THE EFFECT OF STRATEGIC HUMAN RESOURCE

MANAGEMENT PRACTICE ON EMPLOYEES

ORGANIZATIONAL PERFORMANCE: IN THE OF
COMMERCIAL BANK OF ETHIOPIA BAHIR DAR BRANCHES

PREPARED BY:-Dessalegn Alamirew

ADVISOR: Abrham Seyoum. (PHD)

A Thesis submitted to the Department MBA of Yom Postgraduate College, in

partial fulfillment for the requirements of Masters of Science Degree in

Business Administration

Aug, 2023

BAHIRDAR /ETHIOPIA
Contents
1.3. Statement of the Problem......................................................................................................7
1.4. Objectives of the Study.......................................................................................................10
1.4.1. General Objective............................................................................................................10
1.4.2 Specific Objective.........................................................................................................10
1.5 Significance of the study.....................................................................................................10
1.6 Scope of the Study...............................................................................................................10
1.6.1 Conceptual Scope.........................................................................................................10
1.6.3 Methodological Scope..................................................................................................11
1.7 Limitation of the Study........................................................................................................11
1.8 Definition of Terms.............................................................................................................11
CHAPTER TWO...........................................................................................................................13
2. RELATEDLITRATURE REVIEW......................................................................................13
2.1. 3.Recruitment and Selection...........................................................................................15
2.1.4 Training and Development...........................................................................................16
2.1.5 Staff motivation............................................................................................................18
2.1.3 Organization Performance............................................................................................20
2.2. Underpinning Theories of HRM.........................................................................................21
2.2.1 Organizational Commitment Theory............................................................................21
2.2.2 Motivation Theory........................................................................................................22
2.2.3 Human Capital Theory.................................................................................................24
2.2.5 Social Exchange Theory...............................................................................................25
2.3 Empirical Literature Review................................................................................................25
2.3.1 .Relation/n recruitment and selection and organizational performance...........................25
2.3.2. The relationship b/n T&D and Organizational Performance.......................................26
2.3.3. The relationship b/n staff motivation and organizational performance.......................27
2.3.4Therelationshipb/n working environment and organizational performance..................27
CHAPTER THREE.......................................................................................................................29
METHODOLOGY OF THE STUDY...........................................................................................29
 3.1. Research Design.................................................................................................................29
3.1.1. Quantitative Research Approaches..................................................................................30
3.1.2. Qualitative Research Approaches....................................................................................31
3.2. Data Type and Source.........................................................................................................31
3.3. Data Collection Instrument.................................................................................................32
3.4. Sampling Design.................................................................................................................32
3.4.1. Target Population.............................................................................................................32
3.4.2 Sampling Frame................................................................................................................33
3.4.3. Sampling Unit..................................................................................................................33
3.4.4. Sampling Techniques.......................................................................................................33
3.4.5. Sample Size.....................................................................................................................33
3.5.Data Analysis Techniques...................................................................................................35
3.6. Reliability and Validity Test...............................................................................................36
3.6.1. Reliability Test.................................................................................................................36
3.6.2. Validity Test....................................................................................................................37
3.7. Ethical Issues......................................................................................................................37
3.8. Time schedule.....................................................................................................................37
3.9. Budget schedule..................................................................................................................38
REFERANCE................................................................................................................................39
Annex- I.........................................................................................................................................42
 Chapter One
1.1. Background of the Study
Human Resource Management is an important function for the both the private and public sector
organizations. The process deals with several operational objectives such as recruitment,
providing proper training to the employee, selection of the employee, assessment of the
employee, motivating and maintaining a proper relationship with the employee and maintaining
welfare and health for the employees in the organization through laws created by the concerned
state and country. The human resource management is a process through which the organization
utilizes their limited skilled workforce. The main intensions make effective utilization of the
existing human resource for the organization. Apart from this, human resource management
works in the diverse area like conducting of jobs, planning the employee's needs and recruitment,
determination of wages and salaries, resolving the disputes and creating better working and
safety environment for the employees (Bowen &Ostroff, 2004).
The quality of human resources is a critical factor in the capacity of the government to deliver on
its mandate. Human Resource Management (HRM) is critically important in that it ensures
human capital is well managed and that all issues relating to this resource are effectively dealt
with. Organizational sources of competitive advantage such as natural resources, technology,
economies of scale, and so forth, they can create value but these sources are increasingly easy to
imitate. If that is so, human resource strategies may be an especially important source of
sustained competitive advantage (Armstrong, 2010).
In competitive and fatly changing business world, organizations, especially in the service sector
need to ensure maximum utilization of their resources to their own advantage is crucial for
organizational survival. Studies have shown that organizations can create and sustain competitive
position through management of non-substitutable, rare, valuable, and inimitable internal
resources such as human capital (Jing et al. 2012). In addition to the above, present business
environment which has a very tight competition, the frustration level of organization has
increased day to day due to failure on human resource management practice that directly and
Indirectly affect their organizational performance and many organizations are also trying to
implement the best human resource practice which help them to gain competitive advantage on
their market share.

Before some years ago human resource functions was the preserve of “Personnel Managers‟
whose responsibility were to recruit and select, appraise, promote and demote. These duties
could be performed by any manager, therefore never seemed necessary to employ an expert in
the form of a human resource manager let alone create a whole department dedicated to HRM.
Little attention was paid to human resource management issues and its impact on organizational
performance. Theemp has is on traditions and socio-cultural issues injected an element of
subjectivity in “personnel manager” functions such as recruitment and selection, performance
appraisal, promotion, demotion, and compensation (Daud, 2006).
In Ethiopia, human resource management practices have not been issue for long time. It becomes
concern in recent times compared to the other side of the world. Especially, in the early 1990s’
after the derg regime down the economy policy changed in to free market and organizations start
to organize their own personnel management department to perform human capital related
processes. Many researchers have been studied extensively to understand the effect of human
resource management on firm’s performance but the ones that have a significant effect on firm
performance are recruitment & selection, training & d
Recruitment, as a human resource management function, is one of the activities that impact most
critically on the performance of an organization. While it is understood and accepted that poor
recruitment decisions continue to affect organizational performance and limit goal achievement,
itisbestthatmucheffortisputintherecruitmentandselectionpractices(Randall,1987).Traininganddeve
lopmentpracticeshaveshowntoincreaseemployeemotivationandtohaveatremendousimpactonperfor
mance(Jiangetal.,2012).evelopment ,staff motivation, and working environment .

The success of any organization depends on effective mobilization of all human efforts in the
organization (Okoh, 1998)
Work place level also impacts on employees stress as according to vischer (2006)that a good
working environment will lead to better fit between work space and employees and results in
improving behavior and stress related emotions. A good working environment changes
employees approach towards job.

Customer is the main reason why the business is established and customer preference of banks
determine by the quality of service they received. Quality service is determined by effective and
efficient applicability of human resource management practices. Human resource planning
should be review and forecast the human resource need and fill the gap immediately before it
affects the service. Recruitment and selection process should find out the right candidate and
select the best of them, when knowledge gap is there training and development program should
take place so that the efficiency level of employee will increase and customer perception about
quality service will meet and also other HRM practices directly and indirectly affect the level of
service quality. Base on that the researcher has listed out the factor are relevant to develop
organizational performance. Many previous research (Randall,1987)(Jaing et al 2012)(Okoh
1998)(;vischer 2006) on the effects of human resource management on organizational
performance shows that the performance of organization
The intention of this study will be to investigate the general HRM practice as well as their effect
on CBE’s performance such as recruitment and selection training and development; staff
motivation and working environment.

1.3. Statement of the Problem

Human Resource Management is a process of bringing people and organizations together so that
the goals of each are met. It is types of the management process which is concerned with the
management of human resources in an organization. It tries to secure the best from people by
winning their wholehearted cooperation. In short, it may be defined as the art of procuring,
developing and maintaining competent workforce to achieve the goals of an organization in an
effective and efficient manner (Mahapatro, 2010).
The Bank has the system in place to integrate human Resource practices to the performance of
organization according to the human resource policy of the organization. However, there are
many complaints of employee about the involvement of human Resource practices. This is
because most of the time the company did not show care about employees, and even there is an
observation that middle level managers interpret the HR policies as they wish. Due to
dissatisfaction by practices human Resource many employee leave the company every year.
According to annual report of Commercial bank ofEthiopia, 2015/2016,2016/2017,2017/2018 as
shows that in 2013.
The process of recruiting and selecting all categories of employees into both private and public
companies has been a matter of concern to many and needs attention. Even though it is the wish
of every organization to attract the best human resource in order to channel their collective effort
into excellent performance per the strategic document (2016/17-2020/21) and profile of the Bank
(2014/15), currently Commercial Bank of Ethiopia is implementing the Human Resource
Development strategy. To achieve the success of the strategy and become competent enough in
the banking sector domestically as well as internationally, the Bank has been exerting a lot of
resources. In this regard, the strategies of the bank (2015-2020) clearly reveal why the bank has
designed its vision as," Becoming a world Class Commercial Bank by the year 2025.”
According to Kelly (2006), for any organization to achieve its stated objectives and goals, there
is a need for management to put in place policies or strategies that will help attract the best
employees to strive towards the achievement of organizational objectives.
An organization’s recruitment and selection strategy is driven by its vision, objectives and
strategic agenda (Kelly, 2006). Since the quality of employees employed by an organization has
a direct impact on its financial performance, attracting and selecting the “right” people and
keeping them satisfied is critical to organization success. This is because, poor recruitment
choices (i.e., poor person-job fit) can have a range of undesirable consequences for the worker by
lowering job satisfaction which has impact on the organization including higher rates of
turnover, reduced performance effectiveness, and reduced work motivation. The bank has given
concern to retaining employees considering their needs and their satisfaction.
Training, development and skills are key aspects at the levels of the firm and the national
economy training offers the hope of increased competitiveness through raising skill levels,
productivity and value added. The main thrust of Training and Development is to provide an
environment in which people are encouraged to learn and develop. Although it is business-led,
its strategies have to take into account the needs of individual employees. The importance of
increasing employability outside as well as within the organization is also a concern (Armstrong,
2006).
Employee who possess the right skill for the job and develop it through training on different way
affects organization performance. Researchers argues that a better training that fits to current job
and making sure employees are also provided for future job will increase the confidence level of
employee and due to that employees become motivated to exert their effort so that the
organization become successful(Jiang et al., 2012).
Motivations generate by performance and its attributes are likely to accelerate success more than
failure among current leaders (James & Roberts, 1997).
Hence motivation is very important to the determine employees ability so do other factors such
as the resources given to an employee to do his or her job. Successful work performance can
arise from ultimate companion limited which could achieve through appropriate motivation.
Therefore employee motivation will be a condition necessary to achieve these goals (William,
2010)
MohammedAl-Anzi (2009) argued, it is felt in general that improving the work environment
increases productivity. There are number of interacting factor which affect productivity,
including privacy, communications, social relationship, office system organization, management,
as well as environmental issues. It is a much higher cost to employ people who work than it is to
maintain and operate the building, hence spending money on improving the work environment
maybe the most cost effective ways of improving productivity. Based on that the researcher has
listed out the factor are relevant to develop organizational performance. Many previous research
(Randall,1987)(Ballot et al 2006)(Muhammad et al 2011)(srivastava 2008) on the effects of
human resource management on organizational performance shows that performance of
organization is failed when HRM activities are not properly applied. Since this result do not
represent to the employees of study area (CBE) so it should be studied.
As north achier district commercial bank branch like liven branch many customers are not
receive timely service, they keep long time to get different service, employees do not give fast
and quality service to their customer, most of the time employees of CBE are not receive enough
training based on their interests, employees are not happy by their works this seems like
problems of recruitment and selection and lack of training and development. The employees who
are working in CBE branch asked place change with a few years and most employees are not use
their time properly and are not arrive on time their work place, they are carless on their work and
they are not satisfied and employees are not satisfied on motivational activates that can be
operated by managers on the working environments so it needs to be studied what are reasons for
the problem. This may be the problem of staff motivation and working environment.
Hence, this study focused on the overall situation of human resource management particularly,
on recruitment and selection, training and development, staff motivation, working environment
of Commercial Bank of Ethiopia, Bahir Dar branch

So the study will answer the following major research questions

Research Questions
 What is the effect of recruiting and selecting practice on organizational performance?
 What is the relation between training and development with organizational performance?
 Does Incentive and Compensation practice (ICP) has relationship with organizational
performance?
 To what extent Health and Safety Practice (HSP related to organizational
performance?
 To what extent Communication and Information Sharing Practice (CISP) related to
organizational performance?
 What is the relation between Job Security Practice (JSP) with organizational
performance?


1.4. Objectives of the Study

1.4.1. General Objective

General objectives of this research is to identify the effect of human resource management
practice on organizational performance. In the case of Commercial Bank of Ethiopia.

1.4.2 Specific Objective

The specific objectives of the study will;
 To find out the effect of recruitment and selection on organizational performance of CBE.
 What is the training and development practice that have been take place and their influence
over organizational performance of CBE.
  To find out the relationship of Incentive and Compensation practice (ICP) with
organizational performance
 To investigate the relationship between Health and Safety Practice (HSP) and
organizational performance of CBE.
 To investigate the relationship between Communication and Information Sharing Practice
(CISP) and organizational performance of CBE.
 J To investigate the relationship between J ob Security Practice (JSP) and organizational
performance of CBE.

1.5 Research Hypothesis

Consequently, from the above conceptual frame work the following hypothesis is developed.
 H1: Selection& recruitment practice has a significant effect on organizational
performance of CBE.
 H2: Training& development practice has a significant effect on organizational
performance of CBE.
 H3: Communication & information sharing practice has a significant effect on
organizational performance of CBE.
 H4: Incentive& Compensation practice has a significant effect on organizational
performance of CBE.
 H5: Health & safety practice has a significant effect on organizational performance of
CBE.
 H6: Job Security practice has a significant effect on organizational performance of CBE.

1.6 Significance of the study

The findings of the study, if may be applied, will be believed to benefit the Bank by identifying
the gaps in the implementation of the human resource practices and their effect on organizational
performance. It will also have advantages to employees by identifying the areas in which they
would be dissatisfying and communicating it to the Bank authorities.
The researcher would get a good experience and help him/her to do good works in the future.
The study will enable the researcher in acquiring academic fulfillment for graduation. The study
will serve as reference and documents for related works of others.

Lastly, this research may provide additional output for the research world and it would provide
the way for further research.
1.7 Scope of the Study

1.7.1 Conceptual Scope

Human resource management practices covers all human resource management strategically
roles that may bring effectiveness and efficiency to the organization. Trying to address all in one
is almost impossible. Therefore, conceptually this research focus only for HR practices that are
believed to be most influential on CBE’s performance (HRP), recruitment and selecting, training
and development, staff motivation, and working environment).
1.7.2. Geographical scope
Commercial Bank of Ethiopia is the largest bank in Ethiopia by having more than 1666 branches
and it covers almost all over the country. And due to time and cost shortage the study will take
place only branches found in Bahir Dar.

1.7.3 Methodological Scope

The research design will follow quantitative and qualitative approach and used a descriptive way
of statistical explanation using statistical data.

1.8 Limitation of the Study

Many employees in the selected banks may refuse to take questioners claiming time constraint.
Even though who would take questioners to complete would take several days. Therefore, the
researcher will have to wait several days to collect the questioners. Hence, the time and
unavailability of some employees (managers) among major constraints would face by the
researcher during conducting of this study. This would have affect the depth of analysis and
inclusion of some relevant findings about challenges and practices of human resource
management in the study city.
But the researcher would use different techniques to handle these constraints and finalize this
research work.

1.8 Organization of the Paper

This thesis was organized into five consequential chapters. This report is organized in to five
chapters. The first chapter deals with background of the study, statement of the problem,
objective of the study, significant of the study, scope, and limitation of the study. The second
chapter devote to the presentation of the review of related literature. The third chapter concerned
with the overall methodology and procedures employed to collect, analyze and interpret the
study result. Data presentation and analysis of the finding will deal with the fourth chapter. And
also, Conclusion and recommendation are presented in the last fifth chapter.
 CHAPTER TWO

2. RELATEDLITRATURE REVIEW
This chapter presents the theoretical and empirical literature review from reputable sources. It
also presents the hypotheses and the conceptual framework of the study.
2.1 Theoretical Literature Review
2.1.1 The Concepts of Human Resource Management
Human Resource Management (HRM) is a process of bringing people and organizations together
so that the goals of each are met. It is part of the management process which is concerned with
the management of human resources in an organization. It tries to secure the best from people by
winning their wholehearted cooperation. In short, it may be defined as the art of procuring,
developing and maintaining competent workforce to achieve the goals of an organization in an
effective and efficient manner (Mahapatro, 2010)as cited by Bisrat.
Human resource management (HRM) is a comprehensive and coherent approach to the
employment and development of people. HRM can be regarded as a philosophy about how
people should be managed, which is underpinned by a number of theories relating to the
behavior of people and organizations. It is concerned with the contribution it can make to
improving organizational effectiveness through people but it is, or should be, equally concerned
with the ethical dimension – how people should be treated in accordance with a set of moral
values. HRM involves the application of policies and practices in the fields of organization
design and development, employee resourcing, learning and development, performance and
reward and the provision of services that enhance the well-being of employees. These are based
on human resource (HR) strategies that are integrated with one another and aligned to the
business strategy (M. Armstrong, 2014).Without having an efficient workforce organizations
lose their ability to compete, both locally and internationally, eventually leading to poor
organizational performance and thus ending up with striving for their survival or fading out of
the market due to that (GDressler, 2000). According to Becker, and Huselid (2006), human
resource management is a process which perform interconnected activities, role processes and
other aspects that are aimed to attracting, maintaining, and even developing the organizations HR
activities such as planning, recruitment and selection, training, performance management, benefit
and rewards, compensation, and career development. According to Armstrong, (2014), the
general goal of HRM is to support the organization in achieving its objectives by developing and
implementing human resource (HR) strategies that are integrated with the business
strategy(strategic HRM), contribute to the development of a high-performance culture, ensure
that the organization has the talented, skilled and engaged people it needs, create a positive
employment relationship between management and employees and a climate of mutual trust and
encourage the application of an ethical approach to people management.
2.1.2 Concepts of Human Resource Management Practice
Human Resource Management Practices are the main source to make sure that utilization of
employee’s skills and knowledge to achieve organization goals and a means of influencing
employee’s attitude and behavior towards intended vision. It is a way of creating motivation,
commitment, maintaining quality employees and facilitating smooth run of the business
(Stavrou-Costea, 2005) as cited by bisrat
Human Resource Management Practice is a modern way of improve organizations on core
matters such as staff commitment, competency and flexibility, which in turn leads to improved
performance (Chew and Chan, 2008) as cited by Bisrat. Chao and Lee (2007) HRM practices on
business performance such as training and development, teamwork, compensation, HR planning,
performance appraisal, and employee security help improve firms’ business performance
including employee’s productivity , product quality and firm’s flexibility Therefore, this research
would like to see the relationship between HRM practices and organizational performance

2.1.2.1 Training and Development Practice

According to Abiodum (1999) training and development is an organized/systematic way of

development of skills, attitudes and knowledge requisite by the employees that enable them to
perform their task or job effectively and efficiently. According to Huselid in 1995 training is
considered as important elements of organizational performance of CBE. When the training is
available to the employees all the time they feel committed and have emotional feelings towards
the organization then the result is less chances of turnover (Ashar, Ghafoor, Munir, and Hafeez,
2013). Employee’s commitment and retention have been improved by providing the better
training and development practices and on the training sessions as well (Deery, 2008).

Some researchers have found that training and development have inverse relationship with each
other. When the turnover rate is high, it means low training is provided to the employees. This
statement is based on Rehmanand and Hussain (2013) the logic that the longer stay of employees
in the organization the result is higher training is being provided to the employee.

2.1.2.2 Selection & Recruitment Practice

According to Huselid (1995) and Becker and Huselid (1999), selective hiring procedures are
necessary to insure effective retention of the most qualified employees while lowering employee
turnover in the long term and Huselid (1995) examined practice of high performance companies
and found that attracting and selecting the right employees increase the employee productivity,
boost organizational performance and contribute in reducing turnover. In instance in which
adequate employee training and development exist, employees can become frustrated and
stressed by assuming greater responsibility for which they are ill equipped. Thus employer
policies and practices regarding employee promotion and work designs are among the top
reasons why people join, stay or leave an organization (Cafaro, 2001). Cohen and Pfeffer, (1986)
argued that hiring standards reflect not only organizations' skill requirements but also the
preferences of various groups for such standards and their ability to enforce these preferences.
Michie and Quinn (2001) proposed that a possible indirect link between selective hiring and
organizational performance can be the forging of internal bonds between managers and
employees that creates the write culture for productivity growth. Collins and Clark (2003) argued
that the practice of selective hiring results at sales growth. Paul and Anantharaman (2003)
pointed out that an effective hiring process ensures the presence of employees with the right
qualifications, leading to production of quality products and consequently in increase of
economic performance.

2.1.2.3 Communication & Information sharing Practice

Sharing of information may have a dual effect: Firstly, it conveys employees the right meaning
that the company trusts them. Secondly, in order to make informed decision, employees should
have access to critical information. Communicating performance data on a routine basis
throughout the year help employees to improve and develop. Employees presumably want to be
good at their jobs, but if they never receive any performance feedback, they may perceive to
have a satisfactory performance when in fact they do not (Chow et al., 1999). Furthermore,
information sharing fosters organizational transparency which reduces turnover (Ahmad and
Schroeder, 2003) and forges synergistic working relationship among employees (Nonaka, 1994).
Information sharing is not a widespread HR practice as someone might have expected it to be.

Burgess (2005) studied employee motivations for knowledge transfer outside their work unit and
found that employees who perceived greater organizational rewards for sharing spent more hours
sharing knowledge beyond their immediate work group. However, a significant percentage of
employees perceived knowledge as a means of achieving upward organizational mobility.
Therefore, employees sought information more often than shared it.

2.1.2.4 Compensation & Incentive Practice

Collins and Clark, (2003) performance based compensation is the dominant human resource
practice that firms use to evaluate and reward employees’ effort. Evidently, performance-based
compensation has a positive effect upon employee and organizational performance (Brown et al.
2003, Cardon and Stevens, 2004). Empirical studies on the relationship between performance-
related pay and company performance have generally found a positive relationship, but a
growing body of empirical evidence suggests that it is not just pay level that problems, but pay
structure as well (Wimbush and Singh, 2005). Delery and Doty (1996) identified performance-
based compensation as the single strongest predictor of firm performance. Both performance-
based compensation and merit-based promotion can be viewed as ingredients in organizational
incentive systems that encourage individual performance and retention (Uen and Chien, 2004).

A recent study by Cho et al. (2006) investigated the relationship between the use of human
management practices and organizational performance. It found that companies providing
incentive plans to employees are more likely to experience lower turnover rates among non-
managerial employees. The authors theorize that a firm would further reduce its turnover rate if it
applies reward systems in the form of incentive plans to more employees across the organization.
Several other research studies have indicated that compensation in the form of base or variable
pay may not be sufficient to attract or retain employees. Milman (2003) and Milman and Ricci
(2004) concluded that the most significant retention predictors included intrinsic fulfillment and
working conditions rather than monetary rewards. Similarly, the study by Walsh and Taylor
(2007) revealed that although compensation and work-life balance are important, it is the
absence of opportunity for professional growth and development that affects management
retention and turnover (Walsh and Taylor, 2007).
2.1.2 .5 Health & Safety Practice

According to Sharma, (1998) that healthy workplace or wellness initiatives take on a variety of
forms, including those directed at the physical work environment (cleanliness, safety,
ergonomics, etc.); health practices (supporting healthy lifestyles, fitness, diet, etc.); a nd social
environment and personal resources (organizational culture, a sense of control over one’s work,
employee assistance programs, etc.). Healthy workplace initiatives not only improve the health
and wellbeing of individual employees, but contribute to business performance objectives
including organizational performance of CBE.

2.1.2.6 Job Security Practice

Job security creates a climate of confidence among employees which cultivates their
commitment on the company’s workforce. Job security requires a certain degree of reciprocity:
firstly, a company must signal a clear message that jobs are secure; then, employees believing
that this is true, feel confident and commit themselves to expend extra effort for the company’s
benefit; finally, a company that have learnt that job security contributes to its performance,
invests again in job security (Pfeffer, 1998).

When companies do provide job security, then empirical evidence suggests that it has a positive
effect on to firm performance. Following Pfeffer (1998), Ahmad and Schroeder (2003) found
that among others, job security impacts operational performance indirectly through
organizational commitment. Delery and Doty (1996) studied the US banking sector and found
some support for a positive relationship between employment security and firm performance. In
their study of 101 foreign firms operating in Russia, Fey et al. (2000) found evidence that human
resource practices indirectly improve organizational performance. The results showed that not
only, there was a direct positive relationship between job security and performance for non-
managers, but job security was the most important predictor of HR outcomes for non-managerial
employees. Results also suggested a direct positive relationship between managerial promotions
based on merit and firm performance.

2.1.3 Organization Performance

There are many ways to measure organizational performance. The performance indicator of
organization depends on the objectives which the company intended to achieve such as
profitablity, Societal good(good reputation), Security of employment for the firm's personnel,
Providing a satisfying return on investment , Innovativeness in processes and products, Customer
satisfaction, Employee Satisfaction, Growth of market share, Environmental contributions
(positive, as well as negative), Technological leading edge and Commitment.

2.1.3.1 Employee Satisfaction

For an employee to perform effectively and efficiently in organization, job satisfaction is one of
the important points. It is important for both the worker and the organization. Job satisfaction
brings about a sense of fulfillment and security to the employee. Due to these facts, the
commitment level of employee will be increased, absenteeism will reduce and the turnover rate
will decrease (Yucel, (2012). When employees are satisfied with their jobs, the workforce will be
more committed and this will reduce the cost of recruitment and training. An individual’s general
attitude towards his or her job is known as job satisfaction (Syed and Yan, 2012) as cited by
Bisrat.

2.1.3.2 Quality performance

Quality performance indicator it refers to workload targets met on time, accuracy of work,
effectiveness at processing enquiries, annotating records accurately, work planned effectively
and customers kept well informed and well served(Stredwick,2005) as cited by Bisrat.
2.1.3.3 Innovation
Innovation is a process of introducing new processes and procedures that organizations
believewillincreaseorganizationaleffectiveness.Itisawayofnewldeas, devicesand methods.
(Armstrong, 2014) as cited by Bisrat

2.2. Underpinning Theories of HRM

Human Resource Management originally had strong theoretical base. Theories that has
relationship with this research presented as follow.

2.2.1 Organizational Commitment Theory

Shortly organizational commitment theory says that employees respond best and most creatively
way not when they are tightly controlled by management, placed in narrowly defined jobs and
treated as an unwelcome necessity, but, instead, when they are given broader responsibilities,
encouraged to contribute and helped to take satisfaction in their work. It should come as no
surprise that eliciting commitment and providing the environment in which it can flourish pays
tangible dividends for the individual and for the company (Walton, 1985) as cited by Bisrat.
As Little and Little (2006), organizational commitment is an outcome of the attitudes of job
satisfaction and organizational Citizenship (Socialization). A basic tenet of social exchange
theory is that relationships evolve over time in to trusting, loyal and mutual commitments as long
as the parties abide by certain ‘rules’ of exchange usually involve reciprocity or repayment rules
such that the actions of one party lead to a response or actions by the other party. Addition to the
above Little and Little(2006), delightfully explain Organizational Commitment as employee’s
sense of attachment and loyalty to the working organization with which the employee is
associated and it defined in terms of an employee’s attitudes and intentions. Employees are said
to be committed to the organization when their goals are congruent with those of organizations,
when they are willing to exert effort on behalf of the organization and when they desire to
maintain their connection with the organization.
Therefore, a better human resource management can bring employee satisfaction and satisfied
employees has organizational commitment according to this theory.

2.2.2 Motivation Theory

Motivation theory explains the factors that affect goal-directed behavior and therefore influences
the approaches used in HRM to enhance engagement (the situation in which people are
committed to their work and the organization and are motivated to achieve high levels of
performance). Motivation theories can be divided into three main groups: Instrumentality, Needs
(sometimes known as Content) and Cognitive theories.
Instrumentality theories: emerged in the early 1900s and are based on the assumption that work
has no outcomes other than economic ones. Employees, motivated only by money, need to be put
in a situation where they have no choice but to work hard and efficiently. To achieve this in
practice, work was grouped into large factory units, maximum specialization was achieved
through the limitation of the number of tasks an employee had to do and work was deliberately
made repetitive with as limited amount of training time as possible. Set out by Taylor in1911and
the difficulties arising from this theory is that it does not take in to account the personal and
social needs of employees or the rising level of intelligence and expectations.
Needs theories: emphasize that unsatisfied needs create tension and disequilibrium which leads
to individuals striving to achieve a goal. Maslow (1954) developed a Hierarchy of Needs from
lower order basic needs (food and shelter) to higher order needs (social needs, self-esteem and
self-actualization). The higher order needs become motivators when the lower order needs have
been met.

Self-
actualization

Self-esteem
need

Safety-need
 Social-need

Physiological need

Figure: 2.2 Maslow’s Needs Hierarchy.

Cognitive theories: assumes that individuals think their way through the situation and work out
how they can benefit from particular courses of action. The leading cognitive theory is
Expectancy theory expounded by Vroom (1964). Here, motivation is the product of three
variables:
Instrumentality: which is the degree of an employee’s self-belief in their ability to achieve a goal.
Expectancy: which is the degree to which they believe that, having achieved a goal; it will lead to
a secondary action, namely a reward.
Valiancy: which is the value they put on that reward.
Generally, motivation theory suggested that there should be a pusher for employees to be
satisfied, to deliver quality service. Whether it is economical, promotional or due attention,
motivation can be a source of good performance and a better human resource management
practice could enhance its employees motivation for good.

2.2.3 Human Capital Theory

Human capital theory is concerned with how people in an organization contribute In lower level
of Maslow’s Need’s Hierarchy is a psychological need that is basic needs such as sleep, cover
from weather and thirst. Safety needs such as house, transportation such as car, motorcycle and
public transport. In the third level is Social needs, in this level people needs correspond to the
affection and affiliation needs such as friends. Esteem needs; represent the higher needs of
humans. In this level normally people already achieve the three levels under esteem. In this level
people needs power, achievements and status. In this level mostly related to senior employee or
managerial levels. Lastly the highest level is self-actualization. Those who are self-actualization
are self-fulfilled and are aware of their potential. To achieve the all needs employee needs to
perform well to make sure they were achieve their objective and goals. For social needs is more
related to working environment. If the organization environments are good and positive people
can show a good performance and make high productivity to the organization. Can show a good
performance and make high productivity to the organization.
2.2.4 AMO Theory
Employees for a better The AMO formula as set out by Boxall and Purcell (2003) as cited by
Bisrat states that performance is a function of Ability + Motivation + Opportunity to Participate.
HRM practices therefore impact on individual performance if they encourage discretionary
effort, develop skills and provide people with the opportunity to perform. The formula provides
the basis for developing HR systems that attend to employees ‘interests, namely their skill
requirements, motivations and the quality of their job.
Therefore, giving a developmental chance and good training will change employee for a better
ability and that ability will bring motivation for using the opportunity given to them. Having a
good HRM practice will use organizational performance.

2.2.5 Social Exchange Theory

It is developed by sociologist George Humans and explain it that employees will reciprocate
their contribution to the organization if they perceive that the organization has treated them well.
People weigh the potential benefits and risks of social relationships. When the risk outweigh the
rewards, people intended to terminate their agreement and Vis versa.
Therefore, employees are intended to work hard to give what they have when they receive equal
amount of treatment, rewards, and recognitions by a means of good HRM practices.

2.3 Empirical Literature Review

More recent empirical study on human resource management practices (Lee and Lee, 2007)
uncovered six underlying human resource management practices on business performance,
namely training and development, teamwork, compensation/incentives, human resource
management planning, performance appraisal and employee security help improve firms’
business performance including employee’s productivity, product quality and firm’s flexibility.
This study reveals that three items of human resource management practices influence business
performance, training and development, compensation/incentives, and human resource
management planning. However, some other researches also show that certain human resource
management practice have significant relationship with operational (employee’s productivity and
firm’s flexibility) and quality performance outcomes (Chang and Chen, 2002; Ahmad and
Schroeder, 2003; Kuo, 2004). These research evidence shows that effective human resource
management practices can have positive impact on business performance. Using data from 197
Taiwanese high-tech firms Chang and Chen (2002) conducted a comprehensive study to evaluate
the links between human resource management practices and firm performance. This study
reveals that human resource management practices including training and development,
teamwork, benefits, human resource planning, and performance appraisal have significant effect
on employee productivity. This study also found benefits and human resource planning have
negative relationship with employee turnover.

To generalize the efficacy of seven human resource management practices by Pfeffer (1998)
Ahmad and Schroeders (2003) found the seven human resource management practices such as
employment security, selective hiring, use of teams and decentralization, compensation/incentive
contingent on performance; extensive training, status difference and sharing information have
significant relationship with operational performance. Kuo (2004) adopted eleven human
resource management practices found that employment security, team working and incentive
compensation are regarded as three of the main practices for impacting hospital performance.

Some researchers have found that training and development have inverse relations with each
other. When the turnover rate is high, it means low training is provided to the employees. This
statement is based on the logics that the longer stay of employees in an organization the result is
higher training is being proved to the employees (Rehmanand and Hussain 2013). Lepilale
(2009) investigated the relationship between organizational performance of CBE management
practices and voluntary labor turnover in Five Star Hotels in Nairobi. The study deduced that
organization value compensation practices as a way of retaining employees and that
compensation influences on organizational performance of CBE. Wambui (2014) did a study on
effect of human resource management practices on employee learning in Kenya. Descriptive
statistics and inferential statistics were used in this study to analyze quantitative data, which was
obtained from the closed ended questions. The study established that there is a positive
relationship between the employees training and employee recruitment employee’s retention at
Kenyatta University.

In a study conducted by Chew & Chan (2008) remuneration or compensation positively

predicted organizational commitment and intention to stay. The results of this study can be
generalized in Australia and Europe because it involved nine large organizations from both
private and public sectors and had about 475 respondents. However, the results could be different
in Africa. Hong, Hao, Kumar, Ramendran and Kadiresan (2012) equally found that,
compensation is significant to employee Organizational Performance

In past many aspects of human resources management were covered and discussed in detail. The
most common cited practices of HR practices includes recruitment, reward and compensation,
performance appraisal, training and development, career development, health and safety and
supervisor support (Osemeke, 2012; Hong, et al., 2012; Okeudo&Cmilt, 2012; Omolo, et al.,
2013; Fauzi, et al., 2013; Malik, et al., 2011; Rubel& Hung, 2013). Moreover, it was revealed
that the most effective human resource management practices in the retail industry are
performance appraisal, training and development, reward and compensation, career
development, health and safety (Ming, et al., 2012; Tay, 2011; Puri, 2013). Past research shows a
strong correlation between human resource management practices on organizational performance
of CBE. This is because by following appropriate human resource management practices the
employee are felt appreciated, satisfied, motivated, more engaged with training which will
improve the performance and encourage the employee to retain (Amin, 2013; Hoekstra, 2011).

2.4 Conceptual Framework of the study

A conceptual framework is a theoretical structure of assumptions, principles, and rules that holds
together the ideas comprising a broad concept (Cohen, et al., 2007). So from the above literatures
the conceptual model of human resource management constitutes six components mainly
training development, selection & the dependent variable.
 Employee’s
organizational
performance

Source: Adopted from Felicity Asiedu-A., Eric K. and David A. (2013).

 CHAPTER THREE
METHODOLOGY OF THE STUDY
3.1. Research Design
A research design is the program that guides the researchers in the process
of collecting, analyzing and interpreting the data. This study will use both
descriptive and explanatory research design by mixing quantitative and qualitative approaches
using structured questionnaires and generating statistics through standard statistical analysis
techniques of SPSS-26.Explanatory - inferential study that will be designed to examine the effect
of customer relationship management on company performance. Descriptive research
involves gathering data that describe events and then organizes, tabulates,
depicts, and describes the data collection. This research design will be used
because it often uses visual aids such as graphs and charts to aid the reader
in understanding the data distribution. Because the human mind cannot
extract the full import of a large mass of raw data, descriptive statistics are
very important in reducing the data to manageable form.

3.1.1. Quantitative Research Approaches

Quantitative research is grounded in the post-positivism knowledge claim that primarily reflects
the scientific method of the natural sciences. The researcher will gather data from the real world
setting and then analyses the data statistically to support or reject the hypotheses (Robert K.Yin,
1994). Researchers who adopt a more deductive approach use theory to guide the design of the
study and the interpretation of the results. In line with this, the overall objective of quantitative
research is to test or verify a theory, rather than to develop one. Therefore, the theory offers a
conceptual framework for the entire study, and it also serves as an organizing model for the
entire data collection procedure. Quantitative techniques as an attempt to test a hypothesis by
incorporating it into the research design and responding to it by measuring its strength and
weaknesses that give numerical measurements to the data collected. They are also capable of
being accurately described by a set of rules or formulae which then make their definition (if not
always their interpretation) unambiguous and independent of individual judgments. Quantitative
researchers put their emphasis on procedures, methodologies and statistics. As a result, it relies
on statistical techniques aided by computational algorithms and software packages for analysis
the problem under study.
Quantitative research is one in which the investigator primarily uses positivist claims for
developing knowledge and its strategies of inquiries are associated with experimental and survey
research methods. (Robert K.Yin, 1994) mentioned that experimental research seeks to
determine if a specific treatment influence an outcome. This impact is assessed by providing a
specific treatment to one group and withholding it from another and then determining how both
groups scored on an outcome. Therefore, pure experiment enables the researcher to manipulate
an independent variable in order to see the effect on the dependent variable with the random
assignment of subjects to treatment conditions. Whereas, survey research provides quantitative
or numeric description of research trends attitudes or opinions of a population by studying a
sample of population. It includes cross sectional (data will be collected in one point in time) and
longitudinal studies (data will be collected through time with different interval) using
questionnaires, structured interviews and documentary reviews for data collection, with the
intent of generalizing from the sample to the population. The purpose of quantitative research is
to make explanations and predictions that can be generalized to other persons.

3.1.2. Qualitative Research Approaches

Qualitative research is an exciting interdisciplinary landscape comprising diverse perspectives
and practices for generating knowledge. The qualitative approach to research is a unique
grounding the position from which to conduct research that fosters particular ways of asking
questions and particular ways of thinking through problems. The questions asked in this type of
research usually begin with words like how, why, or what. The social meaning people attribute to
their experiences, circumstances and situations, as well as the meaning people embed into Texts
and other objects, is the focus of qualitative research. Therefore, at the heart of their work,
qualitative researchers try to extract meaning from the data obtained. The focus of research is
generally words and texts against numbers. More than, It was said that qualitative research could
consist of observation and participant`s observation, interviews, and researchers own perceptions
and impressions. In addition to this Qualitative research is collecting, analyzing, and interpreting
data by observing what people do and/or say. It is much more subjective than quantitative
research and typically uses individual interviews and focus groups where comparatively small
numbers of people are interviewed in- depth. And also, the study also uses positivist approach.
This includes review of different studies on the subject where gaps were identified and use
qualitative approach to conduct the study. Moreover this qualitative research is used for better
understanding of complex situations which is sometimes explanatory in nature

3.2. Data Type and Source

For the appropriate achievement of the objectives of the study; the researcher will use
primary data source. Primary data will be collected through structured closed-ended
questionnaire from employees of the bank, and through structured interview with branch
managers’ of the bank.
The questionnaires will be designed in such a way that is understandable to respondents, reduce
bias and offer data that can be statistically scrutinized. The variables are attitudinal and measured
using five point Likert scale with response options ranging from to strongly disagree, disagree,
neutral, agree and strongly agree. The Likert scale method will be preferred to make questions
interesting to respondents and there by enhance their cooperation, ultimately ensure maximum
response rate (Robson Colin, 2002).

3.3. Data Collection Instrument

In order to collect the data from respondents, the questionnaire with an introduction which explain
the purposes of the study will be distributed in person. Additional follow up and clarification will be
provided to some respondents, as require, to ascertain appropriate understanding will be achieved.
Methods of data collection relatively dependence on structured questionnaires prepared by
Swaminath (2004) which will be prepared in the form of Likert five scales. However, to measure
Strategic HRM Practice Dimensions on organization performance, it will attempt to modify in
relation to the study for that matter and test will be made for the reliability of the instrument by
using Cronbach’s alpha and to insure the validity of the instrument the researcher will make pre
pilot, pilot tests and will consult with two local academicians will also check the dependability. For
the purpose of data collection, closed-ended structured questionnaires and structured interviews
will be used. Closed-ended questionnaires will be prepared on the basis of customer relationship
management dimensions and banks company performance. Thus closed ended questionnaires
helps to avoid pressure upon the respondents in any direction and better be able to obtain the
required data in the study area.
The questionnaire will be divided into two sections. The first section contains the demographic
characteristics of the respondents to provide information about their gender, age, marital status,
year of service or experience and education level.
The second section of the questionnaire will be designed to enable to gather information about
The effect of Strategic HRM practices on company performance in selected CBE From these
questions. For all questionnaire that will be included in section 2, the respondents will be
requested to indicate their feeling on a five point Likert scale type to measure weight as follows:
1= strongly disagree, i.e., very much dissatisfied with the case described, 2=disagree, i.e., not
satisfied with the case described, 3=neutral, i.e., uncertain with the case, 4=agree, i.e., feeling
alright with the case described, and 5= strongly agree, i.e., very much supporting the case
described.

3.4. Sampling Design

3.4.1. Target Population

The population of this study will include all employees of seven branches of CBE in bahir dar
city administration. In the determinations of sample size the three criteria will be very important
to gather the required data from sample respondents. These will be included the level of
precision, the level of confidence or risk and the degree of variability in the attributes being
measured that enable to determine appropriate sample size (Miauous&Michener, 1976).
Therefore, the total numbers of employees in commercial bank of Ethiopia in Abaymado branch
(39 employees), Bahir dar branch (97 employees), Bezawit branch (43 employees), Donaber
branch (35 employees), Gishabay branch (44 employees), Shimbet branch (40 employees) and
Tanabranch (67employees), therefore, the total population for this study will be 365 CBE
employees.

3.4.2 Sampling Frame

For this study the sampling frames will be the list of 365 target populations of CBE branches
(Abaymado, Bahir dar, Bezawit, Donaber, Gishabay, Shimbet& Tana) employees from which
the required number of sample size will be drawn, which will be available in the commercial
bank of Ethiopia branches in Bahir Dar city administration.
3.4.3. Sampling Unit
The sampling units for this study will be the individual bank employees comprises in CBE
branches of Bahir Dar City administration depending on their responsibility and experience in
their bank.

3.4.4. Sampling Techniques

For this study the researcher will use probability sampling techniques to identify the respondents
from CBE employees in bahirdar city administration, even if there are different types of
probability sampling techniques, the appropriate one for this study will be simple random
sampling method.

3.4.5. Sample Size

To ensure the validity of the findings, the study will use adequate sample size. The researcher
will determine to accept at 5% sampling error and wanted to be at 95% confidence with the
findings of this study. Having determined the accuracy and level of confidence, the study will
use the following sample size determination formula developed by Taro Yamane (1967)
It is calculated as follows.
N
n = 1+ N ( e ) 2

Where n is sample size, Nis the population size, and e is the level of error term. The researcher
determined to accept a 5% sampling error and wanted to be 95% confidential with the findings of
this study. The sample size will be attained as follows:-
365
n= 1+ 365 ( 0.05 ) 2

n=191
Proportional sample size from each stratum is calculated by using the following formula:
n∗¿
ni= N

Where ni= number of sample size for each branches, Ni= the total number of employees in each

branches, N=the total number of employees in the selected branches (7 branches), n= the total
number of sample size for selected branches.
Accordingly, the table below shows the proportionate sampling for each branches based on the
above given formula.

Table 3.1: Proportionate sample distribution for each branches.

List of the selected seven Total number of Total number of sample
CBE branches in Bahir dar employeesateach size were takenat each
No. city administration. branch of CBE branch of CBE

1 Abaymado branch 39 20

2 Bahir dar branch 97 51

3 Bezawit branch 43 23

4 Donaber branch 35 18

5 Gishabaybranch 44 23

6 Shimbetbranch 40 21

7 Tana branch 67 35

Total 365 191

After identifying the number of respondents by using stratified sampling technique in each seven
CBE branches. The researcher will dispatch the questionnaires using one of the probabilistic
sampling techniques called simple random sampling technique. This sampling technique will be
chosen as it gives each member of population fair or equal chance of being selected.
Finally supplementary data’s will be gathered from branch managers of CBE through an interview.
Therefore, from the selected commercial banks of Ethiopia branches in bahir dar city
administration, for interview branch managers and for questionnaire branch employees will be
assumed to be selected to conduct the research.
3.5. Data Analysis Techniques
In this research, raw data will be changed into a data structure that enabled to generate meaningful
and useful bits of information. All hypotheses will be tested with the aid of the statistical package
for social science (spss-26) software. In order to analyze the data the two sets of statistics:
descriptive and inferential statistics will be used. Descriptive statistics will be summarized and
explained quantitative information in the form of frequency distribution and measures of central
tendency, whereas inferential statistics was used to make conclusions. During the data analysis
Pearson correlation will be used to measure the direction and strength of the relationship between
the research variables
Descriptive statistics in the form of frequencies, arithmetic means and standard deviations
will be computed for the various dimensions of demographic profile of respondents and their
perception on HRM practices.
Multiple Regression Analysis
Multiple regression analysis will be used to investigate the effect of customer relationship
management dimensions (Staff motivation Organization Performance, Recruitment and selection,
Training and development and Working environment) on organization performance.
Regression Functions
The equation of multiple regressions on this study will be generally built around two sets of
variable, namely dependent variables (organization performance) and independent variables
(Staff motivation Organization Performance, Recruitment and selection, Training and development
and Working environment).
Independent variables Dependent variables
Staff motivation Organization Performance
Recruitment and selection
Training and development
Working environment
The basic objective of using regression equation on this study will be to make the researcher
more effective at describing, understanding, predicting, and controlling the stated variables.
Regress Strategic HRM Practice on Organizational Performance.
Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5+ β6X6+ ϵ
Where Y is the dependent variable- Organization performance

X1, X2, X3, and X4are the explanatory variables.

Β0is the intercept term- it gives the mean or average effect on Y of all the variables excluded
from the equation, although its mechanical interpretation is the average value of Y when the
stated independent variables are set equal to zero.
β1, β2, β3,β4, β5 and β6 refer to the coefficient of their respective independent variable
which measures the change in the mean value of Y, per unit change in their respective

independent variables. ϵ is the error term.

Analysis of the data’s

Analysis of data’s will be presented using the following data presentation tools: such as
percentages, tables, figure, frequencies, arithmetic means, standard deviations, histogram,
normality & reliability, correlation and multiple regression along with sufficient interpretations

3.6. Reliability and Validity Test

3.6.1. Reliability Test

Reliability is defined as be fundamentally concerned with issues of consistency of measures
(Bryman and Bell, 2003). According to Hair, et al., (2006), if α is greater than or equal to 0.6, it
means that it has high reliability and if α is smaller than 0.6, then it implies that there is low
reliability.

To test the reliability of the instrument Cronbach’s alpha will be used and the result found must
be greater than 0.6 for each independent variables namely key Staff motivation
Organization Performance, Recruitment and selection, Training and development and Working
environment respectively and also dependent variables namely organization performance.

Table3. 1 Cronbach’s alpha for each independent and dependent variable

Item-Total Statistics
 Cronbach's
Scale Mean if Scale Variance Corrected Item- Alpha if Item
Item Deleted if Item Deleted Total Correlation Deleted
SRP 108.2461 90.681 .864 .945
TDP 108.3613 93.242 .732 .956
CISP 108.2827 91.130 .849 .947
HSP 108.2199 90.120 .862 .945
ICP 108.2618 90.184 .851 .946
JS 108.2304 90.926 .857 .946
EP 108.2513 89.600 .886 .943

3.6.2. Validity Test

According to Leedy et al., (2010), validity of a measurement instrument is defined as the extent to
which the instrument measures what it is actually intended to measure. Moreover, to insure the
validity and reliability of the instrument the researcher will make pre pilot, pilot tests and will be
consulted with two local academicians will be made accordingly. Pilot test will be done for ten
respondents of 191 bank employees and the instruments (questions) internal consistency will be
checked according to their related groups.

3.7. Ethical Issues

According to Ghauri and Gronhaung (2002), any research that has no room for ethical
considerations cannot be termed has been valid. The researcher will undertake all necessary measures
to ensure that all ethical aspects of the research process were followed. In particular, the researcher
will make efforts to ensure that the respondents understood that their participation in the research
process will be on a voluntary basis and they can withdraw at any time of they like. Furthermore,
the researcher will also carry all measures possible to ensure that respondents’ identities were kept
anonymous.

3.9 Conclusion

This chapter presented the overall research methodology of the study which
comprised of the, research approach, research design, source of data, the
population of the study, data collection methods, and sample size to gather
with sampling technique, measurement variables, and methods of data
collection, data analysis, reliability and validity of data collection tools and
ethical considerations will be briefly stated.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 Introduction
This study investigates the Effect of Strategic Human Resource Management Practice on
Employees Organizational Performance: In the of Commercial Bank of Ethiopia Bahir Dar
Branches. This chapter presents both descriptive statistics and inferential statistical analysis. It
has three sections: The first section is the descriptive statistics which summarizes the main
features of the study variable such as mean, frequency, and percentage. The second section is the
correlation analysis which shows the degree of association between the study variables. The third
sections of the chapter, presents the output of the regression models.

4.1Response Rate
Data for the research study was collected with the help of questionnaires and findings were
presented using tables. Of the 191-sample size, all 191 returned their questionnaire which
represented 100 % response rate which was statistically acceptable for the purpose of making
inference on the general population of Commercial Bank of Ethiopia Bahir Dar Branches. The
responses obtained from the data collected from Commercial Bank of Ethiopia Bahir Dar
Branches were adequate enough to fulfill the research objectives of the study. Table 4.1
summarized the response rate from the data collection exercise.

Table4. 1 Response rates of respondents

Item Response Rate

No Percent

Sample size 191 100%

Collected 191 100%

Source: own survey 2023

Finally, in table 4.1 showed that all distributed questionnaires were collected.

4.2 Demographic Characteristics of Respondents

For this study, the following table summarizes the demographic data of the respondents. The
demographic characteristics of the respondents such as sex, age, year of experience, tenure with
your current organization and your position in organization of the respondents are presented and
discussed.

Table4. 2 Back ground profile of the respondents.

Items Options Frequency Valid Cumulative

Percent Percent

Sex Male 93 48.7 48.7

Female 98 51.3 100.0

Total 191 100

Age Less than 25 30 15.7 15.7

25-35 65 34.0 49.7

36-45 82 42.9 92.7

46 and above 1 .6 89.0

Total 191 100.0

Work experience 1-5years 18 9.4 9.4

6-10 years 44 23.0 32.5

11-15 years 100 52.4 84.8

.>15 years 29 15.2 100

Total 191 100.0

Educational level Diploma 5 2.6 9.4

Bachelor of degree 159 83.2 85.9

Master’s degree 24 12.6 98.4

Other 3 1.6 100.0

 Total 191 100.0

Source: field survey 2023

4.2.1 Sex of Respondents

There was a need to analyze the descriptive for the sex of respondents involved in the research
study. From the findings shown in table 4.2 below, the female comprised 51.3% of the
respondents as opposed to the 48.7% which was the percentage for the male respondents. As a
result of the analysis, the results conclude that the significant share of the respondents that
participated in the research study were female.

4.2.2 Age of Respondents

The researcher was also interested in knowing the age supports of the respondents. The research
results presented in table 4.2 above concluded that 30 of the respondent equivalent to 15.7 % of
the respondents that participated were the age of under 25 years old, 65 of the respondents
equivalent to 34 % of the total respondents were between the ages of 26 to 35 years, 82 of the
respondents equivalent to 42.9 % of the total respondents were 36 to 45 years of age and 14 of
the respondents which are equivalent to 7.3 % of the total respondents were 46 and above years
old. Hence, the findings indicated that the majority of the respondents were between the ages of
36 to 45 years.

4.2.3 Work Experience of Respondents

In this study, the researcher also interested in finding out the duration employees has worked
with the organization. Table 4.2 indicated that, 18 of the respondents equivalent 9.4 % of the
respondents have been in the organization for 1-5years, 44 of the respondents equivalent to 23.0
% of the respondents have spent between 6-10 years in the organization, 100 of the respondents
equivalent to 52.4 % of the respondents have spent between 11-15 years in the organization, 29
of the respondents equivalent to 15.2 % of the respondents have spent more than 15 years in the
organization. So, the result indicates that the majority of the respondents are in the range of 11 to
15 years’ experience.
4.2.4 Educational level of Respondents

In this study, the researcher also interested in finding out the duration employees has worked
with the organization. Table 4.2 above indicated that, 5 of the respondent’s equivalent to 2.6 %
of the respondents have diploma, 159 of the respondent’s equivalent to 83.2% of the respondents
have first degree in the organization, 24 of the respondent’s equivalent to 12.6 % of the
respondents have master’s degree in the organization and 3 of the respondent’s equivalent to
1.6% of the respondents have other in the organization. So, the result indicates that the majority
of the respondent’s educational level is degree.

4.3 Descriptive Statistics Measurement of Independent Variables (Availability of training,

Motivation to learn and Manger support for training) and Dependent Variable (Employees
Organizational Performance).
Table4. 3 Descriptive statistics

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
SRP 191 12 24 4.06 1.758
TDP 191 12 24 4.95 1.843
CISP 191 12 24 3.03 1.757
HSP 191 12 24 4.09 1.794
ICP 191 12 24 4.05 1.810
JS 191 12 24 4.08 1.756
EP 191 12 24 4.06 1.784
Valid N (listwise) 191

Using formula adapted from(vichea,2005,p.80)cited from( seblewongel,2015),with 5 point Likert

scales, the interval for breaking the rage in measuring each variable id is calculated by
(5-1)/5=0.8 it means items with scores falling between the ranges of: 4.20-5.00 are considered as
strongly agreed,3.40-4.09 as agreed,2.60-3.39 as neutral,1.08-2.59 as disagreed and 1.00-1.79 as
strongly disagreed.
Table 4.2 above, indicated that SRP has a mean distribution of 4.06 and a standard deviation of
1.758. As per vichea, 2005, p.80 cited from (seblewongel, 2015), the result indicates that the
majority of the respondents are considered as agree and the second TDP has a mean distribution
of 4.95 and a standard deviation of 1.843. As per vichea, 2005, p.80 cited from ( seblewongel,
2015), the result indicates that the majority of the respondents considered as strongly agree, the
third component is CISP which has a mean distribution of 3.03 and a standard deviation of 1.757.

As per vichea, 2005, p.80 cited from (seblewongel, 2015), the result indicates that the majority of
the respondents considered as neutral, the forth component is HSP which has a mean distribution
of 4.09 and a standard deviation of 1.794. While the dependent variable which EP has a mean
distribution of 4.06 and a standard deviation of 1.784 as shown in the table. As per vichea, 2005,
p.80 cited from (seblewongel, 2015), the result indicates that the majority of the respondents
considered as agree.

4.4 The Effect of Strategic Human Resource Management Practice on Employees

Organizational Performance
The first intention of this study was to investigate the Effect of Strategic Human Resource
Management Practice on Employees Organizational Performance of Commercial Bank of
Ethiopia Bahir Dar Branches. The analysis was done using the various variables of Strategic
Human Resource Management Practice components and Organizational Performance indicated
by the table below.

4.4.1 Correlation Test of Strategic Human Resource Management Practice and Employees
Organizational Performance
One of the major objectives of the study is to assess the relationship between the dependent
variable (Organizational Performance) and independent variables (Selection& recruitment
practice, Training& development practice, Communication & information sharing practice,
Incentive& Compensation practice, Health & safety practice and Job Security practice). For this
purpose, relation and effect analysis have been used.

The Pearson Correlation Coefficient is a statistic that indicates the degree to which two variables
are related to one another. The sign of a correlation coefficient (+ or -) indicates the direction of
the relationship between -1.00 and +1.00. Variables may be positively or negatively correlated.
A positive correlation indicates a direct positive relationship between two variables. A negative
correlation, on the other hand, indicates an inverse, negative relationship between two variables.
As per Marczyk, Dematteo and Festinger, (2005) correlations of .01 to .30 are considered small,
correlations of .30 to .70 are considered moderate, correlations of .70 to .90 are considered
strong, and correlations of .90 to 1.00 are considered very strong.

To effectively measure the effect of Strategic Human Resource Management Practice and
Employees Organizational Performance, Pearson correlation analysis at both 0.05 and 0.01 levels
was conducted on both variables and an overall summary of correlation tests is given in table 4.4
below.

Table4. 4 correlation tests of Strategic Human Resource Management Practice and

Employees Organizational Performance

Correlations
SRP TDP CISP HSP ICP JS EP
SRP Pearson Correlation 1 .608** .769** .808** .790** .789** .836**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
** ** ** ** **
TDP Pearson Correlation .608 1 .732 .679 .685 .631 .645**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
** ** ** ** **
CISP Pearson Correlation .769 .732 1 .799 .699 .779 .750**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
HSP Pearson Correlation .808** .679** .799** 1 .760** .726** .818**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
ICP Pearson Correlation .790** .685** .699** .760** 1 .795** .806**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
** ** ** ** **
JS Pearson Correlation .789 .631 .779 .726 .795 1 .847**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 191 191 191 191 191 191 191
** ** ** ** ** **
EP Pearson Correlation .836 .645 .750 .818 .806 .847 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
 N 191 191 191 191 191 191 191
**. Correlation is significant at the 0.01 level (2-tailed).

Table 4.4 above indicated the correlation results of Strategic Human Resource Management
Practice components and Employees Organizational Performance. The correlation table showed
that there is a significant correlation between training and Organizational Performance.

The correlation analysis indicated that there was a positive relationship between Strategic Human
Resource Management Practice components and Employees Organizational Performance. The
correlation coefficient SRP and EP is 0 .836*that shows a positive correlation and has strong
correlation. Table 4.4 show the correlation analysis indicated that there was a positive
relationship between SRP and EP. The correlation coefficient is 0.645 that shows a positive
correlation and correlation is significant. In this study, TDP correlated with EP at the level of
0.05. As per Marczyk, Dematteo and Festinger, (2005) correlations 0.70 to 0.90 are considered
strong correlation, so TDP is positively and strong significant with Organizational Performance.

Table 4.4 show the correlation analysis indicated that there was a positive relationship between
CISP and EP. The correlation coefficient is 0. 750 that shows a positive correlation and strong
significant with EP.

Table 4.4 show the correlation analysis indicated that there was a positive relationship between
HSP and EP. The correlation coefficient is 0. 818 that shows a positive correlation and strong
significant with EP.

Table 4.4 show the correlation analysis indicated that there was a positive relationship between
ICP and EP. The correlation coefficient is 0. 806 that shows a positive correlation and strong
significant with EP.

Table 4.4 show the correlation analysis indicated that there was a positive relationship between
JS and EP. The correlation coefficient is 0. 847 that shows a positive correlation and strong
significant with EP.

Consequently, the above results implied that all independent variables have a positive
relationship with Organizational Performance with high Pearson correlation coefficients and this
means that changes in one variable are correlated with changes in the second variable as it is
close to one. For this reason, it is possible to conclude that there is a strong and positive
relationship between the all Strategic Human Resource Management Practice Component and
Organizational Performance and if Strategic Human Resource Management Practice Component
increases, Organizational Performance also increases.

4.5 Regression Analysis

Regression analysis is a statistical technique that investigates the effect between a dependent
variable and specified independent variables. When paired with assumptions in the form of a
statistical model, a regression can be used for prediction, inference, and hypothesis testing, and
modeling of causal effect (Aron, 1994). Regression analysis employed to examine the Effect of
Strategic Human Resource Management Practice on Organizational Performance in the case of
Commercial Bank of Ethiopia Bahir Dar Branches. Before going to analyze regressions test
results, the assumptions of regression analysis are presented as follows.

4.5.1 Regression Assumptions

4.5.1.1 Normality Test
Regression considers that variables have normal distributions and normality is used to describe a
symmetrical, bell-shaped curve, which has the greatest frequency of scores around in the middle
combined with smaller frequencies towards the extremes (Pallant, 2005). The dependent variable
in this case is employees Organizational Performance. The normal distribution test computed for
the dependent variable in this case is shown by the following histogram.

Figure4. 1 histogram regression standardized residual of training and Organizational

Performance
Another test for normality is the kurtosis and skewness value which is computed by using SPSS
table 4.5 show the kurtosis and skewnes values. According to IBM SPSS statistics, about
Skewness and Kurtosis; skewness is the measures of the asymmetric. The normal acceptable
distribution of symmetric has a zero-skewness value. However, the standard error greater than 2
indicates a normality problem. Kurtosis on the other hand is a measure of the extent to which
observation cluster around a central point. For a normal distribution the value of the kurtosis is
zero. The information in table below shows that the coefficient of skewness (0.237) and kurtosis
(0.469) is not far from zero. Thus, for this research, the ratio of skewness to kurtosis was
checked and the result indicates that data used in the study is normally distributed.

4.5.1.2 Co- linearity Test

Checking co- linearity problem with the assumption of tolerance and the variance inflation
factors (VIF) statistics is important before regressing. Andy (2006) suggested that a tolerance
value less than 0.1 almost certainly indicates a serious co-linearity problem. Liu (2010) also
suggested that a VIF value greater than 10 there is also serious co-linearity problem. Therefore,
the tolerance values of the independent variables of this research are 0.232, 0.393, 0.229, 0.246,
0.249 and 0.253 and the variance inflation factors (VIF) are 4.294, 2.542, 4.352, 4.057, 4.015
and 3.947 for Strategic Human Resource Management Practice. Based on the result, there was no
co-linearity in factors affecting employees Organizational Performance.

Table4.6 Descriptive statistics for normality

 Collinearity Statistics

Model Tolerance VIF

1 (Constant)

SRP .233 4.294

TDP .393 2.543

CISP .230 4.353

HSP .246 4.057

ICP .249 4.016

JS .253 3.948

a. Dependent Variable: EP

4.5.1.3 Linearity Assumptions

The model that shares the response Y to the predictors X1, X2, X3... XN is assumed to be linear in
the regression parameters (Chatterjee and Hadi, 2012). This means that Standard regression can
only precisely estimate the relationship between dependent and independent variables if the
relationships are linear in nature. As in the equation: Y=B 0 + B1 X1 + B2 X2,. This regression
equation is still a linear regression equation because Y is modeled as a linear function of the
parameters. According to the information in figure 4.2 below indicated Normal P-P Plots show
that this assumption had been met for this study.
Figure4. 2 Normal P-P plot of dependent variable Organizational Performance

In conclusion, all of the assumptions are necessary for regression analysis. According to
Tabachnick and Fidell (2001) stated that regression is fairly strong to any violations of the
assumptions and hence the results of the regression analysis were taken to be statistically viable.

4.6.1 Regression Test on the effect of Training on Organizational Performance

The regression analysis was used to measure the link between the independent and the dependent
variables. Regression test is used to recognize the ability of each individual independent
variables (Selection& recruitment practice, Training& development practice, Communication &
information sharing practice, Incentive& Compensation practice, Health & safety practice and
Job Security practice) to predict the dependent variable (Organizational Performance), where
each of the individual Strategic Human Resource Management Practice Component are
examined and clarified.

4.6.1.2 Regression between Strategic Human Resource Management Practice and

Organizational Performance
Model of summary

Table4. 7 Regressions between Strategic Human Resource Management Practice and

Organizational Performance
 Model Summaryb
Change Statistics
R Adjusted R Std. Error of the R Square F Sig. F Durbin-
Model R Square Square Estimate Change Change df1 df2 Change Watson
1 .910a .828 .822 .752 .828 147.394 6 184 .000 1.900
a. Predictors: (Constant), JS, TDP, HSP, ICP, SRP, CISP
b. Dependent Variable: EP

As indicated in table 4.7 above, the adjusted R Square value represents the correlation coefficient
between the dependent variable (Organizational Performance) and the independent variable
(Selection& recruitment practice, Training& development practice, Communication &
information sharing practice, Incentive& Compensation practice, Health & safety practice and
Job Security practice) also known Strategic Human Resource Management Practice Component
that taken together. The regression effect between the dependent variable and the three
independent variables together were the strong in this study, and have a positive regression.
From the model summary, the adjusted R square from the table above showed 0.828 which
means that the independent variables (Selection& recruitment practice, Training& development
practice, Communication & information sharing practice, Incentive& Compensation practice,
Health & safety practice and Job Security practice) which is also termed as the Strategic Human
Resource Management Practice Component, can explain the dependent variable (Organizational
Performance) by 82.8%.However, there are 17.2 % of the variance remained unexplained in this
study.

As we can see from the model summary box The Durbin Watson (DW) statistic is 1.900, which
shows a good autocorrelation in the residuals from a statistical regression analysis table. The
Durbin-Watson statistic will permanently have a value between 0 and 4. The value of 2.0 means
there is no autocorrelation detected in the sample. Values from 0 to less than 2 shows positive
autocorrelation and values from 2 to 4 designate negative autocorrelation (James and Geoffrey,
1950).In this case, the value is 1.900, confirmed that there is a positive autocorrelation so we can
conclude this analysis is valid.

4.6.1.3 ANOVA of Strategic Human Resource Management Practice and Organizational

Performance
Table4. 8 ANOVA of training and AC

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 500.279 6 83.380 147.394 .000b
Residual 104.088 184 .566
Total 604.366 190
a. Dependent Variable: EP
b. Predictors: (Constant), JS, TDP, HSP, ICP, SRP, CISP

The table 4.8 above presented the significance of relationship between Organizational
Performances with Strategic Human Resource Management Practice Component (Selection&
recruitment practice, Training& development practice, Communication & information sharing
practice, Incentive& Compensation practice, Health & safety practice and Job Security practice).
From the statistic in the model if the value of F > 1 and p< 0.05, the model is fit to predict the
effect of independent variables on dependent variable. The result of the study shown that the
prediction power of the model is fit at F- value = 147.394 , P= 0.000 (p<0.01, F>1). Therefore, the
linear regression model is appropriate to this research to predict the effects of Strategic Human
Resource Management Practice on Organizational Performance.

4.6.1.4 Coefficient of Strategic Human Resource Management Practice on Organizational

Performance

Table4. 9 Coefficient of Strategic Human Resource Management Practice on

Organizational Performance

Coefficientsa
Model Unstandardized Standardize t Sig. Correlations Collinearity Statistics
Coefficients d
Coefficients
 Zero-
B Std. Error Beta order Partial Part Tolerance VIF
1 (Constant) .409 .629 .030 .976
SRP .242 .064 .239 3.769 .000 .836 .268 .115 .233 4.294
TDP .028 .047 .029 .588 .557 .645 .043 .018 .393 2.543
CISP .078 .065 .077 1.210 .228 .750 .089 .037 .230 4.353
HSP .289 .061 .291 4.716 .000 .818 .328 .144 .246 4.057
ICP .111 .060 .113 1.838 .068 .806 .134 .056 .249 4.016
JS .406 .062 .400 6.579 .000 .847 .436 .201 .253 3.948
a. Dependent Variable: EP

Coefficient table 4.9 that showed the degree of relationship between each independent variable
under Strategic Human Resource Management Practice Component with the constant at (.409)
all variables were statistically significant at 0.05 and 0.01 significant level. Since two of them
had (p>0.05) and one of them had (p>0.01). In the regression analysis using the coefficient of
determination (Y= Bo+B1x+B2x+ B3x+B4x +B3x +B3x), the researcher arrived at the following
conclusions; Bo = 0.409 B1= 0.242, B2= 0.028, B3=0.078, B4,=0.289, B5=0.111 and B6=0.406.
Therefore, Y= 0.409 + 0.242x + 0.289x + 0.406x+0.111x meaning the constant (0.409) in SPSS
refers to the intercept in “Y” axis were the regression line cross the axis. Whereas, when the
Organizational Performance increase by one unit each of the aspect under the independent
variables do affect Organizational Performance by one time each predicator values of 0.111,
0.242, 0.289 and 0.406, changes respectively.

From the table 4.9 above Job Security practice is the predictor variable contributes the highest to
the variation of the dependent variable (Organizational Performance) because the Beta value for
this predictor variable is the highest (0.406) if compared to the remaining two variables This
means that HSP makes the strongest unique contribution to explain the variation of the
dependent variable (Organizational Performance) when the variance explained by all other
predictor variables in the model is controlled.

4.7 Hypothesis Testing

According to the standardized coefficient of beta and p-value, the hypotheses of the study were
tested and the results of the study presented below.
 H1: Selection& recruitment practice has a significant effect on organizational
performance of CBE.
 H2: Training& development practice has a significant effect on organizational
performance of CBE.
 H3: Communication & information sharing practice has a significant effect on
organizational performance of CBE.
 H4: Incentive& Compensation practice has a significant effect on organizational
performance of CBE.
 H5: Health & safety practice has a significant effect on organizational performance of
CBE.
 H6: Job Security practice has a significant effect on organizational performance of CBE.

Hypothesis One

Selection& recruitment practice is an important factor in Organizational Performance and was

found to be positively and significantly related to Organizational Performance (Bartlett, 2001;
Boon & Arumugam, 2006; Lam & Zhang, 2003). There is significant positive effect between
Selection& recruitment practice and Organizational Performance. Hence, the hypothesis is
supported.

Hypothesis Two

There is a no significant effect between Training& development practice and Organizational

Performance. The findings of this study confirmed that, there is no significant effect of
Training& development practice on Organizational Performance. Training& development
practice has a positive and insignificant effect on Organizational Performance (β=0.027, p=
0.556). Hence, the hypothesis is not supported.

Hypothesis Three

There is a no significant effect between Communication & information sharing practice and
Organizational Performance. The findings of this study confirm that, there is no effect of
Communication & information sharing practice on Organizational Performance. Communication
& information sharing practice has a positive and insignificant effect on Organizational
Performance (β=0.078, p=.0.228). Hence, the hypothesis is not supported.

Hypothesis Four

Incentive& Compensation practice is an important factor in Organizational Performance and was

found to be positively and significantly related to Organizational Performance (Bartlett, 2001;
Boon & Arumugam, 2006; Lam & Zhang, 2003). There is significant positive effect between
Incentive& Compensation practice and Organizational Performance. Hence, the hypothesis is
supported.

Hypothesis Five

Health & safety practice is an important factor in Organizational Performance and was found to
be positively and significantly related to Organizational Performance (Bartlett, 2001; Boon &
Arumugam, 2006; Lam & Zhang, 2003). There is significant positive effect between Health &
safety practice and Organizational Performance. Hence, the hypothesis is supported.

Hypothesis Six

Job Security practice is an important factor in Organizational Performance and was found to be
positively and significantly related to Organizational Performance (Bartlett, 2001; Boon &
Arumugam, 2006; Lam & Zhang, 2003). There is significant positive effect between Job
Security practice and Organizational Performance. Hence, the hypothesis is supported.

Overall, the findings demonstrated that four of research hypotheses have been supported.
Another important result of linear regression analysis is four dimensions of Strategic Human
Resource Management Practice factor have positive and significant effects on Organizational
Performance, which clearly supports the hypothesis that Strategic Human Resource
Management Practice is an antecedent of Organizational Performance.

4.8 Conclusion
As a summary, this chapter covered overall response rate, demographic characteristics of
respondents, and descriptive statistics of variables, correlation test, and regression analysis and
hypothesis teat. And the next Chapter presents the discussion, the recommendations and key
conclusions for further consideration of future research on this study area.
 CHAPTER FIVE

SUMMARY, RECOMMENDATIONS, AND CONCLUSION

5.0 Introduction
The major objective of this study was to examine the effect of Strategic Human Resource
Management Practice on Organizational Performance in the case of Commercial Bank of
Ethiopia Bahir Dar Branches. This chapter summarized and discussed the main findings obtained
from each of the three research questions. It also dealt with the conclusions that were derived
from the analysis, as well as recommendations that can be implemented or used for future
research, for each of the main research objectives.

5.1 Summary of Main Findings

The main purpose of this study was to investigate the effect of Strategic Human Resource
Management Practice on Organizational Performance in the case of Commercial Bank of
Ethiopia Bahir Dar Branches. The study had the following as research objectives:

 To find out the effect of recruitment and selection on organizational performance of CBE.
 What is the training and development practice that have been take place and their influence
over organizational performance of CBE.
 To find out the relationship of Incentive and Compensation practice (ICP) with
organizational performance
  To investigate the relationship between Health and Safety Practice (HSP) and
organizational performance of CBE.
 To investigate the relationship between Communication and Information Sharing Practice
(CISP) and organizational performance of CBE.
 J To investigate the relationship between J ob Security Practice (JSP) and organizational
performance of CBE.
This research study used the quantitative research method and descriptive design in particular.
The study adopted a quantitative approach to the effects of Strategic Human Resource
Management Practice on Organizational Performance. The variables for the research study
included Selection& recruitment practice, Training& development practice, Communication &
information sharing practice, Incentive& Compensation practice, Health & safety practice and
Job Security practice for Strategic Human Resource Management Practice as independent
variables while the Organizational Performance was the dependent variable. The target
population comprised of 305 employees of Commercial Bank of Ethiopia Bahir Dar Branches.
Stratified sampling was used to divide the population. Research findings were analyzed to enable
the researcher to understand what the findings from the data collected meant and this was done
with the help of the statistical packages for social sciences (SPSS). The demographic profiles of
the respondents were analyzed using percentages and frequencies. As for inferential statistics,
tools such as correlation, regression, coefficient, and ANOVA were used to analyze and study
the nature of effects between independent and dependent variables.

After analyzing the gathered information, the following major findings were identified: The
results of the demographic characteristics of the employees indicated that the majority of the
total respondents were male (53.2%), the majority age in the range of 25-35 years (45.7%), with
working experience ranging between 8 to 13 years (56.1%) with educational level of degrees
(49.7

The major results of the descriptive statistics showed that motivation to learn has the highest
mean score of 2.69, which is the highest mean among Strategic Human Resource Management
Practice Component. The second most popular Strategic Human Resource Management Practice
Component perceived by the respondent are availability of training which has a mean score of
2.65. The least popular Strategic Human Resource Management Practice Component perceived
by the respondents is manger support for training which has the lowest mean score of 2.50. For
employees’ Organizational Performance perceived by the respondents is the highest mean of
2.27.

The major findings with regard to the correlation result of this study presented that, the
correlation result on the effect of training on Organizational Performance; availability of training
is positive and strong significance related to employee’s Organizational Performance with
having r=0.937 and p=.000. Whereas, motivation to learn has also positive and strong
significance related to employee’s Organizational Performance that indicates the value of r=.939
and p=.000. Lastly, manger support for training has also positive and strong significance related
to employee’s Organizational Performance with having the value of r=0.917 and p=.000.

With regard to the regression result, this study manifested that, the regression effect between
Strategic Human Resource Management Practice Component and Organizational Performance
was better and has a positive regression. The regression effect between training and
Organizational Performance concluded as it has a very strong effect in this study, and have a
positive regression. Training caused 93.4% variation in Organizational Performance the
remaining 6.6 % variation is caused by other Organizational Performance factors that had not
been considered in this study.

In general, the regression effect of Strategic Human Resource Management Practice Component
on Organizational Performance confirmed that all independent variables (availability of training,
motivation to learn and manger support for training have positive and a strong significant effect
on the dependent variable (Organizational Performance).

5.2 Conclusion
Depending on the analysis results of this study, conclusions are made on the basis of the effect of
training on Organizational Performance. The findings supported the theory that availability of
training results in improved Organizational Performance. From the correlation analysis it can be
concluded positively and strong significantly related to employee’s Organizational Performance.
Organization had strong availability of training Organizational Performance was increasing and
the employee psychological attachment also increasing. According to the findings, improving
motivation to learn abilities result in improved Organizational Performance which then leads to
the attainment of overall organizational performance. From the correlation analysis, it can be
concluded that motivation to learn positively and strong significantly related to employee’s
Organizational Performance. And as seen from the finding of the study, it was clear that
improving the manger support for training of employees in the organization would result in
improved employee’s Organizational Performance and in general improved organizational
performance. From the correlation analysis it can be concluded that, manger support for training
is positively and strong significantly related to employee’s Organizational Performance. The
study indicated that any expense the organization incurs to improve the manger support to
training the abilities of employees will definitely result in improved overall organization
achievement of its goals and objectives.

With regard to the regression analysis, this study concluded that training caused 93.4 % variation
in Organizational Performance; however, the remaining 6.6 % variation is caused by other
Organizational Performance factors that have not been considered in this study

To sum up, based on the major findings, it is possible to conclude that the effects of training on
Organizational Performance in the case of Commercial Bank of Ethiopia Bahir Dar Branches,
the results indicated that each independent variable (availability of training, motivation to learn
and manger support for training)has positive and strong significance effect on Organizational
Performance.

5.3 Recommendations
In line with the above results mentioned, the study recommended that Commercial Bank of
Ethiopia Bahir Dar Branches the availability of training its help to improve employee’s
Organizational Performance as long as has a positive and strong significant effect on employees
Organizational Performance, organizations need to focus on creating availability of training in
developing that to encouraged and promoted so that the employees are in a better position to
evaluate their actions and make very informed decisions.

In addition to this, the study recommended that motivation to learn should optimize the abilities
if they are to improve employee’s Organizational Performance which will then lead to the
attainment of overall organizational performance motivation to learn has a positive and strong
significant effect on employees Organizational Performance needs to be managed by
employee’s to endeavor themselves to be in control of their emotions and ensure these emotions
are effectively managed to avoid it affecting their work and persons they relate and work with
daily to ensure improved output and healthy work environment relationships. The organization
needs to develop and recognize employees who constantly struggle to achieve something and
ensure high standards at the workplace through proper motivation to learn abilities.

Finally, the study recommends that manger support for training needs to absorb the recruitment
process and employees training policy because manger abilities of employees result in a great
effect on employee’s Organizational Performance and organization achievement, goals, and
objectives. Performance improvement in the organization is possible due to employee’s ability to
encourage and model change process towards an acceptable and productive result whenever
necessary and required, therefore, Commercial Bank of Ethiopia Bahir Dar Branches is
recommended to train its employees to manage and view change from a positive angle. The
study noted that employees who are able to manage training effectively are able to avoid
unnecessary occurrences of problems at workplaces throughout the organization and thus
employees initiatives are directed towards improving performance for both individuals and
general organizational performance thus good training skills and practices needs to be recognized
and rewarded to promote a sound work environment culture in Commercial Bank of Ethiopia
Bahir Dar Branches.

5.4 Limitation of the Study

Despite the contribution of the present study, its limitations must be noted. The study was limited
by the small sample size and the resources available to the researcher. In order to get a stronger
picture of the issues in different organizations, the researcher would have liked to involve a
larger number of respondents but due to the time frame limitations provided by the study
program, this was not possible. The study covers only Commercial Bank of Ethiopia Bahir Dar
Branches. Furthermore, the other limitation of the study was the heavy reliance on the
respondents’ information. The entire study was based on perception, which might change from
time to time; also employees might not be frank while providing information on their
competence and therefore the generalization of this study is based on the sampled sectors.

5.5 Direction for Future Research

This research tried to examine the effect of training on employee’s Organizational Performance.
The study only focused on Commercial Bank of Ethiopia Bahir Dar Branches Which Is
inadequate to make inference about the effect of training on employee’s Organizational
Performance in the textile and apparel industry in Ethiopia. Hence, further research needs to be
carried out on the effect of training and development on employee’s Organizational Performance
in other organization and non-governmental organizations. In addition, the research approach
that applied for this research is mostly quantitative type. Future researches should incorporate
both quantitative and qualitative data in order to explore more about the effects of training on
employee’s Organizational Performance.

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Annex- I
Questionnaire for employees

Yom Postgraduate College

Masters of Business Admiration

Questionnaire to be filled by employees of Commercial Bank of Ethiopia, Bahir Dar branches.

Dear Respondent,

I would like to thank you in advance for your willingness and cooperation in filling this
Questionnaire devoting your valuable time.

I assure you that the information you provide will be kept confidential and will only be utilized
for the study purpose.

Part I: Demographic Question

 Circle the letter where appropriate

Gender

A. Male B. Female

2. Age

A. under 25 years old B. 26-35 years old

C. 36-45 years old D.46 and above years old

3. Educational attainment

A. Diploma B. Bachelor of degree C. Master’s degree C. Other

4. For how long have you been employed in this camp any?

A. 1-5years B. 6-10 years C. 11-15 years D.>15 years

N o . Please mark the selected option with tick ( √ ) 1 2 3 4 5

Selection and Recruitment Practice(SRP)

S R P 1 Clarity of job description

S R P 2 Accuracy of person specification

S R P 3 Good recruitment advertisement

Training and Development Practice (TDP)

T D P 1 Opportunity to learn new priorities and new tasks

T D P 2 Opportunity to learning new skills in a team environment

T D P 3 Opportunity to develop one’s skills

Communication and Information Sharing Practice (CISP)

CISP1 provision of to both employees and management on the bank’s

achievements and progress
CISP2 opportunity to participate in the policies which guide and rule their working
lives
 CISP3 opportunity for employees to air their views without fear

CISP4 clearly communicating to employees exactly the firm’s expectations

Health and Safety Practice (HSP

H S P 1 provision of safety gadgets for the workmen whiles on the job

H S P 2 provision of first aid, canteen, rest rooms or sanitary facilities

H S P 3 provision of sick leave with pay, health insurance and retirement benefits
for workers
H S P 4 Safe working environment
Incentive e and Compensation practice (ICP)

ICP1 provision of other allowances like canteen, transportation and housing

ICP2 Provision of adequate working tools and equipment

ICP3 Opportunity for promotion

ICP4 Tax relief on employees’ wages and salaries

Job Security Practice (JSP)

JSP1 management identifying employees’ problems and helping to solve them

JSP2 Bank investing in job security

JSP3 High degree of union activities at the work place

Organizational performance item

Dependent variable
I B. Employee performance 1 2 3 4 5

1 My job enables me to make use of my skills and abilities.

2 I get a sense of personal accomplishment from my work.

3 I know how the office measures my performance.

4 I have a complete knowledge and understanding while performing my

 tasks.
5 I have the required skills and behavioral abilities to perform my task.

6 I perform my work to the expected standards.

7 My organization examines targets given for employees.

8 I trust the feedback I receive from my supervisor.

9 I am able to judge a given work situation and respond to it.

10 I am able to manage my time and allocate resources effectively.
11 I delivered my work assignments timely.

12 As an employee, I give the highest priority and support to meet the needs
of clients.

Thank you for your cooperation