Effect of Perceived Human Resource Management Practices on Performance of Parastatals in Kenya: A Case of Commercial Parastatals in Kenya

Abstract

As globalization and competition becomes a real phenomenon, there is more emphasis to link strategy and organization performance. To compete effectively, organizations must adopt ways of enhancing their competitive advantage and profitability. This research assessed the effect of Perceived Human Resource Management practices on parastatals performance. This study sought to determine the relationship between HRM and performance of parastatals in Kenya. The specific objectives involved examining the effect of recruitment and selection, training and development, decentralized teams, employee reward on the performance of parastatals in Kenya and determining the moderating effect of perceived corruption on the relationship between HRM practices and performance of parastatals in Kenya. The study adopted a descriptive survey design with both quantitative and qualitative approaches. A population of 9600 was targeted in 32 purely commercial parastatals in Kenya. A sample of 240 respondents was selected from 10 parastatals using cluster random sampling technique. The respondents included CEOs, senior managers, supervisors and other staff in each of these parastatals. Primary data was obtained from the respondents through self-administered questionnaires and interviews. A document analysis guide and secondary data collection sheet were used to collect secondary data from the parastatal publications, reports, office of the inspectorate of state corporations and websites. Data was analyzed using both descriptive and inferential statistics with the use of Statistical Package for Social Science (SPSS version 23). Descriptive statistics including mean scores, standard deviations, percentages and frequency distribution were computed to describe the characteristics of the variables of interest in the study. Inferential statistics like correlation, linear and multiple regression techniques were used to establish the nature and magnitude of the relationships between the variables. The results were presented in tables and figures. The study findings indicated that the perceived performance of parastatals was deteriorating and facing much competition from other industries. The study concluded that perceived human resources management practices had a significant positive effect on the performance of parastatals. When all these perceived practices (recruitment and selection, training, decentralized teams and employee reward) were used, it was found that there was improved performance in the parastatals. However when the moderating variable was added into the model, the study found a perceived negative and significant effect on performance. The study therefore concludes that perceived corruption had a negative and statistically effect on the relationship between management practices and performance of parastatals. On perceived corruption which was found to moderate negatively the relationship between HRM practices and performance, HR managers should recognize the contribution of the vices to organizational success. The study recommends that change management should be encouraged to wipe out corruption in the recruitment processes so as to have the competent employees who will enhance organizational performance. The top management should be in support of the changes so as to make the human resource management practices effective in the organization if any success is to be achieved.