YARDESTIC INTERNATIONAL COLLEGE

Master of Business Administration

The Effect of Human Resource Management on

Organizational Performance: In the case of
Ministry of National Defence in Addis Ababa.

Research Proposal

MARCH 2023

Prepared by: - CHIMDESA CHALCHISA

ID Number MBA 01/405/14

Submitted to:
 Table of Contents
CHAPTER ONE 3
INTRODUCTION 3
1.1 Background of the Study 3
1.2 Statement of the problem 4
1.3 Research Questions and Hypothesis 6
1.4 Objectives of the Study 6
1.5 Significance of the Study 7
1.6 Scope of the Study 7
1.7 Limitations of the Study 8
1.8 Operational Definition of Terms 8
1.9 Organization of the study 9
CHAPTER TWO 10
REVIEW OF THE LITERATURE 10
2.1 The Concept of Human Resource Management 10
2.2 Conceptual Framework of the Study 12
2.2.1 Recruitment and Selection 12
2.2.2 Training and Development 13
2.2.3 Performance Appraisal 14
2.2.4 Compensation 15
2.2.5 Organizational performance 17
2.3 Relationship between HRM Practices and organizational Performance 18
CHAPTER THREE 21
3.1 Research Design 21
3.2 Sampling Techniques 21
3.3 Population and Sample Size 22
3.4 Source of Data and Data Collection Instruments 23
3.5 Data collection procedure 24
3.6 Data Analysis Method 25
3.7 Variables of the Study 26
3.8 Reliability and Validity of Data Collection Instruments 26
3.9 Ethical Considerations 27
Work Plan and Budget 28

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Chapter One
Introduction

1.1 Background of the Study

The effectiveness of an organization is mainly depends on the availability of human

resource in the organization. Having the required skill, knowledge and attitude of
employees by itself do not insure organizational effectiveness unless it is managed
properly. Human resource is the key resources that bring success in the organization if an
appropriate range of Human Resource policies and processes are developed and
implemented effectively, then Human Resource will make a substantial impact on
organizational performance (Armstrong, 2006).

Human Resource Management Practice (HRMP) directly contributes towards

organizational performance. An effective HRMP in the organization will enable employees
to contribute effectively to the attainment of the organization’s goals and objectives. It
makes employees to be committed to their work that will increase the organizational
performance. Dessler G. (2005) explained that human resource management is the process
of formulating and executing human resource policies and practices that produce the
employee competencies and behaviors the organization needs to achieve its strategic aims.

The primary objective of HRM in organizations is to bring the achievement of

organizational performance through human resource. Effective human resource
management is seen as more critical and essential in terms of influence on the
organizational performance (Armstrong, 2006). Human resource management refers to the
policies and practices involved in carrying out the ‘human resource aspects of a
management position including human resource planning, job analysis, recruitment,
selection, orientation, compensation, performance appraisal, training and development, and
employee relations (Dessler G., 2005).

Organizational performance is generally indicated by effectiveness, efficiency, satisfaction

of employees and customers, innovation, quality of products or services, and ability to
maintain a unique human resource (Delaney & Huselid, 1996). Effectiveness is the ability

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to choose appropriate goals and to achieve those goals and Efficiency is the ability to make
the best use of available resources in the process of achieving goals.

Ministry of National Defense (MoND) is one of the government institution established to

build strong and professional armed force which is absolutely reliable and loyal for the
constitution and safeguard the country’s sovereignty. To achieve these goal and objectives,
MoND must practice appropriate human resource management. Human resource
management practice also should be linked with the organization organizational
performance.

Recruiting, selecting, placing, promoting, developing and evaluating employees are not an
end to bring organizational performance. The organization is supposed to give great
emphasis on the strategic role human resource management practice in order to ensure the
organizational performance. According to Armstrong, (2006) performance management
practices include rigorous recruitment and selection procedures, extensive and relevant
learning and development activities, incentive pay systems and performance management
processes. It assures that organizational performance is depends on human resource
management practice.

In MoND, many scholars have conducted research on the practice of human resource
management. As it is presented, most of the researcher concentrated on the function of
human resource management in general. However, there is drawback on the practice
Human Resource Management to enhance organizational performance. To fill this gap,
this study will critically examine influence of human resource practice on organizational
performance in MoND.

1.1Statement of the problem

Human resource is the most important resources in any organization. It is necessary for the
organization to manage their employees effectively and efficiently to enhance
organizational performance. Human resource plays a vital role to achieve the mission of
the organization if it is managed properly. Hence it requires the considerable attention of
the management in order to increase organizational performance. Human resource means
Commissioned Officers and noncommissioned officers within the boundaries of Ministry

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of National Defense. They are responsible to safeguard the sovereignty of the country from
internal and external enemies. They have aims to achieve organizational mission and
increase organizational performance by performing the task assigned to them.

Human resource management is enormously important for MoND especially because

MoND is one of the security organizations that keep the interest of the country.
Management of employees is a key challenges facing MoND. Finding and attracting
competent employees with the required skill, Knowledge and ability is currently the
problem for MoND. Training is one of the practices of HRM to improve organizational
performance by developing employee’s knowledge, skill and attitude. However, the
practice of training of employees is not comprehensive. Compensation is a core
motivational tool for employees. But this motivation is negatively going to reflect on the
organizational performance in MoND. It is impossible to manage an organization without
having adequate information on how well its employees are performing. A human resource
management decision is not carried out by sufficient information on employees’
performance.

The influence of Human Resource Management practices on organizational performance

has been a broadly researched area. But unfortunately, inadequate numbers of studies have
been conducted in this area context of Ethiopia. Such studies have been conducted in
business organization. The nature of business organization is completely different from
security organization. The result shows human resource management practice has positive
influence on organizational performance. However, the influence of human resource
management practice on organizational performance has not been adequately addressed in
security organization particularly in Ministry of National Defense. Thus, there is a need
for greater understanding of the link between human resource management practice and
organizational performance.

Taking all these facts in to account, this study will intend to assess the influence of Human
Resource Management practice on Organizational Performance. In addition it will
investigate the influence of MoND’s four human resource management practice
(recruitment and selection, training and development, performance appraisal and
compensation) on organizational performance.

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The results of the study will help MoND to implement appropriate human resource
management policies, strategies and practice to enhance organizational performance. The
study will also contribute to the body of knowledge by providing information on the
relationship between human resource management practice and organizational
performance.

1.2Research Questions and Hypothesis

In order to achieve the purpose of this study, five basic questions will raise. From these
research questions, specific hypotheses will be formulated. The hypotheses will be
concerned with the influence of human resource practice (recruitment and selection,
training and development, performance appraisal and compensation) on organizational
performance in MoND. Therefore, the basic research questions and hypotheses for this
study are as follows:

1) What is the relationship between human resource management practice and

organizational performance at MoND?
H01: There is significant relationship between human resource management
practice and organizational performance at MoND?
2) What is the relationship between Recruitment and selection and organizational
performance at MoND?
H02: Recruitment and selection positively influences on organizational
performance at MoND.
3) What is the relationship between training and development and organizational
performance at MoND?
H03: Training and development positively influences on organizational
performance at MoND.
4) What is the relationship between performance appraisal and organizational
performance at MoND?
H04: Performance appraisal positively influences on organizational performance at
MoND.
5) What is the relationship between compensation and organizational performance at
MoND?

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 H05: Performance appraisal positively influences on organizational performance at
MoND.

1.3Objectives of the Study

The general objective of this study will be examining the influence of Human Resource
Management practice on organizational performance at Ministry of National Defense.

The specific objectives of this study will be:-

1) To assess the relationship between human resource practice and organizational

performance at MoND.
2) To identify the influence of Recruitment and selection on organizational
performance at MoND.
3) To identify the influence of Training and Development on organizational
performance at MoND.
4) To identify the influence of performance appraisal on organizational performance
at MoND.
5) To identify the influence of Compensation on organizational performance at
MoND.

1.4 Significance of the Study

This study will have great significance in several ways. First of all, the finding of the study
will help Ministry of National Defense to come up with appropriate human resource
management policy, strategies and practice that improve organizational performance.
Secondly, the research findings will help leaders to examine the success and challenges of
human resource management practice which are currently being implemented in MoND.
The findings also will be important to identify the most determinants factor that can
enhance organizational performance.

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In addition to this, the finding of this study will added value to the knowledge of other
aspect of human resource management practice and organizational performance. And
finally it will give direction for other researcher that needs to conduct further study in this
subject matter.

1.5 Scope of the Study

This research mainly focuses on the influence of human resource management practice on
organizational performance at Ministry of National Defense. The scope of the study will
be geographically limited to the Head Quarter of Ministry of National Defense and Ground
Force. Because of the large number of participants, Air Force, Special Force and Corps
will not be involved in this study. This study also will delimit to only four human resource
management practices that are recruitment and selection, training and development,
performance appraisal and compensation.

1.6 Limitations of the Study

The major limitation of this study might be relatively small number of sample respondents.
This is as a result of some constraints such as time and lack of sufficient fund. But this
small number of sample size will not affect the result of this research. Other variables
beyond the four human resource management practice (recruitment and selection, training
and development, performance appraisal and compensation) and organizational
performance will not be considered in this study.

1.7 Operational Definition of Terms

Human resource management practice: - A system that attract, develops, motives and
retains employees to enhance organizational performance.

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Recruitment and selection: - The process of identifying the needs for a job, defining the
requirement of the position and the job holder, advertising the position and choosing the
most appropriate person for the job.

Training and development: - Education activities within the organization created to

enhance the knowledge and skills of employees

Performance appraisal: - A regular review of an employee’s job performance and overall

contribution to the organization.

Compensation: - The total amount of the monetary and non-monetary pay provided to an
employee in return for work performed as required.

Organizational performance: - The actual result of an organization as measured against

its intended goals and objectives of the organization.

1.8Organization of the study

This research will consist of five chapters. Chapter one will give the background
information and statement of the problem. It will cover research questions and hypothesis,
objectives, significance, scope and limitation of the study. Chapter two will discuss the key
concept of human resource management and organizational performance that are going to
be used in this research to address the problem in a broader perspective of literature. It will
develop the theoretical framework of human resource management practice and
organizational performance. Chapter three will focus on the research design and
methodology. Sampling techniques, sample size, data source and data collection
instrument will be discussed. Chapter four will present the finding and analysis of the
research. Finally, chapter five will summarize the main findings in the conclusion part and
gives recommendations to assist MoND in the future.

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Chapter Two
Review of the Literature

This chapter will assess relevant theories on the concept of human resource management
practice and organizational performance. The definition, theories and different models of
human resource management practice will be explored. Concepts and measurements of
organizational performance will be also looked at. A review of past findings on the
influence pf human resource management practice on organizational performance will be
presented. At the end of the chapter the conceptual framework for this study will be
presented.

2.1The Concept of Human Resource Management

Human resource management (HRM) is a comprehensive and coherent approach to the

employment and development of people. HRM can be regarded as a philosophy about how
people should be managed, which is underpinned by a number of theories relating to the
behavior of people and organizations. It is concerned with the contribution it can make to
improving organizational effectiveness through people but it is concerned with the ethical
dimension – how people should be treated in accordance with a set of moral values
(Armstrong & Taylor, 2014).

Vincent & Joseph, (2013) define human resource management as a “management function
within organizations that is concerned with people and their relationships at work”.
O'Brien, (2011) also defined human resource management as the management of an
organization's workforce. It is accountable for the attraction, selection, training, and
performance review and rewarding of employees.

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Human Resource management is defined as the managerial utilization of the efforts,
knowledge, capabilities and committed behaviors which people contribute to an
authoritatively coordinated human enterprise as part of an employment exchange to carry
out work tasks in a way which enables the enterprise to continue into the future (Watson,
2010).

The practices of Human Resource management are defined as organizational activities

directed at managing the pool of human resources and ensuring that the resources are
employed towards the fulfillment of organizational goals (Tiwari & Saxena, 2012). While
& Ling, (2012) indicated that human resources management practices can be grouped into
many categories such as: recruitment, selection, training and development, motivation, and
maintenance. Human resource managers have been involved in activities like, recruiting,
interviewing, selecting, and training (Dessler, 2013). There are numerous HR Practices for
the organization to adopt. HR practices contribute to the organization’s bottom line areas
such as recruitment, selection, training, development and performance appraisal which
should be consistent, integrated and strategically focused thus organization build long-term
commitment to retain their work force (Choudhary & Lamba, 2013).

Dessler, (2013) defined Human Resource Management as the process of acquiring,

training, appraising, and compensating employees, and of attending to their labor relations,
health and safety, and fairness concerns.

According to Batti (2014), human resource management is deemed a major management

functions in any organization regardless of its activity. It creates the most crucial condition
for organizational performance. Human resource management is a process that assists
organizations recruit, select and develop staff within the organization.

Human Resource management practice has direct and positive relationship with
organizational performance. Although there are some studies that did not fully confirm
theses positive relationships (Guest, 2003). Their findings continue to be consistent with
the main idea that human resource practices influence employee behavior and generate
positive impacts individual performance and therefore collective organizational level
performance (Jackson, 2014).

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On the other hand strategic human resources management is defined as the comprehensive
set of managerial activities and tasks related to developing and maintaining a qualified
workforce. This workforce contributes to organizational effectiveness. Strategic human
resources management occurs in a complex and dynamic environment within the
organization. A significant trend today is for human resources managers to adopt a
strategic perspective of their job and to recognize critical links between organizational and
human resources strategies (Fottle, 2010)

Therefore, considering the above arguments, it is expected that the extent to which human
resource management practices are strategically oriented toward high performance work
practices (selecting, staffing, intensive training, active employee involvement, a
comprehensive performance assessment, and incentive systems linked to performance),
thus employees will be encouraged in the behaviors and attitudes and reach the need
satisfaction that promotes better individual and employee performance and enables the
organization to reach its goals and reach the full potential of their employees.

2.2Conceptual Framework of the Study

This conceptual framework human resource management practice and organizational

performance tries to explain how a human resource practice has positive influences on
organizational performance.

Recruitment and
Selection

Training and
Development
Organizational
Performance
Performance Appraisal

Compensation

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2.2.1 Recruitment and Selection

Opatha (2010), defined recruitment as the way toward finding and pulling in
appropriately qualified individuals to apply for work opportunities in an association
or organization. It is an arrangement of exercises an organization uses to pull in
work competitors who have the required capacities and mentalities. Recruitment is the way
toward producing a pool of qualified candidates for hierarchical employment
opportunities.

Selection is the way toward settling on the decision of the most appropriate candidate from
the pool of candidates selected to fill the important activity opening (Opatha, 2010).
Selection is the procedure by which particular instruments are locked in to look over the
pool of people most appropriate for the activity accessible (Ofori & Aryeetey, 2011).

Selection includes the utilization of at least one strategies to evaluate candidate's

appropriateness with a specific end goal to settle on the right choice and can be on the
other hand observed as a procedure of dismissal as it rejects various candidates and select
just a couple of candidates to fill the opening. Subsequently, choice capacity might be a
negative capacity as opposed to a positive capacity (Gamage, 2014). As per Gamage
(2014) the targets of choice capacity are to get the opportune individual to the correct
activity, build up and keep up a decent picture as a decent business, and keep up the
selection procedure as savvy as could be expected under the circumstances. Selection is a
critical angle to consider for organizations because of various reasons. Regularly the
execution of organizations relates specifically to the general population working inside
it, which means the opportune individuals should be enlisted to guarantee
authoritative achievement (Henry & Temtime, 2009).

2.2.2 Training and Development

A high level of a skilled and competent workforce can contribute to the firm`s success by
developing a comprehensive and internally cohesive human resource management system
(Beh, Han Loo, 2013)

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Training is necessary because many changes come in a competitive environment, the
current market nowadays faces increasingly rapid amount of changes in technology,
system, and products (Awan & Sarfraz, 2013)

Development is also defined in this study as the use of the use of strategies such as career
planning, job rotation, coaching, mentoring, job training, and proficiency courses such as
technical courses and professional certifications to improve the current and future job
performance of employees. It also involves existence of a cordial atmosphere in
organizations that encourage employees to add value to them to enhance their current and
future goal attainment in a cost effective ways.

According to Saraswathi (2010), human resource development in organizational context is

a process by which the employees of an organization are aided in planning a way to: obtain
or hone capabilities required to perform various functions associated with their present or
expected functional roles; develop their general capabilities as individuals and discover
and exploit their own inherent potentials for their own, and, or organizational development
processes; develop an organizational culture in which supervisor-subordinate relationship
is positive or strong; teamwork and collaborations among sub-units are strong and
contribute to the professional well-being, motivation and the pride of employees. Human
resources include knowledge, skills, abilities and experience controlled by an organization
that enables it to improve upon its performance, competitiveness, innovation, efficiency
and effectiveness. This is because, employees skills, knowledge and abilities are among
the most distinctive and renewable resources upon which an organization can draw their
strategic management and comparative advantage.

Accordingly, Luthans, (2011) made the submission that, optimal use of human resource
can be a key source of competitive advantage because it is difficult for competitors to
replicate. This resource-based view has led to considerable attention in employee
development focusing on performance

2.2.3 Performance Appraisal

Performance appraisal is a method by which the job performance of an employee is

measured in terms of quality, quantity, cost, behavior and time. He further explained that it

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is conducted by self, peers, seniors, and junior. However, generally, in the formal method,
it is conducted by the immediate manager or supervisor under whom the person is directly
working. A performance appraisal is a part of measuring, comparing, finding, guiding,
correcting and managing career development of the employees, (Mullins, 2007). The
Journal of Global Business and Economics (2010) established that performance appraisal
is the process of gathering, recording and critically analyzing information about the
relative importance of employees to the organization. Performance appraisal is a study of
present achievements, and failures, personal strengths and weaknesses, and suitability for
incentives, rewards and recognition, increased pay scale, promotion or further training.

An appraisal is the evaluation of worth, quality or merit. The appraisal should measure
both performances in accomplishing goals, plans and performance as a manager. It is the
evaluation of present performance and future capabilities. “Performance appraisal is a
systematic periodic and impartial rating of employee’s excellence in matters about his
present job and his potentialities for a better job”. “It is the process of evaluating the
performance and qualifications of the employees in terms of the requirements of the job
for which he is employed for purposes of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential
treatment among the members of a group as distinguished from actions affecting all
members equally. In addition, Douglass (1999) sees performance appraisal as a method of
acquiring and processing the information needed to improve an individual employee’s
performance and accomplishments. Likewise, performance appraisal is defined as the
process of evaluating the performance of employees, sharing that information with them
and searching for ways to improve their performance. Thus, performance appraisal can be
seen as the process by which a manager or consultant examines and evaluates an
employee’s work behavior by comparing it with preset standards, documents the results of
the comparison, and uses the results to provide feedback to the employee to show where
improvements are needed. An effective performance appraisal system has five components
which include performance planning, managing of performance, performance review/
assessment, performance monitoring and rewarding of performance. Performance
appraisals are employed to determine who needs what training, and who will be promoted,
demoted, retained or fired (Delery & Doty, 1996).

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2.2.4 Compensation

In competitive business environment both locally and globally, many companies

attempting to identify innovative compensation strategies. It is directly linked to improving
organizational performance. Incentive compensation form has been a common feature of
employment contract. The use of incentive systems is not only a defense mechanism on the
part of failing firms, but more often is also a positive action in recognition of the strategic
role of compensation in furthering corporate goals (David and Robbins, 2006). The basic
of incentive pay and how it correlates with known organizational behavior theories can be
linked with achievement of corporate goals through the use of rewards system. Many
researchers have suggested that, utilization of human resources in organizations is often
below optimum levels, because employees rarely perform at their maximum potential
(Huseild, 1995). Therefore, organizational attempts to obtain discretionary efforts from
employees are likely to provide benefits in excess of costs (Huseild, 1995). There are
many approaches to incentive compensation, such as bonuses, stock purchase, profit
sharing and so on.

Compensation and benefits function is very important to ensure effective compensation

and benefits package can significantly increase the motivation of an individual to increase
their performance. Employee compensation refers to all forms of pay or rewards going to
employee and arising from their employment and it has two main components (Dessler,
2008). Compensation management is one of the strapping features that organizations use to
attract and retain its most valuable and worthy assets. It is includes financial and non-
financial rewards. Direct compensation (financial) is in the form of wages, salaries,
incentives, bonuses, commissions and so on. Indirect compensation is the form of non-
financial benefits like vacation, annual leave entitlement, medical and hospitalization
benefits, employer retirement contribution and etc.Today’s employees not only require
money to fulfill their basic needs but they alsonecessitate various non-financial rewards
and benefits often known as the “Fringe Benefits”. These include bonus, retirement
benefits, gratuity, educational, medical facilities including family and etc. (Khan,
Aslam&Lodhi, 2011). For example, INTEL Corporation designed the benefits to keep
their employees as the most important assets to stay in healthy and productive. Their

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packages is tolerant and personalized, in many cases letting their employees choose the
options that are right for themselves and their family.

The compensation management is considered to be a complex process which requires

accuracy and precision. Failure carried out these properly, may lead to organizational
failure. An ideal compensation policy encourages the employees to work harder and with
more determination that can help the organizations to set the standards that are job related,
realistic and measurable. The policies should have integration with other practices of
human resource management and may provide growth opportunities to its employees and
to create a vigorous competition among the employees in order to have an urge work more
efficiently and proficiently. Again, the compensation management policy is used to
motivate and retain employees and ultimately its aims at improving the overall
effectiveness of an organization. The organization should develop its compensation
structures in accordance with its goals, objectives and strategies. Compensation
management is advantageous to both employees and employers. It is beneficial for the
employer in the sense that it lowers the absenteeism rate. Low satisfaction from job and
increased absenteeism rate are the consequences arising from the insufficient and
inadequate benefits (Khan, Aslam, Lodhi, 2011).

The purpose of any compensation, whether direct or indirect, is to recognize the

performance value of employees and to establish ways to motivate them to work with full
efficiency and could link with the improvement organizational performance. Effective
rewards system can significantly increase the motivation of individuals to increase their
performance. In real situation people not only looking for a job that suitable with their
qualification and talents only but they also consider the compensation and benefit that
employer can provide to them in term of salary and other benefits. This topic is very
important because no body work for free and everybody wants to be valued. An empirical
study shows that five factors of employee satisfaction have been chosen namely
empowerment and participation, working conditions, reward and recognition, team work
and training and personal development (Ali & Ahmed, 2009).

2.2.5 Organizational performance

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Studies on SHRM emphasize the role of human resources practices in achieving
organizational objectives (Combs, 2006; Ferguson; Reio Jr., 2010; Huselid; Jackson;
Schuler, 1997; Oliveira; 2011; Wright; Mcmahan, 1992). However, one of the key
challenges of understanding organizational performance lies in the alignment of its
theoretical definition, methodological design and research objectives.

Since organizational performance is a multidimensional concept, it seeks to measure

companies’ success in achieving the objectives proposed for different stakeholders in a
given period (Richard, 2009). The various dimensions of organizational performance seek
to encompass the diversity of interests in the company’s success. One of the most
influential approaches states that organizational performance is made up of three
dimensions that can be considered as spheres that superimpose and complement each other
(Venkatraman & Ramanujam, 1986). The wider dimension of organizational performance
would be organizational effectiveness, including economic and social goals that take into
consideration the Organization’s relationship with society and its stakeholders. The
operational dimension encompasses aspects such as technology, innovation, productivity
and quality, and mediates the relationship between the company’s resources and its
financial performance. Finally, the financial dimension incorporates aspects of financial
returns, market value and growth (Combs; Crook; Shook, 2005; Venkatraman;
Ramanujam, 1986).

Far from a consensus, the debate on organizational performance recognizes the existence
of different approaches and metrics. Most of authors recognize the importance of linking
performance measures to a theoretical approach and even to a greater construct that
explains the strategic advantage (Combs; Crook; Shook, 2005; Richard, 2009;
Venkatraman; Ramanujam, 1986).

2.3Relationship between HRM Practices and organizational

Performance

The main premise of studies on SHRM is that human resource management practices are
causal antecedents of performance (Barney; Wright, 1998; Huselid, 1995). Therefore, to
analyze the causal relationship among constructs, it is necessary to evaluate longitudinal
data. Furthermore, due to the very nature of the process by which people management

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practices develop resources and capabilities that impact performance, it is argued that there
is a maturation period for the results to be observable. Therefore, it is recommended the
observation of longitudinal data, in a period compatible with the development of resources,
and a lagged analysis between cause and effect (Wright, 2005).

Another important aspect of performance evaluation is in its hierarchical nature, with

different levels of analysis or spheres of influence: business, industry and institutional
context (Mcgahan; Porter, 1997). The evaluation of superior performance depends on the
competitive environment in which the company is inserted. Similarly, the effect of
investments in human resources depends on the context and the level of expertise of
human capital (Crook, 2011). The more human capital-intensive sectors demand more
investments, whilst less intensive ones may seek competitiveness from other strategic
factors (Shaw; Park; Kim, 2013). Seen in these terms, results from HRM analysis between
sectors with different specificities of resources cannot be comparable (Crook, 2011).

Finally, it is important to consider that the relationship between investments in HRM and
performance is mediated by resources and capabilities generated in the process. This
aspect can be even more relevant when one observes only the financial performance of the
organization. This is because the value created may not revert into superior profitability if
appropriated by transaction partners (Coff, 1999). In the bargaining process for the value
created, employees increase their bargaining power as they become more specialized and
not easily replaceable (Coff, 1999). In addition, managers are recognized as actors in
privileged condition of appropriating value, given their access to important information
(Coff, 1999; Coff; Lee, 2003). The influence of employees and managers in the process of
distribution of the value created has an impact on the costs of the company and,
consequently, on its profitability (Blyler; Coff, 2003). In this sense, the relationship
between HRM and operating performance can be more easily observed, both from the
direct relationship between the two concepts and the fact that the operational performance
precedes the process of appropriation (Combs, 2006; Crook , 2011). Financial variables,
however, are more impacted by the process of appropriation and may not reflect the value
created by the resources.

Over the years, researchers have devoted a great deal of time and attention to establishing
and examining the linkage between HRM practices and organizational performance.

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Based on the evidence and findings, it is becoming increasingly clear that HRM is an
important component that can impact on organizational effectiveness leading to improved
performance.

Khan (2010) conducted a study in Pakistan to investigate the effect of human resource
management practices such as recruitment and selection, training and development,
performance on organizational performance and he found a significant positive
relationship between these practices and firm performance. Boohene and Asuinura (2011)
stressed that HRM practices, specifically, recruitment and selection, performance
appraisal, compensation, and training and development have positive impact on
organizational performance.

In a recent study conducted by Soomro, (2011) it was found that HRM practices (training,
selection, career planning, employee participation, job definition, performance appraisal
and compensation) correlated positively with the employee performance.

Chapter Three
Research Design and Methodology

This chapter will describe the research design and methodology used to determine the
influence of human resource management practice on organizational performance at
Ministry of National Defense. The structure of this chapter will begin with the research
design and then discuss the study population and sample, sampling techniques, data
gathering instruments, reliability and validity, dependent and independent variables and
data analysis procedures.

3.1Research Design

This research will be conducted with the purpose to assess the influence of human resource
management practice on organizational performance at Ministry of National Defense. This
research will be an interpretive research. The aim will be to see the relationship between

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human resource management practice and organizational performance through the eye of
employees being studied. The approach used to gather data and address the research
questions of this study will be Quantitative approach. This approach will be appropriate for
this study because it will lead to accurate conclusion.

A correlation descriptive survey design describe a given state of affairs as it exists at

present (Fraenkel and Wallen, 2008). The reason for the selection of such approach is that
this research involves assessing the influence of human resource management practice on
organizational performance and collecting data to test hypothesis.

A cross-sectional survey design was adopted in this study. This is where data is collected
at one point in time from a predetermined population (Fraenkel and Wallen, 2008). The
variables are measured once through a survey where the opinions of the respondents are
illustrated.

3.2Sampling Techniques

The target population of the study includes both leaders and subordinates who are working
in Ministry of National Defense. According to organizational structure of Ministry of
National Defense, there are two forces. They are Ground Force and Air Force. Because of
the number of employees they have, Ground Force will be deliberately selected for this
study. The total populations of the study will be 2340 employees who are working in Head
Quarter of Ground force.

A stratified random sampling technique will be applied so as to obtain a representative

sample of respondents from MoND. This technique is preferred because there are several
sections I each department under the Ground Force. In order to determine the number of
respondents from each section, first the population will be partitioned into six departments
called strata and then each department will be divided in to sections. The number of staff
in each section will be divided in to leaders and subordinates. Secondly, a desired sample
size will be determined in each section. Then proportional number of sample will be
allocated to each department of Ground Force and finally sample will be drawn from each
section. After having determined the number of respondents from each stratum, the

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respondents will be selected using simple random sampling technique. All department and
section heads are selected using availability sampling. To summarize, the researcher will
use a combination of stratified and simple random sampling techniques to select samples.
Since it ensures that the sample become representative and improves efficiency of data
collection.

In order to get sufficient and relevant information from the respondents, employees who
have worked for at least two years will be participated as respondents in this study.
Leaders must have been also a year in the current leadership position. This is for the reason
that at least one year work experience is enough to identify the current situation of human
resource management practice and organizational performance.

3.3Population and Sample Size

The total population for this study will be 2340 employees who are working in six
different departments of Ground Force. The size of sample depends upon the amount of
money available and time required for the study purpose. These factors should be kept in
to consideration while determining size of sample (Kothari, 2008).

In determining the sample size for the study, Guilford and Flruchter (1973)'s formula for
estimating sample size is used. The formula is expressed below:

The formula: - N= N/ 1+ Q²N Where n is Sample Size, N is Size of Population and Q is

0.05

Sample size for the study is N/ 1+ Q²N = 2340/1+ 0.05² X 2340 = 341.6 which is
approximately equals to 342. Therefore, in order to reach at statistically valid conclusion,
the researcher will select 342 sample respondents. Summarized population and sample size
are presented in the table below.

Table 1: Population and Sample Size

Subordin Sample
Institutions Population Leader
ates Size
Ground Force Head Quarter 198 5 25 30
Operation 448 8 58 66
Human Resource management 178 6 20 26
Logistics 398 11 47 58

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 Training 756 16 93 109
General service 362 11 42 53
TOTAL 2340 57 285 342

3.4 Source of Data and Data Collection Instruments

In order to obtain relevant data for this study, both primary and secondary source of data
has been considered. According to Fraenkel and Wallen (2008) primary data source is data
prepared by individuals who is participant in or a direct witness to the event that is being
described. This type of data is more accurate.

Basically this research is empirical in nature. Because of this, primary data will be
collected from leaders and subordinates to address the research questions of the study. Due
to the objective of the research, the more emphasis has been given to primary data source.

For better understanding and explanation of the research problem, the researcher will
collect data from secondary data sources. Information from secondary data source used to
supplement data obtained from primary data source. The secondary source is a document
prepared by an individual who is not a direct witness to an event but who obtained
information from someone (Fraenkel and Wallen, 2008). Secondary data will be collected
from books, journals (articles) and internet. This data used to establish the theoretical
framework and to design questionnaire. The main advantage of using secondary data for
this research will be to validate and compare the data obtained through questionnaire.

For collecting primary data this study will use questionnaires and interviews. The
questionnaires will be based on the research questions. This is because questionnaires are
advantageous in collecting large number of data from respondents and help
respondents to fill the questionnaire at their convenient time without the interviewer
bias. In order to be understandable by all respondents, the questionnaires will be translated
in Amharic.

3.5 Data collection procedure

First the researcher will collect official letter from PESC Information Systems College
which express about a researcher who is conducting MA research on the influence of

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human resource management practice on organizational performance at Ministry of
National Defense. This official letter will help researcher to collect necessary data in effect
of the consent of MoND.

By the use of a combination of stratified and simple random sampling techniques, the
researcher personally will give the questionnaires to both leaders and subordinates to fill.
The researcher will distribute 57 questionnaires for leaders and 285 questionnaires for
subordinates. After a week, the researcher personally collects all completed questionnaires
from each employee. After the questionnaires are collected, the researcher will check the
respondents answered all relevant questions.

For respondents who are not able to fill out the questionnaire on the first visit of the
researcher, one week will be given to do so for collection at a later date. After two weeks,
all questionnaires will be collected and will start analysis.

The researcher will not conduct interview with leaders. Because of the epidemic of
COVID-19, it is difficult to conduct interview with leaders to collect the necessary
information.

Secondary sources of data will be collected from books, journals (articles), annual reports
and internet. They are useful in obtaining relevant data and information to supplement the
primary data.

3.6 Data Analysis Method

Descriptive statistics will be applied to compile and analyze the data. The collected data
will be analyzed up on receiving completed surveys by using descriptive and inferential
statistics. The survey data will be processed using SPSS version 24. The relevant data will
be coded, summarized and then transferred to SPSS version 24 to be analyzed and
presented. Data collected from the respondents will be presented and analyzed using
frequency counts, descriptive statistics

The researcher will use frequency tables to summarize the characteristics of sample
respondents in the form of frequency and percentage. Frequency and percentage are used
to present the data by the help of SPSS. And Tables and graphs will be used to ensure

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easily understanding of the analysis. Finally, the result of statistical analysis will be
summarized, tabulated and interpreted appropriately.

A two-tailed Pearson Correlation analysis will be used to investigate the relationship

between human resource management practice and organizational performance.
Correlation coefficient (r) is normally reported as a decimal number somewhere between -
1.00 and +1.00 (Huck, 2012). Its result gives the researcher an idea of the extent of the
relationship between the two variables (Human resource management practice and
Organizational performance). According to Huck (2012) a positive correlation coefficient
(r) indicates a positive and direct relationship and a negative correlation coefficient (r)
indicates a negative relationship and an indirect or inverse relationship between the two
variables (leadership styles and organizational commitment). A zero correlation indicates
that there is no correlation between the variables.

The level of significance is defined as the probability a researcher is willing to accept or

reject the null hypothesis when that hypothesis is true (Singh, 2007). For this study
significance level (alpha level) of 0.05 and 0.01 are taken as the standard for a two-tailed
test. It is the probability of the value of the random variable falling in the critical region
(Singh, 2007). In accordance with various researchers the significance levels most
commonly used in research are the 0.05 and 0.01 levels (Huck, 2012).

The hypothesis test procedure for this research will be if the p-value is less than the alpha
level of 0.05 (P<0.05) or 0.01 (P<0.01), the researcher will reject the null hypothesis and
conclude that there is significant correlation between human resource management
practice and organizational performance. On the other hand if the p-value is greater than
the alpha level of 0.05 (P>0.05) or 0.01 (P>0.01), the researcher will fail to reject the null
hypothesis and conclude that there is no significant relationship between the two variables.

3.7Variables of the Study

For this research Human resource management practice is independent variables and
organizational performance is dependent variables. Four separate measures of human
resource management practice will be used as independent variables. They are recruitment
and selection, Training and development, performance appraisal and compensation.

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3.8Reliability and Validity of Data Collection Instruments

Reliability (internal consistency) and validity (construct validity) are the statistical criteria
used to assess whether the research provides a good measure. They are the two important
concepts that should be considered when the researcher select or design the instrument.
According to Fraenkel and Wallen (2008) reliability refers to the consistency of scores or
answers from one administration of an instrument to another and from one set of items to
another. If an instrument is reliable, it provides consistent result.

The term validity refers to the appropriateness, meaningfulness, correctness, and

usefulness of any inferences a researcher draws based on data obtained through the use of
an instrument (Fraenkel and Wallen, 2008). It is the degree to which an instrument
measures what it is supposed to measure (Kothari, 2008). Reliable measuring instrument
does contribute to validity, but a reliable instrument need not be a valid instrument
(Kothari, 2008).

Cronbach’s alpha is a commonly used test of internal reliability. A computed alpha

coefficient varies between 1, denoting perfect internal reliability, and 0, denoting no
internal reliability. The figure of .75 or more usually is treated as a rule of thumb to denote
an accepted level of reliability (Singh, 2007).

The questionnaire will be distributed to 30 employees who are randomly selected to test
the content validity of the instrument and also to check the clarity, length, word
ambiguity and structure. The sample respondents comment and suggestion will be
included before the final distribution of the questionnaire.

3.9Ethical Considerations

During conducting this research, maximum effort will be made to keep the data collected
confidential. A guaranty will be given to all respondents where their personal data will not
be reported in this study. The final copy of this research report will be given to Ministry of
National Defense.

Work plan and Budget

4.1 Work plan

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This work plan is a time line that shows when specific tasks will be accomplished

Time schedule 2023

Activity February March April may June july
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Literature
Review
Data collection
Data analysis
Presentation
First draft report
Final report
Publication
Each task will be performed by researcher.
The researcher will conduct the study in Addis Ababa.

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4.2 Budget

No Item Measurement Quantity Unit Total

Price Price
1 Office Supplies
1.1 Lap top Computer Unit 1 20000.00 20000.00
1.2 Compact disc CD Unit 20 20.00 400.00
1.3 Flash disc 4Gb Unit 2 300.00 600.00
1.4 Computer paper A4 Packet 5 250.00 750.00
1.5 Pen Unit 10 25.00 250.00
1.6 Pencil Unit 5 5.00 25.00
2 Communication
2.1 Telephone charge Period 1000 min 1.00 1000.00
2.2 Internet service period 2hr per day 12.00 per hr 1200.00
2.3 Transport service Trip Estimated Estimated 4000.00
3 Publication
3.1 Questioner print Pcs 250*3=750 4.00 3000.00
3.2 Draft report print pcs 160 pages 4.00 640.00
3.3 Final report color print pcs 160 pages 10.00 1600.00
3.4 Binding and laminating pcs 5 50.00 250.00
4 Other cost
4.1 Per diem for researcher Day 30 days 250.00 7500.00
4.2 Type writing service Pages 500 4.00 2000.00
Total 43215.00

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Reference
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Fraenkel Jack R. and Wallen Norman E. (2008). How to Design and Evaluate Research in
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Guest D. (2011) Human resource management and performance: still searching for some

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Kothari, C.R. (2004). Research Methodology: Method and techniques (2nd Ed.). New
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 YARDESTIC INTERNATIONA COLLEGE
School of Graduate Studies
Department Of Business Administration
My name is chimdesa chalchisa (0900281376). I am second year MA student. Currently I
am conducting research on “the effect of Human Resource Management Practice on
Organizational Performance: In case of Ministry of National Defense.IN Addis Ababa”

The objective of the study is examining the influence of Human Resource Management
practice on organizational performance at Ministry of National Defense.

To make the study fruitful, the respondents’ intense cooperation in filling the questionnaire
is highly valuable. Hence, the researcher highly demands your support to objectively fill
the questionnaire. The researcher also wants the respondents to assure that the data to be
collected will be used only for the acadamic purpose and the personal data of the
respondents will be kept confidential.

Thank you in advance!

PART ONE

The following questions concern about your personal information. Its confidentiality is
assured.

1) Sex of Respondents

Male Female

2) Current job title or

Responsibility………………………………………………………
3) Total service year for the current position ………………………………….
4) Military Rank………………………………………………………………

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 5) Age group
21- 25 years 26 – 30 Years Above 41 years

1 -35 Years 36 -40Years

6) Highest Level of Education

TVET Diploma First Degree Master’s Degree

Doctorate Degree

Others, please specify…………………………………

7) Your Marital Status

Single Married Divorced

Other …………………………………

PART TWO

The following questionnaires describe the levels of agreement in each of the items below
with regards to the Human resource Management Practice of Ministry of National
Defense. There are five scales in front of each question. Please tick (√) in the box to the
extent of your agreement or disagreement with each statement regarding Recruitment and
Selection Practice using the scale below (1 – 5).

1 2 3 4 5
Strongly Disagree (SD) Disagree (D) Neutral (N) Agree (A) Strongly Agree (SA)

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 SD D N A SA
Code Recruitment and Selection
1 2 3 4 5
RS1 Appointments in MoND are based on merit.
RS2 Advertisements are used by the MoND to recruit
RS3 There is formal induction, orientation and familiarization process
designed to help new recruits understand the organization
RS4 In MoND, line managers and HR managers participate in the
selection process.
RS5 Selection system selects those having the desired knowledge,
skills and attitude
RS6 Vacancies are filled from qualified employees internally

PART THREE

The following questionnaires describe the levels of agreement in each of the items below
with regards to the Human resource Management Practice of Ministry of National
Defense. There are five scales in front of each question. Please tick (√) in the box to the
extent of your agreement or disagreement with each statement regarding Training and
Development Practice using the scale below (1 – 5).

1 2 3 4 5
Strongly Disagree (SD) Disagree (D) Neutral (N) Agree (A) Strongly Agree (SA)

SD D N A SA
Code Training and Development
1 2 3 4 5
TD1 MoND has a training and development policy applicable to all
employees.
TD2 Training and development positively improve the organizational belief.

TD4 Training and development help create better corporate image which
aids organizational development, Organizational Culture and
Performance.
TD5 The training needs of the employees in our organization are assessed on the
basis of their performance appraisal

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 TD6 Training in our organization includes social skills, general problem solving
skills and broader knowledge of the organization and business.
TD7 When employees arrive from training, supervisors encourage them to share
what they have learned with other employees
TD8 Supervisors support the use of techniques learned in training that employees
bring back to their jobs.
TD9 Supervisors give employees the chance to tryout their training on the job
immediately.
TD1 Supervisors ease the pressure of work for a short time so employees have a
chance to practice new skills that are taught in training.
0
TD1 I am motivated to learn the concepts that will be covered in the training
program.
1
TD1 Training has helped improve my job performance

2
TD1 Training for motivation towards performance improvement enabled me to
contribute to increased productivity
3
TD1 Training program helps me to improve the quality and quantity of my work.

4
TD1 Training program enable the employees to be accountable and authoritative in
making decision
5
TD1 Training helps to improve employee –employee relationship

6
Td17 Training helps to the motivation level of employees

TD1 Training enables employees to be more productive

8
TD1 I am actively involved in learning during training process

9
TD2 Training course facilitate you in improving personal competency

PART FOUR

The following questionnaires describe the levels of agreement in each of the items below
with regards to the Human resource Management Practice of Ministry of National
Defense. There are five scales in front of each question. Please tick (√) in the box to the

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extent of your agreement or disagreement with each statement regarding Performance
Appraisal Practice using the scale below (1 – 5).

1 2 3 4 5
Strongly Disagree (SD) Disagree (D) Neutral (N) Agree (A) Strongly Agree (SA)

SD D N A SA
Code Performance Appraisal
1 2 3 4 5
PA1 Performance appraisal is fair in MoND
PA2 There is a formal and written performance appraisal system in
MoND
PA3 I am informed of how my performance evaluation is done
PA4 Performance of employees is measured on the basis of objective
quantifiable results
PA5 The objectives of the appraisal system are clear to employees
PA6 Appraisal system has a strong impact on individual and team
performance
PA7 Appraisal system helps me to grow and develop my career
PA8 Employees are provided with performance based feedback and
counselling
PA9 I feel performance appraisal is just a formality in this organization

PART FIVE

The following questionnaires describe the levels of agreement in each of the items below
with regards to the Human resource Management Practice of Ministry of National
Defense. There are five scales in front of each question. Please tick (√) in the box to the

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extent of your agreement or disagreement with each statement regarding Compensation
Management Practice using the scale below (1 – 5).

1 2 3 4 5
Strongly Disagree (SD) Disagree (D) Neutral (N) Agree (A) Strongly Agree (SA)

SD D N A SA
Code Compensation Management
1 2 3 4 5
CM1 There Is compensation management in MoND.
CM2 I am satisfied with compensation management of MoND
CM3 MoND provides a general increase of salary.
CM4 MoND provides a cost of living increase .
CM5 MoND has a bonus or incentive plan.
CM6 MoND has a formal employee merit review process. .
CM7 Salary and other benefits are comparable to the market.
CM8 The compensation for all employees is directly linked to his/her
performance.
CM9 Profit sharing is used as a mechanism to reward higher
performance.
CM10 Compensation administrators always seek to achieve internal
equity and consistency through organizational belief.
CM11 I am paid adequately for the work I do.
CM12 Pay increments offered by our organization are satisfactory.
CM13 MoND follows the policy of matching pay with performance.
CM14 The pay I receive is competitive compared to that of employees
doing similar work in other organizations.
CM15 Rewards and incentives are fairly distributed in MoND
CM16 Rewards in MoND are strictly linked to employee’s performance.
CM17 The existing reward and incentive plan does not motivate me for
better performance.
CM18 The salary increments given to employees who do their jobs very
well motivates me.
CM19 Financial incentives motivates me more than non-financial
incentives.
CM20 I am satisfied with the salary I draw at present.
CM21 I am satisfied with the benefits I receive.

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 PART SIX

The following questionnaires describe the levels of agreement in each of the items below
with regards to the Human resource Management Practice of Ministry of National
Defense. There are five scales in front of each question. Please tick (√) in the box to the
extent of your agreement or disagreement with each statement regarding Organizational
Performance using the scale below (1 – 5).

1 2 3 4 5
Strongly Disagree (SD) Disagree (D) Neutral (N) Agree (A) Strongly Agree (SA)

SD D N A SA
Code Organizational Performance
1 2 3 4 5
OP1 My relationship with my supervisor is a harmonious one
OP2 My relationships with members of my work group are cordial as
well as professional
OP3 The goals of MoND are clearly known to me.
OP4 I understand the purpose of MoND
OP5 I have enough input in deciding my work-unit goals
OP6 I am personally in agreement with the stated goals of my work
units.
OP7 The priorities of MoND were understood by its employees
OP8 Other work units are helpful to my work unit whenever
assistance is requested.
OP9 I have the information that I need to do a good job.
OP10 MoND has a skilled and competent personnel and capable of
providing services to guests.

Thank you

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