IMPACT OF HUMAN RESOURCE MANAGEMENT ON ORGANISATIONAL EFFECTIVENESS AND DEVELOPMENT (CASE STUDY: FIRST BANK OF NIGERIA)

Description

IMPACT OF HUMAN RESOURCE MANAGEMENT ON ORGANISATIONAL EFFECTIVENESS AND DEVELOPMENT (CASE STUDY: FIRST BANK OF NIGERIA)

CHAPTER ONE 
INTRODUCTION

1.1     BACKGROUND OF STUDY

This research is on Impact of human resource management on Organizational effectiveness and development (case study: first bank of Nigeria). There is the need for organizations to be viable and grow, as this is crucial for the organization to perform well and also achieve good results. There can be many means to achieve this, and one possibility is to manage the organization’s human resources in such a way that they give rise to increased performance and improved organizational results. Most Organizations have increasingly acknowledged the fact that the company’s human resources are valuable and can be a unique source for competitive advantage, as Barney (1991) noted that the people working in organizations can be a source for competitive advantage unlike any other resource, in the way that they can be rare and hard to imitate by competitors. Because of the need for proper management and understanding of Human resources present at work places, we now see companies having departments and employees exclusively dedicated to the management of their human resources. In addition, we can also observe a more extensive involvement of the HR function in the organizational strategic planning.

In Nigeria, organizations too have come to understand and believe just like the rest of the world that it is an undisputable fact that the creation of competitive advantage lies in people, which also includes their workers, long before now HR functions was left to be managed by “Personnel Managers” whose duties were to recruit and select, appraise, promote and demote workers, but getting to understand that HR goes beyond this functions their became the need to have unit(s) in organizations that are made up of employees solely responsible for catering for workers needs as regards to ensuring optimum productivity. 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 HRM.

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 organization 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 HRM has on corporate performance to take the center 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).

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 organization performance.

Lately, organizations are focused on achieving superior performance through the best use of talented human resources as a strategic asset. HRM 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 organization. After all, successful businesses are built on the strengths of exceptional people.  HRM 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.

1.2     Statement of the problem

Every business needs to grow and achieve its set corporate goals to be able to also keep up with competition that exist in every sector, workers are usually the brain box behind how well a business grows, as with their skills and attitudes to work they can inject positive ideas that can bring about changes. With the constant change in technology, ways of doing business, customer relationships and more, there is need for workers to also be made to keep up to speed with modern trends that relate to business and their sectors. This steps towards upgrading knowledge at workplace can be seen by some workers to come with great price to pay and to an extent they can willingly shy away from going through courses and trainings to mention a few to be more effective at work for the overall development of their organization, this is where Human Resource Management comes in as its part of their duties to recruit employees with knowledge relevant to the jobs they are to perform, also train and retrain staffs to be better equipped, but has human resource management’s impact being really felt on workers productivity?

Achieving better corporate performance requires successful, effective and efficient exploit of organization resources and competencies in order to create and sustain competitive position locally and globally. The enormous benefits of properly managing human resource cannot be over emphasized, however the organization and planning of functions to be carried out by HRM seems to be lacking because employers are still yet to understand the full benefits of HRM in a workplace. From observatory evidences, most 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-HRM experts to implement or enforce strategies, policies, processes, programs and practices. The value of properly managing human resources seems lost in those banks.

For businesses to survive, HRM should be given its rightful place of relevance in any organization 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.

As for banks Human Resource Management is extremely important especially because the banking sector is a service providing industry. Management of people and management of risk are two key challenges facing banks. How you manage the people and how you manage the risks determines your success in the banking business. Efficient risk management may not be possible without efficient and skilled manpower.

It is believed that HRM has sank into oblivion in most of the banks in Nigeria due to the lack of professionalism in banks staffs constantly felt when it comes to customer’s interaction with staffs who most times feel lost as regards to what to do when customers come with problems. It is in the face of this existing state that the researcher wishes to establish the impact of human resource management on organizational effectiveness and development as way to further encourage its all-inclusiveness in the operation of banks and other businesses.