The influence of human resource management practices on firm performance in the Kenyan banking industry
Over the last decade, much research has been conducted in the field of human resource management (HRM) and its associations with firm performance. For firms to survive in a global economy in the new millennium, they need to exploit all the available resources as a means of achieving competitive advantage. One resource recognized as providing a source of competitive advantage is the human resources of the firm. The main objective of this study was to establish the inf1uence of human resource management practices on performance ofbanks in Kenya.The specific objective of this study was to; establish the effect of selection and recruitment on performance; to gauge the effect of training and development on firm performance, to determine the effect of performance appraisal and compensation management on firm performance.The research used a descriptive quantitative approach. The target population of this study was all the 43 banks in Kenya. Piloting was carried out to test the validity and reliability of the instrument (questionnaire). The researcher perused the completed research instruments and document analysis recording sheets. Quantitative data collected using questionnaires was analyzed by the use of descriptive statistics using SPSS (Statistical Package for Social Sciences) and was presented through percentages, means and frequencies. The findings show that recruitment and selection is effective but is done less often in the banks and that the application of the right practices in recruitment and selection enhances organizational performance. The study also found out that training and development alongside performance appraisals also affect performance of the commercial banks. On the same note, the study established that rewardl compensation affect the performance in the banks. The findings revealed that the banks had performance appraisal systems and were effective. The developmental purpose of performance appraisal is more productive in inf1uencing organizational performance. Finally, the study established that for a remarkable firm performance, constant fixed salaries are better than higher ones, and irregular hourly rates and bonuses should be distributed to all employees who have helped the organization achieve goals.