ADDIS ABABA UNIVERSITY SCHOOL OF COMMERECE

THE EFFECT OF SELECTED HUMAN RESOURSE

MANAGEMENT PRACTICES ON EMPLOYEES’ JOB
SATISFACTION: THE CASE OF HIBRET BANK SHARE
COMPANY

By Yoseph Abshiro

A research proposal submitted to Addis Ababa University School of

Commerce in partial fulfillment of the requirements for Master of Art in
Human Resource Management

Advisor: Seifu Mamo (PHD)

June 2022

Addis Ababa Ethiopia

i
 ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
GRADUATE PROGRAM

THE EFFECT OF SELECTED HUMAN RESOURCE MANAGEMENT

PRACTICES ON EMPLOYEES’ JOB SATISFACTION IN CASE OF
HIBRET BANK S.C

BY YOSEPH ABSHIRO

A THESIS SUBMITTED TO THE SCHOOL OF COMMERCE OF Addis

Ababa UNIVERSITY IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN
HUMAN RESOURCE MANAGEMENT

ADVISOR: SEIFU MAMO (PHD)

JUNE 2022

ADDIS ABABA

ii
Addis Ababa University School of Commerce Graduate Program

The Effect of Selected Human Resource Management Practices on

Employees’ Job Satisfaction in case of Hibret Bank S.C

By: Yoseph Abshiro

Approved By:

_________________ _______________ ____________

Advisor Signature Date

_________________ _________________ _____________

Internal Examiner Signature Date

_______________ ______________ _____________

External Examiner Signature Date

iii
 DECLARATION

I, Yoseph Abshiro, declare that ―The Effect of selected Human Resource Management
Practices on Employees’ Job Satisfaction in case of Hibret Bank’’ is my original work and
has not been presented in Addis Ababa University or any other university, and that all sources of
material used; for the thesis have been duly acknowledged. It is submitted for the degree of
Masters of Art in Human Resource Management to Addis Ababa University School of
Commerce Graduate Program.

Declared by:

Name Yoseph Abshiro

Date: __________________

Signature: ______________

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 LETTER OF CERTIFICATION
This is to certify that Yoseph Abshiro carried out his thesis on the topic entitled with‘‘The Effect
of Selected Human Resource Management Practices on Employeess‘s Job Satisfaction in case of
Hibret Bank S.C‘‘ under my supervision. This work is original in nature and is suitable for the
awards of Master of Arts (MA) in Human Resource Management.

_______________

SEIFU MAMO (PHD)

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 ACKNOWLEGEMENT

I would like to thank my almighty God for helping me in the process of my study until this time.
My next thank goes to advisor Seifu Mamo (PHD) for the guidance and support he has given
throughout the program. Also I would be thankful for employees for Hibret bank to share their
opinion honestly.

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Table of Content

Contents
ACKNOWLEGEMENT .............................................................................................................................vi
Abstract..................................................................................................................................................... xiii
CHAPTER ONE ......................................................................................................................................... 1
1. INTRODUCTION .............................................................................................................................. 1
1.1 Background of the Study ................................................................................................................... 1
1.2. Back Ground of the organization ................................................................................................ 2
1.3. Statement of the Problem ............................................................................................................ 4
1.4. Research Questions ..................................................................................................................... 5
1.5. Objectives of the study ................................................................................................................ 6
1.5.1 General objective ....................................................................................................................... 6
1.5.2 Specific Objectives .................................................................................................................... 6
1.6. Significance of the study ............................................................................................................. 6
1.7. Scope of the Study ...................................................................................................................... 6
1.8. Definition of Terms ..................................................................................................................... 7
1.9. Organization of the Study ........................................................................................................... 7
CHAPTER TWO ........................................................................................................................................ 8
2. REVIEW OF RELATED .................................................................................................................... 8
2.1. Conceptual Definition .......................................................................................................................... 8
2.1.1. Human Resource Management (HRM) ......................................................................................... 8
2.1.2 Human Resource Management Practice ..................................................................................... 8
2.1.3 Job Satisfaction ........................................................................................................................ 12
3. Classification of Job Satisfaction Theories ....................................................................................... 12
4. Empirical Literature Review ............................................................................................................. 15
4.1. Effect of Training on Job Satisfaction ........................................................................................ 15
4.1.2 Effect of Promotion on Job Satisfaction ................................................................................... 15
4.1.3. Effect of Reward and Compensation on Job Satisfaction ........................................................ 16
5. Conceptual Framework ..................................................................................................................... 16
5.1 Research hypothesis .................................................................................................................... 17
CHAPTER THREE .................................................................................................................................. 18

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3. RESEARCH DESIGN AND METHODOLOGY ............................................................................. 18
3.1 Research Approach ......................................................................................................................... 18
3.2. Type/ Design of Research ......................................................................................................... 18
3.3. Study variables .......................................................................................................................... 18
3.4. Population of the Study ............................................................................................................. 18
3.5 Sampling Techniques ...................................................................................................................... 19
3.6 Population and Sample Size ............................................................................................................ 19
3.7. Sources/Instrument of Data Collection .......................................................................................... 20
3.8. Procedures of Data Collection........................................................................................................ 20
3.9. Ethical Consideration ..................................................................................................................... 20
3.10. Data Analysis Method .................................................................................................................. 20
3.11. Reliability and Validity Test ........................................................................................................ 21
CHAPTER FOUR .................................................................................................................................... 23
4. DATA ANALYSIS, INTERPRETATION AND DISCUSSION ...................................................... 23
4.1. Introduction .................................................................................................................................... 23
4.2. Demographic Characteristics .................................................................................................... 23
4.3. Result of Descriptive Statistics.................................................................................................. 25
4.3.1. Employee‘s response on training practice ......................................................................... 25
4.3.2. Employee‘s response on promotion practice ..................................................................... 26
4.3.3. Employee‘s response on Reward and Compensation Practices ......................................... 27
4.3.4. Employee‘s response on job satisfaction ........................................................................... 28
4.4. Result of Correlation Analysis .................................................................................................. 30
4.5. Result of Regression analysis .................................................................................................... 32
CHAPTER FIVE ...................................................................................................................................... 38
5. SEMMERY OF FINDING, CONCULTIONS AND RECOMENDATION ..................................... 38
5.1. Summary of the research study ...................................................................................................... 38
5.2. Conclusions ............................................................................................................................... 38
5.3. Recommendations ..................................................................................................................... 39
5.4. Research limitation and Areas of Future Research .................................................................... 40
5.4.1. Limitation of the study ...................................................................................................... 40
5.4.2 Suggestions for future research ................................................................................................ 40

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References

Appendices:

Appendix 1 Employees Questionnaire

Appendix 2 Correlation Analyses

Appendix 3 Regression Result for Training and Job Satisfaction

Appendix 4 Regression Result for promotion and Job Satisfaction

Appendix 5 Regression Result for reward and compensation and Job Satisfaction

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Acronyms
HR Human Resource

HRM Human Resource Management

SD Standard Deviation

x
List of Tables

Table No. Page No.

Table 2.1 Average Cronbach‘s alpha Reliability Coefficient for all Variables----------------20

Table 1.2 Cronbach‘s Alpha Reliability Coefficients

For Independent and Dependent Variables---------------------------------------------------------20

Table 3.1 .Demographic characteristics of the respondents--------------------------------------21

Table 3.2: descriptive results of training practice-------------------------------------------------25

Table 3.3 Descriptive result of promotion practice------------------------------------------------26

Table 3.4 Descriptive result of reward and compensation practice------------------------------27

Table 3.5 Descriptive result of job satisfaction-----------------------------------------------------28

Table 3.6 Correlation analysis result-----------------------------------------------------------------29

Table 3.7 Multi- Collinearly Test---------------------------------------------------------------------33

Table 3.8 Model Summery-----------------------------------------------------------------------------34

Table 3.9 ANOVA---------------------------------------------------------------------------------------34

Table 3.10 Regression coefficients --------------------------------------------------------------------36

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List of Figures

Figure 2.1 Conceptual Frameworks----------------------------------------------------16

Figure 4.1 Normal Q-Q Plot of Employee job satisfactions-------------------------35

Figure 4.2 Histogram for testing normality--------------------------------------------35

xii
 Abstract

The aim of this study is to investigate the effect of selected HRM practice on employee’s job
satisfaction in case of Hibret Bank S.C. The explanatory research design used and primary and
secondary data are utilized. The primary data was collected through questionnaires to 187
employees of Hibret Bank. The collected data were analysis using SPSS version 20.0 to analyzed
frequencies, descriptive statistics, correlation and regression analysis. The descriptive analysis
showed that the respondents’ overall feelings towards the selected human resource management
practices on average show that employees are not satisfied The regression analysis showed that
the human resource management practices which are training, promotion and reward and
compensation practices have positive and significant effect on employees’ job satisfaction. Also
the result of correlation showed that there are positive and significant relationships between the
selected HRM practice and job satisfaction. The overall implication of the study result is that the
human resource management practice has significant portative relationship with job
satisfaction.

Key words: HRM, HRM practices, Employees’ job satisfaction

xiii
 CHAPTER ONE

1. INTRODUCTION
1.1 Background of the Study

Human resource management is the key axis in managing the relationship between the
organization and its employees, and HRM is in charge of achieving organizational goals through
a variety of activities and special programs for human resource development and employee
retention (Zahidul, 2015)

On the other hand Job satisfaction is also defined as an overall evaluation of the work for the
company (Chetty & Phung, 2018). Job satisfaction can be thought of as a machine that affects
the internal environment, employee performance, and service quality in the repair and
enhancement of customer services. Employee happiness is crucial, but it is never achieved at any
given time, and it is extremely difficult to calculate (Dorothea, 2015). In service businesses, job
satisfaction is a critical factor. The employees who are satisfied are employees who are
motivated to convey his concern for others and serve the company better (Paul, 2013).

The effect of human resource management practices on employee job satisfaction has been
studied, and the majority of the studies have indicated that human resource management
practices have a positive impact on employee job satisfaction. The study by Chetty and Phunt
(2018) demonstrates the link between human resource management practices and job satisfaction
among employees. They discovered that employee satisfaction is influenced by training and
development.

Mira et al. (2019) found that HRM strategies such training and development, reward, promotion,
and recruiting and selection have a favorable impact on employee work satisfaction. While
Jaynob et al (2018) look into the impact of HRM practices on employee job satisfaction in
Bangladesh's private commercial banks. HRM activities like as training and development,
compensation and reward, recruiting and selection, and work-life balance have the strongest link
and influence on employee job satisfaction. In addition, Govand Anwar and Inji Shukur (2015)
found that training and development has a large and favorable 3 effect on job satisfaction in
1
Erbil, Iraq. In our county context, Amare Worku (2015) found that training and development,
performance appraisal and compensation practices in Ethiopian public banks have a favorable
impact on job satisfaction.

In the context of a developing economy, where the need for formation of capital is pressing,
where developments in the field of the bank management are dynamic, and where financial
crises frequently accompany economic downturns, the issues provided by HRM become
increasingly important; as a result, examining the possibilities of HRM application becomes
increasingly important. a very relevant field of enquiry and research (Md. Tofael Hossain
Majumder, 2012). Overall, the inconsistency of the results may be influenced by the country's
context, among other things.

In our country, it is difficult to access and get researches conducted that show the relationship
between human resource management practices and employees‟ job satisfaction in public banks.
Some studies on the relationship between human resource management practices and employee
job satisfaction in commercial banks have been undertaken in our country. According to Ijigu
(2015), HRM strategies such as training and development and compensation packages have a
substantial impact on job satisfaction. Other research findings also indicated reward system has
positive and strong effect on job satisfaction (Abel G/tsadik, 2012). Furthermore, as the findings
of Bekele (2014) explain the banking industry of Ethiopia is experiencing a rapid turnover due to
employees‘ dissatisfaction.

Therefore, study of job satisfaction on bank employees is critical, as their activities have a
significant impact on a country's economy, and their contentment determines their performance.

1.2. Back Ground of the organization

United bank was incorporated as share Company on 10 September 1998 in accordance with the
commercial cod of Ethiopia of 1960 and the Licensing and supervision of banking business
proclamation No.84/1994. Currently it has 383 branches as of June 30 2021. The existing
branches render all types of banking service. The bank has board of directors, which is
accountable to the general meeting of shareholders. The current board consists of none members
appointed bay general meeting of shareholders. The board appoints the CEO of the bank, who
carries out the day -to - day management of the bank. The banks total number of staff reached

2
more than 6,537 as of December 31, 2021 including managerial, supervisory and support staff.
The bank‘s total capital as at June30, 2021 was 6.5 billion.

Vision
―To globally be the preferred financial services provider of innovative solutions across Africa‖

Mission
―Committed to exceeding the expectations of our customers and other stakeholders by proving
competitive financial solutions while ensuring efficient service delivery and people
empowerment‖
Main services are
 Domestic banking operations
 Foreign banking operations
 Loans and advances
 Internet banking operation
 Mobile banking
 Debit card operation
 Interest free banking (IFB)

According to the Hibret bank Human resource management policy functions of Human resource
management practice which are related to the purpose of this study stated below.
Training practice
The annual plan of the bank prepared considering the facts on the ground and within the
framework on the long strategy. Thus Branches & departments in to account the themes,
objective and the goals set in the strategy while preparing its respective annual plans. And so HR
plan is one of the elements of annual plans prepared by branches & departments.

Branches & departments have responsible to sketch its respective human resource plan, the part
of Human Capital Director Office is compile and improve the plan before approving by directors
of board. Finlay the directors of board approved the human resource plan.

3
As it can be seen from the HR plan of the bank, the bank‘s HR plan consider the long terms
strategy and participants of the HR plan in to account the objective and goals of the strategy
while preparing the HR plan.

Promotion practice

The Human Resource Director office has responsible to promote employees from internal based on
approved corporate HR plane. The Sources of internal recruitment of the bank are promotion, job rotation
& transfer.

Reward and compensation

The bank has compensate its employees with direct compensation/base pay/ and indirect
compensation/benefits/. This compensations /salary scale and benefit package/ approved by
board of directors. The human resource director office follow-up the implementation of salary
scale and also advise the executive managements on improvement the scale for competitive to
other banks. The banks‘ Salary adjustment consider performance appraisal of the bank. When the
staffs promoted and reclassify the job the salary adjustment is made for the staffs.

1.3. Statement of the Problem

HRM practices, according to Armstrong (2017), improve employee performance by facilitating

their engagement, motivation, and skill development in order to complete their work
successfully. Active recruitment and selection procedures, substantial and relevant training and
development activities, incentive pay schemes and strong performance management processes or
performance appraisal methods are all linked to high employee satisfaction.

The research revealed that most employees are unsatisfied with their compeanstion package,
followed by reward and motivation, career progression, training and development, management
style, and job design and duties, according to the research. 2012 (Goyal and Shrivastava) It was
discovered that a business's HR strategies can boost employees' job satisfaction and strengthen
their commitment to the organization. A study was conducted to determine the impact of HRM
strategies on job satisfaction, organizational commitment, and intention to leave, recruitment and
hiring, remuneration and benefits, training and development, and supervision and evaluation
were all examples of HRM activities. The study discovered a substantial link between HR

4
practices views and intention to quit, which was mediated by organizational commitment and
work satisfaction. 2008 (Aswathappa) in order to motivate employees, a firm needs have
comprehensive HR plans, according to the researcher. Employee work satisfaction can be
improved by effective HR planning that allows employees to participate in the planning of their
careers (Weeratunga, 2003).

According to the findings of the literature review, there is a significant link between employee
satisfaction and productivity and HRM practices. As a result, organizations, particularly service-
oriented ones like banks, should focus on proper HR practices to satisfy and motivate their
employees and gain competitive advantages over their competitors. However, Most of the above
mentioned studies were conducted in developed economies that are economically, culturally, and
politically different from developing counties like Ethiopia and therefore yield different
outcomes and the findings may not apply in the current context. In addition there is limited
published research in Ethiopian private bank context. And also, yet it was observed that the
independent variables considered by the researcher were not crucially analyzed. These research
gaps in knowledge so the purpose of this research is to fill the research gap through by
investigating the effect of human resource management practices /training, promotion and
reward and compensation practice on satisfaction of employees‟ towards a job those employed
on the Hibret bank.

Based on the above study, the researcher wants to investigate some selected HRM practice
among other such as training practice, promotion practice and reward and compensation practice
that Hibret Bank practicing and identify the relationship between these practices and employee
job satisfaction The researcher‘s reasoning for concentrating on this HRM practices was that
they were the most common evaluating the aspects that will influence an employee's future
career and modifying their way of living.

1.4. Research Questions

In order to achieve the statement of the problem stated the following research questions were
developed.

 What is the level of Job satisfaction at Hibret Bank?

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  What is the relationship between selected HRM practice and employees‘ job
satisfaction?
 How do selected HRM practices affect employees‘ job satisfaction?

1.5. Objectives of the study

1.5.1 General objective

The main objective of the study is to investigate the effect of selected Human Resource
Management practices on employees‘ job satisfaction.

1.5.2 Specific Objectives

 To explain the level of job satisfaction at Hibret Bank.

 To examine the relationship between selected HRM practice and employee‘s job
satisfaction.
 To evaluate the effect of selected HPM practice and employee‘s job satisfaction.

1.6. Significance of the study

The study is important because it provides an insight on the effect of certain HRM practices have
on employees‟ job satisfaction which is supported by empirical evidence. Therefore, it helps to
understand the effect of certain HRM practices on employees‟ job satisfaction. In addition, the
result of the study is important and it informs to the concerned Hibret banks to implement the
recommendations that were forwarded by the researcher. The study also gives the researcher the
opportunity to gain deep knowledge on the effect of HRM practices on employees‟ job
satisfaction towards private banks. Finally, the study contributes to the existing literature and
serves as a further reference on the field of study and to the future researchers who want to
conduct a research on this area.

1.7. Scope of the Study

Human resource management practice includes different activities however; this study focuses
only three HRM practices named training practice, promotion practice and reward and
compensation practice. The reason for selecting these three practices is its direct attachment with
financial earning and its direct enhancing effect on employee performance . Further the study

6
focus employees how are located head office of the Hibret bank. The reason of choosing Head
office due to time and financial constraints, and geographical restriction moreover, the researcher
believed that the data which is gathered by the questionnaire is going to be identical or
homogeneous for both Addis Ababa and outlining branches. The research has only covered
employees who are permanent and being clerical or professional and managerial staffs that are
also have one or more years of experience in the bank. Therefore, non – clerical employees, and
regional and City branches employees and managers are excluded from the study.

This research investigated relationships between independent variables and dependent variable
using descriptive and quantitative analysis applying multiple regression analysis.

1.8. Definition of Terms

Human resource management – refers to rules procedures, practice and systems that have an
impact on employee behavior, attitude and performance (Noe et al...., 2007).

Training - is the process of coaching employees with specific skills or assisting them in
correcting performance flaws (Luis R., David B., & Robert L. 2001:260)
Promotion –happened when an employee progresses up the organizational ladder and into a
position of higher responsibility, Des (2008)
Job satisfaction -refers to the approaches and state of mind people have about their job. Positive
and advantageous assertiveness towards the job indicate job satisfaction. Negative and
unfavorable attitudes towards the job indicate job dissatisfaction (Armstrong M, 2006).

1.9. Organization of the Study

The study was organized into five chapters. Chapter one was include introduction, research
problem, research questions and objectives of the study, hypothesis, definition of key terms and
finally the significance and scope of the study.

Chapter two was deal review of related literature. Chapter three was describing research design
and methodology. Chapter four was being data presentation, analysis and interpretation which
present the empirical findings. And finally chapter five was comprises summary, conclusions
and recommendations which includes summary of findings, conclusions, limitations of the study,
recommendations and suggestions for future research.

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 CHAPTER TWO

2. REVIEW OF RELATED

2.1. Conceptual Definition

2.1.1. Human Resource Management (HRM)

HRM is defined by Bratton and Gold (2009) as a strategic approach to managing employment
relations that emphasizes the importance of leveraging people's capabilities to achieve
competitive advantage, which is accomplished through a unique set of integrated employment
policies, programs, and practices.

HRM is also "a systematic and cohesive approach to the administration of an organization's most
important asset: the people who work there individually and collectively to achieve the
organization's goal" (Amstrong, 2011 p. 3.).

Staffing, human resource development, remuneration and benefits, safety and health, and
employee and labor relations are among the functions of HRM, according to Mondy and Noe
(2005).

HRM is defined by Zahidul (2015) as the "main axis in regulating the relationship between the
organization and its employees, and HRM is responsible for achieving organizational goals
through a variety of activities and special programs for human resources development,
employment, and evaluation, maintenance, and retention."

2.1.2 Human Resource Management Practice

HRM practices, according to Minbaava (2005), are a set of practices used by organizations to
manage human resources by facilitating the development of firm-specific competencies,
producing complex social relationships, and generating organizational knowledge in order to
maintain competitive advantage. HRM practices, according to Tiwari and Saxena (2012), are
those organizational activities aimed at managing the pool of human resources and ensuring that
those resources are used to achieve organizational goals. In addition, according to Yeganeh and
Su (2008), the most prevalent human resource management strategies are recruiting, selection,

8
training and development, compensations, reward, and recognition. The study's focus was on
training, promotion, and reward and recognition procedures, as they appear to be the most
important elements in job satisfaction.

Training

Training is the process of equipping personnel with specific skills or assisting them in correcting
performance flaws (Luis R., David B., & Robert L. 2001:260) one of the most difficult aspects of
working in today's world is the constant sensation of having to sell oneself, with no time to
pursue personal or professional objectives. Employee development programs can go a long way
toward easing such feelings. Employee development programs result in increased employee
satisfaction and lower turnover rates in companies that use them. Training fosters business
loyalty, according to Stacey Wagner, a director with the American Society for Training and
Development, because employees feel the company is investing in their futures (Karen S.
2001:24).

The most popular HR practice is believed to be training and development. It refers to any
endeavor to increase the skills, abilities, and knowledge of present and prospective employees.
Training and development has a substantial beneficial impact on employee work satisfaction and
leads to superior employee knowledge, skills, abilities, attitudes, and conduct, all of which
contribute to the organization's good financial and non-financial performance (Mir M. et al.
2010: 34). Effective training can reduce learning costs, increase individual, team, and corporate
performance speed and overall productivity, improve operational flexibility by broadening
employees' sets, and attract high- quality employees by providing them with opportunities for
learning and development. It improves skill their job knowledge and skills, allowing people to be
more satisfied at work and earn a greater salary and promotion. It also assists employees in
identifying the firm's goals and mission, as well as managing change and building a positive
culture inside the organization, all of which may lead to a greater quality of service to
stakeholders (Tegene A. 2008:22).

Employees can continuously update their abilities and grow their careers by providing systematic
and planned training and development activities to enhance learning. Many people now consider
access to training to be an important part of the entire compensation package. The availability of

9
learning opportunities, the selection of individuals for high-profile training courses and
programs, and the organization's emphasis on the acquisition of new skills as well as the
enhancement of current ones can all be effective motivators. This is especially significant in
delayed companies, where promotion opportunities are limited but workers can still advance
laterally (Armstrong, 2007:35).

Promotion

According to Dessler (2008), who is quoted by Naveed A., Usman A., and Bushra F. (2011:301-
302), promotion occurs when an employee progresses up the organizational hierarchy and into a
position of increased responsibility. Furthermore, according to Naveed A. et al. (2011:301),
promotion can result in a large increase in an employee's income as well as the scope of authority
and control. It will assist competitors in identifying the most productive individuals in the
business sector while also recognizing employees within their own organization. Pergamit &
Veum are cited (1989) According to Naveed A. et al. (2011:302), employees that feel like they
are contributing effectively would be more satisfied with their jobs. Employees will be more
satisfied with their jobs if they have a better opportunity of being promoted.

According to De Souza (2002), as mentioned in the study of Naveed A. et al (2011:302),

employee happiness is determined by contentment with advancement in addition to job
satisfaction. When employees believe they have a good chance of getting promoted, they are
content with their current position in the company.

According to Armstrong (2009:994), a promotion strategy could declare the organization's aim to
promote from within whenever possible as a manner of meeting its high-quality staffing needs.
However, the policy could recognize that there will be times when the organization's current and
future needs can only be satisfied through external recruitment.

(Torrington D. Hall L. & Taylor S. 2008:149) argue that giving preference to internal recruits,
particularly when it comes to promotions, has the significant benefit of providing existing
employees with an incentive to work hard, demonstrate their commitment, and stay with the
company when they might otherwise consider leaving. Furthermore, the practice sends a strong
message from management, demonstrating that current employees are valued and that attractive

10
career growth options are available. Failing to recruit internally may thus serve to put off good
candidates with potential from applying for the more junior positions in an organization.

Reward and Compensation

The main goal of a recognition and reward program, according to Rizwan Q. and Ali U.
(2010:160), is to create a compensation system and explain it to employees so that they may link
their reward to their performance, which leads to employee job satisfaction. In addition, they
claimed that incentives, awards, and recognitions are the most important variables influencing
employee motivation. Employees will feel intrinsic motivation in their actions if they engage in
their work tasks for their own sake. Their activities will fundamentally be joyful and satisfying.

Employees are obviously closer to their organization, according to Wilson (1994), as stated by
Rizwan Q. & Ali U. (2010:161), because their employment can become the major source of
satisfaction in their lives if they are properly rewarded and recognized at work. According to
Flynn (1998), as referenced by Rizwan Q. & Ali U. (2010), rewards and recognition programs
keep employees happy, increase their morale, and create a relationship between their
performance and motivation.

According to Rizwan Q. & Ali U. (2010:162), recognition is the process of assigning a specific
position to an individual inside a company. This is a critical component of employee motivation.
The term "recognition" refers to how an employee's performance is judged and how much
admiration he receives from his employer. It also describes how an organization rewards and
elevates its employees based on their efforts and accomplishments.

According to Ali and Ahmed (2009), who were quoted in a study by Khawaja J., Mazen F.,
Anwar R., and Alamzeb A. (2012), reward and motivation are the two key aspects that influence
employee job satisfaction and motivation. There is a considerable association between reward
and recognition, as well as motivation and job happiness, according to statistics.

There are three parts to total compensation. The proportion of each (known as the pay mix)
varies a lot from company to company. Base compensation, which is the set income an employee
receives on a regular basis in the form of salary or hourly wage, is the first and (in most

11
organizations) major component of total compensation. Pay incentives, or programs that reward
employees for good performance, are the second component of total compensation. Bonuses and
profit sharing are two examples of these incentives. Benefits, often known as indirect
compensation, are the final component of total remuneration. Benefits include a wide range of
services such as health insurance, vacations, and unemployment compensation, to name a few
(Luis R. et al. 2001:325).

2.1.3 Job Satisfaction

Job satisfaction is the degree to which people feel good or bad about their jobs, according to a
formal definition. It's a mentality or emotional reaction to one's tasks, as well as the physical and
social environment at work (John R., James G., & Richard N. 2002: 162).

Job satisfaction, according to Man M., Modrak V., Dima I.C., and Pachura P. (2011: 8), is a
generic statement of workers' favorable sentiments about their jobs. They also stated that
workers' attitudes toward their occupations are influenced by a variety of factors such as the
nature of their jobs, the social status they have attained as a result of their jobs, and their
experiences in the workplace. This mindset can also be detrimental to one's career. Job
satisfaction exists when the economic advantages, social status, job-specific traits, and the job
expectations employees hoped for are all acceptable for the employees' desires. Job satisfaction
refers to employees' positive sentiments regarding the entire corporate environment as a result of
their work experiences.

3. Classification of Job Satisfaction Theories

According to Saifuddin K., Allah N., Farzand A., Muhammad I. (2012:1384), a review of the
literature on job satisfaction theories reveals that theories are typically grouped either by their
"type of theories" or their "chronological appearance."

Shajahan S. & Linu S. (2004) cited in the study by Saifuddin K. et al (2012) classified
motivation theories as ‗Content-theories‘ under which we can find Maslow‘s Needs Hierarchy,
Herzberg‘s Two Factor theory, Theory X and Theory Y, Alderfer‘s ERG theory, and
McClelland‘s theory of Needs and ‗Process-theories‘ which constitutes Behavior Modification

12
theory, Cognitive Evaluation theory, Goal Setting theory, Reinforcement theory, Expectancy
theory, and Equity theory).

Content theories: Focus primarily on individual needs—the physiological or psychological

deficiencies that we feel a compulsion to reduce or eliminate. These theories suggest that the
manager‘s job is to create a work environment that responds positively to individual needs. They
help to explain how poor performance, undesirable behaviors, low satisfaction, and the like can
be caused by ―blocked‖ needs or needs that are not satisfied on the job (John R. et al, 2002: 147).

Process theories: Focus on the thought or cognitive processes that take place within the minds
of people and that influence their behavior. Whereas a content approach may identify job
security as an important need for an individual, a process approach probes further to identify why
the person behaves in particular ways relative to available rewards and work opportunities.
Ultimately, we use the insights of three sets of theories to offer an integrated view of
motivational dynamics that should be useful in any work setting (John R. et al. 2002: 147).

For the purpose of this research only Herzberg‘s two factor theory will be discussed .

Herzberg’s Two Factor theory

Frederick Herzberg, as cited in John R. et al. (2002:157-158), developed a distinct approach to

studying motivation. He simply asked employees to report on the instances when they felt
particularly pleased about their jobs and when they felt particularly bad about them.
Furthermore, Herzberg and his colleagues discovered that when respondents felt good or
negative about their work, they listed somewhat different things. They established the two-factor
hypothesis, also known as the motivator-hygiene theory, as a result of their research, which
depicts many aspects as key drivers of job satisfaction and discontent. Hygiene variables,
according to this hypothesis, are sources of job dissatisfaction. These variables are linked to the
employment context or work setting; that is, they have more to do with the environment in which
individuals work rather than the nature of the work itself. Job satisfaction and job dissatisfaction
are two distinct variables in the two-factor hypothesis. As a result, enhancing a hygiene
component, such as working circumstances, will not make people satisfy at work; it will simply
keep them from being dissatisfied.

13
Herzberg (1959), as cited by John Adair (2004: 162), identified the elements that influence job
satisfaction and discontent, which are addressed further below.

The eight ‘hygiene’ factors, according to Herzberg, which can create job dissatisfaction, are:

1. Company policy and administration: Availability of clearly defined policies, especially

those relating to people, adequacy of organization and management
2. Supervision – technical: Accessibility, competence and fairness of your superior
3. Interpersonal relations: Relations with supervisors, subordinates and colleagues, quality of
social life at work
4. Salary: Total compensation package, such as wages, salary, pension, company car and other
financially related benefits.
5. Status: A person‘s position or rank in relation to others, symbolized by title, size of office or
other tangible elements.
6. Job security: Freedom from insecurity, such as loss of position or loss of employment
altogether
7. Personal life: The effect of a person‘s work on family life, eg stress, unsocial hours or moving
house
8. Working conditions: The physical conditions in which you work & the amount of work,
facilities available, environmental aspects eg ventilation, light, space, tools, noise.

The six motivating factors that lead to job satisfaction were identified by Herzberg as being:

1. Achievement: Specific successes, such as the successful completion of a job, solutions to

problems, vindication and seeing the results of your work.
2. Recognition: Any act of recognition, whether notice or praise (separating recognition and
reward from recognition with no reward).
3. Possibility of growth: Changes in job where professional growth potential is increased.
4. Advancement: Changes which enhance position or status at work.
5. Responsibility: Being given real responsibility, matched with necessary authority to discharge it.
6. The work itself: The actual doing of the job or phases of it.

14
4. Empirical Literature Review

This section contented the researched papers which are done by other researchers about human
resource management practices impact on employees‗ job satisfaction in different countries are
discussed below.

4.1. Effect of Training on Job Satisfaction

Khan et al. (2015) used explanatory research in their study in Pakistan, collecting data from a
sample of 100 respondents using a questionnaire. Correlation and regression statistical tools were
used to analyze the data. The researchers came to the conclusion that there was a link between
job satisfaction and training and development. The exploratory and descriptive study designs
were used by Chaudhary and Bhaskary (2016). A random sample of 125 people was chosen at
random. Data was gathered via questionnaires. Training and development, according to the
findings, lead to job satisfaction.

Nagaraju and Archana (2015) used a self-administered questionnaire and a sample of 237
respondents to investigate work satisfaction and training and development. Descriptive statistics
and paired test methods were used to evaluate the data. The findings suggested that training and
development have an impact on job satisfaction in the workplace. Johanzeb et al. (2013) used
250 employees to investigate the impact of training on job satisfaction. Questionnaires were used
to collect data, which was then analyzed using correlation and regression analysis. The findings
indicated that there was a considerable positive association between training and work
satisfaction among employees. Employees who have the possibility for training and development
are more satisfied with their jobs in organizations, according to Costen and Salazar (2011).

4.1.2 Effect of Promotion on Job Satisfaction

Zahid N., Aman U.K., and Imran N. (2015) investigated the impact of promotion on job
satisfaction in universities in Pakistan's KPK province. The study included 94 faculty members
from ten universities, five from each of the private and public sectors, and found a favorable
relationship between advancement and work satisfaction.

15
According to Petros W.F. and Dawit T.B. (2016), there is an appositive association between job
satisfaction and promotion; however the relationship is minimal when compared to the other
factors studied.

Asan and Wirba (2017) conducted a study on faculty members (N=30) from several universities
in Saudi Arabia's eastern province. They looked at over thirteen variables, including promotion,
to see if there was a link between job satisfaction and promotion. According to the findings, there
is a link between job happiness and advancement.

4.1.3. Effect of Reward and Compensation on Job Satisfaction

Salisu, et al. (2015) used stratified random sampling procedures to choose a sample of 265
respondents for their study on the impact of compensation and reward on job satisfaction of
public sector construction workers in Nigeria. Confirmatory factor analysis was used to analyze
the data. Compensation and rewards, according to the study, have a beneficial impact on
employee work satisfaction. Yaseen (2013) looked into how salary affects employee satisfaction.
In this study, a simple random sample technique was employed, as well as correlation, ANOVA,
and regression analytic techniques. Pay, recognition, promotion, and meaningful work all had an
impact on job satisfaction, according to the findings. Teseema et al. (2013) conducted research in
the United States, Vietnam, and Malaysia on the effects of remuneration packages on job
satisfaction. A self-reported questionnaire survey was used on a sample of 457 respondents from
the United States, 391 respondents from Vietnam, and 347 respondents from Malaysia in this
cross- sectional study. ANOVA, descriptive statistics, and regression analysis were used to
evaluate the data. Recognition was found to have a favorable impact on job satisfaction.

5. Conceptual Framework

Based on the above theoretical and Empirical reviews, the diagrammatic representation was
formulated in Fig. 2.1 below. The diagram provided an understanding of the association between
the independent variables and dependent variables. Therefore it helped to understand the
variables and formed after the consideration to set the research questions, objective, and
literature review.

16
The researcher had selected the three HRM practices to include in the conceptual framework by
using these practices as an indicator of how good HRM practices were used in the private
banking sector. The numbers of HRM practices presented were determined by the adaptation of
more HRM practices used previously that had better employee job satisfaction.

Reward & Promotion

Training
Compensation Practices
Practices
Practices

Job
Satisfaction

Fig 2.1 Conceptual Framework of the Study

5.1 Research hypothesis

Based on the literature review the following three hypotheses are proposed.

H1. Training practices do have significant effect on employee‘s job satisfaction

H2. Promotion practices do have significant effect on employee‘s job satisfaction

H3. Reward and compensation practices do have significant effect on employee‘s job satisfaction

17
 CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

3.1 Research Approach

There are two basic approaches to research, quantitative approach and the qualitative approach.
The quantitative approach involves the generation of data in quantitative form which can be
subjected to rigorous quantitative analysis in a formal and rigid fashion. Qualitative approach to
research is concerned with subjective assessment of attitudes, opinions and behavior. Research in
such a situation is a function of researcher‘s insights and impressions (Kothari C. R. 2004: 22).
Therefore, the research design that is used for this study is a quantitative research design. The
reason for choosing quantitative research design is due to the fact that it involves studies that
make use of statistical analyses to obtain their findings.

3.2. Type/ Design of Research

The final goal of this study is to describe the relationship between the selected HRM practice and
employee‘s job satisfaction in Hibret Bank S.C. selected HRM practices are independent
variables whereas employee‘s job performance is the dependent one. Though the study seeks to
answer ―what‖ and ―how‖ questions, how and in what ways selected HRM practices affect
employees‘ job satisfaction and describe the situation in terms of its characteristics, the research
tend to be explanatory research.

3.3. Study variables

The independent and dependent variables are;
Independent variables - training, promotion and reward and compensation practices

Depended variable- employee‘s job satisfaction

3.4. Population of the Study

The total population of the study is all employees of Hibret Bank S.C in 2014 E.C form whom
the researcher was took a sample.

18
3.5 Sampling Techniques

Sampling technique is the process of selecting appropriate sample for the purpose of determining
parameters of the whole population. The two basic sampling techniques are probability and non-
probability sampling. A probability sampling techniques can be defined as a sample in which
every element of the population has an equal chance of probability sampling technique
guarantees equal representation for each group in proportion to the size of each group. According
to this, the researcher use stratified random sampling. This probability sampling technique
guarantees equal presentation for each group population to the size of each group. The researcher
employed this technique by taking the list of population from HRM department. The population
of the study is divided in to groups based on the structure of the bank namely Credit Department,
Trade Finance Department, Human Capital Department, Finance Department, Internal Audit
Department, Risk and Compliance Department, Legal Department, Retail Banking Department,
IT Department, Marketing and Customer experience Department and Facility Department.

3.6 Population and Sample Size

As the data obtained from Hibret bank, currently the overall number of employees working in the
bank is 6537. But, by considering geographical restrictions, access to data, expected rate of
return from the study and degree of literacy, the study will confine to employees and managers at
head office who are at clerical position of the bank. So, the target population of the study wills
employees at head office of Hibret bank those who are above the clerical position and whose
work experience is one year and above. Hence, the population size will be 365. The following
formula is use to select the appropriate sample size based on 95% confidence level and 5%
margin of error or level of precision.

z2 .p. q. N
n= e2 (N-1) + z2. p. q
Source: C.R. Kothari (2004)

1.962 (0.5) (0.5) (365) = 187

2 2
n = 0.05 (365-1) + 1.96 (0.5) (0.5)

19
So, based on the above formula a sample of 187 will be selected from the target population.

3.7. Sources/Instrument of Data Collection

In order to address the research objectives the research were used primary and secondary sources
of data. Primary data is obtained through questionnaire that is collect from employees and
managers at the head offices of the bank. In order to collect data from the target population,
instruments of data collection will prepare. Questionnaires are used where the aim is to generate
quantitative data from a large sample to test research questions and/or hypotheses (Phyllis
Tharenou et al..., 2007). A five point Likert Scale questionnaire will use to measure the variables
of the study.

Secondary data was gathered from published theoretical literatures and empirical studies, books,
journal articles, internet and other publications.

3.8. Procedures of Data Collection

First, questionnaire will distribute to the participants of the study. After the questionnaires are
carefully filled, then the completed questionnaire will collect and arrange for data discussion and
analysis. Finally, the collected data will insert into data set and ready for data analysis and
discussion by using statistical software application programs (SPSS). And then the result will
summarize and conclude.

3.9. Ethical Consideration

The study will carefully consider ethical issues throughout the research process. Before the
actual study conducted, the researcher will sent a permission letter to concerned parties of the
bank and showed willingness and allowed to participate in the study. The participants of the
study will fully inform and understand the aim and/or purpose of study and then, the data that
obtained from respondents will keep honestly and confidentially.

3.10. Data Analysis Method

The Quantitative data analysis tools will use to analyze the collected data. Quantitative data
analysis tools include both descriptive and inferential statistics.

20
Descriptive statistics are used to describe and interpret the results of the study. Descriptive
analyses are used to compute the demographic profile of respondents, determine respondents‟
satisfaction level of HRM practices and with the job.

Correlation analysis more specifically Pearson correlation coefficient is used to measure the
degree of association between Training, Reward and compensation and Promotion and
employees‟ job satisfaction.

From inferential statistics, Regression analysis is used to test the hypothesis of the study. It also
used to measure the causal relationship between the Training, Reward and Compensation and
Promotion and employees‟ job satisfaction.

3.11. Reliability and Validity Test

The reliability of questionnaire item was tested to check the relevance and consistence of
research instruments. The researcher used Cronbach‟s alpha to measures internal consistency of
items in this study.
No table of figures entries found.

Table 2.1 Average Cronbach‘s alpha Reliability Coefficient for all Variables

Cronbach‘s Cronbach‘s Alpha based on N of items

Alpha standardized item
.943 .941 35

Table 2.2 Cronbach‘s Alpha Reliability Coefficients for Independent and Dependent Variables

Variables Items Cronbach‘s Status

Alpha
Training practice 4 .851 Good
Promotion practice 4 .768 Acceptable
Reward and 4 .767 Acceptable
compensation practice
Job satisfaction 4 .824 Good

21
Cronbach‘s alpha reliability coefficient normally ranges between 0 and 1 the closer Cronbach‘s
alpha coefficient closer to 1.0 the greater the internal consistency of the items in the scale.
Therefore; average Cronbach‘s alpha coefficient of all variables is 0.943, which indicates that the
internal consistencies of the items are great.

22
 CHAPTER FOUR

4. DATA ANALYSIS, INTERPRETATION AND DISCUSSION

4.1. Introduction

This chapter presents and discusses the results of the study. The following discussion is
organized around sub-topics reflecting the research objectives and questions. The purpose is to
simplify the discussion and to contribute to a better understanding of the research findings.
Findings about the demographics of study participants, and the statistical analyzes used to
answer hypothesis and research questions also presented. This helped to interpret and understand
the results.

Data for the analysis was collected from Hibret Bank. One hundred eighty seven (187)
questionnaires were distributed to employees and out of which one hundred seventy two (172)
questionnaires were returned, and the researcher found it suitable for further analysis. Meaning
91.97 percent response rate is recorded.

4.2. Demographic Characteristics

In this section the selected demographic characteristics of the study respondents such as sex, age,
position, service year and educational level are presented. Descriptive statistics using frequencies
was used to analyze the demographic characteristics of the respondents and hence the result of
the analysis is described in detail here under.

Table 3.1 .Demographic characteristics of the respondents

Variables Category Frequency Percent

N=172
Sex Male 93 54.1%
Female 79 45.9%
Age ≤25 6 3.5%
26-35 91 52.9%

23
 36-45 66 38.4%
≥46 9 5.2%
Position Officer level 118 68.6%
Supervisory level 32 18.6%
Managerial level 22 12.8%
Service year 1-5 years 35 20.3%
6-10 years 96 55.8%
11-15 years 26 15.1%
>15 years 15 8.7%
Educational level Diploma 0 0
Degree 76 44.2%
Masters 96 55.8%
PHD 0 0

Source: Employee Questionnaire, 2022

According to the table, 93 (54.1%) of the respondents were male, while the remaining 79
(45.9%) were female. This result indicate that to genders were represented adequate level in this
study.

The respondent's age group was mostly 26-35 and 36-45 years, accounting for 91(52.9%) and
66(38.4%) of the total, respectively, while 25 and 46 years accounted for just 6(3.5) and 9(5.2%),
respectively The result indicates that respondents were well distributed in terms of their age
group. Therefore, again with regard to age, the study did not suffer from age group bias.

Another important demographic variable is the work experience which was defined as years of
service an employee have worked. In this regard, 35 (20.3%) of respondents service year was <5
years, 96 (55.8%) of respondents service year was 6-10 years, 26 (15.1%) of respondents service
year was11-15 years, and 15(8.7%) of respondents service year was more than 15 years. This
indicated that only 20.3% respondents are serving less than 5 years the remaining respondents
have work experience more than 5 years. This long time service creates awareness of HRM
practice of the bank.

24
The study result also showed that the majority of the respondents 118(68.6%) worked as officers,
with the remaining 32(18.6%) in supervisory positions and 22 (12.8%) in management positions.
This indicated that respondents whom above officer level represented with 31.4 percent in this
study.

The respondent's educational levels were largely bachelor's and master's degrees, accounting for
76 (44.2%) and 96 (55.8%), respectively. This result showed as the respondents are well
educated and they well capable to read and respond this research questionnaire.

4.3. Result of Descriptive Statistics

The descriptive statistics of the variables are presented here after. The average score from the 5-
point lickert scale with 5 as strongly agree and 1 as strongly disagree for all the variables was
computed to show the proportion of the respondents that either strongly agreed or disagreed with
the items of the variables.

For the purpose of this study the researcher used the mean score measurement of Mabonga
(2012). The interpretation of the independent and dependent variables were presented as follows.
Mean score range from 1.10 up to 1.80 are categorized in very low level (very disagree), mean
score range from 1.90 up to 2.60 are categorized in low (disagree), mean score range from 2.70
up to 3.40 are categorized in undecided (neutral), mean score range from 3.50 up to 4.20 are high
(agree) and mean score range from 4.30 up to 5.00 are categorized in very high (very agree).

4.3.1. Employee’s response on training practice

Table 3.2 Descriptive results of training practice

Item N Mean Std. Dev.

1. I believe that I have training 172 2.93 1.300
opportunities to learn and grow.
2. I consider that available training 172 2.85 1.180
match with my job.
3. I feel I get the chance to develop 172 2.74 1.141
new and better ways of doing a job.
4. I am happy with the way my boss 172 3.06 1.208

25
trains his/her employees.
5. I feel that sufficient time and 172 2.61 1.051
money are allocated for training.
6. I am happy that training currently 172 2.78 1.075
provided is leading to satisfactory
results.
7. I feel that training plans are 172 2.77 1.195
developed and monitored for all
employees and it enhances job
satisfaction of employees.
8. I feel that employees receive 172 2.88 1.156
training to perform multiple tasks.
Grand mean 172 2.83 0.856
Source: Own Survey Questionnaire, 2022

As it can be seen form the above table the respondents expressed their agreement with moderate
level for; training opportunities to learn and grow 2.93 SD=1.93, available training match with
job scored mean 2.85 SD=1.18, the chance to develop new and better ways of doing a job scored
mean 2.74 SD=1.141, the way boss trains his/her employees mean 3.06 SD=1.208, the bank
allocate sufficient time and money for training scored mean 2.61 SD= 1.051, satisfactory result
of the training scored mean 2.78 SD= 1.075, the bank‘s training plans are developed and
monitored for all employees scored mean 2.77 SD= 1.195 and for that employees receive
training to perform multiple tasks scored mean 2.88 SD= 1.56.

Also the overall training practice based on the respondent‘s perception mean scored value of
2.83 with SD= 0.856 therefore, it can be infer that training practice of the Hibret Bank is
moderate level.

4.3.2. Employee’s response on promotion practice

Table 3.3 Descriptive result of promotion practice

Item N Mean Std. Dev.

26
1. I feel that I have the chances for 172 2.94 1.227
advancement on my job.
2. I am happy that the way promotions 172 2.57 1.155
are given to employees.
3. I feel that there are good promotion 172 2.65 1.208
policies and procedures at this bank.
4. I am happy with the advancement 172 2.62 1.248
opportunities of the bank.
5. The company do have clear 172 2.74 1.259
promotion strategies.
Grand mean 172 2.70 1.048
Source: Own Survey Questionnaire, 2022

Regarding promotion practice, the above result shown as mean scored 2.94 with SD= 1.227 for
the chance for the advancement of the job, again mean scored 2.257 with SD= 1.155 for the way
promotion given to employees, also for good promotion policies, the advancement of promotion
opportunities and clear promotion strategies means scored 2.65 with SD= 1.208, 2.62 with SD=
1.248 and 2.74 with SD= 1.59 respectively. And also the overall mean scored for promotion
practice 2.70 with SD= 1.048 which is below the level of satisfaction. So, this implies that the
promotion practice in Hibret Bank at moderate level.

4.3.3. Employee’s response on Reward and Compensation Practices

Table 3.4 Descriptive result of reward and compensation practice

Item N Mean Std. Dev.

1. In this bank, employees get 172 3.44 1.145
incentives such as promotions, awards,
bonuses, etc.
2. I feel my salary is fair for my tasks, 172 2.69 1.230
duties and responsibilities of my job.
3. The banks reward system really 172 2.69 1.063
recognizes the people who contribute

27
the most to the bank‘s efficiency and
effectiveness.
4. I feel that the incentive system 172 2.83 1.167
encourages me to strongly pursue the
bank objectives.
5. The bank provides performance 172 2.60 1.122
based compensation and I am happy
with the system.
6. I believe that the bank provide 172 2.71 1.198
equitable external salary.
7. I am happy with the assistance given 172 2.67 1.081
by the bank in terms of money, leave
and subscriptions.
Grand mean 172 2.80 0.849
Source: Own Survey Questionnaire, 2022

As it can be clearly understood the above table the bank incentive program rated as mean 3.44
SD= 1.45 therefore, it can be concluded as the respondents are moderately satisfied with the
incentive program such as award and bonus. Also for salary fairness for the tasks, duties and
responsibilities scored mean value 2.69 SD= 1.123, for the banks reward system really
recognizes the people who contribute the most to the bank‘s efficiency and effectiveness mean
scored 2.69 SD= 1.063, the incentive system encourages employees to strongly pursue the bank
objectives mean scored 2.83 SD= 1.167, for providing performance based compensation mean
scored 2.60 SD= 1.122, for the bank provide equitable external salary mean scored 2.71 SD=
1.198 and for the assistance given by the bank in terms of money, leave and subscriptions mean
scored 2.67 SD= 1.081. And also the overall responses regarding compensation and reward
practice mean scored 2.80 with SD= 0.849. This implies that the reward and compensation
practice in Hibret bank at moderate level.

4.3.4. Employee’s response on job satisfaction

Table 3.5 Descriptive result of job satisfaction

28
Item N Mean Std. Dev
1. The job requires me to be creative 172 3.16 1.011
2. The job allows me to make my 172 2.99 1.121
own decisions about how to schedule
my work.
3. I always feel comfortable in doing 172 3.06 1.219
my work.
4. The company do have good 172 3.49 0.970
technological tools.
5. The challenges of my job make me 172 3.37 0.949
more dedicated to work.
6. I am paid fair amount for the work 172 2.76 1.245
I do.
7. Everyone is treated fairly and with 172 2.88 1.099
respect.
8. I do get acknowledgment by 172 2.95 1.120
bosses and colleagues for my skills
and competencies.
9. I like the people I work with. 172 3.76 0.878
10. My nearest supervisor respects 172 3.55 1.077
the co-worker‘s opinion.
11. My supervisor is competent in 172 3.77 0.943
doing his/her job.
12. I am motivated to work for this 172 3.26 1.230
organization because I do have
opportunity to continually advance to
more senior positions.
13. I am motivated to work for this 172 3.35 1.097
organization because I do have
secure, permanent and reliable job

29
position.
14. I am motivated to work for this 172 3.02 1.209
organization because I do have
opportunities to acquire new
knowledge and skills, reach personal
potential.
15. The rules and procedures of the 172 3.28 1.028
organization support doing a good
job.
Grand mean 172 3.24 0.656
Source: Own Survey Questionnaire, 2022

Table 5 result showed that for the statements the job requires me to be creative, The job allows
me to make my own decisions about how to schedule my work, I always feel comfortable in
doing my work, The company do have good technological tools, The challenges of my job make
me more dedicated to work. I am paid fair amount for the work I do, Everyone is treated fairly
and with respect, I do get acknowledgment by bosses and colleagues for my skills and
competencies, I like the people I work with, My nearest supervisor respects the co-worker‘s
opinion, My supervisor is competent in doing his/her job, I am motivated to work for this
organization because I do have opportunity to continually advance to more senior positions, I am
motivated to work for this organization because I do have secure, permanent and reliable job I
am motivated to work for this organization because I do have opportunities to acquire new
knowledge and skills, reach personal potential and . The rules and procedures of the organization
support doing a good job the total mean scored 3.24 SD=0.656. Based on the interpretation tool
and the descriptive results at the Hibreat bank there is exist job satisfaction with undecided level.
Hence, the company should try to increase the level of job satisfaction by implementing better
HRM practice.

4.4. Result of Correlation Analysis

Correlation is a measure of relationship between two variables. The correlation coefficient gives
a mathematical value (-1 to 1) for measuring direction and the strength of the linear relationship
between two variables. Pearson‘s correlation coefficients were computed through bivariate

30
correlation for this study. Bivariate correlations which test the strength of the relationship
between two variables without giving any consideration to the interference some other variable
might cause to the relationship between the two variables being tested.

In this study, Correlation analysis is used to measure the relationship between independent and
dependent variables. Training practice was measured by using eight items (questions), five items
were used to measure promotion practice. Finally, reward and compensation practice was
measured by using seven items.

According to Franzblau

(1985), the correlation coefficient can be interpreted as follows:-

If r=0 to 0.20, it indicates no correlation

If r=0.20 to 0.40, it indicates positive but low degree of correlation

If r=0.40 to 0.60, it indicates positive moderate degree of correlation

If r=0.60 to 0.80, it indicates positive and marked degree of correlation

If r=0.80 to 1.00, positive and high degree of correlation

Table 3.6 Correlation analysis result

Variables Training Promotion Reward and Job

practice practice compensation satisfaction
Training practice Pearson correlation 1 .598** .476** .434**
Sig. (2-tailed) .000 .000 .000
N 172 172 172 172
Promotion practice Pearson correlation .598** 1 .757** .587**
Sig. (2-tailed) .000 .000 .000
N 172 172 172 172
Reward and Pearson correlation .476** .757** 1 .713**
compensation Sig. (2-tailed) .000 .000 .000
practice N 172 172 172 172
Job satisfaction Pearson correlation .434** .587** .713** 1

31
 Sig. (2-tailed) .000 .000 .000
N 172 172 172 172
**.Correlation is significant at 0.01 levels (2-tailed).

Source: Own Survey Questionnaire, 2022

As shown in the table, training practices, promotion practices, and reward and compensation
practices all have a positive relationship with job satisfaction. According to the above table,
training practices have a moderately positive relationship with job satisfaction, with a correlation
value of 0.434; promotion practices have a moderately positive relationship with job satisfaction,
with a correlation value of 0.587. The other reward and compensation practices have a strong
positive relationship with a correlation value of 0.713. The three variables has a significant value
<0.01.

4.5. Result of Regression analysis

The effect of HRM activities on job satisfaction was investigated in this study using the SPSS
statistical method. This tool was used to conduct linear regression to ascertain the impact of
employees of Hibret Bank perceptions regarding HRM practices on their job satisfaction.

In a regression analysis, a decision must be taken on which independent variables should be

included in the regression equation and which should be excluded. Employees' perceptions of
HRM activities (independent variables) had a significant beneficial effect on their job
satisfaction, according to the regression results (dependent variable).

4.5.1. Test for Assumptions of Regression Analysis

Multiple Regressions is the study of a dependent variable y is related to two or more independent
variables. The general objective of the study is to investigate the effect of selected HRM
practices on job satisfaction at Hibret Bank S.C. To determine the relationship between the two
variables multiple regression analysis was conducted. It illustrates that how much each
independent variable has an effect or relationship with dependent variable. Before the result of
the regression analysis, the data was analyzed to check the basic assumptions such as multi-
collinearly test, normality test, homoscedasticity, and linearity test. Some of the test is illustrated
in the form of tables as follows:-

32
1. Multi- collinearly Test: may occur when two or more x-variables that are included
simultaneously in the model are strongly correlated with each other. It is tested by variance
inflation Factors (VIF).

Table 3.7 Multi- Collinearly Test

Model collinearly statistics

Tolerance VIF
Training practice 0.641 1.560
Promotion 0.354 2.823
practice
Reward and 0.426 2.345
compensation
practice
Source: Survey, 2022

For this study, multico-linearity was checked with tolerance and VIF statistics. A tolerance value
less than 0.1 almost certainly indicate a serious co linearity problem and also state that a VIF
value greater than 10 is also a concern. In this study, all of the independent variables were found
to have a tolerance of more than 0.1 and a VIF value of less than 10, which again indicates that
the assumption of Multi-co linearity is not violated.

2. Model Specification
The researcher used the multiple regression analysis by using dependent and independent
variables. In this study the estimation process was based on ordinary least square (OLS)
[i.e=a+bx]. For this purpose, Job satisfaction is considered as dependent variable and the selected
HRM practices are considered as independent variables and the following models are developed
to find out statistical significant among the two variables.

JS=β0+ β1 (TR) + β2 (PO) + β3 (RC) +e----model (1)

Where:-

β0 is constant

β1, β2, β3 are the regression coefficient

JS=Job satisfaction

TR=Training

33
PO=Promotion

RC= Reward and compensation

e=error term.

Table 3.8 Model Summery

Model R R square Adjusted R S t d error of

square the estimate
1. 0.766(a) 0.57 0.581 3.17881
Predictors (constant):- training, promotion and reward and compensation

Source: Survey 2022

As seen from the above table the value of adjusted R =0.581. This indicates that independent or
predictor variables jointly explained 58.1% variance in dependent variable, job satisfaction.

3. ANOVA

Table 3.9 ANOVA

Model Sum of Df Mean Square F Sig

Square
Regression 2757.832 3 919.277 90.97 .000(b)
Residual 1940.168 192 10.15
Total 4698.000 195

a. Dependent Variable: Job satisfaction

b. Predictors (constant): Training, Promotion and Reward and compensation Coefficients

The result in table (14.2) shows that the predictor variables training, promotion, and reward and
compensation were jointly significant predictors of job satisfaction (F (3,192=90.97). This
indicates that the selected HRM practices are key managerial tools to boost up employees job
satisfaction.

4. Normality Test

The figure below displays the frequency distribution of the standardized residual compared to
normal distribution. As can be understood from the figure, the data points are close to the
diagonal line confirming that there is normality.

34
 Figure 4.1 Normal Q-Q Plot of Employee job satisfactions
Source: Survey 2022

The linearity pattern was observed because the point was symmetrically distributed along a
diagonal line. As a result, the linearity was demonstrated by the straight line relationship between
the residuals and the projected dependent variable scores.

35
 Figure 4.2 Histogram for testing normality

Since the graph was nearly belly-shaped and symmetric about the mean, the distibution was
approximately.

4.5.2. Regression coefficients

The Beta value is used to measure the contribution of HRM practices (independent variables) on
employee job satisfaction (dependent variable), which can be explained using t values. The
coefficients table contained coefficients for the regression equation t-tests of significance for

36
each variable and collinearity statistics. The collinearity statistics in the table above showed that
measurements of multiple variables'(the selected HRM practices) relationships.

Table 3.10 regression coefficients

Variables Unstandardized coefficients Standardized

coefficients

B Std. Error Beta t Sig.

Constant 1.574 .142 11.114 .000
Training
practice .082 .051 .107 1.602 .111
Promotion
practice .032 .056 .052 .577 .565
Reward and
compensati .482 .063 .623 7.623 <0.01
on practice

This study was conducted to determine if various HRM practices can be impact on employee job
satisfaction. It was hypothesized that training, Promotion and reward and Compensation, will
positively predict the effect on job satisfaction. To test this hypothesis, multiple regression
analysis was used.

The beta value is a measure of how strongly independent variable influences the dependent
variable. Looking at the individual HRM practice contributions of the predictors, the result
shows that training (β=.107, t=1.602), promotion (β=.052, t=0.577), and reward and
compensation (β=.623, t=7.623) positively impact job satisfaction. This supports the predict
hypothesis. From the analysis of the coefficient result reward and compensation has a higher
impact on job satisfaction. Since the higher the beta value the greater the effect of the
independent variable on the dependent variable.

37
 CHAPTER FIVE

5. SEMMERY OF FINDING, CONCULTIONS AND

RECOMENDATION
5.1. Summary of the research study

This study was conducted to examine the relationship between selected HRM practices and
employees‘ job satisfaction. The selected HRM practices are training, promotion, and reward and
compensation practice. To address the stated objectives both descriptive and inferential statistics
were employed. The descriptive statistics explained in the form of frequency, percent, mean and
standard deviation. Descriptive results of training, promotion, reward and compensation and job
satisfaction had a grand mean score of (M=2.83, M=2.70, M=2.80, M= 3.24) respectively. The
inferential statistics was presented in the form of correlation and multiple Regression analysis.
The correlation coefficient of the selected HRM practices showed positive relationship with job
satisfaction (Training and practice r=.434, promotion practice r=.587, and reward and
compensation r=.713). Multiple Regression analysis of predictor variables were jointly
significant of job satisfaction (F (3,192=90.972, R2=0.587, p<0.05). And 58.1% of independent
variables jointly explained job satisfaction. The regression coefficient result shows that training
(β=.107, t=1.602), promotion (β=.052, t=0.577), and reward and compensation (β=.623, t=7.623)
positively impact job satisfaction. This findings support to accept the three hypotheses.

5.2. Conclusions

The purpose of this study was to examine the effect of the selected human resource practices on
employee job satisfaction in the case of Hibret Bank S.C. For any organization to be successful,
having satisfied employees has a paramount importance. Because organization will be efficient if
and only if their employees are satisfied and this can happen among others through having an
efficient HRM practice system that always considers and meets employee‘s expectations to get
best out of employees.

The findings show that the total result of perception of employees towards training, promotion
and reward and compensation practice is dissatisfied. Likewise the results revealed that
employees were not satisfied with the above mentioned there HRM practices.

38
The data obtained from the respondents indicating the extent of adoption of human resource
management practice are correlated with employee‘s job satisfaction. The overall correlation
analyses which were found to be significant showed that training practice and promotion practice
have moderate correlation with employee job satisfaction and reward and compensation practice
have strong correlation with employees job satisfaction. Furthermore, the regression result shows
training practice, promotion practice and reward and compensation practice have a significant
positive impact on job satisfaction of employees.

5.3. Recommendations

Training and development: the average mean of training and development M=2.83 was
inconclusive. As a result, decision makers should work to overcome the practice's limitations by
introducing stronger training and development policies and procedures. Because it is critical to
have stronger policies and practices in place in order to retain competent people, which in turn
improves organizational performance.

In regarding of promotion practice the over mean was 2.40 it indicates poor so, the bank should
revise and make adjustment it promotion practice in order to maintain employees at the bank and
to increase the extents of job satisfaction.

Compensation practice revealed the average mean was 2.80 this indicates which is below the
agreement level Decision-makers should make every effort to enhance reward and compensation
practices in the future, both in terms of financial and non-financial categories. Because
compensation has a significant impact on job satisfaction

Job Satisfaction: This received a mean score of 3.24 with a level of indeterminate. This finding
shows that employees are dissatisfied with their jobs to some level As a result, company
decision-makers should develop and adopt stronger HRM strategies to improve job satisfaction
Because highly pleased personnel lead to the achievement of the organization's short and long
term goals

Finally, to reduce turnover, absenteeism, tardiness, and employee withdrawal, the organization
should develop better HRM policies and practices. As a result, employees are likely to be
satisfied, and their productivity is likely to be high. In general, top-level management should

39
strive to implement a more comprehensive set of HRM practices in order to motivate and retain
competent people. Employee satisfaction and competence are a source of competitive advantage.

5.4. Research limitation and Areas of Future Research

5.4.1. Limitation of the study

The following are some of the study's limitations:

 The sample size may not fully reflect the actual population.
 One of the study's primary limitations is respondents' unwillingness to participate.
 The study might be influenced by the respondents' biases and preconceptions

 The study might be subjected to the bias and prejudices of the respondents. Hence 100%
accuracy can‘t be assured
 The research is confined to head office employees and managers only, so the result
might be indicative it might not be conclusive

5.4.2 Suggestions for future research

The study's sample is primarily focused of employee from the Hibret bank head offices. As a
result, future researchers can collect a sample of employees and managers from city and outline
or regional branch locations. Furthermore, the study aims to investigate the impact of certain
HRM practices on employee job satisfaction, such as training, promotion, and reward and
compensation. Potential researchers can investigate whether HRM methods have an impact on
employee job satisfaction by looking into it deeper.

40
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44
 RESEARCH QUESTIONNAIRE
Addis Ababa University School of Commerce

Post Graduate Studies Department in Human Resources Management

Dear respondents;

This questionnaire is prepared for the partial fulfillment of Master of Arts Degree in Human

Resource Management. The thesis title is “The Effect of, selected HRM practices on employees’

job satisfaction”. The purpose of this questionnaire is aimed at collecting your views and opinions

about the above variables. The motivation you provide will only

be used for the purpose of the research and will strictly be kept confidential. Your genuine

response for every question is very essential and has an impact on the findings of the research.

Contact Address

If you have any query, please do not hesitate to contact me and I am available as per your
convenience at (Tele; 09-13-13-17-71 or e-mail; [email protected].)

There is no need to write your name.

Best Regards,
Please tick your answer with (√)
Part 1: Demographic Variables
1: Gender: _____Female _____Male
2: Age: ____25 years or less ____26 to 35 years____36 to 45 years ____ 46 years and above
3: Position: ___Strategic level ____Tactical Level ___ Operational Level ____ Non managerial
4: Service Year ____<5 years ____>6 but < 10 ____>11 but <20 ____20 years and above
5: Educational Level ____Diploma ____Degree ____Masters ____PH.D

Part 2: Human Resource Management (HRM) Dimensions:

Please read the following items and respond by indicating your degree of agreement on each statement on
the five point Likert scale; where 1= strongly disagree 2= Disagree 3= Neutral 4= Agree 5= strongly
agree.

45
No Training Practice 1 2 3 4 5
1 I believe that I have training opportunities to
learn and grow
2 I consider that available training match with my
job
3 I feel I get the chance to develop new and better
ways of doing a job
4 I am happy with the way my boss trains his/her
employees
5 I feel that sufficient time and money are
allocated for training
6 I am happy that training currently provided is
leading to satisfactory results
7 I feel that training plans are developed and
monitored for all employees and it enhances job
satisfaction of employees
8 I feel that employees receive training to
perform multiple tasks
Promotion Practice 1 2 3 4 5
1 I feel that I have the chances for advancement
on my job
2 I am happy that the way promotions are given
to employees
3 I feel that there are good promotion policies and
procedures at this Bank

4 I am happy with the advancement opportunities

of the bank
5 The company do have clear promotion
strategies
Reward and Compensation Practice 1 2 3 4 5
1 In this bank, employees get incentives such as
Promotions, awards, bonuses, etc.
2 I feel my salary is fair for my tasks, duties and
responsibilities of my job
3 The banks reward system really recognizes the
people who contribute the most to the bank‘s
efficiency and effectiveness
4 I feel that the incentive system encourages me to
strongly pursue the bank objectives
5 The bank provide performance based compensation
and I am happy with the system
6 I believe that the bank provide equitable external
salary
7 I am happy with the assistance given by the bank in
terms of money, leave and subscriptions

46
Job Satisfaction

1 2 3 4 5
1 The job requires me to be creative.
2 The job allows me to make my own decisions
about how to schedule my work.
3 I always feel comfortable in doing my work
4 The company do have good technological tools
5 The challenges of my job make me more
dedicated to work.
6 I am paid fair amount for the work I do
7 Everyone is treated fairly and with respect
8 I do get acknowledgment by bosses and
colleagues for my skills and competencies
9 I like the people I work with
10 My nearest superior respects the co-worker‗s
opinions.
11 My supervisor is competent in doing his/her
job.
12 I am motivated to working for this organization
because I do have opportunity to continually
advance to more senior positions
13 I am motivated to working for this organization
because I do have secure, permanent and
reliable job position.
14 I am motivated to working for this organization
because I do have opportunities to acquire new
knowledge and skills, reach personal potential
15 The rules and procedures of the organization
support doing a good job.

47
Annex Different tests

48