WOLDIA UNIVERSITY

FACULTY OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

The Effect of Human Resource Management Practice on Employee Performance:

The Case of Abay Bank/Dessie District

BY

Sosena Tadesse

Advisor: Mr. Tewodros Biset (Ass. Prof, Woldia University)

April, 2024
Woldia, Ethiopia
THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICE ON EM-
PLOYEE’S PERFORMANCE THE CASE OF ABAY BANK S.C

BY
SOSENA TADESSE

ADVISOR: MR. TEWODROS BISET (ASS. PROF, WOLDIA UNIVERSITY)

A THESIS SUBMITTED TO WOLDIA UNIVERSITY, COLLAGE OF GRADUATE

STUDIES IN PARTIAL FULLFILLMENT OF THE REQUIREMENTS FOR DEGREE
OF MASTERS OF ART IN BUSINESS ADMINISTRATION

April, 2024
Woldia, Ethiopia

2
 CERTIFICATION

This is to certify that the Thesis entitled “Effect of Human Resource Management
Practice on Employee Performance: The Case of Abay Bank/Dessie District” prepared
by Ms. Sosena Tadesse and submitted as partial fulfillment for the award of the degree of
master of Art in Business Administration complies with the regulations of the university and
meets the accepted standards for originality, content, and quality.

Tewodros Biset (Ass. Prof) _______________ ___________

Advisor Signature Date

3
 APPROVAL SHEET

We, the undersigned, members of the Board of Examiners of the final open defense by Sosena
Tadesse have read and evaluated his/her thesis entitled “Effect of Human Resource Manage-
ment Practice on Employee Performance: The Case of Abay Bank/Dessie District” and ex-
amined the candidate. This is, therefore, to certify that the thesis has been accepted in partial ful-
fillment of the requirements for the award of the degree of Master of Art in Business Adminis-
tration complies with the regulations of the university and meets the accepted standards for
originality, content, and quality.

_______________________ ________________ ________________

Name of Major Advisor Signature Date

_______________________ ________________ ________________

Co- Advisor Signature Date

_______________________ ________________ ________________

Name of Internal Examiner Signature Date

_______________________ ________________ ________________

Name of External examiner Signature Date

4
 DECLARATION

I declare that this thesis entitled “Effect of Human Resource Management Practice on Em-
ployee Performance: The Case of Abay Bank/Dessie District” is an original report of my re-
search, has been written by me with guidance of my advisor Mr. Tewodros Beset (Ass.prof). It
has not been submitted for any previous degree or other professional qualification. I contribute
this thesis presenting in partial fulfillment of the requirements for master of degree of Art in
Business Administration at Woldia University. I confirm that the Woldia University has free
right to archive, reproduce, distribute and displays this thesis in any form including electronic
format or/and via any digital library.

Sosena Tadesse ______________ ________________

Author: Signature Date

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 ACKNOWLEDGMENT
First, I like to say thanks to the almighty GOD, who grant me healthiness, a chance, and an ef -
fort to adjust to all difficulties I face to achieve this. I extend my great gratitude to my advisor
Mr. Tewodros Biset (Ass.prof) for his encouragement, support, advice, and his valuable guid-
ance to follow all steps to my work. I would like to thank the Abay bank Dessie district staffs,
for their kindness to all the required data and to fill the questioners for my study as possible as
with free charges. Last but not least my greatest gratitude to my beloved family for their unlim-
ited support, love, and always encouragement, strength to go through my study.

Table of Contents

6
CERTIFICATION............................................................................................................................I

APPROVAL SHEET......................................................................................................................II

DECLARATION...........................................................................................................................III

ACKNOWLEDGMENT...............................................................................................................IV

LIST OF TABLES......................................................................................................................VIII

LIST OF FIGURES.......................................................................................................................IX

ACRONYMS..................................................................................................................................X

ABSTRACT..................................................................................................................................XI

CHAPTER ONE..............................................................................................................................1

Introduction......................................................................................................................................1

1.1 Background of the study.......................................................................................................1

1.2. Statement of the problem.....................................................................................................2

1.3 Objective of the study...........................................................................................................4

1.3.1 General objective.............................................................................................................4

1.3.2 Specific objectives of the study.......................................................................................4
1.4 Significance of the Study......................................................................................................4

1.5 Scope and Limitation of the Study........................................................................................5

1.6 Organization of the paper....................................................................................................5

1.7. Limitations of the Study.......................................................................................................5

CHAPTER TWO.............................................................................................................................6

Literature Review............................................................................................................................6

2.1 Theoretical literature.............................................................................................................6

2.1.1 Definition of Human Resource management..................................................................6

2.1.2 Management Theories.....................................................................................................6
2.2 Human Resource Management Practices..............................................................................9

2.2.1 Compensation................................................................................................................14
2.2.2 Career Planning.............................................................................................................14
2.2.3 Training.........................................................................................................................15

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 2.2.4 Employee Involvement.................................................................................................15
2.2.5 Performance Appraisal..................................................................................................16
2.2.6 Employee Performance.................................................................................................17
2.3. Hypothesis..........................................................................................................................21

2.4 Conceptual Model...............................................................................................................21

CHAPTER THREE.......................................................................................................................22

Research Methodology..................................................................................................................22

3.1 Research Design and Approach..........................................................................................22

3.2 Population, sampling technique and sample size................................................................22

3.2.1 Population......................................................................................................................22
3.2.2 Sampling Technique......................................................................................................23
3.2.3 Sample Size...................................................................................................................23
3.3 Types of Data......................................................................................................................23

3.3.1 Data Collection Instrument...........................................................................................24

3.3.2 Procedure of Data Collection........................................................................................24
3.4 Data Analysis......................................................................................................................24

3.5 Reliability Test.....................................................................................................................25

3.6 Validity Test........................................................................................................................26

3.7 Ethical Considerations.........................................................................................................26

CHAPTER FOUR.........................................................................................................................27

Data Analysis and Presentation.....................................................................................................27

4.1 Demographics Characteristics of the Respondent...............................................................27

4.1.1 Sex of the respondents...................................................................................................29

4.1.2 Age Category.................................................................................................................29
4.1.3 Educational Qualification of the respondents...............................................................29
4.1.4 Experience of the respondents.......................................................................................29
4.1.5 Work status of the respondents.....................................................................................30
4.2 Descriptive Analysis...........................................................................................................30

4.2.1 Employee Performance.................................................................................................31

4.2.2 Human Resource management Practice........................................................................32

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 4.3 Correlation Analysis............................................................................................................41

4.4 Multiple Regression Analysis.............................................................................................44

4.4.1 Normality......................................................................................................................44
4.4.2 Linearity........................................................................................................................45
4.4.3 Multicollinearity............................................................................................................45
4.4.4 Heteroscadascity............................................................................................................46
4.5 Hypothesis testing...............................................................................................................48

Chapter Five...................................................................................................................................50

Summary, Conclusion and Recommendations..............................................................................50

5.1 Summary of Findings..........................................................................................................50

5.2 Conclusions.........................................................................................................................52

5.3 Recommendations...............................................................................................................52

5.4 Suggestions for further study..............................................................................................53

References......................................................................................................................................54

Appendix........................................................................................................................................59

LIST OF TABLES

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Table 1: Reliability test.................................................................................................................25
Table 2: Demographic Characteristics of the respondents............................................................27
Table 3: Likert Scale.....................................................................................................................30
Table 4: Employee Performance Descriptive Statistics................................................................31
Table 5: Training Descriptive Statistics........................................................................................33
Table 6: performance appraisal Descriptive Statistics..................................................................34
Table 7: Career Planning Descriptive Statistics............................................................................36
Table 8: Employee involvement Descriptive Statistics................................................................37
Table 9: compensation Descriptive Statistics...............................................................................39
Table 10: selection Descriptive Statistics.....................................................................................40
Table 11: Correlation Analysis.....................................................................................................42
Table 12: Collinearity Test...........................................................................................................45
Table 13: Model Summary...........................................................................................................46
Table 14: ANOVAa test Result.....................................................................................................46
Table 15: hypothesis testing Coefficients.....................................................................................47

LIST OF FIGURES

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Figure 1: Conceptual Framework of the study.............................................................................21
Figure 2: Normality test................................................................................................................44
Figure 3: Linearity test..................................................................................................................45

ACRONYMS

HRM – Human resource management

HRP - Human Resource Planning

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HR- Human Resource
Trai- Training
HRMP- Human Resource Management Practice
EP- Employee Performance

ABSTRACT
The primary aim of the research is to evaluate the impact of human resource practices on em-
ployee performance. The study focused on employees in the Dessie district of Abay bank. The to-
tal number of employees in the Dessie district is 530, from which a sample of 227 was selected,
and 210 questionnaires were collected. The research utilized both descriptive and explanatory
research designs to thoroughly examine the characteristics and nature of the study, as well as

12
the cause-and-effect relationship between explanatory and dependent variables. Data was col-
lected from primary sources using structured questionnaires. Descriptive statistics such as
mean, standard deviation, percentage, frequency tables, and econometric analysis including
Pearson correlation and multiple regressions were employed to answer the research questions.
The findings indicated that all six independent variables (training, career planning, perfor-
mance appraisal, employee involvement, selection, and compensation) had a statistically signifi-
cant impact on employee performance in Abay bank. The results of multiple regressions demon-
strated that training, performance appraisal, career planning, employee involvement, selection,
and compensation positively and significantly influenced employee performance. According to
the study's results, training involves imparting specific skills for a particular job, while develop-
ment focuses on enhancing and growing individual skills and abilities through conscious and
unconscious learning.

Keywords: Human resource management, employee Performance, Performance Appraisal

CHAPTER ONE

Introduction
1.1 Background of the study
The term "human resource management" (HRM) refers to a planned collection of HRM prac-
tices and policies that are created and put into place to help a company meet its goals. (Dressler,
2020). Human resources management, according to Pearson (2020), is the process of assessing
and overseeing an organization's human resource requirements in order to guarantee that its
strategic goals are met. They show that an organization can only accomplish its stated aims and
objectives if its human resources are properly evaluated and managed. The strategic approach to
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the efficient administration of people inside a business or organization so that they contribute to
the company's competitive advantage is known as human resource management or HRM for
short. The goal is to optimize worker performance in the service of an employer's strategic ob-
jectives (De Cieri et al, 2018). An organization may accomplish its competitive goal by imple-
menting an effective HRM strategy, which methodically arranges all individual HRM measures
to directly affect employee attitude and behavior (Huang, 2019).
In the dynamic and fiercely competitive business world, it is imperative for companies, particu-
larly those in the service industry, to make the most use of their resources for their own benefit
in order to survive. Studies have demonstrated that firms may develop and maintain a competi-
tive edge by managing internal resources that are non-replaceable, uncommon, precious, and
unique, such as human capital (Jing et al. 2021). Aside from the aforementioned, the current
business environment is characterized by intense competition, and many organizations are striv-
ing to implement the best human resource management practices in order to gain a competitive
edge in their market share. This has led to an increase in employee dissatisfaction and an in-
crease in organizational frustration on a daily basis due to poor HRM practices.

HRM emphasizes the need for the Human resource (HR) plans and strategies to be formulated
within the context of overall organizational strategies and objectives and to be responsive to the
changing nature of the organization’s external environment. It is an approach which requires an
interpretation and revision by practitioners to ensure the most appropriate fit between HR busi-
ness strategies and plans. Thus, the overall themes of Strategic Human Resource Management
(SHRM) are the integration of all HRM functions, adherence to broad organization goals and re-
sponsiveness to the external environment (Brown and Benson, 2019).

Human Resources are the significant asset of any organization to achieve organizational goals
and many assets can be copied and maintained by others easily but the skill and competencies
level held by employees can bring special advantage to any organization which gives unique
competitive advantage. Human resource management is all about policies and practices of any
organizations concerned with HR (Michael Armstrong, 2020). He also justified that companies
now a day becoming more aware of that employees could be the greatest strength of all and
aligning different HR practices with knowledgeable HR specialists could bring competitive ad-
vantage. (Dirk, 2020). Therefore, by integrating and association HR practices and policies to the
strategy of organization and by maintaining good practice organization can win the market eas
ly.

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Employ performance is a process for establishing a shared workforce understanding about what
is to be achieved at an organization level Performance of any organization largely depends on
the performance of its employees. Fertile organizations are increasingly realizing that there are a
number of factors that contribute to performance, but human resources are clearly the most criti-
cal (Coens and Jenkins, 2017). In spite of the size and nature of an organization, the activity it un-
dertakes, and the environment in which it operates, its success depends on its employees‟ deci-
sions and their behavior. Employee performance has become a common and understandable
word as almost everyone talks about it. Yet, the term „performance‟ means different things to
different persons. As experience, it ranges from efficiency to performance, employee turnover
and absenteeism rates, product return measures, customer or customer satisfaction measure-
ments, intangible assets such as work process disruption and other intangible assets such as
morale, loyalty and work satisfaction. Employee performance is a result of the behavior or ac-
tions that have been set to achieve goals based on certain criteria’s. This usually involves the ac -
tions or behavior of all mental processes that are not observable. This includes problem-solving,
decision making, program planning, and reasoning (Bailey & Robert, 2018).

Performance of an employee may be evaluated in terms of the output of an employee in a spe-

cific period of time. Typically, the performance of a given worker will be assessed relative to an
average of employees doing similar work; because the success of any organization relieson the
performance of its workforce. Employee performance is an important concern for businesses.

Background of the organization

1.2. Statement of the problem

According to Samuel and Ajiri (2021), human resources management involves various adminis-
trative tasks such as resource planning, recruitment, selection, orientation, training, appraisal,
motivation, ensuring the welfare of employees and the organization, as well as providing guid-
ance on national objectives. Human resources play a crucial role as the driving force behind an
organization, requiring continuous training and development to ensure optimal performance re-
gardless of technological advancements. Neglecting the well-being of employees through proper
training and development can hinder political, economic, social, Performance, efficiency, and
profitability outcomes in both firms and nations.
Measuring employee performance can be a challenging task, but it directly impacts a company's
profits. Employers carefully select their staff with performance in mind and can assess an em-
ployee's capabilities during the initial job interview. However, there are various factors within

15
the job itself that contribute to maximizing an employee's output (Lake, 2007). Enhancing em-
ployee performance is a crucial objective for many organizations, as it offers numerous advan-
tages to both the organization and its employees. Higher levels of performance lead to favorable
economic growth, increased profitability, and improved social progress (Sharma & Sharma,
2014). Abay Bank has conducted preliminary studies and implemented various human manage-
ment practices to enhance employee efficiency. Given the competitive nature of the business
world, having productive employees is essential for retaining customers. However, the bank has
yet to conduct further investigations to determine the effectiveness of these HRM practices in in-
creasing employee Performance. Employees at Abay Bank have expressed dissatisfaction with
their compensation, including wages and benefits. They believe that there is a lack of sufficient
salary and rewards, as well as a lack of employee involvement within the company. Conse -
quently, a research study is being conducted to gain a better understanding of the benefits of
practicing HR and evaluate its impact on employee efficiency.
In the banking industry, particularly in the growing phase, it is crucial for banks like Abay Bank
to understand the various factors that contribute to and influence employees' performance. This
understanding is essential for achieving economic development and prosperity. Abay Bank em-
ploys a large number of individuals, many of whom are uncertain about their satisfaction with
the bank's human resource management (HRM) practices. The impact of HRM practices on em-
ployees' performance has been extensively studied. Researchers such as Faith Wacheke (2014),
Mandar b et al. (2019), and Oel Kipleting (2011) have focused on the effect of individual HRM
practices on employees' performance. The results of these studies, conducted in both developed
and developing countries, consistently demonstrate that HR practices significantly affect em-
ployees' performance. However, there is a lack of research in this area specifically within the
context of Ethiopia and other developing countries. To contribute to the existing knowledge base
on HR practices in developing countries, this study aims to assess the impact of human resource
management on employees' performance. Specifically, it investigates the impact of six HR prac-
tices at Abay Bank, namely selection, compensation, training, career planning, performance ap-
praisal, and employee involvement, on employees' performance. Although it is widely accepted
that HRM is positively related to employees' performance, there is a need for additional evi-
dence to support this relationship in different contexts. Therefore, the researcher is motivated to
identify the effect of human resource management practices at Abay Bank.

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1.3 Objective of the study

1.3.1 General objective

The general objective of this study is to investigate the effect of human resource management
practice on employ performance in Abay Bank/Dessie District. In addition to the above general
objectives, the study has the following specific objectives:

1.3.2 Specific objectives of the study

The specific objectives of this study are the following:

 To determine the effect of human resource planning practice on employees‟ performance in

Abay Bank Dessie District.
 To examine the effect of performance appraisal on employee performance in Abay Bank/
Dessie District.
 To investigate the effect of training and development on employee performance in Abay
Bank /Dessie District.
 To examine the effect of Selection on Employee’s Performance.
 To determine the effect of Compensation on Employee’s Performance.
 To evaluate the effect of Employee Participation on Employee’s Performance.

1.4 Significance of the Study

The study identified the effect of human resource management practices on employees’ perfor-
mance in general. Hence this paper was help bridging the gap and to contribute to the body of
knowledge that relates to human resource management practice and employees performance.
The study was benefit the bank by showing the association of the HRM practice to the employ-
ees performance and recommending the bank management on the proper enhancement of the
practices for the improved employees performance.

1.5 Scope and Limitation of the Study

There are several branch offices of Abay Bank SC; however, the research is specifically focused
on employees in the Dessie district. Human Resource Management (HRM) practices encompass
a wide range of factors such as training and development, career advancement, recruitment and
selection, rewards and incentives, employee benefits, employee well-being, flexible schedules,
bonuses, and more. Due to time and resource constraints, the study is limited to examining only
five HRM practices: compensation, performance evaluation, employee training, employee in-
volvement, and career planning. The research framework does not incorporate any moderating

17
or intervening variables. One of the limitations of the study is the inability to include all employ-
ees from Abay Bank branches. The study solely concentrates on the impact of selected HRM
practices on employee performance at Abay Bank SC, making it challenging to extrapolate the
findings to all employees of the bank. The primary data for the study was gathered from employ-
ees within the organization; however, it would have been beneficial for the researchers to also
include secondary data related to HRM practices.

1.6 Organization of the paper

The study organized into five chapters. Chapter one is the introductory chapter that covers the
background of the study, problem statement and objectives of the study, scope and limitation of
the study. The second chapter was present the review of related literature. It covers concepts and
theoretical framework of internal service Quality. Chapter three was present in detail a discus-
sion and explanation of the research methodology. It was begin with a discussion of the research
design, population of the study, sampling techniques, sample size, data collection instruments,
the data collection procedures and ends with data analysis approach. Chapter four was present
the data presentation and data analysis of the study. Finally, chapter five was present the find -
ings, conclusions, and recommendations of the study.

1.7. Limitations of the Study

The researcher has not a sponsor to pay for the study so, I used my own resources to meet the
research expenses. The second limitation is there were many requirements in offices in order to
exercise the whole research. The third limitation is that the research is limited only the selected
branches of dessie district office as the result; it may affect generalization of the findings to all
Abay bank dessie districts across the country. The fourth limitation the presence situation com-
mand post due to ware in Woreda level which make it very challenging to distribute and col -
lected the questioner.

CHAPTER TWO
Literature Review
2.1 Theoretical literature

2.1.1 Definition of Human Resource management

Human resource management plays a crucial role in the formulation and execution of policies
and procedures that have an impact on all employees within an organization. These encompass

18
various aspects such as knowledge management, people management, talent management, re-
cruitment and selection, employee welfare, equal opportunity, health and safety, human resource
administration, and compliance with statutory requirements (Armstrong, 2008). According to
Armstrong (2008), the primary focus of human resource management lies in recruitment and se-
lection, performance management, human resource planning, training and development, reward
management, and employee relations. Watson (2010: 919) provides a more comprehensive defi-
nition, stating that human resource management involves effectively utilizing the efforts, knowl-
edge, capabilities, and committed behaviors of individuals within a coordinated organizational
framework, either through employment or temporary contractual arrangements, to carry out
work tasks in a manner that ensures the sustainability of the enterprise. It encompasses all as -
pects of employee employment, management, and development within organizations. As Boxall
(2013:13) highlights, human resources encompass not only the knowledge, skills, networks, and
energies of individuals but also their physical and emotional well-being, intellectual capabilities,
personalities, and motivations. HRM is implemented through the HR architecture, which in-
cludes systems, structures, HR functions, and, importantly, line management.

2.1.2 Management Theories

2.1.2.1 Classical Approach Theory

The Classical approach theory underscores the importance of on-the-job training and the imple-
mentation of monetary incentives to enhance employee performance. This theory posits that in-
dividual worker performance can be elevated through on-the-job training and further improved
by offering incentives to employees. Monetary incentives are specifically highlighted as a means
of motivating employees. According to this theory, these two components (on-the-job training
and monetary incentives) are crucial factors in achieving higher levels of Performance. The dual
objectives of performance and efficiency, as elucidated by Fredrick Taylor's principles of scien-
tific management, provide a systematic approach to enhancing performance. Taylor's approach
consists of three key elements: assessing employees' capabilities based on the work process uti-
lized, closely monitoring workers' activities by minimizing discretion, and standardizing work
procedures and allotted time for each task. Through this method, employees are led to believe
that they will receive compensation commensurate with their efforts, while management can an-
ticipate increased output. In order for employees to maximize their compensation, they must
strive for peak performance (Owen et al, 2007).

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2.1.2.2 Systems Approach Theory

Jackson (2007) argues that the systems approach theory emphasizes the interconnectedness of
all elements within an organization. This perspective suggests that every aspect of the organiza-
tion is linked to one another, and there is a designated place for each component. Ultimately, this
interconnectedness leads to stability within the organization. Jackson further asserts that it is the
responsibility of management to plan, organize, control, and coordinates all activities within the
organization. In contrast, Hatch (2006) highlights the systems approach's focus on the interrela-
tionships between structure and behavior. According to Hatch, changes in organizational struc-
ture can influence behavior, and vice versa. The organization is viewed as both a whole entity
and a part of a larger environment. This environment encompasses the relationships between
technical and social variables within the system. Hatch also challenges the classical theory's no-
tion of one-way relationships, emphasizing the critical role of technology in shaping organiza-
tional design. Judge (2007) contributes to the discussion by outlining the five components of the
systems theory of organization. These components include inputs, process, outputs, feedback,
and environment. Inputs refer to the material, human, financial, and information resources that
undergo transformation. Process involves the management's utilization of production technology
to convert inputs into outputs. Outputs encompass the organization's products and services.
Feedback represents the knowledge of results that influences the selection of inputs. Lastly, the
environment comprises the social, economic, and political forces that impact the organization.
Furthermore, Jackson (2007) suggests that implementing Henri Fayol's Principles of Manage-
ment can lead to increased Performance and improved work outcomes. By leveraging the bene-
fits of specialization, organizations can achieve more efficient and effective results with the
same level of effort.
Furthermore, it is crucial to establish an environment where discipline and authority hold utmost
importance. According to Jackson's assertions, authority not only entails responsibility but also
leads to productive actions. In this context, discipline plays a vital role as it ensures that workers
receive instructions solely from a single supervisor, thereby promoting a sense of unity in their
actions. Based on this argument, it becomes evident that effective coordination necessitates the
presence of a singular leader and the subordination of individual group interests to the overarch-
ing interests of the organization. Nevertheless, while upholding respect for line authority, it is
imperative to strike a balance with the need for initiative at lower levels within the organiza -
tional hierarchy.

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2.1.2.3 The Contingency Approach

According to Judge et al (2007) the contingency approach emphasizes the need for flexibility.
There is no one best way to structure or manage organizations but management decisions should
take situational and contextual factors into account. Management's job is to learn and identify
the specific characteristics of the situation and then fit solutions to overcome these contingen-
cies.
The size of the organization, the technology employed, the industry characteristics and the envi-
ronment in terms of external changes and uncertainty are some of some of the Contingency fac-
tors influencing organizational design and effectiveness.
the contingency theory is criticized on the basis of lacking a clear description of what the organi-
zation is in light of the fact that some businesses have the ability to create can create their own
environments or influence the existing environment to their advantage. The contingency ap-
proach draws attention to the possibilities of different structures of the organization, each with a
different impact on the organizational effectiveness (Judge, 2007).

2.1.2.4 Motivational Theories

Many commentators on the theory believe that motivation is the driving force behind human be-
havior. For the many proponents of this approach to employee motivation, businesses are basi-
cally formed with the intention of achieving certain objectives and thus to be successful. Despite
this, businesses or organizations are run by human being or human resources. It is not lost in this
approach that human resources are the most difficult resource to manage for any organization.
People have to be interested enough in what they are set out to do in the organization if they are
to perform in the way they are expected to. If they are not interested and are not driven into ac-
tion from within, there is little the organization can do to improve its performance (Rousseau,
2009).
According to Mullins (2007), employees need to be motivated. Mullins describes Motivation as
a managerial process of engaging employees into behaviour whose objective is to drive the orga-
nization to effectively achieve its objectives. Other scholars when analyzing this approach define
Motivation as a process that is initiated by a physiological or psychological need, which causes a
specific behavior or drive in order to achieve a goal or incentive. In this definition, motivation is
seen in three dimensions which are independent and interacting elements, needs, drive and in-
centives.
Mullin (2007) defines motivation as the 'degree to which an individual wants are met. The em -
ployee was chosen to engage in certain specified behaviors' depending on the level of motiva-

21
tion. Accordingly, employee's behavior is determined of by the availability of what motivates
them. Rousseau, (2009) argues that the underlying concept of motivation is some driving force
within individuals by which they attempt to achieve some goal in order to fulfill some need or
expectation. Their performance is a product of both ability and the level of motivation. The rela -
tionship between organization and its members is influenced by what motivates them to work
and the rewards and fulfillment they derive from it. The work organization, and the design and
content of jobs can have a significant effect on the satisfaction of staff and their levels of perfor-
mance (Rousseau, 2009).
Hatch et al (2006) explains that the management needs to know how best to elicit the coopera -
tion of staff and direct their efforts to achieving the goals and objectives of the organization. He
has strongly hinted that motivation is the key to achieving organizational objectives. To Hatch,
Motivation could be extrinsic or intrinsic. Motivation is extrinsic where tangible rewards such as
salary and fringe benefits, security, promotion, contract or service, the work environment and
conditions of work are the primary causes. Such tangible rewards are determined at organiza-
tional level and may be outside the control of individual managers. However, the organization as
a whole should cultivate this type of motivation by putting on place systems that work towards
the provision of such.
Intrinsic Motivation results from the provision of psychological rewards. Such rewards include
the opportunity to use one's ability. This is simply empowering the individual employee by the
provision of such things as individualized training. According to Armstrong (2006), making
work challenging to the employee raises the worker‟s motivation. Other such motivators include
the employee receiving some form of appreciation and positive recognition. To Armstrong,
these motivators are available to line managers and can be employed with a very high degree of
success.
2.2 Human Resource Management Practices
Schuler and Jackson (1987) described HRM as organizational activities for talent pool manage-
ment with the motive of resources are utilized aligning with organizational goal. According to
them, HRM consists of various practices and its associated functions could be used for manag-
ing people in the organizations. Besides that, definition offered by Delery and Doty (1996)
stated that HRM contributes to the achievement of business objectives by having an internally
rational policies and practices designed for firm‟s human capital. HRM practices included re-
cruitment, appraisal and selection of perspective employees at which influencing the human re-
source policies and lastly provide direction for the development of human resource philosophies

22
as a whole in an organization. HRM practices acts as the backbone of the organization structure
and its main responsibility is to transform the operational system into modern system in order to
fulfill present requirements and needs regardless of the rapid technological development
(Priyadarshini&Venkatapathy, 2005).
On top of that, HR Practitioner better focuses on system approach rather than implement specific
practices (Lepak, Bartol, &Erhardt, 2005). Furthermore, HRM practices complement each other
and it is better to be looked from an integrated perspective for a more comprehensive and holis-
tic view (Lepak and Snell, 1999; Lepak et al., 2005). According to Purcell (2003), employee
commitment is positively influenced by the HRM practices. HRM needs can be identified within
the context of organizational objectives through HRM planning and many kinds of micro-
staffing can be introduced for meeting the needs as long as the needs are identified and under-
stood in advance (Montgomery, 1998; Heraty and Morley, 1998; Paul and Anantharaman,
2003). Saha and Gregar (2012) revealed that HRM acts as the backbone of any business for bet-
ter competitive advantage as these competitive practices are designed for Performance enhance-
ment and has driven the knowledge development process in the aspect of knowledge transfer
According to Khan (2010), in an energetic business atmosphere, there is the need for an ap-
proach to achieve better performance, to originate and implement HRM practices. This realiza-
tion reinforces the critical role HRM practices play in this globally modern and increasingly
competitive business landscape. Scholastically, Human Resources Management practices is a
form of system in which a set of distinct but interrelated activities, functions and processes are
directed at attracting, developing and maintaining or disposing firms‟ human resources for that
matter employees (Lado& Wilson, 1994). Additionally, HRM practices refer to organizational
activities directed at managing the pool of human resource and ensuring that the resources are
employed towards the fulfillment of organizational goals (Schuler & Jackson, 1987).
Likewise, Appelbaum (2001), captures HRM practices as being basically concerned with the
management of people within the internal environment of organizations, comprising the activi-
ties, policies, and practices involved in planning, obtaining, developing, utilizing, evaluating,
maintaining, and retaining the appropriate numbers and skill mix of employees to achieve the or-
ganization‟s objectives. According to Ahmed & Schroeder (2003), human resources are consid-
ered the most important assets of an organization, but very few organizations are able to fully
harness its potential. Employee performance in an organizational context is usually defined as
the extent to which an organization’s member contributes to achieving the goal of the organiza-
tion. Employees are primary source of competitive advantage in service- oriented organization
(pfeffer, 1994).
23
Employee performance is originally what employee does or does not do. Currently, organiza-
tions are competing through implementation of unique and exceptional human resource manage-
ment practices and as a result of globalization, many organizations are adopting up-to-date hu-
man resource practices in order to achieve their organizational goals. Excellent human resource
management practices are advantageous for both employees and employers. These practices ac-
cording to Guest (1997) consist of selection, training, appraisal, rewards, motivation, job design,
involvement and status, and security. According to Sari (2009), training and development is seen
as one of the key practices of HRM and it refers to the programs designed to teach the employ-
ees about the company specifics, educate them on the general rules of an organization, to pro -
vide them technical knowledge which is considered important to complete the job tasks effec-
tively and to eradicate the probable imperfections at work. Meanwhile, Rajput (2011) considers
motivation as another component of HRM practice and defines it as “individual desire to
demonstrate the behavior and reflect willingness to expand efforts”. Similarly, Remuneration/
Reward has been found to play motivational role and include but not limited to pay strategies
such as performance related pay, production-based pay, skill-based pay, knowledge based pay
and base pay Brown (1989). Performance appraisal as HRM practice in the words of Shahzad et
al. (2008, p. 304) represents “a formalized process for monitoring workers and is intended to be
a management tool to improve the performance as well as Performance of workers”. Internal
communication on the other hand as defined by Salas et al. (2008) is the “process through which
knowledge and information is shared between team members” and this is also seen as a key
HRM practice. Scholastically, Human Resources Management practices is a form of system in
which a set of distinct but interrelated activities, functions and processes are directed at attract -
ing, developing and maintaining or disposing firms‟ human resources for that matter employees
(Lado& Wilson, 1994). Additionally, HRM practices refer to organizational activities directed at
managing the pool of human resource and ensuring that the resources are employed towards the
fulfillment of organizational goals (Schuler & Jackson, 1987).
Employee performance is originally what employee does or does not do. Currently, organiza-
tions are competing through implementation of unique and exceptional human resource manage-
ment practices and as a result of globalization, many organizations are adopting up-to-date hu-
man resource practices in order to achieve their organizational goals. Excellent human resource
management practices are advantageous for both employees and employers. These practices ac-
cording to Guest (1997) consist of selection, training, appraisal, rewards, motivation, job design,
involvement and status, and security. According to Sari (2009), training and development is seen
as one of the key practices of HRM and it refers to the programs designed to teach the employ-
24
ees about the company specifics, educate them on the general rules of an organization, to pro -
vide them technical knowledge which is considered important to complete the job tasks effec-
tively and to eradicate the probable imperfections at work. Meanwhile, Rajput (2011) considers
motivation as another component of HRM practice and defines it as “individual desire to
demonstrate the behavior and reflect wasingness to expand efforts”. Similarly, Remuneration
Reward has been found to play motivational role and include but not limited to pay strategies
such as performance related pay, production based pay, skill based pay, knowledge based pay
and base pay Brown (1989). Performance appraisal as HRM practice in the words of Shahzad et
al. (2008, p. 304) represents a formalized process for monitoring workers and is intended to be a
management tool to improve the performance as well as Performance of workers”. Internal com-
munication on the other hand as defined by Salas et al. (2008) is the “process through which
knowledge and information is shared between team members” and this is also seen as a key
HRM practice.Several scholars have noted that managing people is more difficult than managing
technology or capital (Barney, 1991; Lado and Wilson, 1994). However those firms that have
learnt how to manage their human resources well would have an edge over others for a long time
to come because acquiring and deploying human resources effectively is cumbersome and takes
much longer (Wright et al., 1994).
The effective management of human resources requires sound Human Resource Management
systems. Storey (1995) defines HRM as a distinctive approach to employment management
which seeks to obtain competitive advantage through the deployment of a highly committed and
skilled workforce, using an array of techniques. HRM can help firms improve organizational be-
havior in such areas as staff commitment, competency and flexibility, which in turn leads to im-
proved staff performance and in turn improve the financial performance (Koch and McGrath,
1996). In order to develop a sound HRM system, the organization should 13 Guest (2002) has
argued that the Impact of HRM on performance depends upon worker‟s response to HRM prac-
tices, so the impact was move in direction of the perception of HRM practices by the employee.
Wood (1999) and Guest (2002) has stressed that a competent, committed and highly involved
work force is the one required for best implementation of business strategy. Huselid (1995) have
found that the effectiveness of employees was depend on impact of HRM on behavior of the em-
ployees. Patterson et al (1997) while discussing impact of people management practices on busi -
ness performance has argued that HR practices in selection and training influence performance
by providing appropriate skills. Their research has found that HR practices have powerful im-
pact on performance even if measured as Performance. Huselid (1995) stressed that by adopting
best practices in selection, inflow of best quality of skill set was be inducted adding value to
25
skills inventory of the organization. He also stressed on importance of training as complement of
selection practices through which the organizational culture and employee behavior can be
aligned to produce positive results. Career planning is a tool that aligns strategy with future HR
needs and encourages employee to strive for his personal development (Wasiam et al, 1996). By
increasing employee participation, the firm was benefit from increase in Performance of the em-
ployee due to increased commitment of the employee.
Financial participation schemes were more beneficial for the organizations than the associated
cost (Summers & Hyman, 2005). Use of best HR practices shows a stronger association with
firm‟s Performance in high growth industry (Datta et al, 2003). This finding has significance in
our case as we have shown that the telecom sector of Pakistan is a high growth industry. Wright
et al (2003) have argued that an employee was exert discretionary effort if proper performance
management system is in place and is supported by compensation system linked with the perfor-
mance management system. Job definition is combination of job description and job specifica-
tion. It clearly outlines duties, responsibilities, working conditions and expected skills of an indi-
vidual performing that job (Qureshi M Tahir, 2006).
Ichniowski (1995) while observing Performance of steel workers have found that complemen-
tary HR practice System effects workers performance. Majority of previous research has verified
significant relationship between HR practices and Employee Outcomes (Sels, 2006) Collins
(2005) in a research of similar nature targeting small business have found that effective HR
practices impact employee outcomes significantly (employee outcomes used by them were dif-
ferent than ours). A research was conducted by Tahir Masood Qureshi (2006) regarding Impact
of HR practices on organizational performance in Pakistan.

2.2.1 Compensation

Compensation is a process of providing monetary value to employees for the work they per-
formed. Compensation can be used to hire skilled employees, reward the performance, encour-
age company loyalty by reduce turnover. Compensation may include Basic Pay, Overtime,
Bonuses, Travel/Accommodation Allowance, Stock Options, Medical Allowance, Commissions,
and Profit Sharing. A recent study conducted by Hay points out that 20% employees plan to
switch their current positions in at least five years. Employee retention turnover has become a
more prominent aspect of organizational life. The implementation of retention compensation
strategies has seen significant growth over the last several years. A study conducted by Frye
(2004) show positive relationship between compensation and organization performance. Frye
(2004) reported that compensation strategies play an important role in recruiting and retaining

26
skilled employees. Most of the firms used Performance-based compensation to reward employ-
ees (Collins and Clark, 2003). Performance-based compensation positively influences em-
ployee‟s performance (Brown et al., 2003). A research study by Huselid (1995) showed a signif-
icant relationship between compensations and employee performance. An effective HRM strat-
egy is to integrate performance and compensation system that enhance employee’s was to work
effectively and efficiently (Wright, 2003). Teseema and Soeters (2006) indicate a significant
correlation between compensation and employee’s performance. It is important that employer
view compensation practices in a favorable light as compensation practices heavily influence
employee recruitment, turnover and Performance

2.2.2 Career Planning

Career planning is process of setting career goals and identifies the ways to attain them. Career
planning is a process of planning individual’s life work. Career planning is a tool used to moti -
vate employees to work for the development of the organization (Wright and Snell, 1998). The
career planning focused on motivating the employees to achieve a desired match between per-
sonal goals and organizational goals. A process of developing human resources to increase orga -
nizational performance is referred as career planning (Leibowitzet al., 1986). Career develop-
ment process is useful in identifying employee‟s skills and experience and assigning them tasks
accordingly. Individuals prefer to join those organizations where they get enough opportunities
to pursue their career goals and exploit their potential fully (Gardener et al., 2011).
Career planning serves as a tool to motivate employees to work effectively and efficiently in or-
der to achieve the goals of the organization. Career planning is a deliberate process of providing
opportunities for successful development (Snell, 1992).

2.2.3 Training

Training is a systematic approach that enables employees to attain knowledge and skills in order
to accomplish their tasks effectively with the resultant improvement in the behavior (Armstrong,
2006). Training and development contribute positively towards organizational growth. Training
refers to the methods used to develop skills in the employees required to perform the job
(Dessler, 2008). Most organizations considered training and development as an important factor
of the human resource activity. Training can be used as a tool to increase employee’s perfor-
mance by developing knowledge and skills. Training can be described as an endeavor to develop
additional competencies needed today or in future in order to increase the level of employee’s
performance (Jackson and Schuler, 2000). Training can be used as a tool to increase efficiency

27
and effectiveness of employees in order to increase organizational performance (Cook and Hun-
saker, 2001). Training programs play a significant role in achieving organizational goals (Dob-
son and Tosh, 1998). A desired change can be attained in employees performance by providing
them proper training (Huselid, 1995). Training and development constitute a subsystem inside of
the wide range of work force capacity. Human resource is the most elements of all resources in
any organization in this way extensive consideration must be given to human development in the
organization (Gajanayake, 2006). Training infers readiness for a calling while development in-
fers a more extensive perspective of learning and aptitudes securing through training. The litera-
ture revealed that training is the utilization of methodical and arranged direction exercises to ad-
vance learning (Ghafoor, & Khan, 2009). It includes the utilization of formal procedures to give
information and help people to get the right stuff important for them to perform their occupa-
tions tastefully. The center of training is on down to earth abilities and is worried with applying
and actualizing strategies and procedures (Fatima &Tayyaba, 2011). Consequently, training is
putting resources into individuals to empower them to perform well and enable them to make the
best utilization of their characteristic capacities. The literature additionally revealed that training
is a procedure that creates and enhances abilities related to performance and which comes full
circle at the better performance of the organization (Osemeke& Monday, 2015).

2.2.4. Selection

2.2.4 Employee Involvement

Employee involvement is creating an environment in which employees are empowered to make

their decisions and take actions relevant to their jobs. Employee involvement helps the organiza -
tion in retaining its employees as it increases ownership and commitment and fosters an environ-
ment to make the employees motivated and contributing. Employee contribution influence em-
ployees performance positively (Locke et al., 1997). Employee involvement increase job satis-
faction, motivation and employees commitment as employees feel themselves more involved in
the success of the organizational goals (Mullins and Peacock, 1991). Empowering the employ-
ees by involving them in decision making contribute to the success of organization as it in-
creases the Performance, saves time for decision making, lowers the gap between supervisor and
subordinates, encourages a strong sense of teamwork among workers. Smith (1997) focused on
empowering employees in order to release their potential. Nykodymet al. (1994) indicate that
empowering the employees can reduce conflict among employees

28
2.2.5 Performance Appraisal

Performance appraisal is a systematic evaluation of an employee‟s performance in his assigned

tasks. The overriding purpose of performance appraisal is to increase motivation and employees
self-esteem. Selset al. (2003) stated that performance evaluation increase the employee‟s Perfor-
mance that in turn increases organizational performance. Performance appraisal enhances pro-
fessional growth by pointing out the area of performance enhancement. Transparent perfor-
mance evaluation motivates employees to work more in order to achieve the organizational ob-
jectives (Singh, 2004). Wan et al. (2002) reported that merit based performance appraisal in-
crease employee‟s motivation and commitment that has a significant effect on organizational
performance. The key to organization‟s success relates to the wasingness of employees to play
extra role (Ahmad and Schroeder, 2003). Satisfied employees lead towards reduced turnover and
absenteeism. The practice of performance management includes a ceaseless judgment on the
conduct and performance of staff. It is imperative that employees know precisely what is antici-
pated from them and the measuring stick by which their performance and results was be mea-
sured (Cook & Crossman, 2006). A formalized and orderly appraisal plan was empower a stan-
dard evaluation of the people's performance, highlight potential and recognize training and de-
velopment needs. In particular, a powerful appraisal plan can enhance the future performance of
staff (Burney & Widener, 2008). The appraisal plan can likewise frame the premise for a survey
of budgetary rewards and arranged vocation movement. The literature revealed that there is a
reasonable and solid connection between organizational performance and the consideration
given to performance management and worker appraisal (Anupama&Dulababu, 2011). The odds
of really accomplishing the goals of the association are significantly enhanced when all manage-
ment levels are in accordance with each other. What's more, this guarantees all association indi-
viduals realize what is imperative for the association and what is normal from them (Michael,
Melanie & Dinesh, 2014).

2.2.6 Employee Performance

The studies by Weitzmen& Kruse (1990) and Gerhart&Milkovich (1992) found that the links
between incentive compensation systems and Performance have consistently been well. The
studies demonstrated that training; goal setting and socio- technical systems design had positive
effects on Performance. Terpstra and Rozell (1993) identified five staffing practices and found
that the use of these practices had a moderate positive relationship with Performance and organi-
zational outcome. Barte1 (1994) in his study established a link between the adoption of training
programmers and Performance. Ichinowski, Shaw and Prennushi (1994) have shown that a com-

29
bination of human resource practices have bigger effects on Performance. Arthur (1994) in his
research study identified two types of human resource systems viz., „control‟ and „commit -
ment‟ systems and tested the strategic human resource proposition that specific combination of
policies and practices were useful in predicting differences in performance and turnover across
“Steel Minimills”. He demonstrated that the mills with commitment systems had higher Perfor-
mance and lower scrape rate, than those with control system. In addition, he found that human
resources system moderated the relationship between turnover and manufacturing performance.
MacDuffie (1995) derived specific configurations or bundles of human resource practices to en-
hance Performance. A comprehensive study of Huselid (1995) found that each standard devia-
tion increase in high performance work practices equaled a 16% increase in Performance (mea-
sured by log of Sales per employee) Cooke (2000) has included efficiency and effectiveness as
ingredients of performance apart from competitiveness and Performance. He or she further ar-
gued that training is the tool to develop knowledge and skills as means of increasing individuals’
performance (efficiency and effectiveness). Guest (2002) has argued that the impact of HRM on
performance depends upon workers response to HRM practices, so the impact was move in di-
rection of the perception of HRM practices by the employee. Wright et al. (2003) have argued
that an employee was exert discretionary effort if proper performance management system is in
place and is supported by compensation system linked with the performance management sys-
tem. Singh (2004), whose observations are more relevant in our cultural context, argues that
compensation is a behaviour aligning mechanism of employees with business strategy of the
firm. Qureshi M Tahir (2006) argues that job definition is combination of job description and
job specification. It clearly outlines duties, responsibilities, working conditions and expected
skills of an individual performing that job. Sels (2006) opines that majority of previous research
has verified significant relationship between HR practices and employee outcomes. A research
was conducted by Mr. Tahir Masood Qureshi (2006) regarding impact of HR practices on orga-
nizational performance in Pakistan. His findings were supportive of our assumption that HR
practice system effect organizational performance through employee outcomes. Research on the
impact of HRM practices on organizational Performance is more extensive. Cutcher Gershenfeld
(1991) found that firms adopting "transformational" labor relations-those emphasizing coopera-
tion and dispute resolution-had lower costs, less scrap, higher Performance, and a greater return
to direct labor hours than did firms using "traditional" adversarial labor relations practices. Katz,
Kochan, and Weber (1985) demonstrated that highly effective industrial relations systems, de-
fined as those with fewer grievances and disciplinary actions and lower absenteeism, increased
product quality and direct labor efficiency, and Katz, Kochan, and Keefe (1987) showed that a
30
number of innovative work practices improved Performance. Katz, Kochan, and Gobeille (1983)
and Schuster (1983) found that quality of work life (QWL), quality circles, and labor-manage-
ment teams increased Performance. Bartel (1994) estab-lished a link between the adoption of
training programs and Performance growth, and Holzer (1987) showed that extensive recruiting
efforts increased Performance. Guzzo, Jette, and Katzell's (1985) meta-analysis demonstrated
that training, goal setting, and sociotechnical systems design had significant and positive effects
on Performance. Links between incentive compensation systems and Performance have consis-
tently been found as well (Gerhart & Milkovich, 1992; Weitzman & Kruse, 1990).
2.3 Empirical literature
Nicholas Bloom and John Van Reenen (2010) contacted a research on the effect of human re-
source management on Performance the result show that the adoptions of coherent system of
new work practice include work team flexible work assignment employment security, training
and incentive pay produce high level of Performance.
Faith .w (2017) did his research on the effects of motivation, staff skills, performance appraisal
and leadership and on the Performance of employees at the county government of Ethiopia.
From the analysis, the study has found out that indeed, there is a strong correlation between mo -
tivation and Performance whereby, the more motivated employees are, the higher the likelihood
of more Performance. In case of performance appraisal, it has been found to have a largely nega-
tive effect on Performance. In the same token, the study has found out that workers skills and
levels of education are important to a very large extent in raising Performance. However, leader -
ship seems to be most influential factor affecting Performance. The overall effect is that poor
and uninspiring leadership tends to kill Performance. The study has recommended that county
government leadership needs to facilitate training and acquisition of skills for the employees to
be more productive. It also needs to motivate the employees for Performance to rise. In the case
of performance appraisal, the method used for this purpose is currently demoralizing employees
leading to disaffection and thus low Performance. The leadership needs to be more inspiring to
the employees. Dull or poor leadership is found to lower Performance by a very large extent.
The results of the findings are important to the other county governments and the national gov-
ernment and indeed to all organizations in that they can be used as guide in enhancing Perfor -
mance.
Simegn Z (2019) examined factors which affect employees‟ performance need to be addressed.
The main aim of this study was to investigate factors affecting employees‟ job performance in
commercial bank of Ethiopia Woldia area branches. Quantitative research approach as well as
simple and stratified random sampling was employed in the study. Moreover, the research em-
31
ployed descriptive, correlation and regression method of analysis. Thus, the mean score values
of all factors in the study have low level of preference for employees. This clearly shows that the
bank has weak management in managing these factors investigated in this study. Pearson corre-
lation coefficient(r) was used to determine the relationship between each independent variable
with the dependent variable of which working related factors, training and motivational factors
have substantial association with employee job performance. Unlike the others performance ap-
praisal system has a moderate association with employee‟s job performance. Moreover, regres-
sion analysis was computed to determine the impact of independent variables on dependent vari-
able for which working environment, training, performance appraisal and motivational factors
lead to a positive change on employee job performance. Hence, commercial bank of Ethiopia
has to provide a great attention in bringing about improvement in training, performance ap-
praisal system, working environment and motivational packages so that it can improve employ-
ees‟ performance in particular and organizational performance in general.
Kalekrstos .k (2020) this study intends to examine effect of HRM practices on employee
turnover intention in Abay bank S.C. Multi stage sampling was used to select a sample size of
262. The study used primary data collected through questionnaires. Both descriptive and infer-
ential statistical techniques were used to analyze the data. The finding indicates that, Career de-
velopment opportunities and reward and recognition aspects of HRM practices are more signifi-
cant in leading to employee turnover intention in Abay Bank S.C. Hence, change in reward
schemes and transparent application of career growth opportunities strongly recommended.
Remuneration, inventiveness, training, and growth, according to Abdullah (2014), all have a fa-
vorable effect on an employee's ability to do their work. According to his study on the effect of
compensation on employee performance, employees typically believe that receiving competitive
pay, incentives, and remuneration that is paid on time has a beneficial effect on their perfor-
mance at the company. In addition, respondents who were asked about the relationship between
creativity and employee performance concurred that it depends on how much the firm values
creativity. Finally, despite training ranking and preferences, training and development are also
considered to be the main factors influencing performance. However, he disregards other ele-
ments that may affect an employee's success at work.
Zhang (2016) asserts that a variety of factors, including pay and benefits, work demands, the ho-
tel environment, and the possibility of career advancement, had an impact on how well hotel
personnel performed even in the other service sectors. A sizable percentage of participants, in-
cluding employees and managers, concurred that rewards and incentives were key drivers of em-
ployee performance since they serve as inspiration for the hotel personnel. On the other side, a
32
large number of staff members concurred that the hotel managers appreciated their effort and
hard work. They recognized the workers' accomplishments by designating them as star perform-
ers or employee of the month, in exchange for which they received money or non- financial re-
wards.
Employees are constantly searching for employers with better perks and pay packages. The
compensation scale is the most frequent cause of the high employee turnover rate since workers
are typically looking for well-paying employment, and the availability of better-paying jobs
makes it easier for them to leave their jobs and organizations. According to Firth et al. (2004),
employees whose compensation is below the going market rate may feel underappreciated at
their current employers and search for one that was pay them what they are worth.
The conceptual framework of the study focused on assessing the effect of HRM practice on em-
ployee Performance. The following conceptual model of the study was developed by Charles J
(2016) which intended to improve employee Performance through identifying and managing
HRM practice which is compensation, Career Planning, Training, Performance appraisal and
employee involvement.
Compensation strategies play an important role in recruiting and retaining skilled employees.
Most of the firms used Performance-based compensation to reward employees (Collins and
Clark, 2003).Irshad (2009) in his study finds that training and career development was found
motivating factor which leads to retention. Besides Phillips & Connell (2003) concluded that
provision of development opportunities for individual employee is vital for the organization in
order to enhance employees „proficiencies and improve their chances of getting higher posts.
2.3. Hypothesis

Human Resource Management Practices are positively correlated to Employee’s Performance.

 H 1; Selection is positively correlated to Employee’s Performance.

 H 2; Training impacts Employee’s Performance positively.
 H3; Performance appraisal has significant effect on Employee’s Performance.
 H 4; Career planning has a direct effect on Employee’s Performance.
 H 5; Compensation is positively correlated to Employee’s Performance.
 H 6; Employee Participation is positively correlated to Employee’s Performance

2.4 Conceptual Model

The conceptual framework illustrates the connection between a dependent variable and an inde-
pendent variable, as explained by Young (2009). Within this theoretical framework, employee

33
performance is depicted as the dependent variable, with Human resource planning, performance
appraisal, selection, compensation employee participation and training serving as independent
variables on Figure 1.

Figure 1: Conceptual Framework of the study

Source: developed by researcher from the reviewed literature.2024

CHAPTER THREE

Research Methodology
3.1 Research Design and Approach
According to Bryman and Bell (2007), a research design is "the framework for the generation of
evidences that are suited both to a certain set of criteria and to the research question in which the
investigator is interested." Using a suitable sample approach, the aim of this study is to deter-
mine the impact of HR practices on employee performance. Descriptive research was employed
by the investigator. A collection of scientific techniques and processes are used in descriptive re-
search to gather unprocessed data and build a data structure that characterizes the current state of
affairs in a certain target group. The descriptive research approach collects and calculates mea-
surements that provide several ways to explain the data. Which means the method is set out to
describe and to interpret what is going on and more concerned with facts. With emphasis on de-
scriptive type, in order to conduct primary data, the researcher has questionnaires.).
Both descriptive and explanatory (Causal) research designs were used in this study to address

34
the research question. The survey strategy was chosen because it allowed the researcher to easily
and affordably collect a large quantity of quantitative data from a large population, which was
then analyzed using descriptive statistics. Descriptive research was used to characterize the pop-
ulation's characteristics, and an explanatory research methodology was used to look into the the -
ories positing causal links between the variables. It's worth noting that different correlation or re-
gression analyses aim to establish cause-and-effect relationships (Sekaran, 2003). It was looking
at the cause-and-effect relationship between the independent and dependent variables. This
study aims to determine the impact of Abay Bank employee performance on human resource
practices. The study employed a descriptive research approach in accordance with its objectives.
A mixed research technique is used to gather, examine, and combine data that is both quantita-
tive and qualitative. In order to respond to the research questions through a survey employing a
questionnaire, this study used an explanatory research design.

3.2 Population, sampling technique and sample size

3.2.1 Population

Hair et al., 2002, p.334, defines population as the total number or sum of elements (i.e. individu-
als, products, entities, physical objects) that the researcher is interested in and relevant to the in-
formation problem in question. The target population of this study was the Dessie district staff
of Abay bank.

3.2.2 Sampling Technique

Mugenda (2003) states that “a researcher should take as large a sample as possible when time
and resources permit”. Generally, the size of a sample depends on variables, study design, data
analysis method, and size of the available population. For descriptive studies, “30% of target
population is sufficient” (Neuman (2000). Based on the above discussion, some respondents
were sampled by the researchers. Kumar (2005) defines sampling as “the process of taking a few
samples from a larger group (the sample population) to serve as a basis for the estimation or pre -
diction of an unknown information, situation, or outcome about the larger group”. For this study,
we used a stratified sampling method to select respondents in the target population to ensure that
everyone has a fair chance of being included in the sample.

3.2.3 Sample Size

The research sample was consisting of the employee of Abay Bank on the basis of their status
and the service years. According to Kothari (2004) a sample is a collection unit from the uni-

35
verse to represent it. In quantitative research mathematical procedures are used to determine the
sample size. The total numbers of employee belonging to the Dessie district are 530 and from
which a sample of 227 was be drawn. Using Yamane (1967) sample size determination formula,
a sample of 227 was selected for the study at 95% confidence level. A proportionate stratified
sampling technique was used to draw sampling units from each stratum is in proportion to the
population size of that stratum.
N
n=
1+ Ne 2
Sample Size for ±5% Precision Levels where, Confi-
dence Level is 95%, n = Sample size
N = Study population
e = Level of confidence n
N 530
n= = = 227
( 1+ Ne 2 ) ( 1+ 530∗0.052 )
3.3 Types of Data
For the purpose of conducting a research primary and secondary data was used. The primary
data are those which are collected afresh and for the first time, and thus happens to be original in
character. Secondary data, on the other hand, are data not gathered for the immediate study at
hand but for some other purpose. A both, primary and secondary data source was used to con-
duct this study. The primary data was be collect by administrating questionnaires to the respon-
dents during data collection phase, whereas secondary data was collected from related books,
journals, research papers, and organizational website to develop research background and fur-
ther justifications of the findings.

3.3.1 Data Collection Instrument

The instrument was used to collect data from the employees of Abay Bank Dessie district in
Woldia is questionnaire. Questionnaires are a formalized set of questions involving one or more
measurement scales design to collect specified primary data. Often, they are the only feasible
way to reach a number of reviewers large enough to allow statistically analysis of the results.

3.3.2 Procedure of Data Collection

Before administrating the instruments of data collection, the questionnaires were tested for va-
lidity and reliability. Conforming this (Wilkinson and Birmingham, 2003), have stated that usu-
ally mistakes are quickly spotted through piloting; ambiguous questions can be restated or rede-
veloped. This pretest was being done with the objective of checking whether or not the items

36
contained in the instruments could enable the researchers to gather relevant information. First
questionnaire was being prepared in English and then by professional translators it was being
translated in to Amharic. Based on the result of the pre-test vague statements was be corrected.
Finally, the modified and corrected questionnaires were being distributed to employee of the
sample branch of Abay bank. The questionnaires distributed and collected back, then the data
processed All the variables was coded and entered to the SPSS to analyze data obtained through
questionnaires.
3.4 Data Analysis
Data that collected from questioner is analyzed by using descriptive and inferential or economet-
rics analysis. As stated by Duncan Cramer and Dennis Howitt (2004), descriptive data analysis
emphasizes on maximizing the gain from the data by making clearer the process of describing
and analyzing the data gathered. After proper editing, the data was coded and entered to the soft-
ware then it was ready to analysis. For the purpose of achieving the objectives of the study, the
collected data was processed and analyzed with descriptive statistics using Statistical Package
for Social Studies version 26. This technique is selected because it helps to summarize the
sample, provides and allows describing the characteristics of the data collected and it helps to
thoroughly analyze and interpret the questions one by one in order to reach meaningful results.
Throughout the analyzing process, percentages, frequency and mean were employed. In doing so
tables were used to present and made easily understandable the findings in order to arrive at cer-
tain conclusion.
Correlation and Multiple Regression model was be applied to determine the significance level of
the variables human resource management practice on employee performance. In this study, the
degree of association between the independent variables of the study and the dependent variable
is assessed using Pearson's correlation coefficient. The multiple regression technique was be
used to analyze the cause-and-effect relationship between independent and dependent variables.
3.5 Reliability Test
Validity means the validity of the results that is how well the questions measure the matters cho-
sen to be studied. Consisting of forty (40) respondents is selected for a Pilot test and with this
small group the researcher tried to look the feedback of the total population and check validity
of this project. Reliability tells about stability of the results that is how accurately the study or
measuring has been carried out. It refers to whether a measurement instrument is able to yield
consistent results each time it was applied. It is also the property of measurement device that
causes it yield similar outcomes for similar inputs. In this study, Alpha reliability was used to

37
measure internal consistency of the mean of the items at the time of administration of the ques-
tionnaire. Cronbach’s Alpha is a reliability coefficient that indicates how well the items in a set
are positively related to one another (Shuttle worth, 2015). Therefore, this study used Cron-
bach’s Alpha method to test reliability.
Based on the reliability test, the value of Cronbach’s alpha in all variables in the questionnaire
were above the suggested value of 0.7. On the basis of reliability test, it was supposed that the
scales used in this study were reliable to capture the constructs and could fairly represent opin-
ions of other respondents.
Table 1: Reliability test

Cronbach's Alpha No of Items

Employee performance 0.530 6
Training 0.825 6
Performance Appraisal 0.723 6
Career planning 0.815 7
Employee Involvement 0.826 5
Compensation 0.784 5
Selection 0.784 6

3.6 Validity Test

Validity defined as the accuracy and meaning fullness of the inferences which are based on the
researcher results (Creswell 2009) content validity of measures were determined for the valida-
tion of an instrument. (Collins & smith 2003) and (Minbarve 2009). A pilot study conducted to
refine the methodology and test instrument such as questionnaires before administrating final
phase. Questionnaires was tested on potential respondent to make the data collecting instrument
objective, relevant, suitable to the problem and reliable as recommended by (John Adams et al
2007). Issue raised by respondents was corrected and questionnaires were refined. Besides,
proper detection by an advisor was also taken to ensure validity of the instruments. Finally, the
improved version of the questionnaires were printed, duplicated and dispatched.

3.7 Ethical Considerations

To begin, the researcher already asks permission and authorization from Abay Bank Administra-
tion to conduct this study, as well as clarification that the study is solely for academic purposes.
Furthermore, participants were informed that they had the option to deny participation and with-
38
draw from the study if they are not comfortable and secure.

CHAPTER FOUR

Data Analysis and Presentation

Three topics are covered in this chapter. The first section focuses on the profile of respondents,
which includes information on their gender, age group, education level, and experience of the re-
spondents. The second section presents about descriptive analysis of Human resource manage-
ment practice that were obtained from respondents, and the third and final section analyzes Cor-
relation and multiple regression analysis. The data was examined using quantitative descriptive
and inferential statistics. In the end, analysis and interpretation were done using the information
from the respondent's questionnaire. Regarding the response rate, in order to get the primary
data, questionnaires each contained 46 questions were distributed to 227 individuals for quanti-
tative data analysis. Consequently, the given questionnaires have been collected back from 210
respondents out of 227 sample respondent individuals and yet due to various reasons 17 respon-
dents haven’t yet returned so that 93.51% response rate could properly be completed and re-
turned. According to Mugenda O.M and Mugenda A.G (2003) a 50% response rate is adequate,
60% good and above 70% rated very well. From this demarcation the response rate is very good
to make analysis and answer the research questions. As a result, their proper response has also
been taking in to consideration for data presentation, analysis and interpretation.

39
4.1 Demographics Characteristics of the Respondent
Understanding the demographic characteristics of employees can provide insights into the effec-
tiveness of HRM strategies and their impact on performance outcomes. This paper examines the
demographic characteristics of respondents in studies investigating the relationship between
HRM and employee performance. They provide valuable insights into the composition and na-
ture of the respondents, which can influence the interpretation and generalizability of research
findings. This paper examines the demographic characteristics of the respondents in a research
study, highlighting the key variables and their implications for the research.
Table 2: Demographic Characteristics of the respondents

Variable Personal Information Frequency Percentage

Sex Male 123 58.6%

Female 87 41.4%

Total 210 100%

Age Category Under 30 70 33.3%

30-40 80 38.1%

41-49 60 28.6%

more than 50 0 0.0%

Total 210 100

Educational Qualification College Diploma 10 4.8%

BA/BSC Degree 120 57.1%

Masters 80 38.1%

PhD and above 2 1.0%

Total 210 100.0%

Experience 1-5 Years 111 52.9%

40
 5-10 years 60 28.6%

Less than one year 24 11.4%

Above 15 Years 15 7.1%

Total 210 100.0%

Position Employee 149 71.0%

Supervisor 50 23.8%

team leader 9 4.3%

Directorate 2 1.0%

Total 210 100.0%

4.1.1 Sex of the respondents

Table 2, illustrates the gender distribution among the participants. The data reveals that out of
the total respondents, 87 individuals (41.4%) were identified as women, while the remaining
123 individuals (58.6%) were categorized as men. These findings indicate that men constitute a
larger proportion of the workforce within the organizations under study, whereas women are
comparatively underrepresented.

4.1.2 Age Category

According to the findings presented in Table 2, the majority of respondents (38.1%) fell within
the age group of 30-40 years. Following this, 33.3% of respondents were under the age of 30.
Additionally, 28.6% of respondents were between the ages of 41-49, while none of the respon-
dents were above the age of 50. It can be inferred from the age distribution of respondents that
the majority are between the ages of 25-40. The descriptive analysis indicates that most employ-
ees are young and in the middle age groups, displaying high levels of energy and enthusiasm for
their work. The study was predominantly participated by young and middle-aged individuals,
which has positively impacted the quality of work.

41
4.1.3 Educational Qualification of the respondents

In relation to the educational levels of the participants, the data presented in Table 2, reveals
that the majority of respondents possess a bachelor's degree, constituting 120 individuals or
57.1% of the total. Following this, 80 respondents or 38.1% hold a Master's degree or higher.
Additionally, the findings indicate that 10 respondents, equivalent to 4.8%, have a diploma,
while 2 respondents, accounting for 1%, hold a PhD. These results suggest that a significant pro-
portion of employees at Abay Bank possess degrees and advanced qualifications in various
fields of study. This educational background plays a crucial role in enabling the organization to
achieve its mission, vision, and goals with notable accomplishments.

4.1.4 Experience of the respondents

The survey findings on work experience at Abay Bank revealed that the majority of respondents
(52.9%) had between 1-5 years of experience within the organization, while 28.6% had worked
for 5-10 years. Additionally, 11.4% and 7.1% of employees or research participants had 11-15
years and over 15 years of experience, respectively. Specifically, employees at the Dessie dis-
trict branch of Abay Bank had an average tenure of four years. These results suggest that longer
employee retention within the organization can lead to increased efficiency and effectiveness
among workers.

4.1.5 Work status of the respondents

The research findings reveal that 71% of the participants were non-supervisors, while 29% held
supervisory positions or higher. This suggests that over 71% of the participants have a direct im-
pact on performance. Overall, the demographic characteristics of the participants indicate their
ability to comprehend and respond to the questions presented to them in order to gather primary
data.
4.2 Descriptive Analysis
The study outlined the research goals, which centered on Human Resource management practice
and its influence on employee performance through the use of liker scale questions. According to
Pallant (2005) Descriptive statistics concern the creation of specific indexes from raw data.
These are the mean scores, standard deviations, and percentages for each subgroup. The interpre-
tation of these numbers also provided insight into the influence of the independent variable. Ac-
cording to Murry.J. (2013), develop equal intervals for a five-point Likert scale (ranging from
strongly agree to strongly disagree on the survey questionnaire). Standard deviation was pre-
ferred for assessing the data. Small standard deviations imply that the data is close to the mean,

42
but a big standard deviation (relative to the mean) shows that the data points are far from the
mean. The mean provides a poor fit to the data. The standard deviation is a measure of how well
the mean represents the data. The factors were assessed using five-point Likert scales, with 1
representing strongly disagree and 5 representing strongly agree. As a result, the interpretation
made using the mean of each variable, as a matter of fact the mean lies between the two ranges,
so if the mean approaches 5, the interpretation would be that the respondents agree on the vari -
able, and if it approaches 5, the converse would be true.
Table 3: Likert Scale

Scale Interpretation

1 to 1.80 represents strongly disagree

1.81 until 2.60 represents Disagree

2.61 until 3.40 represents Neutral

3:41 until 4:20 represents Agree

4:21 until 5:00 represents strongly agree

4.2.1 Employee Performance

HRM practices play a crucial role in enhancing employee performance in their tasks. By focus-
ing on Selection, performance Appraisal, training and development, employee involvement,
Compensation, and career planning can create a positive work environment that encourages em-
ployees to perform at their best. Moreover, the integration of these practices is essential for
achieving optimal results. As organizations continue to compete in the global marketplace, the
effective management of human capital will become increasingly important for achieving long-
term success. Under this section the study clearly discusses about how HRM Practice contribute
to make employee performance in their tasks.

Table 4: Employee Performance Descriptive Statistics

Descriptive Statistics

Objective questions N Mean Std. Deviation

I offer timely help to customers without being asked 210 3.520 1.193

Because of Good HRM Practice in the organization I am quick 210 4.70 .001

43
 to solve problems before things go wrong

Efficiency (performing or functioning in the best possible man- 210 3.65 1.046
ner) of employees ensures high performance in achieving the
mission vison and goal of the organization

Effective (Producing the intended or expected re- 210 3.45 1.202

sult) employees have led to low customer complaints by doing
the right things.

I communicate well with colleagues and customers 210 3.79 .773

The bank profitability has increased for the last five years due 210 3.95 1.086
to employees Performance

Valid N (listwise) 210 3.81

Source: Own Survey, 2024

The above table 4 shows level of employee performance due to effective human resource man-
agement practice. The statement "I offer timely help to customers without being asked" had a
mean of 3.52 and standard deviation of 1.19. This indicates that respondents agreed with this
statement since the mean is above 3.41, which falls in the agreeing range. This implies that ef-
fective human resource management practices in the organization lead employees to engage in
extra role behaviors like helping customers without expecting orders from managers. The state-
ment "I am quick to solve problems before things go wrong" had a mean of 4.7 and standard de-
viation of 0.01. This shows that respondents strongly agreed that human resource management
practices enable them to quickly resolve issues before they escalate. The statement "Efficiency
of employees ensures high performance in achieving the mission, vision and goals of the organi-
zation" had the highest mean score of 3.65 and standard deviation of 1.046. This indicates that
employees agreed that proper human resource management systems allow them to provide more
services than individually expected. The statement "Effective employees have led to low cus -
tomer complaints by doing the right things" had a mean of 3.45 and standard deviation of 1.202.
This shows that employees agreed that human resource practices help them perform their roles
effectively. The statement "I communicate well with colleagues and customers" had a mean of
3.79 and standard deviation of 0.773. This indicates that respondents agreed that human resource
management practices facilitate smooth communication with staff and customers, enabling long-

44
term relationships. The statement "The bank's profitability has increased for the last five years
due to employees' performance" had a mean of 3.95 and standard deviation of 1.086. This shows
that respondents were agreed with this statement, implying they were aware of how their perfor-
mance impacted profitability.

The overall mean of 3.81 indicates that human resource management practices increased em-
ployee performance, encouraging them to exceed expectations in meeting organizational goals.
The findings align with existing research that human resource management plays a crucial role
in employee satisfaction, performance, and competitive edge.

4.2.2 Human Resource management Practice

4.2.2.1 Training
Training and development play a vital role in enhancing employee performance and contributing
to the overall success of an organization. By investing in the growth and development of their
employees, organizations can improve Performance, increase competitiveness, and reduce em-
ployee turnover. To ensure the success of training and development programs, organizations
must consider factors such as alignment with organizational goals, relevance to employees'
needs, active participation, and continuous evaluation and improvement. Under this section the
study clearly discusses about how training and development contribute to make employee per-
formance in their tasks
Table 5: Training Descriptive Statistics

Std. Devia-
Descriptive Statistics N Mean
tion

Our organization conducts extensive training programs for its em-

210 4.69 .971
ployees in all aspects of quality

Employees in each job was normally go through training pro-

210 4.62 .487
grams every year

Training needs are identified through a formal performance ap-

210 3.42 1.046
praisal mechanism

There are formal training programs to teach new employees the

210 3.45 1.202
skills they need to perform their jobs

210 3.99 .920

New knowledge and skills are imparted to employees periodically

45
 to work in teams

Training needs identified are realistic, useful and based on the

210 4.57 .496
business strategy of the organization

Valid N (listwise) 210 4.125

Source: Own Survey, 2024

The table 5 above illustrates the impact of training on employee Performance and effectiveness
within the organization. Abay Bank is known for its comprehensive training programs aimed at
enhancing employee skills and knowledge in various aspects of quality (Mean 4.69, SD .971).
This indicates that the organization prioritizes training to bridge any knowledge or skill gaps
among its workforce. Additionally, the data reveals that employees in each job role undergo
training programs annually, with a Mean value of 4.62 and SD .487, indicating that employees
acknowledge the organization's commitment to regular training for improved job performance.
Furthermore, the mean values of 3.42 and 4.45 suggest that respondents agree on the existence
of formal training programs to equip new employees with the necessary skills for their roles, as
well as periodic training to enhance teamwork skills. This highlights the organization's dedica-
tion to providing extensive training to new employees, ensuring they acquire essential skills and
knowledge to excel in their roles.
The statement that training needs are identified through a formal performance appraisal mecha-
nism and that the identified training needs are realistic, useful, and based on the business strat-
egy of the organization received the lowest mean scores of 3.99 and 4.57, respectively. This in-
dicates that respondents generally agreed that the training programs provided to employees were
designed by taking into account the performance appraisal of the employees and by conducting
training needs assessments. The overall grand mean of 4.125 suggests that the training program
offered by Abay Bank is highly effective in enhancing employee Performance in their respective
tasks. The analysis of the study reveals that the human capital development program is particu-
larly effective in improving employee performance within Abay Bank. This finding aligns with
Joel's (2017) research, where respondents agreed that training and development have a positive
impact on employee performance and, consequently, on organizational performance, with an av-
erage mean score of 3.715. Furthermore, the respondents indicated that Abay Bank has a spon-
sorship program that supports employees in pursuing academic and professional education pro-
grams. Additionally, supervisors are reported to encourage the application of techniques learned
during training when employees return to their work stations.

46
4.2.2.2 Performance appraisal
Performance appraisal is a crucial tool that contributes significantly to employee performance.
By setting clear expectations, identifying development needs, providing feedback and recogni-
tion, improving communication, motivating performance, enhancing employee retention, and
aligning performance with organizational goals, performance appraisal helps employees perform
their tasks effectively and contribute to the overall success of the organization. Under this sec-
tion the study clearly discusses about how performance appraisal contribute to make employee
performance in their tasks.
Table 6: performance appraisal Descriptive Statistics

Descriptive Statistics

N Mean Std. Devia-

tion

Performance of the employees is measured on the basis of objective 210 3.57 1.483
quantifiable results

Appraisal system in our organization is growth and development 210 3.73 .716
oriented

Employees are provided performance based feedback and counsel- 210 3.47 .752
ing

Employees have faith in the performance appraisal System 210 3.97 .484

Appraisal system has a strong influence on individual and team be- 210 3.79 .773
havior

The appraisal data is used for making decisions like job rotation, 210 3.95 1.086
training and compensation

Valid N (listwise) 210

Source: own survey, 2024

Based on the findings of the study, the performance of employees at Abay bank is evaluated us -
ing objective and measurable criteria, with a mean score of 3.57 and a standard deviation of
1.0483. This indicates that the respondents agreed that the organization measures employee per-
formance based on the established standards. Additionally, the appraisal system in the organiza-
tion is focused on growth and development, with a mean value of 3.73 and a standard deviation

47
of 0.716. The respondents also agreed that the appraisal system is oriented towards change. The
results clearly demonstrate that employees have confidence in the performance appraisal system,
as indicated by mean scores of 3.79 for individual behavior and 3.97 for team behavior. The re-
spondents agreed that employees believe in the effectiveness of the appraisal system and its im-
pact on workers.

The results presented above indicate that Employees receive performance-based feedback and
counseling, with the lowest mean scores of 3.47 and 3.95 for job rotation, training, and compen-
sation decisions, respectively. The overall mean of 3.75 suggests that respondents agreed that
the performance appraisal system contributes to employee performance. This system plays a key
role in improving and enhancing employee job performance. Regular performance assessments
also contribute to employee motivation. According to a study by Judy (2018), performance ap-
praisal and feedback are crucial as they provide organizations with a valuable opportunity to
evaluate each staff member in relation to established standards and expectations. The study fur-
ther highlights the importance of setting performance appraisal goals, as effective appraisals can
lead to outcomes such as job satisfaction, employee performance, quality work, and employee
trust and commitment.

4.2.2.3 Career Planning

Career planning plays a crucial role in enhancing employee performance by improving motiva-
tion, skill development, job satisfaction, and alignment with organizational goals. By imple-
menting a comprehensive career planning framework, organizations can create a workforce that
is motivated, skilled, and aligned with the organization's strategic objectives, leading to im-
proved organizational performance. Under this section the study clearly discusses about how Ca-
reer planning contribute to make employee performance in their tasks.
Table 7: Career Planning Descriptive Statistics

Descriptive Statistics

Std. Devia-
N Mean
tion

Individuals in this organization have clear career paths. 210 3.31 1.626

48
 Employee’s career aspirations within the organization are known by
210 4.00 .638
his/ her immediate superior.

Employees in our organization have more than one potential posi-

210 3.07 1.105
tion For promotion.

Individual and organization growth needs are matched in this Orga-

210 4.02 1.107
nization

Our organization plans for the career and development of employ-

210 3.27 .972
ees

Our organization prefers an internal employee whenever a vacancy

210 3.98 .656
exists

Each employee is aware of his/her career path in the organization. 210 3.50 1.617

Valid N (listwise) 210

Source: own survey, 2024

The data presented in the table 7 illustrates the positive impact of career planning on employee
effectiveness and efficiency within Abay Bank. The findings reveal that individuals within the
organization have well-defined career trajectories, with their career aspirations known to their
immediate superiors. Moreover, employees have multiple potential positions for promotion,
aligning individual and organizational growth needs. The organization actively plans for em-
ployee career development, giving preference to internal candidates for vacancies. Each em-
ployee is also aware of their career path within the organization, as indicated by mean scores of
3.31, 4.00, 3.07, 4.02, 3.27, 3.98, and 3.5 for various aspects. Respondents generally expressed
agreement with their career paths at Abay Bank, falling within the neutral to strongly agree
range. The overall grand mean of 3.59 suggests that respondents acknowledge the significant
role of career planning and development in enhancing employee performance. This process
serves as a tool for recognizing employees' efforts through rewards and appreciation, thereby
bridging the gap between organizational objectives and individual career aspirations.

49
4.2.2.4 Employee involvement
Employee involvement is a strategic approach that empowers employees, fosters collaboration,
and drives organizational performance. By actively engaging employees in decision-making,
providing opportunities for growth, and creating a supportive work environment, organizations
can reap the benefits of increased employee performance, innovation, and organizational suc-
cess. By embracing best practices for employee involvement, organizations can unlock the po-
tential of their workforce and achieve sustainable competitive advantage in the modern business
landscape. Under this section the study clearly discusses about how Employee involvement con-
tribute to make employee performance in their tasks.
Table 8: Employee involvement Descriptive Statistics

Descriptive Statistics

N Mean Std. Devia-

tion

Employees in this organization are allowed to make decisions 210 3.19 1.165
related to cost and quality matters

Employees in this organization are asked by their superiors to 210 4.60 .492
participate in operations related decisions

Employees are provided opportunity to suggest improvements 210 3.85 .736

in the way things are done here

The organization provides priority to seniority in promotion 210 3.79 .773

decision

Employees have more than one potential position they could 210 3.95 1.086
be promoted to within the organization.

Valid N (listwise) 210

Source: own survey, 2024

The table 8 above illustrates how the practice of employee involvement in human resource man-
agement enables employees of Abay bank to be productive and effective in their duties. Within
this organization, employees are given the authority to make decisions pertaining to cost and
quality matters, with a mean value of 3.19 and a standard deviation of 1.165. The respondents'
opinions varied, as the mean value fell within the range of 2.61 to 3.40. Additionally, the organi -

50
zation prioritizes seniority when making promotion decisions, as indicated by a mean value of
3.79 and a standard deviation of 0.773. This result suggests that the participants of the study
agreed with this statement. Furthermore, employees in this organization are actively encouraged
by their superiors to participate in decisions related to operations, with a mean value of 4.60 and
a standard deviation of 0.492. This result indicates that the participants strongly agreed with this
statement. The mean score of 3.85 and a standard deviation of 0.736 from the result table
demonstrate that employees are given the opportunity to suggest improvements in the organiza-
tion's processes. The statement "Employees in this organization are asked by their superiors to
participate in operations related decisions" also received a mean value of 3.79 and a standard de-
viation of 0.773, further confirming the agreement of the study participants. Overall, the grand
mean of the study (3.876) indicates that the respondents agreed with the concept of employee in-
volvement in various aspects of the organization. This suggests that employees of Abay bank are
actively invited to participate in the decision-making process for operations, but they are not
granted decision-making authority in matters concerning costs and quality.

4.2.2.5 Compensation
Compensation plays a significant role in shaping employee performance. By offering fair, equi-
table, and transparent compensation packages that align with organizational goals and values,
organizations can motivate employees to perform better and contribute to the overall success of
the organization. However, it is essential to recognize that compensation is just one factor that
influences employee performance, and organizations should also focus on other factors, such as
leadership, culture, and opportunities for growth and development. Under this section the study
clearly discusses about how compensation contribute to make employee performance in their
tasks
Table 9: compensation Descriptive Statistics

Descriptive Statistics

N Mean Std. Devia-

tion

Job performance is an important factor in determining the 210 3.75 1.407

incentive compensation of employees

In our organization, salary and other benefits are compara- 210 4.17 .755
ble to the market.

51
 In our organization, compensation is decided on the basis of 210 3.19 .984
competence or ability of the employee

The compensation for all employees is directly linked to 210 3.79 .773
his/her performance.

In our organization, profit sharing is used as a mechanism to 210 3.33 .969

reward higher performance

Valid N (listwise) 210

Source: own survey, 2024

The data presented in the table 9 above demonstrates the positive impact of compensation on
employee effectiveness and Performance within the organization. The respondents indicated a
mean score of 3.75 for the statement regarding the importance of job performance in determin-
ing incentive compensation, which suggests agreement with this notion. Furthermore, the stan-
dard deviation of 1.407 indicates a moderate level of variability in the responses. In addition, the
statement regarding the comparability of salary and other benefits to the market received a mean
score of 4.17, indicating a high level of agreement among the respondents. The corresponding
standard deviation of 0.755 suggests a relatively low level of variability in the responses for this
statement. On the other hand, the statement regarding compensation being decided based on em-
ployee competence or ability, with profit sharing used as a mechanism to reward higher perfor-
mance, received mean scores of 3.19 and 3.33 respectively. These scores indicate that the re-
spondents neither agreed nor disagreed with these statements. The descriptive results suggest a
lack of consensus among the respondents regarding these aspects of compensation. However,
the statement indicating a direct link between compensation and employee performance received
a mean score of 3.79, suggesting agreement among the respondents. This result further supports
the notion that compensation plays a significant role in motivating employees to perform well.
Overall, the mean value of 3.646 indicates that the respondents generally agreed on the impor-
tance of compensation in enhancing employee Performance within the organization. This find-
ing aligns with the research conducted by Nyawa (2017), which also emphasized the signifi-
cance of fixed and constant monthly salaries, along with career increment based on position and
experience, in motivating and retaining employees. In conclusion, the results of this study sug-
gest that the compensation offered by the organization is perceived as sufficient to motivate and
retain employees. The findings also highlight the importance of aligning salaries and remunera-
tion with employees' skills, competence, and work output.

52
4.2.2.6 Selection
Table 10: selection Descriptive Statistics

Descriptive Statistics

N Mean Std. Devia-

tion

The organization has written and operational recruitment and selec- 210 3.22 1.870
tion policy

The organization has clear job description and specification 210 3.97 .920

The organization has attractive salary scales that can attract quali- 210 3.99 1.268
fied applicants

The organization considers high role of merit in recruitment and 210 4.80 .401
selection process

The organization has a good image that attract qualified applicants 210 3.20 1.193

The selection tests of the organization are conducted by skilled and 210 4.90 .001
unbiased/impartial people.

Valid N (listwise) 210

Source: own survey, 2024

The data presented in the table 10 illustrates the impact of selection on employee Performance
and effectiveness within the organization. Abay bank has a documented and operational recruit-
ment and selection policy, with a mean score of 3.22 and a standard deviation of 1.87. This indi-
cates that respondents neither fully agreed nor disagreed with the policy. Furthermore, the orga-
nization's clear job descriptions and specifications received a mean score of 3.97 and a standard
deviation of 0.920, showing that respondents generally agreed that these aspects contribute to in-
creased employee job performance. The mean scores of 3.99, 4.80, and 4.9 indicate that respon-
dents agreed that Abay bank offers an attractive salary scale, places a high value on merit in re-
cruitment and selection, and conducts selection tests with skilled and impartial individuals. This
suggests that new employees are selected based on tests and attractive salary packages. Addi-
tionally, the mean score of 3.20 for the statement regarding the organization's positive image in
attracting qualified applicants shows that respondents neither fully agreed nor disagreed with
this assertion. Overall, the grand mean of 4.02 indicates that Abay bank's selection program is

53
effective in enhancing employee Performance. The study's analysis demonstrates that employee
selection processes are indeed effective.
4.3 Correlation Analysis
Correlation was measure the linear relationship between two variables. The level of association
as measured by Pearson’s co- efficient falls between -1.0 and +1.0, which indicates the strength
and direction of association between the two variables. The interpretation of the result a correla-
tion result between 0 to 1 implies positive relationship, 0 (zero) for no relationship, 1 for perfect
positive relationship, ‐1 for perfect negative relationship and between ‐1 to 0 indicate the exis-
tence of negative relationship Berndt (2005). Though it indicates the existence of a positive or
negative relationship, the strength of such a relationship is not high when the results fall below
±0.61 (Oogarah-Hanuman, 2011).

Table 11: Correlation Analysis

Correlations
Dependent Selection training Performance planning Employee in- compensation
appraisal volvement

A Pearson Correla- 1 .875** .78 .809** .724** .742** .724**

tion
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 210 210 210 210 210 210 210
B Pearson Correla- .875** 1 -.257** .685** .795** .861** .795**
tion
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 210 210 210 210 210 210 210
C Pearson Correla- .78 -.257** 1 .183** .225** -.001 .225**
tion
Sig. (2-tailed) .000 .000 .008 .001 .989 .001
N 210 210 210 210 210 210 210
D Pearson Correla- .809** .685** .183** 1 .793** .843** .793**
tion
Sig. (2-tailed) .000 .000 .008 .000 .000 .000
N 210 210 210 210 210 210 210
E Pearson Correla- .724** .795** .225** .793** 1 .965** 1.000**

54
 tion
Sig. (2-tailed) .000 .000 .001 .000 .000 .000
N 210 210 210 210 210 210 210
F Pearson Correla- .742** .861** -.001 .843** .965** 1 .965**
tion
Sig. (2-tailed) .000 .000 .989 .000 .000 .000
N 210 210 210 210 210 210 210
G Pearson Correla- .724** .795** .225** .793** 1.000** .965** 1
tion
Sig. (2-tailed) .000 .000 .001 .000 .000 .000
N 210 210 210 210 210 210 210
**. Correlation is significant at the 0.01 level (2-tailed).

The Pearson correlation analysis reveals the magnitude and direction of the relationship between
the independent variables, namely Training, Performance appraisal, Career plan, Employee in-
volvement, selection, and Compensation, and the dependent variable, Employee performance.
The correlation results for these variables are presented in Table 11 above. Among the six inde-
pendent variables, Performance appraisal, Employee involvement, selection, and compensation
were found to be statistically significant. As indicated in Table 11, there exists a positive, strong,
and statistically significant correlation between all human resource management (HRM) prac-
tices and Employee performance. This finding suggests that if organizations effectively imple-
ment performance appraisal, training, selection, compensation, career planning, and employee
involvement, it will directly and positively impact the performance of their employees across
various domains. The correlation coefficient between all HRM practices and employee perfor-
mance is less than 0.01, indicating that their correlation is statistically significant at the 0.01
level. Furthermore, the correlation coefficient between HRM practices and employee perfor-
mance demonstrates a level of significance (P<0.01), suggesting that compensation within the
organization can enhance employee Performance and efficiency in their roles.

55
4.4 Multiple Regression Analysis

The regression analysis was conducted to know by how much the independent variable explains
the dependent variable. In this study, regression was employed to examine the effect of the Hu-
man resource management practice such as Training, Performance appraisal, career plan, em-
ployee involvement and compensation and dependent variable employee performance. To check
whether the regression analysis is effective and efficient in measuring the parameters, regression
assumptions (Linearity, multicollinearity, heteroscedasity and normality) was checked.

4.4.1 Normality

Figure 2: Normality test

Smith and Wells (2006) define kurtosis as a characteristic of a distribution that indicates the
thickness of its tails. The thickness of the tails is determined by the number of scores that fall at
the extremes compared to a Gaussian distribution. On the other hand, skewness measures the

56
symmetry, or lack thereof, in a distribution or dataset. A distribution is considered symmetric if
it appears the same on both sides of its central point. When conducting multiple regressions, it is
necessary for the independent variables to follow a normal distribution. Skewness and kurtosis
statistics can be used to describe the normality of the data distribution. To assess the first as -
sumption of normality, skewness and kurtosis statistics were calculated based on the survey data
presented in the figure above. All skewness and kurtosis statistics should fall within the accept-
able range of ± 1.0. In the current study, since all the skewness and kurtosis values for each vari -
able are within the acceptable range, it can be concluded that the data is normally distributed.

4.4.2 Linearity

Figure 3: Linearity test

The first assumption of multiple regression analysis is that the relationship between the indepen-
dent (Training, Performance appraisal, Career plan, Employee involvement, selection and Com-
pensation) and dependent variable (employee performance) can be characterized by a straight
line. As the graph above shown in this paper assumption of linearity is met.

4.4.3 Multicollinearity

Table 12: Collinearity Test

No Variable Tolerance VIF

1 Training .577 1.732
2 Performance Appraisal .577 1.732
3 Career Plan .871 1.149

57
 4 Employee Involvement .942 1.062
5 Compensation .792 1.263
6 Selection .85 1.147

Churchill and Iacobucci (2005) discuss the concept of multicollinearity, which pertains to the re-
lationship between explanatory variables. When multicollinearity is present, the amount of infor-
mation regarding the impact of explanatory variables on dependent variables diminishes. Conse-
quently, some explanatory variables may be incorrectly deemed unrelated to the dependent vari-
ables, despite their actual relationship. The extent of correlation that leads to multicollinearity is
outlined by Drazin and Rao (1999), who suggest that tolerance values exceeding 0.2 indicate the
absence of multicollinearity. Additionally, the VIP result should not exceed 10. Based on the
VIF result, it can be inferred that there is no issue of multicollinearity among the explanatory
variables.
4.4.4 Heteroscadascity
Heteroskedasticity refers to a consistent pattern of errors where the variances of the errors do not
stay the same. On the other hand, homoscedasticity is the condition where the variance of the
residuals remains constant. In order to conduct multiple regressions, it is necessary to have ho-
mogeneity of variance, also known as equal variance. This implies that the model errors are ex-
pected to have an unknown but finite variance that remains constant across all levels of the pre-
dictor variables. To visually confirm this assumption, one can examine a plot of the standardized
residuals of the regressions.
Table 13: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .956a .8991 .899 .23499

a. Predictors: (Constant), Training, Performance appraisal, Career plan,

Employee involvement, Compensation and selection.
R 2 = the amount of variance in the dependent variable that is accounted for or explained by the
independent variable. The Adjusted R2 of 0.899 means that Training, Performance appraisal, Ca-
reer plan, Employee involvement and Compensation accounts for 89.9% of the variance in em-
ployee performance.
Table 14: ANOVAa test Result
Model Sum of Squares Df Mean Square F Sig.

58
 1 Regression 111.115 3 22.223 402.433 .000b
Residual 13.143 207 .055
Total 124.257 210
Dependent Variable: Dependent
Predictors:(Constant), Training, Performance appraisal, Career plan, Employee in-
volvement, Compensation and selection
ANOVA provides information about the statistical acceptability of the model as a whole, indi-
cating whether the independent variables have a significant degree of predictive power on the
outcome variable (Hair et al., 2004). The ANOVA test results, presented in Table 4.9, demon-
strate that the collective independent variables exert a statistically significant influence on em-
ployee performance. This is supported by the high p-values (.000), which are deemed statisti-
cally significant at a 99% confidence interval. Consequently, there is substantial evidence to
suggest that Human Resource Management practices have a significant impact on employee per-
formance.
Table 15: hypothesis testing Coefficients
Unstandardized Coefficients Standardized Co- t Sig.
efficients Beta
Model B Std. Error
(Constant) .842 .151 6.757 .000
Training .102 .015 .151 6.726 .000
Performance appraisal .862 .034 .743 25.599 .000
Career .312 .054 .139 5.763 .000
Involvement .084 .034 .58 2.452 .000
Compensation .220 .025 .270 8.888 .000
Selection 0.251 0.27 .291 8.92 0.00
Dependent Variable: Employee Performance
The unstandardized Beta Coefficients (β) values demonstrate the impact of each independent
variable on the dependent variable. Additionally, the unstandardized Beta Coefficients in the
Beta column of Table 4.16 above highlight the independent variable (Human resource manage-
ment practice) that has the most significant contribution in explaining the dependent variable
(employee performance) when controlling for the variance explained by other independent vari-
ables in the model. The t value and the sig (p) value indicate the significant contribution of the
independent variable to predicting the dependent variable. The results of the multiple regres-
sions, as shown in Table 4.16 above, indicate that Training had a positive and significant effect

59
on employee performance (β =.151, & p <0.05). These findings suggest that by prioritizing hu-
man capital development (training), organizations can increase employee performance by .151
units. This outcome suggests that providing training based on the results of a needs assessment
enables Abay Bank employees to perform their tasks efficiently and effectively. This result
aligns with Zirra .C's (2017) discovery that the coefficients of human resource planning and staff
training and development were statistically significant at a 5% significance level, with probabil-
ity values of 0.0220 and 0.0195, respectively. The results clearly indicate a significant and posi-
tive association between performance appraisal and employee performance, with a p value of
0.00. This suggests that a one-unit increase in organizational performance appraisal leads to
a .862 increase in employee performance. Conducting proper, objective evaluations and docu-
menting employee performance plays a crucial role in enhancing employee Performance.
The study's findings align with Judy's (2018) research, which suggests that performance ap-
praisal and feedback are crucial in organizations as they provide a valuable opportunity to assess
each staff member's performance against established standards and expectations. Additionally,
the study highlights the importance of setting performance appraisal goals, as effective ap-
praisals can lead to positive outcomes such as job satisfaction, improved employee performance,
high-quality work, and increased trust and commitment. According to the regression analysis,
career planning has a significant and positive impact on employee performance at Abay Bank.
This is evidenced by a low P value of 0.000 and a coefficient of .312, indicating that for every
unit increase in career planning within the organization, employee performance increases
by .312 units. When an individual's career plan aligns with the organization's goals, it creates a
conducive environment for employees to exceed expectations.
The statistical significance of the two independent variables presented in Coefficients table 4.16
indicates that employee involvement (Sig. = .000) makes a significant contribution to predicting
the dependent variable. This finding suggests that allowing employees to participate in various
decision-making processes, such as operational activities and cost considerations fosters a sense
of belongingness that ultimately enhances their job performance. Moreover, the association be-
tween Compensation and Employee performance is statistically significant, as evidenced by a p
value of less than 0.05. Specifically, the results indicate that a one-unit increase in both financial
and non-financial compensation within the organization corresponds to a 0.220 increase in em-
ployee performance. Furthermore, the study highlights the importance of clear and market-based
salary structures or compensation schemes in positively influencing employee performance at
Abay bank. The findings underscore the undeniable role of compensation in enhancing the Per-
formance of Abay bank employees in fulfilling their duties and responsibilities, aligning with
60
the conclusions drawn by Simegn (2019). Notably, motivational package-related factors
(Beta=0.488) emerge as the most influential in explaining the dependent variable, with a one-
unit increase or positive change in motivational package leading to a 0.488 unit increase in em-
ployee job performance.
4.5 Hypothesis testing

Based on the standardized coefficients beta and P-value, hypothesis testing is utilized to deter-
mine whether a hypothesis should be rejected or accepted. In the study, various hypotheses were
tested using regression analysis. For instance, Hypothesis 1, which posited that selection is posi -
tively correlated to employee performance, was supported by statistically significant findings
(β=.291, p < 0.1). Similarly, Hypothesis 2, which suggested that training impacts employee per-
formance positively, was also accepted based on the regression results (β= .51, p <0.1). Further-
more, Hypothesis 3, focusing on the effect of performance appraisal on employee performance,
was supported by the regression analysis (β=.743, p < 0.1). Additionally, Hypothesis 4, 5, and 6
were also accepted based on the statistically significant positive relationships found between ca-
reer planning, compensation, employee participation, and employee performance. H4: The im-
pact of career planning on employee performance was examined through regression analysis, re-
vealing a statistically significant positive relationship (β=.139, p < 0.1). Consequently, Hypothe-
sis 4 was supported, indicating that career planning directly affects an employee's performance.
H5: The relationship between compensation and employee performance was investigated using
regression analysis, which demonstrated a statistically significant positive correlation (β= .270, p
<0.1). As a result, Hypothesis 5 was confirmed, suggesting that compensation is positively asso-
ciated with an employee's performance. H6: Regression analysis was employed to assess the
connection between employee participation and employee performance, revealing a statistically
significant positive relationship (β=.58, p < 0.1). Therefore, Hypothesis 6 was accepted, indicat-
ing that employee participation is positively correlated with an employee's performance.

4. 6. Discussion of Major Findings

61
 Chapter Five

Summary, Conclusion and Recommendations

This chapter aimed to summarize the key findings, conclusion and recommendations of the
study based on their search questions. The purpose of this study was to assess the effect of hu-
man resource management practice the case of Abay Bank.
5.1 Summary of Findings
From the findings of the study, it is evident that there is a gender disparity among the respon-
dents. Out of the total responders, 87 (41.4%) were women, while the remaining 123 (58.6%)
were men. This indicates that men are more prominently represented in the workforce of the
study organizations, while women are underrepresented. Analyzing the age category of the re-
spondents, it can be inferred that the majority of the participants fall within the age range of 25-
40. Based on the descriptive analysis data, it can be observed that most of the employees are
young and in the middle age groups, which implies that they possess high levels of energy and
enthusiasm to work effectively. The dominance of young and middle-aged individuals in this
study has undoubtedly contributed to the overall quality of work. In terms of educational levels,
the data reveals that a significant portion of the respondents hold a degree, accounting for 120
(57.1%) individuals. This is followed by 80 (38.1%) respondents who possess a Master's degree
or higher. Additionally, 10 (4.8%) respondents had a diploma, while 2 (1%) had PhD. These re-
sults indicate that the majority of employees working in Abay Bank have attained degrees and
masters in various fields of study. Such qualifications undoubtedly assist the organization in
achieving its mission, vision, and goals with remarkable success. Regarding work experience in
Abay Bank, the survey results indicate that the majority of respondents, 111 (52.9%), have 1-5
years of experience in the organization. Furthermore, 60 (28.6%) respondents have worked for
5-10 year. The remaining 24 (11.4%) and 15 (7.1%) employees or research participants have an
experience ranging from 11-15 years and above 15 year respectively. The results also reveal that
employees working at the Dessie district of Abay Bank have an average work experience of ap-
proximately five years. This finding suggests that employee retention within the organization
significantly contributes to enhancing workers' efficiency and effectiveness. The data obtained
from the study indicates that the mean score of 3.81 suggests an increase in employee perfor -
mance at Abay bank, which can be attributed to the effective and efficient human resource man-
agement practices implemented. The employees are motivated and encouraged to go beyond
their job descriptions in order to align with the organization's mission, vision, and goals. Fur-
62
thermore, the findings reveal that the respondents agreed that the organization provides regular
training to its employees in order to enhance their job performance. The identification of training
needs is carried out through a formal performance appraisal mechanism, ensuring that the train-
ing provided is realistic, useful, and aligned with the organization's business strategy. The results
also demonstrate that the performance appraisal system holds significant influence over both in-
dividual and team behavior, as indicated by means scores of 3.79. The respondents agreed that
employees have faith in the appraisal system and recognize its impact on their work. Addition-
ally, employees receive performance-based feedback and counseling, and the appraisal data is
utilized for decision-making processes such as job rotation, training, and compensation. How-
ever, the grand mean scores of 3.75 suggest that the provision of performance-based feedback
and counseling, as well as the utilization of appraisal data for decision-making, are areas that re -
quire improvement. In terms of individual and organizational growth, the organization ensures
that the needs of both are aligned. The mean scores of 3.31, 4.00, 3.07, 4.02, 3.27, 3.98, and 3.5
indicate that the organization plans for the career and development of its employees, prefers in-
ternal candidates for vacancies, and ensures that each employee is aware of their career path
within the organization.
In this organization, the growth needs of both individuals and the organization itself are taken
into consideration. The organization has a clear plan for the career and development of its em-
ployees and it gives preference to internal candidates when there is a job opening. The human
resource management practice of employee involvement plays a significant role in making em-
ployees at Abay Bank more productive and effective in their roles. Employees in this organiza-
tion are empowered to make decisions related to cost and quality matters, as indicated by a mean
score of 3.19 and a standard deviation of 1.165. The respondents neither agree nor disagreed
with this statement, as the mean value fell within the range of 2.61 to 3.40. Generally, em-
ployee’s involvement in this organization had grand mean of 3.95 which show that the respon-
dents agreed with the statement. However, all participants of the study did not agree with this
statement. The study findings revealed that compensation and selection also had similar result
with other variables of human resource management practice.
The findings of the correlation analysis indicate that among the six independent variables exam-
ined, all variables (Performance appraisal, Employee involvement, selection and Compensation)
were found to have a statistically significant impact on employee performance at Abay Bank.
Furthermore, the results of the multiple regression analysis demonstrated that Training, Perfor-
mance appraisal, Career plan, Employee involvement, selection and Compensation all had a pos-
itive and significant influence on employee performance.
63
5.2 Conclusions
Abay Bank's effective and efficient human resource management practices have been found to
significantly enhance staff performance, according to the study's findings. The bank's training
programs in human capital development have proven to be highly effective in improving job
performance. However, there are still areas that require improvement, such as aligning training
with performance appraisal results and conducting thorough need assessments. The study re-
veals that employees at Abay Bank undergo training programs on an annual basis. The perfor-
mance appraisal system implemented by the bank has also played a crucial role in boosting staff
performance. Regular performance reviews have inspired employees and led to improved per-
formance. Additionally, career planning and development initiatives have provided significant
benefits to employee performance. These initiatives serve as tools for employers to recognize
and appreciate the work of their staff members, often through awards and other forms of recog-
nition. They also serve as a means to align the company's goals with the career aspirations of its
employees.
The research findings reveal that there was consensus among respondents regarding the extent to
which employees should be engaged in different aspects of company operations. This indicates
that employees at Abay Bank were included from participating in operational decision-making
processes and were authorized to have a say in matters concerning pricing and quality. The
study inferred that the organization's employees were not given the chance to propose enhance-
ments to the existing practices at Abay Bank. Consequently, it was observed that few employees
were not empowered to influence the level of compensation based on their performance within
the organization. Respondents agreed that compensation plays a role in enhancing the Perfor-
mance of employees at the organization. The study findings suggest that the compensation prac-
tices at Abay Bank adequately link job performance to incentive and compensation decisions, as
decisions regarding compensation are not contingent upon an employee's skill set.
5.3 Recommendations
The proposed recommendations, derived from the research findings, suggest that training in-
volves imparting specific skills for a particular job, while development focuses on enhancing
and nurturing individual skills and abilities through both conscious and unconscious learning. In
order to identify the actual performance gap between an employee's current and desired perfor-
mance, a training needs assessment should be prioritized. The organization should place greater
emphasis on providing both on-the-job and off-the-job training across all aspects of quality. The
research study identified a few problems based on the organization's performance appraisal. The

64
evaluation of employee performance lacks a few objectivity and fails to prioritize the growth
and development of the organization. It is crucial for both managers and employees to actively
participate in the conversation, with employees demonstrating equal investment in the prepara-
tion process to establish trust in the assessment activities. Primarily, the information gathered
from performance appraisals should be utilized for training, compensation, and employee pro-
motion purposes.
A dependable performance management system is essential for the bank. The performance eval-
uation process should be comprehensive, inclusive, transparent, fair, and applicable to all staff
members. All employees should be subjected to a transparent, fair, and open performance re-
view system that is grounded on predetermined criteria. Additionally, employees should be
given the opportunity to provide input into the performance appraisal process. Career planning is
a crucial aspect of Human Resource Management practice that enhances employee Performance
and efficiency in their roles. The organization should establish career paths that enable employ-
ees to comprehend their prospects for advancement within the company and gather data to iden-
tify the necessary skills they would need. The management of Abay Bank should regularly up-
date employee incentive packages, including bonuses, salaries, profit-sharing, financial and non-
financial rewards, to enhance employee performance specifically and organizational perfor-
mance overall. In contrast to remuneration and rewards offered in the same industry, manage-
ment should enhance employee compensation based on experience and job performance evalua-
tions.
5.4 Suggestions for further study

The researcher solely employed a quantitative research method to explore the impact of specific
human resource practices on employees' performance within the bay bank dessie district only.
The study was confined to the only Dessie district of Abay bank, where only primary data was
gathered through closed-ended questionnaires. The research primarily concentrated on data in-
terpretation and analysis through correlation and regression analysis. Subsequently, future re-
searchers could enhance this study by incorporating both qualitative and quantitative research
methods. Additionally, the data collection tools could encompass open-ended questionnaires, in-
terviews, and secondary data sources.

65
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 Appendix

Research Questionnaire

My name is Sosena Tadesse; I am student of Master‘s degree in Business Administration at

Woldiya University. The purpose of this questionnaire is to collect data in order to study the Ef-
fect of Human Resource Management Practice on Employee Performance: The Case of
Abay Bank/Dessie District. I request kindly to be participant in this research since your help is
crucial to conduct this research successfully.
Instruction
1. Please read the entire questionnaire and respond to every item. There is no ‗right ‘or ‗wrong
‘answer: It is your own personal opinions about current HRM activities ‘contribution to enhance
employees ‘performance in your organization.
2. The data collected using this questionnaire is purely for academic requirement and I assure
you that your response is strictly confidential and the information will be used for scientific re-
search purposes only.
Note:
 No need of writing your name.
 Please fill the answer by putting tick mark [√].
 Genuinely provide your response attentively and return the completed questionnaire as soon
as possible.
 If you need further explanation, you can contact me through the address indicated below:
Sosina Tadese
Thank you very much for your cooperation in advance.
Good Time for You!!
Section 1: Personal Information
1. Sex: a. Male b. Female
2. Age: a Less than 30 year’s b. 30 years to 40 years c. 41years to 50 years
d. More than 50 years
3. Education level: A. Collage B. Bachelor c. Master D.
Ph.D.
4. Position: a. Employee b. Supervisor c. team leader d.
directorate
5. Seniority: a. Less than 5 year’s b. 5 years to 10 years c. 11 years to 15 years
d. More than 15 years
Section 2: Human Resource Management Practices (HRM Practices)

71
N.B If the item strongly matches with your response choose Strongly Agree, if you moderately
agree on the idea choose Agree, if you don‘t have any idea or information on the point choose
Neutral, if you moderately disagree with the point choose Disagree and if you completely dis-
agree with the point choose Strongly Disagree. In each statement please indicate your personal
choose by a tick mark [√] in the appropriate box.
Please indicate your level of agreement with the statements. The scale is measured as 1(Strongly
Disagree), 2(Disagree), 3 (Neutral), 4 (Agree), 5 (strongly Agree) Employees Performance
I. Employee performance

No Statement 1 2 3 4 5
1 I offer timely help to customers without being asked

2 Because of Good HRM Practice in the organization I

am quick to solve problems before things go wrong

3 Efficiency (performing or functioning in the best possi-

ble manner) of employees ensures high performance in
achieving the mission vison and goal of the organization
4 Effective (Producing the intended or expected re-
sult) employees have led to low customer complaints by do-
ing the right things
5 I communicate well with colleagues and customers

6 The bank profitability has increased for the last five years
due to employees Performance

II. Human Resource Management practices

A. Recruitment and Selection Practices
`No Statement 1 2 3 4 5
1 The organization has written and operational recruitment and
selection policy
2 The organization has clear job description and specification
3 The organization has attractive salary scales that can attract
qualified applicants
4 The organization considers high role of merit in recruitment and
selection process
5 The organization has a good image that attract qualified appli-
cants

72
6 The selection tests of the organization are conducted by skilled
and unbiased/impartial people.

B. Training
`No Statement 1 2 3 4 5
1 Our organization conducts extensive training programs for its em-
ployees in all aspects of quality
2 Employees in each job was normally go through training programs
every year
3 Training needs are identified through a formal performance ap-
praisal mechanism
4 There are formal training programs to teach new employees the
skills they need to perform their jobs
5 New knowledge and skills are imparted to employees periodically
to work in teams
6 Training needs identified are realistic, useful and based on the
business strategy of the organization
C. Performance Appraisal
`No Statement 1 2 3 4 5
`1 Performance of the employees is measured on the basis of objec- `
tive quantifiable results

2 Appraisal system in our organization is growth and development

oriented
3 Employees are provided performance based feedback and coun-
seling
4 Employees have faith in the performance appraisal System

5 Appraisal system has a strong influence on individual and team

behavior
6 The appraisal data is used for making decisions like job rotation,
training and compensation
D. Career Planning

73
`No Statement 1 2 3 4 5
1 Individuals in this organization have clear career paths.
2 Employee’s career aspirations within the organization are known
by his/ her immediate superior.
3 Employees in our organization have more than one potential po-
sition For promotion.
4 Individual and organization growth needs are matched in this Or-
ganization
5 Our organization plans for the career and development of em-
ployees
6 Our organization prefers an internal employee whenever a va-
cancy exists
7 Each employee is aware of his/her career path in the organiza-
tion.
E. Employee involvement
1 Employees in this organization are allowed to make decisions re-
lated to cost and quality matters
2 Employees in this organization are asked by their superiors to partic-
ipate in operations related decisions
3 Employees are provided opportunity to suggest improvements in the
way things are done here
5 The organization provides priority to seniority in promotion decision

5 Employees have more than one potential position they could be pro-
moted to within the organization.
F. Compensation
1 Job performance is an important factor in determining the incentive
compensation of employees
2 In our organization, salary and other benefits are comparable to the
market.
3 In our organization, compensation is decided on the basis of compe-
tence or ability of the employee

74
4 The compensation for all employees is directly linked to his/her per-
formance.
5 In our organization, profit sharing is used as a mechanism to reward
higher performance
Thank you again for your cooperation

75
 የምርምር መጠይቅ

ሶሰና ታደሰ እባላለሁ; በወልድያ ዩኒቨርሲቲ በቢዝነስ አስተዳደር የማስተርስ ዲግሪ ተማሪ ነኝ። የዚህ መጠይቅ
አላማ የሰው ሃብት አስተዳደር አሰራር በሰራተኛ አፈጻጸም ላይ ያለውን ተፅእኖ፡ የአባይ ባንክ/ደሴ ለማጥናት
መረጃ መሰብሰብ ነው። ይህንን ጥናት በተሳካ ሁኔታ ለማካሄድ የናንተ እገዛ ወሳኝ ስለሆነ በዚህ ጥናት ላይ
እንድሳተፍ በአክብሮት እጠይቃለሁ።.
መመሪያ
1. እባክዎ ሙሉውን መጠይቁን ያንብቡ እና ለእያንዳንዱ ንጥል ምላሽ ይስጡ። ትክክለኛ ‘ወይም የተሳሳተ’ መልስ
የለም፡ ስለ ወቅታዊው የኤችአርኤም እንቅስቃሴዎች ‘በድርጅትዎ ውስጥ የሰራተኞችን አፈጻጸም ለማሳደግ
ስላደረገው አስተዋጽዖ የራስዎ የግል አስተያየት ነው።
2. ይህንን መጠይቁን ተጠቅመው የሚሰበሰቡት መረጃዎች ለአካዳሚክ መስፈርቶች ብቻ ናቸው እና ምላሽዎ በጥብቅ
ሚስጥራዊ እንደሆነ እና መረጃው ለሳይንሳዊ ምርምር ዓላማዎች ብቻ እንደሚውል አረጋግጣለሁ።
ማስታወሻ:
 ስምህን መጻፍ አያስፈልግም።
 እባኮትን ምልክት [√] በማድረግ መልሱን ይሙሉ።
 ምላሽዎን በትኩረት ያቅርቡ እና የተሞላውን መጠይቅ በተቻለ ፍጥነት ይመልሱ።
 ተጨማሪ ማብራሪያ ከፈለጉ ከታች በተጠቀሰው አድራሻ ሊያገኙኝ ይችላሉ።
ሶሲና ታደሰ
በቅድሚያ ለምታደርጉት ትብብር በጣም እናመሰግናለን።
መልካም ጊዜ ለናንተ!!
ክፍል 1: የግል መረጃ
1. ጾታ፡ ሀ. ወንድ ለ. ሴት
2. ዕድሜ፡ ከ 30 ዓመት በታች ለ. ከ 30 - 40 ዓመት ሐ. ከ 41 - 50 ዓመታት መ. ከ 50
ዓመታት በላይ
3. የትምህርት ደረጃ፡- A. Collage B. ባችለር ሐ. ማስተር ዲ. ፒ.ዲ.
4. ቦታ፡ ሀ. ሰራተኛ ለ. ተቆጣጣሪ ሐ. የቡድን መሪ መ. ዳይሬክቶሬት
5. ከፍተኛ ደረጃ፡ ሀ. ከ 5 ዓመት በታች ለ. ከ 5 - 10 ዓመት ሐ. ከ 11 - 15 አመት መ. ከ
15 ዓመታት በላይ
ክፍል 2፡ የሰው ሃይል አስተዳደር ልማዶች (HRM ልምዶች)
N.B መግለጫው ከምላሽዎ ጋር በጥብቅ የሚዛመድ ከሆነ በጠንካራ እስማማለሁ የሚለውን ይምረጡ፣ በሃሳቡ ላይ
በመጠኑ ከተስማሙ እስማማለሁ፣ በነጥቡ ላይ ምንም አይነት ሃሳብ ወይም መረጃ ከሌለዎት ገለልተኛን ይምረጡ፣
በመካከለኛው ነጥብ ካልተስማሙ አልስማማም የሚለውን ይምረጡ። እና በነጥቡ ሙሉ በሙሉ ካልተስማሙ በጥብቅ
አልስማማም የሚለውን ይምረጡ። በእያንዳንዱ መግለጫ ውስጥ እባክዎን የግል ምርጫዎን በትክክለኛው ሣጥን ውስጥ በ
ምልክት ምልክት [√] ያመልክቱ።
76
 እባክዎን ከመግለጫዎቹ ጋር ያለዎትን ስምምነት ያመልክቱ። ሚዛኑ የሚለካው እንደ 1(በጠንካራ መልኩ
አልስማማም)፣ 2(አልስማማም)፣ 3 (ገለልተኛ)፣ 4 (እስማማለሁ)፣ 5 (በጣም እስማማለሁ) የሰራተኞች አፈጻጸም
ነው።
ክፍል 3: የሰራተኞች አፈፃፀም
No መግለጫ 1 2 3 4 5

1 ሳይጠየቅ ለደንበኞች ወቅታዊ እርዳታ አቀርባለሁ።

2 በድርጅቱ ውስጥ ባለው ጥሩ የኤችአርኤም ልምምድ ምክንያት ነገሮች

ከመበላሸታቸው በፊት ችግሮችን ለመፍታት ፈጣን ነኝ
3 የሰራተኞች ብቃት (በተቻለ መጠን መስራት ወይም መስራት) የድርጅቱን
ተልእኮ እና ግብ ለማሳካት ከፍተኛ አፈፃፀም ያረጋግጣል።
4 ውጤታማ ሰራተኞች ትክክለኛ ነገሮችን በማድረግ የደንበኞችን ቅሬታ
አላስከተሉም

5 ከስራ ባልደረቦች እና ደንበኞች ጋር ጥሩ ግንኙነት አደርጋለሁ

6 በሠራተኞች አፈጻጸም ምክንያት የባንክ ትርፋማነቱ ባለፉት አምስት

ዓመታት ጨምሯል።
ክፍል 4: የሰው ኃይል አስተዳደር ልምዶች
1. የምልመላ እና ምርጫ ልምዶች
`No መግለጫ 1 2 3 4 5
1 ድርጅቱ የጽሁፍ እና የስራ ቅጥር እና ምርጫ ፖሊሲ አለው።
2 ድርጅቱ ግልጽ የሥራ መግለጫ እና ዝርዝር መግለጫ አለው
3 ድርጅቱ ብቁ አመልካቾችን ሊስብ የሚችል ማራኪ የደመወዝ ሚዛን አለው

4 ድርጅቱ በምልመላ እና በምርጫ ሂደት ውስጥ ያለውን የላቀ ሚና

ይመለከታል
5 ድርጅቱ ብቃት ያላቸውን አሜልካቾች የሚስብ ጥሩ ምስል አለው።

6 የድርጅቱ የመምረጫ ፈተናዎች የሚካሄዱት በሰለጠነ እና አድልዎ

በሌላቸው ሰዎች ነው።

2. ስልጠና እና ልማት
No መግለጫ 1 2 3 4 5
1 ድርጅታችን በሁሉም የጥራት ዘርፎች ለሰራተኞቹ ሰፊ የስልጠና መርሃ

77
 ግብሮችን ያካሂዳል
2 በእያንዳንዱ ሥራ ውስጥ ያሉ ሰራተኞች በመደበኛነት በየዓመቱ የሥልጠና
ፕሮግራሞችን ያደርጉ ነበር።
3 የሥልጠና ፍላጎቶች የሚታወቁት በመደበኛ የሥራ አፈጻጸም ምዘና ዘዴ ነው።

4 አዲስ ሰራተኞችን ስራቸውን ለማከናወን የሚያስፈልጋቸውን ክህሎቶች

ለማስተማር መደበኛ የስልጠና ፕሮግራሞች አሉ
5 አዳዲስ እውቀቶች እና ክህሎቶች ለሰራተኞች በየጊዜው-ጥሪ በቡድን ውስጥ
እንዲሰሩ ይሰጣሉ
6 ተለይተው የታወቁ የስልጠና ፍላጎቶች ተጨባጭ, ጠቃሚ እና በድርጅቱ የንግድ
ስትራቴጂ ላይ የተመሰረቱ ናቸው
3. የአፈጻጸም ግምገማ
No መግለጫ 1 2 3 4 5
` የሰራተኞች አፈፃፀም የሚለካው በተጨባጭ ሊገመቱ በሚችሉ ውጤቶች መሠረት ነው `
1
2 በድርጅታችን ውስጥ ያለው የግምገማ ሥርዓት እድገት እና ልማት-ተኮር ነው።

3 ሰራተኞች በአፈጻጸም ላይ የተመሰረተ አስተያየት እና ምክር ይሰጣሉ

4 ሰራተኞች በአፈፃፀም ምዘና ስርዓት ላይ እምነት አላቸው

5 የግምገማ ስርዓት በግለሰብ እና በቡድን ባህሪ ላይ ጠንካራ ተጽእኖ አለው

6 የግምገማው መረጃ እንደ ሥራ፣ ስልጠና እና ማካካሻ ውሳኔዎችን ለማድረግ

ያገለግላል
4. የሙያ እቅድ ማውጣት
No መግለጫ 1 2 3 4 5
1 በዚህ ድርጅት ውስጥ ያሉ ግለሰቦች ግልጽ የሆነ የሙያ ጎዳና አላቸው።.
2 በድርጅቱ ውስጥ የሰራተኛው የስራ ምኞቶች በቅርብ አለቃው ይታወቃሉ።

3 በድርጅታችን ውስጥ ያሉ ሰራተኞች ለማስተዋወቅ ከአንድ በላይ ሊሆኑ የሚችሉ

የስራ መደቦች አሏቸው።

78
 4 በዚህ ድርጅት ውስጥ የግለሰብ እና የድርጅት እድገት ፍላጎቶች ይጣጣማሉ

5 ድርጅታችን ለሠራተኞች ሥራ እና ልማት አቅዷል

6 ድርጅታችን ክፍት የስራ ቦታ በሚኖርበት ጊዜ የውስጥ ሰራተኛን ይመርጣል

7 እያንዳንዱ ሠራተኛ በድርጅቱ ውስጥ ስላለው የሥራ ዝርዝር ሁኔታ ያውቃል።

5. የሰራተኛ ተሳትፎ
1 በዚህ ድርጅት ውስጥ ያሉ ሰራተኞች ለዋጋ እና ጥራት ባላቸው ጉዳዮች ላይ ውሳኔ
እንዲያደርጉ ተፈቅዶላቸዋል
2 በዚህ ድርጅት ውስጥ ያሉ ሰራተኞች ከኦፕሬሽን ጋር በተያያዙ ውሳኔዎች ላይ
እንዲሳተፉ በአለቆቻቸው ይጠየቃሉ
3 ሰራተኞቹ ነገሮች በሚከናወኑበት መንገድ ላይ ማሻሻያዎችን እንዲያቀርቡ እድል
ተሰጥቷቸዋል።
5 ድርጅቱ በፕሮሞሽን ውሳኔ ላይ አዲስ ላልሆኑ ሰራተኞች ቅድሚያ ይሰጣል

5 ሰራተኞች በድርጅቱ ውስጥ ሊያድጉ የሚችሉ ከአንድ በላይ የስራ ቦታዎች

አሏቸው።
6. ማካካሻ ወይም ሽልማት
1 የሥራ አፈጻጸም የሠራተኞችን ማበረታቻ ካሳ ለመወሰን ወሳኝ ነገር ነው።

2 በድርጅታችን ደሞዝ እና ሌሎች ጥቅማጥቅሞች ከገበያ ጋር ተመጣጣኝ ናቸው።

3 በድርጅታችን ውስጥ ማካካሻ የሚወሰነው በሠራተኛው ብቃት ወይም ችሎታ ላይ ነው

4 የሁሉም ሰራተኞች ማካካሻ በቀጥታ ከሥራ አፈፃፀሙ ጋር የተያያዘ ነው።

5 በድርጅታችን ውስጥ, ትርፍ መጋራት ከፍተኛ አፈፃፀምን እንደገና ለመመለስ

እንደ ዘዴ ጥቅም ላይ ይውላል

ስለ ትብብርዎ በድጋሚ እናመሰግናለን

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