Yeshihareg Addis
Yeshihareg Addis
Yeshihareg Addis
Jun 2019
Addis Ababa, Ethiopia
I
Addis Ababa University College of Business and
Economics School of Commerce Graduate Studies
The Effect of Human Resource Management practice
on perceived employee Performance: In the case of
Ministry of Trade and Industry
II
Declaration
I, the undersigned, hereby declare that the work Contained in this thesis is
my own original work and that I have not previously in its entirety or in part
Yeshihareg Addis
III
CERTIFICATE
This is to certify that the thesis titled “The Effect of Human Resource Management
Practice on employee performance: The Case of Ministry of trade and Industry”,
submitted to Addis Ababa University in partial fulfillment of the requirements for the
Degree of Master of Arts in Human Resource Management (MA) complies with the
regulations of the University and meets the accepted standards with respect to originality
and quality.
Confirmed by:
Solomon Markos (PhD) ___________________ Jun, 2019
Advisor Signature Date
IV
Table of Contents
Topics Page No.
Approval of the Research Board Examiners …………………………………….II
Declaration …………………………………………………………………………III
Certificate ……………………………………………………………………………IV
Acknowledgments ……………………………………………………………………VII
Acronyms………………………………………………………………………………VIII
List of tables ………………………………………………………………………….IX
Abstract ………………………………………………………………………………X
Introduction………………………………………………………………………………………………...1
V
Chapter Four- Data analysis interpretation and discussion………………………………………………28
Introduction……………………………………………………………………………………………….28
VI
ACKNOWLEDGMENTS
I am grateful to God for His mercy that made this possible. He gave me wisdom and
Strength to always be courageous in accomplishing this thesis. Then, I would like to
express my special gratitude and respect goes towards my thesis advisor Dr. Solomon
Markos his patience in repeatedly reading the draft document of this study and for
making constructive comments and suggestions from which I have immeasurably
benefited in sharpening my understanding, predominantly, on the area I study. It is
palpable fact that without his closer follow-up and continuous encouragement with
valuable comments this thesis would not have been finalized in its present structure. I
would also like to extend my additional admiration for Dr. Konjit Hailu for her
genuine and sincere comment in the case of proposal as an internal examiner Also, I
would like to express my heartfelt appreciation to my friends Woinishet Haileysus,
Yehualashet ketema, and Emebet shewangizaw for their valuable support and advice
that gave me strength during my final project career.
Finally, I express my gratitude to the employee of the ministry of Trade and Industry
that spent their lovely time to provide me with all the necessary data required to carry
out the study.
VII
Acronyms
EP: Employee performance
VIII
List of tables
Table 3.1 Target Population and Sample Size ............................................................................... 24
Table 4.3: Perception on HRM practice and perceived employee performance ........................... 32
Table 4.4: The Correlation between HRM practices and employee performance ........................ 37
IX
Abstract
The purpose of this research is to examine the effect of human resource Practices on
employee performance in the case of ministry of trade and industry. To achieve the study
objectives, the researcher developed, distributed questionnaires, collected and analyzed
the data with SPSS tool by using descriptive analysis and inferential statistics. Samples of
275 employees were selected from the population of 887 by using simple random
techniques; 270 questionnaires was collected back; the response rate was 98.8%. The
descriptive statistics result shows that the perceptions of employee of (recruitment and
selection, and Reward management, Performance appraisal and training and
development) were low. The Correlation results indicated that recruitment and selection,
Reward management, Performance appraisal and training and development were
significantly and positively correlated with the employee performance in MOTI. In
regression analysis recruitment (29.3%) and selection and reward management (23.7%)
have greater effect on employee performance in the ministry. In genegeral, the variation
of 45.9% of employee performance due to the predictors of Human resource practices
(recruitment and selection, and Reward management, Performance appraisal and
training and development).
X
CHAPTER ONE–INTRODUCTION
Introduction
This chapter explains the nature of the proposed research and the overall planned
approach to deal with the stated research problem. It consists of the background of the
study, statement of the problem, research questions, objectives of the study, Significance
of the study, Scope of the study, Definition of Terms (Operational Definitions of Terms)
the management of an organization‟s most valued assets – the people working there, who
concerned with all aspects of how people are employed, managed and developed in
organizations. They also stated that „Human resource management involves all
management decisions and action that affect the nature of the relationship between the
As Raymond(2011) argued, there are several important HRM practices that should
support the organization‟s business strategy: analyzing work and designing jobs,
determining how many employees with specific knowledge and skills are needed (human
(selection), teaching employees how to perform their jobs and preparing them for the
1
management), rewarding employees (compensation), and creating a positive work
environment.
Human resource practices are the process of procuring, maintaining and developing
disciple and plays an important role in helping an organization to achieve its mission,
vision, strategy, and goals. As mentioned by Byremo (2015), one of the reasons for
popularity is the assumption that HRM is a source for competitive advantage and will
As Guest et al. (2000) argued, “The distinctive feature of HRM is its assumption that
improved performance is achieved through the people in the organization.” If, therefore,
appropriate HR policies and processes are introduced, it can also be assumed that HRM
As Hamzah et al. (2014) argued, Employee performance is one of the most important
understands the importance of HR as a critical factor that directly affects and contributes
Decisions such as whom to hire, what to pay, what training to offer, and how to evaluate
employee performance directly affect employees‟ motivation and ability to provide goods
and services that customers value. Companies that attempt to increase their
2
1.2 Statements of the Problem
How to manage people‟s knowledge, skills, attitudes, life, experiences, and motivation
affect the organizational performance. Employees are the most competitive advantages of
system is being organized and managed in organizations (Osibanjo & Andeniji, 2012).
working, and the management of diversity and inclusion. Therefore, human resource
management practice is the most crucial element to create effective and efficient
employees.
There have been many studies from different part of the world under the Effect of HRM
researcher could only access few studies undertaken related to this topic in Ethiopia. The
researcher also found out that no study carried out on the effect of HRM practices on
Additionally, the aforementioned studies were carried out in a different culture and time
which make it difficult to show and conclude the effect of HRM practices on Employee
Performance based on these studies. Hence, this research is essential to know the current
status of the HR practice in the ministry and its effects on employees‟ performance.
When referring specifically the case of the Ministry of Trade and Industry, the researcher
collected Five years employee‟s data from the Ministry of Industry for the years 2014-
3
2018 (see table 1.2 that attached in appendix). As seen in the data 66 employees resigned
from the organization in 2016 alone and the turnover rate is calculated at 36.04% which
is significant. The exit interview report published same year revealed that 51.06% of the
total resigned employees left the organization due to low salary and benefit packages.
The second major causes of their resignation were also Training & Development and
Career Development. As a result of this they sought to look for other better opportunities
that could satisfy their needs. This is obviously affects the organization performance by
not only losing competent employees but also lacks the capacity to attract new ones from
the market. It also creates dissatisfaction which hinders employees to use their maximum
Based on the above mentioned facts, the researcher wants to study some selected HRM
practice among other such as Recruitment and Selection, training and development,
performance appraisal and reward management that the Ministry is exercising and
identify the relationship between HRM practices with employees‟ performance. This
study, therefore, aimed to contribute to the field of research by analyzing and creating
understanding of the link between HRM practices and Perceived employee performance.
The main targets of this study will be to answer the following basic questions:
employee performance?
4
1.3 Objective of the study
The general objective of this study is to find out the effect of HRM practices on perceived
The geographical scope of this study is delimited to the ministry of Trade and Industry
head Office only. The study focuses on the following human resource management
and reward management). Data gathering tools was structured questioners and interview.
5
1.5 Significance of the Study
First, the result of this study gives a chance for the ministry of trade and Industry to
change and manage their human resource policies and practices in appropriate style,
Secondly, the research is supposed to use for further reference to conduct a study in the
subject matter of the human resource management practices and employee performance.
management practice on employee performance might not be fully welcomed by all since
it may create unintended alarm among some management members( like human resource,
Strategic planning and change management directorates. Secondly, regarding the attitude
of the respondents towards answering the questionnaire and interviews was carelessly
responded. The other pitfall that the researcher was face is lack off enough money to
distribute questionnaires to the whole population of the study, so the researcher was draw
a sample. To add, due to lack off sponsorship the researcher was face financial challenge
HRM practice: is composed of the policies, practices, and systems that influence
Recruitment and Selection (Selection and Staffing): This is the process of recruitment
and selection to staff. This involves matching people and their expectations with which
6
the job specifications and career path available within the organization (Mahapatro,
2010).
knowledge, skills, and behavior that improve employees‟ ability to meet the challenges of
a variety of new or existing jobs, including the client and customer demands of those jobs
(Noel, 2011).
generating or adopting new tasks, peer evaluation, frequent evaluations, and auditing
innovation processes? This strategy appraises individual and team performance so that
there is a link between individual innovativeness and company profitability. Which tasks
should be appraised and who should assess employees‟ performance are also taken into
includes background of the study, statement of the problem, objective of the study,
significance of the study, scope of the study, Limitation of the study and definition of
terms. The second chapter presents the theoretical frame work, empirical review of
literatures and conceptual frame work. The third chapter consists of research
methodology and design that will be used in the study. It describes the type and design of
the research; the population and sampling techniques of the study; data collection
7
instruments and procedures used to collect data and the methods of data analysis. In the
fourth chapter will contain data analysis, presentation and interpretation. Finally, the fifth
8
CHAPTER TWO - LITERATURE REVIEW
This chapter should be divided into two major categories Theoretical Literature Review;
the study clarifies concepts and theories of human resource management and employee
performance and Empirical Literature Review; the study presents the research findings of
several researchers in relation to human resource management. At last, this chapter will
end up with the presentation of conceptual framework that indicates Human Resource
management as independent variable and employee performance as dependent variable.
development, and labor relations (Dessler, 2007). HRM is composed of the policies,
practices, and systems that influence employees‟ behavior, attitude, and performance
(Noel, Hollenbeck, Gerhart & Wright, 2007). HRM practices have an effect on employee
2010). The employees of every organization are a basis of competitive advantage. The
employees of every organization are a basis of competitive advantage. There has been an
increase in the experimental studies that examines the influence of some practices of
(HRM) on performance of employees (Becker & Huselid, 2006; Bowen & Ostroff,
2004).
According to Armstrong (2016) the goals of HRM are supporting the organization in
achieving its objectives by developing and implementing human resource (HR) strategies
9
that are integrated with the business strategy (strategic HRM) to contributing the
development of a high performance culture ensuring the organization has the talented,
skilled and engaged people it needs, creating a positive employment relationship between
management and employees and a climate of mutual trust and encouraging the
selection is the process by which specific instruments are employed to choose from a
pool of applicant‟s persons most suitable for the job taking into consideration
management goals and legal requirements (Bratton & Gold, 2003). It is the process of
finding and engaging the people the organization needs. Selection is that part of the
appointed to jobs (Armstrong, 2008 & 2016). Mahapatro (2010, PP.64 ), the objectives of
recruitment to attract people with multi-dimensional skills and experiences that suit the
present and future organizational strategies, to induct outsiders with a new perspective to
lead the company, to infuse fresh blood at all levels of the organization, to develop an
organizational culture that attracts competent people to the company, to search or head
hunt people whose skills fit the company‟s values, to devise methodologies for assessing
search for talent globally and not just within the company, to design entry salary that
competes on quality but not on quantum and to anticipate and find people for positions
10
2.1.3 Training and Development
Training is a planned effort to enable employees to learn job related knowledge, skills,
and behavior. Development involves acquiring knowledge, skills, and behavior that
improve employees‟ ability to meet the challenges of a variety of new or existing jobs,
including the client and customer demands of those jobs. Development programs often
help employees learn the ins and outs of effective teamwork (Noël, 2011). As studied by
Busungu (2015) in Kenya Insurance company research revealed that training and
delivery, boosts employee motivation, and productivity. Employee training also lowers
Guest (1987) argues that policies are necessary to ensure that employee performance is
evaluated, which in turn ensures that the appropriate training and development take place.
With the help of the performance appraisal reports and findings, the organization can be
able to identify development needs. However, individuals themselves can help to indicate
the areas requiring improvement as a result of the issues raised in the performance
appraisal process and their career path needs. Training plays an important role in
that will improve the organization and to do their best in order to see that organizational
11
2.1.4 Performance Appraisal
According to Landy and Farr (1983), performance appraisal data is organized into two
groups: judgmental or subjective measures and nonjudgmental or objective measures.
Although judgmental measures are more broadly used, objective performance
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measurements (e.g. production rates, time to complete a task, and scrap rates) have
been helpful measures of performance for routine, manual jobs (Rothe, 1946).Even so,
whether it is measured subjectively or objectively, the outcome of the performance
appraisal gives an insight to the management to how and to what extent an employee is
performing a given tasks and exhibit behaviors. (Collins and Clark, Mohamed .et al.
2003). Performance appraisal was found to have both direct and indirect effect on
administrative performance of employee and the feedback obtained from performance
appraisal activities, usually conducted at least once annually can help to improve
administrative processes.
positive psychological contract and this can serve as a differentiator in the recruitment
individual employees, and hence their current on-the-job performance. Incorporating the
selection of reward strategies and the administration of payment and benefits systems
(Mahapatro, 2010). As argued by ( Keller & Szilagyi, Begum W. et al. 1976, 2016) it is a
and teamwork, rewards and recognition are often given through both monetary and
nonmonetary means. Literature supports the idea that reward and recognition are
important factors that influence employee behavior, job satisfaction, and employee
performance.
According Armstrong (2007), rewarding people according to the value they create,
aligning reward practices with business goals and with employee values and needs,
13
rewarding the right things to convey the right message about what is important in terms
of behaviors and outcomes, helping to attract and retain the high-quality people the
organization needs, motivating people and obtain their engagement and commitment and
According to Armstrong (2007) and Rose (2014), Reward management deals with the
strategies, policies and processes required to ensure that the contribution of people to the
Reward management deals with the strategies, policies and processes required to ensure
that the value of people and the contribution they make to achieving organizational,
departmental and team goals is recognized and rewarded. It is about the design,
procedures), which aim to meet the needs of both the organization and its stakeholders.
The overall objective is to reward people fairly, equitably and consistently in accordance
with their value to the organization in order to further the achievement of the
perception, values and attitudes. Porter and Lawler (1974) defined performance as a
function of individual ability and skill and effort in a given situation. In other words,
employee's performance is the ability of the employees to work effectively and efficiently
in order to accomplish the organizational goals and objectives (Kovach, 1987). Perceived
employee performance represents the general belief of the employee about his behavior
14
and contributions in the success of organization. Employee performance may be taken in
the perspective of three factors which makes possible to perform better than others,
knowledge” and “motivation” (McCloy, Campel & Cudeck, 1994). Buchner (2007), a
management:-
Goal theory as developed by Latham and Locke (1979) highlights four mechanisms that
stimuli-late effort; 3) they challenge people to bring their knowledge and skills to bear to
increase their chances of success; and 4) the more challenging the goal, the more people
will draw on their full repertoire of skills. This theory underpins the emphasis in
them to direct and evaluate their actions; while performance feedback allows the
individual to track how well he or she has been doing in relation to the goal so that, if
Robertson, Smith and Cooper (1992). Goal theory supports the agreement of
15
means of shaping behavior. As people receive feedback on their behavior they
appreciate the discrepancy between what they are doing and what they are expected
Social cognitive theory was developed by Bandura (1986). It is based on his central
concept of self-efficacy. This suggests that what people believe that they can or
objective.
The main purposes of performance evaluations are to provide input into such
training and development needs. They pinpoint employee skills and competencies
that are currently inadequate but for which programs can be developed to remedy
There are many researchers conducted around the world that showed the relationship
between human resource practices and perceived employee performance. Under this topic
the researcher consider only few studies to show the gap and the relationship between
HRM practices and employee performance in the ministry of Trade and Industry.
16
2.2.1 Recruitment and Selection and perceived employee Performance;
Recruitment and selection is one of the human resource management practices. The
effective a way as possible (Tyson, 2006). Tanveer (2011) ,study revealed that
recruitment and selection found significantly related and impact with performance of
2016). (Fatema.N, 2018, PP.11), the study revealed that Recruitment and selection
selection was positive and shows positive change in dependent variable, so it shows staff
H1: There is a significant and positive relationship between Recruitment & Selection
and perceived employee performance.
showed that HRM practice has significant impact on organizational performance. The
study found that university performance can be attributed by training and development (
Kassa, 2016). The study conducted by Yaounde (2017), training practice and employee
17
concluded that Training and employee involvement play a positive role in increasing
employee‟s performance. According to Sarker.S (2017) study found that Training and
association with the employee performance. Hypothesis was supported, i.e. employee
efficiency on the university performance Mohamd (2014), found that regression analysis
performance.
H2: There is a significant and positive relationship between Training & Development
and perceived employee performance.
Soeters, 2006); this may be because employee performance evaluation is crucial for most
HR practices in that, if it is done properly, it could serve several purposes: first, for taking
proper personnel actions such as salary increment, promotion and other incentives.
Farooqi (2016) argued that performance evaluation is a significant and positive relationship
employees and determine the future needs for training in development; Strong and positive
et al (2011) study revealed that performance appraisal found significantly related and
18
revealed that human resource practice has significant impact on organizational
The impact of human resource management in case of Telekom Malaysia, the study was
found that Performance appraisal has moderate influence on the performance and
(Mohamd, 2014).
employee performance
For instance, compensation affects employee motivation and practices, salary was also
(Tessema and Soeters, 2006). Compensation is a significant and positive relationship with
and retain the competitive human resources and can also shape the behaviors and
performance of employees. Balanced, fair and competitive compensation system affects the
with the employee performance. (Farooqi, 2016). The study undertook at debrebrhan
performance. The study found that university performance can be attributed by HRM
19
practices; compensation (Kassa, 2016). Compensation management has significant
compensation and the pay structure directly impact the performance of the employees.
non-financial; compensation in the form of pay, rewards or incentives are the most
performance.
and perceived employee performance. Hence the entire hypotheses are taken from the
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2.3 Conceptual Framework
In this section, the Researcher developed the Conceptual framework based on the review
of literatures of the study that indicates the relationship between HRM practices, as
independent variable, and Employee Performance (as dependent variable).
Independent Variables
Dependent Variable
Source: Own Survey (2019)
HRM Practices
Recruitment and Selection
Performance Appraisal
Reward Management Employee Performance
Training and Development
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Chapter Three- Research Methodology
This chapter focuses on the research design, the source of data, sampling and sampling
techniques, data collection methods and data analysis procedures that the researcher
The purpose of the research is to asses and investigates the effects of HRM Practice on
kind of research, the researcher adopted explanatory research design. This research
design is preferable to identify and explain the relationship among different variables.
For this reason the researcher followed this research design for the intended study to
explain the relationship between the human resource management practice and perceived
through questionnaires from the employees who are working for the ministry and through
interviews from management staff. The secondary data was collected from different data
sources such as professional journals, books, and the organizational HR data bank.
qualitative data. A questionnaire enables to organize the questions and receive replies
without actually having to talk to every respondent. It is a very flexible tool that has the
advantages of having a structured format, is easy and convenient for respondents, and is
22
cheap and quick to administer to a large number of cases covering large geographical
The questionnaire was the main data collection instrument that helped to collect different
information from employees who are working in the Ministry of Trade and Industry. For
this study, the researcher prepared both closed ended and likert scale questionnaires to
3.3.2 Interviews
Interviews are more suitable for questions that require probing to obtain adequate
information. They are particularly useful when qualitative data are required.
To strengthen the data collected through questionnaires the researcher used interviews to
collect data from human resource manager, Strategic management manager and change
management manager of the ministry. Because those managers have close contact with
the employees and know the performance of each individual as well as have the exposure
to know the challenges that hinder the employees to utilize their potential effectively. The
researcher conducted a face-to face interview and by telephone with those managers in
the ministry.
„Population‟s collective term used to describe the total quantity of cases of the type which
are the subject of the study. It can consist of objects, people and even events (Walliman,
2011).
There are 887 employees working for the Ministry. Sample size is number of items to be
selected from the population to constitute a sample. It refers to the appropriate number of
23
respondents for the study, and that was taken from the total population who are working
Thus, the sample sizes were chosen so as to represent the whole population. The study
determined sample size by considering Yamane (1967:886) Statistical Formula:
n= N\(1+N (e2))
Where n = sample size N = population of the study, Where the study considered 5% as
tolerable Error and 95% as confidential level. The calculated sample size of the
population was approximately 275 employees. The researcher used proportionate
stratified sampling techniques that could be assumed to represent fairly each sector.
Simple random sampling technique was also adopted for the respective sectors until the
required sample size is reached since simple random sampling technique is supposed to
be well representative to the intended research work.
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3.4 Data collection procedures.
Data collection instrument which were used in the study was prepared on the basis of
review of literature and research questions. Relevant and suitable questionnaires was
prepared in English, and translated to Amharic for simple understanding for the
respondents. The questionnaire consists of likert scale and close-ended. The questionnaire
was divided into two parts. Part – 1 of the questionnaire consists of profile of the
respondents such as, gender, education, occupation and experience. Part – 2 contains the
main body of the questionnaires. The structured close ended questionnaires were
social science (SPSS) version 20. The responses of the questionnaire were filled by the
employees and analyzed by using descriptive statistics, finally regression analysis. The
data was analyzed and presented quantitatively by using tools like percentile, tables,
charts, graphs and others to facilitate the interpretation of the results of the data. In
understand the interrelationship between different human resource practice and employee
performance.
25
3.6 Reliability Test
To establish how closely related the variables are in the study, a Cronbach‟s alpha test
was done. According to Andrew, Pedersen, and McEvoy (2011), Cronbach‟s values
range from 0 to 1. However, values at or above 0.7 are desirable. Based on this
assumption the data was considered acceptable with an overall reliability coefficient of
0.94. The findings are presented in the table below.
Alpha varies between the range 0.75 and 0.88. This shows high consistency among the
items of the constructed. Since all items are considered useful and reliable for computing
The researcher informed the target group of study that was subjected in this
research project that they have the freedom to withdraw from the study at any
time without any unfavorable conditions, and they would not be harmed as a
26
Participants were informed of the purpose of the research and assured of
treats confidentially.
27
Chapter Four- Data analysis interpretation and discussion
Introduction
This section includes the rate of response, demographics analysis , analysis of HRM
practices and employee performance from the data that collected, the relationship
between HRM practices and employee performance, to what extent HRM practices
ministry of Trade and industry. To increase the probability of a good response rate, 275
questionnaires were sent out; from which 270 respondents filled and returned the
(2003); Cooper and Schindler (2014), 50% response rate is adequate for analysis, while
60% is good and 70% excellent response rate for analysis. Therefore, the research‟s
28
4.2 Demographic Characteristics
Table 4.1: Demographic Characteristics
Demographic Frequency Valid Cumulative
Variables Frequency
variables percentage percentage Percentage
Gender of the Female 88 32.6 32.6 32.6
respondents Male 182 67.4 67.4 100
270 270 100 100
Age of the 18-30 166 61.5 61.5 61.5
respondents 31-40 80 29.6 29.6 91.1
41-50 8 3 3 94.1
51-60 16 5.9 5.9 100
Total 270 100 100
Level of Primary 8 3.0 3.0 3.0
education Secondary 11 4.1 4.1 7.0
Diploma 4 1.5 1.5 8.5
Degree 232 85.9 85.9 94.4
Above degree 15 5.6 5.6 100
Total 270 100 100
Experience 0-5 146 54.1 54.1 54.1
6-10 87 32.2 32.2 86.3
11-15 12 4.4 4.4 60.7
16-20 19 7.0 7.0 97.8
Above 21 6 2.2 2.2 100.00
Total 270 100 100
Source: Own Survey (2019)
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4.1.2 Age of the Respondent
The study also looked to establish the age bracket of the respondents by asking them to
check the boxes with their age. The findings showed the highest percentage of 61.5% of
the respondent were between the of 18 and 30 years old (in number 166 out of the total
respondent 270,) i.e. most of the respondent were at young age in the ministry, 29.6% of
the respondents were between the age of 31 and 40 years old (in number 80 out of the
total collected which is 270 respondents), which is the second most dominant age in the
ministry, 3.0% of the respondent were between the age of 41 and 50, 2.6% of the
respondent i.e. few in number (in number 8 out of the total respondents) . Between the
age of 51 and 60 years old 5.9%. They were also few in numbers out of the total
population about 16 in number.
It was also necessary for the study to determine the educational levels of the respondents
as that could help to determine the level of understanding of the respondents about the
employee. The table in the above showed that the respondents hold a wide range of
educational qualifications from masters and above level. Majority of the sample group
were holding first degree which account for 85%, followed by above degree which is
5.5%, diploma 1.5%, higher school 4.1%. This implies that people of different
educational qualifications are assumed to work in the Ministry and the large proportion of
them degree and master„s and above graduates who do have at least the basic knowledge
about the management concept of human resource practice and also its association with
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4.1.4 Level of experience in the Organization
The study finds out how long the respondents have worked in the ministry of Trade and
Industry. The findings showed those that had 0-5 years‟ experience were 146. 6-10
years‟ experience was 87. Respondents with 11-15 years were 12, 16-20 were 19 and
lastly those with over 21 years of work experience were 6. The above findings confirmed
that most of the respondents had served the ministry for a short period of time. This
indicates that most of the employees have few experiences in the Ministry so that they
may not know well about the human resource practice and how that HRM can affect their
In the final section of the questionnaire respondents were asked the effect of HRM
practice on employee performance and asked to fill in their option by selecting answers
corresponding to their choice on the Likert scale options (5=Strongly agree, 4=Agree,
31
Depending on the above assumptions the mean and standard deviation of the HRM
practices and employee performance in the ministry of Trade and Industry as follows;
In the table above showed that recruitment and selection has the mean value scored of
2.26. If the mean value falls between 1.5 and 2.5 the respondent disagree with this
practice (burn, 2008). The finding also supported by the frequency distribution
percentage of 54.51% from the total respondents was disagree with this practice. This
implies that recruitment and selection practice in the ministry of trade and Industry is low
level.
32
The above table showed that performance appraisal practice aggregated mean scored of
2.3. If the mean value scored between 1.5 and 2.5 then according to likert scale
assumptions Burns (2008) the respondent‟s response rate falls with disagree.
61.62% from the total respondent also disagrees with the practice of performance
appraisal. This means performance appraisal practice in the ministry was low.
Reward Management practice aggregated mean scored of 2.2. If the mean value scored
falls between 1.5 and 2.5 then the respondents were disagree with reward practice. In
addition to the above fact, the findings also supported by the frequency distribution
percentage of 61.27% from the total responses rate were disagree with practice. Hence,
the researcher can concluded that reward practice in MOTI was low.
And also the table above showed that training and development practice average mean
has scored of 2.1. According the assumption given above the respondents were disagree
with this practice. Beside to the above mean result, the frequency distribution percentages
of this practice of 72.39% from the total respondents were disagree. This showed that
the ministry has low practice in training and development. Finally, the researcher asked
the perception of employees on their own performance level the mean scored result was
falls under disagreed level. Furthermore, the frequency distribution percentage of this
practice showed that 63.46% of the total respondents were disagree with their own
performance. Therefore, in this study the researcher can conclude that human resource
training and Development) and employee performance in the ministry of trade and
industry the respondents were disagree and the level these practices were low.
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4. 2.2 Interview response
Heads of from HR, Strategic Planning and Change Management sections were also
interviewed related to the subject to triangulate the responses from employees side
Accordingly, for the interview question is there clear recruitment and selection criteria
for the open vacant position at the Ministry, the HR Directorate, the Strategic Planning
Directorate and Change management directorates all had similar answers and saying that
yes, the vacant posts consist of the educational, skill and knowledge requirement for the
However, based on the descriptive analysis presented above, most of the employees were
not in agreement with the above statement and showed that they are dissatisfied with the
With regard to the second variable i.e. Training and Development, the three directorates
were asked if there is any training and development practices at the Ministry and how the
program is run. The HR Director replied that there is a training and development practice
in their organization. They usually plan and make appropriate budgeting at the beginning
of the year. They also usually make training need assessment and tried to organize as
much as possible internal and external trainings based on the gap analysis. The other two
Directorates agreed that there exists training need assessment and different trainings
offered to employees. However, they question on the fairness and effectiveness of the
training provided to employees. They further elaborated that post assessment is not
conducted after the training whether the training brought the required behavior and
34
Similar to the strategic and change management directorates, the employees do not
believe that enough training opportunities were not offered to all. This implies that they
have also fairness issue. The response from the employees also indicated that the
trainings offered did not help to improve their decision making and problem solving
skills. In general, it can be concluded that they were not satisfied with the training and
Both the HR and Change Management Directorates believed that there is implementation
appropriate tool is designed and provided to managers. The HR Director also believes
that supervisors are biased in filling their direct supervisees according to their real
performance and the feedback provided by them is not reflecting the overall achievement
of the employees objectively. In contract with the two Directorates, the Strategic
Directorate believes that result based evaluation is done every six months and feedback is
The response of the majority of employees reflects that there is a performance appraisal
system for formality. They are not appraised objectively and they were not provided
appropriate feedback. They also believe that the result of the performance appraisal do
For the fourth interview question asking the directorates if the reward system depends on
employees performance at the Ministry, all of the respondents agreed at one point that
there said to be reward management system at the ministry which is not practical and
35
they preferred to say there is no reward system at the ministry in general. This response
was similar with that of the employees‟ response in which their reflection was very
Finally, the directorates were asked to describe the contribution of human resource
management practices for the performance of employees. Hint was given to the
respondents that HRM practices included Recruitment and selection criteria, Training and
replied that all are interrelated and very important factors for enhancement of the
performance of the employees. Having clear recruitment selection criteria and deploying
the right employee for the position is the first move for achieving the objective of the job.
By identifying gaps through performance appraisal system and offering training and
Employee Performance
Identifying the relationship between two or more variables is the most important in
relationship between variables exists. To determine whether two or more variables are
related and to determine the strength of the relationship between or among the variables
are used (Allan, 2009, pp 534). The correlation coefficients have ranges from 1 to -1. I.e.
36
the relationship between variables. If the correlation value exactly +1 and -1 called
symbolized by r. When we come to this study, the research would identify relationship
between human resource practice and perceived employee performance. Based on the
questionnaires that were filled by the employees of the ministry of trade and Industry on
HRM practice and employee performance, the result of the correlation analysis between
Table 4.4: The Correlation between HRM practices and employee performance
Correlations
RS PA TND RM EP
Pearson Correlation 1
RS Sig. (2-tailed)
N 270
Pearson Correlation .780** 1
PA Sig. (2-tailed) .000
N 270 270
Pearson Correlation .572** .784** 1
TND Sig. (2-tailed) .000 .000
N 270 270 270
Pearson Correlation .482** .559** .423** 1
RM Sig. (2-tailed) .000 .000 .000
N 270 270 270 270
Pearson Correlation .607** .623** .514** .523** 1
EP Sig. (2-tailed) .000 .000 .000 .000
N 270 270 270 270 270
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Own Survey (2019)
Development
Pearson correlation test was conducted as depicted in table 4.11 to know the degree of
and development and the dependent variable perceived employee performance. As shown
37
in the table the independent variables, which are recruitment and selection and,
significant & positive relationship with the dependent variable (perceived employee
performance) with correlation coefficient 0.607, 0.623, 0.514 and 0.523 respectively.
From the correlation table (F), all independent variables (performance recruitment and
selection, performance appraisal and training and development and reward management)
are correlated with employee have highest correlation coefficient of r= (0.61, 0.62 and
0.51 and 0.52 respectively which is P value less than 0.05,) As shown in the table all the
independent variables are also significant and have positive relationship with dependent
According to (Wong and Hiew, 2005) the correlation coefficient value(r) range from;
independent variables.
Therefore in this study we can conclude that recruitment and selection, reward
management, performance appraisals and training and Development have strong positive
38
Section Three: Effect of human Resource practice on employee
performance
data truly represented the sample and that researcher has obtained the best results (Hair et
al., 1998). Two assumptions for regression analysis used in this study discussed for the
individual variables: multi-collinearity and linearity (Hair et al., 1998). In the following
independent variables using the Variance Inflation Factor (VIF), Tolerance test for
each variable to ensure the independence of errors. Taking into account the Variance
Inflation Factor not to exceed the allowable value (10), Tolerance value greater than
39
Tolerance value greater than 0.2 and a VIF value less than 10. i.e. the data checked multi
collinearity passed for further regression analysis.
represented the degree to which the change in the dependent variable is associated with
the independent variable (Hair et al., 1998). In a simple sense, linear models predict
values falling in a straight line by having a constant unit change (slope) of the dependent
variable for a constant unit change of the independent variable (Hair et al., 1998).
The scatter plot is a visual way to describe the nature of the relationship between the
independent and dependent variables (Bluman, 2009). In our case the graph shows most
likely linear relationship between human resource practices and perceived employee
performance.
40
4.3.1.3 Normality test
Hence, one of our assumption or normality test can be done using Kurtosis test by the
help of SPSS version 20. As we can see from the Table 4.6, even though the distribution
is positive skewed we can say that it is approximately normal. Since a normal curve has 0
skewness or symmetrical. As to the reference of kurtosis measure, out of all the indicated
values of variables, Training and development and employee performance have nearly
Kurtosis values =3 but the rest which are recruitment and Selection and performance
appraisal and reward management have values greater than the normal.
41
between the independent variables and the dependent variable is measured by a
correlation coefficient. This multiple correlation coefficient is symbolized by R.
Hence, EP= b0+b1RS+b2PA+b3RM+b4TND+£ Where b1, b2, b3 and b4 are the
Unstandardized regression coefficients.
In the above table the model summary the multiple regression correlation efficient R
variables which are (training and development, recruitment and selection, Reward
square(R=0.459) this means 45.9 % the variation of employee performance is due to the
42
are explained by other variables out of this model or variables which are not incorporated
in this study.
ANOVAa
Model Sum of df Mean Square F Sig.
Squares
Regression 27.445 4 6.861 58.127 .000
A. Dependent Variable: EP
From the above ANOVA table F value is significant (significant value is less than 0.05) it
In the above regression analysis model table points out that the relationship between
independent and dependent variable. The model coefficient table reported that the
recruitment and selection and reward management have positive and both practices have
a significant value of P=0.000 which is less than 0.05. Whereas, performance appraisal
43
training and development have positive coefficients value but have the p values = 0.072
and 0.146. Therefore, the two variables were Insignificant to the employee performance
The beta coefficient result also shows that recruitment and selection has ß=0. 293, this
implies that a one unit of recruitment and selection increased will leads to an increase in
Correlation Regression
r value P Degree of Status B P hypothesi
Hypothesis Predictors
value correlatio value value s Status
n
H1 RS 0.607 0.000 Strong Accept Accepted
and ed .293 .000
positive
H2 TND 0.523 0.000 Strong accepte Rejected
and d .178 0.146
positive
H3 PA 0.623 0.000 Strong accepte rejected
and d .106 0.072
positive
H4 RM 0.514 0.000 Strong accepte Accepted
and d .237 .000
positive
44
H1: There is a significant and positive relationship between Recruitment & Selection and
perceived employee performance in the ministry of trade and industry was supported.
As shown in regression coefficient table the p value of recruitment and selection practice
is equal to 0.000 which is much less than 0.05 if the p value less than 0.05 then we have
H2: There is a significant and positive relationship between Training & development and
practice is equal to 0.146 i.e. p value is much greater than 0.05 if p> 0.05 then the
alternative hypothesis was rejected and Training and development doesn‟t has influence
employee performance;
H3: There is a significant and positive relationship between performance appraisal and
employee performance in this ministry was not supported;
As inferred in table 4.11 value training and development practice is equal to 0.072 i.e. p
value is much greater than 0.05 if p> 0.05 then the alternative hypothesis was rejected
H4: There is a significant and positive relationship between reward and employee
performance in this ministry was supported.
As shown in regression coefficient table the p value of reward management practice is
equal to 0.000 which is much less than 0.05 if the p value less than 0.05 then we have
adequate statistical evidence to accept the alternative hypothesis or we fail to accept the
null hypothesis.
As considered from regression coefficient the table above H1 and H4 alternative
hypothesis were accepted, have the p value 0 .000 respectively. Except H2 & H3 which
is has a p value of (p=0.146 and P= 0.072) respectively, then the null hypothesis were
fail to accept.
45
CHAPTER FIVE Finding Summary, Conclusion and
Recommendation
5.1 Introduction
In this chapter, the summary, conclusion, and the possible recommendation are presented
and described. At the end of this chapter, limitations and suggestions for future research
are discussed.
The general objective of this study was to find out the effect of HRM practices on
perceived employee‟s performance in the case of Ministry of Trade and Industry. The
research was guided by the three specific objectives of this study. The major findings of
With regard to the first research object i.e. assessing the status of the practice of Human
Resource Management (HRM) at the Ministry, the result of this study revealed that:
The Mean and standard deviation corresponding to the recruitment & Selection,
practices were law. This implies that the practice of these key HRM functions are
low rate of mean and standard deviation. This means that the performance level
46
The second objective of this study was to examine the relationship between HRM
The correlation analysis shows that human resource practices and perceived employee
performance have positive and significant relationship. The first highest correlation is
correlation is between recruitment and selection and employee performance. The third
performance and the fourth highest correlation is between reward management and
perceived employee performance. From this the researcher can say that all HRM
The third objective of this study was to evaluate the extent to which HRM practices
influence perceived employee performance. The regression model summary result has
Based on the standardized coefficients, recruitment and selection accounts greater rate of
The correlation and regression analysis showed that both recruitment & selection and
performance at p-value = 0.000. Therefore, H1 and H4 are accepted. On the other hand,
47
performance appraisal and training & development practices have insignificant positive
The practices of human resource management are very important in industry as well as in
trade sectors, the involvement of modernize HRM system and practices should improves
employees and organization effectiveness. In this research the researcher examined four
management & training and development) and their effect on the dependent variable
With regard to the status of HRM practice, the aggregate mean rate of variables shows
that they fall between 2.1 and 2.3. The researcher can conclude that the ministry has low
HRM practice and employee performance. Concerning with HRM practices and
positive and significant relationship between HRM practices and employee performance.
In relation to the effect of HRM practices and employee performance, the variation of
management are consistent with other researcher findings Tanveer et.al (2011),
Soetere(2006), while the results of Training and development & performance appraisal
48
Mohamd(2014), Farooqi(2016), Yaounde(2017), Tessema & Soetere(2006), Tanveer
et.al (2011), Jouda(2016) Ahamd and Jemal (2016), There for the researcher can
concludes that HRM practices (recruitment & selection and reward Management) in the
5.4 Recommendation
Human resource is the most valuable assets and a competitive advantage of any
managed. Based on the findings of the study, the following recommendations are given
by the researcher.
The Human resources capacitate and engage the line managers as a hiring
manager during recruitment and selection. Additionally, set clear selection criteria
for internal and external candidates such as the qualification, knowledge and skill
required from the job holder. As the ministry is being challenged in getting
Reward management is obviously one of the major factors to attract and engage
study and propose a competitive salary scale and introduce other allowable
49
Even though the regression analysis result showed the performance appraisal
appraisal method should be used to truck the achievement level of the employees
and fill the gap. The training and development program should be arranged based
on gap analysis to enhance the capacity of employees and make them ready for
better achievement. The ministry should also make the impact assessment to
5.5 Limitation
Research context was limited to Trade and Industry Sector, while the future research can
respondents has been chosen for this study so a similar study should be conducted by
increasing a sample size. This study examined only four human resource practices
(recruitment and selection , Performance appraisal, Training & development and reward
management), while other human resource management practices can also be used for
further study to get a clear idea of the important employee‟s performance determinants.
50
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Appendix
ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE
Questionnaires on the Effect of HRM Practices on Perceived Employee
Performance: In case of Ministry of Trade and Industry.
This study collects relevant information from selected employees to help in “The Assessment of the Effect
of HRM Practices on Employee Performance”. The information required is only for academic purpose and
any information provided would be treated with the highest confidentiality and shall be used only for the
intended purpose. The researcher will much appreciated if you could spare some minutes to complete this
questionnaire.
General guide lines:
No need of writing your name
Put your level of agreement by putting (√) sign. Thank you!!
Email address: ya9314@gmail.com
Respondent Demographic Information
1. Gender
Male Female
2. Age
18 – 30 Years 41-50 Years
31 – 40 Years 51-60Years
3. Marital status
Single Married
Divorced
4. Educational Level
Primary Diploma
Secondory Degree
Above
5. Experience
1 – 5 years 6-10 years
11-15 years 16-20 years
21 and above
55
Please express how far these practices in your organization by indicating your level of
agreement/disagreement on a five point LIKERT scales.
(1)Strongly Disagree (2) Disagree (D) (3) Neutral (N) (4)Agree (A) (5) Strongly Agree (SA)
(SD)
Using the above scales (1-5) please tick (√) the levels of agreement in each of the items below with regards
to the HRM practices and perceived employee performance of your organization.
RS2 Applicants are fully informed about the qualifications required to perform the
job before being hired
RS3 Measurable selection criteria's are developed and used while filling up jobs
RS6 Selection system selects those having the desired knowledge, skills and attitude
PA Performance Appraisal
PA1 There is a formal and written performance appraisal system
PA2 I am informed of how my performance evaluation is done
PA3 Performance of employees is measured on the basis of objective quantifiable
PA4 results
The objectives of the appraisal system are clear to employees
PA5 Appraisal system has a strong impact on individual and team performance
56
RM3 We are satisfied with the benefits we receive.
RM4 Rewards and incentives are fairly distributed in our organization
RM5 The existing reward and incentive plans motivate us for better performance
TD3 I am selected for training programs that suit my job needs most
EP Employee Performance
EP1 My performance is better than that of my colleagues with similar qualifications
EP2 We have good working relations between me and my colleagues
EP3 I am able to find solutions to the various challenges I encounter in my work We
have good working
EP4 I am able to finish my work on time.
EP5 I rarely have to repeat a task because it was not done properly
EP6 The quality of my output is quite good
EP7 Customers have never raised a complaint about my service
EP8 I am able to provide necessary information that would assist others to complete
their tasks
EP9 We assist each other in handling tasks that are challenging
57
Questioner Interview
1. Does it exist clear recruitment and selection criteria while you open vacant positions
in ministry of Trade and Industry?
2. Is there any training and development practice in your organization? If so how did
you run with it?
3. Is there a performance evaluation practice in your organization? Have you give
comment for employees after you evaluate their performance?
4. Does the reward system depend on employee performance in ministry of Trade and
Industry?
5. What is the contribution of human resource management practice to perceived
employee‟s performance in ministry of Trade and Industry?
Thank You!!
Beginning year + ending year employee / 2 148 186 197 250 309
Employees Left during the Budget year/ (Beginning year 46.62% 30.11% 36.04% 16.8 18.77%
+ ending year employee / 2) * 100 %
58
Mean and Standard deviation of Recruitment and Selection
Descriptive Statistics
Recruitment And Selection
N Mean Std. Deviation
59
Appraisal system has a strong
impact on individual and team 270 2.33 .721
performance
Appraisal system helps me to grow
270 2.29 .703
and develop my career
Employees are provided with
performance based feedback and 270 2.42 .633
counseling
I feel performance appraisal is just
270 2.48 .765
a formality in this organization
Performance appraisal is fair in this
270 2.59 .543
organization
Cumulative Mean and standard
270
Deviation 2.3 0.7
Source: own survey (2019)
60
Descriptive Statistics
Training and Development N Mean Std. Deviation
Extensive training programs are
provided for employees in all 270 2.13 .341
aspects.
I have training opportunities to
270 2.20 .543
learn and grow.
I am selected for training programs
270 2.13 .619
that suit my job needs most
Training needs are identified
through a formal performance 270 1.87 .500
appraisal mechanism
Training programs have improved
my decision making and problem 270 2.13 .807
solving skills
My communication and working
relationships with co-workers have 270 2.33 .790
improved due to training programs.
I feel better equipped to tackle
unexpected events with skill and 270 2.07 .443
confidence.
Cumulative Mean and standard
270
Deviation 2.1 0.6
Source: Own survey (2019)
61