The Effects of Human Resources Development on Financial Performance of Organisations

James Adetunji Odumeru; Oladele Ayodeji Ilesanmi

doi:10.18034/abr.v2i1.117

Authors

James Adetunji Odumeru Osun State College of Technology
Oladele Ayodeji Ilesanmi Osun State University

DOI:

https://doi.org/10.18034/abr.v2i1.117

Keywords:

Human Resources Development, Training and Development, Employee Competence, Commitment, Financial Performance, Strategic Human Resources Management

Abstract

Contemporary organisation invests huge resources on a regular basis on Human Resources Development (HRD) initiatives because of the age long belief that this will enhance efficiency and effectiveness. But sadly, these expectations often go unfulfilled. This study empirically tests the effect of HRD on financial performance with employee competence and organisational commitment acting as mediating mechanisms. A total of 84 copies of a questionnaire that was distributed to and received from bank workers of two of Nigeria’s leading banks: First Bank of Nigeria Plc and Zenith Bank Plc to elicit relevant data on employee participation in and perceived benefits of HRD, commitment & competence and financial performance were analysed using Cronbach’s Coefficient Alpha and multiple regression analysis. Results show a significant relationship between employee participation in HRD including perceived benefits of HRD and organisational commitment and employee competence. The study also shows a significant relationship between competence & commitment and financial performance. Thus organisation should focus attention on delivering consistent HRD initiatives relevant to the need of employees and focused on addressing identified Skills, Knowledge and Abilities (KSA) gaps for a continuous financial performance improvement.

JEL Classification Code: M120

Downloads

Download data is not yet available.

Author Biographies

James Adetunji Odumeru, Osun State College of Technology

Lecturer, Department of Banking & Finance, Osun State College of Technology, Esa Oke, Nigeria

Oladele Ayodeji Ilesanmi, Osun State University

Lecturer, Department of Business Administration, Osun State University, Esa Oke, Nigeria

References

Kelly D. (2001). Dual Perceptions of HRD: Issues for Policy: SME’s, Other Constituencies, and the Contested Definitions of Human Resource Development, http://ro.uow.edu.au/artspapers/26 Viewed 8th Feb-ruary 2012

Armstrong, M (2006) A Handbook of Human Resources Management (16th ed.), London: Kogan Page

Swanson, R.A (1999) HRD Theory; Real or Imagines Human Re-sources Development International 2(1) 2 – 5

Swanson, R. A. (1995). Human resource development: Perfor-mance is the key. Human Resource Development Quarterly, 6 (2), 207–313.

Schwoerer, C. E., May, D. R., Hollensbe, E. C. & Mencl, J. (2005). General and specific selfefficacy in the context of a training inter-vention to enhance performance expectancy. Human Resource De-velopment Quarterly, 16, 111-129

Garavan, T. N., Costine, P., & Heraty, N. (1995). The emergence of strategic human resource development. Journal of Euro-pean Industrial Training, 19(10), 4-10.

Katou, A. A. (2009). The impact of human resource development on organisational performance: Test of a causal model. Journal of Behavioural & Applied Management, 10, 335-356.

Macky, K., & Boxall, P. (2007). The relationship between high-performance work practices and employee attitudes: An investi-gation of additive and interaction effects. International Journal of Human Resource Management, 18, 537-567

Lepak, D. P., & Snell, S. A. (1999). The human resource architec-ture: Toward a theory of human resource capital allocation and development. Academy of Management Review, 24, 31-49.

Tracey, J. B., Hankins, T. R., Tannenbaum, S., & Mathieu, J. E. (2001). The influence of individual characteristics and the work environment on varying levels of training outcomes. Human Re-source Development Quarterly, 12, 5-23.

Bartlett, K. R. (2001). The relationship between training and or-ganizational commitment: A study in the health care field. Human Resource Development Quarterly, 12, 335-352.

Guest, D.E (2010) Human resource management and perfor-mance: still searching for some answers http://www.americanstaffing.net/members/pdf/Staffing_and_CSR_Businessa se.pdf Viewed 6th March 2001

Torraco, R.J. (1999). Advancing our understanding of performance improvement. In R.J. Torraco (Ed.), Performance improvement theory and practice. Baton Rouge, LA: Academy of Human Resource De-velopment.

Combs, J., Liu, Y., Hall, S., & Kitchen, D. (2006). How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psy-chology, 59, 501–528.

Lopez, S. P., Peon, J. M. M. & Ordas, C. J. V. (2005). Human resource practices, organizational learning and business performance. Human Resource Development International, 8, 147-164.

Garavan, T. N. (2007). A strategic perspective on human resource development. Advances in Developing Human Resources, 9:11-30.

Walton. J (1999) Strategic Human Resources Development. Harlow: Financial Times/Prentice-Hall

Wang J, Hutchins, H.M and Garavan, T.N (2009) Exploring the Strategic Role of Human Resource Development in Organizational Cri-sis Management Human Resource Development Review, 8;22 http://hrd.sagepub.com/cgi/content/abstract/8/1/22

Grieves, J. (2003). Strategic human resource development. Thousand Oaks, CA: Sage.

Young Sung, S & Choi, J (2011) The Effects of Human Resource Development on Operational and Financial Perfor-mance of Manufacturing Companies: A Large-Scale, Lon-gitudinal Analysis. Institute for Research on Labour and Employment: IRLE Working Papers.

Analoui, F. (ed.) (1999) Effective human resource development: a chal-lenge for developing countries, Ashgate, Aldershot, Hants, England

Bates, R., & Chen, H. C. (2004). Human resource development value orientations: A construct validation study. Human Resource Development International, 7, 351-370.

Delahaye, B.L. (2005) Human resource development: adult learning and knowledge management, Queensland, Wiley Milton

Clardy, A. (2008). The strategic role of human resource develop-ment in managing core competencies. Human Resource Develop-ment International, 11, 183-197.

Woodall, J. (2001). HRDI special issue: defining HRD. Human Resource Development International, 4(3), 287.

Paradise, A., & Patel, L. (2009). 2009 State of the industry report. Alexandria, VA: American Society for Training and De-velopment. [27] Gubbins, C., Garavan, T. N., Hogan, C., & Wood-lock, M. (2006). Enhancing the role of the HRD function: The case of a health services organisation. Irish Journal of Management, 171-206.

Holton, E. F., Bates, R. A., & Ruona, W.E.A. (2000). Development of a generalized learning transfer system inventory. Human Re-source Development Quarterly, 11, 333–360.

Meyer, J. P., & Allen, N. J. (1997). Commitment in the workplace: Theo-ry, research, and application. Thousand Oaks, CA: Sage p. 3

Nunnally, J.C. (1978). Psychometric theory (2nd Edition). New York: McGraw-Hill.p. 153

Delaney, J. T. & Huselid, M. A. (1996). The impact of human re-source management practices on perceptions of organizational performance. Academy of Management Journal, 39, 949–969.

--0--