resource systems based on employment policy,
comprising a set of policies designed to maximise organisational integration, employee
commitment, elasticity, and quality of work (Alagaraja 2013, p. 119). HRM is defined as a
strategic and compatible approach to management of an organisation’s most approached assets –
the people working there who one by one and jointly contribute to the accomplishment of its
objectives. According to Armstrong, the main aim of human resource management is to provide
that the organisation can achieve success through people (Armstrong 2006, p. 8).

When the world is turning more competitive and unstable than ever before, organisations are
seeking to obtain competitive advantage at all cost and are becoming more innovative sources
with HRM practices (Sparrow, Schuler & Jackson 1994, p. 267-299). HRM practices can create
enriched knowledge, motivation, synergy, and commitment of firm’s employees, outcome in a
source of sustained competitive advantage for the firm (Harter, Schmidt & Hayes 2002, p. 274).
HRM practices regulate the attitude and status of the employer-employee relationship which can
encourage the employees to become more innovative (Tan & Nasurdin 2006, p. 156).

With changing conditions in the world, especially for businesses struggling in the rapidly
changing global competitive environment, HRM practices began to be seen as the basic element of
the ongoing success of competition. In order to gain maximum competitive advantage and to
enhance organisational performance, companies need to use much more their human resources
7
practices. In recent years, global companies believe that one of the most important tools for human
resource management practices is improvement of individual and organisational performance and
maintenance.

HRM practices affect employees’ abilities through the obtaining and improving firm’s human
capital. HRM practices are able to impress firm performance through supply of organisational
structures that embolden participation among employees and permit them to enhance how their
jobs are performed (Huselid 1995, p. 635-672). HRM practices are also conceived as a set of
inwardly coherent policies and practices designed and implemented to provide that firm’s human
capital contribute to accomplishment of its business aims (Delery & Doty 1996, p. 802-835).

A number of studies have tested the linkage between Human Resource Management practices and
performance of organization with generally helpful results. In fact, existing researches in this area
has changed its focus from testing the linkage between several Human Resource Management
practices and the performance of organizations to find out the means from which Human Resource
Management practices affects the performance of the organization. Boselie et al., (2005) is also of
the same view.

Collins and Smith, (2006) also tested the above relationship. Similarly Hailey et al., (2005) studies
also revealed the same results. However, current researches on the association between HRM
practices and performance of the organization are confused about the methods of these studies
(Wall & Wood, 2005). These studies recommend that it is early to assume a clear positive
relationship between Human Resource Management practices and performance of the organization
and argue that further research could be done though using more thorough research designs. If
social exchange perspective is viewed, employees respond to the organization’s actions by their
continuous participation in the organization.

There is empirical research which shows that HR practices enhance employee retention. For
example, Paré and Tremblay, 2007 examined four of the five Human Resource practices were
significantly negatively related to turnover ratio. Druker, 1995 also is of view that If the Human
Resource wants to create value to the organization in order to enhance quality and improved
services then, it has to satisfy its employees, compensate them, conduct their appraisal, open
8
communication systems should be there and then give feedback of the overall organization. These
actions can make sure that the organisation is now able to satisfy its employees which will move
the organization towards success. For years, HR researchers are of view that Human Resource
practices play a very important role in employee productivity and loyality because the means
through which the organization treats its employees directly affects overall organizational
performance. For example, Huselid, 1995 observed that Human Resource Practices impact
turnover ratio, overall profit and performance of the company in financial terms.

Many researchers over the period have identified different HRM practices by different names.
Researchers variously refer to certain sets of HRM practices as “best practices” or „high
performance’ (Huselid, 1995) “sophisticated” (Golhar and Deshpande, 1997; Hornsby and
Kuratko, 1990; Goss et al., 1994; Wagner, 1998) or as “professional” (Gnan and Songini, 2003;
Matlay, 1999). Pfeffer (1994; 1998) argued the most appropriate term is „Best HRM practices’.
However, according to Chandler and McEvoy (2000) one of the lingering questions in HRM
research is whether or not there exists a single set of policies or practices that represents a
universally superior approach to managing people. Theories on best practices suggest that
universally, certain HRM practices either separately or in combination yield improved
organisational performance.

2.1.1 Recruitment and Selection

Recruitment which is the process of generating a pool of capable people to apply for employment
to an organisation and selection which is the process by which managers and others use specific
instruments to choose from a pool of applicants a person or persons more likely to succeed in the
job(s) given management goals and legal requirements’ Bratton and Gold (2007, p 239).
Recruitment and selection can play a pivotal role in shaping an organisation’s effectiveness and
performance, if organisations are able to acquire workers who already possess relevant
knowledge, skills and aptitudes and are also able to make an accurate prediction regarding their
future abilities. Performance improvement is not only a result of well functioning system but also
depends on effective human resource strategies that succeed in recruiting and maintaining a
committed and motivated workforce (Al-Ahmadi, 2009).

9
Recruitment and selection has become ever more important as organisations increasingly regard
their workforce as a source of competitive advantage. It is often claimed that selection of workers
occurs not just to replace departing employees or add to the number but rather aims to put in place
workers who can perform at a higher level and demonstrate commitment (Ballantyne, 2009). This
function of HR is presented as a planned rational activity made up of certain sequentially-linked
phases within a process of employee resourcing, which itself may be located within a wider HR
management strategy. The process of recruiting and selecting may come in four stages: defining
requirement, planning recruitment campaign, attracting candidates and selecting candidates
(Armstrong, 2010).

2.1.2 Training and Development

A formal definition of training and development is any attempt to improve current or future
employee by increasing an employee’s ability to perform through learning, usually by changing
the employee’s attitude or increasing his or her skills and knowledge. While training is seen to be
the process of imparting specific skills, development is said to be the learning opportunities
designed to help employees grow. According to (Armstrong 2001:543) training is the formal and
systematic modification of behaviour through learning which occurs as a result of education,
instruction, development and planned experience. Training has the distinct role in the achievement
of an organisational goal by incorporating the interests of organisation and the workforce (Stone R
J. Human Resource Management, 2002). For training to have a better effect on performance, its
design and delivery should be well executed.

Training remains a vital to enhancing employee performance. The organisational commitment or

“the relative strength of an individual’s identification and involvement in a particular
organisation” (Pool & Pool, 2007, p. 353) depends on effective training and development
programs. According to these authors, organisations demonstrating keen insight make provisions
for satisfying the training needs of their current workforce. Cheng and Ho (2001) indicate that
adequate training produces marked improvements in employee communication and proficiency of
performances as well as extending retention time. Moreover, when programs target
communication skills with co-workers, there are significant increases in profit as well as a greater

10
number of reported positive working relationships that are formed. Also, training and education
have been shown to have a significant positive effect on job involvement, job satisfaction, and
organisational commitment (Karia & Asaari, 2006). Moreover, poor performance reviews due to
inadequate job training can produce employee dissatisfaction and conflict.

2.1.3 Compensation

Compensation processes are based on compensation philosophies and strategies contained in the
form of policies, guiding principles, structures and procedures which are devised and managed to
provide and maintain appropriate types and levels of pay, benefits and other forms of
compensation. This constitutes measuring job values, designing and maintaining pay structure,
paying for performance, competence and skill and providing employee benefit. However,
compensation management is not just about money, it is also concerned with that non-financial
compensation which provides intrinsic or extrinsic motivation (Bob, 2011). Compensation has a
motivational effect and therefore implies that having a compensation structure in which the
employees who perform better are paid more than the average performing employees is vital to
enhancing organisational performance (Hewitt, 2009). The growing recognition and consensus
that compensation promotes productivity is consistent with the early work of Peter Drucker (1956)
that states “happy workers are productive workers.”

2.1.4 Appraisal/Performance Management

Performance appraisal of employees is the systematic evaluation of employees’ performance and

potential for development during a certain period of time by supervisors or others who are familiar
with their performance. It is one of the oldest and widely used management practices.
Performance appraisal is an indispensable tool for an organisation because the information it
provides is highly useful in decision making regarding issues such as promotion, merit increases
transfer, discharge, training and development. Not only is performance appraisal useful for the
above issues, it may also increase employee’s commitment and satisfaction Wiese and Buckley,
(1998). However, there has been a great realization that it is more important to focus on defining,
planning and managing performance than merely appraising performance Pareek and Rao, (2006).
The increased competitive nature of the economy and rapid changes in the external environment
11
has forced many organisations to shift from reactive performance appraisals to proactive
performance management to boost productivity and improve organisational performance (Nayab,
2011). Prasad (2005) defines performance management as the process of planning performance,
appraising performance, giving its feedback, and counselling an employee or teams to improve
performance. As Armstrong (2006) put it, performance management is a systematic process for
improving organisational performance by developing the performance of individual and teams.
Performance management is one of the most important developments in the field of HRM
probably propelled into visibility in the early 1980’s as a result of the growing importance of total
quality management.

2.1.5 Employment Security

Studies by Delery and Doty (1996); Bjookman and Fey (2000) have emphasized the significant
correlation between employment security and organisational performance. According to Pfeffer
(1998) benefits of employment security, aside workers’ free contribution of knowledge and their
efforts to enhance productivity, it also encourages people to take a longer-term perspective on
their jobs and organisational performance. In a study of the financial performance of 192 banks,
John Delery and Harold Doty observed significant relationship between employment security and
the bank’s return on assets, an important measure of financial performance. Employment security
maintained over time helps to build trust between people and their employer, which can lead to
more cooperation, forbearance in pressing for wage increases and better spirit in the organisation.
The idea of employment security does not mean that the organisation retains people who do not
perform or work effectively with others; of course performance does matter. Employment security
is fundamental to the implementation of most other high-performance management practices such
as selective hiring, extensive training, information sharing and delegation. Companies are unlikely
to invest the resources in the careful screening and training of new people if those people are not
expected to be with the firm long enough for it to recoup these investments. Similarly, delegation
of operating authority and the sharing of sensitive performance and strategic information requires
trust and that trust is much more likely to emerge in a system of mutual, long-term commitments.

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2.1.6 Employee Voice (Involvement and Participation)

The direct participation of staff to help an organisation fulfil its mission and meet its objectives by
applying their own ideas, expertise and efforts towards solving problems and making decisions is
termed as employee involvement. Research has shown that organisations that tap the strength of
their people will be stronger and more aggressive than those that cannot. Firms will never realise
the full potential of employees if they regard people as automatons or mere cogs in a wheel. In the
long run, such companies’ inefficiencies attract competition, and unless the management
philosophy changes, they will disappear (Apostolou, 2000).

So many studies have shown how much of an impact employee participation can have on the
performance and well being of an employee, team or the entire organisation: improved
organisational decision-making capability, and reduced costs through elimination of waste and
reduced product cycle times (Apostolou, 2000); improved attitude regarding work (Leana,
Ahlbrnadt, &Murrel, 1992); empowerment, job satisfaction, creativity, commitment and
motivation as well as intent to stay (Apostolou, 2000; Light, 2004); increased employee
productivity across industries (Jones, Kalmi, & Kauhanen, 2010)

2.1.7 Information Sharing and Knowledge Management

As Pfeffer (1998) asserts, information sharing is an essential component of high-performance

work systems for two reasons; first, the sharing of information on things such as financial
performance, strategy and operational measures conveys to the organisation’s people that they are
trusted and the second is that even motivated and trained people cannot contribute to enhancing
organisational performance if they do not have information on important dimensions of
performance and in addition training on how to use and interpret that information. An enterprise
that makes real a shared culture that is in actual fact unbreakable through information flow will be
a competitive one. When the sharing of information is a vital component of the entire enterprise’s
culture, this can surely impact the effectiveness of the enterprise. When people work together,
share ideas, and sometimes wrangle, they build on one another’s ideas for the benefit of the
enterprise. The lack of communication and information sharing disrupts works and brings about
enterprise mediocrity.
13
In a study by Brian Hackett (2000) titled, “ Beyond Knowledge Management: New Ways to Work
and Learn,” knowledge management is defined as,” An integrated, systematic approach to
identifying, managing, and sharing all of an enterprise’s information assets, including databases,
documents, policies, and procedures, as well as previously unarticulated expertise and experience
held by individual workers.” In essence, it is gathering all the information and resources of a
corporation and making them available to the individual employee. In turn, the employee uses
these resources to create new innovative processes and thus, gives back to the firm.

2.1.8 Job design

Job design refers to work arrangement or rearrangement aimed at reducing or overcoming job
dissatisfaction and employee alienation arising from repetitive and mechanistic tasks. Through job
design, organisations try to raise productivity levels by offering non-monetary rewards such as
greater satisfaction from a sense of personal achievement in meeting the increases challenge and
responsibility of one’s work. Job enlargement, job enrichment, job engineering, job rotation and
job simplification are various techniques used in a job design exercise. Opatha (2002) „Job design
is the functions of arranging task, duties and responsibilities in to an organisational unit of work’.
The process of job design has been defined as, “...specification of the contents, methods, and
relationships of jobs in order to satisfy technological and organisational requirements as well as
the social and personal requirements of the job holder.” (Buchanan, 1979) It can also be the
process of putting together various elements to form a job, bearing in mind organisational and
individual worker requirements, as well as considerations of health, safety, and ergonomics. In this
rapidly changing business environment, it is has become even more critical for jobs design to meet
the requirement of challenging work. Changing technology, advanced communication, and
changing organisational structures have all impacted job design. To be more responsive to the
rapid pace of change, jobs must have some degree of built-in flexibility. This flexibility is
achieved through careful attention to job design.

Job simplification standardizes work procedures and employs people in clearly defined and highly
specialized tasks. Job rotation and job enlargement were designed to take advantage of
specialization of labour from the job engineering approach (Luthans, 2005). Job rotation allows an

14
employee to work in different departments or jobs in an organisation to gain better insight in to
operations. Job enlargement can be used to increase motivation by giving employees more and
varied task. Job enrichment is the technique which entails the inclusion of greater variety of work
content, requiring a higher level of knowledge and skill, giving workers, autonomy and
responsibility in terms of planning, directing, and controlling their own performance, and
providing the opportunity for personal growth and meaningful work experience (Garg & Rastogi,
2006). A wealth of studies show that there exists a correlation between job design and
performance Al-Ahmadi (2009) indicated that the nature of job itself was found positively
correlated with performance , which indicates that satisfaction with amount of variety and
challenge in one’ s job actually influence performance.

Job design gives a clear direction to how tasks are performed and this leads a positive change in
job performance and analysis as a result of which the organisational productivity is enhanced
though efficient work performance.

2.1.9 Career Planning

Career planning is the deliberate process through which someone becomes aware of his or her
personal skills, interests, knowledge, motivations, and other characteristics; acquires information
about opportunities and choices; identifies career-related goals; and establishes action plans to
attain specific goals (Dessler, 2008). According to Edgar Schein career planning (Manolescu,
2003) is a continuous process of discovery in which an individual slow develops his own
occupational concept as a result of skills or abilities, needs, motivations and aspirations of his own
value system. In HRM, career planning seeks to identify to identify needs, aspirations and
opportunities for individuals’ career and the implementation of developing human resources
programs to support that career. A well-planned career development system along with internal
advancement opportunities based on merit, results in high motivation among employees, which
has an impact on firm performance (Milkovich & Boudreau, 1998).

In a broader sense, career management which is defined by Mayo (1991) as the design and
implementation of organisational processes that enable the careers to be planned and managed in a
way that optimizes both the needs of the organisation and the preferences and capabilities of
15
individuals has become one of the most important elements in HRM. Byars and Rue’s (2000)
explanation of career management is that, it is a joint-responsibility between individuals,
organisation, and employees’ immediate managers. Individuals’ responsibility, which covers two
main areas: preparing their own career plans and putting the plan into practice are termed as career
planning and career strategies respectively. The organisation’s and the immediate managers’
responsibilities, if combined together would generate another dimension which is best named as
organisational career management.

Huselid and Delaney, 1996 find Human Resource practices play crucial role on perceptions of
performance of a firm. Pfeffer and Veiga, 1999 and Pfeffer, 1998 are also of view that
organizational success depends upon how the organization treats its employees and also observed
that there are 7 Human Resource practices which when combined together move the organization
towards achievement, profits and sustainability. Barney and Wright, 1998 discuss one way to get
unique edge is to find special means to attract, retain and motivate employees; and hence their
arguments mainly focuses on specific Human Resource practices to gain competitive advantage.

According to Yoon and Thye, 2002 firm’s practices are concerned with the emotions of the
employees and also their thinking that make employee committed, proposing that that employee’s
process actions of organization carefully regarding matters of employees. According to Sheppeck
and Militello (2000), Human Resource Management issues are often measured in terms of how
organizations treat their human resources, and the much focus is on operationally oriented tools
and measures. The management considers its human resource as a very important asset for any
organization and it needs heavy investment, loyalty, and giving financial benefits in order to
motive its employees and definitely they will remain loyal with the organization (Armstrong,
2006). Birdi et al., 2008 has analyzed the linkage between Human Resource practices and firm’s
performance in financial terms. Other study was done by Arthur, 1994.

Strategic Human Resource management researchers are relying heavily on firm’s database to
analyze the impact of Human Resource practices on company’s performance (Wright et al, 2001).
However, theoretical research on long term management of human resource has recommended
that Human Resource practices procedures can increase performance of the firm and can become a

16
mean of unique edge because the practices are mostly matchless, causally unclear, and difficult to
copy (Lado & Wilson, 1994). However, Wright et al., 2001 was of view that Human Resource
practices can become a mean for sustainable unique edge when they are concerned towards
resources or competencies that create value for the organization. Thus, Wright et al., 2001 and
other researchers have discussed that SHRM research must discover resources that are crucial for
firm’s competitive edge.

2.1 Perceptions of employees on Human Resource practices, policies and programmes of

these rural banks

Irene Hon-fun Poon and Chris Rowley (2010) many competing hypotheses have been advanced to
relation for human resource management (HRM) change. The present review evaluates the
theoretical development and empirical revise in HRM change in Asia in the early twenty-first
century (from 2000 to 2006). Three research themes common to HRM change are discussed. (1)
Change context is about the issues of forces to make easier or to make difficult HRM change; (2)
Change process includes pace, sequence and magnitude of HRM change movement and (3)
Change direction is about resultant change outcome. Comparisons of HRM change were made on
Asian economies as well as between Asia and other ranges. It is resulted that the interplay between
different perspectives can produce a wide variety of more complex understanding of change
circumstance while cross-sectional approach can add value to explain dynamic process and
resultant direction.

In recent years, increased research attention has been paid to the impact of Human Resources
strategy and practices on organizational performance. The growing interest produced in this
domain was based on the idea that human resources should be considered as a strategic factor and
Human Resources Practices (HRP) can help to create a source of sustained competitive advantage,
especially when they are aligned with organization’s objectives (Delaney and Huselid, 1996;
Wright et al., 2001, 2005; Sun et al., 2007). When organizational human resource strategy is
properly configured, it will provide a direct and economically significant contribution to
organization performance (Chang and Huang, 2005).

17
However research has been too much focused on establishing positive effects of HR practices on
behaviors outcomes and firm performance (Becker and Huselid, 1999, 2006; Boselie et al., 2005;
Guest, 2002; Nishii et al., 2008; Ostroff, 1992; Paauwe and Boselie, 2005) and towards strategic
employee behaviors because they are key to the organizational strategy and less attention has been
taken to the perceptions of employees about the importance of the HR practices (Kehoe and
Wright, 2013) on their professional development and career success.

Human Resources practices are a set of activities implemented by organizations in order to

develop employees’ competencies and skills as well as to influence their attitudes and behaviors to
be focused on the organization objectives and to contribute to the achievement of high
performance levels (Gomes et al., 2008). However some studies refers that employees’ attitudinal
and behavioral reactions depends on the HR practices that employees perceived to exist in the
organization (Bowen and Ostroff, 2004; Kehoe and Wright, 2013). Thus, some empirical research
has been made on the relationship HRP perception’s to employees attitudes, such as job
satisfaction and organizational commitment (Meyer and Allen, 1997; Meyer et al., 2002), or
organizational citizenship behavior (Organ, 1988; Podsakoff et al., 2000). Furthermore, recent
empirical studies suggest that employees’ perceptions of the importance given to HR management
practices significantly vary from organization to organization (Liao et al., 2009; Hinkin and
Tracey, 2010). In an economic recession context, organizations tends to reduce the intensity of HR
practices, recruitment is reduced to a minimum, training programs just for the essentials, cut offs
in pay (e.g., overtime compensation or special allowances) but under a job insecurity atmosphere
employees value what the organization can do for them, in terms of promoting their employability
trough the development of their work experience and professional competencies. If organizations
within this recession context cannot make promises of a safe formal employment relation they
have to be committed to promote the employability level of employees, through performance
management systems, training opportunities and others competencies development activities.

18
2.3 Role of properly managing human resources on the organizational performance of
selected rural banks.

Guest (2002) has argued that the Impact of HRM on performance depends upon worker’s response
to HRM practices, so the impact will move in direction of the perception of HRM practices by the
employee. Wood (1999) and Guest (2002) has stressed that a competent, committed and highly
involved work force is the one required for best implementation of business strategy. Huselid
(1995) have found that the effectiveness of employees will depend on impact of HRM on behavior
of the employees. Patterson et al (1997) while discussing impact of people management practices
on business performance has argued that HR practices in selection and training influence
performance by providing appropriate skills. Their research has found that HR practices have
powerful impact on performance even if measured as productivity.

Huselid (1995) stressed that by adopting best practices in selection, inflow of best quality of skill
set will be inducted adding value to skills inventory of the organization. He also stressed on
importance of training as complement of selection practices through which the organizational
culture and employee behavior can be aligned to produce positive results. Cooke (2000) has
included efficiency and effectiveness as ingredients of performance apart from competitiveness
and productivity. S(he) further argued that training is the tool to develop knowledge and skills as
means of increasing individual’s performance (efficiency and effectiveness). Singh (2004), whose
observations are more relevant in our cultural context, argues that compensation is a behavior
aligning mechanism of employees with business strategy of the firm.

Career planning is a tool that aligns strategy with future HR needs and encourages employee to
strive for his personal development (William et al, 1996). By increasing employee participation,
the firm will benefit from increase in productivity of the employee due to increased commitment
of the employee. Financial participation schemes were more beneficial for the organizations than
the associated cost (Summers & Hyman, 2005). Use of best HR practices shows a stronger
association with firm’s productivity in high growth industry (Datta et al, 2003). This finding has
significance in our case as we have shown that the telecom sector of Pakistan is a high growth
industry.

19
Wright et al (2003) have argued that an employee will exert discretionary effort if proper
performance management system is in place and is supported by compensation system linked with
the performance management system. Job definition is combination of job description and job
specification. It clearly outlines duties, responsibilities, working conditions and expected skills of
an individual performing that job (Qureshi M Tahir, 2006). Ichniowski (1995) while observing
productivity of steel workers have found that complementary HR practice System effects workers
performance. Majority of previous research has verified significant relationship between HR
practices and Employee Outcomes (Sels, 2006)

Collins (2005) in a research of similar nature targeting small business have found that effective
HR practices impact employee outcomes significantly (employee outcomes used by them were
different than ours). A research was conducted by Mr. Tahir Masood Qureshi (2006) regarding
Impact of HR practices on organizational performance in Pakistan. His findings were supportive
of our assumption that HR practice system effect Organizational Performance through employee
outcomes.

20
 CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter gives a description of research design, study population, sampling design and
sampling methods, sample size, data source, data collection instruments and data collection
methods, data processing, presentation and data analysis.

3.1 Research Design

The research was based on both the qualitative and quantitative research designs. A case study
was chosen as the most appropriate research designs. Saunders et al (2003) define a case study as
“a strategy for doing research which involves an empirical investigation of a particular
contemporary phenomenon within its real life context using multiple sources of evidence”. This
fitted well with the author’s intention to investigate a real life issue through a variety of data
collecting methods. Jankowicz (2000) suggests the appropriateness of a case study when the thesis
focuses on a set of issues in a single organization. The qualitative research design was descriptive
in nature and this enabled the researcher to meet the objectives of the study.

The quantitative research design was used in form of mathematical numbers and statistics assigned
to variables that may not be easily. A statement was used to assign variables that was adequately
measured using numbers and statistics.

3.2 Study population

The study population were employees from the selected Banks.

3.3 Sample Size

The area under study was visited then the sample was determined by grouping the populations in
the Selected Banks in categories of sales departments and the management employees. Then a

21
sample of 50 respondents were selected for this study. This was because these respondents give a
clear picture of the feedback of the problems under study.

3.4 Sample selection

The researcher employed purposive as well as Snowball Sampling during the process of selecting
study respondents. The researcher used purposive sampling method during the selection of
respondents within the study area. Purposive sampling method was used because it allows the
selection of a sample with experience and knowledge about the study variables.

Snowball Sampling was further used during the selection of top management from the study area
since the researcher found it hard to trace respondents in this category for her. In this case, the
researcher approached the Branch manager who helped her to get to the employees in other
departments as the pattern was followed until the total sample size in the same category was
obtained.

3.5 Source of data

The study used two main sources of data as identified below.

3.5.1 Primary source

This is data obtained for the first time from respondents. Primary data was obtained through
personal interviews with respondents, observations and self-administered questionnaires.

3.5.2 Secondary source

Secondary data was obtained through the company brochures, statistical report and bulletins,
annuals marketing reports on general consumers survey, textbooks, other students research work,
journals, company’s sales records and newspapers, Secondary data as a contributory factor for
comparative purposes especially national and international, data was got from journals and books.
The books were got from Kyambogo University Library and other documents of selected rural
Banks. The internet was used so as to enable the researcher get current and up to date data related

22
to the research study so as to enrich the facts resulting from data got from respondents. Most of the
secondary data was got through observation and compilations like magazines.

3.6 Data collection methods

3.6.1 Questionnaires

This technique helped to collect primary data through a number of questions, which were given to
a cross section of respondents. The questions were open ended and closed ended questions with
the questionnaire mainly based on predetermined and standardized questions. They were focused
on the role of human resource management on the performance of an organisation and was used to
capture data from the staffs of selected rural banks.

3.6.2. Interview guide

Structured interviews were used to collect data from the staffs of the company. This led to face to
face interaction and solicitation of pertinent information from the respondent. Self-administered
questionnaires were used by the researcher because they were cheap to distribute and process.
They were more flexible and helped to save time.

3.6.3 Observation

The researcher used the observation method which enabled her to collect data from the field so as
to compile the report.

3.7 Reliability and validity

Validity of an instrument used in this study was consistent with the definition provided by Miles
and Huberman (1994), as the” extent to which the items in the instrument measure what they are
set out to measure.” The validity of the instruments was established by the supervisor. Reliability,
according to Miles and Huberman (1994), has to do with the extent to which the items in an
instrument generate consistent responses over several trials with different audiences in the same
setting or circumstances”. The reliability of the instruments and data was established following a
pre-test procedure of the instruments before their use with actual research respondents.

23
3.8 Research Procedure

The study observed all those procedures followed in research. Using the letter of introduction
obtained from the Faculty, the researcher introduced it to every respondent reached at, fully
explaining the purpose of research. After getting their consent, she conducted the research. The
researcher also built the confidence of the respondents by assuring them that their views will be
confidential and will be used only for academic purposes.

3.9 Data Processing, Presentation and Analysis

3.9.1 Data Analysis and Management

Data analysis is the process of bring order, structure and meaning to the mass of information
gathered. The instruments yielded both qualitative and quantitative data (Mugenda & Mugenda,
2003). After collecting all the necessary data, these data was coded and edited, analyzed and
rephrased to eliminate errors and ensure consistency. It involved categorizing, discussing,
classifying and summarizing of the responses to each question in coding frames, basing on the
various responses. This was intended to ease the tabulation work. It also helped to remove
unwanted responses which were considered insignificant. Data collected from the field with the
use of study instruments was classified into meaningful categories. This enabled the researcher to
bring out essential patterns from the data that was organized for the presentation. Data was entered
into a computer and analyzed with the use of statistical packages for social scientists (SPSS),
which helped to summarize the coded data and this facilitated quick interpretation. Finally, a
research report was written from the analyzed data in which conclusions and recommendations
were made.

3.9.2 Data Processing

Data processing includes coding and editing all the responses collected from the field which were
edited with the view of checking for completeness and accuracy to ensure that data is accurate and
consistent. Coding was done after editing which is done manually and by the use of computer
through word processing and Excel.

24
3.9.3 Data Presentation

The researcher presented data got from the primary and secondary source using statistical package
for social science (SPSS) software and the result were presented in tables for easy interpretation.

3.10 Ethical Consideration

Before commencing the research, an introductory letter from the University was got and the
purpose of the study was explained to the authorities to avoid inconveniences and
misunderstandings about the purpose. The information collected was kept highly confidential.

25
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.0 Introduction

This chapters presents the findings of the study as they were got from field using questionnaires
and interview guide as the main data collection methods. It presents rather detailed information
concerning the Impact of Human Resource Management on the performance of an organisation.

4.1 Personal Characteristics

4.1.1 Gender of the respondents

Table 4.1 Gender of the respondents

Frequency Percentage
Male 27 54%
Female 23 46%
Total 50 100%

Source: Primary data

Data from the above table indicated that most of the respondents who involved in the study were
male thus contributing to 54% while 46% of the respondents were female. Involving both genders
in the study indicated that, the study was gender sensitive.

26
4.1.2 Age bracket of the respondents

Table 4.2 Age bracket of the respondents

Age of the respondents Frequency Percentage

18-30 years 9 18%
31-40 years 25 50%
41-50 years 11 22%
Above 51 years 5 10%
Total 0 0%
Source: primary data

Findings from the above table indicated that, most of the respondents who involved in the study
were between the age bracket of 31-40 years thus contributing to 50%, 18% of the respondents
were between the age bracket of 18-30 years, 22% of the respondents were between the age
bracket of 41-50 years while 10% of the respondents were above 51 years of age.

27
4.1.3 Marital status of the respondents

In trying to find out other responsibilities of the respondents, the researcher took interest in
understanding the marital status of the respondents.

Figure 4.1: Showing the marital status of respondents

74.3
80
70
60
50
40
30
20 11.4
8.6
5.7
10
0
Married Single Widow Divorced

Source: primary data

From the figure above, 74% of the respondents are married, 12% of the respondents are single, 8%
of the respondents are divorced and only 6% of the respondents are widow. This meant to the
researcher that many of the selected respondents working in rural Banks are married.

28
4.1.4 Length of time in employment

Table 4.3: Length of time in employment

Frequency Percentage (%)
1-2 years 27 54%
3-4 years 10 20%
5-6 years 6 12%
7-9 years 3 6%
10 years and above 4 8%
Total 0 100%

Source: primary data

From the table above, data indicated that most of the respondents who took part in this study had
spent 1-2 years working with the rural Banks thus contributing to 54%, 20% of the respondents
had spent 3-4 years, 12% of the respondents had spent 5-6 years working with rural Banks, 6%
had spent 7-9 years while 8% of the had spent 10 years and above while working with rural Banks.
This therefore implied that all the respondents who involved in the study had worked with rural
Banks for some time and their responses for this study can be used for drawing the general
conclusion for this current study.

4.1.5 Highest Levels of education

Table 4.4: Respondent’s level of education

Levels of education Frequency Percent (%)
Bachelor’s degree 33 66%
Diploma 12 24%
Certificate 4 8%
Post graduate 1 2%
Total 0 0

Source: Primary data

Results from the above table, testifies that 66% of the respondents attained Bachelors degree of
education though from different Universities in Uganda and from others places in the world, 24%

29
of the respondents attained diploma as their highest level of education, 8% of the respondents
attained certificates, while 2% of the respondents attained post graduates.

4.2 Human Resource practices, policies and programmes of these rural banks

4.2.1 Number of employees in the organisation

Table 4.5: Number of employees in the organisation

Frequency Percentage
0-5 7 14%
6-29 38 76%
30-99 5 10%
100 and above 0 0
Total 0 0

Source: Primary data

From the table above, data indicated that most of the rural Banks selected employee between 6-29
employees thus contributing to 76%, followed by those that employ 0-5 employees with 14%
while the least agreed that they are between 30-99 employees. None of the respondents agreed that
they are 100 employees and above. This therefore implied to the study that, most of rural Banks
have less than 100 employees that help them run day to day businesses. Additionally all the
respondents agreed that their Bank has a department dedicated to Human Resource.

30
4.2.2 Responses on recruitment and Selection as an HRM Practice

Table 4.6: Responses on recruitment and Selection as an HRM Practice

Statement 1 2 3 4 5
Appointments in this organisation is based on merit 10 - 5 15 20
20 10 30 40%
% % %
Applicants are fully informed about the qualifications - - - 5 45
required to perform the job before being hired 10 90%
%
Advertisements are used by the bank to recruit 20 5 - 15 5
40 10 30 10%
% % %
There is formal induction, orientation and familiarization - - - 15 35
process designed to help new recruits understand the 30 70%
organisation %
In this organisation, line managers and HR managers - 15 10 20 5
participate in the selection process 30 20 40 10%
% % %
Selection system selects those having the desired knowledge, 40 - - - 10
skills and attitude 80 20%
%
Vacancies are filled from qualified employees internally - - - - 50
100
%

Source: Primary data

From the table above, 40% of the respondents strongly agreed that Appointments in this
organisation is based on merit, 30% of the respondents just agreed with the statement, 10% of the
respondents were neutral while 20% of the respondents strongly disagreed with the statement.

31
The table above also indicated that, 90% of the respondents strongly agreed that Applicants are
fully informed about the qualifications required to perform the job before being hired while 10%
of the respondents just agreed with the statement.

Data also indicated that, 10% of the respondents strongly agreed that Advertisements are used by
the bank to recruit, 30% of the respondents just agreed, 10% of the respondents disagreed while
40% of the respondents strongly disagreed with the statement. This therefore implied that, most of
the rural Banks in Nsuube do not advertise during the recruitment and selection process of the
required employees.

Additionally, 70% of the respondents strongly agreed that there is formal induction, orientation
and familiarization process designed to help new recruits understand the organisation while 30%
of the respondents just agreed with the statement.

More so, 10% of the respondents strongly agreed that in this organisation, line managers and HR
managers participate in the selection process, 40% of the respondents just agreed with the
statement, 20% of the respondents were neutral while 30% of the respondents disagreed with the
given statement. Additionally, all the respondents who involved in the study strongly agreed that
Vacancies are filled from qualified employees internally.

4.2.3 Responses on Compensation (Pay) and Rewards as an HRM Practice

Table 4.7: Responses on Compensation (Pay) and Rewards as an HRM Practice

1 2 3 4 5
Pay for performance improves performance - - - - 50
100
%
Employees are rewarded based on performance 30 - - 15 5
60 30% 10%
%
Compensation packages encourage employees to achieve - - - - 50
organisation’s objectives
100
%

32
 Employees are recognized and rewarded appropriately in this - - - 50 -
organisation 100
%

Source: Primary data

From the table above data indicated that, 100% of the respondents strongly agreed that Pay for
performance improves performance.

The table also indicated that, 10% of the respondents strongly agreed that Employees are rewarded
based on performance, 30% of the respondents just agreed with the statement while 60% of the
disagreed with the statement.

All the respondents who involved in the study strongly agreed that Compensation packages
encourage employees to achieve organisation’s objectives and that Employees are recognized and
rewarded appropriately in this organisation

33
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

Human resource management practices heavily impact on the performance of an organisation right
from entry processes of recruitment, selection and training or placement, among others to the stage
of laying off, promoting, or firing employees. When only some HRM practices are used, the
organization is left wanting. However, as a whole, the HRM practices have the potential to
smoothen organization systems of work, management and operation, while steering the firm to
untold heights and success. Human resource management practices are essential to all
organizations, big or small, for as long as their goal includes success.

5.2 Recommendations

The government should desist from appointing employees and instead takes on the more
productive form of recruitment criteria based solely on the job analysis.

I suggest that guidance is extended to the mid-level and small organizations in Uganda where
there are no HRM practices put in place and serious issues such as recruitment are based on
whether or not you are known or the family you come from and which part of the country is your
origin.

I implore that emphasis is increased on the quality of work done rather than the quantity of work
covered since this is a higher institution of learning and compromise can be heaped on the time
spent.

34
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 APPENDIX I : QUESTIONNAIRE

Dear sir/madam,

My name is Namboowa Racheal, a student of Kyambogo University, currently carrying out a

research on the Impact of Human Resource Management on the performance of an organisation. This
is part of the requirements for the award of a degree in Management Science. Information given shall
be treated in the utmost confidence and results will be produced in aggregate data for the study only. I,
therefore, appeal to you to give correct and accurate information that will assist in drawing a valid
conclusion.

SECTION A: BIO DATA.

1. Gender/sex

a) Male b) Female

2. Age

a) 18-30years b) 31-40years

c) 41-50years d) Above 50 years

3. Marital status

a) Married b) Single

c) Widow d) Widower

e) Divorced

4. Length of time in employment

a) Below 1 year b) 1-5 years

c) 5-10 years d) Above 10 years

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5. Highest level of education attained

a) Diploma b) Degree

c) Masters d) ACCA/CPA

e) Any other specify……………………………………………..

6. Please indicate your position in the organization

…………………………………………………………

7. How long have you worked for the organisation?

a) Less than 1 year b) 1-2 years

c) 2-3 years d) More than 3 years

Section B: Human Resource practices, policies and programmes of these rural banks

How many employees are in your organisation?

0-5 [ ] 6-29 [ ] 30-99 [ ] 100 and above [ ]

Does your bank have a department dedicated to Human Resource?

Yes () No ()

How does your Bank execute and manage the following HR practices;

a. Centralized (C) OR b. Executed and managed by line managers (LM)

i. Recruitment and selection (.....) ii. Training and development (.....)

iii. Compensation (.....) iv. Performance Appraisal/Management (.....)

v. Employee Participation (.....) vi. Career planning (.....)

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Using the scale above (1 – 5) please tick (√) the levels of agreement in each of the items below
with regards to the HRM practices of your bank

Key: 1=Strongly Disagree (SA), 2=Disagree (D), 3=Neutral (N), 4=Agree (A), 5=Strongly Agree
(SA)

Statement 1 2 3 4 5
Recruitment and Selection
Appointments in this organisation is based on merit
Applicants are fully informed about the qualifications required to perform the
job before being hired
Advertisements are used by the bank to recruit
There is formal induction, orientation and familiarization process designed to
help new recruits understand the organisation
In this organisation, line managers and HR managers participate in the
selection process
Selection system selects those having the desired knowledge, skills and
attitude
Vacancies are filled from qualified employees internally
Compensation (Pay) and Rewards
Pay for performance improves performance
Employees are rewarded based on performance
Compensation packages encourage employees to achieve organisation’s
objectives
Employees are recognized and rewarded appropriately in this organisation
Training and Development
Training needs are discussed with employees
There is a training strategy and coherent training programme
Training incorporates the interests of the organisation as well as the individual
Training needs identified are realistic, useful and based on the business
strategy of the organisation
Every employee goes through various training programmes every year
There is a budget dedicated to training and development every year
Employment Security
Employees are assured of long term future with the organisation
There are sanctions for employees who do not obey instructions yet achieve
desired results
There is a formal, fair and reasonable process for handling grievances and
complaints
If the organisation were facing economic problems, employees would be the
last to get downsized
It is very difficult to dismiss an employee

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Section C: Perceptions of employees on Human Resource practices, policies and programmes of
these rural banks.

Statement 1 2 3 4 5
In this organisation, employees are provided performance based feedback and
counselling
The appraisal data is used for decision making like promotion, job rotation,
training, compensation, transfers and discharge
There are corrective measures for under-performance
Appraisal system is growth and development oriented
There is a well-defined performance management strategy
Retraining, redeployment and employability take precedence over downsizing
There is regular appraisal for promotion
Employee participation is encouraged on a wide range of issues
Employees can exercise independent thought and action in executing their
jobs
Adherence to instructions with little room for empowerment
You have regular staff meetings to encourage communication with peers and
supervisors
Career development is the responsibility of the employee
Employee’s career aspirations within the organisation are discussed with
immediate supervisor
Employees are clear about promotion possibilities
Our organisation prefers an internal employee whenever a vacancy opens up

Section D: The role of properly managing human resources on the organizational performance
of selected rural banks.

According to you, what are the roles of properly managing human resources on the organizational
performance of selected rural banks?

……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………

***Thank you for Participating***

41