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International Journal in Management & Social Science
Year : 2019, Volume : 7, Issue : 1
First page : ( 10) Last page : ( 46)
Online ISSN : 2321-1784.

Effects of Human Resource Management Practices on Organizational Performance: The Case of Small Scale Business Enterprises in Akaki Sub City, Addis Ababa

Lemma Mesfin1, Gebreyes Getachew2

1Ph. D, Associate professor at International Leadership Institute, Ethiopia

2MBA, Managing Director-Private Construction Company, Ethiopia

Online published on 27 March, 2019.

Abstract

The importance of human resources management (HRM) has received much attention in recent years. The aim of this study was to identify the effect of HRM practices on the performance of small scale business enterprises in Akaki sub city administration. Accordingly, the approach that was used to conduct this research was explanatory research design. In this study four factors have identified and they are recruitment and selection, training and development, compensation/incentives, and performance appraisal. The population of the study consists of all employees of selected small scale business enterprises in Akaki sub city administration, Addis Ababa directly related to the study. A total of 194 small scale enterprises are found at wereda 7 and 8. Out of 194 enterprises, considering the similarity nature of operation among small scale businesses, six small businesses were selected from the area through lottery method. Furthermore, the required data were collected from sample employees and managers taken from the selected six enterprises. The researchers employed a convenient sampling technique to draw representative respondents of 44 employees and judgmental sampling technique for selecting representative sample of 6 managers. The necessary data was collected using primary sources of data collection (questionnaires) and enterprises’ documents. The study revealed that a HRM practice has significant effect on the performance of small scale business enterprises. The hypothesis testing result indicated that the HRM practice components (recruitment and selection, incentives, training and development practices and performance appraisal practices) have significant effect on the performance of small scale enterprises. It is recommended that the management of respective small scale business enterprises should be able to increase the businesses’ performance by establishing effective human resource management practices.

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Keywords

HRM, Performance, Small Scale Business Enterprises.

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