Addis Abeba University

College of Business and Economics

School of Commerce

Assessment on the Effect of Human Resource Development (HRD) Practice on Employee

Job Satisfaction: A Case of Agricultural Transformation Agency (ATA)

-
By: Mignot Admassie

A Thesis Submitted to Addis Abeba University

College of Business and Economics School of Commerce Office of Graduate Studies in
Partial Fulfillment of the Requirements for the
Degree of Masters of Arts in Human Resource Management

Advisor: Wubishet Bekalu (PhD)

May 2018
Addis Abeba, Ethiopia
 Assessment on the Effect of Human Resource Development (HRD) Practice on Employee
Job Satisfaction: A Case of Agricultural Transformation Agency (ATA)

-
By: Mignot Admassie

A Thesis Submitted to Addis Abeba University

College of Business and Economics School of Commerce Office of Graduate Studies in
Partial Fulfillment of the Requirements for the
Degree of Masters of Arts in Human Resource Management

Approval Board Committee

RESEARCH ADVISOR _____________ DATE _________ SIGNATURE _____________

INTERNAL EXAMINER _____________ DATE _________ SIGNATURE _____________

EXTERNAL EXAMINER _____________ DATE _________ SIGNATURE _____________

May, 2018
Addis Abeba

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 DECLARATION

I, Mignot Admassie, declare that this thesis work entitled “Assessment on the Effect of Human
Resource Development (HRD) Practice on Employee Job Satisfaction: A Case of
Agricultural Transformation Agency (ATA)”is my own original work. I have carried out it
independently with the guidance and suggestions of the research advisor. And it has not been
presented in Addis Ababa University or any other University and that all sources of materials used
for the study have been duly acknowledged.

Declared by:

Name

Signature______________________

Place and date of submission: Addis Ababa University, May 2018.

Confirmed by Advisor:

Name____________________________

Sign_____________________________

Date _____________________________

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 STATEMENT OF CERTIFICATE

This is to certify that Mignot Admassie has carried out this thesis work on the topic entitled,
Assessment on the Effect of Human Resource Development (HRD) Practice on Employee
Job Satisfaction: A Case of Agricultural Transformation Agency (ATA)under supervision of
me for the partial fulfillment of Master of Human Resource Management in Addis Ababa
University.

Advisor: Wubishet Bekalu (PhD)

Signature _________________
Date: ______________

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 ACKNOWLEDGEMENTS
This is a great opportunity to express my deepest gratitude to all the people who have motivated
and supported me to complete this research on time because of which my Master’s degree study
experience has been a remarkable occurrence. My grateful thanks first go to Almighty God for
giving me the health, strength and ability to successfully undertake this study. Second for my
family for their unconditional love and support all the time. For my advisor Wubishet Bekalu
(PhD) for his careful and thorough reviews of drafts, useful suggestions and directions and moral
encouragement during the preparation of this work.

I would also like to thank all staffs of the ATA who provided me relevant materials and for their
unreserved contribution in responding to my questionnaire. Finally, thank you for all who support
me on this study with advices and encouragement.

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LIST OF ABBREVIATIONS

• HRD Human Resource Development

• HRM Human Resource Management
• HR Human Resource
• T&D Training and Development
• ATA Agricultural Transformation Agency
• JS Job Satisfaction
• NA Need Assessment
• D Design
• I Implementation
• E Evaluation

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 Abstract
Human Resource Development (HRD) is a planned and systematic approach to development of
employees for both organizations’ and employees’ benefit. HRD needs investment in training,
development and education programs. Employees’ satisfaction with HRD practices are among the
most important criteria to consider when assessing the human resource development practices. The
purpose of this study is to assess the effect of Human Resource Development (HRD) practice on
Employee Job satisfaction in the case of Agriculture Transformation Agency (ATA). The research is
designed as a case study. Both secondary and primary data were used in the research. Factors that
have an impact on employee satisfaction towards HRD practice identified in this study are need
assessment, designing, implementation and evaluation practice of the organizations training and
development. Random sampling was used for the sampling technique and 80 employees were selected
from employees of ATA. Descriptive analysis was performed to determine level of employees’ job
satisfaction. In addition, regression analysis was utilized to empirically test the relationship between
employees’ job satisfaction and the factors. A survey questionnaire with five-point Likert scale is a
main tool for gathering primary data about employees’ satisfaction with human resource development
practices of the corporation. Employees of ATA Head office were participated in filling the
questionnaires. An interview was also made with the education and grant manager of the organization.
Findings suggest that majority of employees are satisfied with the HRD practices implemented in the
origination. However, more can be done to increase the satisfaction level in every factor by
implementing the following activities. Need assessment practice should be done regularly that covers
all levels of employee to identify their performance gap. With regard to designing and implementing
the organization needs to include variety of training methods that will enable employees to update
their capacity and to improve their performance. The evaluation practice also has good response on
the questioner but it should be done based on the four levels of evaluation: participant reaction,
learning, behavior, and results.

Key Words: Job Satisfaction, Need assessment, Designing, Implementation, Evaluation, ATA

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 Table of Contents
I INTRODUCTION ............................................................................................................................ 11
1.1 Background of the Study................................................................................................................. 11
1.1.1 Background of the Organization ..................................................................................................... 12
1.2 Statement of the Problem ................................................................................................................ 13
1.3 Research Questions ......................................................................................................................... 14
1.4 Objective of the Study..................................................................................................................... 15
1.5 Significance of the Study ................................................................................................................ 15
1.6 Scope of the Study .......................................................................................................................... 15
1.7 Limitation of the Study ................................................................................................................... 16
1.8 Definition of Terms......................................................................................................................... 16
1.9 Organization of the Study ............................................................................................................... 17
II REVIEW OF RELATED LITERATURE ...................................................................................... 18
2.1 Definitions and Concepts of Human Resource Development ......................................................... 18
2.2. HRD four step process .................................................................................................................... 21
2.2.1 Assessing HRD needs ..................................................................................................................... 21
2.2.2 Designing effective HRD programs ................................................................................................ 22
2.2.3 Implementing HRD programs ......................................................................................................... 22
2.2.4 Evaluating HRD programs .............................................................................................................. 23
2.3 Empirical Reviews .......................................................................................................................... 25
2.4 Conceptual framework .................................................................................................................... 26
Figure 2.1 Conceptual framework .............................................................................................................. 27
III RESEARCH METHODOLOGY .................................................................................................... 28
3.1 Research Design.............................................................................................................................. 28
3.2 Data and Variables .......................................................................................................................... 30
3.3 Source of Data................................................................................................................................. 30
3.4 Sample design and Sampling Technique ........................................................................................ 30
Table 3.1 Composition of the population ............................................................................................... 31
3.4 Data Capturing Instruments ............................................................................................................ 31
3.6 Reliability and Validity of the research Instrument ........................................................................ 32
Table 3.2 Reliability Statistics.................................................................................................................. 33
Table 3.3 Sample Size Determination ..................................................................................................... 33

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3.7 Data Analysis and Discussion ......................................................................................................... 34
3.7.1. Ordinary Least Square ..................................................................................................................... 34
3.7.2. Diagnostic Analysis .......................................................................................................................... 35
3.7.3 Heteroscedasticity ........................................................................................................................... 35
3.7.4 Autocorrelation ............................................................................................................................... 36
3.7.5 Multicollinearity .............................................................................................................................. 36
3.7.6 Normality......................................................................................................................................... 37
3.7.7 Model Specification......................................................................................................................... 37
3.8 Ethical Issues and Considerations ................................................................................................... 37
IV DATA PRESENTATION AND ANALYSIS ............................................................................................. 39
4.1 Description of the Results ............................................................................................................... 39
4.1.1 Demographic Information of the Respondents ............................................................................... 39
Table 4.1 Demographic information’s .................................................................................................... 39
4.2 HRD Practice in ATA ..................................................................................................................... 41
4.2.1 General information on HRD practice of the organization ............................................................ 41
Table 4.2 General information on HRD policy ........................................................................................ 41
4.2.2 Need Assessment ........................................................................................................................... 42
Table 4.3: Need assessment ................................................................................................................... 42
4.2.3 Design ............................................................................................................................................ 43
Table 4.4: Design ..................................................................................................................................... 44
4.2.4 Implementation ............................................................................................................................. 44
Table 4.5: Implementation...................................................................................................................... 44
4.2.5 Evaluation ..................................................................................................................................... 45
Table 4.6: Evaluation............................................................................................................................... 45
4.2.6 Job Satisfaction ............................................................................................................................. 46
Table 4.7: Job Satisfaction....................................................................................................................... 46
4.2 Pearson Correlation Analysis ........................................................................................................ 47
Table 4.8 Correlations ............................................................................................................................. 47
4.3 Discussion of Regression Results .................................................................................................. 48
Table 4.9 Model Summary ...................................................................................................................... 48
Table 4.10 ANOVA................................................................................................................................... 48
Table 4.11 Coefficients............................................................................................................................ 49
4.3.1. Heteroskedasticity ........................................................................................................................ 49

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 Table 4.12 Heteroskedasticity Test: ARCH ............................................................................................ 50
4.3.2 Autocorrelation .......................................................................................................................... 50
Table 4.13: Autocorrelation Test: Breusch Godfrey Serial Correlation LM Test .................................. 50
4.3.3 Multicollinearity ......................................................................................................................... 51
Table 4.14: Multicollinearity Test: High Pair-Wise Correlation Coefficients .......................................... 51
4.3.4 Normality ................................................................................................................................... 52
Table 4.15: Normality Test: Bera-Jarque Test ......................................................................................... 52
4.3.5 Model Specification ................................................................................................................... 52
Table 4.16: Model Specification Test: Ramsey-RESET Test .................................................................... 53
V Conclusion and Recommendation ............................................................................................ 54
5.1 Summary of findings................................................................................................................. 54
5.2 Conclusions............................................................................................................................... 54
5.3 Recommendations ................................................................................................................... 55
5.4 Future Research ....................................................................................................................... 56
References .................................................................................................................................................. 57
ANNEX 1 ...................................................................................................................................................... 58
Annex 2 ....................................................................................................................................................... 62

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 I

INTRODUCTION

1.1 Background of the Study

Organizations operate in a complex and changing environment that greatly enhances or influences
their growth and expansion therefore, to manage this changing environment and technological
advancement organizations need to develop and train their employees. Human Resource
Development (HRD) is part of human resource management that specifically deals with training
and development of the employees in the organization. HRD includes training a person after he or
she is first hired, providing opportunities to learn new skills, distributing resources that are
beneficial for the employee's tasks, and any other developmental activities. Thus, HRD is the
framework for helping employees develops their personal and organizational skills, knowledge,
and abilities. It includes such opportunities as employee training, employee career development,
performance management and development, coaching, mentoring, succession planning, key
employee identification, tuition assistance, and organization development. The human resource or
personnel department is responsible to undertake the function of upgrading skills and knowledge
of the employees and this is done through training, educating and developing. The focus of all
aspects of Human Resource Development is on developing the most superior workforce so that
the organization and individual employees can accomplish their work goals in service to
customers.

Human Resource Development can be formal such as in classroom training, a college course, or
an organizational planned change effort or it can be informal as in employee coaching by a
manager. If organizations want to keep playing their key roles and achieve the kind of change they
want to bring, they must create a work environment that allows staff development and utilizes each
one’s unique potential for organizational success. Organizations also have to attract and retain best
talent based on merit while taking into account the required skill developments. According to Ford
and Noe (1987), ac cited by Eddie W.L Cheng and Danny C.K. (1998), for HRD system to be
effective and resulted in employee satisfaction eventually retention, it must be perceived positively
by employees. Employees’ satisfaction pertaining to provision of training and development,

11
opportunities for growth and development within the organization and management’s supervision
and guidance are very important for successful HRD practices (Hooi Lai Wan, 2007). Simply
providing training and development programs is not the key to better performance and employees’
satisfaction. Moreover, organizations need to look into the needs of the employees’ and ensure that
HRD practices are aligned with both company and individual goals. Employees’ satisfaction with
the organization HRD practices can be expected only when the practices incorporate employees’
needs. Therefore, in assessing and improving the existing HRD practices, the level of employees’
satisfaction with the practices is worth to consider. Problems in HRD system arise when the
training and development practices fail to accommodate employees’ needs. So if an organization
wants to enhance employees’ satisfaction and retain its’ employees; it should concern with
improving the skills, knowledge, attitudes and behavior of employees in organizational settings
for the benefit of both employees and the organization.

Hence, the purpose of this study is to make assessment of the case study organization Agricultural
Transformation Agency (ATA) - HRD practices and its effect on employees’ satisfaction, based
on a thorough literature review, and finally to come up with recommendations that will fill the
gaps identified in the study.

1.1.1 Background of the Organization

The Agricultural Transformation Agency (ATA) is a strategy and delivery-oriented government

agency created to help accelerate the growth and transformation of Ethiopia’s agriculture sector.
The ATA was established as an autonomous federal organ having its own legal personality by the
Council of Ministers Regulation No. 198/2010 and amended by Council of Ministers
(Amendment) Regulation No. 380/2016. The Agency’s mandate is focused solely on improving
the livelihoods of smallholder farmers across the country. ATA is governed by the Agricultural
Transformation Council, chaired by the Prime Minister. The Council sets the strategic direction of
the ATA and provides oversight of all of the organization’s activities, involving other parties to
facilitate decision-making as required. ATA is accountable to the Ministry of Agriculture and
Natural Resource.

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The Agency strives to introduce new technologies and approaches that can address systemic
bottlenecks & catalyze transformation of the sector. ATA’s Strategic Goals are to identify systemic
constraints of agricultural development through conducting studies and recommend solutions in
order to ensure sustainability and structural transformation; develop a prioritized list of
deliverables that can catalyze agricultural transformation for focused implementation; support
implementation of recommended solutions and prioritized deliverables; manage and lead projects
of specific deliverables within the agricultural transformation agenda as requested by the
Agricultural Transformation Council; create strong linkages among agricultural and related
institutions and projects in specific geographies in order to ensure the effectiveness of agricultural
development activities

Training and development program is giving in different ways as organization wide training
through- basic skills training, leadership and management development program and educational
grants. The other one is vertical specific training with a budget allocated to all Senior Directors to
manage their specific training need. Special training for top performers is also given from the
bbudget held in CEO office; focused on ‘Outstanding’ might consider “Exceed” performers in the
annual performance review process.

1.2 Statement of the Problem

Employees might not have the required skill and capacity to perform the organization activity at
the time of employment and there may be a gap between employees’ knowledge, skills and attitude
and what the job demand. Thus, this gap must be filled through human resource development
programs which plays a great role in creating satisfaction and help the organizations to retain their
human resource through a regular and well-designed training and development skims. As a result,
personnel training, development and education are the major ways that firms attempt to maintain
the competency levels of their human resources and increase their adaptability to changing
organizational demand. The frequent changes in production system and method also have
significant impact on production skills requirements of similar tasks. Thus, employees face the
need to constantly upgrade their skills and develop an attitude that permits them to adopt change.

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Moreover, employees are demanding professional and career development opportunities within
their organization which in turn require considering the needs of employees in training,
development and education programs. Accordingly, providing an effective human resource
development program is required to enhance both firm’s competitiveness and employee
satisfaction. Job satisfaction of employees is very important for a success of a company and
employee satisfaction is increasing in importance, as the competition for talent is high and still
growing (Boyens, 2007). The general job satisfaction feedback will help HR in identifying the
level of employee satisfaction and the significant factors affecting job satisfaction.

With this regard, the researcher tried to find any research studies made on similar topic at the case
organization. However, to my knowledge there are no previous studies done on HRD practice of
the case organization. As a result, the contribution of HRD practices in keeping employees
satisfied has not been measured either. Therefore, this research endeavor is meant to assess the
effect of HRD practice especially focused on training and development towards employee’s
satisfaction in ATA. Moreover, the researcher needs to contribute few things in this study and the
relevance of the outcome of the study for the organization and other similar organizations will get
considerable attention.

1.3 Research Questions

The following research questions were formulated

1. How does the HRD practice (need assessment, designing, implementation, evaluation)
look like in ATA?
2. What is the level of employee satisfaction in ATA?
3. What is the relationship between HRD and job satisfaction in ATA?
4. What is the effect of HRD on job satisfaction in ATA?

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1.4 Objective of the Study

The general objective of this study is to assess the HRD practice in ATA and identifying its effect
on job satisfaction.

The specific objectives therefore, are identified as follows:

- To assess the HRD practice in ATA
- To determine the level of Job satisfaction in ATA
- To identify the relationship between HRD and Job satisfaction
- To identify the effect of HRD on Job satisfaction.

1.5 Significance of the Study

This research study would assess the implementation HRD practices in ATA and its impact on
Employee job satisfaction by conducting a survey questions with the selected HQ employees. The
study identifies the gaps on the HRD practice currently implemented in ATA. The findings and
results of the study will provide a more reliable in-depth understanding of the factors that affect
employee satisfaction towards the implementation of HRD practices. To the management of ATA,
the findings are expected to provide answers to the fundamental question of implementation of
HRD practices and its effect on employee satisfaction. To other researchers, the result of the study
will serve as literature to throw more light on the factors that may affect employee satisfaction.
The outcome will further serve as secondary data for future research on the topic.

1.6 Scope of the Study

Among the different applications of HRD practices in this study the scope of HRD focused on
training and development aspect only. It would have been appropriate if the study could cover the
whole ATA filed offices but due to reachability of respondents only the Head quarter employees are
selected for sample size. Also, the scope of the study is based on the past experience of the HRD
practice implementation, but it would have been good if it would be possible to assess the whole
process as it happens. More advanced research methodologies could be used to assess the subject area
in depth.

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 1.7 Limitation of the Study

Even though, ATA has a field office in four different regions of Ethiopia (Amhara, Tigray, Oromia
and SNNPR) this study has only take some sample respondents from the head office. Thus, HRD
practice and findings of this research might not fully reflect the satisfaction level of other field
office employees in the regional office. In addition, since it is not possible to incorporate all factors
of HRD practice that could affect employee job satisfaction in one study, only four specific factors
are included in this study. Moreover, to minimize staff member’s reluctance to participate in the
survey the researcher informs them from the beginning that the results of the study will not be
exposed to any third party except for academic purpose and anonymity will be ensured.

1.8 Definition of Terms

Human Resource Management (HRM) is " planning, organizing, leading and controlling the
work of organization members and of using all available human resources to reach stated
organizational goals" Stoner J., R.Edward Freeman and Daniel R.G., (1998)

Human Resource Development (HRD) defined as a set of systematic and planned activities
designed by an organization to provide its members with the opportunities to learn necessary skills
to meet current and future job demands. Werner & DeSimone (2001)

Training: is defined as a planned process to modify attitude, knowledge or skill behavior through
learning experience to achieve effective performance in an activity or range of activities. Its
purpose, in the work situation, is to develop the abilities of the individual and to satisfy the current
and future needs of the organization. Manpower Services Commission (1981:17).

Development: is an unfolding process that enables people to progress from a present state of
understanding and capability to a future state in which higher-level skills, knowledge and
competencies are required. (Harrison, 2000).

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Job satisfaction: The term job satisfactions refer to the attitude and feelings people have about
their work. Positive and favorable attitudes towards the job indicate job satisfaction. Negative and
unfavorable attitudes towards the job indicate job dissatisfaction (Armstrong, 2006).

1.9 Organization of the Study

The thesis has consisted of five chapters.

The first chapter deals with the introductory issues about the research background, background
of the organization, statement of the problem, research question, objectives and significance of the
study, scope and limitation of the study followed by definition of terms to be used in the study,
and the organization of the study for undertaking this research.
The second chapter explore related literature to the area under study so as to better understand
concepts, theories and models related to HRD practices.
The third chapter address issues related to research methodology in a bit more detail.
The fourth chapter is devoted to data presentation, analysis and findings.
The final part (chapter five) will conclude the topic under discussion with concluding remarks
and the way forward (i.e., recommendation to the case study organization and further research for
academic purpose).

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 II

REVIEW OF RELATED LITERATURE

This chapter will serve as the foundation for the development of the study and it will give the
theoretical understanding in assessing employee’s satisfaction about an organization human
resource development practices. More specifically, review of up-to-date related literatures on HRD
practices, purposes of HRD, components of HRD and factors affecting Employees Satisfaction
(ES) will be reviewed. Then, an empirical review and conceptual framework on HRD practice and
its effect on employee satisfaction will be presented.

2.1 Definitions and Concepts of Human Resource Development

The study of HRD indicates that views on what constitutes HRD vary considerably and various
terms were used such as training, development and education. The more contemporary terms are
Human Resource Development (HRD) and Human Capital Development. Human resource
development comprises efforts that make available knowledge and training opportunities to teams
and individuals inside establishments to be able to advance and expand their performance.
Moreover, development of human resources is essential for any organization that would like to be
dynamic and growth-oriented and unlike other resources, human resources have rather unlimited
potential capabilities. According to Mondy and Noe (1990), human resource development is:
“planned and continuous process of helping employees to become better at their tasks, knowledge
and experiences through training, education and development programs.” From this definition we
can learn that HRD is planned and continuous effort of organizations to enhance employees’ task
performance, knowledge and experiences. Therefore, HRD is primarily designed to benefit both
organizations and employees through: improving employees’ task performance and supporting
employees knowledge and experience development.

According to Nadler (1989) who coined the term “Human Resources Development is defined as
organized learning experiences in a definite time period to increase the possibility of improving
job performance and growth”. In addition, Ortigas (1997) defines or divides HRD in two major
spheres, development of human resources in economic terms, and in political or social terms.
Michale M.Harris (2008), also describes HRD as "organized learning activities arranged within an

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organization in order to improve performance and/or personal growth for the purpose of improving
the job, the individual, and/or the organization." As per the definitions we have seen so far we can
understand that the driving force of HRD is built on the assumption that employees cannot be
treated as commodities to be hired and discarded depending on short-range notions of the
organization. HRD is a process of developing and releasing expertise for improving individual,
team, work process, and organizational system performance. According to Hooi (2007) the most
successful companies and countries will be those that manage human capital in the most effective
and efficient fashion by investing in their workers and encouraging workers to invest in
themselves. In developing countries most organizations tend to give less emphasis for employees
needs in HRD programs.

According to Harrison (2000) as cited in Michael Armstrong (2006), human resource

development: “Involves introducing, directing and guiding processes in such a way that all
individuals and teams are equipped with the skills, knowledge and competences they require to
undertake current and future tasks required by an organization.” To Martin (2006), development
means modernization of human resource and all other processes that involves human resources.
HRD is stated as, “the integrated use of training and development, career development, and
organization development to improve individual and organizational effectiveness (McLagan and
Suhadonlik, 1989). The three primary functions of HRD are identified as training and
development, organizational development, and career development. According to Werner
&DeSimone (2011) the focus of training and development (T&D) is on changing or improving the
knowledge, skills, and attitudes of individuals. HRD activities also encompass coordinating
management training and development programs so that managers and supervisors will gain
necessary knowledge, skills, and attitude that enable them to effectively discharge their
organizational responsibilities. Organizational development (OD) is an ongoing process by which
individual’s progress through a series of stages, each of which is characterized by a relatively
unique set of issues, themes, and tasks. It involves two distinct processes: career planning and
career management.

Inadequate need assessment, outdated training and development methods, limited educational
opportunities, unequal access to training opportunities, insufficient opportunity to learn

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skills/knowledge that will improve employees chance of promotion, inadequate opportunities for
career growth and poor supervisors guidance for employees’ development are some of the areas
which results dissatisfaction with HRD practices. These problems later lead the organizations to
resistances of employees in taking future assignments, decrease in productivity, increase in
operational error, decrease in employee morale and commitment and increase in employee
turnover. According to Fiona (2005) ineffective HRD practice can bring many problems such as
reduced employees enthusiastic to learn and apply new skills, decreased employee productivity,
low morale and higher employee turnover. Thus, organizations shall be innovative and creative to
ensure their sustainability and enhance their credibility by creating and sustaining a positive
environment (culture) that attracts and retains this key talent through proper implementation of
HRD practices. Therefore, if an organization wants to enhance employee’s satisfaction and retain
its employees; it should concern with improving the skills, knowledge, attitudes and behavior of
employees in organizational settings for the benefit of both employees and the organization.

It has been suggested that the level of employee’s satisfaction with the HRD practices are among
the most important criteria to consider when assessing the HRD practices. Moreover, employee’s
satisfaction with the organization HRD practices can be expected only when the practices
incorporate employee’s needs. Simply providing training and development programs is not the key
to better performance and employees’ satisfaction though, organizations need to consider the needs
of the employees and ensure that HRD practices are aligned with both company and individual
goals. It has been suggested that the level of employees’ satisfaction with the HRD practices are
among the most important criteria to consider when assessing the HRD practices. Satisfied,
motivated employees will create higher customer satisfaction and in turn positively influence
organizational performance. The top five most important factors that influenced employees’
satisfaction have more to do with interpersonal relationships (quality of decision makers,
communication and relations between managers and employees), atmosphere at the workplace
(work ethic, level of innovation and physical environment) and sense of personal achievement
(personal growth opportunities and level and range of responsibility) than it has to do with
attributes that can be measured (amount of time off, benefits, work hours and salary).

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2.2. HRD four step process

The Scope of the HRD system is to develop or to increase effectiveness and potential of the
individual, employees, teams, and organizations in a formal and systematic way. HRD
interventions should be designed using a four-step process or sequence: needs assessment, design,
implementation, and evaluation.

2.2.1 Assessing HRD needs

Training needs assessment is recognized as the first step in any Human Resource Development
intervention and it is the process of collecting information about an expressed or implied
organizational need that could be met by conducting training. According to Erasmus et al (2000).
Need Assessment is defined as an investigation, undertaken to determine the nature of performance
problems in order to establish the underlying causes. A needs assessment should be designed to
identify and prioritize needs, while a need analysis should break and identified need into its
component parts and determine solution requirement (Watkins and Kaufman, 1996). Desimone, et
al., (2002) contested that in analyzing HRD needs, four levels of needs must be analyzed. This
includes assessing the needs of the organization, individual employee’s skills, knowledge and
attitudes, and their functional responsibilities as well as departments needs. The ultimate aim of
the need analysis is to establish: what needs actually exist; whether they are important; how the
need become apparent; how they were defined; how they may best be addressed and what the
priorities are (Erasmus et al, 2000).

HRD need analysis should not only focus on performance deficiency because this approach is too
restrictive and includes diagnostic, analytic, and compliance need. Diagnostic needs focus on the
factors that lead to effective performance and prevent performance problems, rather than
emphasizing existing problems. Analytic needs identify new or better ways to perform tasks. These
needs are generally discovered by intuition, insight, or expert consideration. Compliance needs are
those needs mandated by law. A thorough needs analysis examines HRD needs at three
levelsStrategic/organizational analysis, Task analysis and Person analysis.
Organizational/Strategic analysis examines where training is needed in the organization, under
what conditions the training will be conducted and how is training/HRD linked to and supporting
team or organizational performance? Task analysis is defined as the systematic identification of

21
the fundamental elements of a job and examination of knowledge and skills required for the job’s
performance. It focuses on the job, rather than on the individual doing the job and its obtained
from job descriptions, observing a job, asking activity about a job, and reviewing literature about
a job. Person analysis tries to answer two basic questions: who needs training and what kind of
training do they need? The sources for person analysis data may include performance evaluation,
direct observation, tests, questionnaires, and critical incidents. Person analysis data are also used
to define developmental needs, which can be identified during the periodic performance
evaluation.

2.2.2 Designing effective HRD programs

In HRD program design, the identified need is translated into a set of objectives which will define
what participants will be expected to learn or do because of participating in the HRD program or
intervention. The key activities involved in designing an HRD program are setting objectives,
selecting the trainer or vendor, developing a lesson plan, selecting program methods and
techniques (including the appropriate use of technology), preparing materials and scheduling the
program. Objectives state the outcome the program is intended to produce including the specific
performance expected, the conditions under which it will be performed, and the criteria to be used
to judge whether the objective has been achieved. It also describes the intent and the desired result
of the HRD program. After an organization identifies a need for training, the next step is to decide
whether to purchase the program from an outside vendor or design the program in-house. If the
organization decides to stay inhouse, a trainer must be selected. If there is a full-time trainer with
content knowledge available, the decision will be an easy one. If not, then a content specialist may
need to be identified and sent to a train-the-trainer program. Once the trainer designs the program,
the next step is to determine the best schedule while avoiding potential conflicts.

2.2.3 Implementing HRD programs

Implementing Training &Development program is the stage of putting the training program in to
practice in accordance with the design. In delivering the training contents the responsibility of
implementing the program largely depends upon the trainer. The trainer should make sure that the

22
training environment is free from physical destructor like noise and there should be conducive
ventilation, temperature, and good lighting to deliver the training program. The trainer also must
prepare the trainees by putting them at ease and it is important to find what the trainees already
know to stimulate their interests. This is followed by careful presentation of the training content
by stressing on key points. The trainer has also to test the trainees by asking questions and correct
errors and finally follow up them by ways of frequent checking and encouraging their learning. It
is also important to find a venue away from the normal place of work so as to avoid interruptions;
to make sure that any equipment that might be needed is available; to check that seating
arrangements are in a proper way in order to make people feel more comfortable with their
surroundings are important considerations.

There are three primary training approaches: on-the-job training through the technique of Job
construction training, Job rotating, Coaching and Mentoring; classroom method uses Lecture,
Conference Discussion, Audio visuals, Experimental techniques, Computer-based trainings and
the self-paced method of paper-based training and computer-based trainings. The trainer needs to
select the best combination of techniques and use of technology that will maximize trainee
learning. When thinking about what training method or methods to use, the current level of
expertise of the trainees need to be considered. Organizations may combine the use of lecture,
discussion, case studies, behavior modeling, role playing, and games or simulations. This
combined approach is especially valuable when trainees have different learning styles and
preferences. The basis for choosing a training method should be determined by the program
objectives, an explicit consideration of the current level of trainee expertise and the human and
technological resources available.

2.2.4 Evaluating HRD programs

Evaluation of training and development is the most essential aspect of training program. All good
training and development programs start with identification of training and development needs
and ends with evaluation of training. When conducting an evaluation, both descriptive and
judgmental information may be collected. Descriptive information provides a picture of what is
happening or has happened, whereas judgmental information communicates some opinion or

23
belief about what has happened. Goldstein (1980:237) defined HRD evaluation as "the systematic
collection of descriptive and judgmental information necessary to make effective training
decisions related to the selection, adoption, value, and modification of various instructional
activities." According to Noe (2002) training evaluation involves both formative and summative
evaluation. Formative evaluation refers to evaluation conducted to improve the training process
through provision of information during its implementation (Noe, 2002). This methodology is
performed to assure that the training program is well organized and runs smoothly and trainees are
satisfied with the program. Summative evaluation refers to evaluation conducted to determine the
extent to which trainees have changed because of participating in the training program (Noe, 2002).
This includes whether the trainees have acquired knowledge, skills, attitudes, behavior or other
outcomes identified in the training objectives.

There are many training evaluation approaches and techniques. Kirkpatrick's evaluation model is
the one most commonly used by many organizations, which is the earliest and most popular that
proposes four levels of evaluation: participant reaction, learning, behavior, and results. The
Reaction Level answers whether people are happy with the training inputs thus, it evaluates
participants' reactions, opinions, impressions and attitudes toward the program, such as, to what
extent the participants liked T&D program, its contents, the trainer, the methods and the
environment surrounding the program. This is commonly obtained at the end of the program
through questionnaires or group discussion. The Learning level answers what do people remember
from the training session, to what extent have the participants learned the material and the
particular skills or know-how contained in the program. This measurement is made through special
standardized tests at the end of the program, such as pre-post, paper-and-pencil tests, skill practice,
workshops and job simulation. The Behavioral Level answers whether people use what they know
at work - the changes in the participants' behavior, skills, patterns of work, relationships and
abilities, and so on. In this kind of measurement, management would like to know if participants
have improved on-the-job performance as a result of T&D. These indications could be collected
through observations, survey, interview and comments of supervisors and colleagues and from
performance appraisal. The Result level finds out what are the outcomes of applications on the job
over a period of time focusing on the impact of behavior change on the organization's performance.
The information gathered from the training evaluation is then included in the next cycle of training

24
needs assessment, training objectives, design, implementation and evaluation process is a
continual process for the organization.

2.3 Empirical Reviews

Several researches have been made by different researchers to assess and examine the practices of
employees training and development using their own hypotheses. Each of the researches has their
own distinctions and conducted with different context and in different country. Rama Devi V,
Nagurvali Shaik (2012) conducted a study on Evaluating training & development effectiveness -
a measurement model in India. There is a causal relation between training and employee
satisfaction. Training helps organizations in achieving their strategic objectives and gives
organizations a competitive edge. In this context, organizations train and develop their employees
to the fullest advantage to enhance their effectiveness. Chris Obisil (2011), also conducted a study
on Employee Training and Development in Nigerian Organizations. In his study training and
development are the topic employees needed to enhance their performance and potentials that will
in turn enhance organization effectiveness. Other studies shows that the impact of HRD itself
maybe contingent on other factors, such as the age, skill and educational composition of the
workforce, or on employees’ individual dispositions and orientations to work, or on existing
institutional arrangements (Hooi Lai Wan, 2007).

As far as the effect of HRD policies on ES is concerned; limited literature on this shows a positive
correlation. According to Lee (2000), organizations that invest in HRD are more likely to increase
ES. In addition, Chen et al. (2004) found that opportunities for mobility within organization and
career development programs positively influence ES, professional development and productivity.
Henry Ongori, Jennifer Chishamiso Nzonzo(2011) Conducted research on training and
development practices in an organization: an intervention to enhance employee satisfaction in
Botswana. Here, an organization uses various methods, for instance job rotation is used to train
employees in this era of globalization. Similarly, various methods are used to evaluate the training
programs. Personal and awkward influences are affecting employee-training efforts.

25
The findings of the research showed that training of employees has a positive effect to the
individuals and the organization at large. For instance, training of employees improves
communication in an organization, transfer of skills and knowledge, improves job performance,
encourages team work, boosts the morale of employees and leads to job satisfaction. However,
(Schuler and Jackson, 1996) suggested that decisions concerning delivery sites and methods might
be constrained by the type of learning that is to occur, as well as the considerations of costs and
time. The implication of this study is that it will broaden the literature of training and development in
organizations. Furthermore, this study would spur debate among managers to come up with various
strategies to ensure that employees are trained and developed to be strategically positioned cope with
any changes in the business environment. Finally, the study will provoke various managers to
understand the need for training and development of employees in their organizations.

2.4 Conceptual framework

A conceptual framework is an analytical tool with many variations and contexts. It is used to make
conceptual distinctions and organize ideas by using diagrams or charts and the like. So the
researcher tries to see the relationship between Independent variables (models of HRD practice –
Needs assessment, Designing, Implementation and evaluation) and Dependent variable
(Employees Satisfaction). The below framework diagram for the independent variables is adopted
from Werner and DeSimone (2012) and linked with the dependent variable for this study. The
researcher chose these variables based on the major objective of the study which focuses on the
assessment of the effect of HRD practices on employee satisfaction in the case study organization.
The below diagram is derived from Werner &DeSimone (2011) and modified to reflect the link
between the Independent variable – employee satisfaction (ES) with HRD processes.

26
Figure 2.1 Conceptual framework

Training and HRD Process

Need
assessment
- Prioritize needs

Designing
- Define Objectives
- Develop lesson plan
- Develop/acquire materials
- Select trainer/leader
- Select methods
- Select methods and techniques
- Schedule the program/intervention

Employee Job
Implementation Satisfaction
Deliver the HRD
program or intervention

Evaluation
- Select evaluation criteria
- Determine evaluation
design
- Conduct evaluation of
program or intervention
- Interpret results

Source: Developed for the research

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 III

RESEARCH METHODOLOGY

Research methodology refers to the methods or techniques used to collect and analyze data as well
as the logic behind selecting and using the methods in order to arrive at sound conclusions
(Kothari, 2011). This chapter briefly discusses the methodology used in this research. It tried to
cover explanations of the research approach, research design, data sources, population and
sampling techniques, data collection methods and instruments, mode of data analysis and ethical
considerations of the research. Generally, data was being collected from primary and secondary
sources. The primary data was being collected through interview and questionnaire methods of
data collection. The secondary data also gathered from different published and unpublished books
and other relevant materials. In this study, to obtain accurate and relevant information to this
research: questionnaire, interview, and document analysis was being used as data collection tools.

3.1 Research Design

The data collection procedures were through questionnaires and interview. The questionnaire was
distributed in person for each respondent in order to enable them to fill the questionnaires when
they can. The questions were close ended with 5 Likert scales, because these kinds of questions
mostly clear and helps to get respondents view. The interview questions will also be open ended
to obtain detail information from the interviewees by directing and raising additional questions.
The interview was administered in the normal work time by setting an appointment with the
interviewee. Both the interviews and questionnaires were prepared in English language as it is the
working language of the organization. According to Creswell (2003), there are three basic types
of research approaches including quantitative, qualitative, and mixed approach. Qualitative
research is an approach for exploring and understanding the meaning individuals or groups ascribe
to a social or human problem. Quantitative research is an approach for testing objective theories
by examining the relationship among variables. Mixed methods research is an approach to
inquiry involving collecting both quantitative and qualitative data, integrating the two forms of
data, and using distinct designs that may involve philosophical assumptions and theoretical

28
frameworks. A mixed approach is useful to capture the best of both quantitative and qualitative
approaches. Thus, to achieve the objective of this study and answer the research questions mixed
research approach will be used.

Research Design is about organizing research activities including data collection and analyzing in
such a way that help to achieve the Research aims (Oppenheim, 1992). According to Burns and
Bush (2003) research designs are classified into three categories: exploratory, descriptive, and
causal. Exploratory research is most commonly unstructured, informal research that is undertaken
to gain background information about the general nature of the research problem. In contrast to
exploratory designs, descriptive research is undertaken to describe answers to questions of who,
what, where, when, and how. The third one is causal, which may be thought of as understanding a
phenomenon in terms of conditional statements (Burns & Bush, 2003). The researcher used
descriptive research design (regressive analysis) in order to determine the relationship between the
dependent and the independent variables and to establish any association between these variables.

The constructs identified in the literature described using various statistical tools as deemed
appropriate in addition; each construct was correlated with employment satisfaction. The research
was designed as a case study approach since it is the best method to explore in depth a program,
event, activity, process or one or more individuals. Furthermore, case study approach can provide
very engaging and rich explorations of a program or application as it develops in a real-world
setting. The objectives of the study addressed using primary sources of data by administering
quantitative survey questionnaire distributed to employees of the case study organizations while a
structured interview will be conducted with head Talent Development Manager of ATA. Finally,
the data collected from primary sources analyzed both quantitatively (using descriptive correlation
method of analysis) and qualitatively (using content analysis).As to secondary data, two categories
of sources consulted. For data specific to the organization HR policy/procedures manuals,
guidelines, and other relevant sources such as their respective websites was referred in order to get
better understanding and pertinent information about the organization. As to the theoretical and
conceptual frameworks of HRD, a critical review of literature including relevant books, journal
articles and authenticated internet sources used.

29
3.2 Data and Variables

The required data for the research focus on the four HRD interventions or variables stated at the
conceptual frame work depicted above. They are needs assessment, design, implementation, and
evaluation as Independent variables and Employee satisfaction as Dependent variable. The data
analysis of the study was done in away that its objectives demand. As much as possible, separate
analysis for individual objectives will be done. Demographic characteristics were summarized
using frequencies and percentages for all variables including: age, sex, work experience,
employment category and educational level. The data gathered through questionnaires analyzed
and presented in the form of charts, figures and tables using SPSS software. The results of the
interview questions are integrated to the responses of employees through questionnaires and were
analyzed accordingly.

3.3 Source of Data

The population of this study are employees of ATA both management and non-management staffs
who are working in the organization; with a total population of 477 staffs as at April1, 2018.The
primary data was collected using self-administered survey questionnaire with current employees
of ATA, and structured interviews with head of Talent Development Manager. The secondary
data was collected from books, publications, journal articles, proclamations, and other online
materials from the internet.

3.4 Sample design and Sampling Technique

The scope of the research was limited to the target population of 382 staff in ATA Head Quarter
found in Addis Ababa out of the total staff of 477. Simple random sampling technique was
employed once the nine different strata are identified based on departments as shown below. This
is because all selected sample respondents in each department have similar knowledge of the case
study. On the other hand, purposive technique of sampling was used to gather information from
specific types of people who can provide the desired information, either because they are the only
ones who have it, or to conform to some criteria set by the researcher. Based on this ATA head of
Talent Development Manager was selected through purposive technique of sampling for interview.

30
As the nature of the problem at hand is descriptive correlation, a mixed approach employed (i.e.,
both quantitative and qualitative data were collected).A case study is preferred due to accessibility
and availability of employees for the study. Simple random sampling technique used once the
different strata are identified and to select samples from the existing employees of the organization
in each department so that the total population would have representative. As it is mentioned in
Kothari (Kothari, 2004) stratified sampling results in more reliable and detailed information and
enables to get more representative samples. As to the selection of respondents for the structured
interview, subject matter specialists were chosen from HR department based on their functional
responsibility.

Table 3.1 Composition of the population

Population Size Sample Size Remark
Departments F M Grand Total
Analysts 17 24 41 7
Agricultural Comm. Cluster 20 75 95 16 Regional office
Agribusiness & Markets 15 40 55 9
Analytics 16 24 40 8
Cross cutting Imitative 3 8 11 2
CEO Office 1 6 7 1
Crops & Natural Resources 4 49 53 9
Livestock 5 5 1
Operations 51 88 139 23
Strategic Services 11 20 31 5
Grand Total 138 339 477 80
Source: Staff data from ATA

3.4 Data Capturing Instruments

For this study, the survey-questionnaire instruments were used to achieve the main objective of
the study. The questionnaire is developed through the adaptation and modification from previous
studies (Desalegn 2010 &Bitew, 2016). The self-administered questionnaire was given to the
employees that aimed to assess the constructs of HRD practices in the organization. The
questionnaire was structured in such a way that respondents able to answer it easily thus the set of
questionnaires was structured using the Likert format with a five-point response scale. A Likert
Scale is a rating scale that requires the subject to indicate his or her degree of agreement or

31
disagreement to a statement. To measure the satisfaction level a five-points Likert scale be used
which is denoted by 1=Strongly Disagree, 2=Disagree, 3= Neutral, 4=Agree, and 5=Strongly
Agree. In this type of questionnaire, the respondents will be given five response choices these
options served as the quantification of the participants' agreement or disagreement on each
question item. As secondary sources, internet, text books, articles, related researches undertaken
in this area, and journals were consulted. In addition, purposively selected head of Talent
Development Manager was interviewed to collect pertinent information.

The data that is going to be obtained from five point Likert scale will be calculated and analyzed
before giving degree of satisfactions. The five-point rating is scored as shown below:

5 = Strongly agree
4 = Agree
3 = Neutral
2 = Disagree
1 = Strongly disagree

According to Boontharika Banjongjit (2010), the five-point scale was calculated and interpreted
into the degree of agreement using the following formula.

Interval = The highest Score - The lowest Score

Number of Interval
Interval = 5-1
5
= 0.8

The average score (mean) obtained from each item was interpreted into degree of agreement as
follows:

Average Score = 1.00 -1.80 Very low degree of agreement

Average Score = 1.81 -2.60 Low degree of agreement
Average Score = 2.61 -3.40 Moderate degree of agreement
Average Score = 3.41 -4.20 High degree of agreement
Average Score = 4.21 -5.00 Very high level of agreement

3.6 Reliability and Validity of the research Instrument

The questionnaire was forwarded for the respective advisor comment before pre-testing with some
sample selected respondents from the case organization to test the content validity of the

32
instrument and to check the clarity, length, word ambiguity and structure then; their suggestion
was incorporated before distribution of the questionnaire to the large sample population. Validity
refers to the extent to which a test measures what we wish to measure. Reliability has to do with the
accuracy and precision of a measurement procedure (Kothari, 2004). The reliability of the survey
questionnaire will be tested using Cronbach’s Alpha. Cronbach’s alpha is a coefficient of
reliability and is a measure of internal consistency, that is, how closely related a set of items are
as a group. Ideally, the Cronbach's alpha coefficient of a scale should be above 0.70. Content
validity will be ensured using pilot-test with sample respondents in the case study organizations to
include comments and suggestions from the research advisor as well as subject matter specialists
from the case study organization. The sample size will be determined based on the table shown
below (Naresh K. Malhotra. 2009) and only 80 employees were being enough, but to cover
defective questioners the researcher distributed additional 20 questioners.

Cronbach’s alpha is used to measure the internal consistency of the measurement items. Higher
Alpha coefficients indicate higher scale reliability and as shown in the table below, Scale
Reliability Cronbach Alphas coefficients for job satisfaction item the overall Cronbach alpha
coefficient for expected-scale items is 0.953. Therefore, the expected scales used in this study
demonstrate high reliability.

Table 3.2 Reliability Statistics

Cronbach's N of Items
Alpha

.953 41

Table 3.3 Sample Size Determination

Population Size Sample Size

Low Medium High
51-90 5 13 20
91-150 13 32 50
281-500 20 50 80
501-1200 32 80 125
1201-3200 50 125 200
3201-10000 80 200 315
10001-35000 125 315 500
35001-150000 200 500 800
Source: Naresh K. Malhotra. (2009)

33
To be able to generate both qualitative and quantitative data that provides comparable results and
obtain in-depth information, open/close ended questionnaires for a sample of 80 employees of
ATA was distributed and analyzed. The questionnaire was being administrated among the selected
respondents in the head office. The questions were designed to facilitate the respondents to identify
the various variables contributing towards Job satisfaction of employees.

3.7 Data Analysis and Discussion

After the required data are collected from the primary sources, it was analyzed through quantitative
and qualitative data analysis methods. In addition, Frequency and percentage will be used to
present the data. Tables and charts was also being used to ensure clear understanding of the
analysis. Finally, the result of statistical analysis summarized, tabulated and interpreted
appropriately. Meanwhile, responses from the interview was reported in line with the questions
forwarded to the interviewees and then these findings will be combined and summarized together
with the quantitative data findings to triangulate the results accordingly.

Regression Analysis as used to measure the relative strength of independent variables on

Dependent variable. The multiple regression model is applied to assess the magnitude and
direction of each independent variable: Y=βo+β1x1+β2x2+ β3x3 +ei; Where y=dependent
variables,x1,x2,x3=independent variables, βo is the intercept, β1measures of change in y with
respect to x1, holding other factors fixed, β2 measures of change in y with respect to x2, holding
other factors fixed, β3 measures change in y with respect to x3, and ei is error term. The aim of
this research is to make assessment on the Effect of HRD practices: Needs assessment (NA),
Design (D), Implementation (I), and Evaluation (E)and its impact on employee satisfaction(ES).
The regression model of this study is estimated in the following form: ES = 𝛽0 + 𝛽1 NA + 𝛽2 D
+ 𝛽3 I + 𝛽4 E + 𝜀

3.7.1. Ordinary Least Square

According to Brooks (2008), ordinary least squares (OLS) or linear least squares is a method to
estimate the slope and intercept in a linear regression model. This study used an ordinary least squares

34
(OLS) regression to estimate the linear equation. The rational for choosing OLS is that, if the Classical
Linear Regression Model (CLRM) assumptions hold true, then the estimators determined by OLS will
have a number of desirable properties and are known as Best Linear Unbiased Estimators (Brooks,
2008). In addition, as noted in Petra (2007) OLS outperforms the other estimation methods when the
following holds; the cross section is small and the time dimension is short. Therefore, as far as both
the above facts hold true in this study it is rational to use OLS. Thus, the following section discussed
the CLRM assumptions.

According to Brooks (2008), the assumptions of ordinary least squares are:

1) The errors have zero mean

2) The variance of the errors is constant and finite over all values
3) The errors are linearly independent of one another
4) There is no relationship between the error and corresponding x variate

3.7.2. Diagnostic Analysis

Diagnostic checking is done to test whether the sample is consistent with the following assumptions:

1) The model is correctly specified

2) There is no relationship between independent variables (No multi-collinearity)
3) There is no relationship among the error term at the period t and the error term at period before t
(No autocorrelation problem)
4) The error term is constant across the number of observations (Homoscedasticity)
5) The error term is normally distributed
If all the above assumptions are consistent with the sample, E-view result will be accurate and
reliable. The following tests are done in this research to test the above assumptions.

3.7.3 Heteroscedasticity

According to Brooks (2008), Heteroscedasticity means that error terms do not have a constant variance.
If heteroscedasticity occur, the estimators of the ordinary least square method are inefficient and
hypothesis testing is no longer reliable or valid as it will underestimate the variances and standard
errors. There are several tests to detect the Heteroscedasticity problem, which are Park Test, Glesjer
Test, Breusch-Pagan-Goldfrey Test, White’s Test and Autoregressive Conditional Heteroscedasticity
35
(ARCH) test. In this study, the popular Autoregressive Conditional Heteroscedasticity (ARCH) test
was employed to test for the presence of heteroscedasticity. The hypothesis for the Heteroscedasticity
test was formulated as follow:

H0: There is no Heteroscedasticity problem in the model

H1: There is Heteroscedasticity problem in the model
α = 0.05
Decision Rule: Reject H0 if p-value is less than significance level. Otherwise, accept H0.

3.7.4 Autocorrelation

According to Brooks (2008), when the error term for any observation is related to the error term of
other observation, it indicates that autocorrelation problem exist in this model. In the case of
autocorrelation problem, the estimated parameters can still remain unbiased and consistent, but it is
inefficient. The result of T-test, F-test or the confidence interval will become invalid due to the
variances of estimators tend to be underestimated or overestimated. Due to the invalid hypothesis
testing, it may lead to misleading results on the significance of parameters in the model. In this study
to test for the existence of autocorrelation, the popular Breusch-Godfrey Serial Correlation LM Test
was employed.
H0: There is no autocorrelation problem in the model
H1: There is autocorrelation problem in the model
α = 0.05
Decision Rule: Reject H0 if p-value less than significance level, otherwise accept H0.

3.7.5 Multicollinearity

According to Brooks (2008), Multicollinearity will occur when some or all of the independent variables
are highly correlated with one another. If the multicollinearity occurs, the regression model is unable
to tell which independent variables are influencing the dependent variable. The consequences of
Multicollinearity are large variances and covariance of OLS estimators, wider confidence interval,
insignificant t ratio, high R2 but few significant t ratio, sensitivity of OLS estimators and their standard
errors to small changes in data. There is no one unique method to detect the multicollinearity problem,
it only have some rules of thumb, which are high R2 but few significant t ratio, high pair wise correlation
coefficient and Variance Inflation Factor (VIF) or Tolerance. This study used high pair-wise
correlation coefficients method to test the presence of multicollinearity problem in a regression model.

36
Because it can see the correlation of independent variables between each other one by one. If the
correlation coefficient is higher than 0.8, the model would be considered as it consists of serious
Multicollinearity problem Guajarati (2004).

3.7.6 Normality

Normality tests are used to determine if a data set is well-modeled by a normal distribution. With the
normality assumption, ordinary least square estimation can be easily derived and would be much more
valid and straightforward. This study used JarqueBera Test (JB test) to find out whether the error term
is normally distributed or not. The hypothesis for the normality test was formulated as follow:
H0: Error term is normally distributed
H1: Error term is not normally distributed
α = 0.05
Decision Rule: Reject H0 if p-value of JB test less than significance level, otherwise accept H0.

3.7.7 Model Specification

According to Brooks (2008), Specification error occurs when omitting a relevant independent variable,
including unnecessary variable or choosing the wrong functional form, so that regression model will
be wrongly predicted. If the omitted variable is correlated with the included variable, the estimators
are biased and inconsistent. If the omitted variable is not correlated with the included variable, the
estimators are unbiased and consistent. Ramsey RESET test was used to see whether the developed
model is correctly regressing.
H0: the model is correctly specified
H1: the model is not correctly specified
α = 0.05
Decision Rule: Reject H0 if p-value is greater than significance level. Otherwise, accept H0.

3.8 Ethical Issues and Considerations

The study was conducted in such a way that it consider ethical responsibility. Ethical responsibility
includes providing information about the study for respondents (like who’s conducting the
research, for what and who will benefit), also the study provided anonymity, meaning the
information from the respondents will be confidential and will not be used for any personal interest.
The objective of the research is to make assessment of the HRD practice and employee satisfaction

37
in ATA. Providing Assurances to Participants will be given high priority. In order to protect the
identity of the respondents, guarantee their active participation and satisfy ethical considerations,
the following guidelines adhered to the information will be used strictly for academic purpose; the
identity of the respondents will be protected; the response of the participants will be presented in
general terms except where it is absolutely necessary to make reference to the office or officer;
after the interview, the respondents are required to vet the draft of the interview report. This is part
of the measures to guarantee the confidentiality of the exercise; and the manuscript of the interview
will not be made available in any public domain. At the end of the research, essential information
that can support further research will be preserved by the researcher while the others will be
destroyed.

38
 IV

DATA PRESENTATION AND ANALYSIS

Research results were obtained in respect of the “Assessment on the Effect of Human Resource
Development (HRD) Practice on Employee Satisfaction in the Case of Agricultural
Transformation Agency (ATA)”. The total population of ATA is 477 as at April 2018 out of that
95 are at the regional office. The researcher selects a random sample of 90 employees and 77 of
them return the questioners but 13 questionnaires were not returned from respondents that gives
85% return rate.

The data received from the respondents were analyzed with the help of statistical software program
SPSS-20. Correlation analysis was performed for measuring the independent variable which is
ATA’s HRD practice effect on employee’s satisfaction. The data obtained through semi structured
interviews that was forwarded to Talent Development Manager of the organization was also
included. Presentation of findings has been organized in accordance with the variables.

4.1 Description of the Results

4.1.1 Demographic Information of the Respondents

The first part of the questionnaire consists of the demographic information of the participants
which, requested a limited amount of information related to personal and professional
characteristics of respondents.

Table 4.1 Demographic information’s

Demographic information Frequency Percent Valid Cumulative
Percent Percent
F 31 40.3 40.3 40.3
Gender M 46 59.7 59.7 100.0
Total 77 100.0 100.0
30 – 40 36 46.8 46.8 46.8
Age 41 – 50 41 53.2 53.2 100.0
Total 77 100.0 100.0

39
 Diploma 9 11.7 11.7 11.7
Degree 35 45.5 45.5 57.1
Education
Masters 33 42.9 42.9 100.0
Total 77 100.0 100.0
<= 5 32 41.6 41.6 41.6
Work
6+ 45 58.4 58.4 100.0
Experience
Total 77 100.0 100.0
Non manager 44 57.1 57.1 57.1
Employment
Manager 33 42.9 42.9 100.0
Category
Total 77 100.0 100.0
Source, own survey 2018

As far as the distribution of the respondent’s terms of sex is concerned, out of 77 respondents 31
(40.3%) of them are females and the remaining 46 (59.7%) of them are men as shown in the chart
below. Therefore, in this study one can conclude that the majority of the respondents were male.
This has resulted in male dominancy in responses than females based on the total population
gender distribution of the organization. Most respondents are at the age of 41-50, which accounts
to 53.2% (41) of the total respondents and the rest 36 (46.8) are between 30-40 years of age. This
can be generalized that there are more young employees in ATA. Regarding respondent’s
educational level is concerned, the study revealed that 9 (11.7%) respondents are Diploma holders
35 (45.5%) of the respondents are Degree holders and 33(42.9%) of them are master’s as it is
shown in the figure below. This indicates that most of the respondents 88.4% are Degree and above
in various area of specialization. We can conclude that the respondents have better understanding
about the concept of training and development as they were well educated.

With regard to service years of the respondents in the organization revealed that 32 (41.6%) had
below 5 years’ service, and the remaining 45 (58.4%) are had between 5-8 years’ service as it is
shown in the figure below. From this we can understand that 60% of the respondents were having
above 5 years work experience. The researcher can conclude that, majority of the respondents has
longer experience in the organization and the composition of work experience of the representative
samples may have a positive effect on the quality of the finding of the study as it incorporates the
views of each group. The respondents position is categorized into Manager and Non-Manager and
out of the total respondents 44 (57.1%) are Nonmanagers and the rest 33 (42.9%) are Mangers.

40
4.2 HRD Practice in ATA

The summary of descriptive statistics that was intended to give general descriptions about the data
(both dependent and independent variables) is presented below. The total number of observation
for each variable is 77. Accordingly, frequency, percentage, mean and standard deviation values
of each variable were used to show the overall trend of the data. As stated in ATA’s Educational
Grant Administration Guideline, all permanent Ethiopian citizen employees who fulfill the
requirement are eligible to compete for the grant. The questions are categorized into six sections
– General information, need assessment, design, implementation, evaluation and job satisfaction.

4.2.1 General information on HRD practice of the organization

Table 4.2 General information on HRD policy

Descriptive Statistics

N Minimum Maximum Mean Std.

Deviation

1.1 T&D policy and program is well defined and conducted

77 2 5 4.25 .781
based on the strategic plan and objectives of the organization.
1.2 The organization has realistic and measurable T&D Policy
77 1 5 3.95 .902
objectives and roles.
1.3 T&D plan of the organization is well communicated to all
77 2 5 4.01 .866
employees.
1.4 T&D plan enables to improve skills, knowledge and attitude
77 2 5 4.00 .811
of employees which can increase performance on the job.
1.5 The organization reviews its strategies and objectives to
77 2 5 3.90 1.008
reveal valuable information for T&D.
1.6 Employees are being benefited equally from Human
77 2 5 4.01 .866
Resource Development (HRD) practices of the Organization.
1.7 The selection of candidate for T&D is clearly defined. 77 3 5 4.05 .759
1.8 The organization provide training program - local and abroad. 77 2 5 4.01 .866
1.9 T&D helped employees to perform the work quickly and
77 2 5 3.90 1.008
efficiently.
1.10 HRD practice of the organization reduces the employee
77 2 5 3.90 1.008
turnover rate.
Valid N (listwise) 77 3.998
Source, own survey 2018

In the general information questionnaire that contains 10 items about employee’s information of
the HRD practice in the organization, greater part of the respondents rates the highest scale
“strongly agree” and the minimum value rate is “strongly disagree”. The highest mean value of
the response for this category is 4.25 and a standard deviation of 1.008. This shows that majority
of employees in the ATA has clear information about the organization HRD policy and procedure.

41
According to Boontharika Banjongjit (2010), the five-point scale was calculated and interpreted
into the degree of agreement. The average score (mean) obtained from each item was interpreted
into degree of agreement as follows:

Average Score = 1.00 -1.80 Very low degree of agreement

Average Score = 1.81 -2.60 Low degree of agreement
Average Score = 2.61 -3.40 Moderate degree of agreement
Average Score = 3.41 -4.20 High degree of agreement
Average Score = 4.21 -5.00 Very high level of agreement

Therefore, the responses rate on the general information of HRD practice in ATA indicated a grand
mean value of 3.99 which indicates most of the respondents agreed with the presence of general
information about HRD policies and practices in the organization. These mean value indicates a
high level of agreement on the overall HRD policy and practice of the organization. However, the
organization can do more to enhance the information sharing on HRD practices and policies
implemented in the organization regularly; for all employees with the updated practices in the area
that could also help the organization to increase their work efficiency. Training policies are
necessary to provide guidelines for those responsible for planning and implementing training, to
ensure that a company's training resources are allowed to priority requirements, to provide equal
opportunities for training throughout the company and to inform employees training and
development opportunities (Kenney and Others, 1979). The organization has a clearly defined
training and development policy which is integrated with the objectives of the organization.

4.2.2 Need Assessment

In the questionnaire under the need assessment category there are 5 questions, the maximum rate
value of “strongly agree” was selected and the least value rate is “strongly disagree” about the
need assessment practice of the organization.

Table 4.3: Need assessment

Descriptive Statistics
Item N Minimum Maximum Mean Std.
Deviation
2.1 T&D needs are assessed regularly. 77 2 5 4.12 .778
2.2 T&D needs analysis methods of the organization enables to
clearly identify the required training that employees need to 77 1 5 3.95 .902
perform their job.

42
2.3 T&D needs identified are prioritized properly 77 2 5 4.01 .866
2.4 T&D needs assessment can able to differentiate
performance problems caused by employees lack of skills, 77 2 5 4.21 .894
knowledge and abilities.
2.5 T&D needs analysis methods of the organization enables to
clearly identify the required training that employees need to 77 2 5 4.19 .874
perform their job

Valid N (listwise) 77 4.096

Source, own survey 2018

The responses rate on the need assessment of the organization indicated the highest mean value of
4.19 and standard deviation of .902 which indicates most of the respondents agreed with the
presence of need assessment in the organization. Thus, the researcher realized that majority of the
respondent’s accord upon the need assessment practice of the organization. The responses rate on
the need assessment practice in ATA indicated a grand mean value of 4.09 which indicates most
of the respondents agreed with the need assessment practice of the organization or can be
interpreted into a very high level of agreement. This mean value could be increased if the
organization do the need assessment regularly at all levels of the organization to see the gap on
employee performance. This will also help the organization to use the budget on time and
efficiently for the right human power that will add more value to the production.

Need identification is the starting point in any training and development activity. Need
identification or assessment is not a routine function, because it should conduct carefully and in a
diagnostic manner. As discussed above in the questionnaire training and development is conducted
based on needs assessment in the organization.

4.2.3 Design

Training and development design is the process of developing a plan of instruction for each training
program to be offered to meet training objective (Goldstein & Ford, 2007). The success of training
should be measured in terms of the objectives set and useful objectives are measurable that serves as a
check on internalization, or whether the person really learned. Objectives for training can be set in any
area by using one of the following four dimensions: such as Quantity, Quality, Timeliness, and Cost
savings as a result of training.

43
Table 4.4: Design
Descriptive Statistics
Item N Minimum Maximum Mean Std.
Deviation
3.1 T&D Policies and programs are designed based on need
77 1 5 3.95 .902
assessments
3.2 T&D program of the organization is designed compatible with
77 2 5 4.01 .866
the actual job to be performed.
3.3 The T&D program given enables to demonstrate it on the job. 77 2 5 3.90 1.008
3.4 The T&D programs able to improve skills, knowledge and
77 2 5 4.01 .939
attitude of employees which can increase performance on the job
Valid N (listwise) 77 3.96
Source, own survey 2018
As indicated in the above table for designing practice with 4 questions the highest mean value of
4.01 and standard deviation of 1.008 is scored for the question items on HRD designing practice
of the organization that shows most of the respondents agreed with the training and development
designing practice. The grand mean value is 3.96 which show a high level of agreement on the
HRD designing. This value could be improved through use of different designing practices that
will feet into the need of employee development and at the same time that will increase
productivity level with advanced technologies.

4.2.4 Implementation

Table 4.5: Implementation

Descriptive Statistics
N Minimum Maximum Mean Std.
Deviation
4.1 The organization gives on the job training ie. Job rotation,
77 2 5 3.90 1.008
Coaching and Mentoring.
4.2The training delivery method that the organization used is
77 2 5 4.01 .866
convenient to get the necessary knowledge and skills
4.3 Participatory T&D delivery method is implemented 77 1 5 3.95 .902
4.4 The training method that the organization used is convenient to get
77 2 5 3.90 1.008
the necessary knowledge and skills.
4.5 The T&D delivery method has enabled to transfer the skills
77 2 5 3.90 1.008
acquired to the job.
Valid N (listwise) 77 3.932
Source, own survey 2018
The above table contain 5 implementation practice related questions and the highest mean value
of 4.01 is scored with 1.008 standard deviation rate. The grand mean of the response on the
implementation practice of the organization is 3.932 which indicate most of the respondents agreed
with the implementation of training and development program in the organization and a high

44
degree of agreement. With this value one can understand that employees are not fully satisfied
with the implementation practice the organization uses. Therefore, HRD implementation practice
needs to be revised to make it simple and accessible for all employees on their level that will enable
the whole employees to benefit from each training and development. The Training methods can
be generally categorized as either on the job or off the job. The training delivery options for either
method can be sourced from either in-house or external sources, or a combination of both. In
addition, even if, the trainers were capable and knowledgeable and can transfer and demonstrate
the training and development appropriately in the organization and training materials and teaching
aids are complete and appropriate and the training environment is conducive.

4.2.5 Evaluation
Under evaluation practice there are 12 questions to assess the employee’s satisfaction on evaluation
practice of the organization.

Table 4.6: Evaluation

Descriptive Statistics
N Minimum Maximum Mean Std.
Deviation
5.1 The trainers are knowledgeable about the subject matter. 77 2 5 4.01 .866
5.2 The training materials and teaching aids are complete and
77 1 5 3.95 .902
appropriate to the level of trainees.
5.3 The training environment given by the organization is
77 2 5 3.90 1.008
conducive to conduct training.
5.4 The T&D delivery method has enabled to transfer the skills
77 2 5 4.03 .873
acquired for the job.
5.5 The organization tests the trainees before and after the
77 2 5 4.01 .866
program.
5.6 The organization asks the trainees for their evaluation
77 1 5 4.26 .818
through questioners at the end of the T&D program.
5.7 The organization looks the performance appraisal report of
77 2 5 3.90 1.008
employees after training to evaluate the T&D impact.
5.8 T&D efforts are evaluated based on the reaction of
77 2 5 3.90 1.008
participants knowledge.
5.9 T&D efforts are evaluated based on learning level of
77 2 5 4.01 .866
participants.
5.10 T&D efforts are evaluated based on the change on
77 1 5 3.95 .902
behavior of participants knowledge.
5.11 HRD department requests feedback from trainees after
77 2 5 4.01 .866
training.
5.12 HRD department makes use of the trainees feedback to
improve the effectiveness of future trainings in the 77 2 5 3.90 1.008
organization.
Valid N (listwise) 77 3.98
Source, own survey 2018

45
The response indicated a highest mean value of 4.03 and standard deviation of 1.008 that indicate
most of the respondents agreed with the evaluation process of training and development practices
in the organization. The grand mean value is 3.98 which indicate that majority of the respondents
agreed about the evaluation practice in the organization which is a high degree of agreement.
Evaluation of training and development is the most essential aspect of training program. As
discussed above in the questionnaire, majority respondents agreed that the organization evaluates
the trainees before and after the program and requests the trainees through questioners at the end
of the training and development program. However, the evaluation method should follow the
theoretical practices that indicates the need to have systematic evaluation of all T&D approaches
that are most popular techniques with the four levels of evaluation: participant reaction, learning,
behavior, and results.

4.2.6 Job Satisfaction

Table 4.7: Job Satisfaction

Descriptive Statistics
N Minimum Maximum Mean Std.
Deviation
6.1 HRD opportunities influence employees’ job satisfaction in
77 2 5 4.23 .826
the organization.
6.2 Employees are satisfied with the T&D practice of the
77 2 5 4.01 .866
organization.
6.3 After receiving T&D employees become motivated. 77 1 5 3.95 .902
6.4 Employees after receiving the T&D their attitude has
changed positively and willing to accept more challenging 77 2 5 4.01 .866
assignments.
6.5 Employees’ job satisfaction increased through the HRD
77 2 5 4.00 .960
practice of the organization.
Valid N (listwise) 77 4.04
Source, own survey 2018

For employee’s job satisfaction with regard to the organization HRD practice category, 5 questions
were given and a highest mean value of 4.23 and a standard deviation of .960 set. These shows
that majority of respondents are satisfied with their job in relation to HRD practices in the
organization. The grand mean of 4.04 is scored for employee’s job satisfaction in HRD practice
of the organization, which indicates most of the respondents agreed with the HRD practice on the
process of training and development practices in the organization that also indicates a higher
degree of agreement. The origination should do more in terms of improving the employees

46
satisfaction towards the HRD practice taking into consideration all the recommendations given
under each variables above.

4.2 Pearson Correlation Analysis

Correlation means relationship between two variables. It measures the degree to which two sets of
data are related. Higher correlation value indicates stronger relationship between both sets of data
(Coetzee, 2003). Correlation Analysis is to show the strength of the association between the
variables involved. Inter-correlations coefficients (r) were calculated by using the Pearson’s
Product Moment Alwadaei (2010). Field (2006) also state that the output of correlation matrix can
be the correlation coefficient that lies between -1 and +1 within this framework, a correlation
coefficient of +1 indicates a perfect positive relationship, and a correlation coefficient of -1
indicates a perfect negative relationship; whereas a coefficient of 0 indicates no liner relationship.
According to Alwadael, (2010) Value of coefficient Relation between variables 0.70-1.00 Very
strong association, 0.50-0.69 Substantial association, 0.30-0.49 Moderate association, 0.10- 0.29
Low association, and 0.01-0.09 negligible association. Therefore, to show the correlation between
the four variables: Need Assessment, Design, Implementation and Evaluation Pearson correlation
coefficient was used.

Table 4.8 Correlations

JS NA D I E
JS 1.000 .892 .912 .871 .871
NA .892 1.000 .827 .750 .750
Pearson Correlation D .912 .827 1.000 .966 .966
I .871 .750 .966 1.000 1.000
E .871 .750 .966 1.000 1.000
JS . .000 .000 .000 .000
NA .000 . .000 .000 .000
Sig. (1-tailed) D .000 .000 . .000 .000
I .000 .000 .000 . .000
E .000 .000 .000 .000 .
N 77 77 77 77 77
Source, own survey 2018

The result in the above table showed us positive and significant correlation exists between the four
variables (NA,D,I &E) and JS. A correlation coefficient of 0.892, 0.912, 0.871 and 0.871 is
recorded for NA, D, I & E respectively. This indicates that the correlation is significant and there

47
is moderate association between the variables. Hence, it is possible to conclude that since most of the
respondents associated their satisfaction on the HRD practice with the four factors the variables
are correlated with each other.

4.3 Discussion of Regression Results

The study aims to investigate the relationship between the independent variable need assessment,
design, implementation and evaluation with the dependent variable job satisfaction in ATA. To
test the relationship between the independent variables and dependent variable the following
regression model is developed. The findings revealed that, there was significant association among
need assessment, design, implementation and evaluation at ATA.

Table 4.9 Model Summary

Model R R Adjusted Std. Error Change Statistics
Square R Square of the R Square F Change df1 df2 Sig. F Change
Estimate Change
1 .946a .894 .890 .16793 .894 205.954 3 73 .000
Predictors: (Constant), Evaluation, Need Assessment, Design

Table 4.10 ANOVA

Model Sum of Squares Df Mean Square F Sig.
Regression 17.424 3 5.808 205.954 .000b
1 Residual 2.059 73 .028
Total 19.482 76
a. Dependent Variable: Job Satisfaction
b. Predictors: (Constant), Evaluation, Need Assessment, Design

The R-squared of this model is 0.894335, which means that 89% of the total variation of job
satisfaction at ATA is explained by the total variation of need assessment, design, implementation
and evaluation or the predictors evaluation, need assessment and design account for 89% of the
variance in Job satisfaction. The adjusted R-squared is 0.889992, which means that 89% of the
total variation of job satisfaction at ATA is explained by the total variation of need assessment,
design, implementation and evaluation, by taking into account the number of independent
variables and sample size. Although, the remaining 11% the change is explained by other factors

48
which are not included in this study model, both the R-squared and the Adjusted R-squared values
in this study are found to be sufficient enough to infer that the fitted regression line is very close
to all of the data points taken together (has more explanatory power). R-Squared greater than 20%
is still large enough for reliable conclusions for such data. (Cameron Trivedi, 2009; Hsiao, 2007,
cited in Nyamsogoro, 2010). The overall regression model was significant F(3,73) = 205.954
P<.001, R2.89.

Table 4.11 Coefficients

Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) .155 .171 .907 .367
Needs Ass .500 .077 .464 6.459 .000
1
Design .316 .163 .358 1.938 .056
Evaluation .135 .120 .177 1.125 .264
a. Dependent Variable: Job Satisfaction
Excluded Variablesa
Model Beta T Sig. Partial Collinearity
In Correlation Statistics
Tolerance
1 Implementation .b . . . .000
a. Dependent Variable: Job Satisfaction
b. Predictors in the Model: (Constant), Evaluation, Need Assessment, Design
As mentioned in the methodology part of this study, as far as the assumptions of classical linear
regression model hold true, the coefficient estimators of both α (constant term) and β (independent
variables) that are determined by ordinary least square (OLS) will have a number of desirable
properties, and usually known as Best Linear Unbiased Estimators (BLUE). Hence, the following
sections discuss results of the diagnostic tests (i.e., heteroscedasticity, autocorrelation,
multicollinearity, normality and model specification test) that ensure whether the data fits the basic
assumptions of classical linear regression model or not.

4.3.1. Heteroskedasticity
When the scatter of the errors is different, varying depending on the value of one or more of the
independent variables, the error terms are heteroskedastic Brooks (2008). Heteroscedasticity test
is very important because if the model consists of heteroskedasticity problem, the OLS estimators
are no longer BEST and error variances are incorrect, therefore the hypothesis testing, standard
error and confident level will be invalid. An ARCH test has been made, to ensure that this

49
assumption is no longer violated. The hypothesis for the heteroskedasticity test was formulated as
follow;

H0: There is no Heteroscedasticity problem in the model

H1: There is Heteroscedasticity problem in the model
α = 0.05
Decision Rule: Reject H0 if P value is less than significant level 0.05. Otherwise, accept H0.

Table 4.12 Heteroskedasticity Test: ARCH

ARCH Test P-Value Decision Rule
F-statistic 0.3292 Accept the Ho
Obs*R-squared 0.3229 Accept the Ho
Source: Own computation (Developed for the research)
As shown in the above table, all versions of the Arch test statistic (F-statistic and Chi-Square) gave
the same conclusion that there was no evidence for the presence of heteroscedasticity in this
particular study. Since the p-values of 0.3292 and 0.3229 for F-statistic and Chi-Square
respectively were in excess of 0.05, the null hypothesis should be accepted.

4.3.2 Autocorrelation

According to Brooks (2008), when the error term for any observation is related to the error term
of other observation, it indicates that autocorrelation problem exist in this model. In the case of
autocorrelation problem, the estimated parameters can still remain unbiased and consistent, but it
is inefficient. The result of T-test, F-test or the confidence interval will become invalid due to the
variances of estimators tend to be underestimated or overestimated. Due to the invalid hypothesis
testing, it may lead to misleading results on the significance of parameters in the model. In this
study to test for the existence of autocorrelation, the popular Breusch-Godfrey Serial Correlation
LM Test was employed.
H0: There is no autocorrelation problem in the model
H1: There is autocorrelation problem in the model
α = 0.05
Decision Rule: Reject H0 if p-value less than significance level, otherwise accept H0.
Table 4.13: Autocorrelation Test: Breusch Godfrey Serial Correlation LM Test
Arch Test P-Value Decision Rule
F-statistic 0.1083 Accept the Ho
Obs*R-squared 0.0853 Accept the Ho
Source: Own computation (Developed for the research)

50
From the above table, it can be concluded that this research accepted the null hypothesis (H0),
since the p value for both F-Statistic and Chi-Square is 0.1083 and 0.0853, which is greater than
significance level of 0.05. Thus, it can be concluded that the model does not consist of
autocorrelation problem.

4.3.3 Multicollinearity

According to Brooks (2008), Multicollinearity will occur when some or all of the independent
variables are highly correlated with one another. If the multicollinearity occurs, the regression
model is unable to tell which independent variables are influencing the dependent variable. The
consequences of Multicollinearity are large variances and covariance of OLS estimators, wider
confidence interval, insignificant t ratio, high R2 but few significant t ratio, sensitivity of OLS
estimators and their standard errors to small changes in data. There is no one unique method to
detect the multicollinearity problem, it only have some rules of thumb, which are high R2 but few
significant t ratio, high pair wise correlation coefficient and Variance Inflation Factor (VIF) or
Tolerance. This study used high pair-wise correlation coefficients method to test the presence of
multicollinearity problem in a regression model. Because it can see the correlation of independent
variables between each other one by one. If the correlation coefficient is higher than 0.8, the model
would be considered as it consists of serious Multicollinearity problem Guajarati (2004).

Table 4.14: Multicollinearity Test: High Pair-Wise Correlation Coefficients

NA D I E
NA 1.000000 0.644234 -0.034732 0.206216
D 0.644234 1.000000 -0.215191 0.231066
I -0.034732 -0.215191 1.000000 0.244792
E 0.206216 0.231066 0.244792 1.000000

The table above shows that there is no strong pair-wise correlation between the independent
variables (Need assessment, Design, Implementation and Evaluation). As a rule of thumb, inter-
correlation among the independent variables above 0.80 signals a possible multicollinearity
problem. In this study the correlation coefficient is below 0.80 between the independent variables.
Thus, it can be concluded that all variables have low correlation power; as a result there is no
multicollinearity problem in the independent variables.

51
4.3.4 Normality

Normality tests are used to determine if a data set is well-modelled by a normal distribution. With
the normality assumption, ordinary least square estimation can be easily derived and would be
much more valid and straightforward. This study used JarqueBera Test (JB test) to find out whether
the error term is normally distributed or not. The hypothesis for the normality test was formulated
as follow:
H0: Error term is normally distributed
H1: Error term is not normally distributed
α = 0.05
Decision Rule: Reject H0 if p-value of JB test less than significance level, otherwise accept H0.
Table 4.15: Normality Test: Bera-Jarque Test
Probability (P-Value) Decision Rule
JarqueBera Test 0.615601 Accept Ho

The above table indicates that distribution of the panel observation is symmetric about its mean.
The Jarque-Bera statistic has a P-value of 0.61 implies that the p-value for the Jarque-Bera test is
greater than 0.05 which indicates that there was no evidence for the presence of abnormality in the
data. Thus, the null hypothesis that the data is normally distributed should be accepted since the
p-value was considerably in excess of 0.05.

4.3.5 Model Specification

According to Brooks (2008), Specification error occurs when omitting a relevant independent
variable, including unnecessary variable or choosing the wrong functional form, so that regression
model will be wrongly predicted. If the omitted variable is correlated with the included variable,
the estimators are biased and inconsistent. If the omitted variable is not correlated with the included
variable, the estimators are unbiased and consistent. Ramsey RESET test was used to see whether
the developed model is correctly regressing.
H0: the model is correctly specified
H1: the model is not correctly specified
α = 0.05
Decision Rule: Reject H0 if p-value is greater than significance level. Otherwise, accept H0.

52
Table 4.16: Model Specification Test: Ramsey-RESET Test
Test Statistic Value Decision Rule
Ramsey-RESET test Prob. F Test = 0.9968 Accept the Ho

From the above table, it can be concluded that this research accepted the null hypothesis (H0),
since the p value is 0.9968, which is greater than significance level of 0.05. Thus, it can be
concluded that the model specification is correct. Overall reliability and validity of the model was
enhanced further by the Prob (F-statistic) value of 0.000000.

53
 V

Conclusion and Recommendation

5.1 Summary of findings

The purpose of this study was to assess the effect of HRD practice on employee satisfaction in the
case of ATA. As discussed above in the questionnaire, the organization's training and development
plan has been developed in accordance with the strategic plan and the organization has a realistic
and measurable training and development objectives and roles. This study has reviled that, in ATA
Training and development plan is well communicated to all employees and it enables programs to
improve skills, knowledge and attitude of majority employees which can increase their performance
on the job. The organization has HRD guideline and committed to improve its employee’s
knowledge and skills thus most of the respondents are satisfied by the opportunity of further
education in organization. HRD practice has a remarkable impact on the performance of
employees in ATA and the organization is practicing fair treatment in providing education and
training to all its employees. There is good practice on education grant and providing training
program but talent development department has to collect trainees feedback after training or
education and also need to use it to improve and provide effective training in the future.

5.2 Conclusions
• Need assessment should be done regularly at all levels of the organization to see the gaps
identified on employee performance and also to include new employees to enhance their
capacity to the organization level. This will also help the organization to use the allocated
budget on time and efficiently for the right human power that will add more value to the
production.
• The current designing practice could be improved through use of different designing practices
depending on the type of work and availability of resources that will feet into the need of
employee development and at the same time that will increase productivity level with advanced
technologies.

54
• HRD implementation practice needs to be revised to make it simple and accessible for all
employees on their level that will enable the whole employees to benefit from each training
and development practice. The Training methods can be generally categorized as either on the
job or off the job. The training delivery options for either method can be sourced from either
in-house or external sources, or a combination of both.

• The evaluation method should follow the theoretical practices that could identify the success
of employees after training session is given. This indicate the need to have systematic
evaluation of all T&D approaches that are most popular techniques with the four levels of
evaluation: participant reaction, learning, behavior, and results.

5.3 Recommendations

Taking into consideration the above research findings and conclusions, the researcher suggests the
following recommendations to the management of the organization and other concerned officials
are forwarded:
• The organization should continue improving educational level of its employees and also
providing trainings in order to utilize their performance and increase their satisfaction.
• The organization should set short term plan to maintain those employees who are benefited
from its further education and trainings by availing promotional opportunities to them so that
employees may stay long and give their contributions for the organization.
• Talent development unit in the organization should collect feedbacks from employees after
they finished their education and training, these practices may enable the department to
improve for future training programs and educational fields which may help the advancement
of agricultural sector.
• Mangers of functional departments and HRD department should have short term plan to
provide the required training for employees when the performance evaluation report of the
employees show poorly performed.
• Finally, as ATA is a recently established and fast-growing organization they should share
experience with other similar organizations to improve performance of their vital resource.

55
5.4 Future Research

The intension of this study was to assess the effect of HRD practice on Employee Satisfaction in
the Case of ATA. Thus, future researchers can take other branches of the organization employees.
Furthermore, potential researchers can study on the advanced HRD practices that needs to be used
to assess the performance before training and development given to the employees and after they
trained or educated.

Finally, the study is emphasized on one sector and other researchers can study on other public
organizations or private firms and confirm whether or not HRD practices have an effect on
employees satisfaction.

56
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ANNEX 1
ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE GRADUATE STUDIES

Introduction

Dear Respondent,
I am a postgraduate student in the Department of Human Resources Management and presently
conducting a research on the “Assessment of the Effect of HRD practice and its impact on
Employees satisfaction in ATA”.

As part of my thesis I would like to gather some information from you on the HRD practice of the
organization and its impact on Employees satisfaction. You are kindly requested to complete the
attached questionnaire as honestly as possible. The information being solicited from you is purely
for academic purposes. All information provided by you will be treated confidentially; hence, your
name and that of your Signature are not required. Your honest completion of this questionnaire
will assist in generating information that will help organization to improve HRD practices and get
employees knowledge and skill. Hence that enhances quality service delivery and improved
productivity.

Instructions
The questionnaire will be prepared in close-ended questions. These Close-ended questions are
rating scale type questions which offer 1-5 rating scale, with answers ranging from strongly
disagree to strongly agree or very dissatisfied to completely satisfied you will put X or √ in front
of each items in the given tables below. If clarification is needed, my phone number is 0911-
602777.

Thank you for your cooperation.

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Section I: Demographic Information
Sex Age Educational Levels Service of years in Employment Category
the organization
Male Female Diploma Degree Masters Non- Manager
and above Manager

Section II: Questions related to HRD practices

Listed below are statements about the practices of Human Resource Development of the
organization. Please indicate your level of agreement with the statements so that your answers to
these questions will enable the researcher to assess what you think about the practices of human
resource development focusing on training and development program (TDP) in your organization.

No Items Strongly Disagree Neutral Agree Strongly

Disagree agree
1 General (Strategic)
1.1 T&D policy and program is well defined and
conducted based on the strategic plan and
objectives of the organization.
1.2 The organization has realistic and measurable T&D
Policy objectives and roles.
1.3 T&D plan of the organization is well communicated
to all employees.
1.4 T&D plan enables to improve skills, knowledge and
attitude of employees which can increase
performance on the job.
1.5 The organization reviews its strategies and
objectives to reveal valuable information for T&D.
1.6 Employees are being benefited equally from
Human Resource Development(HRD) practices of
the Organization.
1.7 The selection of candidate for T&D is clearly
defined.
1.8 The organization provide training program - local
and abroad.
1.9 T&D helped employees to perform the work
quickly and efficiently.
1.10 HRD practice of the organization reduces the
employee turnover rate.
2 Need assessment
2.1 T&D needs are assessed regularly.
2.2 T&D needs analysis methods of the organization
enables to clearly identify the required training
that employees need to perform their job.
2.3 T&D needs identified are prioritized properly

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2.4 T&D needs assessment can able to differentiate
performance problems caused by employees lack of
skills, knowledge and abilities.
2.5 T&D needs analysis methods of the organization
enables to clearly identify the required training that
employees need to perform their job
3 Design
3.1 T&D Policies and programs are designed based on
need assessments
3.2 T&D program of the organization is designed
compatible with the actual job to be performed.
3.3 The T&D program given enables to demonstrate it
on the job.
3.4 The T&D programs able to improve skills,
knowledge and attitude of employees which can
increase performance on the job
4 Implementation
4.1 The organization gives on the job trainingie. Job
rotation, Coaching and Mentoring.
4.2 The training delivery method that the organization
used is convenient to get the necessary knowledge
and skills
4.3 Participatory T&D delivery method is
implemented
4.4 The training method that the organization used is
convenient to get the necessary knowledge and
skills.
4.5 The T&D delivery method has enabled to transfer
the skills acquired to the job.
5 Evaluation
5.1 The trainers are knowledgeable about the subject
matter.
5.2 The training materials and teaching aids are
complete and appropriate to the level of trainees.
5.3 The training environment given by the organization
is conducive to conduct training.
5.4 The T&D delivery method has enabled to transfer
the skills acquired for the job.
5.5 The organization tests the trainees before and after
the program.
5.6 The organization asks the trainees for their
evaluation through questioners at the end of the
T&D program.
5.7 The organization looks the performance appraisal
report of employees after training to evaluate the
T&D impact.
5.8 T&D efforts are evaluated based on the reaction of
participants knowledge.

60
5.9 T&D efforts are evaluated based on learning level
of participants.
5.10 T&D efforts are evaluated based on the change on
behavior of participants knowledge.
5.11 HRD department requests feedback from trainees
after training.
5.12 HRD department makes use of the trainees
feedback to improve the effectiveness of future
trainings in the organization.
6 Job Satisfaction

6.1 HRD opportunities influence employees’ job

satisfaction in the organization.
6.2 Employees are satisfied with the T&D practice of
the organization.
6.3 After receiving T&D employees become motivated.

6.4 Employees after receiving the T&D their attitude

has changed positively and willing to accept more
challenging assignments.
6.5 Employees’ job satisfaction increased through the
HRD practice of the organization.

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Annex 2
Research Interviews

This interview has been designed to seek information purely for academic purposes. The main
purpose of the study is to conduct a thesis on the topic: “Assessment on the Effect of HRD practice
and its impact on Employees satisfaction in ATA”. The purpose of interview is to gather additional
data which may not be obtained through the questionnaires to be filled by respondents. Thus, as a
Training and Development unit leaders and experts of the Organization, it is hoped that the success
of the study depends on the information you provide. Therefore, the researcher kindly request you
in advance your invaluable cooperation.

Thank You!!

1. How does training and development practices of ATA have been conducted?
2. How does the below listed steps of HRD practices implemented in your organization?
a. Need assessment
b. Designing
c. Implementation and
d. Evaluation
3. Have you ever evaluated staff satisfaction towards HRD practices?
If Yes, How?
If No, Why Not?
4. Does the organization give enough emphasis for the development of all employees in the
organization?
5. What formal and informal opportunities exist for professional as well as personal growth and
development?
6. What are the effects of human resource development practices on employee satisfaction in
ATA?
7. What are the major issues in HRD practices which affect employees satisfaction in ATA?

62