Impact of human resource management practices on organizational performance: The case of selected manufacturing firms in Accra

Abstract

It is now a recognized fact amongst both academics and practitioners that Human Resources play a critical role in the success of organizations. This awareness has precipitated the myriad of empirical researches that have explored the link between the HR practices used by firms and the performance firms attain. The objective of this study was to first, identify and examine the extent to which bundles of HRM practices affect performance of Ghanaian manufacturing firms. Specifically, the study also analyzed the impact of HR planning, recruitment and selection, training and development, performance appraisal and compensation and rewards on organisational performance.By administering a questionnaire to a purposively selected sample of 200 respondents across 8 manufacturing firms located in the Greater Accra Region of the Republic of Ghana, multivariate regression analysis based on ordinary Least squares (OLS) estimation was performed to analyze the effects of HRM practices on organisational performance. The results indicate that control variables account for only small proportion of the total variations in organisational performance and that this joint effect is statistically insignificant at the 0.05 level. The R-square change indicates that the HRM practices significantly accounted for total variations in performance of manufacturing firms and this observed effect is statistically significant. Finally, the results reveal that only compensation and rewards positively and significantly influenced performance of manufacturing firms. The study recommends to management of manufacturing firms in Accra to pay critical attention to their compensation and rewards systems.