EXAMINING STRATEGIC HUMAN RESOURCE

MANAGEMENT PRACTICES TOWARDS ORGANIZATIONAL

EFFECTIVENESS IN IN THE CASE OF ETHIO TELECOM NORTH
WEST REGION

By
Dessalegn Alamirew
Advisor
Abrham Seyum(PhD)

A Proposal Submitted To Yom Postgraduate College in Partial

Fulfillment of the Requirements for the Master of Business
Administration (MBA) Degree
 Mar, 2023
Bahir Dar, Ethiopia
Table of Contents
CHAPTER ONE ........................................................................................................ 1
INTRODUCTION AND BACKGROUND INFORMATION ............................... 1
1.1 Introduction ............................................................................................... 1
1.2 Background Information ........................................................................... 3
1.3 Statement of the Problem .......................................................................... 7
1.4 Objectives of the Study ............................................................................. 8
1.4.1 Main Objective .......................................................................................... 8
1.4.2 Specific Objectives of the Study ............................................................... 9
1.6 Significance of the Study .......................................................................... 9
1.7 Definitions of key Terms......................................................................... 10
1.7.1 Human Resource Management (HRM)................................................... 10
1.7.2 SHRM practices ...................................................................................... 10
1.7.3 Strategic HRM......................................................................................... 10
1.7.4 Organizational effectiveness ................................................................... 10
1.8 The Organization of thesis ...................................................................... 11
CHAPTER TWO ..................................................................................................... 12
LITERATURE REVIEW AND THEORETICAL ANALYSIS .......................... 12
2.1 Introduction ............................................................................................. 12 2.2 The
aim of strategic human resource management ................................. 12
2.3 Theoretical Conception of strategic human resource management ........ 13
2.4 Theoretical models of SHRM ................................................................. 14
2.4.1 Contingency theory or behavioural Model.............................................. 14
2.4.2 Universalistic theory ............................................................................... 16 2.4.3
Configurationally theory ......................................................................... 17 2.4.4
Resource-based model and SHRM ......................................................... 18 2.5
Strategic HRM Practices and organizational effectiveness..................... 19 2.5.1
Integration of HRM with Corporate Strategies and Management .......... 19
2.5.2 Flexibility and adaptation ........................................................................ 20
2.5.3 Recruitment and Retention ...................................................................... 20
2.5.4 Decentralization for empowerment ......................................................... 21
2.5.5 Selection System ..................................................................................... 21
2.5.6 Training and Development System ......................................................... 21 2.5.7
Performance Appraisal System ............................................................... 22 2.5.8
Compensation System ............................................................................. 22
2.5.9 Effective communication ........................................................................ 22
2.6 Strategic Human Resource Management and Firm Performance ........... 23
 2.7 Empirical literature reviews .................................................................... 24
2.8 Conclusion ............................................................................................... 25
2.9 Conceptual Framework ........................................................................... 26
CHAPTER THREE ................................................................................................. 28
RESEARCH METHODOLOGY ........................................................................... 28
3.1 Introduction ............................................................................................ 28
3.2 Research design ....................................................................................... 28
3.3 Study area ................................................................................................ 28
3.4 Study population ..................................................................................... 29
3.5 Sample and Sampling procedures ........................................................... 29
3.6 Sample and sampling techniques ............................................................ 30
3.6.1 Purposive sampling technique ................................................................. 30
3.6.2 Random probability sampling technique................................................. 30
3.7 Data collection methods .......................................................................... 31
3.7.1 Primary data ............................................................................................ 31
3.7.1.1 Questionnaires. ........................................................................................ 31
3.7.1.2 Interviews ................................................................................................ 31
3.7.1.3 Observation ............................................................................................. 32
3.7.2 Documentary review (Secondary data). .................................................. 32
3.8 Measurement of variables ....................................................................... 32
3.9 Data Analysis .......................................................................................... 33
 CHAPTER ONE

INTRODUCTION AND BACKGROUND INFORMATION

1.1 Introduction
A complex array of resources must be used by an organization in order for it to develop,
endure, and accomplish the overarching goals that motivated its conception or existence.
The organization has leverage toward the intended outcome thanks to the mobilization
and deployment of these resources—human, financial, and material—in the proper
resource-mix. The most powerful and essential of them is the human resource, which
makes a considerable contribution to the profitability and competitiveness of businesses.
As a result, the staff within the company gives it a persistent competitive edge.
Everything that offers a company an advantage over rivals in its market is referred to as a
competitive advantage. According to Porter (1985), the distinctive skills of employees,
including as flexibility, innovation, exceptional performance, high productivity, and
personalized customer service, are ways employees supply a crucial ingredient in creating
a firm's competitive position. An increasing number of people agree that an organization's
success depends on its ability to manage its human resources effectively (Akhtar, Ding &
Ge, 2008).

The importance of human resources in achieving goals and objectives is something that
governments that want to be effective are coming to understand more and more.
Facilities, goods and services, or technological advancements are examples of tangible
assets that can be copied or replicated by another company. Because human resources
cannot be replaced, they give a business a competitive advantage.

The focus of strategic HRM is on a number of issues, such as the alignment of human
resource management practices with organizational strategic goals, the inclusion of
human resource management in organizational strategic management, the participation of
human resource function in senior management teams, the delegation of human resource
practices to line managers, and adopting a strategic approach to employee selection,
compensation, performance appraisal, and the value that is added to the organization. It
can also be described as the pattern of organized activities and human resource
deployments intended to help an organization reach its objectives (Wright and McMahan,
1999). In contrast to conventional HRM, the latter definition emphasizes the two key
aspects that set SHRM apart. It emphasizes how HR practices are connected to and
supportive of one another, linking them both vertically and horizontally with the firm's
strategic management process.
By focusing on the connections between an organization's HR practices and goals and
internal and external elements that influence and shape HR choices, SHRM goes beyond
traditional approaches to human resource management (Martin-Alcazar, Romero-
Fernandez, & Sanchez-Gardey, 2005).
Contrarily, Cascio and Aguinis (2005) noted that Strategic Human Resources
Management (SHRM) is a useful step toward more thorough personnel planning and
development to meet organizational goals and determine outcomes. Hence, SHRM entails
the synchronizing and integrating the organization’s strategic business needs and plans
with all those aspects stemming from and relating to managing its personnel (Härtel,
Fujimoto, Strybosch & Fitzpatrick 2007).

In order to establish the relationship between strategic human resource management and
organizational effectiveness, Robbins (2009) argue that effectiveness is the degree or
extent to which an organization achieves its goals. Organizational effectiveness, in
Robbins' opinion, is the main focus of organization theory and would make the theory
more challenging to comprehend.

1.2 Background Information

In the 1990s, a proactive, integrated, and value-driven approach to human resource
management came to be known as strategic human resource management (SHRM)
(Schuller, 1992). The term "strategic human resource management" refers to a managerial
approach that guarantees that human resources are used in a way that advances the
mission and goals of the business.

The traditional role of the personnel manager, which precedes human resource
management, is to oversee the organization's human resources (HRM). Others believe
that HRM is a logical progression of personnel management techniques in light of the
evolving business and economic climate (Armstrong, 2004). With the recent introduction
of strategic human resource management (SHRM) in organization and management
literature, the field of people-management is undergoing ongoing metamorphosis.
Lengnick-Hall, Andrade, and Drake (2009) give an evolutionary and chronological
viewpoint on the development of SHRM in a recent review spanning 30 years.
There will be a range of responses among industrial organizations as a result of the
mounting pressures brought on by the quick changes in the economic environment. The
dynamism of the competitive environment to which firms must adapt has grown due to a
number of causes, including the globalization of markets and production, the pace of
technical advancement, and changes in consumer demand. For instance, in order for
Malaysian businesses to thrive in the new millennium global economy, they must make
the most of all available resources in order to get a competitive edge. The human
resources of the company are one resource that has recently been acknowledged as
offering a source of competitive advantage, and it is generally acknowledged that people
in organizations are an essential source of competitive advantage for enterprises (Pfeffer,
1994).

Boswell (2006) discovered a substantial association between employees who

comprehended company goals, objectives, and strategy—and knew how to contribute to
them—and firms that adopted SHRM principles. SHRM offers incentives based on an
organization's performance. It advances knowledge of the connection between how
businesses manage their people resources and the success of their business goals. In a
chaotic setting, it also provides a feeling of direction and influences how people are
treated, as well as their security and the type of work they do. Moreover, SHRM had an
impact on even the closest bonds amongst people, and like the previous research
mentioned, workers had higher levels of individual senses of belonging, attitude, job
stress, and retention within the company.

One of the duties of human resources management is performance management. It makes

an effort to connect employee or staff member performance. Organizations, managers,
and employees must follow performance goals and output objectives that specify
particular duties in order to achieve this.
Moreover, hiring is a crucial step in developing a skilled ICT workforce, so it is
important to make sure that this function of human resources management is aggressively
pursued. As a result, the government of Ethiopia's recruitment regulations explicitly state
that ICT literacy is a need for employment in the public sector. Similarly, most of private
sector firms and Civil Society Organizations (CSOs) require ICT competence to their
staff as a must qualification.

Moreover, Ethio Telecom Northwest region is taking a number of initiatives to ensure

that training and development which is also an important facet of Human Resources
Management, plays its vital role in building ICT capacity to its employees and society at
large. Since the beginning of the Public Sector Reform Program, Ethiopia's IT capacity
building strategy has taken a holistic approach. Individual skill development, enhancing
the train-the-trainer component, and placing more focus on the institutional growth of
national training partners are all part of the capacity building programs. Two stages of
capacity enhancement will be addressed in the Ethio Telecom Northwest region. Initially,
let's put the emphasis on individual capacities, which are understood to signify
knowledge and skills that are often learned through non-technical (ICT skills) and
technical training workshops. It is believed that acquiring these abilities is a necessary but
insufficient pre-requisite for creating locally sustainable capacities. The second is a focus
on enhancing organizational capabilities, which is believed to include internal
organizational structures, protocols, the staff's collective skills, and external institutional
background elements like the policy framework. The Ethio Telecom Northwest area
employs a variety of capacity-building techniques to guarantee that its human resources
have the necessary skills for leveraging ICT in public service. To accomplish these goals,
these trainings include seminars, conferences, workshops with a focus on "soft" skills like
project management, train-the-trainer programs, and consultancies (Yambesi, 2012).
1.3 Statement of the Problem
In recent years, there will be a lot of research effort devoted to the performance of
organizations. The degree to which an organization successfully carries out its policies,
programs, and strategic intent in light of its goal and vision is of the utmost importance.
Managers in both private and public organizations are becoming more and more aware
that having a suitable system for attracting and managing the organization's human
resources is a critical source of competitive advantage that frequently does not come from
having local products and services, the best public relations strategy, or cutting-edge
technology (Ayanda and Sani, 2010).

Although there will be a lot of research on strategic HRM since the late 1990s, there is
little conclusive evidence regarding how different human resource management strategies
and practices are developed in actual practice in public organizations or how their
synergistic effects may affect organizational effectiveness. The majority of strategic
HRM studies (mainly US-based) concentrated on how strategic HRM techniques affected
large business companies' organizational performance (Ayanda and Sani, 2010).

Thus, there is a dearth of research on the connection between strategic HRM practices
and efficient organizations. So, there is a need for study in this field, and our research
endeavor is intended to address the fundamental issue of filling this gap.

According to recent studies (e.g. Katou and Budhwar, 2007; Dimba and K'bonyo, 2009),
strategic human resource management strategies are crucial for improving corporate
performance in private sector firms. However, little is known about how these methods
affect public sector organizations. Findings showed that the most crucial strategic HRM
practices that had the greatest impact on organizational effectiveness in the public sector
will be line management development, training and development, remuneration, career
planning systems, and employee participation. By analyzing the impact of strategic HRM
practices on the performance of one of Ethiopia's public sector telecom service providers,
Ethio telecom, and this research aimed to fill this gap.

The Ethiopian government has opted to concentrate its efforts on the enhancement of
communications services as a continuation of the previous five-year plan and after
concentrating its efforts on agriculture, health care, and education. This desire to assist
the steady development of our nation gave birth to Ethio Telecom, 2010. The business
wants to use cutting-edge procedures, build a solid network infrastructure, and offer its
clients the highest caliber services possible. This is the organization's mission, and it
directs all ethio telecom operations.

The Ethiopian government has a deal with one of the top telecommunications
corporations in the world, France Telecom, to ensure that ethio telecom runs concurrently
with leading telecom carriers. The contract will be made with the understanding that the
transfer of famous knowledge and abilities would assist Ethio Telecom in enhancing its
management competence.

The Ethiopian government has made the decision to upgrade its telecommunications
network and services to international standards because it sees them as a vital tool for the
country's growth. As a result, ethio telecom will be established with the goal of bringing
about a paradigm shift in the expansion of the telecom sector to aid in the steady
development of our nation.

The company has developed with ambitious Vision, Mission, Strategy, Goals and
Objectives in order to reach on and achieve the above, both the sector's (telecom) growth
and the country's development.
The company will be organized into 12 divisions in light of the breadth and depth of its
operations: Residential Marketing, Enterprise Marketing, Marketing Communication,
Customer Service, Network, Information System, Finance, Sourcing & Facilities, Process
& Quality, and Internal Audit, Legal, and Human Resource divisions. These divisions'
business plans will be all created in accordance with the company strategies. The HR
division will be divided into four sections, each with the following responsibilities:
managing human resources, developing an HR strategy based on company strategy,
supplying the company with the appropriate personnel at the appropriate locations, and
conducting internal communication.

Yet, it is not clear to what extent the business and corporate strategy of the corporation
and the HR division are in alignment. The used methodologies, procedures, and processes
are insufficient. As a result, the goal of the research is to address this issue by addressing
the following research topics.

1.4 Research Questions

The study will be designed to provide answers to the following research questions:

 What extent does the Company practice strategic HRM?

 Does the effectiveness of the organization have any association with strategic
HRM practices?

 Does the Organization‘s strategic approach to HRM experience better

performance outcomes?

 Does the organization's strategic approach to human resources management result

in improved performance?

1,5 Objectives of the Study

1.5.1 General Objective
The main objective of the study is to examine strategic HRM practices on Organizational
effectiveness in Ethio telecom.

1.5.2 Specific Objectives of the Study

 show the extent to which strategic human resource management is practiced by
the organization;
 examine the degree of relationship among the individual strategic human resource
management practices;
 show the relationship between individual strategic human resource management
practices and organizational effectiveness;

1.6. Research Hypothesis

In order to provide answers to the basic questions raised above, the following hypotheses
will be tested:

H1: Strategic HRM is practiced by the organization (Ethio telecom).

H2: There are significant and positive interrelationships between the individual strategic
HRM sub-systems.

H3: There is significant and positive relationship between strategic HRM practices and
Organizational Effectiveness.

H4: Strategic HRM practices have significant and positive effect on organizational
effectiveness (OE)
1.7 Significance of the Study
The research will be conducted in such a way that it has certain significances for practices
as well as literature:

 The study's results will assist the organization in identifying potential problem
areas related to its human resource practices, particularly those that could directly
or indirectly affect the effectiveness of the organization, such as training and
development policies, performance management systems, career paths,
compensation & reward policies, and selection procedures.

 The suggestions made based on the results of the research findings will assist the
firm in maintaining, enhancing, or completely altering the current HR strategic
approach. Also, the study adds value for the researcher by expanding his or her
understanding of the subject and giving them the chance to work on the
organization's strategy formulation, analysis, and execution as well as to carry out
research with comparable titles in other public sectors.

 The study will be used by other governmental or nongovernmental organizations

as a tool to adapt the suggested models to organizational contexts and solve HR-
related strategic concerns.

 The study will serve as a resource for other academics investigating relevant or
parallel problems.

1.8 Delimitation/Scope of the Study

The study's focus is on the organization's management, including the chief officers,
officers, and managers who made the idea of missions, vision statements, and strategies
commonplace inside the company. Just the management groups that operate in the core
areas of strategy are taken into account, despite the study's overall goal of examining the
impact of strategic HRM practices on the efficacy of Ethiopian telecom. The argument is
that the chief executives, officers, and managers are what should be powering the
organization's operations and the efficacy of its policies and programs.

In order to include every management group in the company, the study's geographic
scope is limited to the entire company. The instruments of questionnaires and interviews
will be employed to gather the necessary data for analysis. By defining a model,
descriptive and inferential analysis of the data will be performed using analysis tool
(SPSS V. 26).

1.9 Definitions of key Terms

Placement System, a component of strategic HRM will be employed in this study, is
operationally described as the process of hiring, choosing, and assigning individuals to
jobs that are associated with their KSAs.

Theoretically, there is no consensus on what constitutes organizational effectiveness as a

benchmark for measuring organizational performance. Depending on the situation, an
organization's size, and its industry, this concept may have different definitions. The
capacity or degree to which an organization is attaining the four Balanced Score Card
characteristics, such as financial growth, learning and development, internal process, and
customer satisfaction, is therefore operationally defined as organizational effectiveness
for the purposes of this study.

1.10 Organization of the study

This research thesis will have five chapters. The details of each chapter are as follows:
Chapter1- focuses on the rationale for the study. It explains why there is a need for a
study of this nature, its context, the setting, its significance, and its scope. Chapter 2-
presents reviewed relevant literature pertaining to the study thus provides the theoretical
background to the problem identified in chapter 1. Chapter 3- describes and explains the
research design employed during the study. It outlines procedures of data collection, and
introduces the analysis techniques. Chapter 4- provides detailed presentation of results
pertaining to the objectives set for the study based on the overall relevant data gathered
and subsequent analysis made on them. Chapter5- summarizes the major findings,
contributions, implications made from the study and its limitations.

CHAPTER TWO

LITERATURE REVIEW AND THEORETICAL ANALYSIS

2.1 Introduction
The Strategic Human Resource Management section of the review of related literature is
divided into four sections: theoretical literature, organizational effectiveness, empirical
investigations, and conceptual framework of the study.

he definitions of terminology connected to strategy, Strategic HRM's aspects,

methodologies, nature, and activities are all included in the first section of theoretical
literature. The second section of the article, titled "Empirical Literature," examines
several empirical research on strategic human resource management as well as the SHRM
practices of a few chosen nations. The definition, models, and methods for ensuring
organizational effectiveness are covered in the third section.

The study's conceptual structure is illustrated in the last section, which also shows how
the independent variables—SHRM practices—could affect the dependent variable,
organizational effectiveness, which is elaborated with its indicators. In the case of this
study, the following SHRM practices are identified as an independent variables;
Integration of HRM with Corporate Strategies, Delegation of HR Practices to Managers,
Placement System, Training and Development System, Strategic Performance
Management System, Strategic Compensation System, Career Planning System,
Employee Participation
2.1 Theoretical Literature
2.1.1 Definitions of terms Related to SHRM
The definition of terms connected to the issue is important in assisting readers in
comprehending the notions of these terms; they are interrelated components, and
relationships to one another, consequences to conditions, and their impact on one
another, as well as other associated variables. Below are definitions for the following
crucial terms: Strategy, Strategic Planning, Strategic Management, Strategic HRM, and
HRM Planning.

Strategy: Organizational aims, goals, and objectives, together with action plans for
accomplishing them, must expressly take into account competition and the influence of
external environmental variables. It outlines the strategy the company will use to
accomplish its objectives. The organization's strategy consists of the actions it will take,
the methods it will employ, and its general operating and competitive strategies
(Belcourt and McBey, 2009).

Strategic Planning: Strategic planning is the process of systematically identifying an

organization's goals and objectives and using that information to create plans to attain
those goals. A strategic plan is a tool that offers direction for carrying out a task as
effectively and dramatically as possible. To be effective and useful, it must state clear
objectives and specify the resources and steps required to reach those objectives. Most
strategic plans should, on average, be reevaluated and updated every three to five years.

Strategic plans are thorough papers that include all facets of an organization's work,
including facilities, governance, administration, and operations, as well as programs,
services, and management. A plan may also include strategies to improve marketing,
internal and external communications, membership development, and administrative
processes, depending on the organization's focus and breadth (Mittenthal, 2002).

Strategic Management: The analysis, choices, and actions a business takes to establish
and maintain competitive advantages are together referred to as strategic management.
Two key components that are at the core of the discipline of strategic management are
covered by this definition. First, analysis, decisions, and actions are three continuing
activities that make up strategic management of a business.

Second, figuring out why certain businesses perform better than others is at the heart of
strategic management. In order to acquire advantages that are sustained over a long
period of time, managers must decide how a firm will compete. To do that, we must
concentrate on two essential issues: How should we compete to gain a competitive edge
in the market? Gregory G. Dess and others, 2005)

HR Planning: In order to provide methods to enable an organization respond pro-

actively to changing conditions throughout time, human resources planning focuses on
examining an organization's HR needs as those conditions change. HRP assists in
ensuring that the appropriate number and mix of individuals are on hand at the
appropriate times and locations to carry out organizational plans (Rothwell and Kazanas,
2003).

HR Management: The term "human resource management" refers to a planned and

comprehensive approach to managing an organization's most valuable resource: the
employees who, both individually and collectively, help the organization achieve its
goals.

Strategic HRM: A method for creating and putting into practice HR strategies that are
integrated with business plans and help the firm accomplish its objectives is known as
strategic human resource management (SHRM). Strategic HRM is conceptual at its
core; it is a broad understanding of how HR and business strategies can be integrated or
"fit," the advantages of taking a longer-term view of where HR should be going and how
to get there, and the development and implementation of coherent and mutually
supportive HR strategies (Armstrong, 2008).
Strategic HRM is largely about integration and adoption. Its concern is ensuring that: (1)
human resources (HR) management is fully integrated with the strategy and the strategic
needs of the firm; (2) HR policies cohere both across policy areas and across
hierarchies; and (3) HR practices are adjusted, accepted, and used by line managers and
employees as part of their everyday work. It is the process by which organizations seek
to integrate the human, social, and intellectual capital of their members with the strategic
needs of the firm (Greer 2001).
HR Strategy: The organization's human resource management policies and practices, as
well as how they should be integrated with the business plan and with one another, are
outlined in the HR strategies. They are referred to be "internally consistent bundles of
human resource practices" by Dyer and Reeves (1995) in Armstrong (2008), and
according to Peter Boxall (1996) they offer "a framework of critical aims and means."

2.1.2 Strategic Human Resource Management

The process of integrating human resource functions with organizational strategic goals
in order to boost performance is known as strategic human resource management. It has
also been described as "a collection of unique but connected practices, policies, and
ideologies with the aim of facilitating the achievement of the organization's strategy."
An organization has a better probability of successfully implementing strategic policies
if HR is included in those conversations. The corporate strategy that leads to the HR
strategy, the HR competences that lead to the business strategy, and the linkage between
the HR strategy and the corporate strategy are some of the different ways to link HRM
strategies (Belcourt and McBey 2009).
The planned method of utilizing human resources and activities is meant to help the
business achieve its goals and objectives (Noe et al. 2007). To put it another way, the
definition of SHRM provided by the authors demonstrates that it is the level of
involvement and partnership that HRM departments engage in during core decision-
making processes, as well as the level of formality and specificity that HRM departments
demand during planning and implementation. All of this is done to ensure that the firm's
human capital contributes to the achievement of the firm's business goals.

2.1.2.1 Background and Concepts of SHRM

Integrating HR unit practices with business strategy is the core concept of strategic HR
management. It began its transition from the person-job-fit era, which will be marked by
vertical integration, productivity, a concentration on administrative tasks, the division of
labor, and work standardization. The knowledge-based competitiveness, innovation and
change, learning culture, distinctiveness, agility, and the development of intellectual
capital are the present and future faces of strategic HR management.

The term "strategic human resource management" refers to a managerial approach that
guarantees that human resources are used in a way that supports the accomplishment of
corporate objectives and mission.

As the idea of strategic human resource management developed in the 1990s, the
emphasis on a proactive, integrated, and value-driven approach to human resource
management intensified (Schuller, 1992). (2007) Armstrong. The focus of strategic
human resource management (HRM) is on a number of issues, such as how well HRM
practices align with organizational strategic goals, how HRM is integrated into
organizational strategic management, how HRM is involved in senior management
teams, how HRM is developed for line managers, and how HRM adopts a strategic
approach to employee selection, compensation, and performance appraisal.
It has also been defined as the pattern of planned human resource deployments and
activities intended to enable an organization to achieve its goals (Wright and McMahan,
1999). The latter definition highlights the two important dimensions that distinguish
SHRM from traditional HRM. It links HR practices with the strategic management
process of the firm vertically and horizontally, it emphasizes that HR practices are
integrated and support each other.
The fundamental aim of strategic HRM is to generate a perspective on the way in which
critical issues relating to people can be addressed. It enables strategic decisions to be
made that have a major and long-term impact on the behavior and success of the
organization by ensuring that the organization has the skilled, committed and well
motivated employees, which the organization needs to achieve sustained competitive
advantage. Its rationale is the advantage of having an agreed and understood basis for
developing approaches to people management in the long term by providing a sense of
direction in an often turbulent environment (Armstrong, 2006).
2.1.2.2 Perspectives of Strategic HRM

Various academic disciplines frequently favor particular points of view. For instance,
when describing the connections between systems of human resource management
practices and organizational performance, experts in industrial relations and labor
economics frequently adopt a Universalist and configuration viewpoint. Business policy
and strategic management experts typically use a contingency perspective. Although
they tend to take a contextualize stance, academics in the subjects of sociology, political
economy, and comparative and international human resources are a diverse group. The
next section discusses the specifics of the opinions from several perspectives:

2.1.2.2.1 Universalist Perspective

Delery and Doty (1996) first formally identified the Universalist mode of theorizing in
the early strategic human resource literature. As they noted:
‘Universalistic arguments are the simplest form of theoretical statement in the SHRM literature
because they imply that the relationship between a given independent variable and a dependent
variable is universal across the population of organizations. Developing universalistic
predictions requires two steps. First, important strategic HR practices must be identified.
Second, arguments that relate the individual practices to organizational performance must be
presented’, (p. 805) The statement suggests that the relationship between HRM practice
and organizational performance occurs, no matter the context in which an organization
operates, is what separates this mode of theorizing in SHRM from the others.

2.1.2.2.2 Configurational Perspective

The second SHRM theoretical framework, the Configurational perspective, explains
how systems, clusters, or bundles of human resource management practices interact with
each other to have synergistic outcomes at the organizational level. As Lepak and Shaw
(2008) explained:
Researchers focusing on this perspective have used a variety of terms such as
"horizontal fit," "internal fit," "complementarity," or "bundling" (Baird
 &Mesboulam, 1988; Delery& Doty, 1996; Wright & McMahan, 1992) to
emphasize the focus on alignment among multiple HRM practices.
This perspective suggests that a configuration of a set of internally aligned HRM
practices will have a much greater ability to explain variation in organizational
performance than single HRM practices taken in isolation (Delery, 1998).
2.1.2.2.3 Contingency Perspective
The third SHRM theoretical framework is based on classical contingency theory. The
choice of HRM practices and the relationship these practices have with organizational
performance depends on external environmental factors as well as on organizational
factors, primarily the strategies the organization formulates and deploys to successfully

adapt to a changing external environment (Scott, 1995).

2.1.2.2.4 Contextualist Perspective

The fourth SHRM theoretical mode of theorizing is the contextualist perspective. Unlike
the other three modes, this perspective encompasses the particularities of geographic and
industrial contexts and macroeconomic and social factors such as business systems
(Tempel & algenbach, 2007), varieties of capitalism (Edwards & Kuravilla, 2005),
historical path dependence, and institutional environments.

International SHRM scholars applying this theoretical framework to identify and

describe how these various macro-social factors affect the relationship between HRM
practice and organizational performance (Martin-Alcazar et al., 2005). This last
theoretical perspective will be having limited application in U.S. strategic human
resource management scholarship to date.

This paper assumes the resource-based view as its tool of analysis and through its
determinants of competitive advantage, supports the configuration perspective‘s
rejection of the universalistic perspective of SHRM by proposing and demonstrating that
a universal typology of HR best-practices offers no competitive advantage to a firm.
Instead, it is proposed that firms should take a configurational approach to SHRM and
develop an HR system that achieves both horizontal and vertical fit within the firm and
fosters sustainable competitive advantage of the firm‘s human resource capital pool.
2.1.2.3 Features and Principles of Strategic HRM
Based on the concepts and its nature as a departure from the transitional HRM, Strategic
HRM has the following features and principles according to Armstrong, (2008);

 Features:
The main features of strategic human resource management are:
1. As strategic human resource management is closely associated with goal-setting,
policy formulation and allocation of resources, it performs at top management
levels.
2. Strategic human resource management aims at fulfilling the long-term HR
requirements of the organization and, thus, focuses on the expansion of process
capabilities (process refers to HR policies and procedures that produce
efficiency).
3. It is interrelated with business strategies. For instance, it provides critical inputs
to the formulation of business strategy, and specific HR strategies (like
recruitment, training and performance appraisal) are in turn shaped by overall
business strategies.

 Principles:
Strategic HRM supplies a perspective on the way in which critical issues or success
factors related to people can be addressed and strategic decisions are made that have a
major and long-term impact on the behavior and success of the organization. It is not
just concerned with ‗mirroring current conditions or past practices‘ (Smith, 1982). As a
means of developing integrated HR strategies, strategic HRM is facilitated to the extent
to which the following seven principles set out by Ondrack and Nininger (1984) in
Armstrong, (2008) are followed:
  There is an overall purpose and the human resource dimensions of that purpose are
evident.
 A process of developing strategy within the organization exists and is understood, and
there is explicit consideration of human resource dimensions.
 Effective linkages exist on a continuing basis to ensure the integration of human
resource considerations with the organizational decision-making process.
 The office of the chief executive provides the challenge for integrating human
resource considerations to meet the needs of the business.
 The organization of all levels establishes responsibility and accountability for human
resource management.
 Initiatives in the management of human resources are relevant to the needs of the
business.
 It includes the responsibility to identify and interact with the social, political,
technological and economic environments in which the organization is and will be

doing business.

2.1.2.4 Linking HR Processes to Strategy

Various academic disciplines frequently favor particular points of view. For instance,
when describing the connections between systems of human resource management
practices and organizational performance, experts in industrial relations and labor
economics frequently adopt a Universalist and configuration viewpoint. Business policy
and strategic management experts typically use a contingency perspective. Although
they tend to take a contextualize stance, academics in the subjects of sociology, political
economy, and comparative and international human resources are a diverse group. The
next section discusses the specifics of the opinions from several perspectives:

The basic premise is that every HR policy and practice must directly support the
organizations strategy and objectives. This does not happen as frequently as it should.
In the worst-case scenario, HR plans are developed as an afterthought and separate from
organizational strategy. They are not relevant to the business and are seen as important
only by the HR people. No other unites or level is committed to these plans. While it has
long been recognized that HR policies and practices must be linked to the firm‘s overall
strategy, there will be little research that offers prescriptions on exactly how to do this.
According to Belcourt and McBey (2009), aligning HR strategy with business strategy
can be done in one of the following ways:-
Corporate Strategy that leads the HR Strategy
A traditional perspective of HR planning views HRM programs as flowing from
corporate strategy. Corporate strategy drives HR strategy. In other words, personnel
needs are based on corporate plans. If a firm decides to compete on the basis of offering
low-cost products, HR policies and practices must align and be based on lower labour
costs. This model assumes that people are more adaptable than strategy and that
causeand-effect relationships are unidirectional.
Given their investment in thousands of employees, larger organizations seem to prefer
this approach (making the resources fit the strategy), despite the literature showing the
difficulty and time consuming nature of organizational change. Within this approach
employees are considered a means to an end, not part of the strategy formulation
equation.
HR Competencies lead to Business Strategy
A competing view states that an organization cannot implement a strategy if it does not
have the human resource necessary.
HR Strategy and Corporate Strategy

An emerging perspective sees HR strategy as contributing to business-level strategy and

vice versa. Increasingly, in large firms senior HR vice- presidents are asked not only to
review business plans to ensure consistency with HR strategy, but also to provide input
to this strategy based on HR strengths and weakness. In this context, an organization
chooses a business strategy, such as being a leader in innovative products, based on its
inhouse, highly educated, trained employees who will be socialized to value creativity.
 Characteristics of an Effective HRM Strategy

The purpose of HR strategy is to capitalize on the distinctive competencies of the

organization and add value through the effective use of human resource. According to
Belcourt and McBey (2009), effective HRM strategies include the following External
and Internal fit, and a focus on results characteristics. Belcourt and M cBey (2009)
identified, the Fit is an important consideration when designing HR programs. There are
two types of important fit. Fitting HR strategy to organizational strategy (external fit),
and linking the various HR programs into other functional areas and to each other
(internal fit).
External Fit:
HR Programs must align with or fit the overall strategy of the organization. If the
business strategy is to differentiate an organization from its competitors based on
superior service, then the selection and training programs should be developed to hire
and train people in the skills and attitudes necessary to deliver superior service. Fit with
other functional strategies is as important as fit with corporate strategies. HR senior
management must be included in strategy discussions to be sure this happens.
Internal Fit:
There are two kinds of internal fit; a fit with other functional areas, such as marketing,
and a fit among all HR programs. Fit with other functional areas is important. If the
marketing department is developing an advertising plan that promises 24 hours access to
customer service representatives but the HR plan does not include compensation
differentials for shift work, the overall marketing strategy might fail.
As HR programs must fit with other functional areas, they have to be also consistent
with each other. That is, selection, training, and appraisal must work together to support
a strategy. If the training department decides to each employee to use the internet to
handle customer service, the staffing department must hire people who either are
computer literate or who have the kinds of intelligence that enable them to learn
computer skills rapidly. This working together is commonly referred to as bundling HR
practices.
Focus on Result:
The hard work of deciding on strategy is not its formulation but its implementation and
the tracking of results. Many HR managers do not have the resources or skills to
measure results to see if the goals will be achieved. Unless the strategy contains
performance measures – that is, results oriented- it will be difficult to know how
successful the strategy will be implemented.

2.1.2.5 The Strategic HR Planning Model

The model of Strategic HR Planning emphasizes monitoring, identifying, and analyzing,
external environment factors; developing a tentative corporate strategy; assessing the
strengths and weaknesses of the organization‘s human resources; developing strategic
plans for each division consistent with the overall view; identifying the HR policies and
practices that help to achieve the plans; and measuring the results and making
modifications as necessary (Belcourt and McBey, 2009).

After the analysis of the environment the relative strengths and weakness of the
organization‘s human resources will be assessed using forecasting and analysis
techniques. Determine the KSAs of an organization and the capacity to learn and
change. Identify the competitive advantages of the HR department.
Develop strategic plans for each division that are consistent with the overall strategic
thrust and that ensure a fit with related components across functional areas. Identify HR
policies and practices that will increase the likelihood of achieving the strategy and
implement them.
Aligning HRM programs and policies with organizational goals is the beginning of the
strategic HR planning process. Assessing whether these policies and practices will be
effective is the end of one cycle in the planning process. HR professionals need to know
how their programs and policies are doing by measuring results and modify plans as
necessary.HR effectiveness can be evaluated using the 5C model: compliance with laws
and regulations, Client satisfaction, Culture management to influence employee attitude,
Cost control of the labour component of the budget, and the Contribution of HR
programs (Belcourt and McBey, 2009).

2.1.3 Strategic HRM Functions/Practices

2.1.3.1 Integration of HRM with Corporate Strategies

Integration of HRM refers to HRM's participation in the development and execution of

organizational strategies and its alignment with the strategic requirements of a company
(Schuler and Jackson, 1999). According to Buyens and De Vos (1999), for HR to be a
strategic partner, HR managers need to participate in strategic decision-making
alongside other senior managers. This will give them a better chance to match HR goals,
strategies, philosophies, and practices with corporate goals and the execution of business
strategy.

This involvement would include the membership of HR managers in the most senior
management teams in the organization. This would provide an opportunity for
HRM to represent its concerns and influence business strategy from the outset of
decision making. The chances of integration and value creation may be further
increased if the senior HR manager and the CEO have an opportunity to establish
a relationship. In this role, HR managers need to have knowledge of core
markets, competitors, costs, profit indicators and stakeholders to be considered
equal business partners (Chaddie, 2001) in (Oladipo and Abdulkadir, 2011). The
involvement of a senior HR manager in a firm‘s senior management team provides an
important channel for interactive information flow and communication.

To achieve strategic integration and alignment of HRM with business strategies, a

documented HRM strategy would also be useful (Budhwar, 2000; Teo, 2002) as it can
make more concrete the role and authority of HR managers in corporate decision
making and increase capacity to cope with externalities such as a tight labour
market (Cunningham and Deborah, 1995). A documented HRM strategy helps the
organization to develop an HRM vision and objectives and to monitor performance.

Some empirical evidence from previous research indicates that the full impact of
HR practices on organizational performance occurs when HR practices are
strategically congruent and consistent with each other (Khatri, 1999).
2.1.3.2 Delegation of HR Practices to Managers
According to Budhwar and Khatri (2001), line managers should be responsible for the
routine execution and administration of HR practices because they have frequent and
direct contact with employees. This would make HR managers more accessible for
participation in the strategic decision-making process.
However, for the benefit of development to be realized, line managers will need
to possess the appropriate skills to execute HR practices competently and
effectively to a benchmarked standard advocated by HR managers. This means that
the senior HR manager needs to be a strategic partner with line managers,
providing training, resources, incentive and a communication channel to ensure
these HR practices are carried out in accordance with HRM policy (Teo, 2002).
2.1.3.3 Placement System

An firm will choose from among the pool of qualified job seekers it has attracted once
recruiting efforts have produced it. The new hires do their duties more efficiently and
encounter fewer performance issues when the company chooses the right people for the
right tasks. The end effect will be increased job satisfaction and engagement (Vance,
2006).

On his finding he suggested that, to enhance engagement and the performance of an

organization through selection of employees, identify those candidates who are
bestsuited to the job and ask them what they know about the role/the job in question and
having them provide work samples. Successful candidates feel good about having
―passed the test,‖ and see your company as careful and capable for having selected
them. A positive initial impression of an employer encourages growth of long-term

commitment (Ibid, 2006).

A rigorous, valid and sophisticated selection system helps in identifying a right

candidate with potential to perform. A rigorous selection system generates a sense of
elitism, creates high expectations of performance, and signals a message of importance
of the people to the organization.
The mismatch between the person and the job can hamper performance levels, whereas a
sophisticated selection system can ensure a better fit between the person‘s abilities
and the organization‘s requirement. Also, the selection will be found to be positively
related to firm performance (Oladipo and Abdulkadir, 2011).
2.1.3.4 Training and Development System

By offering thorough training and development, businesses can improve and develop the
quality of their current personnel. Moreover, studies show that spending on staff training
in problem-solving, cooperation, and interpersonal skills has a positive impact on
company level outcomes (Barak et al., 1999).

Strategic Human Resource Development

According to Walton (1999), in Armstrong (2008) Strategic human resource
development involves introducing, eliminating, modifying, directing and guiding
processes in such a way that all individuals and teams are equipped with the skills,
knowledge and competencies they require to undertake current and future tasks required
by the organization.
Strategic HRD policies are closely associated with that aspect of strategic HRM that is
concerned with investing in people and developing the organization‘s human capital.
According to Harrison (2000), strategic HRD is ‗development that arises from a clear
vision about people‘s abilities and potential and operates within the overall strategic
framework of the businesses. Strategic HRD takes a broad and long-term view about
how HRD policies and practices can support the achievement of business strategies. It is
business-led and the learning and development strategies that are established as part of
the overall strategic HRD approach flow from business strategies and have a positive
role in helping to ensure that the business attains its goals in (Armstrong 2008).
Strategic HRD aims to produce a coherent and comprehensive framework for
developing people through the creation of a learning culture and the formulation of
organizational and individual learning strategies. Its objective is to enhance resource
capability in accordance with the belief that a firm‘s human resources are a major source
of competitive advantage. It is therefore about developing the intellectual capital
required by the organization as well as ensuring that the right quality of people is
available to meet present and future needs (Armstrong, 2006).
2.1.3.5 Performance Management System

Strategies for managing performance exist to develop a high-performance culture and

achieve increased organizational effectiveness, better results for individuals and teams,
and higher levels of skill, competence, commitment and motivation. Managing
performance is a continuing responsibility for managers and team leaders. It is not
achieved by a once-a-year performance appraisal meeting. Individual employees are
responsible for managing their own performance but may need guidance and support in
doing so (Armstrong, 2006).

Managing human resources includes keeping track of how well employees are
performing relative to objectives such as job descriptions and goals for a particular
position. The process of ensuring that employees‘ activities and outputs match the
organization‘s goals called performance management. The activities of performance
management include specifying the tasks and outcomes of a job that contribute to the
organization's success. Then various measures are used to compare the employees‘
performance over some time period with the desired performance (Steen, Neo,
Hollenbeck and et al., 2009).

Performance management is a continuous process of identifying, measuring, and

developing the performance of individuals and teams and aligning performance with the
strategic goals of an organization. It involves a never-ending process of setting goals and
objectives, observing performance, and giving & receiving ongoing coaching and
feedback. Performance management requires that mangers insure that employees‘
activities and outputs are congruent with the organization‘s goals and, consequently,
help the organization gain a competitive advantage. Performance management therefore
creates a direct link between employee performance and organizational goals and makes
the employee‘s contribution to the organization explicit (Aguinis 2009).
The fundamental aim of performance management system in an organization is for a
strategic purpose through linking employee activities with the organization‘s mission
and goals. They identify results and behaviours needed to carry out strategy, and they
maximize the extent to which employees exhibit the desired behaviours and produce the
desired results (Ibid).

The link between Performance Management and Strategic Plan

The mere presence of a strategic plan does not guarantee that it will be used effectively
as part of the performance management system. Aguinis (2009) explained that,
numerous organizations spend thousands of hours creating strategic plans that lead to no
tangible actions. Many organizations spend too much time and effort crafting their
mission and vision statements without undertaking any concrete follow-up actions. The
process then ends up being a huge will bete of time and a source of frustration and long
lasting cynicism.
Thus, to ensure that strategy cascades down the organization and leads to concrete
actions, a conscious effort must made to link the strategic plan with individual
performance. The below figure, provides a useful framework for understanding the
relationship between an organizations strategic plan, a unit strategic plan, job
descriptions, and individual & team performance.
As soon as the organizational strategies will be defined, senior management proceeds to
meet with the department or unit managers, who intern solicit input from all people
within their units to create unite-level mission and vision statements, goals, and
strategies. A critical issue is to ensure that each unites or department‘s mission and
vision statements, goals, and strategies are consistent with those at the organizational
level.
Job descriptions are then revised to make sure they are consistent with unite and
organizational priorities. Finally, the performance management system includes results,
behaviors and developmental plans consistent with the organizational and departmental
level priorities as well as the individual job descriptions.

Hence, Performance management systems have a critical role in translating strategy into
action. A recent study including 338 organizations in 42 countries found that
performance management is the third most important factor affecting the success of a
strategic plan. This is particularly true for larger organizations and for organizations that
operate in a rapidly changing environment (Aguinis, 2009).
What we can understand from this study is, there is a positive relationship between
performance management, strategic planning and organizational performance. The more
the integration performance management with the strategic plan of an organization, the
more will be a positive contribution to the effectiveness of that organization.
2.1.3.6 Compensation System

Rewarding employees for actions that are in line with strategic goals is one of the crucial
ways that firms implement their strategy. Reward systems allow for the reinforcement of
desired behaviors and serve the customary purposes of luring and retaining a skilled
workforce (Greer, 2001).

Employers have a variety of techniques to influence employee motivation. Employees

can receive rewards for meeting the specific aims and objectives of the company via
performance-based compensation. A significant body of research has shown that
incentive-based compensation affects business performance (Milkovich and Boudreau,
1998).

2.1.3.7 Career & Succession Planning System

The procedures of career planning and management succession make up career

management. According to evaluations of organizational needs, outlined employee
success profiles, and the performance, potential, and preferences of individual members
of the company, career planning affects how individuals advance within an organization.
Planning for management succession ensures that, to the extent practicable, the company
has the managers it needs to meet future business needs (Armstrong, 2008).

A well-functioning career planning system may also encourage employees to take more
responsibility for their own development, including the development of the skills viewed
as critical in the company. A well-planned career development system along with
internal advancement opportunities based on merit, results in high motivation
among employees, which has an impact on firm performance (Milkovich and
Boudreau, 1998).
 2.1.3.8 Employee Participation

One of the key tenets of HRM is the idea that treating employees as the company's most
valuable asset. As a result, it goes without saying that the foundation of effective HR
practice in organizations is facilitating and increasing more employee impact and
engagement. Studies have shown that employee participation is positively related to
performance, satisfaction, and productivity of an employee and then to the

organization (Verma, 1995).

As a result, employee participation in organizations‘ decision making process can be

undertaken in different ways. Some organizations can do through employee
Engagement. Employee engagement is a key driver of organizational effectiveness and
workforce performance. To give their best every day, employees need to feel they have
a stake in the company‘s success. Employee engagement results in part from
understanding the company‘s direction and the significance of an employee‘s role in
helping the company reach its goals.

2.2. Organizational Effectiveness

Because a sizable amount of the service sectors in the economies of industrialized

countries depends on knowledge and human capital, measurement is a problem.
Management in these economies understand that human ingenuity is ultimately the
source of technology. Quantifying and managing the intangible elements of the
productivity mix will be difficult (Miller, 2004).

The measurement of organizational performance is therefore, not easy for business

organizations with multiple objectives of profitability, employee satisfaction,
productivity, growth, social responsibility and ability to adapt to the ever changing
environment among other objectives. Although performance will be traditionally
conceptualized in terms of financial measures, some scholars have proposed a broader
performance construct that incorporates non-financial measures including among others
market share, product quality, and company image (Waiganjo, Mukulu and Kahiri,
2012).
Consequently, organizational effectiveness is the concept explaining how effective an
organization is in achieving the outcomes the organization intends to produce. It is an
abstract concept and basically impossible to measure. Instead of measuring
organizational effectiveness, the organization determines proxy measures which will be
used to represent effectiveness. Malik, Ghafoor and Naseer (2011), include in their study
of measuring organizational effectiveness such things as efficiency of management,
performance of employees, core competencies, number of people served, and types and
sizes of population segments served and so on.
Hence, for the purpose of this study the researcher uses Organizational Effectiveness as
a measure of organizational performance which will be expressed through the four
Balanced Scorecard (BSC) dimensions such as; Financial growth, Customer satisfaction,
Integration of Internal Process and, Learning and Development.

2.2.1 Definitions of Organizational Effectiveness

Organizational Effectiveness (OE) is a systemic and systematic approach to

continuously improving an organization‘s performance, performance capacity and client
outcomes.
―Systemic‖ refers to taking into account an entire system or in the case of OE an entire
organization; ―systematic‖ refers to taking a step-by-step approach. In simple terms,
therefore, OE is a step-by-step approach to continuously improving an entire
organization (American Public Human Services Association, 2009).
An effective organization is one that achieves its purpose of meeting the needs of its
stakeholders, matching its resources to opportunities, adapting flexibly to environmental
changes and creating a culture that promotes commitment, creativity, shared values and
mutual trust. The improvement of organizational effectiveness is an overall objective of
strategic HRM, which addresses the organization-wide process issues relating to
organizational development and transformation, culture management, knowledge
management, change management, developing a climate of high commitment and trust,
quality management, continuous improvement and customer relations (Armstrong,
2008).
2.2.2 Background and Models of Organizational Effectiveness
 Background
Organizational effectiveness has different dimensions. There is no a universal model for
organizational effectiveness which is applicable to all organizations. And there are no
universally accepted indicators/variables of measuring effectiveness.

From different viewpoints about the nature of organizations, their relevant features and
dimensions, and their key effectiveness criteria, multiple models of organizational
effectiveness naturally arose. Debates about which approach will be best, which model
will be most predictive, and which criteria will be most appropriate to measure will be
typical of the organizational studies literature in the 1970s and 1980s (Smith and Hitt,
2005:307).
None of the models of effectiveness has emerged as the universalistic model of choice,
of course, although the Competing Values Framework is probably considered to be the
most comprehensive. Some writers have become so frustrated by the confusion
surrounding effectiveness models, in fact, that they recommended a ‗‗moratorium on all
studies of organizational effectiveness, books on organizational effectiveness, and
chapters on organizational effectiveness‘‘ (Smith and Hitt, 2005).
In response to this confusion and resistance, the literature in organizational studies and
the discussions at the annual Academy of Management meetings provided a series of
suggestions for resolving issues and clarifying approaches (Cameron and Whetten,
1983). The primary objective will be to clarify the construct and stimulate additional
research. Five conclusions emerged from that literature in (Smith and Hitt, 2005):
 1. Despite the ambiguity and confusion surrounding it, the construct of
organizational effectiveness is central to the organizational sciences and cannot be
ignored in theory and research.

2. Because no concept of an organization is comprehensive, no concept of an

effective organization is comprehensive. As the metaphor describing an
organization changes, so does the definition or the appropriate model of
organizational effectiveness.

3. Consensus regarding the best, or sufficient, set of indicators of effectiveness is

impossible to obtain. The criteria are based on the values and preferences of individuals,
and no specifiable constructs boundaries exist.

4. Different models of effectiveness are useful for research in different circumstances.

Their usefulness depends on the purposes and constraints placed on the organizational
effectiveness investigation.

5. Organizational effectiveness is mainly a problem-driven construct rather than a

theorydriven construct.

Because rigorous effectiveness evaluations are much more complicated than merely
using a single, universalistic assessment (e.g., A perceptual judgment of effectiveness)
or a single numerical indicator (e.g., Profitability) as a proxy for effectiveness,
guidelines will be created to assist effectiveness researchers in systematically assessing
this construct. These guidelines are in the form of seven questions meant to assist
researchers in selecting appropriate effectiveness criteria and to help build a set of
comparable effectiveness studies (Cameron and Whetten, 1996).
That is, by carefully and systematically selecting effectiveness criteria, comparisons
among definitions and approaches to effectiveness are possible, cumulative findings can
emerge, and theoretical propositions can begin to be developed.
These seven guidelines should be taken into account in any assessment of organizational
effectiveness. That is, every investigator of effectiveness consciously or unconsciously
makes a selection regarding these seven questions, and deliberately articulating which
choices are made will greatly enhance the probability of comparative research (Smith
and Hitt, 2005).
 1. What time frame is being employed?
2. What level of analysis is being used?
3. From whose perspective is effectiveness being judged?
4. On what domain of activity is the effectiveness judgment being focused?
5. What is the purpose for judging effectiveness?
6. What types of data are being used for judgments of effectiveness?
7. What is the referent against which effectiveness is judged?

 Models of Organizational Effectiveness

Different authors‘ at different times have developed and argued different organizational
effectiveness models. Later on five models, in particular, became representative of the
best known and most widely used in scientific investigations Smith and Hitt, ( 2005),
identifies the following models;

1. The goal model will be the most appropriate model of choice i.e. Organizations
are effective to the extent to which they accomplish their stated goals.

2. Resource dependence model, i. e., Organizations are effective to the extent to

which they acquire needed resources.

3. Internal congruence models, i.e., Organizations are effective to the extent to

which their internal functioning is consistent, efficiently organized, and without
strain.

4. Strategic constituency’s model, i.e., Organizations are effective to the extent to

which they satisfy their dominant stakeholders or strategic constituencies.

5. The human relations model, arguing that organizations are effective to the
extent to which they engage members and provide a collaborative climate.

Finally, they become to develop the competing values framework of organizational

effectiveness: An integration of the five well-known models as it can be seen below in
the picture.
Figure 2.2.2: The competing values of organizational effectiveness: An integration of the five well-known
models

FLEXIBILITY

INTERNAL MAINTENANCE
The Human Relations Model: The System Resource Model
Collaboration Innovation
Engagement New resourcess EXTERNAL
Harmonous relations Adaptation

POSITIONING
The Goal Model
The Internal Process Model Productivity
Aggressiveness
Control Achievement
Efficiency The multiple Constituencies Model
Consistency Customer Focus
Boundary spanning
Competitiveness

STABILITY

Source: Smith and Hitt, (2005), pp-309

As discussed above in the literatures, different researchers use different performance
measures or indicators for different organizations‘such performance attributes like
profitability, productivity and competitive advantage. However, this study resembles
focusing on measuring organizational effectiveness using the collaboration of the above
model as a benchmark mainly focusing on (Goal, Human Relations, Internal Process,
System Resource, and the Customer Focus models).
Consequently, the researcher extracts from the literature and develops one model to
explain that an organization is effective to the extent the four Balanced Score Card
(BSC) dimensions are achieved i.e., The BSC model of organizational effectiveness.
This means that an organization is effective when it achieves its financial targets
(savings&/or revenue); its internal processes are clearly defined, integrated with each
other and supported by business system solutions (e.g. Oracle ebs, Enterprise Resource
Planning); when it provides quality of service to meet the expected level of customer
satisfaction; and its ability to attract and retain quality &competent manpower.
Furthermore, the BSC model of organizational effectiveness can be expressed in the
following effectiveness indicators. Such as; culture to develop intellectual capital
through organizational, team and individual learning, ability to attract and retain
quality manpower, relationship between top management and labour union and, the
efforts made to satisfy customers , the level of customer satisfaction, quality of services
& infrastructure (efficiency). The ability to identify, design, and well integration of
Internal work processes, the use of standard business process frameworks and
supporting IT systems solutions, the interaction within and/or across sections,
departments.

2.2.3 Employee Productivity and Organizational Effectiveness

The effectiveness of an organization and productivity of the workforce within are the
interrelated and synchronized elements of the performing organization. That means, as
the one becomes to be maintained (OE or employee productivity) the other will have a
positive result or an implication that the one has a positive impact on the other. For
example, subject to the challenges & practices of the HR functions in an organization, if
an employee is well equipped with the necessary knowledge, skills, and attitude (KSAs)
for his/her immediate position, it has an implication that he/she will add a positive
contribution for his/her team, section, department & division as well as for the
organization.
Thus, organizational effectiveness can be achieved depending on the organization's
culture, business area, structure, process, systems, level of technology employing, and
employee productivity. The productivity of employees in turn is dependent on the
organizations HR system. To increase organizational effectiveness, winning companies
create sustainable competitive advantage by aligning their talent and business strategies.
Mergers or acquisitions, restructurings or shifts in business strategy are examples of
fundamental organizational change that create strong demand for processes and systems
to bring focus and restore the organization‘s capability to function effectively.
2.2.4 Strategies for Improving Organizational Effectiveness
Organizational effectiveness capability brings value to organizations by facilitating the
integration and alignment of the business strategy with a workable talent management
strategy. Organizational effectiveness solutions serve companies build and align the
capabilities, processes, attitudes, and talent needed to more effectively implement its
chosen strategy.
Strategies for improving organizational effectiveness focus on developing processes that
support the achievement of business goals and a positive culture. Armstrong (2006:90)
identified the following as areas for developing organizational effectiveness:

 Clearly defined goals and strategies to accomplish them.

 A value system that emphasizes performance, productivity, quality, customer
service, teamwork and flexibility.
 Strong visionary leadership from the top.
 A powerful management team.
 A well-motivated, committed, skilled and flexible workforce.
 Effective teamwork throughout the organization.
 Continuous pressure to innovate and grow.
 The ability to respond faster to opportunities and threats.
 The capacity to manage, indeed thrive, on change.
  A sound financial base and good systems for management accounting and cost
control.

2.3 Empirical Studies and Experience from Selected Countries

2.3.1 Empirical Studies on Strategic HRM
Coleman, Sharon, et al, (2000) study identified, the experiences of several organizations
provide good examples of the integration of strategy and HRM. One such example is
provided by experiences of people‘s Bank, a financial service company headquartered in
Bridgeport, Connecticut. During the 2000, the company has made a massive
transformation following the changing environment of the banking sector in Bridgeport
Connecticut.

As a result of these changes the bank transformed itself into a diversified financial
services company with 139 branches and a fully integrated banking services and stock
trading presence on the internet. Because of the changes in the bank, the organizational
structure will be changed to accommodate those changes. Following this change the
bank then conducted a study of the type of employees that would be needed with the
new strategy‘s skill and organizational requirements. Major changes will be undertaken
as a result of the audit. For example the performance appraisal system will be revised to
emphasize goal-setting by linking individual goal plan accomplishment and rewards
with the attainment of the bank's objectives. Further human resource planning will be
more fully integrated with the strategic planning process through synchronization of its
scanning process with the bank‘s overall environmental scanning process (Coleman,
Sharon, et al, 2000).

Niehaus and Price (1988) in Greer (2001) described that, the experiences of the U.S
Navy provide another example of the integration of strategy and human resource
management. As a result of the linkage, the Navy will be able to pursue a proactive
strategy that provides lower labour costs. In the Navy‘s case, its human resource
planners analysed the labour cost savings of a strategy involving its civilian employees
that would substitute local wage policies for national wage policies. By developing
human resource forecasts to determine labour market reactions to these changes,
planners could determine whether sufficient labour supplies would be available with the
cost saving strategy. In this example, the planner also examined the impact of the
reduction private sector middle management positions and found that higher quality
employees could be hired.

McManis, Gerald and Leibman (1988) in Greer (2001) found that, In-gersoll-Rands
experiences with one of its divisions also provide a good example of the outcome of a
strong linkage between strategy and human resource management. Ingersoll-Rand‘s
rock drilling divisions will be experiencing rapid growth and had a shortage of labor. It
also needed to train its employees to work with new technology and wanted to control
labour costs. The outcome of integrating its human resource capabilities with its
strategic planning process will be that the company implemented a number of programs,
including gain sharing and employee involvement teams. It also had employees
participate in decisions on the purchase of new technology and made a major
commitment to technological training.

In their comparative study of 137 large manufacturing firms, Budhwar and Boyne
(2004) differentiate the HR practices in the public sector and private sector
companies in India. Their findings suggest that against the established notion, the
gap between the Indian private and public sector HRM practices (structure of HR
department, role of HR in corporate change, recruitment and selection, pay and
benefits, training and development, employee relations and key HRM strategies) is not
very significant but in a few functional areas (compensation, training and
development), private-sector firms have adopted a more rational approach than their
public sector counterparts.

Green et al., (2006) reported that organizations that vertically aligned and
horizontally integrated HR function and practices performed better and produced more
committed and satisfied employees who exhibited improved individual and
organizational performance.

Dimba and K‘Óbonyo (2009) investigated the nature of the effect of SHRM practices on
organizational performance. The study sought to determine whether the effect of human
resource management practices on organizational performance is direct or indirect
through employee motivation, and whether employee cultural orientations moderate the
relationship between strategic human resource practices and employee motivation. Fifty
multinational manufacturing companies in Kenya will be sampled. One HR manager, 2
line managers and 3 employees from each organization will be chosen for the survey.
The study adopted the measures developed by Hofstede and Huslid. Using regression
analysis, the results indicate that all the variables of SHRM practices, except recruitment
and selection will be positive and significantly correlated with performance; relationship
between SHRM practices and firm motivation did not depend on employee cultural
orientations when cultural values will be considered; motivation mediated the
relationship between SHRM practices and firm performance and motivation affected
firm performance.
Bana (2006) reported that within the public service in developing countries most
activities of the HR offices go little beyond routine administrative tasks on record
keeping, drafting personnel procedures, payroll, and staff welfare.
McCourt and Ramgutty-Wong (2003) studied the applicability of Strategic Human
Resource Management (SHRM) in the Mauritian civil service. They revealed that
HRM in the civil service will be fragmented and the SHRM model will be unfamiliar
with the service. The study also highlighted myriad pitfalls that hindered the
applicability of the SHRM model in Mauritius. These include nontransparent
staffing procedures, over centralization of HRM in the service, lack of autonomy in the
Public Service Commission, ministries, and line managers in staff management.

In a study conducted by Bana and McCourt (2007) in Tanzania and Uganda,

findings indicate that while each country had a vision and a national strategy for
economic growth and reduction of poverty, the government ministries, agencies and
departments did not have HRM policies which will be either derived from or
integrated to the macro level policy frameworks. As such, the vertical and
horizontal integrations which are essential pre-requisites of the HRM model will
be acutely missing.
In another study, Gray and Shasky (2007), using multiple regression analysis examined
the impact of strategic HRM practices on the performance of State Government
agencies. The results show that when organizations employ such personnel
practices as internal career ladders, formal training systems, results-oriented
performance appraisal, employment security, employee voice and performance-
based compensation, they are more able to achieve their organizational goals and
objectives.
Okpara and Pamela (2008) examined the extent to which organizations in Nigeria use
various HRM practice and the perceived challenges and prospects of these practices.
Data will be collected from 253 managers in 12 selected companies in 10 cities. Their
findings revealed that HRM practices, such as training, recruitment, compensation,
performance appraisal and reward systems are still in place and those issues of tribalism,
AIDS, training and development and corruption are some of the challenges facing HRM
in Nigeria.
Som (2008) sampled 69 Indian companies with a view to examining the impact of
innovative SHRM practices on firm performance. Using descriptive statistics and
regression analysis, results indicated that innovative recruitment and compensation
practices have a significant positive relationship with firm performance. Their results
showed that recruitment, the role of the HR department and compensation practices
seem to be significantly changing within the Indian firms in the context of Indian
economic liberalization. The synergy between innovative HRM practices will be not
found to be significant in enhancing performance during the liberalization process.

2.3.2 Strategic HRM in the Context of Different Countries

As will be said in the background section, despite the fact that the theoretical literature on
strategic human resource management will be emerging in the United States, it is now
being used as a strategic tool by enterprises worldwide. What would the practices of
strategic human resource management therefore look like in the following nations?

2.3.2.1 The U.S Context

Kaufman (2012), provides a historical perspective on High Performance Work Systems
(HPWSs), which he argues date back a hundred years (not 25), but prefaces this
historical review with a highly critical assessment of current U.S. based SHRM
empirical scholarship. Claiming that many of the problems with U.S. SHRM "arise from
overemphasis on knowledge areas and ideas relating to the internal dimension of
organizations and management (e.g., Strategy, I-O psychology, organizational
behaviour) and too little attention to those relating to the external dimension (e.g.,
Economics, industrial/employment relations, the macro side of sociology)" , Kaufman
gives SHRM research a failing grade. Although the evidence Kaufman provides to
support his negative assessment might be highly criticized by others, his call for more
actionable research and for applying neoclassical economic frameworks that might
"explain the lack of congruence between what the theory predicts and what the data
show" offers further cross disciplinary avenues for SHRM scholarship.
While SHRM researchers are well aware of the theoretical and empirical challenges still
to be overcome, Kaufman expands the list in a provocative way by asking questions
economists would raise about the current distribution of HRM practices across
companies.
The current distribution suggests that the average profit- maximizing firm in the United
States uses only a few HPWS practices, not the complete system. If using more HPWS
practices translates to higher organizational performance, why are firms not maximizing
profits? Are these practitioner failures, or is the failure a result of inadequate theory?
Are there determinants of choice of HRM practices that will be neglected in the
mainstream U.S. based SHRM theories?
 2.3.2.2 The German Context
Festing (2011) examines the literature on divergence, convergence, and cross vergence
and applies a more sophisticated contextualize perspective to the German setting. He
explains how the legislative, corporate governance, capital market, and educational
systems in Germany have an impact on the use of strategic human resource management.
For instance, numerous HPWS-specific strategic human resource management practices,
such as job security, in-depth training, and employee participation, are governed by
national law in Germany and as a result, cannot be considered strategic differentiators
that are connected to variations in firm performance.

Although they are not regulated by law, other HPWS procedures including selective
hiring and profit sharing are common and seem to have developed into useful extra
practices. It's intriguing to observe the spread of HRM methods that are typically
American, including performance management and pay for performance that is
dependent on an individual's performance. As a result, Festing provides evidence of
directional convergence in addition to examining the strong theoretical justifications for
SHRM divergence across national settings. (Is this the result of economic forces, other
factors, or the "coercive" influence of US-based SHRM research and business school
education, which she mentions and discusses)?

2.3.2.3 The China Context

Strategic human resource management is a relatively new idea in China. A check of the
literature turned up no articles about SHRM in China until 2002. The HPWS
Universalist perspective's application in China, where businesses work in a fast growing
and volatile economic environment and within the confines of their own unique
historical and cultural legacy, is contested by Liang, Marier, and Cui (2010). Although
having a sizable impact on business practices, the government has made it a priority
over the past 30 years to encourage and support the growth of privately held companies.
They suggest an HPWS substitute that is more appropriate for the Chinese setting. They
also point out the considerable prospects for study on contextual variables in strategic
human resource management given the extraordinary political, social, and economic
transformations happening in China.
2.4 Conceptual Frame Work of the Study
The modern approach to HRM, known as strategic HRM, differs from traditional HRM in that it
has a horizontal fit with all HR activities inside a company as well as a vertical connectivity with
corporate and business strategy. The behavior, productivity, and performance of employees are
significantly impacted by this strategic connection. As a result, as depicted in the diagram below,
an organization's effectiveness will be based on the SHRM practices.

Source: Own extraction from the theory.

Also, the picture above depicts the conceptual framework of the study to show how
strategically integrated HRM practices (the flow from box 1 to box 2) mentioned in
section 2.1.3 (box 3) have the ability to affect individual employees' or team behavior
(box 4), which will have an impact. on their performance and productivity(box-5). For
example, a training & development designed to increase KSAs has a direct and positive
impact on employees ‘behavior to be productive & best performer.
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction
This chapter describes the research method that will be followed to achieve the objectives
of the study. The subsections include here are research approach, research design, types
of data and instruments of data collection, target population, sample size and sampling
techniques, methods of data analysis, model specification, validity and reliability, and
ethical issues.

3.2 Research design

The objective of this study will be to examining strategic human resource management
practices towards organizational effectiveness in in the case of ethio telecom north west
region. To this end, a quantitative and qualitative research approach will be used.
According to Creswell (2014), the primary criterion to be considered for selecting an
approach is the research problem or research questions. The type of research approach
appropriate for this study is mixed research approaches. Because using both quantitative
and qualitative approaches give a broad base to the findings of the study and helps the
study to be more valid and reliable. Both methods triangulate to support each other in an
integrated framework (Creswell2009). Applying this approach will helpful for the
researcher to neutralize biases of applying any of a single approach as well as ways to
balance the weaknesses inherent in a single method with the strengths of the other
method.
Phillips (1971) defines research design as the blueprint for the collection, measurement,
and analysis of data. The type of research design employed in this study is descriptive
and explanatory research design. The main importance of descriptive research is a
description of the state of affairs as it exists at present (Kothari, 2004). The descriptive
part of the research includes surveys and fact-finding inquiries of different kinds to
describe and critically assesses the factors affecting employee performance. The
researcher also uses explanatory research design to investigate strategic human resource
management practices towards organizational effectiveness.
This study will use a cross-sectional survey in the sense that all relevant data is collect at
a single point of time from selected sample employees through the use of questionnaires.
The reason for preferring a cross-sectional study is due to the vast nature of the study
and the limitation of time. In addition to this, obtaining information from a cross-section
of a population at a single point in time is a reasonable strategy for pursuing many
researches, Janet M. Ruane, (2006:94).
3.3 Study area
The study conducted at Ethio Telecom, Northwest Region. This has chosen due to the
availability of information and it is very easy of researcher to access to the area concern.
3.4 Study population
The researcher will use use a multi-stage sampling strategy for this investigation. A
certain group will be purposely chosen from the population in the first step, and in the
second stage, either a basic random or systematic sampling technique will be used.

As a result, as it will be noted in the study's delimitation section, this research

deliberately concentrates on the organization's strategic players. Based on the notion that
management teams in organizations have a better awareness of their subordinates' plans,
aims, and objectives than they do. The organization's management group, which consists
of 295 higher officials, including 12 chief officers, 40 officers, and 243 managers, will be
the target population as a result.

3.5 Sample and Sampling procedures

As a result, the sample size is determined using Guilford and flruchter (1973) formula
for estimating sample size: Z = N 1+µ2N
Where: Z is sample size, N is the size of the population, µ is alpha = +0.05.
The sample size of this study will be calculated to be 121and a total of 150 questionnaires
accompanied by a covering letter will be randomly distributed to Chief Officers, Officers
and Managers. In addition, 5 HR officers will be interviewed.

3.6 Data collection methods

The researcher will use two types of data sources that are primary and secondary source
as listed below.

3.6.1 Primary data

Primary data comprises firsthand knowledge; normally the researcher will collect them
during the field. In this study questionnaires and structured interviews will be used.

The questionnaires will contain closed ended questions that will be distributed among
workers at Ethio Telecom, Northwest Region for collecting information (in obtaining
data).This technique brought freedom and enough time on digesting questions and filling
in questionnaires.

3.7 Methods of Data Analysis

In addition to using an exploratory technique to analyze respondents' opinions and

interview results, descriptive statistics, basic percentage analysis, and correlation analysis
were utilized to analyze the quantitative data. Also, a regression model was used to
analyze the numerical data, verify the relationship between the variables, and forecast the
dependent variable. Ayanda & Sani (2010) used the approach to assess organizational
efficiency in the States of Nigeria's public sector. Because it could be tailored to the
study, the researcher used it with significant changes to the variables and indicators.

3.7.1 Empirical Model Specification

The general model of the study work which is stated as follows:
Organizational Effectiveness =f (strategic HRM practices)…………….…..………………
(1)
Equation 1 will further expand as follows
OE = f {SHRA, DHRM, PS, PMS, TDS, CS, CSPS, EP}………..……..….…..………..…..………
(2) Where:
OE = Organizational Effectiveness
SHRA= Strategic HRM Alignment with Overall Organizational Objectives
DHR= Delegation of HR practices to Line Managers
PS= Placement System
PMS=Performance Appraisal system,
TDS= Training and Development System
CS = Compensation system.
CSPS = Career planning system.
EP = Employee participation.
This hypothesized model will be quantitatively captured and tested using the following multiple
regression model and the parameters will be standardized:

OE = β0+β1SHRA+β2DHR +β3PS +β4PMS +β5TDS +β6CS +β7CSPS + β8EP + e…………………….. (3)

Where:
e = Error term i.e. other variables not included in the model. ß0 = Constant or intercept term. ß1, ß2… ß8 =
Parameter estimate associated with the influence of the independent variables on the dependent variables.

3.5.2 Operational Definition of Variables

 Dependent Variable
Depending on an organization's size and industry, measuring organizational performance
is a larger and more complicated notion. Theorists have created various organizational
effectiveness models over the years to quantify organizational effectiveness. Goal
Model, Internal Congruence Model, and Strategy
The three most well-known five models for evaluating organizational efficiency are the
constituencies' model, resource dependence model, and human relations model (Ken and
Armstrong, 2005).

The four BSC dimensions (customer satisfaction, finance, learning & development, and
internal process) will be taken from an existing model called the BSC (Balanced Score
Card) model in order to quantify organizational success for the objectives of this study.
The following models will serve as a standard for the new model (Goal, Human
Relations, Internal Process, System Resource, and the Customer Focus models). The
ability to attract and retain quality employees, the relationship between top management
and labor unions, the efforts made to satisfy customers, the low rate of customer
complaints, the degree of customer satisfaction, the quality of services & infrastructure,
and financial growth (revenue/savings & profitability) are all variables and indicators
from each model (efficiency).The ability to identify, design, and well integration of internal
work processes, the use of standard business process frameworks and supporting IT systems
solutions, the interaction within and/or across sections, departments.
The integration of the above variables will lead the company to organizational
effectiveness indicators like; Financial growth, Internal Process, Learning and
Development and Customer satisfaction. These indicators have been rated anonymously
by the respondents on a 5-point Likert scales (1 = strongly Disagree; to 5 = strongly
Agree) method.

 Independent Variables

The independent variables (which collectively are a measure of Strategic HRM

practices) in this study will be: strategic HRM alignment with organizational and
business objectives and strategies, line management development in HR practices
(delegation of HR practices to managers), placement system (recruitment, selection,
placement), performance management system, training and development system,
compensation system, career & succession planning system and employee participation.
The items are derived from a comprehensive review of the literature on strategic HRM

practices that are considered to relate to organizational effectiveness.

‗Strategic HRM alignment‘ with business objectives and strategies will be measured by
fourteen (14) items, each item rated on a 5-point scale ranging from 1 ‘strongly disagree
to 5 ‘strongly agree’. A sample items are ‘ET develops processes and programs to link HR
strategies with business strategy, I am expected to develop processes and programs that link HR
strategies to business strategy, I make sure that HR strategies are aligned with business
strategy, and I work/provide inputs to align HR strategies and my business strategy’.

The ‗Line management development in HR practices‘ variable will be measured by

having 8 items and respondents will be asked to indicate on a scale of 1 ‗strongly
disagree‘ to 5 ‗strongly agree‘ the proportion of line managers trained in the
organization and the skills they gained from the training. A sample items are ‘I
participate in HR practices training & found that very useful, I get the necessary skills
from the training on HR practices, and I believe that these skills are very important to
my business area’.
‗Placement (recruitment, selection & appointment) system ‘will be measured by an
instrument having 6 items each rated on a 5-point scale. The respondents will be asked
to indicate on a scale of 1 ‗strongly disagree ‘to 5 ‗strongly agree ‘the extent to which
the employment process is done as per the business priority of the organization. A
sample items will be ‘The recruitment process focuses only on promising candidates
and Placement process matches the skills of candidates with competency requirement
for positions’.

‗Performance management’ is measured through an 8-item scale. The respondents will

be asked to indicate the extent to which performance management system is designed
and implemented to support the achievement of business goals. In other words, they will
to indicate on a scale of 1 ‗strongly disagree ‘to 5 ‗strongly agree’ their agreement with
some performance management systems in the organization. Sample questions are ‘your
division/department-level goals and strategies are consistent with those at the corporate
level, Job descriptions (JDs) are designed consistent with unite and organizational
priorities, and Performance management System includes results, behaviors and
developmental plans consistent with the unit and organizational-level priorities’.
‗Training and development ‘variable will be measured by an instrument having 8 items,
each rated on a 5-point scale. The respondents will be asked to indicate on a scale of 1
‗strongly disagree to 5 ‗strongly agree ‘the extent to which training and development
needs in the organization are identified and met. A sample questions are ‘Training and
development programs are designed to support business objectives and Trainings are
offered based on training need analysis translated in to training programs ‘.
‗Compensation ‘system is measured through a scale having 7 items. The respondents
will be asked to indicate on a scale of 1 ‗strongly disagree to 5 ‗strongly agree ‘the
extent to which compensation is linked to the performance and qualification of
employees in the organization. A sample question is ‘in our company salary and other
benefits are comparable to what is generally obtainable in the industry‘.
‗Career & succession planning ‘system variable will be measured by an instrument
having 7 items, each rated on a 5-point scale. The respondents will be asked to indicate
on a scale of 1 ‗strongly disagree to 5 ‗strongly agree’ the clarity and usage of career
planning system in the organization. A sample questions are ‘Employees in their
respective job have clear career paths within the organization and Career & Succession
Planning are designed to support business goals’.

‗Employee participation ‘will be measured through a 6-item scale. The respondents will
indicate on a scale of 1 ‗strongly disagree to 5 ‗strongly agree‘ the extent to which
superiors allow employees to participate in operations decisions as well as the
opportunity given to suggest improvements in the way things are done. A sample
questions are ‘employees in this company are will be asked by their superiors to
participate in decisions and employees are encouraged to suggest improvements in the
way things will be done‘.
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APPENDICES:

Appendix-A: Interview Questions

Appendix-B: Questionnaire designed for the study participants
Appendix-A: Interview Questions

This interview question designed for HR Division department heads including the Chief
HR officer, to know to what extent their respective department‘s strategies are aligned
with the business and corporate strategies.

1. Are the mission and strategy of the human resource organization designed to
match the business strategy of the organization?
2. Does the design of the human resource organization enhance its ability to
accomplish its strategy?
3. Are the kinds of people who run the human resource function good choices for
the ongoing tasks?
4. How effective is the selection process in ensuring that people are placed in
appropriate positions? Explain.
5. How effective is the appraisal process in accurately assessing performance?
Explain.
6. How effective are rewards (financial and nonfinancial) in driving performance?
Explain.
7. How effective are the training, development, and career planning activities in
driving performance? Explain.
8. How effective is the appraisal process in differentiating performance levels for
justifying reward allocation decisions? Explain.
9. How effective is the appraisal process in identifying developmental needs of
individuals to guide training, development, and career planning? Explain.
10. How effective are the training, development, and career planning activities in
preparing people for selection and placement into new positions in the
organization? Explain.
11. Overall, how effectively are the five components integrated and mutually
supportive? Explain.
1
Appendix-B: Questionnaire
St.Merry’s University School of Graduate Studies
Master of Business Administration
Questionnaire to be filled by Ethio telecom Managers/Officers/Chief Officers

Dear Sir/Madam,

You have been selected as a valued and knowledgeable participant in this research project titled ‘The Role of
Strategic HRM on organizational Effectiveness’. The aim is to clarify the strategic role that HR division plays
towards Ethio telecom‘s organizational effectiveness. By participating in this research project you will provide
valuable information that the researcher will use to determine the current role of the HR division and make
valuable recommendations regarding the strategic link between ethio telecom‘s HR functions with the
organizations corporate/ business strategies.
The questionnaires are completely anonymous and confidentiality is assured. For the research to yield valid
results, it is important that you answer all the questions as honestly and truthfully as possible. The answers must
reflect your own opinion and perception. Please answer all the questions and statements.
Thank you for your willingness to participate in this study. It is greatly appreciated!!!

For any clarification request:

Haftu W/Tekle(0911510393)
SECTION-I: Demographic Information

Please provide me with some information about yourself:

1. Which age brackets are you belong?

□ 25– 30 years □ 41-50

□ 31 – 40 years □51- 65
2. Sex?

□ Male □ Female
3. Your highest level of formal education?

□Diploma/equivalent □ BA/BSc/BLL degree □ Master‘s Degree □ PhD

4. How long have you been working in your current position?

□1 – 4 year‘s □11 – 15 years

□5 – 10 years □16 years & above
5. Your current job level?

□ Manager (N-3) □ Officer (N-2) □ Chief Officer (N-1) □Other please specify ________
6. Your working division?

2
7. □ Marketing, Customer service, Network □ IS, Quality &Process, PMO
□ SFD, HR, Finance, Internal Audit □ Other __________________

SECTION-II: Integration of HRM Practices with Corporate Strategy

Listed below are descriptive statements about Strategic Human Resource Management. For each
statement, please indicate to which degree you display the behavior described.

Please make a cross (X) mark in the applicable box.

eStrongly
Moderately

e Slightly

Moderately
Strongly
Disagree

Agre
Disagre

Agre
Agre
e

e
Statements

#1. Strategic HRM alignment with organizational objectives 1 2 3 4 5

1 Ethio Telecom (ET) has a clear vision, mission and strategic goals.

2 Business/division strategies are derived from corporate strategies.

3 ET develops processes and programs to link HR strategies with business strategy.
I am expected to develop processes and programs that link HR strategies to
4 business strategy.
5 I make sure that HR strategies are aligned with business strategy.
6 I work/provide inputs to align HR strategies and my business strategy.
7 I participate in the process of defining business strategies.
8 I am an active participant in business planning in my division.
9 I believe that I am a strategic partner in my organization.
10 I believe that line managers/officers perceive me as a strategic partner.
11 My credibility comes from helping to fulfill strategic goals.
12 Being a strategic partner determines my success as a manager/officer.
13 ET management group expect me to participate in strategic decisions.
14 ET management group expect me to contribute to the achievement of business goals.

#2. Delegation of HR Practices to Line Managers 1 2 3 4 5

3
1 Ethio telecom has a line management development process in HR practices.

2 I participate in HR practices training & found that very useful.

3 I get the necessary skills from the training on HR practices.

4 I believe that these skills are very important to my business area.

5 I believe that HR managers/officers are strategic business partners to me.

6 I understand that those HR practices & my business strategies are aligned.

7 I believe that this integration has a great impact on strategic goals achievement.

8 I believe that this integration explicitly has been practicing in Ethio telecom.

Disagree

Disagree

Moderately
Slightly

Strongly
Strongly

Agree

Agree
Agree
Statements

#3. Placement (Recruitment, Selection & Placement) System 1 2 3 4 5

1 Employment is done as per the business priority of Ethio telecom.

2 The recruitment process focuses only on promising candidates.

Placement process matches skills of candidates with competency requirement for
3 positions.
4 Employees are selected & placed according the business requirement.

5 Employee's in your respective division feel that their job is worth doing.

6 Employees are provided with opportunities to make full use of their skills and abilities.

#4. Performance Management System(PMS) 1 2 3 4 5

1 Organizational vision, mission, goals and strategies are clearly defined.
2 My division/dep’t-level goals and strategies are consistent with those at corporate level.
3 Job descriptions (JDs) are designed consistent with unite and organizational priorities.
PMS includes results, behaviors and dev’tal plans consistent with unit and
4 organizationallevel priorities.
5
PMS includes results, behaviors and developmental plans consistent with individual JDs.
6 Employees know what’s expected of them –their goals and accountabilities.
7 Performance appraisals are used for compensation decisions.
8 Performance appraisals are used for professional development.

4
 #5. Training and Development System 1 2 3 4 5
1 Ethio telecom has a clear training and dev’t plan linked with business strategy.
2 Training and development programs are designed to support business objectives.

3 Trainings are offered based on training need analysis translated in to training programs.
4 Formal & related development programs are offered to managers/officers each.
5 Formal & related training programs are provided to employees.
Training programs are offered to new hires the skills they need to perform their jobs.
6
Feedbacks are collected after the training delivery.
7
8 Feedbacks are analyzed for further improvements.

#6. Compensation System 1 2 3 4 5

1 The benefit & compensation packages are designed to support business goals.

2 Managers are eligible for cash bonuses based on individual performance.

3 Managers are eligible for cash bonuses based on company-wide productivity/ profitability.

4 The compensation packages are linked to performance.

5 The compensation packages are linked to qualification of employees.

6 Individual & team performance is adequately rewarded.

7 I am satisfied with the company’s flexible benefits programme. Moderatel
Disagree

Disagree
Slightly

Strongly
Strongly

y Agree
Agree

Agree
Statements
#7. Career & Succession Planning System 1 2 3 4 5
1 There is a career development system in Ethio telecom.
2 There is a succession planning system for all critical positions.
3 Career & Succession Planning are designed to support business goals.
4 Employees are kept informed about what is required of them to advance.
5 I have a good understanding of the potential career moves in the company.
6 Employees in their respective job have clear career paths within the organization.
7 Employees have more than one potential position they can promoted to.

5
 #8. Employee Participation 1 2 3 4 5
Employees in their job are often asked by their superiors to participate in
1 decisions.
2 Employees are encouraged to suggest improvements in the way things are done.
3 Employees are encouraged to play a proactive role in improving the labor-mgt relationship

4 There is a culture of inclusion that promotes labor-mgt as partner in business success.

There is a climate of trust and teamwork b/n employees &mgt aimed at delivering a
5 typical service to the customer.
Management promotes positive attitudes that result in an engaged, committed and
6 motivated workforce.

SECTION-III: How Ethio telecom is effective to the extent the four Balanced Scorecard
dimensions are achieved.

Please make a cross (X) mark in the applicable box.

#9. Organizational Effectiveness 1 2 3 4 5

Customer Satisfaction
1 Ethio Telecom makes every effort to satisfy its customers.
2 Our service quality and infrastructures are adequate.
3 I believe that ET acquires the maximum expectation level of customer satisfaction.
Financial Growth
4 During the last three years ET achieves financial targets (savings and/or revenues).
Learning & Development

5 ET encourages employees to learn and develop their competency.

6 ET promotes to develop intellectual capital through organizational, team and individual learning.

7 Ethio telecom is accumulated the required resource (knowledge, equipment and technology).
8 The right quality workforce is available to meet present and future needs.
Internal processes
9 Internal work processes are exhaustively identified.
10 Internal work processes are clearly designed, well integrated and cost effective.
11 Work processes are supported through ERP system.
12 The interaction within and/or across sections, departments is smooth.

Please state why you agree/ disagree in the items above for the following categories
respectively?

6
#1.Integration of HRM with Company Strategies
Agree because,
____________________________________________________________________________
Dis agree
because,__________________________________________________________________________
#2.Line Management training in HR Practices
Agree because,____________________________________________________________________
Dis agree because,_________________________________________________________________
#3.Placement (Recruitment & Selection) System
Agree because,___________________________________________________________________
Dis agree
because,_________________________________________________________________________
#4.Performance Management System
Agree
because,__________________________________________________________________________
__
Dis agree
because ,_________________________________________________________________________
#5.Training and Development System
Agree
because,__________________________________________________________________________
__
Dis agree
because,_________________________________________________________________________
#6.Compensation System
Agree
because,__________________________________________________________________________
__
Dis agree because,
_________________________________________________________________________
#7.Career & Succession Planning System
Agree
because,__________________________________________________________________________
__
Dis agree because,
_________________________________________________________________________
#8.Employee Participation
Agree
because,__________________________________________________________________________

7
 _
__
Dis agree
because,__________________________________________________________________________

Finally, how do you evaluate the HR division‘s overall level of influence to ethio telecoms of
strategic support?
1 – Not at all influential 2 – slightly influential 3 – Somewhat influential 4–
Very influential 5 – extremely influential