Configuration of Human Resource Management Practices, Organizational Characteristics, Social Capital and Performance of Firms Listed in the Nairobi Securities Exchange
Abstract
The human resource function may play a significant role in helping organisations and
individual employees acquire the core qualities that drive high performance. Over time
however, institutions including Nairobi Securities Exchange (NSE) with their
administrative and proficient uniqueness have indicated poor performance. Thus, the aim
of the study was to determine how configurations of HRM practices, organizational
characteristics, and social capital influenced the performance of firms listed in the NSE.
The research was anchored on the Ability-Motivation-Opportunity (AMO) theory, Social
Exchange Theory (SET), and Social Capital Theory (SCT). This research applied the
positivist approach as well as a descriptive cross sectional research design. The target
population included 65 firms listed at the Nairobi security Exchange. Both primary and
secondary data were employed. Questionnaires were used to gather primary data whereas
secondary data collected information relating to return on Assets (ROA). Descriptive and
inferential statistics were utilized to analyse the data. The method utilized was simple
linear regression and multiple linear regression analyses. Both stepwise and hierarchical
approaches as suggested by Baroni and Kenny (1986) were followed. From the findings,
configurations of human resource management practices had a significant influence on
the performance of firms listed in the NSE. Social capital was also found to have a
moderating influence ion the relationship between HRM practices configurations and
listed firms’ success at the NSE. In addition, the study revealed that organizational
characteristics had a significant intervening effect on the relationship between HRM
practices configurations and firm performance on the NSE. Furthermore, there was a
confirmed joint effect of configurations of human resource management practices, social
capital and organizational characteristics on performance of firms listed at NSE. The
findings imply that organizations with HRM practices that suit the professional package
score much higher on metrics of firm performance, workers' stepping above commitment,
and company innovation. Also, organizations considering aspects of social capital
identify the value in relationships among people, and often this relational type of capital
is missing in HRM. Results imply that organizational characteristics including size,
unionization, industry or business conditions are not significant and thus may not offer
the foundation for aligning resources with corporate strategy goals and ultimate
performance. Based on the findings, the study recommends that configurations of human
resource management practices should be linked with business strategy to improve
employee satisfaction and performance, ensuring that teams are working together to assist
the company accomplish its strategic goals, and raise their influence and decision-making
authority across the organizations. Configurations of HRM practices, organizations ought
to understand that social capital is just as essential as conventional human capital, and
merging the two may assist HRM better manage employee career advancement, task
staffing, and team building hence record positive performance. This study focused solely
on listed trading firms at NSE. Thus a similar study could be done on non-listed trading
firms on the NSE, Kenya.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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