The Effect of Human Resource Management Practices on

Employee Performance in
Ethiopian Construction Work Corporation/Jimma District

A Thesis Submitted to the School of Graduate Studies of Jimma University in Partial

Fulfillment of the Requirements for the Award of the Degree of Master of Business
Administration (MBA)
By
Mengistu Markos Chamisa

Under the Supervision of

Webeshet Mengisha
And
Mohammed Yasen

MBA Program, Department Of Management, College Of Business and Economics, Jimma

University, Jimma, Ethiopia

May, 2018

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 Declarations

I hereby declare that this thesis entitled “The Effect of Human Resource Management
Practices on Employee Performance in Ethiopian Construction Work Corporation Jimma
District”, has been Carried out by me under the guidance and supervision of Main Advisor
Wubeshate Mengesha and Co- Advisor Mohammad Yasen.

The thesis is original and has not been submitted for the award of degree of diploma any university
or institutions’.

Researcher’s Name Date Signature

Submission Date:-

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 CERTIFICATE
This is to certify that the thesis entities “The effect of human resource management practices on
employee performance in Ethiopian Construction Work Corporation/ Jimma district”, Submitted to
Jimma University for the award of the Degree of Master of Business Administration (MBA) and is a
record of Valuable research work carried out by Mr. Menigstu Markos Chamisa, under our
guidance and supervision

Therefore we hereby declare that no part of this thesis has been submitted to any other university or
institutions for the award of any degree of diploma.

Main Adviser’s Name Date signature

Co-Advisor’s Name Date Signature

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 ABSTRACT
The purpose of the study was to assess the effect of Human Resource Management practice towards
employee performance in Ethiopian Construction Work Corporation (Jimma District).Human
resource management (HRM) practice enhance employee efficiency, effectively, commitment and
productivity of employee performance. Descriptive &explanatory research design was adapted to
answer the research problem. A total number of 284 set of questionnaire was collected from the
respondent. Semi structured interview were conducted to six tem leaders, the respondent were
selected using stratified sampling design &simple random sampling technique. Both primary &
secondary source of data were used to collect data. Descriptive & Inferential statistics was utilized
to analysis the collected data with the help of statistical package for social sciences (SPSS 20.0).
The research finding shows that organization recruitment and selection practice that the right
person not assigned at right job and selection of candidate not based on merit, after training &
development employee not evaluate the perceived level of change in job knowledge. The criteria
used in appraisal practice not actual measure of employee performance. Compensation practices of
the organization not have the system to recognize the effort of employees. Poor HR practice in
organization. The findings indicate that significant relationship was found between independent
variable and dependent variable. Based on the finding of this study, ECWC (Jimma District) should
work towards improving the human resource practice to achieve the goal of Organization.

Key Words: Compensation, Training & Development, Performance Appraisal & Recruitment
Selection.

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 Acknowledgements

First of all I would like to thank the almighty God for His interminable help. Without His help this
research could not have been realized.

I am grateful to my advisors Webeshst Mengeshsa and Mohammed Yasin, invaluable comments

and unreserved assistance in understanding this study.

I would like to express my gratitude and love to my wife W/RO Firehiwot Getachew , with whom I
share all ups and downs of life and acknowledge her concerns about my education and initiation she
took to let me go to school , from idea initiation to covering necessary costs concerning my
education.

Also I would like to express my indebtedness to earlier boss and friend Engineer Amanual
Albachew my friends AsayeYohaness, Lecturers at kitofurdsa technology faculty Getahune Bekell
and Engineer Abubeker Kider who have assisted me during education.

Finally, I would like to thank to all Jimma district workers, especially Yinges Girma, Dawite Filke
and Kiros Belaye, they greatest support and supplying relevant and update information. And I am
happy to give my special thanks to Jimma university BECO campus Department Head secretaries.

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 TABLE OF CONTENTS
CONTENTS PAGE

Abstract ................................................................................................................................................................ i

Acknowledgements .............................................................................................................................................. i

Table of Contents ............................................................................................................................................... iii

List of Table ....................................................................................................................................................... vi

List of Acronyms .............................................................................................................................................. vii

CHAPTER ONE ..................................................................................................................................................1

INTRODUCTION ...............................................................................................................................................1

1.1 Background of the study ...........................................................................................................................1

1.2 Statement of the problem ...........................................................................................................................4
1.3. Research Question ....................................................................................................................................7
1.4. Objective of the study ...............................................................................................................................8
1.4.1. General Objective ...............................................................................................................................8
1.4.2 Specific Objectives .............................................................................................................................8
1.5 Scope of the study ......................................................................................................................................8
1.6 Significance of the study ............................................................................................................................9
1.7. Organization of the paper..........................................................................................................................9
CHAPTER TWO ...............................................................................................................................................10

2. LITERATURE REVIEW ..............................................................................................................................10

2.1 THEORETICAL LITERATURE REVIEW ........................................................................................... 10

2.1.2 Human Resource Practice Concept. ............................................................................................... 10
2.1.3 Recruitment and Selection. .............................................................................................................. 11
2.1.4 Training and Development............................................................................................................... 12
2.1.5 Performance Appraisal. .................................................................................................................... 13
2.1.6 Compensation. ................................................................................................................................. 14
2.1.7 Employee Performance .................................................................................................................... 16
2.1.8 The relationship between HRM practice and Employee Performance ............................................ 16
2.1.9 Employee Performance Measurement ............................................................................................. 18

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 2.2. Results of Empirical Studies of HRM and Employee Performance ...................................................... 21
2.2.1 Theoretical / Conceptual Frame Work ............................................................................................. 24
CHAPTER THREE ...........................................................................................................................................26

3. RESEARCH METHODOLOGY .................................................................................................................26

3.1 Research Design...................................................................................................................................... 26

3.2 Target Population .................................................................................................................................... 26
3.3 Sampling Design and Technique ............................................................................................................ 26
3.4 Sample size Determination ..................................................................................................................... 27
3.5 Proportional Allocation ........................................................................................................................... 27
3.6 Source of Data Collection ....................................................................................................................... 29
3.7 Method of data collection. ...................................................................................................................... 29
3.8 Reliability and Validity ........................................................................................................................... 29
3.9 Measurement of variables ....................................................................................................................... 30
3.10 Data Analysis ........................................................................................................................................ 31
3.10.1 Descriptive Analysis ...................................................................................................................... 31
3.10.2 Inferential Analysis ........................................................................................................................ 31
3.10.3 Regression ...................................................................................................................................... 32
3.11 Model Specification .............................................................................................................................. 32
3.12 Description of variables ........................................................................................................................ 33
3.13 Ethical Consideration ............................................................................................................................ 33
CHAPTER FOUR..............................................................................................................................................34

DATA, ANALYSIS AND DISCUSSION.........................................................................................................34

4.1 Introduction ............................................................................................................................................. 34

4.2 Respondents Return Rate. ....................................................................................................................... 34
4.2.1 Back ground of respondent by Sex .................................................................................................. 35
4.2.2 Back ground of respondent by Age .................................................................................................. 36
4.2.3 Back ground of respondent of marital status.................................................................................... 36
4.2.4 Educational background of respondents .......................................................................................... 36
4.2.5 Work experience of the respondent. ................................................................................................ 36
4.2.6 Work status of the respondents ........................................................................................................ 37
4.3 Current HRM practice of ECWC (Jimma District)................................................................................. 37

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 4.3.1 Level of Employee performance. ......................................................................................................49

4.4 Association between HRM & Employee ................................................................................................ 53

4.5 Discussion of results ............................................................................................................................... 60
CHAPTER FIVE ...............................................................................................................................................63

5. CONCLUSION AND RECOMMENDATION .............................................................................................63

5.1 Conclusion .............................................................................................................................................. 63

5.2 Recommendation .................................................................................................................................... 64
5.3 Directions for Future researcher ............................................................................................................. 65
Reference ...........................................................................................................................................................66

Appendix ............................................................................................................................................................70

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 LIST OF TABLE
Table 3.1 Response rate Per Strata.………………………………………………………………………………………………………………28

Table 3.2 Reliability Test of the Items ...............................................................................................................30

Table 4.2.2 Socio-Demographic characteristic of Employee performance .......................................................34

Table 4.3.1 Recruitment and Selection Practice ................................................................................................37

Table 4.3.2 Training and Development practices ..............................................................................................41

Table 4.3.3 Performance appraisal practices .....................................................................................................44

Table 4.3.4 Compensation practices ..................................................................................................................47

Table 4.4 The effect of HR practice on employee performance. .......................................................................49

Table 4.5. The effect of HRM practice on employee performance ...................................................................54

Table4. 6 Association between (HRM) and Employee Performance variables .................................................55

Table 4.7 Regression Analysis ANOVA ...........................................................................................................56

Table 4.8 Coefficientsa ......................................................................................................................................59

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LIST OF ACRONYMS

HRM= Human Resource Management

HR= Human Resource

PA= Performance Appraisal

TD= Training and Development

RS= Recruitment and Selected

CM= Compensation

ECWC= Ethiopia Construction Works Corporation

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 CHAPTER ONE
INTRODUCTION

1.1 Background of the study

Human Resource (HR) is the most important asset for any organization and it is the source of
achieving competitive advantage without having adequate human resource, the organization will
be unable to achieve established goals and objectives. Hence, managing human resource is the key
role of success of an organization.

Human resource management (HRM) refers to the practice systems and police that influence the
behavior performance and attitude of employees (De Cieri et al, 2008).the resent years has shown
growing interest in the management of knowledge – based organizations (Robertson and Swan,
2004). Human resource management (HRM) refers to the police and practice involved in carrying
out the human resource (HR) aspect of a management position including human resource planning,
job analysis, recruitment, selection, orientation, compensation, performance appraisal, training and
development and labor relation.( Dressler, 2007). HRM is a composed of the polices, practice and
system that influence employees: behavior, attitude, and performance (Gerhart&Wright, 2008).
The effective implementation of HR practice in organizations is a key source of competitive
advantage and has a positive relationship with performances. HR practice is abroad concept and an
aspect of organizational management that intendeds to affect directly those who work within
organization.

Employee performance in organizational context is usually defined as the extent to which an

organizations member contributes to achieving the goal of the organization. Human resource
practice are the primary means by which can influence and shape the skill , attitudes and behavior
of individuals to do their work and thus achieve organization objectives . HRM practice enhance
employee effectiveness and performance by attracting , identifying , and releasing employees with
knowledge , skills ,abilities and getting them to behave in manner that will support the objectives
of the organization. As a result it is important that organization adapts human resources
management practice that makes best use of its employees.

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As supported by (Lee and Lee 2007) HRM practices on employee performance, namely training
and development, team work, performance appraisal, Compensation/ incentive and employee
security help improve performance of employee productivity , product quality.

Human resource management practice influence employee skills through the acquisition and
development of firm’s human capital. Recruiting procedures that provide a large pool of qualified
applicants, paired with a reliable and valid selection regimen, will have a substantial influence over
the quality and type of skills new employees possess. Providing formal and informal training,
experiences, such as basic skills training, on the- job experience, coaching, monitoring and
management development can further influence employee’s development. Performance appraisal is
intended to be, for the improvement of employee productivity and performance as it is a formal
process of monitoring the employees (Brown and Heywood, 2005). Employees can be made more
productive / efficient and committed towards the organization by using appropriate performance
appraisal systems (Brown and Benson, 2000).

Effective appraisal practice should improve the performance of employee in the future, it can also
suggest for the rewards and career development of employee. The system which only measures the
performance of employee once in a year without providing a continuous feedback and coaching is
just a performance appraisal not the complete performance management system, because
performance management is much more than only measuring the performance (Halachimi, 2005).
Performance appraisal is an obligatory process in which a rater measures the employee’s traits /
behaviors individually and described in a specific time period and the record is maintained by the
organization (Coens and Jenkins, 2000).According to (Caruth and Mandlogten, 2001), state that
employees are motivated when there are financial rewards directly tied to their performance,
employee receive compensation from company in return for work performed.

The effectiveness of even highly skilled employees will be limited if they are not motivated to
perform, however, and human resource management (HRM) practices can affect employee
motivation by encouraging them to work both harder and smarter. Examples of firm efforts to
direct and motivate behavior include the use performance appraisals that asses individual or work
group performance, linking those appraisals tightly with incentive compensation systems.

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The development of infrastructure has so far been given due emphasis along with the provision of
utilities to the public. Increasing the road network of the country, the demand for the development of
this infrastructure has been growing tremendously both domestically as well as in foreign nations.

The federal government of the Democratic Republic of Ethiopia has taken the initiative to establish
developmental public enterprises to meet this growing demand. On the one hand, the establishment
of these public enterprises has the objective of fostering the socio-economic development of the
country. On the other hand, they are intended to fill the market gap in the development of these types
of infrastructure. To meet their purpose of establishment, these enterprises need to be competent.
With a growing number of domestic contractors and competitiveness in the industry, it has become
difficult for many public enterprises to deliver what they were intended for. Thus it is necessary as
well as compulsory to strengthen and enhance the competitiveness of some of the strategic
developmental enterprises through different means.

At the end of the Ethiopian fiscal year 2007, the federal government of the Democratic Republic of
Ethiopia announced the establishment of the Ethiopian Construction Works Corporation, The
formation of the new corporation indicates the strengthening of the competitive power and
enhancement of operational efficiency of the former enterprises. Thus it can be said that the
corporation can have a major impact in the construction industry both in terms of efficiency as well
as competitiveness.

Ethiopian Construction Work Corporation Jimma District is one of the oldest construction
organization in south west Ethiopia. In spite of its experience, not modernized in human resource
management practice, the organization is wasting its resource by wrong human resource practices for
employee performance (Mohammed & Javed 2012). And again due to lack of efficient Human
Resource (HR) practice reduce employee’s productivity towards their organization and ultimately
that affects their commitment to the organization (Husain Majumder, 2012).Therefore, based on the
above background, this study will examine the relationship between human resource management
practices with employee performance in Ethiopian Construction Work Corporation Jimma District
(ECWCJD).

The organization Vision & Mission

The Ethiopian Construction Works Corporation is dedicated to becoming a world-renowned and
competent construction company by 2026.

To enable the country to utilize its limited resources by using skilled manpower and modern
technology through delivering quality construction works, both domestically and overseas.

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1.2 Statement of the problem

(Gungor, 2011) suggested in his studies employee performance play an important role for
organizational performance. Employee are a primary source of competitive advantage in service
oriented organizations (Luthans & Stajkovic 1999).The systematic studies that linked human
resource management (HRM) practices and performance were published by (Gerhart and
Milkovich 1992; Arthur 1994; Huselid in, 1995; McDuffie, 1995; Guest, 1997) there after a large
number of researcher were conducted on different sectors of different countries, most of the
researcher showed significant impact of human resource management (HRM) practices on
employee performances. Employee performance is directly linked with performance of the
organization. Hence, the successful organizations consider the HRM practices as a crucial factor
that directly affects the employee performance.

Employee performance is one of the most factors that affect on the performance of organization.
effective Organization acquire competent people , asses their performance , developing their
skills , motivating them to higher levels of performance , and ensuring that they continue to
maintain their commitment to the organization are essential in upgrade employee performance
and achieve organizational objective.( Marquez ,2007).A sound human resource management
system and practice help organization attain the need of their employees and their overall
objectives.

An analysis of prior research works on human resource management (HRM) has identified some
immediate effect on human resource practice outcomes, the outcomes are in return, expected to
explain in some of variance in organization performance (Guest, 1997). Such outcomes include
knowledge, skill and ability or competence.

(Martine,1995) human resource management HRM practice are the primary means by which
organization can influence and shape the skills, attitude and behavior of individuals to do their
work and achieving organizational goal, according to empirical study result that the
organizations with ineffective Human resource management system and practice are unable to
acquire competent people, properly assess their performance and develop their capacity and
subsequently they may risk the hazards of stagnating or going out of business. Many researchers

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conducted their research to determine the relationship between human resource management
practice and employee performance in developed and developing countries.

Employee performance is directly linked with performance of the organization. The successful
organization s considers the HRM practice as crucial factor that directly affects the employee
performance.

The study conducted to evaluate the relationship between human resource practice and employee
performance by (Aycan et al., 2000) in Pakistan textile sector. The researcher examines Five (5)
human resource practices (training and development, performance appraisal, career planning
system, employee participation and compensation system). The result indicates that human
resource (HRM) practices have appositive impact on employee performance.

HRM practice effect on Malaysian private companies’ performance. According to the researcher
(Chew, 2005). Malaysian private business organization really not practicing human resource
management in to their business. in order to understand what influence business performance as
well as first find out the human resource management practices that are influencing business
performance. Their fore the researcher replicated with reference to the human resource practice
related research in developed countries. In this study the research examines six human resource
practice (training and developing, team work, compensation/ incentives, HR planning,
performance appraisal and employee security) have positive and significant influence on
employee performance.

In recent study conducted by (Soommro et a.l, 2011) it was found that human resource
management practices (training, selection, career planning, employee participation, job
definition, performance appraisal and compensation) are correlated positively with employee
performance.

(Teseema and Soetors 2006) also studied eight human resource (HR) practices and their
relationship with perceived employee performance. the eight practices include recruitment and
selection practices, placement practices, training practices, compensation practices, employee
performance evaluation practices, promotion practices, grievance handling procedure practices,

5
and pension or social security, the result indicate that all HR practice have significant effect on
performance of employee.

The above illustrated systematic studies shows that Human resource management (HRM)
practice and employee performance were published by (Hueslid in 1995, MacDuffic,1995) and
(Guest,1995,) there after a large number of researcher were conducted on different sectors of
different countries. Most of them the researcher showed human resource practices are significant
effect on employee performance.

This study arises from the need to manage the human resources of Ethiopian Construction Work
Corporation, Jimma District (ECWCJD) more effectively. The Ethiopian Construction Works
Corporation has been established for state- of-the art construction solutions. The current ECWC
office in Addis Ababa Gured Shola, the following is the major construction business that the
corporation renders; Highways, Bridges, Tunnels, Railways, Airports filled, and Dam
construction is the major one. ECWC has different project located strategically throughout the
countries the corporation has ten district and forty five section.

Jimma district is one of the district which is found in south west of the Ethiopia, the district has
five department, those are Human resource management department, Financial management
department, purchasing and supply department Equipment maintains department and
Engineering department the same us six sections which represented by jimma district in
Gambela, Tapie , Metu ,Chida , Limmu, and Jimma- Gibe section, the main task of the is district
maintain and construct road and bridge the district has more than 1219 worker, out of this 368
workers which is permanent the rest are contracts workers.

According to those empirical study results, it was accepted that human resource management
(HRM) practices is positively related to employee performance( Delery and Doty 1996), but
there is great need for additional evidence to support the HRM – with performance relationship
from different context. There are many HR practices, out of them four HR practices were chosen
for this research after careful reviews of literature. Through observation it is found that human
resource (HRM) practices are very less implanted in jimma district. What make this situation
worse that the write man not assigned at the Wright position, Jimma district not properly handle
its competent employees, due to the lack of accountability and job security, most employee have

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a superficial attitude towards their work more over there is the unavailability of job description
for more employees. this problem occurs by poor staffing and management competencies, The
organization is wasting its resource by wrong Human Resource practice(Muhammad Javed
2012).and lack of efficient Human resource practice reduce employee productivity towards their
organization and ultimately that affect their commitment to the organization (Hussain, Majumder
2012).The investigation of those influence can lead to stronger HR practices and create
awareness on effective practices that can sustain the presence of outcome that deliver quality and
best HR practices new and the long run.

Taking these problems into consideration, this study intended to examine the Human resource
management practices of the ECWC J/D with particular focus on Recruitment and Selection,
Training and Development, Performance appraisal and Compensation.

Hypothesis

1 Hypothesis :- Recruitment and selection practices are positively associated with employee
performance.

2 Hypothesis :- Training and development practices are positively associated with employee
performance.

3 Hypothesis :-performance appraisal practices are positively associated with employee

performance.

4 Hypothesis: - compensation practices are positively associated with employee performance.

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1.4. Objective of the study
1.4.1. General Objective
The main objective of the study was to investigate the effect of Human Resource practice on
employee performance in Ethiopian Construction Works Corporation Jimma district.

1.4.2 Specific Objectives

In order to materialize the general objective of the following specific objectives were considered:

 To assess the current practice of HRM in Ethiopian construction works corporation Jimma
District….

 To examine the effect of recruitment and selection on employee performance in Ethiopian

construction works corporation Jimma District….

 To examine the effect of training and development on employee performance in Ethiopian

construction works corporation Jimma District….

 To examine the effect of performance appraisal on employee performance Ethiopian

construction works corporation Jimma District….

 To examine the effect of compensation on employee performance in Ethiopian construction

works corporation Jimma District….

1.5 Scope of the study

This research was focused on the effect of Human resource (HR) practice on employee
performance. There are numerous human resource practices that have effect on employee
performance, However , this is limited to Four Human resource practices which encompass human
resource that recruitment and selection, training and development, performance appraisal, and
compensation of Ethiopian Construction Works Corporation Jimma district (ECWCJD), in addition
The study does not incorporate employee who employed on contract only permanent employee
basis as population of study and productivity, outcomes quality employee commitment and
employee efficiency will be used as a measure for employee performance.

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 1.6 Significance of the study
The findings of this study are expected to be significant it studies the relationship between HR
practices and employee performance. The importance of this research can be pointed out from
different beneficiaries view;
 The research findings may be used as a source of reference regarding HR practices and
its effect on employee performance.
 May be used by concerned bodies like performance management bodies as an input
while preparing human resource management practices.
 It may be used as a base for other researcher who is interested in the area to
investigate further.

 The findings of this study are considered important to provide insight into the various
human resource management practices needed the recommendation.

 The study can encourage using well – designed human resource management practice
to achieve its objectives, in addition, the study could serve as a reference to similar
organization and others who wont to benefit from the study as a whole.

1.7. Organization of the paper

The study is organized in to five the first chapter introduced the study by giving the back ground
information, research problems, objectives, and cope of the research & significance of the study.
The second:- is deals with review of relevant literature on the problems, Definition of Human
resource management, HRM practice. The third is discussed their research methodology a adapted
for the study and relevant justification if outlines the methodology for carrying out the primary data
collection. Chapter four represents the finding on the effect of HRM practice on employee
performance on Ethiopia construction Work Corporation. It also lay out Descriptive and inferential
analysis on the organization response to the effect of HR practice on Employee performance. The
fifth presents the conclusions that were draw form the research finding and recommendation to
enhance employee performance through proper application of HR practiced.

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 CHAPTER TWO
2. LITERATURE REVIEW
This chapter cover literature related to HRM practice and its effect on employee performance,
classified in to two major parts. The first part cover all theoretical literature and the second part
cover empirical studies that have been done in different years by many scholars.

2.1 THEORETICAL LITERATURE REVIEW

2.1.2 Human Resource Practice Concept

Human resource management (HRM) refers to the polices, and practices involved in carrying
out the human resource (HR) aspects of management position including human resource
planning, job analysis, recruitment and selection, orientation, compensation, performance
appraisal, training and development and labor relations ( Dessler , 2007). HRM is composed of
polices practices, and systems that influence employees behavior, attitude and performance.
There are four top models of HRM, Tich and Devana model, Harvard model, Guest model and
Warwick model, of HRM (Barton and Gold, 1999). out of those models, Guest model of HRM
is considered to be much better than other model (Guest 2002 Aswathappa,2008) has
demonstrated the effect of HRM on performance depend upon response of worker towards
HRM practice so the effect will move indirection of the perception of employees by practicing
HRM. (Ghebregiorgis and Karstan 2007) said that the perception of the employees provide
broader evaluation of HRM systems. They also evaluated a positive picture of HRM practice
including recruitment & selection, training & development, performance appraisal &
compensation. (Qureshi et al, 2007) concluded that HR practice is positively correlated with
employee performance. (Huselid1995) have argued that the effect of HRM on behavior of the
employees result in the effectiveness of the employees.( Patterson et .al 1997) has explained that
HR practice in selection & training effects the performance of employee provided appropriate
skills. (Verboten 2008) suggested that quality & quantity performance is positively associated
with clear & measurable goals; incentivizes are also positively related with the performance.
(Medlin & Green 2009) has stated that goal setting, employee engagement and high level of
work place optimism collectively improve the performance of individual of organization.

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2.1.3 Recruitment and Selection
Recruitment is the process of gathering qualified applicants for available positions within an
organization (Mathis,2004) selection involves choosing the most suitable applicants who satisfy
the requirements for a particular job ,the practice of selection is a decision-making activity or
psychological calculation of appropriateness (price,2004).Recruitment and selection enables
business firms to acquire the appropriate human resources in line with its aims and objectives
(Dessler,2010Huselid1995)effective hiring also allows firms to respond to market opportunities
and threats in a proactive manner in the dynamic markets .Bratton and Gold(2007,p239).
Recruitment and selection can play a vital role in shaping an Organizations effectiveness and
performance, Performance improvements not only a result of well-functioning system but also
depends on effective human resource strategies that succeed in recruiting and maintaining a
committed and motivated work force (Al-Ahmadi,2009) (Lunch & Smith 2010) &
(Cunningham.1999). Recruitment & Selection is the initial process to evaluate staff this
concerned with identification, attraction & selection of the suitable person meeting the job
requirements of the organization. It is an important process to carry out otherwise the outcomes
inappropriate recruitment & selection is extensive. (Qureshi & Ramey 2006) HR practices are
positively correlated with employee’s performance whereas selection & training is more
affecting the performance rather than other practice. (Chand & Katu 2007) demonstrated that
recruitment & selection, part of HRM system is strongly correlated with the profitability &
suggests that management of the organization must focus on these HRM practices (recruitment
& selection) resulting in a improved organizations profit.(O’Meara & Petzall 2009) found that
questionnaire respondents confirmed that job analysis for the particular role including
competence knowledge & experience, under taken by the hr executives. It is important to
consider fit between successful candidate & the organization. Selection criteria are used as basis
on the questions asked by selection panel & interview. The process of recruiting and selecting
may come in four stages; defining requirement, planning recruitment, campaign attracting
candidates and selecting candidates (Armstrong, 2010).
Recruitment and selection are integrated factors that affect the performance of employee
recruitment and select appropriate employee for suitable position of work have close
relationships and connections with the organizations development many studies have found
positive relationship between recruitment and selection and employee performance.

11
HRM out comes were used as mediating factors between HR practices and employee
performance and the result was positively with the relationship between recruitment and
selection and performance at the employee level. A related study smith and Lynch showed that
recruitment and selected is the first step in employee evaluation process. This is linked with
identify, attract and select the appropriate applicant to meet the requirements of the jobs in the
organization.
(Marques 2007) involvement of HR department in hiring process helps to enhance knowledge of
the workforces & required skills. It is also helpful for the identification of up grading skill
requirement of the employees. By such involvement, good communication seems to have
synergy effect on the quality within the workforce
Qureshi and Ramey stated that HRM practice are positively and significant linked with the
performance of the employee and training and selection is the most factor affecting on the
employee performance between all the others practices , based on the previous mentioned
studies it can be safely assumed that employee performance is positively affected by recruitment
and selection .

2.1.4 Training and Development

According to (Guest 1997) training and development program is one of the vital human resource
management practices that affect the valuable of the work forces knowledge, capability and skill
positively. Ultimately, the effects are higher on employee’s job performance and creating super
companies. (Danville Delvalle, et al 2009) training provides employees with the skills, abilities
& knowledge required by the post. This effect can be explained in a way that the organization is
interested in investing in training for the employees & giving them confidence & intends to
count on them in the future, they will make effort & give their best at their work in an effective
way. (Jayawarna et al.2007).Formal training in comparison with informal training is more
effective & significantly associated with performance.(Denby 2010).Training is a continuous
process, one that is constantly refreshed & renewed according to the needs & requirements of
the individuals along / with encouragement to revisit the contents after that training. Training
needs varies from industry to industry so one cannot be sure that the particular industry or the
organization should conduct training every year, semi annually or quarterly. (Wilson & Western
2006). sometimes training plans are same for the next year which may illustrates that possible
needs required to perform a job are not addressed by the manager & the employee & as well.

12
Type of trainer is total depends on the nature of the training as external trainers brings huge,
important & diverse knowledge of multi corporate environment to share with trainees & internal
trainers as well. So it is advantageous for them to gain knowledge to make jobs easier &
effective. (Tzafrir 2005) also asserted strongly those trainings an important element in
producing the human capital. Investing in training programs can make employees feel indebted
to the company. Training is necessary for employees to perform particular job because most
jobs require specific skill and knowledge by which the job is much easier to perform as it is in
the benefit of the employee. (Qureshi et al. 2007), conclude that training as an practices has a
very positive impact on the performance of the employees as there is highly positive correlation
is found in the study. The main purpose of training and development is by improving the
employee skill knowledge so that organizations can maximize the efficiency and effectiveness
of their human assets (Meyer and Smith 2000).

Employee performance refers to the degree of achievement of the mission at work place that
builds up on employee job (Cascio 2005). Different researchers have different thoughts about
performance. Most researchers used the term performance to express the range of measurement
of transactional efficiency and input and output efficiency. Researchers noted effective training
and development is very crucial to the employees, the organization and their effectiveness
(Devi & Shaik 2012).

2.1.5 Performance Appraisal

(Francis & Klener 1994) & (Boice & Kleiner 1997).Employees evaluation, also known as
performance appraisals are crucial for the operations of the organization as well as the
advancement of employees. Rating the employees is necessary as it helps to identify the leading
positions in the organization. To acknowledge employee, a proper work review of the employees
must be done which further helps to rewards them when appropriate. The implementation of the
performance appraisal system is a complicated and difficult job because it requires an accurate
and fair appraisal of an employee’s performance.
Employee commitment and productivity can be improved with performance appraisal systems
(Brown and Benson, 2003). Performance appraisal represents a formalized process of worker
monitoring and is intended to be a management tool to improve the performance and
productivity of workers (Shazed et. al. 2008). The performance appraisal system, in the

13
perspective of the process of observing and evaluating employee’s performance and providing
feedback, is a potentially important method for developing an effective work force. Performance
appraisal to them is used as a mechanism for improving employee performance. it is widely
recognized as the primary human resource management intervention for providing feedback to
individuals on their work – related achievements that ultimately improve workers performance.
(Boice and Kleiner, 1997) reports that effective appraisal system helps to produce committed
and motivated employees, it is important to be effective, accurate record keeping, Clearly
defined measurement system and frequent review of performance. Objectives must be defined
with full consultation of the employee and supervisor which helps indirect communication
between them.

According to (Waddell et.al. 2000) Performance appraisal can be used as an aid in making
decisions pertaining to promotion, demotion. Retention, transfer and pay. (Evrim 2009) also
analyzed whether appraisal system leads to employee performance, it was conclude that in
terms of administration ,the appraisal system helped define roles and responsibilities more
clearly, review and determine job description, determine organizational goals and objectives and
also lead to continuous leering , team building and improve employee performance.

2.1.6 Compensation.
Compensation is one of the human resource management functions that deals with every type of
reward individual receive in exchange for performing organizational tasks, such as wages,
salaries, and bonuses. The objective of the compensation is to create a system of rewards that is
equitable to the employer and employees.(Huselid 1995) asserts that the compensation system is
recognized as employee merit and it is widely linked with firm outcome. Compensation by its
definition means all monetary payments and all commodities used instead of financial to
recompense employees. The reward system was organized to attract and motivate so as to keep
employees.

(Thang 2004) suggests that compensation and reward can be powerful tools for getting efforts
from the employees to fulfill the organizations goals. The rewarding has much different system
to follows, the financial reward can be base pay and performance related pay. Bas pay is
determined with internal and external rates that are the form of job evaluation and market rates
and it is expressed with the relation to a certain time period i.e. year, month and week.

14
The levels of pay are agreed with individual agreements or with collective agreements (with
labor unions).

(Armstrong 2010, p, 275).Most of the time the firms used performance based compensation to
reward employees that enhance employee performance. (Brown e.ta.l, 2003 suggest that
performance based compensation positively influence employees performances. According to
Wright, 2003 an effective HRM strategy is to integrate performance and compensation system
enhance employees will to work effectively and efficiently.

(Tesmma and Soeters 2006) indicate a significant correlation between compensation and
employee performance. it is important that employee view compensation practice in a favorable
light as compensation practice heavily influence employee recruitment , turn over and
productivity.

This study reveals that the selected four items of HR practice have significant relationship with
operational (employee productivity) and good performance outcomes. (Hamiza Mohammed,
Hamiza Edrise, and Alqudah 2014) .These researcher evidence shows that effective HRM
practices can have positive effect on employee performance. In a literature review,( Delery and
Doty 1996) identified seven HR practices that have been consistently considered (HRM)
Practices. They defined HRM practices as those that are theoretically or empirically related to
over all organization performance. These practices include internal career opportunities, formal
training systems, results oriented appraisals, employment security, participation, job
descriptions, and profit sharing. The relationship between Human Resource practice and work
out comes is an increasingly researched topic human resource management (Edger&Geare,
2005).

More specifically HRM is hypothesized to fulfill employees’ needs which enhance favorable
attitudes, and subsequently improver’s performance out comes (Edger and Geare, 2005: kuvaas
2008).previous studies have also shown that implementing HRM practice is an important means
through which favorable out comes can be fostered, For example, the presence of strong
recruitment and selection practice, promotional, opportunities, grievance resolution
mechanisms, flexible benefit plan employee responsibility, autonomy and team work were
found to relate positively to organizational commitment (Young and Meurs,2007).

15
The successful implementation or failure of Human Resource Management practices depends on
the skills of the managers (Guest, 2011)

2.1.7 Employee Performance

Employee performance is one of the most factors that affect on the performance of the
organization (AL- Qudah, AL- Shafanawi, 2014). The successful organization understands the
important of HR as a critical factor directly affects and contributes on the performance. Human
resource management practice is employed to evaluate the performance of the employee in the
organization and in modern era and highly competitive climate between the organizations. The
tendency to improve employee performance is by improving the HRM practice. The employee
performance is use of knowledge, skills, experience and abilities, to perform the assigned
mission required by their managers efficient and effectively.
The importance of the employees performance can be in form of several points such as, help to
consider the cost of the resource used, measure of the quantity and quality of work done, help to
survive and excel between the firms, help to assess and attain of established performance goal
and to increase the efficiency of the employee performance and helps to make the right
decisions.(Kaplian, 2003) explained the main methods of evaluating employee performance
based on employee attributes which confirm characteristics or qualities important to the firm,
employee behavior which are widely used for evaluating or defining employee behaviors
necessary to complete a job successfully and employee achievements which show the extent to
which specific objectives or aims have been met, exceed or not met.

2.1.8The relationship between HRM practice and Employee Performance

A number of studies have shown similar positive relationship between HR practices & various
measures of employee performance. For instance last decades witnessed substantional
development in the area of institutional planning, HR strategies, establishment of pay &
rewards, mechanism capacity building of individual & teams, improvement in HR functions,
managerial development, performance management, and workplace relationships in developed
world. But the scenario is depressing in developing countries. Getting the best & desired
outcome has been point of concern for organizations rewards, low salaries, lack of
accountability & absence of value system for greatening award & rewards.

16
According to (Gerhart 2007) Human Resource management is a combination of multiple factors
and these factors are practice, policies, and system which influence the behavior attitude and
performance of the employee towards an organization in positive way.
Human Resource management Practices are linked with the management of human resource
activities necessary for staffing the organization and sustaining high employee performance
(Mahamood,2004).There has been an increase in the experimental studies that examines the
influence of some practices of Human resource Management (HRM) on performance of
employee (Becker and Huselid, 2006,Bowen) Human resource practices that can influence the
performance of an organization on their own or when merged with other. However, the result
cannot or when merged with other.
However the result cannot be easily interpreted (Ahmad and Schroeder, 2003). In order
examine the influence of HR practice on performance of employees which is also related
organizational growth. Employee performance is one of the most factors that effect on the
performance of organization. The successful organization understands the importance of HR as
a critical factor directly affects and contributed on the performance. Human resources are
considered as one group of key success factor in organization (Dessler2010; Barney et-al, 2001).

Lado and Wilson (1994, p.701) describe human resource practice as asset of distinct but
interrelated activities, functions and process that are directed at attracting, developing and
maintain (or disposing) of a firms human resource. The HRM practices contribute significantly
to the accomplishment of firm objectives and to creating and adding value for its customers and
physical resources. Various studies have attempted to delineate HRM practices (Dessler, 2010),
(Ahmad and Schroeder 2003; Kaya 2006). In general terms HRM comprise practices and
activities of acquiring, retaining, empowering and motivating employees. In order examine the
effect of HR practice on performance of employees which is also related organizational growth.
Employee performance is one of the most factors that effect on the performance of organization.
The successful organization understands the importance of HR as a critical factor directly
affects and contributed on the performance.
The relationship between human resource practice and employee performance is an increasingly
researched topic in human resource management (Farid et al 2014 and Al –Qudah et al 2014).
More specifically HRM is supposed to comply with employees needs which enhances favorable

17
attitudes and subsequently improves performance outcomes. (Kuvaas2008). his is in synch with
social exchange theory (SET) which argues that HRM practice provides positive and relevant
exchange relationship among employee and employer especially when the need of individual
workers are considered to which employees reciprocate with favorable attitudes and behavior
(Gould Williams and Davies ,2005).( Guest 2002) has demonstrated that the effect of HRM on
employees and organizational performance depend up on responses of workers towards HRM
practices, so the effect of HRM practice move in the direction of the perception of employees .
(Qureshiet.al, 2007) concluded that HRM practice are positively correlated with employees
performance.

2.1.9 Employee Performance Measurement

The concept of performance are studied through evaluation of performance is the process
classifying certain out comes within a definite time frame (Coens & Jenkins, 2002) .More over
the axiom if you can’t measure it, you can’t manage it, underpins the rationale for organization
having a completed and comprehensive performance measurement system such as the Balanced
Score Cared or total quality performance management. This approach connects measuring
throughout an organization to translate high level objectives in to lower level activities.

This approach connects measure throughout an organization to translate high level objectives in
to lower level activities .this measure are imposed an individual employees to monitor their
performance of these activities (Plats and Sobotaka 2010). Performance criteria need to be
unambiguous, clearly explained relevant to the work tasks under taken by employees and
achievable. The criteria should not include factors beyond the control of the individual
employee. Supervisors also need to be trained to provide regular, meaningful and constructive
feedback.

Employees should also be providing with appropriate training and development opportunities to
overcome weakness in performance identified through the appraisal process. The assessment of
individual employee behavior and work performance and not the personality of the employee
(O,Brien, 1999). According to (Huseled 1995), employees within firms contribute for
organizational performance and HRM practice can affect individual employee performance
through their influence over employees skill and motivation and through organizational

18
structures that allow employees to improve how they jobs are performed. (Bhatti 2007), and
(Qureshis, 2007) perspectives productivity is a performance measure encompassing both
efficiency and effectiveness.

Labor productivity means the output of workers per unit of time which is commonly used and
straight forward measure of productivity is approximately equal to the difference between the
growth rate of output and growth rate of the number of hours worked in the economy
(Christopher, Gust and Jaime Marquez, 2004).

There are a number of measuring that can be in to consideration when measuring performance
for example, using of productivity, efficiency, effectiveness, quality and profitability measures
(Abuja 1992) as briefly explained here after.

Productivity is expressed as a ratio of output to that of input (Stoner, Freeman and Gilbert
JR1995). It is a measure of how the individual, organization and industry converts input
resources in to good and services. The measure of how much output is produced per unit of
resources employed (Lipsey 1989).

Efficiency is the ability to produce the desired outcomes by using as minimal resource as
possible.

Effectiveness is the ability of employees to meet the desired objectives or target (Stoner, 1996).

Profitability is the ability to earn profits consistency over a period of time. It is expressed as the
ratio of gores profit to sales or return on capital employed (Wood and Stangster2002).

Quality is the characteristic of products or services that bear an ability to satisfy the stated or
implied needs (Kotler and Armstrong 2002).It is increasingly achieving better products and
services at a progressively more competitive price (Stoner 1996, Aidan, 2013).

According to Hawthorne studies and many other research works on productivity of worker
highlighted the fact that employees who are satisfied with their job will have higher job
performance, and thus supreme job retention, than those who are not happy with their jobs
(Londy, 1985). Moreover, it is stated that employees are more likely less efficiency and
productivity if they are not satisfied with human resource management practice. Employee

19
performance is higher in happy and satisfied workers and the management found it easier to
motivate high performers to attain firm targets. (Kinaki and Kreitner, 2007). Employee could be
only satisfied when they feel themselves competent.

Additionally, as noted by (Draft 1988), it is the responsibility of the company manager to ensure
that the organizations strive to and thus achieve high performance levels. This therefore implies
that managers have to set the desired levels of performance for any periods in question. This they
can do by for example, setting goals and standards against which individual performance can be
measured. Companies ensure that there are contributing to producing high quality products and /
or resources through the process of employee performance management. It is important to note
that performance management includes activities that ensure that organizational goals are being
consistently met in an effective and efficient manner. Performance management can focus on
employee performance of employees, department, and process to build a product or service.
Earlier research on productivity of worker has showed those employees who are satisfied with
their job will have higher work performance (Londy 1985). Further Still,(Kinicki and Kretner
2007) document that employee performance is higher in happy and satisfied workers and
management find it easy to motivate high performers to attain firm targets.

High performing, effective organizations have a culture that encourages employee involvement.
Therefore, employees are more willing to get or problem solving activities, which subsequently
result in higher employee performance. If employee output is produced by two factors, Labor
and capital, then the growth of labor productivity depends upon the rate of capital deepening,
and the growth of multifactor productivity (Christopher Gust and Jaime Marquez2004). capital
depending refers to arise in the ratio of capital to labor, that is an increase in the amount of
capital which includes machines, structures, and infrastructure, For a given level of technology
, capital deepening raises workers, ability to produce more output with the same level of effort
increases in multifactor productivity may reflect advances in technology but they also reflect
any other developments that result in greater efficiency, such as reorganization of tasks in affirm
or improvements, in distribution channels used to deliver goods .

Empirical research studies have found a significant relationship between HRM practice and
employee performance. The Malaysian Government has a vision of becoming a developed
country by year 2020. In view of this the government has embarked on deregulation of

20
understanding the human resource practice that will improve employee performance. Then he
tries to examine the effect of certain HR practice on employee performance. The study was
under taken with the basic objectives of identifying the effect of HR practice on employee
performance at Telecom Malaysia. Three major HR practice where chosen for the study
training, performance appraisal and employee participation. The finding of the regression
analysis proved that there was a significant influence of training and performance appraisal on
employee performance. It was found that the employee participation in decision making has no
influence on the employee performance.

This study results match with (Tahir 2006) findings where he revealed that training and
performance appraisal are highly significant in employee efficiency and effectiveness. Likewise
the findings from this research are in line with the result from (Singh 2004) it reviled that
training and performance appraisal has significant influence on organizational and employee
performance. (Uen & Chien 2004) compensation has been as one of organization incentives
arrangement that encourage employee’s performance retention.

(Sultana et: al 2012) in his study showed that employee training helps to develop organization
performance, take vital role in improving employee performance as well as increasing
productivity and eventually helps to place organizations in the best position to face competitive
changes and stay on top.

(Kahn 2010) has measured five human resource management practices that affect the
performance of oil & gas industries in Nigeria. He measured recruitment & selection, training &
development, performance appraisal, compensation & reward. Employee relations to see their
effect on performance optimization, factor & regression analysis indicated appositive &
significant association of those practice with performance optimizations.

2.2. Results of Empirical Studies of HRM and Employee Performance

The results from number of empirical studies that show the effect of HRM practice on employee
performance are summarized in table below.

21
Authors Area of Study Significance

Tsaura& Lin Evaluating Human Resource The study result indicates that Human
Management practices effect on Resource Management practice had
(2004)
employee service quality & behavior partially an indirect effect through
in Tourist Hotel employee service quality employee &
behavior. Means there is relationship
between human resource practice &
service quality.
Budhwar Examine the relationship between The study revealed positively
HR practice & employee relationship between HR practices
(2007)
performance 178 manufacturing such as (recruitment & selection,
firms in Greek. training & development, promotions,
incentives, benefits, involvement
safety) & employee performance.
Forly (2008) Evaluate the effects of Human The research results indicate employee
Resource Management practice on
performance (output) depend on
employee performance.
Human Resource daily activity &
organizations strategy & policy

Kundy (2009) To investigate the effect of HRM A study of Indian & Multinational
practices on productivity. companies conclude that, competitive
advantage of accompany can be
generated from Human Resource (HR)
and company performance is
influenced by asset of effective
Human Resource Practice.

22
Tanver et.al The impact of Human Resource All variables recruitment & selection,
Management practice on the
training & development, performance
(2011) employee performance.
appraisal is found to be significantly
related with performance of employees.
He found that recruitment & selection
and performance appraisal plays a vital
role for the performance of employees.
Sarbapriya, Ray To investigate the effect of selected It was that factors like performance
&IshitaRay
Human resource Management appraisal, participation in decision
(2009)
practice on employee productivity. making training and development
empowerment, compensation
influencing human resource
management (HR) practices have
significant association with job
satisfaction. It has also been found that
other elements like training &
development, empowerment
compensation have substantial effect
on employee performance.
Soomro et.al Evaluate the perceptions of The researcher found that HRM
(2011)
employees on HR practices. practices (training, selection, carrier
planning employee participation, job
definition performance appraisal &
compensation)
Correlated positively with employee
performance.
Farog and Aslam To examine the impact of training & The results of the researcher showed
(2011)
feedback on employee performance that training programs are effective
tools for the enhancement of
employee’s performance.

23
Hamzah To evaluate the effect of Human The research investigated the factor
Mohammed and Resource practice on employee that affect on recruitment & selection
Abdlla Osman performance. compensation to ward employee
(2014) performance. The results indicated that
recruitment and selection and
compensation significantly correlated
with employee performance.

Zaini To identify commonly HRM The research showed that training and
Abdullah Practices effect on private companies development, team work, compensation
Performance. incentives, HR planning, performance
2014
The case of Malaysia private appraisal and employees security have
companies. positive and significant influence on
business performance with the
exception for compensation incentives
and employee security.

Source: Different Literature Review

2.2.1 Theoretical / Conceptual Frame Work

The dependent variable of employee performance is influenced by almost each practice of
human resource management as discussed in literature. But for the present study, I am choosing
four independent variables - recruitment and selection, training and development, performance
appraisal and compensation practice. The variables are decided on the basis of a study
conducted for Ethiopian Works Construction Corporation Jimma District (ECWCJD) to
understand the relationship among human resource management (HRM) practice with perceived
performance of the district employee.

24
Independent Variable
Dependent variable

Recruitment & selection

Employee performance
Training and Development

Efficiency, effectivetity,

Performance Appraisal &

Productivity

Compensation

Source: developed by researcher from the reviewed literature.2018

25
 CHAPTER THREE

RESEARCH METHODOLOGY
This chapter incorporates the detailed research design methodology in general. It was explain
the research design, target of population, sample determination, sampling technique, source of
data, procedure of data collection, analysis and interpretation, reliability and validity test are
presented respectively. This study was examined the effect of human resource management
practice on employee performance of Ethiopian Construction work Corporation /Jimma District/

3.1 Research Design

Research design is the blue print for fulfilling research objectives and answering research
questions (Johu A.H. et al., 2007; 20-84). In other words, it is a master plan specifying the
methods and procedures for collecting and analyzing the needed information. For this study the
researcher utilized both descriptive and explanatory research design. The major purpose of
descriptive research is description of the state of affairs as it exists at present. Then this study
describes and critically assesses the effect of human resource management (HRM) practice on
employee performance of Ethiopian Construction Works Corporation (Jimma District). Second,
the study employs explanatory in that the relationship between variables is correlated with an
aim of estimating the integrated influence of the factors on employee performance.

3.2 Target Population

All employees of Ethiopian Construction Work Corporation /Jimma District employees are
target populations of the study. Therefore, the focus of the study was the effect of HRM practice
on employee performance ECWC /Jimma District / that have 1219 employees.

3.3 Sampling Design and Technique

The target population of this study was made up of all employees of Ethiopian Construction
Work Corporation / Jimma District. This study the researcher was used stratified sampling
design. Because of the researcher believes that it is necessary to include representative
respondents from each division of the organization: (Lombard, 2010).

To select sample respondent the respondents were divided in to six strata namely,
Administration staff, financial staff, Engineering staff, Supply and Procurement staff,
Equipment Maintenance staff, Work Execution staff. In this sampling technique the strata are

26
formed on the bases of the centers’ attributes, this may increase the accuracy of the data through
allocation of the sample to each stratum. Also this method can be used to improve the samples
representativeness of the population. By ensuring those characteristics and to improve the
samples representativeness of the population by ensuring those characteristics & there
proportion of the study sample reflect the characteristics of the population. Then the sample
respondent from each stratum selected randomly using simple random sampling technique.
Random sampling is advantageous in that each member has an equal probability of being
included in the sample (Lombard 2010) after that sample random sampling technique was used
to determine sample respondents from each stratum.

3.4 Sample size Determination

Sample size determination was based on the formula of sample size determination formula that
was developed by Bariddam (2001; 93) and the sample size computed as follows:--

Where; n= The required number of sample size

N= Number of total population

e=Level of significance
N=1219 e=0.05

= 301.17

= 301

3.5 Proportional Allocation

The 301 respondent will be selected from each Department on proportion basis, since the number
of employees in each Department is not the same.

Where:- nn=

N= ∑ = total number of employees

27
 Nn= Total number of population size in stratum-h

n=∑ ……………….total number of sample

nh= Total number of sample size in stratum-h

Nn =

n1=

n2=

n3=

n4=

n5=

n6=

Table 3.1 Response rate Per Strata.

Department Sample size Response Percentage %

Administration Team 49 49 100%

Financial Team 34 34 100%

Procurement & supply Team 37 37 100%

Equip. Maintenance Team 40 40 100%

Engineering Team 36 36 100%

Work excavation Team 105 105 100%

Total 301 301 100%

Sources: Jimma District Human resource Department (2018).

28
3.6 Source of Data Collection

The researcher used for this study both primary and secondary source of data. Primary source of
data is obtained through questionnaire that collected from employees and managers. Secondary
source of data was gathered from published literatures, and empirical studies, books, journals
articles, internet and ECWC web site

3.7 Method of data collection.

The main method of data collection for this study was questionnaire and interview to collect
data. The questionnaires are directly distributed and collected from the target population. Semi -
structured interview was conducted for the HR manager, team leaders, most of the respondent
educational level are diploma, certificate & 12 grade complete for this the question designed in
both English &Amharic language this is to utilize those who cannot clearly understand English
language so they respond easily, in those procedures the researcher collected data about the
effect of HR practice on employee performance by considering the independent variable i.e.
recruitment and selection, training and development, performance appraisal, and compensation.
Dependent variable was employee performance.

3.8 Reliability
Before applying statistical tools, testing of the reliability of the scale is very much important as
it shows the extent to which a scale produces consistent result if measurements were made
repeatedly. This is done by determining the association in between scores obtained from
different administrations of the scales. If the association is high, the scale yields consistent
results, thus it is reliable. Cornbach’s alpha is a coefficient or reliability. It’s commonly used as
a measure of the interval consistency or reliability of a psychometric test score for a sample of
examines. It was first named by Lee cronbach in 1951, as he had intended to continue with
further coefficients.

The Measclres can be viewed as an extension of the Kunder- Richardson formula 20 (KR-20)
which is an equivalent measure for Dichotomous items. Hence, according to (Lombard 2010),
coefficients of 90 or greater are nearly always acceptable, 80 or greater is acceptable in most
situations, and 70 may be appropriate in some exploratory studies for some indices. Therefore,
the researcher used the above mentioned literature in to consideration and tested the reliability

29
of the items which were developed for respondents. And, as indicated in table the reliability of
the whole items is 0.960 which shows as the whole items were reliable and acceptable because.
As Lombard stated Coefficients of 0.9 or greater are always acceptable.
Table 3.2 Reliability Test of the Items

Variables N of items Cronbach‘s Alpha

Recruitment &Selection 10 .980

Compensation 8 .968

Training & Development 10 .972

Performance Appraisal 10 .898

Employee Performance 8 .984

3.8.1 Validity test

Validity defined as the accuracy and meaning fullness of the inferences which are based on the
researcher results (Creswell 2009) content validity of measures were determined for the
validation of an instrument. (Collins & smith 2003) and (Minbarve 2009)

A pilot study conducted to refine the methodology and test instrument such as questionnaires
before administrating final phase. Questionnaires was tested on potential respondent to make the
data collecting instrument objective, relevant, suitable to the problem and reliable as
recommended by (John Adams et al 2007). Issue raised by respondents was corrected and
questionnaires were refined. Besides, proper detection by an advisor was also taken to ensure
validity of the instruments. Finally, the improved version of the questionnaires were printed,
duplicated and dispatched.

3.9 Measurement of variables

In this study, subjective performance measurement was utilized. The first part of the
questionnaire contains demographic information about respondent (sex, age, marital status, year
of work experience, Educational level, position). In section two, Human resource management
practice. (Recruitment & selection Training & Development, Performance appraisal, and
Compensation) Independent variable items of the questionnaire are developed on the basis of

30
literature review and studying some previous questionnaires. A five point Likert- type scale was
used as the response format with assigned values ranging from 1 being "Strongly disagree" to 5
being "Strongly agree". (Bhattacherje, 2012)
The next section Independent variable has incorporated opinion of the respondents concerning
rate of the employee’s performance. The items of the questionnaire were developed on the
basis of literature review and with adopting A five point Likert-type scale was used as the
response format with assigned values ranging from 1 being "Strongly disagree" to 5 being
"Strongly agree".(Bhattacherje, 2012). Finally the researcher incorporate semi structured
interview for team leaders &HR manager.

3.10 Data Analysis

This is the further transformation of the processed data to look for patterns and relationship
between and or among data groups by using descriptive and inferential (statistical) analysis. The
statistical package for social science (SPSS) version 20 was used to analyze the data obtained
from primary and secondary sources. Specifically, descriptive statistics (mean standard
deviation and charts) and inferential statistics (correlation and regression) were taken from this
tool.

3.10.1 Descriptive Analysis

Descriptive Analysis was used to reduce the data into a summary format by tabulation (the data
arranged in a table format) and measure central tendency (mean and standard deviation) and
measure of central tendency (mean and standard deviation), and to show the current status of
human resource management (HRM) practice of Ethiopian Construction Works Corporation
(Jimma District). The reason for using descriptive statistics was to compare the different factors.
Besides, the interview questions were analyzed using descriptive narrations.

3.10.2 Inferential Analysis

According to (Sekarn 2000) inferential statistics allows to infer from the data through analysis
the relationship between two or more variables and how several independent variables might
explain the variance in dependent variable. The following inferential statistical methods were
used in this study.

31
3.10.3 Regression
According to Phyllis and his associates 2007, inferences have a very important in management
research. This is so because conclusions are normally established on the bases of results. Such
generalizations were therefore, the population from the samples. They speculate the Pearson
product moment correlation coefficient is a widely used statistical method for obtaining an
index of the relationship between two variables when the relationship between variables in liner
and when the two variables correlation are continuous.

To ascertain whether a statistically significant relationship exists between independent variables

(recruitment & selection, training & development, performance appraisal and compensation)
with dependent variable (employee performance) the product moment correlation coefficient
was used.

Multiple liner regression is used to analysis the relationship, and to see the significant effect of
the independent variable on dependent variable.

3.11 Model Specification

The equation of multiple regressions on this study is generally built on around two sets of
variables, namely dependent variables (employee performance) & independent variables
(recruitment & selection, training & development, performance appraisal and compensation).

Yi= β1X1 +β2X2+β3X3+ β4X4

Where;
Y=is the response or dependent variable-employee performance
X1= Recruitment and Selection (RS),
X2=Training and Development (TD),
X3=Performance Appraisal (PA) and
X4= Compensation (CM) are the explanatory variables.
β0 is the intercept term-constant which would be equal to the mean if all slope coefficients are 0.
β1, β2, β3 andβ4arethe coefficients associated with each independent variable which measures
the change in the mean value of Y, per unit change in there.
Accordingly, this statistical technique was used to explain the following relationships.

32
Regress employees performance (as dependent variable) on the selected linear combination of
the independent variables using multiple regressions.

3.12 Description of variables

Recruitment and Selection is the process of staffing employee in, organization consists of
finding, evaluation, and assigning people to work (employee skills and organizational structure
contribute to high productivity Huselid 1995).

Training and development is the field concerned with organizational activity aimed at improving
productivity and enhancing skills of individuals and groups.

Performance appraisal represents, in part, a formalized process of worker monitoring and is

intended to be a management tool to improve the performance and productivity of workers (2008
Shahzad, Basher and Ramey).

Compensation is systems that organization offers to the employee play a key role in increasing
employee motivation performance and productivity. Employee performance is normally looked
at in terms of outcomes. However, it can also be looked at in terms of behavior (Armstrong
2000).

3.13 Ethical Consideration

Very one who participated in this study was entitled to the right of privacy and dignity of
treatment. Moreover, there is no any tendency of affecting them negatively related to their
involvement in this study. The response provided was kept confidential and employed solely for
accomplishment of the study. in addition, all sources drawn for the study was properly
acknowledged.

33
 CHAPTER FOUR
DATA, ANALYSIS AND DISCUSSION

4.1 Introduction
In this chapter presents the results of the empirical analysis of the study. The discussion focuses
on Human resources practices and their effect on employee performance with the context of data
Ethiopian Construction Works Corporation Jimma District (ECWCJD). The results are displayed
with regards to the order of arrangement of the questioners. The main issues covered are
demographics of the respondents and data presentation in terms of tables, charts and cross
tabulations to address the objectives of the study.

4.2 Respondents Return Rate.

As presented in Table 4.1 out of the total 301 distributed questionnaires, 284 were properly filled
and collected which accounts the response rate of 94.4 % and no questionnaires were discarded
in relation to missing data. Table 4.1 shows the response rate per department.

Table 4.2.2 Socio-Demographic characteristic of Employee performance

Name of Variable Category of Variable Frequency Percent (%)
Sex Male 225 79.4
Female 59 20.6
Total 284 100
Age in year 18-30 101 35.5
31-50 168 59.5
Above 50 15 5.0
Total 284 100
Marital Status Single 88 29.2
Married 196 70.8
Total 284 100
Educational Level Under 12 grade 12 9.6
12 Grade complete 55 18.3
Certificate 75 24.9
Diploma 97 32.2
First Degree 41 13.6
Master Degree 4 1.3
Total 284 100
Work experience < 10 Years 98 38.2
10-20 Years 86 28.6

34
 21-30 Years 88 29-2
> 30 Years 12 4-0
Total 284 100
Work status Supervisor 24 13
Non supervisor 260 87
Total 284 100
Source: Based on survey questioners (2018).

4.2.1 Back ground of respondent by Sex

The researcher collected data on the gender of the respondents. we can see from figure 4.1.2
above that there were more male 225 (79.2 %) respondents than female 59 (20.8 % ) this is
expected, since the district is a construction organization and is dominated by male gender

4.2.2 Back ground of respondent by Age

From the finding 5% of the respondent were aged above 51years old which indicate they are in a
apposition to retired in the near future. Above thirty five percent of the respondents were yang
aged group of between 18-30 years old. Lastly 59.5 % were between 31- 50 years. Over 50 % of
the respondents of the district were middle aged, by taking (ILO2013) as a reference implying
that they could have good productive prospects.

4.2.3 Back ground of respondent of marital status

With regard to marital status, as it is indicated in the pie chart, the majority of the respondents
196 (69 %) were married and the rest 88 (31%) were single, this has implication that if the
employees are married turnover could be slightly reduced as result of settled life.

4.2.4 Educational background of respondents

The chart 4.5 shows educational level represent ion. The respondents who had under 12 grades
were 4.2 %, (12) while those who had 12 grade complete 19.3 % (55), above 26.4 % (75) of the
respondent had certificate, while those who had diploma were 34.1 % (97). The first degree and
master’s degree were represented by 14.4 % (41) and 1.4% (4) respectively. This signifies that
the majority of the respondents were diploma holders in terms of their educational level and the

35
district should plan for the development of its workers to upgrade degree and masters level so as
to increase of their job performance.

4.2.3 Back ground of respondent of marital status

With regard to marital status, as it is indicated in the pie chart, the majority of the respondents
196 (69 %) were married and the rest 88 (31%) were single, this has implication that if the
employees are married turnover could be slightly reduced as result of settled life.

4.2.4 Educational background of respondents

T he chart 4.5 shows educational level represent ion. The respondents who had under 12 grades
were 4.2 %, (12) while those who had 12 grade complete 19.3 % (55), above 26.4 % (75) of the
respondent had certificate, while those who had diploma were 34.1 % (97). The first degree and
master’s degree were represented by 14.4 % (41) and 1.4% (4) respectively. This signifies that
the majority of the respondents were diploma holders in terms of their educational level and the
district should plan for the development of its workers to upgrade degree and masters level so as
to increase of their job performance.

4.2.5 Work experience of the respondent.

The findings showed that 34.5 % of the respondents had been in employment for less than 10
years, A,30.2 % had worked 10- 20 years, 30.9 % between 21- 30 years, and 4.3 % the
respondents had over 31 years working in the organization. Over 65% of the respondent more
than fifteen years experience in organization. From this we can conclude that the most of the
district staffs have good work experiences which can help them to do their responsibilities
effectively and efficiently.

36
 4.2.6 Work status of the respondents
According to the findings result pie chart 4.1.7, 24 of the respondent were supervisor and 260
non supervisors. This shows a 8.55 % and 91.5 % representation of supervisor and
nonsupervisory. This indicates above 90% of the respondent which is directly related in
productivity. In general, the results of the demographic characteristics of the respondents indicate
that they can clearly understand and respond to the questions provided to them to get her the
primary data.

4.3 Current HRM practice of ECWC (Jimma District)

Listed below are statements about Human resource practices related issues regarding the
organization you currently work, For each please indicate your level of agreement with the
following statements so that your answer to these questions will enable the research to assess the
effect of HRM practice on employee performance in your organization.

Table 4.3.1 Recruitment and Selection Practice

S.No Recruitment and selection practices SD DES NEU AGR. SA Mean
Value

1 Our organization places the right Frequency 19 87 114 45 19 2.86

person in the right job. Percent 6.6 30.6 40 15.8 6.9

2 Adequate & relevant information Frequency 7 10 28 201 38 3.90

about the organization & job is Percent 2.4 3.5 9.8 70.7 13.3
provided to the candidate at the
time of recruitment.
3 Selection of candidates in our Frequency 28 163 59 19 15 2.72
organization is strictly based on Percent 9.8 57 20.7 6.6 5.2
his / her merit.
4 The organization fills vacant Frequency 8 20 16 190 50 3.90
positions from internal and
external sources Percent 2.8 7 5.6 66.9 17.6

37
5 Only candidates with the Frequency 15 34 30 157 35 3.58
relevant skills are considered
during the selection process.
Percent 5.3 12 10.6 55.3 12.3

6 Our organization recruitment & Frequency 7 23 39 172 43 3.79

selection process equal for all
candidate.
Percent 2.4 8 13.7 60.5 15.1

7 The organization make effort to Frequency 16 61 132 59 16 2.99

attract the person for a given
important position Percent 5.6 21.4 46.4 20.7 5.6

8 The organization recruitment & Frequency 22 29 37 148 48 3.62

selection process based on
desired knowledge, skills & Percent 7.7 10.2 13 52.1 16.9
attitude.
9 The organization recruitment & Percent 37 153 33 42 19 2.47
selection system is highly
Frequency 13 53.8 11.6 14.7 6.6
scientific.
10 The recruitment & selection Percent 18 59 131 62 14 2.99
process the organization use Frequency 6.3 20.7 46.1 21.8 4.9
valid & standard test.
Grand Mean = 3.28
Percent = 100
5= Strongly Agree (SA) 4= Agree (A) 3= Neutral (N) 2= Disagree (D) 1= Strongly Disagree (SD)

Source; Based on survey questioner (2018)

Based on analysis of response given by the sample respondent show table 4.3 item 1 above , the
significant proportion of respondent that account 40 % neutrals, 36 % not agreed only few
number 22.7 % of respondent agreed. Furthermore, the mean value results are (2.86) this shows
that the majority of the respondent not happy with the organization placement practice. From the
HR managers explanation, as it can be seen in table 4.2.2 item 2 above, regarding the

38
organization providing adequate and relevant information to the candidate during the time of
recruitment.70.7 % of the respondent agree and 13.3 % strongly agree, 9.8 % neutral or no idea,
while 3.5 % respondents disagree & 2.4 % strongly disagreed, moreover, the mean value result
indicates (3.90).This figure shows that majority of them perceive that the organization provide
adequate and relevant information to the candidate during time of recruitment.

Table 4.2 .1 item 3 shows that (66. 9 %) of the respondent expressed their disagreement, and
20.7 % of respondent no idea or neutral, only (11.8 %) of the respondents were agreed.
Moreover, the mean value result indicates (2.72). This figure shows that majority of the
respondent are not comfortable with selection process of the organization, because selection of
candidates are not strictly based on merit. From this descriptive analysis results, it can conclude
that the organization selection process have problem.

Table 4.2 .1 item 4 shows that 84.5 % of proportion of the respondent expressed their agreement
while few numbers of respondent 9.8 % shows their disagreement on filling of vacant positions
from internal and external sources. Moreover, the mean value results are (3.90). This indicate
that the organization practice new position from outside and inside the organization.

Table 4.2.1 item 5 shows 67.6 % proportion of the respondent agreed that in the organization
relevant skill are considered during the selection process, 17.3 % of the respondent not agreed
with this practice, and 10.6 % respondents are indifferent. The mean value result shows (3.58)
this indicate majority of the respondent agreed with this practices.

In table 4.2 1 item no 6, the majority of the of respondent that representing 75.5% agreed, that
the organization recruitment and selection process are equal for all candidates. on other hand
small percent of respondent not agreed on this issue 10.3 % and 13.7 % of respondent neutral or
no idea, further more the mean value result indicates (3.79) this figure show majority of the
respondents are happy on the selection process of the organization.

In table 4.2.1 item 7 that 46.4 % of the respondent response no idea or neutral, 27 % disagree,
while 25 % of respondent agree, according to the respondent response majority of them neutral
and disagreed this indicate the organization is not make effort to attract the person for a given
important position. More over the mean value result indicate (2.99) this show the respondent not
happy this organization practices.

39
Table 4.2.1 item8 expressed that the organization recruitment & selection process based on
desired knowledge, skill & attitude. For this question 79 % of the respondent agree and 17.9 %
of the respondent response shows disagree, and 13 % respondents neutral or no idea. As mean
value indication is (3.62) this implies majority of respondent are happy on the practice of
organization in recruitment & selection process based on the desired knowledge, skills and
attitudes. But other point related this issue the employee those which have the desired
knowledge, skills and attitude which is not stay long time in this organization. From manager
explanation

Table 4.2.1item 9, the majority of respondent response 66 .8 % expressed their disagreement and
small percent of respondent shows their agreement while 11.6 % of the respondents no idea.
From this descriptive analysis result majority of the respondent expressed the organization
recruitment and selection system is not highly scientific, furthermore, the mean value (2.47).
This shows majority of them are not satisfied this practices

Table 4.2 item 10 shows that 46.1 % respondent expressed neutral or no idea, 27 % of the
respondent expressed their disagreement, while the least 26.7 % of respondent shows their
agreement, about the question that organization used valid and standard test during recruitment
and selection process. Furthermore, the mean value result is (2.99); this implies large number of
respondent not interested in the process of recruitment & selection organization use valid &
standard test.
The above table shows moderate mean value and standard deviation. From this it can be deduced
that to large extent, aspects employee recruitment and selection affect workers performance of
jimma district. This study supported by pervious study (Mathis, 2005). Successful recruitment
and selection can improve employee performance and organizational performance.

40
 Table 4.3.2 Training and Development practices
S.N Training and Development practices SD DES NE AGR SA Mean
O . U. Value
1 The training needs of the employee Frequency 9 32 48 99 96 3.86
in our organization are assessed on
the basis of their performance Percent 3.16 11.2 16.9 34.8 33.8
appraisal.

2 Training in our organization Frequency 10 54 56 86 78 3.61

included social skills, general
problem solving skills and border
knowledge of the organization and Percent 3.5 19 19.7 30.2 27.4
business.
3 The contents of the training & Frequency 10 64 66 102 42 3.40
development programs organized
are always relevant to the changing
needs of our jobs & our business. Percent 3.5 22.5 23.2 35.9 14.7

4 Employees are working efficiently Frequency 12 49 98 108 17 3.23

after attending training course.
Percent 4.2 17.2 34.5 38 5.9
5 Training & Development practice Frequency 16 65 44 124 35 3.38
help to change behavior of
employee. Percent 5.6 22.8 15.4 43.6 12.3
6 Training & Development enhance Frequency 11 56 72 120 25 3.36
the skills of the job of employees.
Percent 3.8 19.7 25.3 42.2 8.8

7 After training you are able to Frequency 13 55 74 108 34 3.37

perform higher level task. Percent 4.5 19.3 26 38 11.9
8 After training you feel confident & Frequency 16 56 55 125 32 3.39
you can handle your own work.
Percent 5.6 19.7 19.3 44 11.2
9 Training & Development practice Frequency 13 46 44 156 25 3.50
have improved knowledge and
skills of employee. Percent 4.5 16.1 15.4 54.9 8.8

10 Training enabled you to be self Frequency 10 36 35 124 79 3.81

sufficient more quickly.
Percent 3.5 12.6 12.3 43.6 27.8
Grand mean= 3.49
Percent 100
5=Strongly Agree (SA) 4= Agree (A) 3= Neutral (N) 2= Disagree (D) 1= Strongly Disagree (SD)

Source; Based on survey questionnaire (2018

41
As a result shows on table 4.3 item 1 above indicate that 33.8% of respondent strongly agreed
&34.8 % respondent agreed, while 16.9 % no idea or neutral about this practiced.and11.2 %
disagree &3 16 % of the respondent was strongly disagree. Accordingly descriptive result
analysis majority of respondent accepted training need assessment on the basis of performance
appraisal result. The mean value result shows (3.86). Majority of respondent are satisfied this
practice.

Table 4.3 item 2 shows 30.2 %of the respondent expressed their agreement, and 27.4 % of
respondent shows strongly agreed, while 19.7 % responded no idea or neutral and 19 % of the
respondent disagrees & 3.5% strongly disagree, majority of the respondent satisfied training
given by organization include social skills, general problem solving and border knowledge, this
shows the mean value result (3.61).

Item 3 indicate 50.6 % of the respondent shown their agreement, 26 % of respondent expressed
their disagreements, and 23.2 % neutral or no idea. More over the mean value result shows
(3.40). This figure shows that majority of the respondent are happy the organization training and
development program.

Item 4 shows that 43.9% of the respondent agrees, 34.5 % of the respondents were no idea and
21.4 % disagreed, about the issue, employees are working efficiently after attending training
course, The mean value which is (3.23). This figure shows that majority of the respondent are
comfortable with the practice of training in the organization.

Item number 5 shows that 55.9 % proportion of the respondent expressed their agreement and
28.4 % of the respondents expressed disagree, the rest 15.4 % respondent express no idea
training & development practice help to change behavior of employee. Mean value result which
is (3.38) this shows as majority response training and development practice can change working
behavior of employees.

Table 4.3 item 6 show 51 % of the respondent response agree, while 25.3 % neutral about item
number six practiced, the reaming 23.5 % responded disagree. As the figures and mean value
results in table indicate (3.36), this implies majority of the respondent accept that training and
development enhance the skill of employee.

42
Item 7 indicate 49.9 % of respondent responses their agreement, 26 % response neutral or no
idea, and 23.8 % file disagree, about training can able to perform more. Mean value result which
is (3.37) leads towards majority responded after training employee can able to support the
organization values.

The next item 8 shows 55.2 % proportion of the respondent express their agreement, were 25.3
% response shows their disagreement while 19.3 % of respondent no idea about the availability
of training & development. these figures and the mean value, which is (3.39).this lead towards
the conclusion majority of the respondent satisfied after receiving training employee
attitude/behavior become willing to accept more challenging assignments.

Item 9 shows that majority of the respondents that representing 63.7 % expressed their
agreements, were 20.6 % respondent shows their disagreement the rest 15.4 % response no
idea, that training and development practice have improved knowledge& skills of employee.
More over these figures and the mean value, result shows (3.50).this shows majority of the
respondent perceive that organization practiced training &development help employee to done
effectively their duties.

Lastly item 10 shows that 71.4 % proportion of the respondent expressed their agreement were
16.1 % of the respondent shows their disagreements, while 12.3%. Of the respondent no idea
about training practices of organization. Furthermore, the mean value result is (3.81).This show
that training giving by this organization enable worker to be self sufficient more quickly.

43
 Table 4.3.3 Performance appraisal practices
S.NO ITEMS SD Des. Neu. Agr. SA Mean
Value
1 Performance Appraisal in our Frequency 5 16 25 183 55 3.94
organization aims at improving
employee performance &
Percent 1.7 5.6 8.8 64.4 19.3
strengthening our jobs skills.

2 Our organization appraises the Frequency 14 18 28 174 50 3.81

performance of its employees at
regular interval. Percent 4.9 6.3 9.8 61.9 17.6
3 We feel our performance Frequency 6 40 109 89 40 3.39
appraisal has been faire &
objective. Percent 2.1 14 38.3 31.3 14
4 We receive proper feedback on Frequency 12 33 69 130 40 3.56
how we are performing.
Percent 4.2 11.6 24.2 45.7 14
5 Our organization recognizes the Frequency 17 92 121 40 14 2.93
career growth needs of its
Percent 5.9 32.3 42.6 14 4.9
employees.
6 Adequate growth opportunities Frequency 18 79 107 66 14 2.93
are available in our organization
for those who perform well. Percent 6.3 27.8 37.6 23.2 4.9

7 I have good understanding of the Frequency 9 45 123 81 26 3.32

appraisal criteria.
Percent 3.1 15.8 43.3 28.5 9.1
8 The current format of rating scale Frequency 13 19 42 157 53 3.78
used (using percentage in each
criteria) form is not an effective Percent 4.5 6.6 14.7 55.2 18.6
measure of employee
performance.
9 The performance criteria used in Frequency 10 23 33 175 43 3.78
the appraisal form does not actual
measure my real performance. Percent 3.5 8 11.6 61.6 15.1
10 The appraisal criteria in which I Frequency 7 77 87 84 29 3.11
am evaluated are fair. Percent 2.4 27 30.6 29.5 10.2
Grand Mean 3.44
Percent 100
5=Strongly Agreed (SA) 4= Agree (A) 3=Neutral (N) 2= Disagree (D) 1= Strongly Disagree(DA)
Source: Based on survey questionnaire 2018.

44
Based on the analysis of response given by sample respondent shows table 4.6 items 1 expressed
83.7 % of the respondent agree, only 7.3 % of the responded disagreed, this result shows
majority of respondent are agreed in the aim of performance appraisal in the organization
improving employee performance and strengthening employee job skills. More over the mean
value result is (3.90).

The next, item 2 shows 79.5 % of the respondent response agrees, and 11.2 % of the respondent
shows their disagreement, while 9.8 % response no idea or neutral. According to the result
majority of respondent agreed the organization appraise the performance of employee at regular
time. The result of mean value indicates (3.81). As conclusion majority of respondent happy the
practiced of performance appraisal.

Table 4.4 item 3 shows that 45.3% of respondent expressed their agreement, were 38.3 % of
respondent shows neutral or no idea, while 16.1 % of the respondent expressed their dis
agreement, majority of employee feel the organization has fairly and objectively measure
employee performance, further more the result of mean value result shows (3.39) .this indicates
majority of the respondent agree the practiced evaluation system of performance employees.

Table 4.4 item 4 shows 59.7% of the respondent expressed their agreement and 24.2 % of
respondent response neutral or no idea, while small number of respondent shows their
disagreement, the result shows majority of respondent accepted, they gate proper feedback on
how they are performing. More over the result of mean value shows (3.56)

Table 4, 4 item 5 shows 42.6 % of respondent neutral, that the organization recognizes career
growth needs of employee, were 38.2 % of the respondent shows their disagreement, the rest
few number of respondent show their agreement. More over the mean value result indicates
(2.93).These the descriptive result imply that majority of the employee are not happy the practice
of organization on the career development of employee.

Item 6 indicate 37.6% of respondent no idea or neutral in this practice, while 34.1% of the
respondent not agree, the remain 28.1 were agree, this shows more respondent shows their
disagreement on adequate growth opportunities for those who perform well .furthermore the
mean value result is (2.93). This shows that more respondent not happy the organization
practiced adequate growth opportunities for those who perform well.

45
Table 4.4 item 8 shows 43.3 % proportion of the respondent expressed their response neutral or
no idea about the organization performance criteria. 37.6 % expressed their agreement, the rest
18.9 % disagree; additionally the mean value is (3.32). The result show almost have of the
respondent expressed no idea about organization performance criteria, it can conclude that in this
practice the organization have problem.

As the result on table 4.4 item 8 show that majority 73.8 % of the respondent expressed agree,
while 14.7 % response no idea or neutral, the remain 11% of respondent shows their
disagreement. On the organization use rating scale format not effectively measure of employee
performance. furthermore the mean value result shows (3.78).this descriptive analysis result
indicate the current format of rating scale that the organization used not an effective measure of
employee performance.

Table 4.4 item 9 shows that 76.7 % proportion of the respondents expressed their agreement,
were 11.6 % of respondent no idea or neutral while 11.5 % of respondent shows their
disagreement, on the organization used performance criteria in the appraisal form does not actual
measure real employee performance. More over the mean value results is (3.78). As the result
indicated that the organization practiced performance criteria in the appraisal form does not
actual measure each employee real performance, as depicted in the table 4.4 item 9 the majority
of the respondent not happy this organization used performance measurement criteria.

Lastly table 4.4 item 10 Shows 39.7 % of the respondent response their agreement, were 30.6 %
of the respondent neutral or no idea, and 29.4 % respondent expressed not agree, on the
organization used appraisal criteria employee are evaluated fairly. Furthermore, the mean value
result is (3.11). These results indicate near hafe of respondent satisfied the organization appraisal
criteria which is employee are evaluated fairly.

46
 Table 4.3.4 Compensation practices
S. Compensation related Question. SD DES. NEU AGR SA Mean
No Value
1 Our organization makes all Frequency 22 155 41 53 13 2.60
payment due to us in time.
Percent 7.7 54.5 14.4 18.6 4.5
2 Pay increments offered by our Frequency 14 39 21 187 23 3.54
organization are satisfactory.
Percent 4.9 13.7 7.3 65.8 8
3 The existing reward and Frequency 8 12 11 109 144 4.17
incentive plans do not motivate
us for better performance. Percent 2.8 4.2 3.8 38.3 50.7
4 We are being paid adequately Frequency 17 48 22 146 51 3.55
for the work we do. Percent 5.9 16.9 7.7 51.4 17.9
5 Rewards in our organization are Frequency 40 142 41 43 18 2.80
strictly linked to employee
Percent 14 50 14.4 15.1 6.3
performance.
6 The pay we receive in Frequency 30 116 33 90 19 2.81
competitive compared to that of
employees doing similar work Percent 10.5 40.8 11.6 31.7 6.6
in other organization.
7 I am entitled for rewarded if the Frequency 9 19 9 104 143 4.11
whole organization achieves its
set target. Percent 3.1 6.6 3.1 36.6 50.3
8 An increase in my basic pay Frequency 8 12 11 108 145 4.17
will encourage me to improve
on my performance. Percent 2.8 4.2 3.8 38 51
Grand Mean 3.46
percent 100
5= Strongly Agree(SA) 4=Agree(A) 3=Neutral(N) 2=Disagree (D) 1= Strongly Disagree (SD)

Source: Based on survey questionnaire 2018.

show that 62.2 % of the respondent response disagree ,while 23.1% of the respondent agree, the
reaming 14.4 % response no idea or neutral, on the organization makes all payment on time this
show that the majority of respondent perceive that the organization not make payment on time,
More over the mean value result indicates (2.60). As a result indicate in this figures show that
majority of them are not comfortable with this compensation practice, this is the problem.

47
Item 2 shows that 73.8 % of the respondent agrees with the pay increments by this organization
are satisfactory, while 18.6 % disagree the rest 7.3 % respondent no idea or neutral, The mean
value which is (3.54). Leads towards the conclusion majority of the respondent perceive that the
pay increment organizations practiced are satisfactory.

As it can be seen item 3 shows majority of the respondent agreed, were few number 7 % of the
respondent disagree, on the existing reward and incentive plan not motivate for better
performance, more over mean value shows which is (4.17) this indicate the majority of the
respondent not happy that the existing organization reward and incentive practice are not
motivate, them for better performance.

The next item 4 shows that 69.3% of respondent agree, while 22.8 % of the respondent response
their disagreement remain 7.7 % of the respondent no idea or neutral, the organization pay
adequately for the work employee do, further more the result shows (3.55).this imply majority
of the respondent comfortable with practice of the organization payment the work employee do.

Table 4.4 item 5 show that 64 % proportion of the respondent expressed their disagreement while
21.4 % of respondent show their agreement, and 14.4 % respond neutral or no idea on the
organization reward practice strictly linked to employee performance, according to descriptive
analysis result majority of respondent show their disagreement, more over mean value result
which is (2.80).

Table 4.4 items 6 shows 51.3 % proportion of the respondents expressed their disagreement,
were 38.3 % of respondent show their agreement the rest 11.6 % respond neutral or no idea, on
the pay practice in the organization competitive compared that of employee doing similar work
in other organization, as result indicate majority of respondent not agreed to this practice further
more mean value result is (2.81).this shows respondent are not satisfied.

Item number 7 table 4.5 shows almost above 86.9 % of respondent expressed their agreement,
were 9.7 % small number of respondent show their disagreement, on the employee entitled for
rewarded if the whole organization achieves its set target, majority of the respondent shows their
agreement, more over the mean value result is (4.11).this shows majority of respondent assume
that reward motivate worker to do their job well.

48
 Lastly table 4.5 item 8 shows 89 % proportion of the respondents expressed their agreement
while 7 % of the respondent shows their disagreement, as result indicate majority of respondent
agreed, the increasing of basic pay encourage employee to improve their performance.

4.3.1 Level of Employee performance.

Listed below are statements about employee performance related issues regarding the
organization you currently work? For each please indicate your level of agreement with the
following statements so that your answer to these questions will enable the research to assess the
effect of HRM practice on employee performance in your organization.

Table 4.4 The effect of HR practice on employee performance.

S. Employee Performance related Questioner 1SD DES NEU AGR SA Mean
No Value

1 Work performed by employee in the Frequency 5517 111 91 47 18 2.79

organization is high quality. 15
Percent 5.9 39 32 16.5 6.3
2 Employees in the organization usually Frequency 5551 28 24 194 33 3.79
meet deadlines while accomplishing
Percent 11.71 9.8 8.4 68.3 11.6
their tasks.
.75
3 The employees in the organization Frequency 12 30 36 166 40 3.69
achieve their specified targets.
Percent 4 10 12 58.4 13.2
4 The rate of absenteeism in the Frequency 6 34 39 169 36 3.72
organization is low Percent 2.1 11.9 13.7 59.5 12.6
5 Employees in the organization are Frequency 13 24 39 173 35 3.70
creative & innovative.
percent 4.5 8.4 13.7 60.9 12.3
6 Employees in the organization are Frequency 15 107 59 79 24 2.80
encouraged to appraise themselves
percent 5.2 37.7 20.8 27.8 8.4
7 Employee in the organization aware of Frequency 5 16 25 182 56 3.94
the organizational objectives mission
statement & vision Percent 1.7 5.6 8.8 64 19.7
8 The costs of work performed have Percent 14 18 28 175 49 3.81
some control over costs.
Frequency 4.9 6.3 9.8 61.6 17.2
Grand Mean= 3.54 Percent100
5=Strongly Agree (SA) 4=Agree(A) 3 =Neutral (N) 2= Disagree (D)1= Strongly Disagree(SD)

Source: Based on survey questioner (2018)

49
Table 4.6 contains the entire items for the employee performance scored mean range from 2.79
to 3.94 the average mean is 3.36, for employee performances. Item 2, item 3, item 4, item 5, item

7 and item 8 have score above the average mean with a mean value of 3.79, 3.69, 3.72, 3.70, 3.94
3.81, respectively, the remain item scored below the average mean. The least scoring item

Is item one (2.79). i.e.: Work performed by employee in the organization is high quality, as a
result of descriptive analysis shows majority of the respondent not agreed, to perform high
quality product and service the organization must improve more effective HR practice which is
seen in this thesis.

The second item which is scored below the average mean value is (2. 80). I.e.: employee in the
organization encouraged to appraise themselves. Majority of respondent not agreed on this
practice, this show the organization must improve the way of encouraging employee to appraise
them.

However, item two, third, fourth, fives, seven, and eight items, received the highest mean score
3.79, 3.69, 3.72, 3.70, 3.94 & 3.81, respectively. this indicate that employees are accomplish
their task well, they achieve their specified targets, employees are low rate of absenteeism,
employee are creative, and aware organization objectives and mission, production cost
minimization respondent feel good. This shows employees in this organization committed for
fuel feel organization objective. In the organization human resource management side, must pay
attention enhancement of organization and specially employee performance and try to modify
various routine activities and mould them to serve employee development, because changes are
occurring in the business environment. The above table shows moderate mean value and
standard deviation. From this it can be deduced that to large extent, aspects employee
recruitment and selection affect workers performance of ECWC Jimma district.

The finding of this study supports by previous study (Mathis, 2005). (Collins and clerk 2000).
Conclude that selective hiring has effect on organization performance (outcome, commitment.
Katu 2007) conclude that recruitment and selection strongly positive relationship.

50
Hypothesis Testing – Correlation Analysis
Hypothesis 1=Recruitment & selection is positively associated with the employee
performance.

Person Correlation Significant

Value 0.740** 0.000
Table 4.5 shows the person correlation test for hypothesis 1. There is significant positive
correlation between recruitment and selection with employee performance significant level of
5%.

Hypothesis 2=Training and Development is positively associated with the employee

performance
Person Correlation Significant
Value 0.384** 0.000
Table 4.6 shows the person correlation test for hypothesis 2. There is significant positive
correlation between Training and Development with employee performance significant level of
5%.

Hypothesis 3=Performance appraisal is positively associated with the employee

performance

Person Correlation Significant

Value 0.522** 0.000
Table 4.6 shows the person correlation test for hypothesis 3. There is significant positive
correlation between Performance appraisals with employee performance significant level of 5%.

Hypothesis 4=Compensation is positively associated with the employee performance

Person Correlation Significant

Value 0.629** 0.000
Table 4.7 shows the person correlation test for hypothesis 4. There is significant positive
correlation between Compensation with employee performance significant level of 5%

51
 Summary of HRM practices

Variables/ HRM N Mean value Standard Deviation Min Max

practices
Recruitment 284 3.28 0.618 1 5
&Selection
Compensation 284 3.45 0.771 1 5

Training & 284 3.49 0.636 1 5

Development

Performance 284 3.44 0.651 1 5

Appraisal
The above table shows that training and development result indicate that mean value scored 3.49
and standard deviation 0.636, according to this respondent are moderately agreed, those training
and development practice affect the performance of employee which is worked in jimma district.
This study supported by (Qureshi and Ramey 2006). Training is more affecting the performance
rather than other practice, successful training and development practice can improve employee
efficiency and productivity and training and development significant relationship with employee
performance (Obis, 2011).

From the above table one can notice that performance appraisal practice affect most of employee
performance. As the result seen mean value and standard deviation of performance appraisal
practice 3.44 and 0.651 respectively. The respondent explains their agreement performance
appraisal practice affect the performance of employee in jimma district. Successful performance
appraisal can improve employee performance. This result match with (Tahir 2006) and Singh
(2004).the same us this finding also relates with the study result the same revealed by (Sultan
2012).
As the result shown in the table, compensation practice of jimma district 3.45 mean value and
0.771, standard deviation, the respondent expressed their agreement compensation practice affect
the performance of jimma district. This study is conformity with previous studies by this study
supported by researcher (Chhabra 2001). Reward is positively correlated to the performance
employee (efficiency, product quality, product development).(Moody 1994) conclude that
compensation significantly relationship with employee performance. another researcher Nelson
and (Supitzer 2003) there is revolution going on in today work place, workers want respect and
they want it now, they want to be trusted to do good job, they want autonomy to decide how best

52
to do it, and they won’t support even if they make mistake and wont to be appreciated when they
do good job. The other researcher(Cascio 2010) show in his study that employee benefits do not
enhance productivity but are rather power fool tools of attracting and retaining talent, and for
improving the quality life of employees and their dependent.

The above table shows that the response result on employee performance practice (3.54) mean
value with (0.724) standard deviation. As the study result indicate, un modernized human
resource practice affect the performance of employee which is work in Jimma district employee
performance. And this study supported by (Singh, 2004). According to (Munjuri, 2011) study
that compensation, performance appraisal, training practices significant relationship between
employee performance. It is clear that from findings that human resource management (HRM)
practice has positive role increasing employee performance. So organization (jimma district)
should implement that practice to achieve the desired goals.

4.4 Association Between HRM & Employee Performance.

Correlation measure the degree to which two sets of data is related. Higher correlated value
indicates stronger relationship between both sets of data (Coetzee 2003). Correlation analysis is
show the strength of the association between the variables involved.

The table 4.6 indicates that the positively correlation between dependent variable (employee
performance with Human resource management practices independent variable (Recruitment and
selection, Training and Development, Performance appraisal and Compensation) and also
significant at 1 % level.

53
 Table 4. 5 Association between (HRM) and Employee Performance variables
Variables Recruitment Compensation Performance Train& Employee
Selection Appraisal Develop performance
Recruitment
1
Selection

Compensation 0.629** 1

Performance
0.522** 0.641** 1
Appraisal

Train& Develop 0.384** 0.256** 0.369** 1

Employee
0.740** 0.629** 0.522** 0.384** 1
performance
**. Correlation is significant at the 0.01 level (2-tailed). N= 301
Source: Own data manipulation (2018).

A Pearson correlation and regression was conducted to determine the association between
Human Resource practices (Recruitment & Selection, Training & Development, Performance
appraisal and Compensation) independent variables and Employee performance dependent
variable. Correlation was applied on the data to check the relationship between Human Resource
Management practices. Pearson correlation for the employee performance with HR practice
recruitment and selection (r=0.740) p<0.05 this show positive relationship between recruitment
& selection with employee performance significant level of 5 %. This study supported from
previous studies concluded by (Collions and Clerk 2003) that selective hiring has effect on
employee performance; (Hand&Katu 2007) conclude that recruitment & selection strongly
correlated with employee performance productivity.
Pearson correlation for the employee performance with HR practice training & development
(r=0.384) p<0.05 this result shows there is positive relationship between training & development
with employee performance significant level of 5 %. According to (Math & Jackson 2008), that
training & development is the processes were by people acquire capabilities to perform job well.
(Lee & Bruvold 2003) stated that compressive training activities are positively associated with
employee productivity.

54
Pearson correlation for the employee performance with HR practice performance appraisal
correlation result (r=0.522) p<0.05 according to result there is positive relationship between
performance appraisal with employee performance with significant value of 5% .this studies
conformity with previous studies conducted by (Wan et, al 2002) which conclude that
performance appraisal has positive effect on employee performance (employee effectiveness,
employee outcome). (Mansour 2010) conclude performance appraisal has positive effect on
employee performance.
Pearson correlation for the employee performance with compensation test shows significant
positive correlation (r=0.629) p<0.05 between compensation with employee performance with
significant level of 5%. Pervious study conducted (Kleberg & Moody 1994); reward is positively
correlated to the performance of employee output, quality increase on productivity and customer
satisfaction, and Khan (2010) compensation has significant relationship with employee
performance. This show that employee performance and HR practices are pair-wise positively
correlated with one to another and also the results inducts that all the variables are statistically
significant at (p<05).
MODEL SUMMARY
Table 4.6. The effect of HRM practice on employee performance
Model R R Square Adjusted R Std. Error of the
Square Estimate

1 .766a .587 .583 .46771

The Adjusted R square indicates the extent the independent variables can be explain the
variations in the dependent variable. From this study, the coefficient of determination (Adjusted
R square) is 0.583, which indicated that independent variables (R&S, CM, and T&D) can explain
58.3% of the variations in dependent variable employee performance, the rest 41.7% are the
human resource practice which is not examine in this research.

55
 Table 4.7 Regression Analysis ANOVA

Model Sum of Squares Df Mean Square F Sig.

1 Regression 214.475 3 71.492 721.239 0.000b

Residual 415.204 281 1.478

Total 629.679 284

a. Dependent Variable: Employee Performance

b. Predictors: (Constant), Recruitment & Selection, Training & Development, Performance
appraisal and Compensation.
The ANOVA table shows significant value of the F statistic that is less than 0.01, which means
that the model is significant statistically; according to result of study the F statistics is significant.
The model for this research is good description of the relation between the dependent and
independent variables. Thus, the independent variable (Recruitment & Selection, Training &
Development, Performance appraisal and Compensation) are significant explain the variance in
employee performance.
Regression Model
The following equation explains the relationship between the independent variables and
dependent variables.

Yi= β0+ β1X1 +β2X2+β3X3+ β4X4

Where;
Y=is the response or dependent variable-employee performance
b=constant value

56
b=standardized coefficients
X=Independent variable
e= random term (unobservable variable)
Thus, the regression equation is
Y=0.284+0.559+R&S+0.218CM+0.096T&D+e
Were Y= employee performance.
β0=0.284, + β1, β2, β3, are 0.559, 0.218, 0.096 respectively.
(R&S) = Recruitment and Selection
(CM) = Compensation
(T&D), =Training and Development
Based on the table, the standardized Beta coefficients indicate the contribution of each variable
to the research. From the results, recruitment and selection is the predictor variables that
contribute the highest to the variation of dependent variable (employee performance) because it
is having the largest standard coefficient Beta value for this predicator variable which is 0.559.
this means the recruitment and selection make the strongest unique contribution to explain the
variation in dependent variable (employee performance).when the variance explained by all other
predictor variables in the model is controlled for. compensation is the predictor variables that
contribute the second highest to the variation of the dependent variable (employee
performance).because Beta value for this predictor variable is 0.218 which is the second highest
if compared to the other predictor variables. This means that compensation make the second
strongest unique contribution to explain the variation in dependent variable, when the variance
explained by all other predictor variables in the model is controlled. Training and development is
the predictor variables that contribute the lowest to the variation of the dependent variable
(employee performance).because Beta value of this predictor variable is smallest 0.096 if
compared to other predictor variables, this means the training and development make the least
contribution to explain the variation in dependent variable.

57
 Assumption of liner Regression.

The word model gets replaced by things that define the line that we fit to the data.

Yi= (Yi = (b0 + b1Xi) + εi

Yi is the outcome that we want to predict and X is the predictor variable. Here b1 is the gradient
of the straight line fitted to the data and b0 is the intercept of the line. Those parameters b1& b0
are known as the regression coefficients.There is a residual term, εi, which represents the
difference between the score predicted by the line for participant i and the score that participant i
actually obtained.

The trend of scatter plots is that of upward straight line, which shows direct positive correlation
between two variables. In figer 1 scatter plots were developed between HRM practices
(recruitment & selection, training & development, performance appraisal & compensation). With
employee performance showing significantly positive relationship.

58
 The multicollinearty statistics table shows that tolerance indicator for recruitment and selection,
compensation and training & development are all greater than 0.1, and Variation Indication
Factor (VIF) are all lesser than 10. This shows that there is no multicollinearty problem between
the three independent variables.

Table 4.8 Coefficientsa

Unstandardize Standardize t Sig. 95.0% Confidence Co linearity Statistics
Model d Coefficients d Interval for B
Coefficients

B Std. Beta Lower Upper Tolera VIF

Error Bound Bound nce

(Constant) 284 .179 1.681 .094 -.051 .654

Ave.R&Selection .634 .058 .559 10.941 .000 .520 .748 .533 1.876
1
Ave .Comp .204 .048 .218 4.256 .000 .110 .299 .531 1.883

Train .Develop .110 .047 .096 2.354 .019 .018 .201 .835 1.198
a. Dependent Variable: Average Employee Performance

59
Multiple liner regression is a method of estimating or predicating a value, on some dependent
variable given the values of one or more independent variables, like correlations, statistical
regression examine the association of relationship between variables. The primary purpose of
regression is predication (Geottrey M.2005) table 4.9 shows parameter estimation of multiple
liner regression.
The coefficient for recruitment and selection is 0.634. So for every unit increase in recruitment
and selection, a 0.634unit increase in employee performance is predicted, holding all other
variables constant. The coefficient for recruitment and selection (0.634) is significantly different
from 0 because its p-value is 0.000, which is smaller than 0.05.

The coefficient for Compensation practices is 0.204. So for every unit increase in Compensation
practices, a 0.204unit increase in employee performance is predicted, holding all other variables
constant. The coefficient for Compensation practices (0.204) is significantly different from 0
because its p-value is 0.000, which is smaller than 0.05.

The coefficient for training and development practices is 0.110. So for every unit increase
in training and development practices, a 0.110unit increase in employee performances predicted,
holding all other variables constant. The coefficient for training and development practices
(0.110) is significantly different from 0 because its p-value is 0.000, which is smaller than 0.05.

4.5 Discussion of results

The primary objective of this study was to assess the effect of human resource practice on
employee performance in ECWC / Jimma District

The coefficient for recruitment and selection is 0.634. So for every unit increase in recruitment
and selection, a0.634unit increase in employee performance is predicted, holding all other
variables constant. The coefficient for recruitment and selection (0.634) is significantly different
from 0 because its p-value is 0.000, which is smaller than 0.05the finding of the study support
from previous studies conducted by (Bratton & Gold 2007) effective recruitment and selection
can play a pivotal role in shaping an organization &effectiveness of employees. (Katou &
Budhwar 2007) conclude the proper recruitment & selection practice has positive effect on
employee performance.

60
The coefficient for Compensation practices is 0.204. So for every unit increase in Compensation
practices, a 0.204unit increase in employee performance is predicted, holding all other variables
constant. The coefficient for Compensation practices (0.204) is significantly different from 0
because its p-value is 0.000, which is smaller than 0.05.The findings of this study support with
pervious study the research carried out by(Kidest Feleke2002) on the impact of compensation on
employee productivity on different organization in Addis Ababa & Debrazite the finding reveled
that employees motivated & being attracted to their work where there is a salary increment&
compensation in organization. And (Mansach Rubg 2012) which compensation elements that
salary, reward & indirect compensation plays an important role in motivating, improving
performance & retaining qualified employees. (NjanjaW.Letal 2013) conclude good
compensation practice has positive effect on employee performance

The coefficient for training and development practices is 0.110. So for every unit increase
in training and development practices, a 0.110unit increase in employee performances predicted,
holding all other variables constant. The coefficient for training and development practices
(0.110) is significantly different from 0 because its p-value is 0.000, which is smaller than
0.05.the result in this study was in line with previous studies of (Raja,Fraguan& Mohammed
2011) who stated that training & development has positive & significant with level of
performance if training continuously practiced. According to (Velada& Caetano2007) the effect
of training & development on employee performance not only significant but also increases job
satisfaction & commitment towards the organization, moreover, according to (Vemic 2007),
modern organization therefore uses their resources (money, time, energy, information etc ---) for
permanent training & advancement of their employee. Out of tested four HR practice the three
HR practice are significant. According to research result analysis in table of model summary
shows that the coefficient of determination (the percentage variation in the dependent variable
being explained by the changes in the independent variables) R2 equals 0.587, that is, Use of
HRM practices explains 58.7% of observed change in HRM practices as measured by employee.
The P- value of 0.000 (Less than 0.05) implies that the regression model is significant at the 95%
significance level. Expect performance appraisal variable its result negative, yet as per multiple
regression model, results are significant thus all. according to the study result there is a gap the
practice of performance appraisal in the organization to avoid this weakness organization need to
use the performance appraisal to strengthen the relationship between the superior and the

61
subordinate by implementing motivational scheme creating transparency, avoiding bias and
improving employees attitude by giving training and development of the employees in order to
help to avoid employees self perceptions wrongly. Drawing from the study , it emerges that
though the people factor always been important its import ants will grow in the future this is
because the change are occurring today change that require the personnel function to play an
even more crucial role in organization. The development aspect needs to be given importance in
the management human resource for enhancement of the effectiveness of the organization and
specially employee performance. It became imperative to modify various routine activities and
mould them to serve the employee development.

62
 CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION

5.1 Conclusion

The study attempted to assess the effect of HRM practice on employee performance in Ethiopian
Construction Works Corporation (ECWC) Jimma District.

The study reveled that HRM practice has significant effect on employee performance. It has been
found that employee performance can be attributed to HRM practice including recruitment &
selection, training & development, performance appraisal & compensation. This study consistent
with (Desser 2005) & (Varkkey 2010). Based on the results, the researcher concluded that the
effectiveness of implementing HR practices in the organization does indeed have a major effect
towards the employee performance. The finding shows that HR practice have an effect of nearly
58.3% on the organization employee performance. Thus form of analysis could help the
organization to realize and be more aware of the importance of human resource practice and the
need to integrate and align HR in to the organizations plan.

The regression analysis shows that three main HR practices seems to have the highest effect on
employee performance during this period:- 1, Recruitment & Selection.2, Compensation. 3,
Training & Development. Recruitment & selection based well –defined merit and unprejudiced
system developed through managerial expert opinions, using standard test to scrutinize the exact
required attitude, skills and knowledge in potential candidates showed notable significant
correlation with employee performance and perceived organizational performance. Results were
similar to the findings of (Holzer1987). (Sels e t al ;2003).(Katu 2008) that identification of the
Wright candidate with required skills to perform the job for achieving organizational
performance is output of sophiscated selection system.

Compensation system based on expectancy of employees; comparable with market packages,

competency based and performance based benefit sharing based mechanism covering both
financial and non-financial dimensions is positively correlated with employee performance.

63
Training and Development improve the job knowledge of employee and it related to increasing
the employee performance. If training and development program designed according to the
organization strategic plan it’s prepare the employees to contribute more to the organization,
hence training and development has positive effect on employee performance.

From the response of respondents training increase performance of employee more over from the
correlation analysis result it can be conclude that training is positively and significantly
correlated with employee performance To build the knowledge and the ability of employee
organization should plane and implement effective training program, employee efficiency should
evaluate the performance before training and after training, this help the organization for the next
training programs.

Finally conclude as the result shown in this study the three independent variable significantly
correlated with dependent variable, while the rest one variable not significantly correlated.

5.2 Recommendation

In order to improve ECWC Jimma district commitment for employee performance managers at
all level will support the effort of employee and to be considering employees as the greatest asset
of the organization Human resource, which are considered as the greatest asset of an
organization refer to people whose knowledge, skills & abilities are utilized to create and to
deliver effective services. Effective recruitment & selection attracts the Wright quality and
quantity of people, develops the knowledge, skills and abilities of employees, upgrade the
efficiency of employees. The organization need to have an effective recruitment policy to
promote scientific selection of prospective employees. The departments should participate in
selection process as they have different preference in the candidates. Candidate need to be
selected based on requisite skills knowledge and qualification using appropriate selection
techniques. Training should be designed on the interest of employee and before and after
training, employee performance should measure what was the perceived level of change in job
knowledge. Performance related compensation is critical in enhancing performance. Hence the
organization should implement this to motivate those employees who achieve the set targets.
Since HRM practice have significant effect on employee performance managers need to
implement them in an integrated and coherent manner (Chen et al; 2009Wickramasinghe and

64
Gamage, 2011).This study has an addition to earlier research efforts in understanding the
relationship between employee performance and HRM practices. The study provides new
dimensions in the research of management by opening a debate on the importance of HRM
practices in employee performance. statistically significant correlations and regression results
were indicated that different HRM practices , such as recruitment and selection, training and
development, performance appraisal and compensation system are significantly related and make
positive contributions towards employee performance.

5.3 Directions for Future researcher

This research assessed the selected HR practice which is more applicable in ECWC (Jimma
District). The study explored the effect of HR practice on employee performance those practice
are recruitment & selection, training & development, performance appraisal and compensation
practice. According to the study to improve employee productivity and to meet the desired
organization goal the management uses continuous review of progress and the implementation of
human resource practice. Their fore this study may pave the way for further researches to be
conduct the implementation of HR practice.

Future researcher can take and asses the rest HR practice which is not conclude in this study and
their effect on employee performance and the way how to solve the problem in private and
public organization. And the future research can be extend to different sectors of different cities
to get more significant results, this research content was limited it is available more studies about
employee performance plan standard this help employee to know what they need to do and to
perform their jobs successfully.

5.4. Limitation of the study

The purpose of this study was to investigate the effect of HR practice on employee performance.
The major constraints of the study that the researcher faced were unwillingness of management
to disclose some information. The researcher select Four HR practice based on the literature
done outside of Ethiopia, her was limitation of bundle human resource practice in the case of
Africa specially Ethiopia case most of the study single base HR practices. The practices which
are not concluding in this study may be more important with the context of Ethiopia.

65
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APPENDIX

70
 Jimma University
College of Business and Economics
Department of Management
MBA program
This questionnaire is designed to gather all the necessary information regarding THE EFFECT
OF HUMAN RESOURCE MANAGEMENT PRACTICE ON EMPLOYEE
PERFORMANCE of Ethiopian construction works corporation.

Dear respondent I would like to express my sincere appreciation and deepest thanks in advance
for your generous time and frank and prompt response. I ask you in all regard to fill the
questionnaire carefully and at your best knowledge.

Name of the student: Mengistu Markos (MBA).Student. Address 0911397236 /0917058195

E-mail: [email protected]

Direction

- No need to write your name

- Your correct information enable the researcher to boost the reliability and validity of the
entire research work
Section 1-Demographic Information
Please complete the following biographical information by ticking (√) from the alternative that is
the most applicable answer to you in respect of each of the following items.
1. Gender : Male  Female 
2. In which age group are you? a, 18-30 Years  b, 31-50 years  c, above 51 years
3. Marital Status : Single  Married 
4. Educational level: a, Under grade 12 b, Certificate c, Diploma d, degree e, Master
& above 
5. Work experience :- a, < 10 year b, 10-20year c, 21-30 year, d,>31year 
6. Status :- supervisor  Non supervisor 

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Part (B) HRM Practice Related Questions

Listed below are statements about human resource practices related issues regarding the
organization you currently work for. For each please indicate your level of agreement with the
following statements so that your answer to these questions will enable the research to assess the
effect of HRM practice on employee performance in your organization.

1= Strongly Disagree 2= Disagree 3= Neutral 4= Agree 5= strongly agree

No Recruitment & Selection related Question Scale

Strongly Disagree Neutral Agree Strongly

Disagree agree
1 Our organization places the right person in the
right job
2 Adequate & relevant information about the
organization & job is provided to the candidate at
the time of recruitment.
3 Selection of candidates in our organization is
strictly based on his / her merit.
4 The organization fills vacant positions from
internal and external sources
5 Only candidates with the relevant skills are
considered during the selection process.
6 Our organization recruitment & selection process
equal for all candidate.
7 The organization make effort to attract the
person for a given important position.
8 The organization Recruitment & Selection
process based on desired knowledge , skills &
attitude
9 The organization Recruitment & Selection
system is highly scientific.
10 The Recruitment & Selection process the
organization use valid & standard test.

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 Training and Development related Strongly Disagree Neutral Agree Strongly
Question Disagree agree
1 The training needs of the employee in our
organization are assessed on the basis of
their performance appraisal.
2 Training in our organization included social
skills, general problem solving skills and
border knowledge of the organization and
business.
3 The contents of the Training & Development
programs organized are always relevant to
the changing needs of our jobs & our
business.
4 Employees are working efficiently after
attending Training course.
5 Training & Development practice help to
change behavior of Employees.
6 Training & Development enhance the skills
of job of Employees
7 After training you are able to perform higher
level task.
8 After Training you feel confident & you can
handle your own work.
9 Training & Development practice have
improved Knowledge and skills of
Employee.
10 Training enabled you to be self sufficient
more quickly.

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 Strongly Disagree Neutral Agree Strongly
Performance Appraisal related Question
Disagree agree

1 Performance Appraisal in our organization

aims at improving employee performance &
strengthening our jobs skills.
2 Our organization appraises the performance
of its employees at regular interval.

3 We feel our performance appraisal has been

faire & objective
4 We receive proper feedback on how we are
performing
5 Our organization recognizes the career
growth needs of its employees.
6 Adequate growth opportunities are available
in our organization for those who perform
well.
7 I have good understanding of the appraisal
criteria
8 The current format of rating scale used
(using percentage in each criteria) form is
not an effective measure of employee
performance.
9 The performance criteria used in the
appraisal form does not actual measure my
real performance.
10 The appraisal criteria in which I am
evaluated is fair.

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 Compensation related Question Strongly Disagree Neutral Agree Strongly
Disagree agree
1 Our organization makes all payment due to
us in time
2 Pay increments offered by our organization
are satisfactory.
3 The existing reward and incentive plans do
not motivate us for better performance.
4 We are being paid adequately for the work
we do.
5 Rewards in our organization are strictly
linked to employee performance.
6 The pay we receive in competitive compared
to that of employees doing similar work in
other organization.
7 I am entitled for rewarded if the whole
organization achieves its set target.

8 An increase in my basic pay will encourage

me to improve on my performance.

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 Part (C) Employee performance related Questioner

Listed below are statements about employee performance related issues regarding the
organization you currently work for. For each please indicate your level of agreement with the
following statements so that your answer to these questions will enable the research to assess the
effect of HRM practice on employee performance in your organization.

1= strongly Disagree 2= Disagree 3= Neutral 4= Agree 5= strongly agree

Items Strongly Disagree Neutral Agree Strongly

Disagree agree
1 Work performed by employee in the
organization is high quality
2 Employee in the organization usually meet
deadlines while accomplishing their tasks
3 The employees in the organization achieve
their. Specified targets
4 The rate of absenteeism in the organization is
low
5 Employees in the organization are creative &
innovative.
6 Employees in the organization are
encouraged to appraise themselves.
7 Employee in the organization aware. of the
organizational objectives mission statement &
vision
8 The costs of work performed have some
control over costs.

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INTERVIEW QUESTION

This is an interview question designed to gather information about the effect of Human
Resources Management Practices on employee performance of ECWC Jimma District. The
Human Resource Management Manager and team leader will be the interviewees. Genuine and
complete responses by each interviewee are highly helpful to make the findings of the study
reliable.

Recruitment and selection

1. Do you think the selection system in our organization selects those having the desired
knowledge, skills and attitudes?

2. What types of recruitment techniques the organization is using?

3. Does the recruitment and selection process help the organization to find out the right person
for right position?
Training and development
1. Do the managers evaluate the effectiveness of the employee training through behaviors?
2. Does the training process for non-managerial employees in our organization are formal and
systematically structured?
Performance appraisal
1. Does the Performance appraisal includes the supervisor setting objectives and goals of
subordinates for the period ahead in consultation with them

2. Does the performance appraisal process employed by this organization is able to point out
areas which I need to improve.
Compensation
1. Does qualified employees have the opportunity to be promoted to positions of greater pay
and/or responsibility within the company?

2. Does the company constantly reviews and updates the range of benefits to meet the needs of
employees

Thank you for participating

77
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[email protected]

78
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79
 c”Ö[ÿ
√)

ከቅጥር እና ምልመላ ጋር የተያያዙ

በድርጅታቸን ትክክሇ ው ሰው በትክክሇ ስራ ላይ ተቀምጧል
በቕጥር ጊዚ ሇእጩዎቸ በቂ እና አስፈላጊ መረጃ ስሇ ስራው ይሰጣቸዋል

በድርጅታችን የእጩዎች ምልመላ ከእሱ ወይም ከእሳ ጥቕም ነው

ድርጅቱ ባዶ ቦታዎችን ከውስጥ እና ከውጨ ያሞላለ

ድርጅቱ ዏግባብነት ያላቸውን ባሇሙያ በምልመላ ጊዜ ታሳቢ ይደረጋል
የድጅታችን ቅጥር እና ምልመላ አካሄድ ሇሁለም እጩዎቸ እኩል ነው
ድርድቱ ላለት አስፈላጊ ቦታዎቸ ሰዎቸን ሇመሳብ ጥረት ያደርጋል
የድርጀታቸነ ቅጥር እና ምሇመላ አካሂድ በሚፈሇገው እውቀት ሙያ እና ችሎታላይ የተመሰረተ ነው
የድርጀታቸነ ቅጥር እና ምሇመላ ዘዴ በጣም ሳይንሳዊ ነው
የድርጀታቸነ ቅጥር እና ምሇመላ አካሂድ በድርጅቱ ዋጋ ያሇው እና በድረጃ የተገመገመ ነው
እና

በድርጅታችን ሰራተኞቸ የሚፈልጉት ስልጠና የሚደረገው በአፈ ም ውጢታቸው ነው

በድርጅታችን ስልጠና የሚያካትተው ማህበራዊ ሙያ: ጠቅላላ ችግሮቸን መፈታት ሙያ: ስሇ
ድርድቱ ሰፊ እውቀት እና ስሇ ስራው ያከተተ ነው
የስልጠናው ይዘትእናድርድቱ እድገትእቅድ ሁልግዜ ከስራቸን መሇወጥ እና ስራ ጋር አግባብነት ያሇ
ነው
ሰራተኞቸ ከ ስልጠና በሐዋላ ስራቸውን በብቃት ይወጣለ
ሰራተኛው ከስልጠው የሚያገኘው እውቀትባህርያቸው ሇመሇወጥ ይረዳቸዋል
ስልጠው እና የማልማቱ ስራ የሰራተኞቸን ሙያ ያሳድጋል
ከስልጠና በሐዋላ አንተ ከፍያሇ ተግባራትን አከናውነሃል
ከስልጠና በሐዋላ ˜አንተ በእራስህ መተማመን መሰማትና የራስን ስራ መስራት ትፈልጋሇህ
ስልጠና ው እና የመልማቱ ልምድ የሰራተኞቸን ሙያ እና እውቀት ማ ልነው
ስልጠና ው አንተን በራሰህ በቁ ሇማድረግ የተፋጠነ ነው

80
በድርድቱ ከእድገትጋር የተያያዙ የአፈ ም ጥያቄ አላማው የሰራተኞቸን አፈ ምማ ል እና
የስራ ሙያ ማጠናከር ነው
በድርጅታችን የሰራተኞችን የስራ አ ፈም የሚመዘነው በሰአቱ ነው
የአኛ እድገት አፈ እንደሚሰማን ፍተአዊ ና አላማ ያሇው ነው
እኛ የተቀበልነው ግብረ መልስ አንደ ድርጅታችን አሇማ እንደምንሰራ ነው
በድርጅታችን ሰራተኞቸ በምፈልጉት የስራ እድገት እና ደረጃ እውቅና አሇው

የእድገት እድል በድርጅታች ጥሩ አፈ ያላቸውን ሰራተኞችን ያሣድጋል

የድርጅቱ የስራ አመራሮ ጥሩ ግንዛቤ ስሇ እድገት መስፍረት አላቸው
በአሁኑ ግዜ የሚምጠቀሙት እስክል ወይም ሇእያንዳንዱ መስፈርት የሚጠቀሙት ፐርስነት
የሰራትኞው አፈ ም መሇከያ ውጤታማ አይደሇም
የአፈ ም መስፈርት የሚጠቀሙበት ቅ እውነተኛ መሇክያ የእኔ እውነተኛ አፈ አየደሇም
የእድገቱ መስፈር እኔ የተገመገሙኩበት ፍታዊ ነው
ን

የአኛ ድርድት ሁለንም ክፍያዎቸ በሰአቱ ይፈተማል

በአኛ ድርድት የሚሰጥ የእደገት ከፈያ አጥጋቢ ነው

አሁን ያሇው የቦነስ እና ጭማሪ እቅድ እኛን ሇተሳሇ ስራ አያንቀሰቀስም

አሁን የሚከፈሇን ክፈያ ሇምንሰራው ስራ በቂ ነው

የአኛ ድርድት ማበረታቻ በቀጥታ ሰራተኛው ከሚሰራው ስራ ጋር የተያያዘነው

ከሌላ መስርያ ቤት ከሚሰሩት ሰራተኖች ጋር ከአኛ ድርድት የምንቀበሇው ክፍያ ተወዳዳር ነው

ድርድተቸን ያስቀመጠውን እቅድ ከግብ ካደረሰ እኔ ማበረታቻ ሇማግኙት እችላሇሁ

በየትኛውም መስረት የሚጨምር ክፍያ ስራ ሇማሳሳል ያነቃቃኛል

ሠራተኞቸ ከሚሰሩት ስራ አፈ ም ጋር የተያያዙ ያሇው ጥያቄ

በድርድርጅቱ ሰራተኖች የሚሰሩት ስራ ከፍተኞ ጥራት አሇው

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በድርድርጅቱ ሰራተኞች የተሇመደው የሚሰበሰቡት ስራቸውን ከጨረሱ በሓላ በመጨረ ቀን ነው

የድርድቱ ሰራተኞቸ የተስጣቸውን ስራ ከግብ ያድረሳለ

በድርድርጅቱ የምልከታ ዙር ዝቅተኛ ነው

የድርድቱ ሰራተኞቸ ፈጣሪ እና ሀሳብ የሚያመነጩ ናቸው

የድርድቱ ሰራተኖቸ እራሳቸውን በማድነቅ ይበረታታለ

የድርድቱ ሰራተኞቸ ስሇ ድርጅቱ አላማ ተልኮ ያውቃለ

በድርድቱ የተሰራው የስራ ዋጋ ከዋጋ በላይ እንዳይሆን ይቆጣጠራል

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