Influence of Human Resource Processes on the Performance of Selected Manufacturing SMEs in Nairobi City County, Kenya



Abstract Views
599

Downloads
483

Citations

Share

##plugins.themes.bootstrap3.article.sidebar##

Submitted Nov 30, 2020
Published Dec 30, 2020
10.24018/ejbmr.2020.5.6.636

Abstract viewed = 599 times

Table of Contents

##plugins.themes.bootstrap3.article.main##

Manufacturing firms in Sub-Saharan Africa are not optimally managed which substantially lowers their productivity. The informal approach to human resource management is attributable to poor management practices with a consequent effect on performance. Due to these challenges, this study sought to examine the effect of human resource processes on the performance of manufacturing SMEs in Nairobi City County, Kenya. The study was explanatory and was based on 136 manufacturing SMEs which was drawn using proportionate stratified sampling. Data collection was achieved through the use of a self–administered questionnaire which was subjected to an inter-consistency test using the Cronbach's coefficient, α ≥ 0.70, which indicated that the research instrument was reliable. Descriptive and inferential statistics (at 0.05 significance levels) was used for the analysis of data. Diagnostic tests were conducted before regression analysis with the data was presented in tabular format. The results show that human resource processes cumulatively explain 23% of the variations in firm performance, therefore, the study concludes that the human resource processes have a positive influence on firm performance. The study recommends that manufacturing firms should seek to entrench an HR philosophy with commensurate improvements in the HR practises. The study limitations include a relatively small sample and geographical scope.

Keywords: Human resource processes, Human resource practises and systems, Manufacturing firms, Small and Medium Enterprises (SMEs)

Downloads

Download data is not yet available.

References

  1. African Development Bank Group (2013). The State of Kenya’s Private Sector. African Development Bank Group, Tunis.
     Google Scholar
  2. Ahmad, S. & Schroeder, R. G. (2003). The impact of human resource management practices on operational performance: recognizing country and industry differences Journal of Operations Management. Elsevier. 21; 19–43.
     Google Scholar
  3. Ahmeti, F. (2015). Human resource management and practices in SMEs in developing countries: Practices in Kosovo. European Scientific Journal (ESJ), 11(7).
     Google Scholar
  4. Armstrong, M. (2006). A handbook of human resource management practice. Kogan Page Publishers.
     Google Scholar
  5. Bacon, N., & Hoque, K. (2005). HRM in the SME sector: valuable employees and coercive networks. The International Journal of Human Resource Management, 16(11), 1976-1999.
     Google Scholar
  6. Barlett, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Organizational research: Determining appropriate sample size in survey research. Information Technology, Learning, and Performance Journal, 19(1), 43.
     Google Scholar
  7. Binyamin, G., & Carmeli, A. (2010). Does structuring of human resource management processes enhance employee creativity? The mediating role of psychological availability. Human Resource Management, 49(6), 999-1024.
     Google Scholar
  8. Birdi, K., Clegg, C., Patterson, M., Robinson, A., Stride, C. B., Wall, T. D., & Wood, S. J. (2008). The impact of human resource and operational management practices on company productivity: A longitudinal study. Personnel psychology, 61(3), 467-501.
     Google Scholar
  9. Boselie, P., Dietz, G., & Boon, C. (2005). Commonalities and contradictions in HRM and performance research. Human resource management journal, 15(3), 67-94.
     Google Scholar
  10. Bowen, D. E., & Ostroff, C. (2004). Understanding HRM–firm performance linkages: The role of the “strength” of the HRM system. Academy of management review, 29(2), 203-221.
     Google Scholar
  11. Boxall, P. (1996). The strategic HRM debate and the resource-based view of the firm. Human Resource Management Journal, 6(3), 59–75.
     Google Scholar
  12. Budhwar, P. S., & Sparrow, P. R. (2002). Strategic HRM through the cultural looking glass: mapping the cognition of British and Indian managers. Organization Studies, 23(4), 599-638.
     Google Scholar
  13. Cania, L. (2014). The impact of strategic human resource management on organizational performance. Economia. Seria Management, 17(2), 373-383.
     Google Scholar
  14. Clarke, G. R. (2012). Manufacturing firms in Africa. Performance of Manufacturing Firms in Africa, 47.
     Google Scholar
  15. Chatterji, A., & Patro, A. (2014). Dynamic capabilities and managing human capital. Academy of Management Perspectives, 28(4), 395-408.
     Google Scholar
  16. Delery, J. E., & Doty, D.H. (1996). Modes of Theorizing in Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurational Performance Predictions. The Academy of Management Journal, 39(4) 802-835.
     Google Scholar
  17. Delmotte, J., Maes, J., Faems, D., Forrier, A., & Sels, L. (2006). Linking HRM and Small Business Performance: An Examination of the Impact of HRM Intensity on the Productivity and Financial Performance of Small Businesses. Small Business Economics, 26(1), 83-101.
     Google Scholar
  18. De Winne, S., & Sels, L. (2010). Interrelationships between human capital, HRM and innovation in Belgian start-ups aiming at an innovation strategy. The International Journal of Human Resource Management, 21(11), 1863-1883.
     Google Scholar
  19. DiMaggio, P. J. & Powell, W. W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, American Sociological Association, 48(2), 147-160.
     Google Scholar
  20. Dinh, H. T., & Clarke, G. R. (Eds.). (2012). Performance of manufacturing firms in Africa: An empirical analysis. The World Bank.
     Google Scholar
  21. Dinh, H. T., Palmade, V., Chandra, V., & Cossar, F. (2012). Light manufacturing in Africa: Targeted policies to enhance private investment and create jobs. The World Bank.
     Google Scholar
  22. Dolan, S. L., Mach, M. & Olivera, V. S. (2005). HR contribution to a firm's success examined from a configurational perspective: An exploratory study based on the Spanish CRANET data. Management Revue, Rainer HamppVerlag, 16(2), 272-290.
     Google Scholar
  23. Fafchamps, M., & Quinn, S. (2016). Networks and manufacturing firms in Africa: Results from a randomized field experiment. The World Bank Economic Review, 32(3), 656-675.
     Google Scholar
  24. Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms. Academy of management Journal, 55(6), 1264-1294.
     Google Scholar
  25. Gamage, A. S. (2014). Recruitment and selection practices in manufacturing SMEs in Japan: An analysis of the link with business performance. Ruhuna Journal of Management and Finance, 1(1), 37-52.
     Google Scholar
  26. Government of Kenya (2018). Accessed from http://www.industrialization.go.ke/images/downloads/vision-2030-manufacturing-sector.pdf.
     Google Scholar
  27. Guest, D. E. (2011). Human resource management and performance: still searching for some answers. Human resource management journal, 21(1), 3-13.
     Google Scholar
  28. Huselid, M. A. (1995). The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance. The Academy of Management Journal, Academy of Management, 38(3), 635-672.
     Google Scholar
  29. Huselid, M. A, Jackson, S. E., & Schuler, R. S. (1997). Technical and Strategic Human Resource Management Effectiveness as Determinants of Firm Performance. The Academy of Management Journal, 40(1), 171-188.
     Google Scholar
  30. Jackson, S. E., & Schuler, R. S. (1995). Understanding human resource management in the context of organizations and their environments. Annual review of psychology, 46(1), 237-264.
     Google Scholar
  31. Katou, A. A., & Budhwar, P. S. (2006). Human resource management systems and organizational performance: a test of a mediating model in the Greek manufacturing context. The international journal of human resource management, 17(7), 1223-1253.
     Google Scholar
  32. Kollenscher, E., Ronen, B., & Farjoun, M. (2009). Architectural leadership: Building a value enhancing infrastructure. Human Systems Management, 28(1-2), 35-45.
     Google Scholar
  33. KAM (2015). Kenya Association of Manufacturers, www.kam. co.ke
     Google Scholar
  34. KNBS (2020). Economic Survey 2020, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  35. KNBS (2019). Economic Survey 2019, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  36. KNBS (2018). Economic Survey 2018, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  37. KNBS (2017). Economic Survey 2017, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  38. KNBS (2016). Economic Survey 2016, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  39. KNBS (2015). Economic Survey 2015, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  40. KNBS (2014). Economic Survey 2014, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  41. KNBS (2013). Economic Survey 2013, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  42. KNBS (2012). Economic Survey 2012, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  43. KNBS (2011). Economic Survey 2011, Kenya National Bureau of Statistics, https://www.knbs.or.ke/
     Google Scholar
  44. KNBS (2010). Economic Survey 2010, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  45. KNBS (2009). Economic Survey 2009, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  46. KNBS (2008). Economic Survey 2008, Kenya National Bureau of Statistics, https://www.knbs.or.ke/.
     Google Scholar
  47. KIPPRA (2018). Kenya Economic Report 2018; Boosting Investments for Delivery of the Kenya Vision 2030. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  48. KIPPRA (2017). Kenya Economic Report 2017; Sustaining Kenya’s Economic Development by Deepening and Expanding Economic Integration in the Region. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  49. KIPPRA (2016). Kenya Economic Report 2016; Fiscal Decentralization in Support of
     Google Scholar
  50. Devolution. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  51. KIPPRA (2015). Kenya Economic Report 2015; Empowering Youth through Decent and Productive Employment. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  52. KIPPRA (2014). Kenya Economic Report 2014; Navigating Global Challenges While Exploiting Opportunities for Sustainable Growth. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  53. KIPPRA (2013). Kenya Economic Report 2013; Creating an Enabling Environment for Stimulating Investment for Competitive and Sustainable Counties. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  54. KIPPRA (2012). Kenya Economic Report 2012; Imperatives for Reducing the Cost of Living in Kenya. Kenya Institute for Public Policy Research and Analysis, Nairobi.
     Google Scholar
  55. Kuvaas, B., & Dysvik, A. (2010). Exploring alternative relationships between perceived investment in employee development, perceived supervisor support and employee outcomes. Human Resource Management Journal, 20(2), 138-156.
     Google Scholar
  56. Laursen, K., & Foss, N. J. (2003). New human resource management practices, complementarities and the impact on innovation performance. Cambridge Journal of economics, 27(2), 243-263.
     Google Scholar
  57. Lopez‐Cabrales, A., Valle, R., & Herrero, I. (2006). The contribution of core employees to organizational capabilities and efficiency. Human Resource Management: Published in Cooperation with the School of Business Administration, The University of Michigan and in alliance with the Society of Human Resources Management, 45(1), 81-109.
     Google Scholar
  58. Lu, K., Zhu, J. & Bao, H. (2015). High-performance human resource management & firm performance, Industrial Management & Data Systems, 115(2), 353 – 382.
     Google Scholar
  59. Mak, S. K., & Akhtar, S. (2003). Human resource management practices, strategic orientations, and company performance: a correlation study of publicly listed companies. Journal of American Academy of Business, Cambridge, 2(2), 510-510.
     Google Scholar
  60. Marimuthu, M., Arokiasamy, L., & Ismail, M. (2009). Human capital development and its impact on firm performance: Evidence from developmental economics. The Journal of International Social Research (8), 265 – 272.
     Google Scholar
  61. McKenzie, D., & Woodruff, C. (2015). Business practices in small firms in developing countries. The World Bank.
     Google Scholar
  62. Meyer, J. W., & Rowan, B. (1977). Institutionalized Organizations: Formal Structure as Myth & Ceremony. American Journal of Sociology, The University of Chicago Press, 83(2), 340-363.
     Google Scholar
  63. Najeeb, A. (2014). Institutional theory and human resource management. Faculty of Business - Papers (Archive). 406.
     Google Scholar
  64. Paauwe, J. (2009). HRM and performance: Achievements, methodological issues and prospects. Journal of Management studies, 46(1), 129-142.
     Google Scholar
  65. Paauwe, J., & Boselie, P. (2003). Challenging ‘strategic HRM’ and the relevance of the institutional setting. Human Resource Management Journal, 13(3), 56-70.
     Google Scholar
  66. Patterson, M. G., West, M. A., & Wall, T. D. (2004). Integrated Manufacturing, Empowerment, & Company Performance. Journal of Organizational Behaviour, Wiley, 25(5), 641-665.
     Google Scholar
  67. Pfeffer, J. (1994). Competitive advantage through people. California management review, 36(2), 9.
     Google Scholar
  68. Sandrey, R., & Edinger, H. (2011). China's manufacturing and industrialization in Africa. African Development Bank Group.
     Google Scholar
  69. Shaukat, H., Ashraf, N., & Ghafoor, S. (2015). Impact of human resource management practices on employee’s performance. Middle-East Journal of Scientific Research, 23(2), 329-338.
     Google Scholar
  70. Snape, E., & Redman, T. (2010). HRM practices, organizational citizenship behaviour, and performance: A multi‐level analysis. Journal of management studies, 47(7), 1219-1247.
     Google Scholar
  71. Stubbart, C. I. (1989). Managerial cognition: A missing link in strategic management research. Journal of Management Studies, 26(4), 325-347.
     Google Scholar
  72. Swan, J. A. (1995). Exploring knowledge and cognitions in decisions about technological innovation: mapping managerial cognitions. Human relations, 48(11), 1241-1270.
     Google Scholar
  73. Teece, D. J. (2007). Explicating dynamic capabilities: the nature and micro-foundations of (sustainable) enterprise performance. Strategic management journal, 28(13), 1319-1350.
     Google Scholar
  74. Uden, A.V., Knoben, J., & Vermeulen, P. (2017). Human capital and innovation in Sub-Saharan countries: a firm-level study. Innovation-the European Journal of Social Science Research, 19, 103-124.
     Google Scholar
  75. Weiss, J. A., & Jalilian, H. (2016). Manufacturing as an engine of growth. In: Weiss J and Tribe M (Eds.) Routledge Handbook of Industry and Development. London: Routledge. 26-37.
     Google Scholar
  76. Were, A. (2016). Manufacturing in Kenya: Features, challenges and opportunities. International Journal of Science, Management and Engineering, 4(6), 15-26.
     Google Scholar
  77. Wright, P. M., Gardner, T. M., Moynihan, L. M., & Allen, M. R. (2005). The relationship between HR practices and firm performance: Examining causal order. Personnel psychology, 58(2), 409-446.
     Google Scholar
  78. Youndt, M.A., Snell, S. A., Dean, J. W., & Lepak, D. P. (1996). Human Resource Management, Manufacturing Strategy, and Firm Performance. The Academy of Management Journal, Academy of Management 39(4), 836-866.
     Google Scholar