HUMAN CAPITAL MANAGEMENT PRACTICES AND ORGANIZATIONAL PERFORMANCE OF DEPOSIT MONEY BANKS IN RIVERS STATE

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Abstract

The study has examined the relationship human capital management practice and organisational performance in commercial banks in Rivers State. In this research, the survey research design method. The population of the study comprises one hundred and twenty (120). The Taro Yemen’s formula was used to determine the sample size of 96. In this study both the primary and secondary data were used. Data collection was done using a structured questionnaire. A self-design questionnaire on human capital management practices and organizationl performance was used specifically for data collection. The method used to analyze the data was simple descriptive method stated in tables and expressed in percentage. The chi-square statistical test was employed. The hypotheses will be tested electronically with SPSS Version 22. The study revealed that there is a significant relationship between human capital management practices and organisational performance in commercial banks in Rivers State. Based on the findings of the study, we recommended that the organizations should implement these practices to achieve the desired goals, the organizations should utilize a variety of reward and recognition programs to drive behavior that promotes high performance, organization should conducts extensive training program for its employees relevant to the changing needs of jobs and business and job performance should be considered an important factor to determine the compensation of employee’s performance.

Table of Contents

Title Page    i

Cover Page ii

Abstract      iii

Certification         iv

Declaration v

Dedication  vi

Acknowledgement         vii

Table of Contents vii

List of Tables       ix

List of Figures      x

CHAPTER 1        1

INTRODUCTION         1

1.1 Background of the Study  1

1.2 Statement of Problems:     2

1.3 Objective of the Study:      3

1.4 Research Question:  3

1.5 Research Hypotheses:       4

1.6 Significance of the study   4

1.7 Scope and Limitation of the Study       5

1.8 Definition of Terms 5

CHAPTER 2        7

LITERATURE REVIEW        7

2.1 Conceptual framework      7

2.1.1 Concept of Human Capital Management Practices        8

2.1.2 Dimensions of Human Capital Management Practices   9

2.1.3 Organizational Performance     11

2.1.4 Measures of Organizational Performance    14

2.2 Theoretical Framework     16

2.2.1 Resource Based View     16

2.2.2 Human Capital Theory  17

2.3 Empirical Framework       17

CHAPTER 3        21

RESEARCH METHODOLOGY      21

3.1 Research Design      21

3.2 Population of the Study    22

3.3 Sample Size Determination         22

3.4 Sampling Techniques        23

3.5 Source and Method of Data Collection 24

3.6 Methods of Data Collection        24

3.7 Questionnaire Design        25

3.6 Data Analytical Techniques        26

3.7 Reliability and Validity     27

CHAPTER 4        28

DATA PRESENTATION AND ANALYSIS       28

4.1Data Collection and Presentation 28

4.2 Data Analysis 29

4.3 Hypotheses Testing 33

4.3 Discussion of Findings      34

CHAPTER 5        36

CONCLUSION, SUMMARY AND RECOMMENDATIONS         36

5.1 Conclusion     36

5.2 Summary       36

5.3 Recommendations   37

Reference    38

Appendix I 40

Appendix II          41

List of Tables

Table 4.1: Questionnaire Administration and Retrieval 28

Table 4.2: showing the age of respondents 29

Table 4.3: Showing the Gender/Sex of Respondents     29

Table 4.4: Showing the Educational Qualification of the Respondents      30

Table 4.5: Showing the Marital Status of Respondents 30

Table 4.6: Employee Compensation and Organisational performance in Commercial Banks In Rivers State.         31

Table 4.7: Employee Engagement and Organisational Performance in Commercial Banks in Rivers State.         31

Table 4.8: Talent Management and Organisational performance in Commercial Banks in Rivers State.         32

List of Figures

Fig. 2.1: A Conceptual Framework on Human Capital Management Practices and Organisational Performance.   7

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Human capital development is the process of helping people to acquire expertise. In an organizational context, it is the process by which organizations help their employees in a continuous and planned way in order to: acquire or sharpen the abilities required to perform various functions associated with their present or expected future roles; develop their general skills as individuals, discover and utilize their inner potential for their own and/or organizational development purposes; develop an organizational culture in which supervisor subordinate relationships, teamwork and collaboration among sub-units are strong and contribute to the professional well-being, motivation, and pride of employees. While analyzing the issue of what contributes to competitive advantages ,more emphasis has been laid on the internal resources which are seen as crucial to sustain effectiveness rather than on external positioning in the industry and the relative balance of competitive forces Penrose‟ work (Maruping, L. M., 2002) shows the beginning of the resource based view of the firm which was later polished  (Johnson J, Griffeth R. W. & Griffin M. 2000, Jonson, M. 2001, Abel, J R.; Deitz, R., 2012). The significance for an organization to build a valuable set of resources and binding them in different and unique ways to develop firm succe4ss has been established by RBV. Unlike traditional assumption competitive advantage doesnot depend on natural resources, technology or economies of scale because they are easily copies. According to RBV competitive advantages depend on the valuable, rare hard to imitate resource that sets within organization. Human capital in a real sense is an „invisible asset‟  (Seymour W. I ., 2003) The importance of the human capital pool (the collection of employee capabilities), and how it is managed through HR processes, becomes apparent, then, to the strategic aims of the organisation.

1.2 Statement of Problems:

Individuals,  organizations  and  nations  increasingly  recognize  that  high  levels  of  skill  and  competence  are essential to future security and success. It is common knowledge that as individuals acquire more education and training during a lifetime, human capital drives the production of goods and services, as well as new innovations in the marketplace.  While  the  economic  value  of  human  capital  cannot  be  questioned,  an  important  concern among scholars is if there is any relationship between human capital development and organization performance. This is the crux of the matter in this study that answer would be provided. Rapid   technological   change,   increasingly   sophisticated   customers   and   the   importance   of innovation has shifted the bases of competition for many business away from traditional physical and financial resources(Cuganesan,2006).The challenge is to ensure that firms have capability to find, assimilate, compensate  and  retain  human  capital  in  the  shape  of  talented  individuals  they need  who  can  drive  a  global  organisation  that  is  both  responsive  to  its  customers  and ‘  the burgeoning opportunities   of   technology   (Armstrong,2006)`.The   banking   industry   is   being buffeted by a storm of trends and challenges. Customers perceive banking products and services as commodities;  shareholders demand  healthy  growth  and  fat margins;  employee turnover  is  a persistent  problem;  and  skilled  talent  is  in  short supply.  While these  challenges  are  faced  in  all corners of the banking enterprise, they have a special impact on human resource departments.

Studies on  Human Capital  Management Practices  in the  banking  industry  are  few and those that have   attempted   to   link   human   capital   management   practices   to   performance   have   given conflicting results (Bassanini and Scarpetta, 2001).Furthermore, most of these studies were done in different environments  from  Kenya and thus the results cannot be generalized to Kenya.  For instance, a study by Olufemy (2009) sought to gain a better understanding of the theoretical and empirical  relationship  between  human  capital  development  practices  and  some  dimensions  of organisational effectiveness of Nigerian Banks.

1.3 Objective of the Study:

The main objective of this study is to examine the relationship between human capital management practices and organisational performance in commercial banks in Rivers State. In specific terms, the study shall:

1.       Examine the relationship between employee compensation and organisational performance in commercial banks in Rivers State.

2.       Examine the relationship between employee engagement and organisational performance in commercial banks in Rivers State.

3.       Examine the relationship between talent management and organisational performance in commercial banks in Rivers State.

1.4 Research Question:

The following research questions will guide the execution of this research work:

1.       Does employee compensation enhance organisational performance in commercial banks in Rivers State?

2.       Does employee engagement influence organisational performance in commercial banks in Rivers State?

3.       Does talent management influence organisational performance in commercial banks in Rivers State?

1.5 Research Hypotheses:

HO: There is no significant relationship between human capital management practices and organisational performance in commercial banks in Rivers State.

HA: There is a significant relationship between human capital management practices and organisational performance in commercial banks in Rivers State.

1.6 Significance of the study

This study is aimed at examining the relationship between employee compensation and organisational growth in commercial banks in Rivers State, it is believed that the completion of this research work will be of immense benefit to all and sundry:

Firstly, this study provides guidance to the management of banks in Port Harcourt, Rivers State, and other industries within and outside the vicinity of Rivers State to understand factors of human capital management practices and its overt importance on the performance of banks. Thus, this study makes suggestions to the management for further implementation, and gives a better understanding on the work environment.

Secondly, policy makers in the three tiers of government will find the recommendations that will follow in the study very useful because it will give sufficient insight into the issues of human capital management practices and its overwhelming influence on the banking industry. Organizational management will see the need to take the issue of strategic human capital management very serious as the impact of it cannot be overemphasized on their companies.

The students and researcher will also benefit from the study because it will serve as a base data for those who might want to carry out further studies in the area.

1.7 Scope and Limitation of the Study

The scope of this study is delimited into the followings:

Content Scope: The content scope of this study shall encompass the area of both the dependent and independent variables. The dependent variable human capital management practices includes employee compensation, employee engagement and talent management whereas, the areas of organizational performance include efficiency, effectiveness and market share.

Geographical scope: This study covers all the banks in Rivers State.

Unit of Analysis: This is a micro study because it is interested in ascertaining the relationship between human capital management practices and organisational growth in commercial banks in Rivers State.. Hence, it is a micro level study.

The major limitation of the study is the short time frame the research lasted, coupled with the tight academic time table, which prevented a very comprehensive study. The fund available to the researcher was also limited and therefore the study was limited to a small portion of the survey population.

1.8 Definition of Terms

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

EFFECTIVENESS: According to Mohr and Zoghi (2006) organizational effectiveness is defined in many ways depending on the organizations goals and objectives in today’s market and also is dependent on the industry. In today’s market, organizational effectiveness is dependent on seven to ten attributes/characteristics.

MARKET SHARE: Market share represents the percentage of an industry or market’s total sales that is earned by a particular company over a specified time period.

TALENT MANAGEMENT: Talent management implies: appositely finding the most suitable incumbent for the organization (Jackson & Schuler, 1990).

EMPLOYEE ENGAGEMENT: Employee engagement refers to the dedication and loyalty of an individual towards its job (Schaufeli & Salanova, 2007).

COMPENSATION MANAGEMENT: Compensation is a process of providing monetary value to employees for the work they performed. Compensation can be used to hire skilled employees, reward the performance, encourage company loyalty by reduce turnover.

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