THE IMPACT OF HUMAN RESOURCE

MANAGEMENT ON ORGANIZATIONAL
PERFORMANCE
A Case Study of Private Banks in T.R.N.C
By
Ugonna I. AGUTA
Supervisor
Assoc. Prof. Dr. Hasret BALCIOGLU

Table of Content
Introduction
Literature Review
Methodology
Analysis
Recommendation and Conclusion
Limitation
References

INTRODUCTION
This research tried to gain an insight on human
resource management practices and its outcomes in
Turkish Republic of North Cyprus TRNC private sector
banks and also explores the human resource
management HRM practices on organizational
performance (private banks in TRNC)

Problem of the Study

The study was focused on HRM practices and it

outcomes as well as the impact of HRM practices on

performance of private sector banks in North Cyprus

The research objectives are as follow

What are the outcomes of HRM practices
of banks in North Cyprus?
How do HRM practices impact on
employee retention, employee satisfaction
and employee commitment?
How do HRM practices impact on
performance of banks in North Cyprus?

Significance of the Study

This study addresses this margin in the literature in

relation to banking industry in TRNC

The research will attempt to provide solution to, what

are the HRM outcomes of the HRM practices of private

sector banks in TRNC?
How do HRM practices impact employee satisfaction,

commitment and retention?

How do HRM practices impact on performance

of private sector banks in TRNC?
what HRM practices are positively related to HR
outcome? and which of these HRM practices are
absolutely related with bank performance.
The findings of this research will be useful to
managers to study the success of HR practices
which are presently implemented by them.
The outcomes of this research can be used to
enhance the performance of private sector banks
in TRNC.

Literature Review
In order to present the theoretical and methodological
underlying principle for this research, this chapter
looks at the literature on
HRM practices and their outcomes.
The effect of HRM practices on organizational
performance
the link between HRM practices, their outcomes and
organizational performance.

Human Resource (HR) and Human Resource

Management (HRM)
In these difficult business times, which has been

brought about by changes in global price

competitiveness, change in technology, changes in the
labor laws, and also the composition of the workforce
has become a challenge to utilize properly by
managers in other to have a competitive advantage.

I have tried to find out how Human resources help the

organization to attain its strategic plans.

Literature cont

Human resource management is defined as a

strategic and a consistent manner to which an
organization manage its most valued human
assets which are individually and as a group
work together for the attainment of its goal.
HRM is a planned and coordinated approach
in which a companys most valued assets are
being managed-these are the people who are
working in the organization, collectively or as
individuals to achieve its set goals. (Armstrong,
(2006: p 3))

Literature cont

HRM involves developing of a persons abilities

and attitudes in a way that allows the individual
to grow and make contributions to the interest of
the organization (Lee, Wu and Lee, (2010: 21, pp
1351-1372)).

The Strategic Human Resource Management

(SHRM) involves,
A combination of a bundle of HRM practices
and policies that when put together bring about
superior employee performance.

Literature cont

HRM practices are aimed at meeting two

set of goals : to improve the performance of
the workers and also improve the overall
organizational effectiveness. (Storey, (1995: p
16)),
The making and carrying out of HR
policies and practices.
It brings about employee competence and
the required behaviors needed by the
company to meet its strategic aims.

Literature Cont

HRM operates through the use of the HR

system that integrates the following
HR philosophy,
HR practices,
HR strategies,
HR policies,
HR processes, and
HR programs
Aspects of Integration

The integration of HR policies and practices

for them to complement one another and to
aid the achievement of strategic goal.

Literature cont

Creation of the awareness of the

importance of HRM to the line managers
To make the workers get in line with the
business in other to make them more
involved or show much interest in the
organization.

HUMAN RESOURCES OUTCOMES

Job Satisfaction
Organizational Commitment
Motivation

Job Satisfaction
The innermost sense of fulfillment a person get
and the joy they have knowing fully well that a
particular job is being accomplished
The attitude people show and the feeling they
have towards their work
A positive and a favorable behavior towards
work
Job satisfaction brings about a sense of
fulfillment and security to the employee

Job satisfaction cont

Due to these facts, the commitment level of

employee will be increased, absenteeism will
reduce and the turnover rate will decrease
Work environment like union membership,
size of the workplaces and the effect of stable
and parttime jobs add to the job satisfaction
of the staff.
Job satisfaction is also influenced by the
blend of job requirements with other roles
such as family roles

Organizational Commitment
Ability of an employee to identify with an
organization
Showing a strong desire to continually be a
part of the organization

Have a strong belief in and accept the goals

and the values of the organization
Display a readiness to put in a great amount
of effort on behalf of the organization

Organizational commitment cont

Workers will be more creative if allowed to

exhibit and make decisions of their own.
Management should encourage employees to
contribute and help them to attain satisfaction in
their job
Job commitment brings about upright and self
direction, less absenteeism, normal supervision
and a dedicated effort.
Commitment is related to loyalty and intension
to stay

Motivation
A psychological driving force that tends to
compel an action or reinforce it towards an action.
It bring about minimization of physical pain,
increased pleasure and a basic impulse to optimize
well being
Well motivated workers will give more to the
organization
Workers who are well motivated are more
productive at workplace.
When employees are motivated, they help the
organization to survive.
This is the most complex aspect of management

Human Resource Management Practices

Here are some of the HRM practices used in other
to make an impact in organizational performance.
Training and Development
Training is the systematic and planned
instruction activities that are used to promote
learning
Development is the unfolding procedures
which allows employees to move from one level of
understanding and capability to an advanced
state whereby a higher level of skills, knowledge
and competences are required.

Training & dev cont

Training and employee development form the

core components in most formation of HRM
Training increases the efficiency and the
effectiveness of both workers and the employer
Training and development should be related to
the employees area of job description.
Organization must only indulge its employees
on training activities which are going to
accomplish organizational objectives, , such as
more effective ways of production, improvement
of the quality of products and services, or the
reduction in the cost of operation

Recruitment and Selection

Recruitment Is the process of attracting

prospective employees and getting them to
apply for a job opportunity in the
organization i.e. hiring the right kind of
candidates on the right job.
Selection is the means where by individuals
are picked who have got the adequate
qualifications to fill an employment
opportunity in an organization.

Recruit and select cont

Objectives of a Well Planned Recruitment

Process

A good recruitment and selection strategy brings

about an improvement in the organizations
performance.
It the upgrades the quality and productivity of

the organization.
Recruitment of prospective employees with
the potentials and capabilities for growth.
The ability to recruit candidates with
qualifications that will bring about success.

Keeping the turnover rate at a minimum level.

Recruit and Select cont

The removal of guesswork during the selection

process, and reduction of lost time because of
open position.
Specification of the competences and
behavioral characteristics required of employees.

Compensation
All manner of pay which is due to the
employee as an outcome of their employment.
Creation of strategies and policies to reward
people justly and equally.
Well compensated workers will perform
better
All inclusive compensation package is
provided to attract, retain and motivate
employees.
It also helps to increase the level of
commitment of an employee to the
organization.

Performance Evaluation
Provides the organization with all employee
accurate information about their level of job
performance.
Shows the efficiency and effectiveness of
each member staff.
It is useful to the employees for them to know
their strength and weaknesses.
To know the gap in knowledge between the
workers, their job functions and technology to
carry these duties out
Determine employee rewards used in HR
planning and recruitment and selection.

Promotional Practices
A Shift of position from a job position of higher
significance and compensation to a higher one.
More responsibility and grade level and an
improved compensation package.
Leads to higher organizational performance and
commitment of such an employee.
A way of rewarding exceptional performance
Filling of vacant positions in the company with
employees who are loyal and well tested.
The opportunities to opt career within an
organization

Promoted employees feel more satisfied and

motivated.

Research Methodology
The research was carried out through a
quantitative survey method.
Primary data was gotten by the use of a
structured questionnaire.
. The form of these questions may be opened or
closed ended (Kothari, (2004: p 101)).
The respondents were approached beforehand to
seek their willingness to participate in the
research.
The research covers two private commercial
banks in TRNC. This was influenced by the reason
in which the survey was conducted and the budget
that was made for it. (SPSS, (2008: p 5))

The sample includes all managerial and nonmanagerial staff from all the departments and
branches of the two selected banks.
In other words purposive sampling was used to
determine who the respondents were. (SPSS,
(2008: p 5))
To determine the sample size, a list of the eligible
respondents was gotten from the various HR
departments of the banks. (Khan,(2010:24, pp 157158)).
A total number of 335 questionnaires were
distributed (Credit West bank 213 and Turkish bank
122) a total number of 214 was valid.

The questionnaire was developed through a

method adopted from SPSS survey tips.
Only closed ended questions were asked.
21 questions were adopted from my literature
review for the purpose of this study
A five point Likert scale was used.
The last option being a neutral one to give
respondents with divided opinion the room to also
have a say rather than skip such question (SPSS,
(2008: p 17)).
The questionnaire was organized into four
sections.

Section A was on demography, B was on

perception of HR Practices such as (staffing,
performance appraisal, training, social benefit and
compensation),
Section 3 and 4 respectively where on HR
outcome (job satisfaction and organizational
commitment).
The questionnaire was developed in English and
translated to Turkish by a lecturer in the language
school of Cyprus International University.

Presentation and Analysis of Data

Data was analyzed with the use of SPSS
Frequency was used in the analysis of
demographic data.

The Sample includes 214 respondents who are

working in two commercial banks in different
departments and branches in TRNC

Figure 1 Marital Status

n=214

Source July, 2013 by Researcher

n=214 Source July, 2013 by Researcher

Figure 2. Gender distribution

n=214 Source July, 2013 by Researcher

Figure 3 Designation

n=214

Source July, 2013 by Researcher

Figure 4 Number of years put in

n=214 Source July, 2013 by Researcher

Figure 5 Age of Respondents

n=214 Source July, 2013 by Researcher

Figure 6 Qualification of Respondents

n=214 Source July, 2013 by Researcher

 The rest of the data was analyzed using simple linear

regression and was also used in the generation of

hypothesis from data gotten from the respondents.
The formula for regression is as follows
Y= a + bx
where
Y= unknown dependent variable
x= known independent variable
a= y intercept
b= slope of the line

 b > 0 Positive relationship between the two variables,

meaning we can use independent variable (x) to

predict the dependent variable (y) for significant
correlation.
b < 0 Negative relationship between the variables, null
hypothesis would be accepted no significant
relationship
b = 0 no prediction prevail, the value of variable (x)
would be the same with variable (y).
The regression analysis was performed using SPSS

package with confidence interval level of 95% to

arrival at a meaningful conclusion and the results are
explained below:

Table 7
Descriptive

Statistics

for

Regression

to

Determine

Significant

Correlation Between Variable (x) Number of Years Put in and (y) My

Work Conditions are Good

Mean

Std. Deviation

Number of Years Put in

3.07

1.111

214

My Work Conditions are Good

2.00

1.066

214

n=214

Source July, 2013 by Researcher

Table 8
Model Summary for Regression to Determine Significant Correlation
Between Variable (x) Number of Years Put in and (y) My Work Conditions
are Good
Model

Adjusted

Square R Square

Std. Error Change Statistics

of

the

Estimate

.135a .018

.014

n=214

1.104

Square F

Change

Change

.018

3.921

Source July, 2013 by Researcher

df1

df2

Sig.

Change

212

.049

Table 9
Coefficient Summary to Determine the Significant Correlation Between
Variable (x) Number of Years Put in and (y) My Work Conditions are Good
Model

95.0% Confidence Interval for B

Unstandardized
Coefficients

n=214

Std. Error

(Constant)

3.346

.161

My Work Conditions Are

Good

-.140

.071

Source July, 2013 by Researcher

The result of table 7, 8 and 9 revealed that the null

hypothesis is accepted because the value of b (slope of
the line) is negative, there is no significant correlation
between the number of years put in and my work
conditions are good

Conclusion and Recommendations

The research found out that an ample of
practices were used by banks in TRNC.
supervision and leadership in the banks should
be more cordial.
The adoption of HPWS is positively related to
employee satisfaction, commitment, retention
and organizational performance in
general.(Henderson, (2010: p 27))
Bad HR practices defiantly leads to an increase
turnover and absenteeism.
Bridge the gap in literature in relations to
private sector banking in TRNC

The study will help bank managers to know

which HR practices to adopt and also let them
know what HR practice bring about HR

outcome
Limitations
Due to limited information granted to me I was
unable to get data relating to bank performance
Language and transportation barriers.
Which HRM practices are positively affecting
the HRM outcome.

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THANK YOU