Effect Of Human Resource Management Practices On The Performance Of Cooperative Bank Of Oromia, Ethiopia

Abstract

In this dissertation, the main objective of the study was to access the effect of human resource management practices (recruitment & selection, training & development, employee satisfaction, employee relations & performance appraisal) on the performance of Cooperative Bank of Oromia. To do so, the methodology employed was descriptive & explanatory research design. Both qualitative & quantitative research approaches were followed. To conduct this study, primary and secondary data were collected. Majority of the data were collected from 300 employees working in 82 branches and the size was determined by formula of Yemane. To proportionally select employees, Cochran 1963 formula was used and then respondents were randomly selected. The tools used were questionnaires, interview, focus group discussion, observation & document review. To collect the data, the tools were pre-tested and then pilot was taken to check for errors and any ambiguity. Questionnaires were prepared in 5-point likert scale. Analyses were done using both descriptive and inferential statistical tools. The descriptive statistics include, mean & standard deviation, while the inferential statistics were chi-square, ordinal logistic regression & Spearman’s Rank Correlation. The results of the research were markedly reported & summarized. Accordingly, the total descriptive statistics of the respondents have been described as feeling alright with the mean values >3 > 60% > 180 for both predicted & predictor variables except for performance appraisal. In short, the overall descriptive statistics of human resource management practices was 3.18. Even if some practices were at relatively better status, performance appraisal is not at good condition. Besides, both the primary and secondary data ratified that the bank’s performance is promising. Moreover, the inferential statistics computed indicated the degree of relationship between the variables. The chi square values of all explanatory variables were significant at P-values<α=.05 & Chi-Square at α=.05, df 4 were > the Table value (9.49). This shows there is association between the variables & performance of the bank. Together with this, ordinal logistic regression was applied. Consequently, computed values verified that there was strong links between the practices & performance of the bank. The correlation between performance of the bank & the variables were in the range of .44 to .72, which is labeled as medium & strong. Besides the odds ratios of the explanatory variables were >1, which means a unit increase in the variables cause > 1 entity increase on the performance of the bank. The same result was also indicated by the inferential statistics. Accordingly, recruitment & selection have the strong effect followed by performance appraisal, employees’ satisfaction, training & development, employees’ relation & demographic variables respectively. Thus, the finding of the research identified which human resource management practice is more contributing to the performance of Cooperative Bank of Oromia in particular. In short, it was concluded that proper handling & execution of practices of human resource management has eloquent value on the performance of the bank. Lastly, the proposed intervention strategies identified were advertising properly recruitment criteria to invite competent employees and announcing the result of selection to candidates on time, practicing substantive training by proper trainer and supporting by necessary facilities. Creating conducive work environment, promotions better to be applied in a fair & transparent manner and motivating the workers based on their performance, harmonious relations among all concerned in the company should exist and finally carrying out periodic fair and free competency-based performance appraisals.