EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON EMPLOYEE PERFORMANCE IN COMMERCIAL BANKS IN NAIROBI COUNTY, KENYA

Abstract

The purpose of this study was to examine the effect of Human Resource Management Practices (HRMP) on employee performance in commercial banks in Nairobi County in Kenya. The specific HR practices examined in the study were reward management practices, performance appraisal practices, employee involvement practices and training and development practices. The study employed descriptive study design. A sample of 235 respondents was selected through stratified random sampling technique. Data was collected using questionnaires and analysed using multiple regression analysis. The study findings indicated that the relationship between HRM practices and employee performance is positive although only the relationship between reward management, performance appraisal as well as training and development practices and employee performance were found to be significant while the relationship between employee involvement and employee performance was not significant. Based on the study conclusions, the study recommended that in order to realize improvement in employee performance, commercial banks as well as other companies, should aim to improve reward structure of their employees by developing a reward structure which recognizes outstanding performance by teams and individual employees, developing pay package that competes with other like organizations in the market as well as salary increment and promotions schemes which are linked to employee performance. The study also recommended that commercial banks should design better performance appraisal schemes which distribute timely and relevant information on performance or goal plans to employees. Lastly the study recommended that those commercial banks and other companies aiming to achieve improved employee performance should also consider developing training and development policies and strategies which aim to identify training needs with full participation of employees, which have fairness in addressing staff training and development needs as well as those policies which create an enabling environment for transfer of learning to succeed.