ADDIS ABABA UNIVERSITY COLLEGE OF BUSINESS AND

ECONOMICS
SCHOOL OF COMMERCE

The Effect of Strategic Human Resource Management Practices on

Organizational Performance: a case study of Commercial Bank of Ethiopia
Bole District
A Thesis Submitted to
Graduate Studies Program in Partial Fulfillment of the Requirements for the Award of
Master of Arts in Human Resource Management

By
Yared Solomon

Advisor: Abdurezak Mohammed (PhD)

June 2022
Addis Ababa Ethiopia
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE
GRADUATE PROGRAM

THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT

PRACTICES ON ORGANIZATIONAL PERFORMANCE: A CASE STUDY
OF COMMERCIAL BANK OF ETHIOPIA BOLE DISTRICT

BY

YARED SOLOMON

Approved by Board of Examiners

___________________ ___________________ __________________

ADVISOR SIGNATURE DATE

____________________ ___________________ __________________

INTERNAL EXAMINER SIGNATURE DATE

____________________ ___________________ __________________

EXTERNAL EXAMINER SIGNATURE DATE

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Declaration

I, Yared Solomon, declare that "The Effect of Strategic Human Resource Management Practice
on Organizational Performance: A Case Study of the Commercial Bank of Ethiopia Bole
District" is my own work, that it has not been submitted for any degree or other examination at
any other university, and that all sources I have used or quoted have been indicated and
acknowledged as complete references. It has been submitted to Addis Ababa University School
of Commerce Graduate Program for the degree of Masters of Art in Human Resource
Management.

Declared by:

Yared Solomon ___________________ June, 2022

Student Signature Date

Confirmed by:

Abdurezak Mohammed (PhD) ___________________ June, 2022

Advisor Signature Date

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

ACKNOWLEDGMENTS

I can truly say that God has blessed me throughout my life, including this educational path. He is
the one I first acknowledge and appreciate for friendship, strength, health, endurance, faith, and a
positive outlook. All of the necessary ingredients for success.

I also want to thank Dr. Abdurezak Mohammed, my thesis advisor, for his unwavering efforts
and significant time in providing correct advice and support throughout the entire course of my
studies. Furthermore, I would like to express my heartfelt gratitude to the management and staff
of the Commercial Bank of Ethiopia Head Office HR department, as well as the Bole District,
for granting permission to conduct this study, and my special thanks to the respondents who have
contributed significantly by participating in the study and answering questionnaires.

Finally, and most crucially, my family has been the most important source of support I have had
throughout my education. Throughout the procedure, my mother w/ro Yeweyintej, my beloved
Dina, and my brother Zeccharias provided me with unending encouragement and support. I am
grateful for all of the excitement, bewilderment, and overall annoyance that you have displayed
throughout the years.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Table of Contents
CHAPTER ONE ............................................................................................................................................... 1
1 INTRODUCTION ..................................................................................................................................... 1
1.1 Background of the Study ............................................................................................................... 1
1.2 Statement of the Problem ............................................................................................................ 3
1.3 Research Questions ...................................................................................................................... 4
1.4 Objectives of the Study ................................................................................................................. 4
1.4.1 General Objective ................................................................................................................. 4
1.4.2 Specific objective .................................................................................................................. 5
1.5 Significance of the Study ............................................................................................................... 5
1.6 Scope of the Study ........................................................................................................................ 5
1.7 Operational Definition of Terms ................................................................................................... 6
1.8 Organization of the Study ............................................................................................................. 6
CHAPTER TWO .............................................................................................................................................. 7
2 Literature Review .................................................................................................................................. 7
2.1 INTRODUCTION ............................................................................................................................. 7
2.2 Theoretical Literature Review ....................................................................................................... 7
2.2.1 The Concept of Strategic Human Resource Management .................................................... 7
2.2.2 Resource-based theory ......................................................................................................... 9
2.2.3 Universalistic Theory ............................................................................................................. 9
2.2.4 Contingency Theory ............................................................................................................ 10
2.2.5 Configurationally Theory..................................................................................................... 11
2.2.6 Principles of Strategic HRM................................................................................................. 11
2.2.7 Organizational Performance and Balanced Score Card ...................................................... 12
2.3 Empirical Study ........................................................................................................................... 16
2.3.1 SHRM Practices and Organizational Performance .............................................................. 16
2.3.2 Human Resource Capabilities ............................................................................................. 16
2.4 Research Gap .............................................................................................................................. 19
2.5 Conceptual Framework ............................................................................................................... 20
CHAPTER THREE .......................................................................................................................................... 21
3 RESEARCH METHODOLOGY ................................................................................................................ 21
3.1 Introduction ................................................................................................................................ 21

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

3.2 Research Design .......................................................................................................................... 21

3.3 Population, Sample Size and Sampling Technique ..................................................................... 22
3.4 Types of Data Collection ............................................................................................................. 22
3.5 Methods of Data Collection ........................................................................................................ 22
3.6 Data Validity and Reliability ........................................................................................................ 23
3.7 Methods of Data Analysis ........................................................................................................... 23
3.8 Ethical considerations ................................................................................................................. 24
CHAPTER FOUR ........................................................................................................................................... 25
4 DATA ANALYSIS, PRESENTATIONAND INTERPRETATION .................................................................... 25
INTRODUCTION ....................................................................................................................................... 25
4.1 Demographic Characteristics of the Respondents...................................................................... 25
4.2 Descriptive Statistics of Variables ............................................................................................... 26
4.2.1 Vertical Integration of HR practices with the Commercial bank of Ethiopia Business
Strategy 27
4.2.2 Human Resource Management (HRM) practices Consistency and Congruence (Horizontal
Fit) 28
4.2.3 High Quality Staff and Internal Practices ............................................................................ 28
4.2.4 The Effect of Strategic Human Resource Management Practice on Organizational
Performance ....................................................................................................................................... 29
4.3 The Relationship between Strategic HRM Practices and overall Performance of CBE ............... 31
4.3.1 Correlations analysis ........................................................................................................... 31
4.4 Regression Analysis ..................................................................................................................... 33
4.4.1 Diagnosis Test ..................................................................................................................... 33
4.4.2 Overall regression model and its ANOVA ........................................................................... 34
CHAPTER FIVE ............................................................................................................................................. 36
5 CONCLUSION AND RECOMMENDATIONS........................................................................................... 36
5.1 Introduction ................................................................................................................................ 36
5.2 Conclusions ................................................................................................................................. 36
5.3 Recommendations ...................................................................................................................... 37
5.4 Limitations and Future Study ...................................................................................................... 39
5.5 Suggestion for Future Research .................................................................................................. 39

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

LIST OF FIGURES

Figure 1: Strategic objective in financial perspective ................................................................................. 13

Figure 2: Strategic objective in customer perspective................................................................................ 13

Figure 3: Strategic objectives in internal process perspective ................................................................... 14

Figure 4: Strategic objectives in learning and growth perspective............................................................. 15

Figure 5: Strategy map framework ............................................................................................................. 15

Figure 6: Conceptual Framework ................................................................................................................ 20

Figure 7: Normality Test (Histogram).......................................................................................................... 34

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 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

LIST OF TABLES

Table 3-1 Reliability test of Measurement Variable ................................................................................... 23

Table 4-1 Demographic Characteristics of the Respondents (N=216) ........................................................ 26

Table 4-2 Descriptive statistics on Vertical Integration of HR practices (N=216) ...................................... 27

Table 4-3 Descriptive statistics on HRM practices consistency and Congruence (Horizontal fit) .............. 28

Table 4-4 Descriptive statistics on High Quality Staff and Internal Practices ............................................. 29

Table 4-5 the Effect of Strategic Human Resource Management Practice on Organizational Performance
.................................................................................................................................................................... 30

Table 4-6 Correlation analysis ..................................................................................................................... 32

Table 4-7 Results of Multicollinearity Test ................................................................................................. 33

Table 4-8 Regression Model Summary ....................................................................................................... 34

Table 4-9 Regression ANOVA.................................................................................................................... 35

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

ACRONYMS

ANOVA: Analysis of Variance

BSC: Balanced Score Card
CBE: Commercial Bank of Ethiopia
HR: Human Resource
HRM: Human Resource Management
SHRM: Strategic Human Resource Management
SD: Standard Deviation
SPSS: Statistical Package for Social Science

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

ABSTRACT
The goal of this research was to investigate the impact of strategic human resource strategies on
organizational performance at the Commercial Bank of Ethiopia. Vertical integration of HR and
the bank's business strategy, consistency and congruence of HRM processes, high quality of
employees and internal practices, and overall performance of Commercial Bank of Ethiopia are
all evaluated in this regard. Integration of HR with the organization's business plan should be
studied in order to maximize service quality and productivity. According to studies, integrating
HR with the organizational business plan has a positive impact on organizational performance.
This investigation's exploration structure is straightforward and illustrative. A questionnaire was
distributed to 222 respondents from the Bole District and CBE branches. The survey used a five-
point Likert scale. To investigate the acquired data, illuminating insights such as standard
deviation, mean, recurrence, and rate were used. The data was analyzed using correlation
analysis (Karl Pearson).The major findings of this study suggested that strategic human
resource strategies had a moderate impact on the overall organizational performance of the
Commercial Bank of Ethiopia. As a result, in order to enhance the bank's total performance, the
Commercial Bank of Ethiopia must improve its strategic human resource practices based on
strategic human resource management principles.

Key words:

Strategic human resource management, Commercial bank of Ethiopia, Organizational

performance

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

CHAPTER ONE

1 INTRODUCTION
1.1 Background of the Study
When compared to science and other business literatures, the modern approach to HR
Management, known as Strategic Human Resource Management, is a newborn field. In the last
25 years, the majority of the academic literature on SHRM has been written by researchers in the
United States. Most were attempting to describe and support U.S. companies' experiments with
new manufacturing technology and employment systems in order to remain globally competitive
in the face of enormous technological change, rising labor-force educational levels, increased
economic volatility, industry deregulation, and increased global competition in the
manufacturing sector, particularly from Japan and Germany (Marier, 2012).

As the field of strategic human resource management continues to grow, international scholars
and researchers have been drawn to it. Strategic human resource management, as a macro
domain of the human resource management field, focuses primarily on firm-level human
resource phenomena and the relationship between human resource practices and company
performance (Lepak& Shaw, 2008).

In recent years, it has been common knowledge that an organization's Human Resource (HR) is
the source of long-term competitive advantage and success. Another business can clone or copy
physical assets such as premises, products and services, or technologies. Human assets cannot be
reproduced and hence become an organization's competitive advantage (Marier, 2012).

Key human resources management executives underline the need of aligning (HRM) policies and
processes with the overall association approach (SHRM). However, (HRM) has been challenged
to justify the value of its functions by demonstrating its impact on an organization's profit, saving
costs and maximizing added value in components of an organization's strategy, and customer
satisfaction. (Ulrich, 1997)

Many studies have been undertaken to investigate the relationship between (HRM) practices and
organizational performance, such as training (Russel et al., 1985), selection (Terpasticea and

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Rozell, 1993), appraisals (Borman, 1991), and compensation (Milkovich, 1992). Huselid's
(1995) research establishes a link between an index of (HR) functions and both financial and
market results. MacDuffie's (1995) study relating bundles of HR practices to productivity and
quality demonstrated a progression toward investigating the relationship between HR practice
systems and performance. The most contentious management literature investigates the effects of
(SHRM) practices on organizational effectiveness and performance (Worsfold, 1999).Some say
that there is a beneficial association between (HRM) interventions and organizational
performance, while others argue that there is a dearth of data linking HR practices to
organizational success. For example, Guest and Hoque's (1994) study looked at the impact of
HRM practices and the presence of an HRM strategy on the outcomes of manufacturing
companies; they discovered higher levels of positive (HRM) and employee relations outcomes,
but no correlation with performance in terms of productivity or quality. On the other side, a
growing body of studies has shown a link between specific HRM practices and greater financial
success (Russell et al., 1985)

Several scholars have stated that (SHRM) is directly related to organizational performance, but
others argue that high-performing work organizations implement specific (HRM) policies and
link them to their organizations' strategy. Despite its growing popularity, few detailed analyses of
the allegations that it is linked to performance have been conducted, and uncertainties regarding
its theoretical underpinnings persist. Furthermore, no research or reporting has been conducted or
published in emerging areas to provide a clear picture of (SHRM) adoption (Altarawneh, 2010).

As a result, the goal of this study is to investigate the impact of SHRM on organizational
performance at the Commercial Bank of Ethiopia. Its specific purpose is to build on earlier study
by investigating the relationship between SHRM and company performance at Ethiopia's
Commercial Bank of Ethiopia (CBE). Furthermore, to determine the extent to which the
Commercial Bank of Ethiopia (CBE) use a (SHRM) technique to manage its staff (HR). It also
intends to investigate the most extensively employed HR practices at the Commercial Bank of
Ethiopia (CBE) as well as identify the most significant barriers to the bank's SHRM
implementation.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

1.2 Statement of the Problem

Organizational performance has recently been the target of intense study initiatives. The
effectiveness with which an organization implements its policies and programs and achieves its
strategic goal in terms of its mission and vision is critical. Managers in both private and public
organizations are becoming increasingly aware that a critical source of competitive advantage is
often not indigenous products and services, best public relations strategy, or cutting-edge
technology, but rather having an appropriate system for attracting and managing the
organization's human resources (Ayanda and Sani, 2010)

The CBE is no difference than what we have seen globally in HRM, where transactional and
administrative activities were predominant and strategic alignment lacking. Realizing the role
technology can play and the strategic contribution HRM should play, the CBE has begun to shift
from the outdated HRM role predominates in the 1980s.

Based on the banks Corporate Strategy document (2018) In order to realize the bank’s vision,
human resource both at leadership and professional levels must uphold critical competencies that
match the world class standards. In this regard, a comprehensive HR strategy is designed and
significant progress has been made to institute the HR programs. Continuous work has been
made to improve the knowledge, skill and attitude gap of the staff as per the desired state of
competency requirement. Critical jobs are identified and urgent training needs have been
determined to prepare future leaders. But, there are still capability gaps in branch operations,
leadership, branch sales and marketing, customer relationship management, product and service
knowledge areas to mention a few.

However, according to the result which obtained from my observation from the bank and bank’s
annual report 2020, the degree of bank HR strategies integration with the bank corporate strategy
planning process is not visible, there is medium level of employee commitment, high level
quality of employees and internal practices are not on sufficient level, management and
employee relationship needs to be improving and high level of integration of HR policies with
one another and with other business strategies. In addition Line managers are poorly integrated
with HR policy of the bank and considering peoples in the organization as a strategic resource is
not as expected level. Thus the study attempted to address the problem in detail by examining the

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

role of strategic HRM practices on the performance of Commercial Bank of Ethiopia Bole
District by providing the answers to the research questions.

Despite the large body of literature on strategic HRM that has been produced since the late
1990s, there is very little solid evidence on how various types of human resource management
strategies and practices are shaped in practice in organizations and how their synergistic effect
can impact organizational effectiveness. The majority of strategic HRM research (mainly from
the United States) concentrated on the influence of strategic HRM practices on the organizational
performance of large corporate enterprises (Ayanda and Sani, 2010)

Only a few studies have been undertaken on the relationship between strategic HRM practices
and organizational performance, with the majority of them focusing on the assessment of SHRM
activities. As a result, this is an area ripe for research, and addressing this gap is the primary
issue that this research work is intended to address.

1.3 Research Questions

The following are the key research questions posed by the understudy researcher:

 To what extent is the bank's HRM practices aligned with the CBE business strategy?
 To what level are the CBE HR policies, procedure and practices integrated with one
another and with the organization’s other work unit?
 How much CBE equipped with capable, competent, and skilled personnel to produce
high-quality services and products?
 How the implementations of SHRM contribute to the improvement of organization's
overall performance?

1.4 Objectives of the Study

1.4.1 General Objective

The study's general objective is to evaluate the impact of SHRM practices on the organizational
performance of Ethiopia's Commercial Bank, Bole district and to give recommendations for
more effective and efficient organizational performance.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

1.4.2 Specific objective

The specific objectives are:

 To see the vertical integration of HR with the business strategy of the Commercial Bank
of Ethiopia.
 To assess the consistency and congruence of HRM practices.
 To determine the impact of high-quality employees and internal practices.
 To see the contribution of implementation of SHRM on organizational performance

1.5 Significance of the Study

SHRM methods are acknowledged to play a critical role in increasing human asset commitment
and, as a result, improving hierarchical execution. As written, there is a favorable relationship
between increased adoption of SHRM practices and organizational success (Caliskan, 2010;
Singh, 2004). This investigation seeks to determine the impact of SHRM on Commercial Bank
of Ethiopia's authoritative execution. The investigation's findings will thus provide information
on the extent to which SHRM is polished at Commercial Bank of Ethiopia. In addition, a link
between SHRM and hierarchical execution will be established. Following that, Commercial
Bank of Ethiopia will have the option of utilizing data from this inquiry to analyze the necessity
to build or enhance SHRM procedures and execute them with the end goal of increasing
hierarchical execution. This study will most likely entice other scholars to conduct additional
research in the area, as well as serve as a foundation for improving policies from an
organizational standpoint and provide insight for future research.

1.6 Scope of the Study

This study included employees from the Bole District staffs of the Commercial Bank of Ethiopia
in Addis Ababa Ethiopia, as well as a target group of employees working at the senior officers,
supervisory, and middle and top management levels. To obtain the necessary data for analysis,
questionnaires and interview methods were used, and the data was analyzed using descriptive
and explanatory statistics by using SPSS.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

1.7 Operational Definition of Terms

Strategic Human Resource Management is a procedure that includes the utilization of general
ways to deal with the improvement of HR techniques, which are incorporated vertically with the
business methodology and on a level plane with one another. (Armstrong 2006).

Commercial Bank of Ethiopia Unlike other banks, the Commercial Bank of Ethiopia (CBE) is
the oldest and largest public-owned commercial bank in Ethiopia. It was established in 1942 with
the objective of facilitating economic activities and expanding use of modern financial services.

Organizational performance is mission fulfillment, accuracy, timeliness and value of service

and program delivery, the extent to which an organization adapts to changing conditions and its
environment and financial viability. (David Muraga, 2015).

Dependent and Independent variable: - Dependent and Independent variables are variables in
mathematical modeling, statistical modeling and experimental sciences. Dependent variables
receive this name because, in an experiment, their values are studied under the supposition or
demand that they depend, by some law or rule, on the values of other variables (Wikipedia). The
cause variable or the one that distinguishes powers or conditions that follow up on something
different is the free factor. The variable that is the effect or is the result or outcome of another
variable is the dependent variable. (Dr. Abdurezak Mohamed and et al 2014)

1.8 Organization of the Study

The thesis will be divided into five chapters. The first chapter introduces and contextualizes the
study variables, which are SHRM practices and organizational performance, as well as the
problem definition, research objectives, significance of the inquiry, and examination barrier. The
second chapter includes a thorough review of the literature on the key study variables, which
include SHRM practices, banking sector culture, HR competencies, and organizational
performance. As a result, a logical structure was created that highlighted the links between the
variables under consideration. The third chapter delves into research methodology, design,
research protocols, variable operation, and ethical issues. Part four examines the consequences of
information collecting and discussions. Part five presents the investigation's outline, conclusions,
andstrategicproposals.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

CHAPTER TWO

2 Literature Review
2.1 INTRODUCTION

This chapter will present theoretical literature, empirical literature, research gaps, and the study's
conceptual framework. The theoretical literature segment will cover the resource-based view,
universalistic theory, contingency theory, and configuration theory, while the empirical literature
section will address SHRM practices and organizational performance, human resource
capabilities, and organizational culture. The conceptual framework for the study will be
described in the concluding.

2.2 Theoretical Literature Review

2.2.1 The Concept of Strategic Human Resource Management

Strategic human resource management (HRM) is a method that describes how the organization's
goals will be realized through people through HR strategies and integrated HR policies and
practices. (Armstrong 2014)

In essence, strategic HRM is a conceptual concept; it is a broad idea of how to achieve

integration or 'fit' between HR and business strategies, the advantages of taking a longer-term
view of where HR should be going and how to get there, and how coherent and mutually
supporting HR strategies should be developed and implemented.2014 (Armstrong)

The ultimate goal of strategic human resource management is to build organizational capacity by
ensuring that the business has the skilled, engaged, dedicated, and well-motivated employees it
requires to maintain a competitive advantage (Armstrong 2014).

SHRM has three basic goals: first, to achieve vertical alignment of HR practices with business
systems; second, to achieve level alignment of HR strategy. The following goal is to teach
employees how to read a compass in a consistently hostile environment so that the organization's
business needs, as well as the individual and aggregate needs of its employees, can be met
through the course of events and the application of intelligent and functional HR approaches and

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

projects. The third goal is to add to the business strategy plan by getting individuals to think
about how the organization can take use of the benefits supplied by its human resources.

Human asset initiatives with long-term goals are fundamental to strategic human resource
management. Rather than focusing on internal human resource issues, the emphasis is on caring
to and addressing long-term challenges affecting individuals and executive programs.

There are five approaches to strategic human resource management. A resource-based approach,
establishing strategic fit, superior administration, strong executive responsibility, and high
management participation are examples of these.

The resource-based strategy: - According to Barney (1991), a major aspect of a resource-based

approach HR strategy is to build vital ability by achieving vital fit between assets and openings
and gaining added value from the appropriate deployment of resources.

Strategic fit: -- The HR strategy should be aligned with the business strategy. Even better, HR
strategy should be integrated into business strategy, contributing to the business planning process
as it takes place.

Superior Administration: Horizontal integration with other parts of HR strategy is critical to

ensuring that the plan's diverse pieces fit together. The goal is to provide a fair method for
dealing with supervising people in which all procedures are consistent.

High performance management: - Its purpose is to influence the firm's performance through its
employees in areas like as productivity, quality, and customer service, as well as growth,
profitability, and, finally, the transmission of greater investor esteem.

High-responsibility the executives:- heavy duty Wood (1996) described the board as a sort of
executive intended to inspire dedication so that behavior is largely self-directed rather than
bound by authorizations and weights external to the individual, and relations within the
organization rely on a high level of trust.

High- involvement of the management: - According to this model, employees are treated as
partners in the project, with their interests considered and a voice on issues that concern them. It
is focused with communication and group dynamics. The idea is to establish an atmosphere in
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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

which heads and members of their groups can engage in discourse in order to characterize
desires and supply information on the organization's major challenges and goals.

2.2.2 Resource-based theory

The resource-based view underpins the SHRM concept to a considerable extent. This asserts that
the variety of resources in a company, especially human resources, gives its distinct character
and competitive edge (Armstrong 2014_13th edition Page 20). Edith Penrose's (1959) research
established resource-based theory by investigating the relationship between firm resources and
business growth. According to this theory, different firms have different bundles of resources
and capabilities that allow them to outperform the competition in certain activities, and resource
differences between firms can be less mobile due to the rarity and difficulty in acquiring or
imitating those resources and capabilities. This underlying articulation of the hypothesis filled in
as the establishment that was extended out by others filled in. However, Barney's (1991)
articulation of the characteristics required for long-term competitive advantage appears to be a
critical piece in popularizing the concept in strategy and other literatures. In this article, he said
that resources that are rare, valuable, unique, and non-substitutable can give sources of long-term
competitive advantage.

2.2.3 Universalistic Theory

According to SHRM's universalistic viewpoint, some human resource practices are superior to
others and should be adopted by all enterprises. According to this viewpoint, there is a universal
relationship between individual "best" human resource practices and organizational performance,
which is also known as the "best practice approach." Human resource techniques are universal in
the sense that they work well in all circumstances.

Best practice advocates contended that a single high-performance human resource approach
improves effectiveness regardless of corporate goals, work systems, or context. Significant
research in the field of SHRM supports the assumption that specific human resource practices are
linked to organizational performance. According to Pfeiffer (1994), the ideal human resource
methods are employment security, selective recruiting, self-managed teams, and high
compensation contingent on performance, training to provide a skilled and motivated workforce,
reducing status differentials, and sharing information. Best HR strategies, according to Guest

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

(1999), include cautious selection, training, job design that ensures flexibility, commitment and
motivation, communication, and employee share ownership programs. Furthermore, Delery and
Doty (1996) listed seven strategic HR practices: internal career ladders, formal training systems,
results-oriented appraisal, performance-based compensation, employment security, employee
voice, and broadly defined occupations.

2.2.4 Contingency Theory

According to the contingency hypothesis, for an organization's HR policies to be effective, they
must be compatible with other components of the organization. The relationship between HR
policies and practices and organizational performance is affected by a third component known as
contingency factors. These variables moderate the relationship between human resource
management and organizational performance. The organization's strategy is the major
contingency factor. Contingency theory is linked to the concept of fit, which refers to the need to
establish congruence between an organization's HR strategies, policies, and practices and its
business strategies in the context of its external and internal environment (Armstrong, 2014).

The best fit model is consistent with the possibility hypothesis. It emphasizes the importance of
HR strategy being aligned with the organization's setting and circumstances. Life cycle model,
competitive strategy, and strategic configuration are the best match models.

2.2.4.1 Life Cycle Model

According to this model, HR strategy should be aligned with the stages of product development
life cycle such as start-up, growth, maturity, and decline.

2.2.4.2 Competitive Strategy

According to this approach, HR strategy should be aligned with Porter's (1985) three competitive
strategies of innovation, quality, and cost leadership.

2.2.4.3 Strategic Configuration

According to the model, HR strategy should be aligned with the four types of organizations
outlined by Mills and Snow (1978), which are prospectors, defenders, analyzers, and reactors.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.2.5 Configurationally Theory

The configurationally point of view establishes a synchronous inner and outer fit between an
organization's outside condition, business system, and HR strategy, implying that business
methodologies and HRM approaches collaborate in determining business performance, as
indicated by organizational context. The contextual perspective contends that it is necessary to
broaden the concept of SHRM in order to provide a more complex explanation, not only of its
internal workings and how it can reinforce the achievement of business goals, but also of its
impact on the external and organizational context in which managerial decisions are made. Many
prominent firms have acknowledged the strategic value of human resources and have developed
an investment mindset toward these resources, according to current management practices. The
configuration approach is used in the study to demonstrate why it is critical for firms to achieve
both vertical and horizontal fit through their HR practices in order to boost an organization's
competitive advantage and, as a result, be judged strategic.

2.2.6 Principles of Strategic HRM

SHRM's primary concepts are HR strategy integration, consistency of HRM practices, and
development of HRM to line management, strong employee commitment, high quality staff, and
internal practices.

2.2.6.1 Integration to Strategy

The degree to which HRM concerns are considered as part of the design of corporate strategies is
defined as integration. It is connected with the concept of fit, which refers to the necessity for an
organization's HR strategies, policies, and practices to be congruent with its business strategies in
the context of its external and internal environments (Armstrong, 2014). The SHRM consistency
principle entails developing and implementing a set of internally consistent policies and practices
to guarantee that firm HR contributes to the achievement of business objectives. The degree to
which all HR practices in a SHRM system are consistent and complementary is referred to as
internal consistency of HR practices.

2.2.6.2 Devolvement of HRM to line management

The locus of responsibility for HRM has shifted from specialist managers to senior line
management. Devolvement refers to the extent to which HRM methods include and delegate

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

authority to line managers rather than HR specialists. It is about how much involvement and
major responsibility line managers have for particular HR activities.

2.2.6.3 High Employee-Commitment

SHRM is concerned with high employee commitment to the goals and practices of the
organization. It is about gaining the ‘hearts and minds’ of employees through involvement,
communications and other methods of developing a high commitment, high-trust organization.

2.2.6.4 High Quality Staff and Internal Practices

SHRM is concerned with hiring, developing, and retaining high-quality employees and internal
practices in order to produce high-quality goods. It encompasses all managerial operations and
procedures associated with creating and retaining a qualified workforce.

2.2.7 Organizational Performance and Balanced Score Card

A balanced scorecard is a management tool that provides partners with a comprehensive picture
of how the organization is progressing toward the achievement of its primary objectives.

2.2.7.1 Perspectives in Balanced Scorecard

2.2.7.1.1 Financial Perspective

In private enterprises, the primary goal is to maximize profits without jeopardizing the interests
of other stakeholders (community, environment, government, etc.)

The long-term shareholder value is the strategic goal from a financial standpoint. This goal is
motivated by two factors: income development and cost effectiveness.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Figure 1: Strategic objective in financial perspective

Source :(www.ExploreHR.org) 2020

2.2.7.1.2 Customer Perspective

This point of view is incredibly important, because a business cannot exist without clients.
Customer perspective covers the following elements
 Customer acquisition
 Customer retention
 Customer profitability
 Market share
 Customer satisfaction

Figure 2: Strategic objective in customer perspective

Source :(www.ExploreHR.org) 2020

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.2.7.2 Internal Process Perspective

This viewpoint shows the procedure in significant businesses that must be followed in order to
meet the expectations of customers.
This viewpoint focuses on four main aspects in particular
 Operations management process
 Customer management process
 Innovation process
 Regulatory and social process

Figure 3: Strategic objectives in internal process perspective

Source: (www.ExploreHR.org) 2020

2.2.7.3 Learning and Growth Perspective

This viewpoint represents the capabilities of a good human resource development system,
organizational system, and information system to provide a solid basis for enhancing firm
performance.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Figure 4: Strategic objectives in learning and growth perspective

Source: (www.ExploreHR.org) 2020

2.2.7.4 Strategy map framework

The strategy map framework is presented in Figure 2.5
This structure displays the kind of major objectives that should be introduced in each point of
view, specifically the budgetary point of view, clients, internal business procedure, and learning
and development point of view.

Figure 5: Strategy map framework

Source: (www.ExploreHR.org) 2020

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.3 Empirical Study

2.3.1 SHRM Practices and Organizational Performance

To satisfy their stakeholders and remain competitive in the business environment, all firms must
perform successfully. To do so, they rely on the quality, passion, enthusiasm, experience, and
talents of the individuals who work in them at all levels. According to Gust (1997: 269), "the
specific component of HRM is the notion that improved performance is attained through the
humans in the business." If appropriate HR ideas and practices are presented in this manner, it
may also be expected that HRM will have an impact on firm execution. West et al. (2002)
conducted a study in 61 UK medical clinics, gathering information on HR technique,
arrangement, and tactics from CEOs and HR Directors, as well as ethical quality rates.

This study found a link between some HR procedures and decreased morale. According to West,
"if you have HR practices that focus on exertion and aptitude; build up relationship building
skills"; enable participation, cooperation, advancement, and collaboration in groups for most, if
not all workers, the entire framework functions and performs better. An investigation of the
effect of superior work practices, for example, teamwork, evaluation, work pivot, broad banded
level structures, and sharing of business data in UK aviation foundations directed by Thompson
(2002) revealed that the quantity of HR training and the size of the workforce secured
demonstrated to be the key separating factor between more and less effective firms. Many
studies examiners are directed to decide links between HRM capacities and hierarchical
execution, such as preparation (Russel et al., 1985), selection (Terpasticea and Rozell, 1993),
examinations (Borman, 1991), and compensation (Milkovich, 1992) in relation to the
organization performance.

2.3.2 Human Resource Capabilities

HR capabilities are usually defined as the schedules installed inside the unspoken and verified
data about individuals from a partnership working to aggregate build, sustain, transmit, and
redeploy HR amid a dynamic, critical condition (Boxall, 1998). HR capacity may be a source of
competitive advantage since it is embedded in incomparable aggregate data on business
individuals that is developed over time, is unusual, and significant (Wright, 2004). The firm's
RBV suggests that if a partnership uses crucial and unusual assets, it gains an advantage, which
gradually leads to greater execution.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.3.2.1 Value
According to Barney (2002), a capability or asset is feasible if it has the potential to inspire a
corporation to reduce costs while also responding to natural opportunities and risks. If a
company can send such an asset or capacity profitably, it will gain an advantage. As a result, the
importance of an organization's assets and capacities determines its advantage. This implies that
organizations with insignificantly valued talents and assets will achieve at best a modest
advantage. In any case, as Wright (2004) contends, organizations endowed with exceptional
abilities and resources are likely to gain a general advantage. This could signal that the
organization is intent on misusing its skills and assets; in light of the fact that only important
capacity and assets with potential can a corporation get an advantage.

According to Penrose (1959), the administrations that result from resources are a part of the
process through which they are utilised. To be able to successfully convey or invest in an asset, a
company must have the necessary skills, which implies that the company must be able to send
assets. Henceforth, even if a specific resource may be idle to provide ascension to a crucial aid,
that administration will remain capable of being utilised in an appropriate manner (Amit and
Schoemaker 2003).

Assets and abilities are usually combined at the same time to get an advantage. Penrose (1959)
goes on to argue that assets or talents cannot be employed in isolation; in order to be effective;
they must be used in potential combinations with other resources or capacities. According to
Makadok (2001), corporations can gain a significant competitive advantage by selecting
preferable assets over rival firms and utilizing them more effectively with the appropriate
capacities. Makadok goes on to argue that while the firm's capabilities are exceptional, they
cannot generate money until the firm acquires assets whose efficiency would be improved by its
capabilities. Thus, despite the fact that an asset or ability may require significant latent worth,
that worth can simply be recognized when it's pooled with a comparable capacity or asset. For
whatever length of time that assets and abilities aren't advantageous in disconnection, the key to
gaining an advantage isn't only the use of a substantial asset or an important capacity, but rather
the use of a significant asset capability mix. Furthermore, the greater the importance of the
company's asset capability mixes, the greater the amount of leeway it will infer as a result of
their utilization (Makadok, 2001).

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.3.2.2 Rarity
According to Barney (2002), for enterprises to get an advantage, they should leverage
advertising opportunity, achieve a value level, or maybe check a risk that their competitors
cannot. In any case, associations are unlikely to achieve these results if the assets and capacities
they use are widely held. Another advantage must be obtained by utilizing skills and assets that
are rare or held by a substantially small number of organizations in an industry.
According to Barney (2002), for rareness to add to an advantage, there must be a degree of asset
ability blending, suggesting that assets and abilities must be exploited together; when abused
exclusively, they will not yield rareness. This supports the notion that selectiveness applies to
asset packs, meaning that if a chosen heap of assets and capacities is broad, then a large number
of associations will be fit for actualizing the subsequent system, reducing the preferred place to
be earned by each firm.
However, Beardwell and Claydon (2007) argue that organizations do not need to have unique
assets and capabilities in order to gain an advantage. For example, if a company has the force
that no other company loves a protected compound modification, it's a little much for it to have
similarly rare assets in order to convert that capability's idle an incentive into an advantage.
Because this protected technique is designed to effect generally realistic crude materials such as
obviously occurring synthetic intensifies, the firm should have an advantage over its competitors
as long as its unique ability allows it to use natural assets differently than other firms.

2.3.2.3 Inimitability
According to Beardwell and Claydon (2007), if an organization's HR include value and are
unique, they will give an advantage in the short term; but, if other enterprises can imitate similar
characteristics, the advantage will be gone and replaced with substantial equality after some
time. HR should establish and sustain attributes that cannot be effectively duplicated by the
organization's competitors.

According to Barney and Wright (2008), if an asset or its benefit is commonly duplicated across
enterprises, it must be a source of substantial equality rather than an advantage. They also notice
the relevance of socially complex wonders, for example, an organization's fascinating history and
culture, which may be inclined to recognize one-of-a-kind procedures and practices that enable
associations to outperform their rivals. Continue to work with Cardeal and Antonio (2012) In

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

general, resources will be more difficult to imitate if they are: very dependant; have an
ambiguous relationship between the assets that gives them an advantage; or are socially
unpredictable. For example, if they are beyond the ability of firms to oversee and control them in
a planned path; there are legitimate property rights, as in the case of licenses; and the strategy for
their impersonation by other organizations is lengthy, for example, because of the time required
to mentor representatives or absorb the information required to master the asset.

2.3.2.4 Organization
Organizations have discovered a workable speed that they will boost, including worth,
irregularity, and dominance. This suggests focusing on a balanced mix, or coordinated, effective
frameworks of HR practice, rather than singular techniques, that enable representatives to excel
in their latent capacity (Gratton, 1999). This necessitates associations ensuring that their HR
utilitarian strategies and practices are composed, logical, and not conflicting.

According to Cardeal and Antonio (2012), the advantage stems from the way organizations work
and interrelate their key and non-vital assets, utilizing hierarchical procedures to provide what
are frequently regarded as halfway items between critical assets and consequently the company's
final.

2.4 Research Gap

Several studies have concluded that the application of SHRM practices and their influence on
both operational and financial execution are undeniable (Delanay and Huselid, 1996; Singh,
2004 and Okara and Pamela, 2008). Studies on the relationship between firm performance and
SHRM practices have primarily been conducted in Europe.

In any event, the majority of the research done in Africa focused on manufacturing firms
(Dimba, 2009, Oladipo and Abdulkadir, 2011), public (Tessema and Soeters, 2006), and
corporate firms in general (Waiganjo et al., 2012). Furthermore, the majority of the studies used
monetary constructs to assess performance. As a result, this has revealed limited insight into
SHRM practices on: vertical integration of HR and business strategy, consistency and
congruence of HR practices, high quality of staff and internal practices has on firm performance
in the service sector while incorporating non-financial measures, and in this case, the bank
industry.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

2.5 Conceptual Framework

According to Njenga (2018) and Mugenda and Mugenda (2010), a conceptual framework is a
study element in which a specific idea is described as a quantitative incident that gives a
cohesive interpretation of the thought. The goal of this research is to look at the connection
between SHRM practice and organizational performance.

Unlike traditional HRM, the new approach to HRM known as strategic HRM has a vertical
connectivity with corporate and company strategy as well as a horizontal fit with all HR
functions of an organization. This strategic relationship has a significant impact on employee
behavior, performance, and productivity. As a result, an organization's performance will be
determined by SHRM practices, as seen in the diagram below.

Independent Variables
Dependent Variables

SHRM Practices
 Vertical integration of
HR Practices with the
organization
Organizational Performance
 HRM practices
consistency and
congruence

 High quality staff and

internal practices

Source: Researcher 2022

Figure 6: Conceptual Framework

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

CHAPTER THREE

3 RESEARCH METHODOLOGY
3.1 Introduction
Unlike traditional HRM, the new approach to HRM known as strategic HRM has a vertical
connectivity with corporate and company strategy as well as a horizontal fit with all HR
functions of an organization. This strategic relationship has a significant impact on employee
behavior, performance, and productivity. As a result, an organization's performance will be
determined by SHRM practices, as seen in the diagram below.

3.2 Research Design

A research design is defined as, “arrangement for directing an examination with most notable
control over circumstances that may interfere with the veracity of the disclosures" (Burns and
Grove, 2003).

Polit et al. (2001) define it as "the analyst's general strategy for addressing the study question or
testing the exploration hypothesis," while Collis and Hussey (2003) define it as "a science or
specialty of arranging techniques for leading investigations in order to obtain the most legitimate
discoveries."

This study used a qualitative and quantitative research method with descriptive and explanatory
in nature because the researcher describes how employees and mana\gers of the bank perceive
the practice of SHRM to improve organizational performance after analysing the results of
questionnaires to be collected from research participants and involving precise procedure & data
source specification, to discover the degree of association between variables and answers. Data
was gathered through a questionnaire, interviews, internal papers, and articles. To gather
information, open-ended surveys and targeted questions were used. The information was
analysed using a guided approach to content inspection.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

3.3 Population, Sample Size and Sampling Technique

In this study the researcher used multi-stage sampling techniques. In the first stage certain group
of population has been selected purposefully and at the second stage simple random sampling
technique was applied from the probability sampling techniques.

Consequently this study purposefully focuses on the strategic contributor of the organization
which has knowledge and understanding on their organizational strategies. Accordingly the
study's population consists of 500 Bole District staff members of the Commercial Bank of
Ethiopia, including directors, managers, and senior officers, and 222 questionnaires were sent to
222 staff members. The simple random sampling technique was chosen from among the
probability sampling techniques.

Guilford and Flruchter's (1973) formula for calculating sample size is used to determine sample
size:

Z= 500/1+ (0.05)²×500

Z= 500/1+0.0025

Z= 500/1+0.0025×500 Z=500/2.25 Z= 222

Where: Z is sample size, N is the size of the population, µ is alpha = +0.05

3.4 Types of Data Collection

The study drew on both primary and secondary data sources. The main data refers to information
received from respondents via interview and questionnaire, whereas the secondary data was
information gathered from prior records such as internal documents and journals dealing with
strategy HRM and the performance of Commercial Bank of Ethiopia.

3.5 Methods of Data Collection

The basic data was acquired via mailing questionnaires to Commercial Bank of Ethiopia workers
at the Head Office and Bole District, as well as organizing focus group discussions and
interviews with managers or team leaders. Secondary data will be gathered from related articles,

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

credible websites, and the records of stakeholders such as the National Bank of Ethiopia and the
Commercial Bank of Ethiopia.

3.6 Data Validity and Reliability

Reliability is a tool for measuring the reliability of a questionnaire, which is an indicator of the
variables or constructs. The reliability of a questioner is assumed to be high if respondents'
responses to questions are constant or stable over time, and the reliability test is carried out using
SPSS version 24 for Windows. Cronbach's alpha values were calculated for each construct's
components by the researcher. George and Mallery's recommendations were used to evaluate the
coefficients (2010), where values of 0.5 or higher indicate excellent reliability, values ranging
from 0.8 to.89 indicate good reliability, values ranging from 0.7 to.79 indicate acceptable
reliability, values ranging from 0.6 to.69 indicate questionable reliability, values ranging from
0.50 to.59 indicate poor reliability, and values less than 0.5 indicate unacceptable reliability
Cronbach's alpha was used to do a reliability analysis on the four variables, and according to
Table 1, all values were acceptable according to George and Mallery's criterion (2010).

Table 3-1 Reliability test of Measurement Variable

Number of Cronbach's
Items Alpha
Vertical integration of HR Practices 9 0.674
HRM practices consistency and congruence 8 0.676
High quality staff and internal practices 2 0.670
Organizational Performance 20 0.668

3.7 Methods of Data Analysis

Using both qualitative and quantitative data analysis methodologies, the acquired data was
analysed and interpreted. The information gathered through focus group discussions and
interview replies was analysed qualitatively. As a result, closed-ended questions were
quantitatively analysed using tables and percentages. Microsoft Excel was used to investigate the
quantitative data.

As a result, the data collected using the Likert scale was coded; encoded, and analysed using
descriptive statistics to describe the characteristics of the variables in the study, and Pearson
correlation was used to establish the nature and magnitude of the relationships between the

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

independent and dependent variables. Narrations, tables, and other statistical approaches were
used to interpret both qualitative and quantitative data. Finally, recommendations were made
based on the findings, which could add to understanding in the field as well as provide insight for
future academics to do additional research.

3.8 Ethical considerations

According to Kumar (2005), the most important moral difficulties concerning study subjects are
security, obscurity, purposeful and educated assent.

The following ethical issues were addressed in the study: informed consent (by informing
respondents about the background of the study, including the importance of the data to be
collected from them) and confidentiality (by assuring respondents that all information in this
study was used solely for academic purposes).

Furthermore, the student researcher ensures that all of the responses from the sample are given
weight, regardless of whether the student researcher agrees or disagrees with their particular
comments. The student researcher was given any personal information about the respondents that
had been explained in the questionnaire and interview. The student researcher additionally
pledges to all selected offices for this investigation regarding these ethical norms.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

CHAPTER FOUR
4 DATA ANALYSIS, PRESENTATIONAND INTERPRETATION
INTRODUCTION
This chapter presents data analysis and discussions. The purpose of this study was to determine
the impact of strategic human resource management practices on organizational performance in
the Commercial Bank of Ethiopia Bole district. Questionnaires were issued to 222 managers,
officials, and experts in the Commercial Bank of Ethiopia Bole district; 216 completed and
useable questionnaires reflecting a response rate of 100% are used for analysis. MS Excel and
the Statistical Package for Social Science software were used to analyze the data (SPSS).

4.1 Demographic Characteristics of the Respondents

This section examines the characteristics of the 216 respondents who completed valid
questionnaires for the study. The study aimed to determine the gender, age ranges, degree of
education, year of service at the bank, and department involved in the bank.

The table below Table 4.1 provides the demographic features of the respondents, which
demonstrate that 69 percent are male and the remaining 31 percent are female. This means that
the gender composition of the employees and management group is balanced in comparison to
the company's overall female population. Furthermore, the report paints a favorable picture of
the respondents' educational level. A considerable number of responders, 95.4 percent, hold a
first degree or higher. This indicates that the respondents are well-educated individuals. The bulk
of respondents (67.2 percent) are under the age of 40. This means that respondents are, on
average, youthful, enthusiastic, and expected to be productive.

Furthermore, 55.6 percent of respondents have served in CBE for more than 5 years, while 44.4
percent have served for less than 5 years. And around 50.5 percent work in top and middle
management positions, while 49.5 percent work at the expert/officer level, which includes
Branch, District HR, Internal Audit, Procurement, Legal, and Quality & Process. The bulk of
respondents have served for at least five years. This also indicates that the respondents have
spent enough time in the organization to understand how strategic the company's management is.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Table 4-1 Demographic Characteristics of the Respondents (N=216)

Demographic Variable Frequency Percent

Sex Male 149 69.0
Female 67 31.0
Total 216 100.0
Educational Qualification Diploma & Below 5 2.3
B.A 117 54.2
M.A /M.S.C 89 41.2
Other 5 2.3
Total 216 100.0
Year of service at CBE 1- 3 years 27 12.5
4- 5 years 69 31.9
5 and Above years 120 55.6
Total 216 100.0
Age Less than 35 years 85 39.4

35-40 years 60 27.8

41-45 years 50 23.1
More than 46 21 9.7
Total 216 100.0
Management Level Top Level Manager 21 9.7
(Position)
Middle Level Manager 88 40.7

Expert/|Officer 107 49.5

Total 216 100.0
Source: Questionnaires and SPSS output (2022)

4.2 Descriptive Statistics of Variables

The descriptive statistics of the dependent and independent variables utilized in this investigation
are presented in this section. Vertical integration of HR practices with the CBE business strategy,
Consistency and Congruence (Horizontal Fit), and High Quality Staff and Internal Practices were
employed as dependent variables in this study. The tables present summary descriptive results
for all variables utilized in the study, including mean, maximum, minimum, and standard
deviation of observation.

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 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

4.2.1 Vertical Integration of HR practices with the Commercial bank of Ethiopia

Business Strategy
The study was evaluated in this section to determine the vertical integration of HR with the CBE
business plan. Respondents were asked to mark how much they agreed or disagreed with
statements on vertical integration of HR with the bank's business strategy. Table 4.2 shows the
results of an analysis using descriptive statistics.

Table 4-2 Descriptive statistics on Vertical Integration of HR practices (N=216)

Variables N Mean SD
Commercial Bank Of Ethiopia’s HRM strategy is aligned with the vision, mission and 216 3.01 1.427
objective of the organization
Commercial Bank Of Ethiopia’s recruitment and selection policy is aligned with the vision, 216 2.92 1.351
mission and objective of the organization.
Commercial Bank Of Ethiopia’s human resource development policy is aligned with the 216 2.97 1.406
vision, mission and objective of the organization.
Commercial Bank Of Ethiopia’s performance management system policy is aligned with the 216 3.11 1.383
vision, mission and objective of the organization
Commercial Bank Of Ethiopia’s compensation management policy is aligned with the vision, 216 3.23 1.402
mission and objective of the organization.
Commercial Bank Of Ethiopia’s recruitment and selection practices are aligned with the 216 3.19 1.374
vision, mission and objective of the organization
Commercial Bank Of Ethiopia’s human resource development investments are made in line 216 3.01 1.379
with (compatibly) the company vision, mission and objective
Commercial Bank Of Ethiopia’s performance management practices are aligned with the 216 3.00 1.345
vision, mission and objective of the organization
Commercial Bank Of Ethiopia’s compensation management practices are aligned with the 216 2.92 1.459
vision, mission and objective of the organization
Vertical integration of HR Practices 216 3.03 0.505

Source: Questionnaires and SPSS output (2022)

According to table 4.6 data, the aggregated mean and standard deviation were 3.03 and 0.505,
respectively. The mean number indicates that respondents are neutral/moderately/agreed on the
vertical integrity of HR processes applied by Commercial Bank of Ethiopia, and the lower
standard deviation value indicates that data variability is minimal. The highest result (M3.23
with SD 1.402) is related to the Commercial Bank of Ethiopia's pay management policy, which
is in line with the organization's vision, mission, and objectives. The lowest result (M=2.92 with
SD 1.351) is related to the connection of CBE's recruiting and selection Policy with the
organization's vision, mission, and objectives.

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 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

4.2.2 Human Resource Management (HRM) practices Consistency and Congruence

(Horizontal Fit)
The study analyzed the consistency and congruence of HRM practices in this sector.
Respondents were asked to mark how much they agreed or disagreed with statements about
HRM practices consistency and congruence. Table 4.3 shows the results of an analysis using
descriptive statistics

Key: 1-Strongly disagree, 2- Disagree, 3-Neutral, 4-Agree, 5-Strongly agree

Table 4-3 Descriptive statistics on HRM practices consistency and Congruence (Horizontal
fit)

Variables N Mean SD
HRM policies are interconnected with a company values 216 3.06 1.466
HR practices are interdependent and integrated with each other 216 3.05 1.384
HR practices focuses on the entire human resource management system 216 2.90 1.432
HRM practices are compatible (are aligned) with operational goals of the organization 216 3.00 1.393
HRM practices are compatible (are aligned) with the organization structure 216 3.14 1.385
HRM practices work together to achieve organizational objectives 216 3.09 1.346
HRM practices are business driven 216 2.76 1.439
HRM practices are coherent with other departments. 216 2.92 1.428
HRM practices consistency and congruence 216 3.08 0.593

Source: Questionnaires and SPSS output (2022)

The aggregated mean and standard deviation were 3.08 and 0.593, respectively, according to the
data in table 4.3. The mean value indicates a neutral/moderate level of agreement on HRM
practices consistency and congruence, while the lower standard deviation number indicates that
the data is variable. As a result, respondents agreed that HRM practices were consistent and
congruent. The best result (M3.14 with SD1.385) indicates that HRM practices are compatible
(aligned) with the organizational structure. The minimum result (M2.76 with SD1.439) for HRM
practices is driven by business.

4.2.3 High Quality Staff and Internal Practices

The study evaluated the impact of high-quality staff and internal practices in this segment.
Respondents were asked to mark how much they agreed or disagreed with statements about the

28
 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

influence of high-quality employees and internal practices. Table 4.4 shows the results of an
analysis using descriptive statistics

Key: 1-Strongly disagree, 2- Disagree, 3-Neutral, 4-Agree, 5-Strongly agree

Table 4-4 Descriptive statistics on High Quality Staff and Internal Practices

Variables N Mean SD
Commercial Bank Of Ethiopia has the capacity to have an able, qualified and skilful workforce 216 3.00 1.435
to produce high-quality service and products.
Commercial Bank Of Ethiopia has internal practices related to developing and maintaining a 216 2.89 1.449
qualified workforce
High quality staff and internal practices 216 3.19 1.037
Source: Questionnaires and SPSS output (2022)

The aggregated mean and standard deviation were 3.19 and 1.037, respectively, according to the
data in table 4.5. The mean value indicates neutrality or modest agreement on the influence of
high quality staff and internal practices, and the standard deviation number indicates that there is
relatively higher variability of data. The maximum result (M3.00 with SD1.435) demonstrates
that the Commercial Bank of Ethiopia has the capacity to have able, qualified, and skilled
personnel to deliver high-quality service and goods. The minimum result, (M2.89 with
SD1.449), is tied to CBE's internal processes for developing and keeping a qualified workforce.

4.2.4 The Effect of Strategic Human Resource Management Practice on Organizational

Performance
The study examined the influence of strategic human resource practices on CBE's overall
performance in this segment. Respondents were asked to mark how much they agreed or
disagreed with statements on the impact of SHRM practices on CBE's overall performance.
Table 4.5 shows the results of the analysis using descriptive statistics

Key: 1-Strongly disagree, 2- Disagree, 3-Neutral, 4-Agree, 5-Strongly agree

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 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Table 4-5 the Effect of Strategic Human Resource Management Practice on Organizational
Performance
Variables N Mean SD
I have observed that Commercial Bank Of Ethiopia customers is satisfied with Commercial Bank Of 216 2.91 1.398
Ethiopia services delivery in the past 3 and half years.
I have observed that the Commercial Bank Of Ethiopia customers increased in the past 3 and half years. 216 2.94 1.418

The bank’s HR result in an increase in revenues 216 2.92 1.451

The bank’s HR result in a decrease in costs 216 2.81 1.466
Customer Perspective 216 3.03 0.724
I have observed that the Commercial Bank Of Ethiopia’s revenue increased in the past 3 and half years. 216 3.07 1.384
I have observed that the Commercial Bank Of Ethiopia’s revenue leakage decreased in the past 3 and 216 3.14 1.394
half years.
I have observed that the Commercial Bank Of Ethiopia’s resource utilization improved in the past 3 and 216 2.72 1.360
half years.
Financial Perspective 216 2.98 0.824
I have observed that the Commercial Bank Of Ethiopia’s service accessibility improved in the past 3 216 2.96 1.453
and half years.
I have observed that the Commercial Bank Of Ethiopia’s communication and branding activities are 216 3.02 1.421
improved in the past 3 and half years.
I have observed that the Commercial Bank Of Ethiopia’s product and services portfolio increased in the 216 2.96 1.425
past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s service quality increased in the past 3 and half 216 3.10 1.346
years
I have observed that the Commercial Bank Of Ethiopia’s fraud prevention performance has been 216 2.97 1.326
enhanced in the past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s infrastructure and information systems 216 3.15 1.427
security has been enhanced in the past 3 and half years
Internal Process Perspective 216 3.09 0.739
I have observed that the Commercial Bank Of Ethiopia’s corporate culture has been improved in the 216 2.88 1.388
past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s employee satisfaction has been improved in 216 2.82 1.416
the past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s performance in deployment and utilization 216 3.10 1.404
latest technologies has been improved in the past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s organizational process and structures has been 216 2.92 1.460
improved in the past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s performance in building the staffs capacity has 216 2.91 1.439
been improved in the past 3 and half years
I have observed that the Commercial Bank Of Ethiopia’s performance in building the management 216 3.01 1.453
capacity has been improved in the past 3 and half years
Learning & Development 216 2.99 0.854

Organizational Performance 216 3.13 0.499

Source: Survey data from questionnaire, 2022

30
 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

The aggregated mean and standard deviation from table 4.5 data were 3.13 and 0.499,
respectively. The mean value of organizational performance indicates that the majority of
respondents are moderately agree on the impact of SHM procedures on the overall organizational
performance of CBE, and the standard deviation values indicate that there is little variability of
data. The largest mean result (M3.15 with SD1.427) is associated to the respondent response that
they had witnessed a moderate increase in CBE clients during the last three years. The lowest
result (M2.72 with SD01.360) is related to the respondent response that they disagree with the
Commercial Bank of Ethiopia's resource utilization improvement during the last three and a half
years.

4.3 The Relationship between Strategic HRM Practices and overall Performance of CBE

4.3.1 Correlations analysis

Pearson Correlation Coefficient (PCC) is a statistical metric that calculates the linear
relationship between two variables in a model and is used to estimate the overall population
correlation, with values ranging from -1 to 1. The correlation coefficient is a statistical measure
of the degree to which changes in one variable predict changes in another. A higher correlation
value suggests a greater connection between the two sets of data (Coetzee, 2003). The value of a
positively linked variable rises or falls in lockstep.
The knowledge of connections is based on following five old style criteria proposed by
Franzblau (1985) to discern connection coefficient among diverse components.

(r = 0 to .20) demonstrates insignificant or no relationship

(r = .20 to .40) demonstrates a positive but low level of connection
(r = .40 to .60) shows positive moderate level of connection
(r = .60 to .80) demonstrates positive and stamped level of relationship
(r = .80 to .1.00) shows positive and high level of connection

31
 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Correlations

HRM practices
Vertical consistency High quality staff
Organizational integration of and and internal
Performance HR Practices congruence practices
Pearson Organizational 1.000 0.464 0.296 0.628
Correlation Performance
Vertical integration of 0.464 1.000 0.116 0.042
HR Practices

HRM practices 0.296 0.116 1.000 -0.191

consistency and
congruence
High quality staff and 0.628 0.042 -0.191 1.000
internal practices
Sig. (1- Organizational 0.000 0.000 0.000
tailed) Performance
Vertical integration of 0.000 0.045 0.272
HR Practices
HRM practices 0.000 0.045 0.002
consistency and
congruence
High quality staff and 0.000 0.272 0.002
internal practices
N Organizational 216 216 216 216
Performance
Vertical integration of 216 216 216 216
HR Practices
HRM practices 216 216 216 216
consistency and
congruence
High quality staff and 216 216 216 216
internal practices

Table 4-6 Correlation analysis

Source: Survey data from questionnaire, 2022

According to table 4.6 the relationships are shown as follows:

 The association between vertical integration of HR processes and overall CBE

performance is moderately positive, with a r value of 0.464 and a p value greater than
0.01.

 The association between HRM practices consistency and congruence is favorable,

although it has a modest level of connection to overall CBE performance, with a r value
of 0.296 and a p value greater than 0.05.

32
 The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

 Because the r value is 0.628 (r=1, p 0.000), the link between high quality staff and
internal practices and overall CBE performance is positive and significant.

4.4 Regression Analysis

4.4.1 Diagnosis Test

Before applying regression analysis some tests were conducted in order to ensure the
appropriateness of data to assumptions regression analysis for the model as follows:

4.4.1.1 Multicollinearity Test

Coefficients
Standardi
zed
Unstandardized Coefficie Collinearity
Coefficients nts Correlations Statistics
Std. Zero- Toleran
Model B Error Beta T Sig. order Partial Part ce VIF
1 (Constant) -0.088 0.153 -0.576 0.565
Vertical 0.387 0.036 0.391 10.735 0.000 0.464 0.593 0.388 0.982 1.018
integration of
HR Practices
HRM 0.321 0.031 0.382 10.290 0.000 0.296 0.577 0.372 0.948 1.055
practices
consistency
and
congruence
High quality 0.329 0.018 0.684 18.558 0.000 0.628 0.787 0.670 0.960 1.042
staff and
internal
practices
a. Dependent Variable: Organizational Performance
Source: Survey data from questionnaire, 2022

Table 4-7 Results of Multicollinearity Test

According to Table 4.7, the VIF for vertical integration of HR practices with the organization
strategy is 1.018, HRM practices consistency and congruence is 1.055, and high-quality staff and
internal processes are 1.042. It demonstrates that the variables have a VIF less than 10 and a
tolerance value greater than 0.1, excluding the possibility of multicollinearity.

4.4.1.2 Normality Test

Figure 7 shows the frequency distribution of the standardized residuals compared to a normal
distribution. As you can see, although there are some residuals (e.g., those occurring around 0)
that are relatively far away from the curve, most of the residuals are fairly close. Moreover, the
33
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

histograms are bell shaped which lead to infer that the residual (disturbance or errors) are
normally distributed for all models. Thus, no violations of the assumption normally distributed
error term.

Figure 7: Normality Test (Histogram)

Source: Survey data from questionnaire, 2022

4.4.2 Overall regression model and its ANOVA

4.4.2.1 RegressionModel Summary

The regression summery are summarized as follows:

Std. Error of
Model R R Square Adjusted R Square the Estimate Durbin-Watson
a
1 .851 0.724 0.720 0.264 2.050
a. Predictors: (Constant), High quality staff and internal practices, Vertical integration of HR Practices ,
HRM practices consistency and congruence
b. Dependent Variable: Organizational Performance

Table 4-8 Regression Model Summary

Source: Survey data from questionnaire, 2022

34
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

R-squared is a measure of the goodness of fit of explanatory variables in explaining differences

in organizational performance in Commercial Bank of Ethiopia. As shown in Table 4.8, the R-
square value for the regression model was 0.724, indicating that the explanatory factors in this
study explain approximately 72.4 percent of the variation in the degree of organizational
performance at Commercial Bank of Ethiopia. Other variables not included in the model explain
the remaining 27.6 percent of the variation in the degree of organizational performance at
Commercial Bank of Ethiopia. As a result, vertical integration of HR practices, consistency and
congruence of HRM practices, and high quality staff and internal procedures are good
explanatory variables of organizational performance in Commercial Bank of Ethiopia.

4.4.2.2 Regression ANOVA

The regression ANOVA table are summarized as follows:

Sum of
Model Squares Df Mean Square F Sig.
b
1 Regression 38.804 3 12.935 185.010 .000

Residual 14.821 212 0.070

Total 53.625 215

a. Dependent Variable: Organizational Performance

b. Predictors: (Constant), High quality staff and internal practices, Vertical integration of HR Practices , HRM
practices consistency and congruence

Table 4-9 Regression ANOVA

Source: Survey data from questionnaire, 2022

From the ANOVA test in table 4.9 it shows the Sig. value 0.01 is greater than the calculated Sig.
value 0.000. It reflects there was a statistically significant correlation between dependent variable
and independent variables at 1% significant level. But it does not mean that all these factors have
equally significant correlation with organizational performance. Beside the F statistics (185.010)
which is used to measure the overall test of significance of the model was presented, and null
hypothesis can be clearly rejected since the p-value is 0.000 which is sufficiently low the model
is well fitted at 1 percent level of significance

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

CHAPTER FIVE
5 CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
This chapter included a discussion of major data results, a discussion of the findings, a
conclusion taken from the highlighted findings, and recommendations. The conclusions and
recommendations focused on the study's aim, which was to determine the effect of strategic
human resource management on organizational performance in the Commercial Bank of
Ethiopia Bole District Case.

5.2 Conclusions
The study evaluates the relationship or function of the modern HR approach Strategic HRM on
the organizational performance of the Commercial Bank of Ethiopia bole District. In other
research, the word organizational effectiveness is employed to assess performance.
Organizational effectiveness has no commonly accepted definition or description. The term
effectiveness as a performance measure was employed in a variety of contexts, including
productivity, efficiency, profit, quality, growth, conflict/cohesion, information management and
communication, the value of human resources, and so on ( Hal , 2009).

Organizational performance is defined for the purposes of this study by developing a new model:
the Balanced Score Card model of organizational performance. This is further stated as an
organization's performance is determined by how well the four BSC dimensions (customer
satisfaction, financial growth, learning and development, and internal process) are met.

According to the findings of this study, the organization practices strategic HRM moderately.
And that organizational performance is represented by the four Balanced Score Card dimensions:
Customer satisfaction (the level and attempt to satisfy customers), Financial growth (sales &
profitability), Learning and development (intellectual capital, equipment's, technologies),
Internal process (organizational structure, scope, definition, and integration internal work
process, the attempt to support and automate those business processes through organization
Resource Planning) is reasonably enhanced by tested strategic HRM practices.

Furthermore, an effective HR strategy is distinguished by external fit (the alignment of HR

strategy with organizational strategy), internal fit (the integration of various HR programs in
36
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

other functional areas such as marketing, as well as a fit among all HR programs or functions),
and a focus on results (Belcourt &McBey, 2009). According to the findings, the distinct Strategic
HRM practices are also highly connected with one another. Indicating that there is some
attempt/promising commencement to combine those practices with one another and with other
business strategies.

To this end, the study has produced evidence for the value added by strategic HRM by
integrating HR functions into the organization's main strategy and activities. Simultaneously,
questions must be raised concerning the outcomes of moderate degrees of involvement in
Strategic HRM practices vs. high levels described elsewhere. Is it possible to dismiss this as an
issue with a different notion, data specification, methods, or even interpretation? Is it possible to
ascribe this result to reasons other than strategic HRM practices? These are issues that can be
addressed in many contexts.

5.3 Recommendations
After presenting the data, analyzing it, and answering the research questions, the researcher
makes the following recommendations:

1. Despite efforts to integrate HR practices with business strategies, an effort must be made to
potentially exploit the maximum advantage out of the modern HR concept (i.e. Strategic HRM)
through strategic alignment/ integration, because it enables the company to achieve its strategic
goals through the strategically available resources.

2. The following actions must be taken in the process of strategic HR integration with business
and corporate strategies: linking HR to strategy, participating in the strategic planning process
and applying the Strategic HR planning model.

3. The strategic linkage process must use one of the following approaches: start with
business/organizational strategy and then create HR strategy, start with HR Competencies and
then craft corporate strategies based on these competencies, or do a combination of both in the
form of a shared relationship.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

4. HR shall play the following roles in the company's strategic planning process:

 Assess/React linkage: to guarantee that HR managers have the opportunity to review

strategic plans before they are implemented. They can then accept or reject them.
 Integrative linkage: to ensure that interaction between department employees and the HR
director is regular, and that the HR director is involved in strategic decisions even when
the HR consequences are not immediately apparent.

5. Connections must be established at an early stage. HR directors, officers, and managers should
be provided with information on employee skills, be included on the strategic planning
committee, and the implications of strategic drives should be documented.

6. In order for the organization to potentially introduce the concept of Strategic approach to
HRM; one the Strategic HR Planning Model has to be applied, and two at least the former name
for the following sections must be modified to;

I. Strategic HR Development: Trainings and development must be analyzed and prioritized

based on business requirements, created as a program, delivered, and evaluated in order
to support current competency requirements and accumulate future intellectual capital.

II. Strategic Performance Management: performance management systems must be designed

to make sure:

 Those business‘s (division, department and section) goals and strategies are consistent
with those at corporate level.

 Performance Management System includes results, behaviors and developmental plans

consistent with the unit and organizational level priorities.

 To make sure that there is a continuous performance review feedback and follow up.

III. Strategic Reward & Compensation- to ensure that compensation packages are transparent
and consistent; to offer a clear link between pay and performance; to encourage and
recognize excellent performance; and to be clearly connected with Commercial Bank of
Ethiopia's values and business strategy.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

7. Line managers' engagement in the implementation of HR procedures should be increased. As

a result, line managers must be trained in HR techniques in order to regularly manage the
performance of their subordinates, mentor, coach, counsel, and motivate their successors.

It will assist managers in involving their employees in the process of planning, implementation,
assessment, and decision making.

5.4 Limitations and Future Study

To make the paper fruit full and valuable, every effort has been done. However, it has not been
without its difficulties. Because the discipline is still in its infancy, there is little research and
literature that explores in depth the link between the independent and dependent variables (i.e.
Strategic HRM and organizational performance respectively). Furthermore, contextualizing it
was difficult due to the lack of similar research with the same title in the country.

5.5 Suggestion for Future Research

However, as a constraint of this study, organizational effectiveness as a measure of
organizational performance uses the Balanced Scorecard dimensions as a summed indicator,
which causes the estimation result to be less than optimal. Thus, additional research is suggested
to involve the effect of Strategic HRM contribution for the separate organizational performance
indicators used for this study (i.e. SHRM with/for financial growth, customer satisfaction,
learning & development, and internal processes) in order to maximize the estimation result in
consisting of additional SHRM practices.

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Appendix I: Questionnaire

Addis Ababa University School of Commerce Graduate Studies Program Masters

in Human Resource Management
Questionnaire for Employees of Commercial Bank of Ethiopia, Bole District

This questionnaire is designed to obtain information for purely academic research

purposes (The Effect of Strategic Human Resource Management Practices on
Organizational Performance) from directors, managers, officers in charge of human
resources and other department’s staff members of Commercial Bank of Ethiopia, Bole
District. The accuracy of the responses you provide will be crucial to the success of the
research project. Kindly respond to all the questions. Thank you for your genuine
response & cooperation.

Note: For any clarification or question: Yared Solomon

Mob. Tele No. 0913-900188 Email Address:yaredinasol@gmail.com

PART A: DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS

Tick (√) where appropriate
1. Gender
Male [ ] Female [ ]

2. What is your highest level of education

High school certificate [ ] Diploma [ ] Bachelor’s degree [ ]
Master’s degree [ ] Doctorate [ ]
Others specify___________________________________
3. Year of service in your current organization.
1-3 years [ ] 4-5years [ ] More than 5 years [ ] small class size
4. Age of respondents
Less than 35 years [ ] 35- 40 years [ ] 41- 45 years [ ]
More than 45 years [ ]

5. Indicate your management level.

[ ] Top level Manager [ ] Middle level Manager [ ] Expert/Officer

PART B: VERTICAL INTEGRATION OF HR PRACTICES WITH THE

COMMERCIAL BANK OF ETHIOPIA BUSINESS STRATEGY

Please indicate to what extent the following statements are true as relates to integration of
HR practices with business strategy of Commercial Bank of Ethiopia in Ethiopia. Please
tick (√) the box with a number from the scale below that best describes your response.

44
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Where 5 = to a very great extent 4 = to a great extent 3 = Not sure 2 = to a little extent 1 =
Not at all

To what extent are the following statements accurate or inaccurate on vertical integration HR
with the bank business strategy? Please tick (√) the box with a number from the scale below that
best describes your response. Where 5 = very accurate 4 = accurate 3 = somewhat accurate 2 =
inaccurate 1 = very inaccurate
# Statement 1 2 3 4 5
6. Commercial Bank Of Ethiopia’s HRM strategy is aligned
with the vision, mission and objective of the organization

7. Commercial Bank Of Ethiopia’s recruitment and selection

policy is aligned with the vision, mission and objective of
the organization.

8. Commercial Bank Of Ethiopia’s human resource

development policy is aligned with the vision, mission and
objective of the organization.

9. Commercial Bank Of Ethiopia’s performance

management system policy is aligned with the vision,
mission and objective of the organization

Commercial Bank Of Ethiopia’s compensation

10. management policy is aligned with the vision, mission and
objective of the organization.

11. Commercial Bank Of Ethiopia’s recruitment and selection

practices are aligned with the vision, mission and
objective of the organization

12. Commercial Bank Of Ethiopia’s human resource

development investments are made in line with
(compatibly) the company vision, mission and objective

13. Commercial Bank Of Ethiopia’s performance

management practices are aligned with the vision, mission
and objective of the organization

14. Commercial Bank Of Ethiopia’s compensation

management practices are aligned with the vision, mission
and objective of the organization

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The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

PART C: HUMAN RESOURCE MANAGEMENT (HRM) PRACTICES

CONSISTENCY AND CONGRUENCE (HORIZONTAL FIT)
To what extent do you agree with the following statements pertaining internal
consistency of
HRM practices in your organization. Please tick (√) the box with a number from the scale below
that best describes your response. Where 5 = strongly agree 4 = agree 3 = somewhat agree 2 =
disagree 1 = strongly disagree
# Statement 1 2 3 4 5
15. HRM policies are interconnected with a company values
16. HR practices are interdependent and integrated with each
other
17. HR practices focuses on the entire human resource
management system

18. HRM practices are compatible (are aligned) with

operational goals of the organization

19. HRM practices are compatible (are aligned) with the

organization structure

20. HRM practices work together to achieve organizational

objectives

21. HRM practices are business driven

22. HRM practices are coherent with other departments.

PART D: HIGH QUALITY STAFF AND INTERNAL PRACTICES

To what extent do you agree with the organization capability in acquiring and securing
high?
Quality staff and internal practices in your organization: Please tick (√) the box with a number
from the scale below that best describes your response. Where 5 = strongly agree 4 = agree 3 =
somewhat agree 2 = disagree 1 = strongly disagree
# Statement 1 2 3 4 5
23. Commercial Bank Of Ethiopia has the capacity to have
an able, qualified and skillful workforce to produce high-
quality service and products.
24. Commercial Bank Of Ethiopia has internal practices
related to developing and maintaining a qualified

46
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

workforce

PART E: QUESTIONS RELATING TO THE ASSESSMENT OF THE

COMMERCIAL BANK OF ETHIOPIAS’S IN ETHIOPIA OVERALL
PERFORMANCE.
Please tick (√) the box with a number from the scale below that best describes your
response. Where 5 = strongly agree 4 = agree 3 = somewhat agree 2 = disagree 1 = strongly
disagree.

# Dimensions 1 2 3 4 5
Customer perspective

25. I have observed that Commercial Bank Of Ethiopia

customers are satisfied with Commercial Bank Of
Ethiopia services delivery in the past 3 and half years.

26. I have observed that the Commercial Bank Of Ethiopia

customers increased in the past 3 and half years.

27. The bank’s HR result in an increase in revenues

28. The bank’s HR result in a decrease in costs

Finance Perspective 1 2 3 4 5

29. I have observed that the Commercial Bank Of Ethiopia’s

revenue increased in the past 3 and half years.

30. I have observed that the Commercial Bank Of Ethiopia’s

revenue leakage decreased in the past 3 and half years.

31. I have observed that the Commercial Bank Of Ethiopia’s

resource utilization improved in the past 3 and half
years.

Internal process perspective 1 2 3 4 5

32. I have observed that the Commercial Bank Of Ethiopia’s

service accessibility improved in the past 3 and half
years.

47
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

33. I have observed that the Commercial Bank Of Ethiopia’s

communication and branding activities are improved in
the past 3 and half years.

34. I have observed that the Commercial Bank Of Ethiopia’s

product and services portfolio increased in the past 3
and half years

35. I have observed that the Commercial Bank Of Ethiopia’s

service quality increased in the past 3 and half years

36. I have observed that the Commercial Bank Of Ethiopia’s

fraud prevention performance has been enhanced in the
past 3 and half years

37. I have observed that the Commercial Bank Of Ethiopia’s

infrastructure and information systems security has been
enhanced in the past 3 and half years

Learning and Development

38. I have observed that the Commercial Bank Of Ethiopia’s
corporate culture has been improved in the past 3 and
half years

39. I have observed that the Commercial Bank Of Ethiopia’s

employee satisfaction has been improved in the past 3
and half years

40. I have observed that the Commercial Bank Of Ethiopia’s

performance in deployment and utilization latest
technologies has been improved in the past 3 and half
years

41. I have observed that the Commercial Bank Of Ethiopia’s

organizational process and structures has been improved
in the past 3 and half years

42. I have observed that the Commercial Bank Of Ethiopia’s

performance in building the staffs capacity has been
improved in the past 3 and half years

43. I have observed that the Commercial Bank Of Ethiopia’s

performance in building the management capacity has
been improved in the past 3 and half years

48
The Effect of Strategic Human Resource Management Practices on Organizational Performance: A case study of Commercial Bank Of Ethiopia

Thank You for your cooperation!

49