An investigation of the relationship between human resource systems, business strategy implementation and performance in selected publicly quoted companies in the Nairobi Stock Exchange

Abstract

In the new economy, competition is global, capital is abundant, and ideas are developed quickly and cheaply. In this kind of environment all that matters is people (human capital) because they are the foundation of value creation. Yet these assets are least understood. Form a practitioner's point of view, it is difficult to grasp the precise mechanism by which interplay of human resource practices and policies generate value. The impact of human resource management policies and practices on firm performance is an important topic in the field of human resource management, industrial relations and industrial and organizational psychology. This study sought to fmd out the relationship between strategy, human resource practices and performance. It considered companies listed in the Nairobi Stock Exchange. The study was carried out in Nairobi using structured questionnaires; the target respondents were human resource and line managers. The researcher administered the questionnaire in 60% of the companies using face-to-face interviews, 40% of the questionnaires were completed using the drop and pick method. 4< The data was then exposed to statistical analysis, which involved generation of frequencies, correlation, and regression analyses. The fmding was that: i) Human resource managers, the percentage of employees who receive rewards, job grading, payroll management and human resource outcomes have significant contribution to performance; and ii) Strategic posture does not influence human resource practices.