Human Resource Management Practices and Performance of Savings and Credit Co-operative Societies in Tanzania

Abstract

This study sought to examine the relationship between human resource management practices and performance of savings and credit co-operative societies (SACCOS) in Tanzania. Additionally, it sought to examine the moderating role of workforce diversity in the aforementioned relationship. The study was guided by five specific objectives, the first one being to determine the relationship between recruitment and selection and performance of SACCOS in Tanzania, second was to determine the relationship between training and performance of SACCOS in Tanzania, third was to determine the relationship between compensation and performance of SACCOS in Tanzania, fourth was to determine the relationship between performance appraisal and performance of SACCOS in Tanzania, and the fifth objective was to examine the moderating role of workforce diversity on the relationship between human resource management practices and performance of SACCOS in Tanzania. SACCOS performance was measured through the indicators of return on equity (ROE) and return on assets (ROA). The study was founded on four theories comprising the Resource Based theory, Ability Motivation Opportunity theory, Attraction Selection Attrition theory and the Herzberg Two Factor Theory. The study adopted a positivist approach and quantitative research design on a population of 1505 SACCOS in Tanzania. A sample of 316 respondents was obtained through simple random sampling technique from a population of 1505. Data was collected from SACCOS in Dar-es-Salaam, Tanzania via a survey using a standard questionnaire. The study’s unit of observation was SACCOS HR managers or their equivalent (SACCOS managers) while the SACCOS were the unit of analysis. Both descriptive and inferential statistics analysis were undertaken using the SPSS software version 21. The descriptive results are presented using frequencies, measures of central tendency and dispersion. The inferential results are captured through correlation and regression tables. The study found that recruitment and selection, training, compensation and performance appraisal had a significant positive relationship on financial performance of SACCOS in Tanzania. Further, workforce diversity was found to have a significant positive moderating effect on the relationship between human resource management practices and performance of SACCOS. The study concludes that HRM practices influence performance of SACCOS in Tanzania. Further, workforce diversity significantly moderates the relationship between HRM practices and financial performance of SACCOS in Tanzania. The study recommends that SACCOS consider conducting effective recruitment and selection in order to gain competent workforce. SACCOS also need to consider training and developing employees to equip them with relevant skills and also ensure that performance appraisal is effectively done to align skills with productivity goals for good performance. Moreover, it is recommended that HR managers integrate workforce diversity in all HR practices configurations for equity and inclusion. For further research, the study recommends that future researchers consider other operationalisations of human resource practices beyond the four in this study. Future researchers may also consider other methodological plans besides the current approach in furtherance of the existing body of knowledge in human resource management.