WOLKITE UNIVERSITY COLLEGE OF SOCIAL SCIENCE DEPARTMENT OF GOVERNANCE AND DEVELOPMENT STUDIES EFFECTS OF HUMAN RESOURCE MANAGEMENT PRACTICES ON EMPLOYEE’S PERFORMANCE: THE CASE OF ENORE ENERE AND MEGER WOREDA PUBLIC SECTORS IN GURAGE ZONE BY: KURABACHEW FIKADU SADORO ADVISORS TAMRU YIHUN (PhD) & GIRMA SENBETE (MBA) A THESIS SUBMITTED TO DEPARTMENT OF GOVERNANCE AND DEVELOPMENT STUDIES IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTER OF ART IN DEVELOPMENT MANAGEMENT WOLKITE, ETHIOPIA JANUARY, 2023 i DECLARATION I, the undersigned declare that this research is my original work, has not been presented for a degree in any other university and that all sources of materials used for this thesis has been duly acknowledged. Candidate‘s Name: Kurabachew Fikadu Date:_______ Signature: ____________ This thesis has been submitted for examination with my approval as thesis advisor. Advisor‘s Name: Tamru Yihun (PhD) Date: ____________Signature:__________________ Co-advisor‘s Name: Girma Senbete (MBA) Date:_____________ Signiture:_________________ ii WOLKITE UNIVERSITY SCHOOL OF GRADUATE STUDIES DEPARTMENT OF GOVERNANCE AND DEVELOPMENT STUDIES COLLEGE OF SOCIAL SCIENCE AND HUMANITIES EXAMINERS’ APPROVAL SHEET We, the undersigned, members of the Board of Examiners of the final open defense by Kurabachew Fikadu Sadoro, have read and evaluated her thesis entitled “Effect Of Selected Human Resource Management Practice On Employees Performance: A Case of Enore Enere And Meger Woreda Public Sectors in Gurage Zone‖, and examined the candidate. This is, therefore, to certify that the thesis has been accepted in partial fulfillment of the requirements for the award of Master of Art in Development Management _________________________ ___________________ _________________ Name of the Chairperson Signature Date _________________________ ___________________ ___________________ Name of Internal Examiner Signature Date _________________________ ___________________ ___________________ Name of External examiner Signature Date _________________________ ___________________ ___________________ SGS Approval Signature Date Final approval and acceptance of the thesis is contingent upon the submission of the final copy of the thesis to the School of Graduate Studies (SGS) through the School Graduate Committee (DGC/SGC) of the candidate‘s department. Stamp of SGS Date: ______________ iii ACKNOWLEDGEMENT First of all, thanks to God, the Lord of existence and the most Merciful. Secondly, a sincere thanks and appreciation goes to my advisor, Tamru Yihun (PhD) and Co-advisor Mr. Girma S. for their valuable guidance and in depth understanding that they extended to me during the entire work of this thesis. I am highly thankful to my office for their unreserved support. I also take this opportunity to record my sincere thanks to my beloved family for their endless patience, encouragement, and Love has contributed a lot for the completion of this proposal. Finally, I would extend my sense of thanks to all who, directly or indirectly, have lent their helping hand in this work. iv TABLE OF CONTENTS Contents Page DECLARATION ................................................................................................................................ i COLLEGE OF SOCIAL SCIENCE AND HUMANITIES .............................................................. ii EXAMINERS‘ APPROVAL SHEET ............................................................................................... ii ACKNOWLEDGEMENT ................................................................................................................ iii TABLEOFCONTENTS .................................................................................................................... iv LIST OF TABLES ........................................................................................................................... vii LIST OF FIGURES ........................................................................................................................ viii LIST OF ACRONYMS .................................................................................................................... ix ABSTRACT ....................................................................................................................................... x CHAPTER ONE ................................................................................................................................ 1 INTRODUCTION ............................................................................................................................. 1 1.1. Background of the study .......................................................................................................... 1 1.2. Statement of the Problem ......................................................................................................... 3 1.3. Objectives of the Study ............................................................................................................ 5 1.3.1 General Objective .................................................................................................................. 5 1.3.2 Specific Objectives ................................................................................................................ 5 1.4. Research Hypothesis ................................................................................................................ 5 1.5. Significance of the Study ......................................................................................................... 6 1.6. Scope of the Study ................................................................................................................... 6 1.7. Limitation of the Study ............................................................................................................ 7 1.8 Definition of Key Terms ........................................................................................................... 7 1.9. Organization of the Study ........................................................................................................ 8 CHAPTER TWO ..................................................................................................................................... 9 REVIEW OF RELATED LITERATURE ............................................................................................... 9 2.1. Theoretical Review .................................................................................................................. 9 2.1.1 Concept of Employees Performance ...................................................................................... 9 2.1.2. Definition and Concept of Human Resource Management ................................................ 10 2.1.3. Objectives and Role of Human Resource Management Practice ....................................... 11 2.2 Human Resource Management Models .................................................................................. 11 v 2.2.1. Guest Model ........................................................................................................................ 11 2.2.2. Warwick Model .................................................................................................................. 11 2.2.3. Harvard Model .................................................................................................................... 12 2.2.4. Michigan Model .................................................................................................................. 12 2.3 Dimensions of Human Resource Management....................................................................... 12 2.3.1 Hiring 12 2.3.2 Training 13 2.3.3 Career Opportunity .............................................................................................................. 13 2.3.4 Performance Appraisal......................................................................................................... 14 2.3.5 Compensation ...................................................................................................................... 15 2.4. Empirical Literature ............................................................................................................... 15 2.5. Conceptual Framework .......................................................................................................... 18 CHAPTER THREE ........................................................................................................................... 19 RESEARCH METHODOLOGY ...................................................................................................... 19 3.1 Description of Study Area ...................................................................................................... 19 3.2 Research Approach ................................................................................................................. 19 3.3 Research Design...................................................................................................................... 19 3.4. Target Population, Sample Size and Sampling Techniques .................................................. 20 3.4.1 Target Population ................................................................................................................. 20 3.4.2 Sampling Technique ............................................................................................................ 20 3.4.3 Sample size .......................................................................................................................... 21 3.5 Data Type and Sources ........................................................................................................... 22 3.5.1 Type of Data ........................................................................................................................ 22 3.5.2 Source of Data...................................................................................................................... 22 3.6 Data Collection Instruments ................................................................................................... 23 3.6.2 Interview 23 3.7 Reliability and Validity ........................................................................................................... 24 3.8 Method of Data Presentation and Analysis ............................................................................. 25 3.8.1 Model specification .............................................................................................................. 25 3.11 Ethical Consideration ............................................................................................................ 26 CHAPTRE FOUR ............................................................................................................................. 27 vi RESULT AND DISCUSSION .......................................................................................................... 27 4.1 Response Rate ......................................................................................................................... 27 4.2 Demographic Characteristics of Respondents ........................................................................ 27 4.3 Descriptive Analysis of study variables .................................................................................. 29 4.3.1 Hiring Practice ..................................................................................................................... 30 4.3.2 Training Practice .................................................................................................................. 31 4.3.3 Career Opportunity Practice ................................................................................................ 33 4.3.4 Performance Appraisal Practice ........................................................................................... 34 4.3.5 Compensation Practice ......................................................................................................... 35 4.3.6 Employee‘s Performance in the Study Woreda ................................................................... 37 4.4 Inferential Analysis ................................................................................................................. 38 4.4.1 Correlation Analysis ............................................................................................................ 38 4.4.2 Regression Analysis ............................................................................................................. 40 4.4.3 Testing Assumptions of Multiple Regression Model .......................................................... 40 4.4.2.2 Result of Regression Analysis .......................................................................................... 43 4.4.2.3 Hypothesis testing ............................................................................................................. 47 CHAPTER FIVE ................................................................................................................................ 50 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS....................................................... 50 5.1 Summary of Major Findings ................................................................................................... 50 5.2 Conclusions ........................................................................................................................... 51 5.3 Recommendation .................................................................................................................... 52 5.4 Future Research Direction ...................................................................................................... 53 REFERENCES ..................................................................................................................................... 54 APPENDEX-I: QUESTIONNIARIE ...................................................................................................... 1 APPENDEX-II: INTERVIEW GUIDE ................................................................................................... 6 vii LIST OF TABLES Table Page Table 3.1 Number of employees and proportion of samples from each sector …………………24 Table 3.2 Reliability Test…………………………...………...……………………….…………26 Table 4.1 Response rat……………………………………………………………………………....27 Table 4.2 Background of respondents……..……….………………..…………………………..28 Table: 4.3 Hiring……………………………………………………………………………….....30 Table 4.4: Training………………………………………………………………………………..33 Table 4.5: Career opportunity……………...…………….……………………………………….34 Table 4.6: Performance appraisal…………………………...…....…………………………….…35 Table 4.7: Compensation……………………….………………...……………………………….36 Table 4.8: Employee performance………………………….…………………………………….37 Table 4.9: Pearson Correlation Analysis……….......………..………………………..……….….39 Table 4.10: Multi-collinearity test…...............................................................................................40 Table 4.11: Model summary……………………………………………..……………………43 Table 4.12: Overall model fit of the regression model (ANOVA)………….…………………....44 Table 4.13: Regression coefficients……………………………………………………….……..46 Table 4.14: Summary of tested hypothesis………………………………………………………50 viii LIST OF FIGURES Figures page Figure: 2.1 Conceptual framework of the study…………...…………………………………….20 Figure: 4.2: Linearity test……………………………………...…………………………………41 Figure: 4.1: Normality test……………………………………………………...………………..42 Figure 4.3: Homoscedasticity test………..…………………………………..…………………..43 ix LIST OF ACRONYMS SNNPR South Nations Nationality People Republic HR Human Resource HRM Human Resource Management PA Performance appraisal SPSS Statistical Package for Social Sciences VIF Variance Inflation Factor x ABSTRACT The purpose of this study was to examine the effect of human resource management Practices on employees’ performance in the case of Enore Enereand Meger Woreda Public Sectors in Gurage Zone. Accordingly, the design that was used to conduct this research was descriptive and explanatory research design with mixed research approach. The population of the study consists of all permanent employees of Enore Enere and Meger Woreda Public Sectors. The required data were collected from sample employees and leaders taken from the sectors. The researcher employed a stratified random sampling technique to draw representative respondents of 292 employees for survey and purposive (judgmental) sampling technique was used for selecting representative sample of five public sector leaders for interview. Both descriptive and inferential analyses were used to see the extent of implementation of study variables and relationship & effect of independent variables on dependent variable respectively. The descriptive analysis results showed that numbers of employee were not fully satisfied on level of practice of hiring, training, career opportunity, performance appraisal and compensation in the study area. Also, employees are not fully performing their tasks. The result of regression analysis indicated that hiring, training, career opportunity, performance appraisal and compensation practices had significant effect on employee performance in the study area at 5% significant level. Furthermore, the value of R 2 showed that 70.3% of variations in employee performance were explained by HRM practices. Thus, it is recommended that the public sectors should able to improve the employee’s performance by improving practice of HRM dimensions namely hiring, training, career opportunity, performance appraisal and compensation. Key words: Employee Performance, Human Resource Practice, Reward Management, Performance Appraisal, Training, Compensation 1 CHAPTER ONE INTRODUCTION 1.1. Background of the study Employees‘ performance is affected by different factors. One of the influential factors that affect employees‘ performance is human resource management practice.According to Singh and Biniam (2016) human resource management is the policies, practices, and systems that influence employees‘ behavior, attitudes, and performance many companies refer to HRM as involving ―people practices‖. There are several important HRM practices that should support the organization‘s business strategy: analyzing work and designing jobs, determining how many employees with specific knowledge and skills are needed (human resource planning), attracting potential employees (recruiting), choosing employees (selection), teaching employees how to perform their jobs, and preparing them for the future (training and development), evaluating their performance (performance management), rewarding employees (compensation), and creating a positive work environment (employee relations). An organization performs best when all of these practices are managed well. At companies with effective HRM, employees and customers tend to be more satisfied, and the companies tend to be more innovative, have greater productivity, and develop a more favorable reputation in the community. In the last ten years, organizations especially in Africa have been hit with the undisputable fact that the creation of competitive advantage lies in people. However, little attention was paid to human resource management issues and its impact on employee performance. The emphasis on traditions and socio-cultural issues injected an element of subjectivity in personnel manager functions such as recruitment and selection, performance appraisal, promotion, demotion, and compensation. In today‘s competitive and rapidly changing business world, organizations especially in the service industry need to ensure maximum utilization of their resources to their own advantage; a necessity for organizational survival (Quansah, 2013). The research studied by Tarekegn (2013) on ‗the history of human resource management practices in Ethiopia‘ value mentioning. The author underscores the importance of human resource management practices in developing country context with particular focus on Ethiopia. As the author confirmed, the recent growth and expansion of public and private organizations added to the flow of multinational companies in to the country has triggered the need for 2 strategic human resources management practices. The researcher described that strategic human resource management has unmatched importance to transform the overall socio-economic situation of Ethiopia. The practices are designed and implemented in such a way that human capital plays a significant role in achieving the goals of the organization. The existing literature on the area of management practice shows that there is a strong positive relationship between HRM practices and employee performance (Sels et al., 2019).The proper use of HRM practices positively influences the level of employer and employee commitment. HRM practices such as training and development, performance appraisal, and compensation encourage the employees to work better in order to increase the organizational performance (Purcell &Kinnie, 2020). According to Inyang&Akaegbu (2014), the public sector is an institution of government and is established mostly to provide goods and required services to the general public in efficient and effective manner. Furthermore, in modern governance, the public service is regarded as the nerve center of the government administration (Olubunmi &Adesopo, 2017). Study by Bason (2018), found the public sector departments and firms have vital role in economic, development, political, social welfare of society. Therefore, public servants (employees) are expected to perform competently in providing these services to the society. Enore Enere and Megerworeda is one of emerging woreda in Gurage Zone which was established in 2018 G.C and consists of 27 public sectors. This study investigated the effect of HRM practice on employee performance of EnoreEnere and MegerWoreda public sectors. In fact, one of the recurrently observed problems of the woreda public sectors refers to HRM practices and employees‘ performance. Specifically, the most relevant HRM practices of the woreda public sectors selected for the study are hiring, training, career opportunity, performance appraisal and compensation, because these five HRM practices in the study area seem ineffective and inefficient. As a result, insignificant changes are observed in the actions of the employees. However, effective implementation of those HRM practices significantly contributes to organizational results is that the HR practices affects the employees in a positive matter, by increasing job satisfaction and motivation, which in turn affects the operational results, such as the quantity and quality of the products and services, which again will have positive effect on the financial and market performance of an organization. Therefore, this study was investigated the effect of selected HRM practice namely hiring, 3 training, career opportunity, performance appraisal and compensation on employee performance in EnoreEnere and Megerworeda public sectors. 1.2. Statement of the Problem To ensure effective organizational sustainability, the public sectors must be aware of the employee‘s knowledge, skill, ability and interest to perform their task well. This is basically achievable through efficient human resource management. Human resource management has become more important to general management because of its role in enhancing performance, securing and developing the talents of employees and enhancing cooperation between them to support organizational development (Elarabi & Johari, 2014). However, the public sectors are branded by different human resource related problems like higher employee turnover; reduced employees‘ desire to learn and apply new skills; decrease employees‘ productivity; and low morale (Davis, 2005). Same is true in Enore Enere and Megerworeda public sectors and such problems are often considered as the manifestation of HRM failure when the capacity building practices are failed to accommodate both the organizational goals and employees‘ needs as well. As, the observations of conducted by the researcher, Enore Enere and Megerworeda public sectors do not apply manuals and procedures of hiring, training, career opportunity, performance appraisal and compensation properly. The improper implementation of these manuals and procedures may result inconsistent practices and unfair treatment of employees. The observations the researcher in the sectors, staff members are not satisfied with their wellbeing in terms of compensation i.e. wages and benefits. There is no sufficient salary and benefit as well as poor career opportunity in the sectors. However, Emebet (2017) point out that, providing well-defined and result-oriented reward and compensation system as well as creating conducive work environment in the sector has substantial influence on motivating employees, resulted in enhancing their commitment in the long run. The other problem is that promotion is not based on performance, lack of transparency, weak follow up, and loose linkage between performance and reward are the problems seen in human resources management practices in the sectors. Duetothesemotives employee lateness and absenteeism is high. According to Woreda‘s 2021 annual report on average 10% of employees were late and absent for work per month. Also, the annual report indicated a large 4 number of employees have been moved to other private and non-governmental organization (i.e rate of employees‘ turnover was 2.7%). To the contrary, Noe (2008) emphasized that it is extremely crucial for the public sector to retain their valued employees and also evident that significant costs would incur in hiring, training, developing and retaining new employees. Further, what makes the situations worse is hiring is not effectively implemented and most of employees have no written job descriptions. SNNPRS performance appraisal policy and procedure stated that a person who got a score of 95% and above performance evaluation result in a year has to receive a recognition letter and financial benefit, but still not implemented in practice and employees in the discussion explain which tends to the staff dissatisfied. These will impact on individual performance. Moreover, the capability development practice of study sectors is insufficient. According to the 2021 annual report of the sectors indicated that on average of only 12% of employees got access to training for two terms yet training needs of employees are not properly identified and itssectorsHR directorate do not evaluate continuously the outcomes of the training through employee performance after trained them up. On the contrary Surbhi (2015) evaluation of training program is the most critical part of the training process and the HR manager should evaluate the program by focusing on the results achieved after training Many studies like Hameed etal.(2014) and Oluigbo and Anyiam (2014), as well as Quartey and Esther (2013) supported a positive relationship between perceived compensation practice and employee performance. In contrast, the study of Bowra (2012), did not found relationship between perceived compensation practice and employee performance. The study of Khalid et al. (2014) provided empirical evidence on the positive relationship between career opportunity and employee performance. The study also argued that the career planning practice provided by organizations inspires the individual employees in the organization to excel in performance. Study by Falolaet.al. (2014) and Issahakuet.al (2014) provided evidences that training &development positively influence employee performance. Fair performance appraisal is a critical tool for the organization in order to get the best of its employees‘ performance (Dello Russo, Miraglia & Borgogni, 2017) and the use of performance appraisal is well-known and current need (Pichleretal, 2016). 5 However, there was no study made on addressing effect of human resource management practice on employee performance in EnoreEnere and Megerworeda public sectors in Gurage Zone. So, there is a need for further research in the area of effect of selected human resource management practice on employee performance in public sector to fill the knowledge gap about public sector practices. Though, some factors or limitations in HRM practice are mentioned above as reasons for factors affecting employee performance in Enore Enere and Megerworeda public sectors, it was not supported by comprehensive and sufficient data. There is evidence of gaps that discusses the effect of human resource management practice on employee performance. Therefore, this study expected to fill these gaps. From the above studies (listed in above) none of them investigated the effect of hiring, training, career opportunity, performance appraisal and compensation as a model on employee performance in the public sector. Hence, this study expected to fill the existing limitation of empirical research gap through conducting the study using this model. Taking these problems in to consideration, this study was investigated the effect of HRM practice on employee performance with particular focus on hiring, training, career opportunity, performance appraisal and compensations a case of Enore Enere and Meger Woreda public sectors in Gurage Zone. 1.3. Objectives of the Study 1.3.1 General Objective The general objective of this study is to investigate the effects of human resource management practice on employee performance a case of EnoreEnere and MegerWoreda public sectorsin Gurage Zone. 1.3.2 Specific Objectives The specific objectives of the study are as follows:  To examine the effect of hiring on employee performance in the study area  To examine the effect of training on employee performance in the study area  To analyze the effect of career opportunity on employee performance in the study area  To analyze the effect of performance appraisal on employee performance in the study area  To explore the effect of compensation on employee performance in the study area 1.4. Research Hypothesis Based on the research problems the researcher develops the following null (Ho) hypotheses 6 Ho1: Hiring has no significant effect on employee performance in the study area. Ho2: Training has no significant effect on employee performance in the study area. Ho3: Career opportunity has no significant effect on employee performance in the study area. Ho4: Performance appraisal has no significant effect on employee performance in the study area. Ho5: Compensation has no significant effect on employee performance in the study area. 1.5. Significance of the Study The study was focused on the effect of HRM practice on employee performance with particular focus on hiring, training, career opportunity, performance appraisal and compensation in Enore Enere and Meger woreda public sectors in Gurage Zone. For this reason; the findings of this study may contribute to the sector‘s managements to re-examine which human resource management practices element most dominantly affects their employee performance and they may design practical strategies. It will be helpful to reconsider human resource management practices are one of the important determinant factors for employee performance by other public organizations available in Gurage Zone. For the researcher, it provides the opportunity to communicate and familiarize with research materials for the research community; it builds confidence to conduct the research independently for the future. Addition to these, it serves as a bench mark to conduct deep and professional research on the research topic area and help as other researchers. 1.6. Scope of the Study The research focused on public sectors of Enore Enere and Meger woreda in Gurage Zone which is selected purposively, because of their nearness to home place of researcher & helps to save time and minimize cost. The study intentionally considered human resource management practices in its five dimensions of hiring, training, career opportunity, performance appraisal and compensation as an independent variable and employee performance as dependent variable. The study used both descriptive and explanatory research design. The study used both quantitative and qualitative data gathering approaches 7 1.7. Limitation of the Study Human Resource Management practice is too broad and it is very difficult to cover all its elements on this research. It is limited to only five human resource management elements. The research only focused to public sectors of EnoreEnere and Meger Woreda in Gurage Zone by excluding private sectors in the Worda which is directly related with time, and availability of other resources. The constituents of behavior outcomes used under this study may not be equally applicable in all public sectors having different background. This study is based on cross sectional data, which may not show the time lag effects of the variables under study. This study confined only to limited in public sector, so, the finding of this study may not represent all the institutions. The study faced lack of awareness and willingness of few employees regarding, filling out the questionnaires or providing the required data with care and being unable to return the questionnaire on time basis. However, the researcher used different approaches to solve the limitations. Therefore to minimize the above limitations and validate the data the analysis achieved the five multiple linear regression assumptions 1.8 Definition of Key Terms Human Resources: are the people employed by a company or the department in a company in charge of hiring, training, benefits and records. Human resource management (HRM): is a process that specializes in securing and increasing skills of individual employees and enhances communication and cooperation between them to support organizational development (Elarabi & Johari, 2014). Human Resource Management Practices: are set of practices used by organization to manage human resources through facilitating the development of competencies that are firm specific, produce complex social relation and generate organization knowledge to sustain competitive advantage (Minbaeva, 2005). Employee performance: it is considered as an integral part of the growth process of an organization, it fosters employee commitment towards the organization (Indris, 2017). 8 1.9. Organization of the Study The paper includes five chapters. Chapter one is introductory chapter and is focuses on background of the study, statement of the problem, research questions, objective of the study, hypothesis, significant of the study, scope of the study, and limitation of the study. Chapter two comprises a review of related literature on theoretical review of study variables, empirical reviews on the relationship between HRM practices and employee performance. It also includes conceptual framework of the study. Chapter three includes research methodology focuses on description of study area, research approach, research design, types and source of data, sampling technique and procedure, data collection method, validity, reliability, data analysis technique, and ethical considerations. Chapter four includes analysis of data, interpretation and discussion. Chapter five presents summary of major findings, conclusions, recommendations and further research directions. 9 CHAPTER TWO REVIEW OF RELATED LITERATURE This chapter deals with review of various literatures on the issue of human resource management practices and employee performance. In the theoretical section the paper presents different definitions, concepts, theoretical review and models of the study, empirical review and conceptual framework of the study. 2.1. Theoretical Review 2.1.1 Concept of Employees Performance Employee performance is typical to the human resource field where it can refer to the ability of employees to achieve organizational goals more effectively and efficiently. It involves all aspects which directly or indirectly affect and relate to the work of the employees. It is one measurement of work results in determining individual attributes such as ability and experience, organizational supports such as resources and technology and work effort, the point at which individual level of motivation comes directly to be involved. Employee performance can also be seen as an aggregate value to an organization‘s set of behaviors that an employee contributes both directly and indirectly to organization goals (Stephen & S., 2016). Employee performance is considered as an integral part of the growth process of an organization, it fosters employee commitment towards the organization. Employees align their goals and objectives with those of the organization and feel responsible for the overall well-being of the organization. As their efforts are in turn appreciated by the management and suitably rewarded, they have immense job satisfaction. In such situation, employees are committed to achieving their goals and thus have a positive effect on the overall performance of the organization (Indris, 2017). Human resource is very important as the backbone of every organization as well as the main resource to the organization. The organizations invest huge amount on the human resource capital that will ultimately increase the performance of the organization. Performance is a major multidimensional construct aimed to achieve results and has a strong link to strategic goals of an organization (Ghafoor, Ahmad and Aslam, 2011) cited in Monsor, etal.(2014) they 10 confirmed that, the performance is the key element to achieve the goals of organization which helpful for the achievement of the organizational goals. The right employee training, development and education at the right time will provides big payoffs for the employer increased productivity, knowledge‘ loyalty and contribution. The contribution and improvement of organizational performance is primarily through development of people as individuals, work group and as members of the wider organization. Performance of any organization largely depends on the performance of its employees. Successful organizations are increasingly realizing that there are number of factors that contribute to performance but human resource is clearly the most critical (Mello, 2005). 2.1.2. Definition and Concept of Human Resource Management Human resource management is the process through which management builds the workforce and tries to create the human performances that the organization needs (Boxall and Purcell, 2016). Human resource management (HRM) is concerned with all aspects of how people are employed and managed in organizations. It covers the activities of strategic HRM, human capital management, know-ledge management, corporate social responsibility, organization development, resourcing (workforce planning, recruitment and selection and talent manage-ment), learning and development, performance and reward management, employee relations, employee well-being and the provision of employee services. It also has an international dimension (Armstrong, 2014). According to Armstrong (2014) HRM is defined as the managerial utilization of the efforts, knowledge, capabilities and committed behaviors which people contribute to an authoritatively coordinated human enterprise as part of an employment exchange (or more temporary contractual arrangement) to carry out work tasks in a way which enables the enterprise to continue into the future. According to Cathrine (2015) as the idea behind the assumption that HRM significantly contributes to organizational results is that the HR practices affects the employees in a positive matter, by increasing job satisfaction and motivation, which in turn affects the operational results, such as the quantity and quality of the products and services, which again will have positive effect on the financial and market performance of a company. 11 2.1.3. Objectives and Role of Human Resource Management Practice According to Armstrong and Taylor (2014), the goals of HRM include support the organization in achieving its objectives by developing and implementing HR strategies that are integrated with business strategy, contribute to the development of a high-performance culture, ensure that the organization has the talented, skilled and engaged people it needs, create a positive employment relationship between management and employees and a climate of mutual trust and encourage the application of an ethical approach to people management. Although Mathis and Jackson (2008) sought that HR management plays a significant strategic role in organizations where there are identifiable core competencies that relate to people, organizational effectiveness is enhanced. Strategic HR management plays a significant role in the strategies of organizational productivity, customer service and quality and financial contributions. 2.2 Human Resource Management Models According to Mathis and Jackson (2008), various models of human resource management various models of HRM have been developed from time to time by different teams of the researchers. All these models have helped the HR practitioner to effectively manage the human resources. Some of the important models have been discussed as follows: 2.2.1. Guest Model Guest comparative model (Guest, 2007) works on the premise that a set of integrated HRM practices will result to superior individual and organizational performance. It advocates a significant difference of HRM from PM. It holds that HRM strategies like differentiation, innovation, the focus on Quality and cost reduction will lead to practices like better training, appraisal, selection, rewards, job designs, involvement, and security leading to more quality outcomes; commitment and flexibility. It will then affect performance in that productivity will increase; innovation will be achieved as well as limited absences, labor turnover, and conflict or customer complaints. 2.2.2. Warwick Model This model was developed by Hendry and Pettigrew (2013) at center for strategy and change, in Warwick University. It emphasizes on analytical approach to HRM. It also recognizes the impact 12 of the role of the personnel functions on the human resource strategy content. The researchers focused their research on mapping the context, identifying the inner (organizational) and external (environmental) context. 2.2.3. Harvard Model The Harvard model (Beeretetal.1984) works as a strategic map to guide all managers in their relations with employees and concentrates on the human or soft aspect of HRM. It strives at employee commitment not control. It also works on the premise that employees needed to be congruent, competent and cost effective. 2.2.4. Michigan Model The Michigan model (Devannaetet al.,1984) focuses on hard HRM. It holds that people should be managed like any other resources and so obtained cheaply, used sparingly, developed and exploited fully. It also emphasized the interrelatedness of HRM activities. According to this model, selection, appraisal, development and rewards were geared towards employees and organizational performance. 2.3 Dimensions of Human Resource Management This study was investigated the effect of selected HRM practice on employee performance with particular focus on hiring, training, career opportunity, performance appraisal and compensation as a model. 2.3.1 Hiring The hiring process is the function of human resource department. It is a process that involves reviewing the applications, selection of the right candidates for interview, testing the applicants, performing the pre-employment tests and choosing the most qualified candidate for the job‖(Wayne & Martocchio, 2016). Hiring is an essential process in an organization because it brings new talents that facilitate creativity and growth. The hiring process involves various other aspects such as job design, job analysis, job description and creation of awareness. Otoo et al. (2018) indicate that the hiring process is the main determinant of a successful organization. The companies that have effective hiring process are likely to have good reputation and financial performance. Grabara et al. (2016) narrates that there are two critical phases of the hiring process. The first phase is the attraction of the large pool of 13 qualified individuals, while the second one is the ability of the human resource manager to select the right people to hire. The efficacy of recruitment process is determined by the ability of the organization to attract large pool of qualified employees and handling the selection process efficiently and effectively. 2.3.2 Training According to Mathis, and Jackson (2008) training is defined as the process whereby people acquire capabilities to perform jobs. Training provides employees with specific, identifiable knowledge and skills for use in their present jobs. Strategic training is linked to how the organization accomplishes its organizational goals. It can have numerous organizational benefits. First, strategic training enables HR and training professionals to get intimately involved with the business, partner with operating managers to help solve their problems, and make significant contributions to organizational results. Additionally, a strategic training mindset reduces the likelihood of thinking that training alone can solve most employee or organizational problems. Effective training requires the use of a systematic training process. The four phases of such a process are assessment, design, delivery, and evaluation. Using such a process reduces the likelihood that unplanned, uncoordinated, and haphazard training efforts will occur. A discussion of each phase of the training process follows (Mathis & Jackson, 2008). Assessing organizational training needs represents the diagnostic phase of a training plan. This assessment considers issues of employee and organizational performance to determine if training can help. Needs assessment measures the competencies of a company, a group, or an individual as they relate to what is required in the strategic plan. It is necessary to find out what is happening and what should be happening before deciding if training will help, and if it will help, what kind is needed (John O‘Connor,2006) 2.3.3 Career Opportunity Career opportunities are identified through job analysis. The manager should identify career path for employees in the organization. He should discuss with the employees what jobs are available in the organizational hierarchy and at the same time find where the employee would want to go up in the organization in future. The employees should be provided information regarding job postings that are available in the organization and, for future reference, what requirements they 14 will have to fulfill to achieve the promotion which they aspire (Risha, 2019). ShaitoFadel (2019) identified three activities for career opportunities namely career path, job analysis and succession planning. Job Analysis: job analysis is a process to identify and determine in detail the certain job duties and requirements and the comparative importance of these duties for a given job. Job analysis is aprocess where results are made about data collected on a job.―The Job; not the person‖. An imperative notion of job analysis is that the analysisis conducted of the job, not the person. While job analysis data may be collected from executivesthrough interviews or questionnaires, the result of the analysis is a description or specifications ofthe job, not a description of the person (HR Guide, 2015). Succession Planning: Business Jargons defined succession planning as ―the systematic process of recognizing and creating future leaders who are able to take the position of the old ones when they leave the organization due to retirement, resignation, termination, transfer, promotion or death (Business Jargons, 2019). Career planning is an important HRM practice of identifying employees‘ career preferences and setting up a development objective by establishing an action plan that enable employees to match their capabilities and interests with organizational available opportunities (Ismail, Adnan, &Bakar, 2014). Gardner et al. (2011), observed that individuals (employees) mostly prefer to join the organization that provides enough opportunities to attain their career goals and fully displayed their potential. 2.3.4 Performance Appraisal Armstrong (2010) describes the role of the performance appraisal as a tool for looking forward to what need to be done by people in the organization in order to achieve the purpose of the job to meet new challenges. Once tasks are assigned to employees in the organization, the management of the organization is supposed to make sure that the tasks are performed as planned accordingly. This could be achieved through performance appraisal. Gardner (2008) describes performance appraisal as the evaluation of an individual‗s work with the main aim of arriving at objective personnel decisions. It is also considered as the process of 15 obtaining, analyzing as well as recording information that revolves about the relative worth of the employee to the organization (Armstrong, 2009). 2.3.5 Compensation Compensation refers to all forms of pay or rewards going to employee and arising from their employment (Dessler, 2008). Compensation management is one of the big and strong features that organizations use to attract and retain its most valuable and worthy assets. It includes financial and non-financial rewards. Direct compensation (financial) is in the form of wages, salaries, incentives, bonuses, commissions and so on. Indirect compensation is the form of non-financial benefits like vacation, annual leave entitlement, medical and hospitalization benefits, and employer retirement contribution and etc. According to Khan, Aslam & Lodhi, ( 2011) today‘s employees not only require money to fulfill their basic needs but they also necessitate various non-financial rewards and benefits often known as the ―Fringe Benefits‖. These include bonus, retirement benefits, gratuity, educational, medical facilities including family and etc). Compensation practices are the procedures and policies that organizations use to pay the workers proportionately based on the performance and terms of contract (Sothy, 2019). When the organization provides better compensation practices, the employees will be encouraged to perform their tasks better; thus contributing to the overall improvement in organization performance (Samnani& Singh, 2014). Organizations use various methods such as job security, promotion, rewards, and salary to increase the employees' performance (Mariani et al., 2019; Hassan &Mahmood, 2016). According to Pradhan and Jena (2016), employee performance is the output of the exchange with the compensation strategies such as rewards offered by the employer. The relationship between compensation practices and workers' performance is a widely researched area. 2.4. Empirical Literature Ana et al. (2019) verified a positive, strong relationship between HRM practices and employee satisfaction as the result organizational performance can be improved. Effective HRM practices can increase employee satisfaction and commitment on one the hand and organizational performance on the other hand (Cai et al., 2019). https://www.emerald.com/insight/content/doi/10.1108/IJSSP-10-2019-0216/full/html#ref009 https://www.emerald.com/insight/content/doi/10.1108/IJSSP-10-2019-0216/full/html#ref011 16 Abebe, Mesele, & Lemessa (2015) conducted on the impact of training and development on employee performance and effectiveness. The beta (β) coefficient from the general linear models, unadjusted score for training and development with 95% Confidence Interval (CI) was β 0.46 (0.28, 0.63) while employee performance with 95% CI was β 0.49 (0.39, 0.60). And in the adjusted models the β value for training and development was 0.25 (0.11, 0.39), while employee performance scored 0.42 (0.32, 0.53). The relationship was found statistically significant at p < 0.05. It revealed, in training and development activities in which employees had participated brings new potentials of employees in performing task and resulted in employee effectiveness. Mohamud (2014) conducted a study on conducted impact of training on the performance of staff. The study found that training had significant contribution on enhancing performance of the staff and reducing various HR issues. Janet (2019) studied on the effect of hiring practices on employee performance. The study found that effective hiring practices leads to improved employee practices performance of the staff. Moraa and Datche (2019) conducted on the impact of performance appraisal on performance of employees. The study reveals that positive association between performance appraisals on performance of employees. Similarly study conducted by Monday (2012) indicated in his study that testing the effect of performance appraisal practices on employee performance, the t-test yields 3.524 and the probability value (p-value) of the relationship between performance appraisal and employee performance is 0.000. Because the t -test is positive and the p-value is 0.000, lower than the level of significance (5%), it found that performance appraisal practices have a positive effect on employee‗s performance in the study area. According to a recent employment survey, lack of career opportunity is the primary reason employees say they leave an organization, whereas 5 years ago, unsatisfactory pay was the leading reason people quit (CEB, 2015). In fact, about 70 percent of those surveyed said they were dissatisfied with growth opportunities at their companies in the study area. The study of Khalid et al. (2014) provided empirical evidence on the positive relationship between career planning and employee performance and argued that the career planning practice provided by organizations inspires the individual employees in the organization to excel in performance.Kadir et al. (2019) studied the relationship between compensation practices and staff 17 performance. The study found that compensation practices is directly associated with lecturers' performance in the study area. Onyekwelu et. al, (2020), established a survey among Nigeria banks that compensation practices led to the motivation of workers leading to increased productivity. The researchers interviewed 80 lecturers of XYZ College to test the relationship between the compensation practices used by the university and lecturers' performance. They concluded that the compensation practices were directly associated with lecturers' performance. Marwat, Qureshi and Ramay, (2015) conducted the study on impact of HRM Practices on employee performance, using training, compensation, performance appraisal, job definition and employee participation on perceived employee performance, it was discovered that all the tested variables were positively correlated but correlation of compensation (0.67) and training (0.66) were highest respectively. Singh and Biniam (2016) investigated the impact of human resource management practice on organizational performance. The study has found that human resource practices: recruitment and selection, training and development, performance appraisal and compensation have a significant relationship with university performance. Njue andKiiru (2018) examined Human resource management practices and performance of manufacturing companies. The study used compensation, information sharing and training & development as an independent variable and it found that there was significant positive relationship between HRM practice and organizational performance. Mufeed and Gulzar(2015), studied the impact of human resource management practices on organizational performance. The study used 80 samples. It explored contribution of HRM practices including general climate, organizational culture, selection, job definition, career planning, employee participation, performance appraisal system, training and compensation on perceived organizational performance. It was found that HRM practices have significant association with organizational performance. 18 2.5. Conceptual Framework This conceptual framework consists of five HRM practices namely hiring, training, career opportunity, performance appraisal and compensation as independent variables and employee performance as dependent variable. Figure 2.1: Conceptual framework of the study Independent variables Dependent variable Source: Adapted from Mahmoodetal., (2021) Hiring Career opportunity Employee performance Performance appraisal Compensation Training 19 CHAPTER THREE RESEARCH METHODOLOGY 3.1 Description of Study Area EnoreEnere and Meger Woredais one of woreda in GurageZone.It was established in 2018 G.C The woreda contains 27 public sectors and the woreda‘s capital town Mike, it is located on the main road from Addis Ababa to Kosse town just 220 km apart from Addis Ababa. Regarding to the climate of the woreda it has two different Agroclimatic conditions, high land (DEGA) and Temperate (Weyna-Dega) and consisting 20% and 80% respectively. The average temperature ranges from 14-27C O and the average annual rainfall ranges from 790-1820mm. About 99% of the population engaged in agriculture (Woredas report of 2014 E.C). The sectors were selected for the study includes all 27 public sectors located in the woreda. 3.2 Research Approach The use of both qualitative and quantitative approach helps to eliminate the weakness of one approach by being complimented by another approach (Fuller, et.al, 2015; Gibson, 2017). Under this study the researcher used mixed method which combines both quantitative and qualitative data. In this mixed method the presentation of the results can be convincing and powerful (Catherine, 2002). This approach used in the different phases of the research to obtain a variety of information on the same issue and to obtain a higher degree of validity and reliability through deeper analysis. Hence, the researcher motive for using mixed approach is that both quantitative and qualitative research which provides an in-depth look at context, processes, interactions and precise measurement of attitudes and outcomes and also a better understanding of the research problem, than just utilizing one approach alone. 3.3 Research Design Research design is blue print for empirical research aimed at answering specific research question or testing specific hypotheses (Bhattacherjee, 2012). According to Kothari (2014) descriptive research describes and interprets what the information is as it is. It looks at individuals, groups, institutions, methods and material in order to describe, compare, contrast, classify analyze and interpret the entity and events that constitute varies field of inquiry. It aims to describe the estate of affairs as it exists. Whereas explanatory research aiming at establishing the cause-and-effect relationship between variable. According to Neuman, (2014) explanatory research helps to 20 explain, understand and predict the cause-and-effect relationship between the variables. This study used a combination of both descriptive and explanatory research design. Since the nature of this research is a cause-and-effect relationship explanatory research design is the most appropriate design to examine briefly the effect of HRM practice on employee performance in the study area. In addition to this, in order to describe background information of respondents and implementation of the selected HRM practices in the study area the study used descriptive research design. 3.4. Target Population, Sample Size and Sampling Techniques 3.4.1 Target Population Target population consists of all members of a real or hypothetical set of people, events or objects from which a researcher wishes to generalize the results of their research while accessible population consists of all the individuals who realistically could be included in the sample (Kothari &Garg, 2018). The populations of the study were the entire (27) Offices of EnoreEnere and MegerWoreda in Gurage Zone which include permanent employees and leadersof the sectors which is 1302 in number. Among these, the numbers of males are 807 and females are 495. 3.4.2 Sampling Technique According to Sekaran, (2003) sampling techniques involve the methods or ways in which the researcher attains or to selects an optimal sample size from the study population. This study used both a probability and non-probability sampling technique, since the target population of the study has selected permanent employees and leaders of EnoreEnere and Meger Woreda public sectors in Gurage Zone. The sampling technique used in this study were two stage sampling including stratified and random sampling techniques which is the process of stratification followed by random selection of subjects from each stratum. The stratified sample has been chosen because the sample data is divided into different strata from the woreda‘s different categories (sectors) are needed (Sekaran and Bougie, 2013). As it is mentioned in Kothari (2013) stratified sampling result in more reliable and detailed information and enable to get more representative sample. Therefore, stratified random sampling was applied for this study to be able to carefully asses and analyze the chosen respondents‘ opinion (response) of each sector. Then, permanent employees of the sectors were randomly selected from each stratum by using simple random sampling technique. 21 In addition, purposive sampling technique was used in the study because purposive sampling enables the researcher to sample on the basis of his/her judgment (Schwandt, 1997). In this study the researcher used purposive sampling in order to choose study public sectors and get primary respondents according to their roles and enable the researcher to solicit relevant data. Through the use of purposive sampling, leaders of the sectors were selected for interview. 3.4.3 Sample size Sample size is the actual number of subjects or a subset of the population chosen as a representative sample of the target population in a given study. It is a basic unit within a population that can be used to represent the whole population. It is unfeasible to study the whole target population and therefore the researcher used sample population. The sample size was determined by a three based criterion, this being level of precision, the level of confidence, and finally the degree of variability in the attributes being measured (Cooper & Schindler, 2014). Based on the formula identified, the sample size estimated was 306 as shown below. Where: n= the size of the sample N= the size of the population e = is the error term, which is 5% (i.e., at 95% confidence level n= 1302/ (1+1302(0.05) 2 ) = 1302/ (1+1302(0.0025)= 1302/4.255 Accordingly, n= 306 sample respondents Since the number of people in each sector is not the same, the number of samples for each sector will be calculated by the following formula: Where n= total number of samples N= total number of populations Ni= total number of populations in each sector ni = number of samples in each sector 22 Table 3.1 Number of Employees and Proportion of Samples from Each Sector S/N o Sector department Ni No of sample in each dept. ni=n.Ni/N 1 Public service 37 306*37/1302 = 9 2 Agriculture 155 306*155/1302 = 36 3 Health 121 306*121/1302 = 28 4 Enterprise 25 306*25/1302 = 6 5 Union 14 306*14/1302 = 3 6 City ev‘t& construction 42 306*42/1302 = 10 7 Education 658 306*658/1302 = 155 8 W/House of people representative 13 306*13/1302 = 3 9 Youth and Sport 11 306*11/1302 = 2 10 Trade & market dev‘t 12 306*12/1302 = 3 11 Plan 8 306*8/1302 = 2 12 Servant & Social ass. Agency 7 306*7/1302 = 2 13 Environment and forest protection 15 306*15/1302 = 4 14 Court 14 306*14/1302 = 3 15 Milisha 4 306*4/1302 = 1 16 Peace & security 7 306*7/1302 = 2 17 Justice 16 306*16/1302 = 4 18 Communication 6 306*6/1302 = 1 19 Finance 19 306*19/1302 = 4 20 Police 16 306*16/1302 = 4 21 Revenue 16 306*16/1302 = 4 22 Water, mineral and energy 19 306*19/1302 = 4 23 Administration 21 306*21/1302 = 5 24 Science and IT 8 306*8/1302 = 2 25 Road 19 306*19/1302 = 4 26 Culture and tourism 8 306*8/1302 = 2 27 Women and children department 11 306*11/1302 = 3 Total 1302 306 Source: Computed by the researcher (2023) 3.5 Data Type and Sources 3.5.1 Type of Data The study used both quantitative and qualitative data. In order to present a broad range of information, both primary and secondary data were used. 3.5.2 Source of Data Primary data were obtained through structured questionnaires from employees of the study sector and personal interview from seven leaders of the sectors. Secondary data were sourced from journals, books, and reports of the woreda administration which is related to study variables. 23 3.6 Data Collection Instruments To obtain valid and reliable data for the study, various methods of triangulation approaches was used. Under this study, various data gathering instruments; questionnaire and interview were applied. 3.6.1 Questionnaire A questionnaire consists of a number of questions which are typed or printed on forms in a definite order (Saranta Kos, 2005). According to Kothari (2004), structured questionnaires are simple to administer and relatively inexpensive to analyze. The researcher used structured questionnaire to collect data. The structured questionnaire was chosen, because it ensures the confidentiality of responses and save time, questionnaires have advantages over some other types of surveys because they are cheap, do not require as much effort from the researcher as verbal or telephone surveys, and often have standardized answers that make it simple to compile the questions (Walliam, 2006). The questionnaire includes three parts; the first part regards the demographic characteristics of respondents, the second part; selected HRM practice and the third part employee performance related questions. Each five independent variables and the dependent variable were consisted six questions and total of 33 close-ended questions was included for survey. Close ended questions are selected because they help the researcher to know the respondent‘s perception, and help the respondents to choose one option from the given scales that best aligns with their views. Data were systematically categorized in order to easily understand and express their feelings 5- point Linkert scale namely (1) Strongly Disagree, (2) Disagree, (3) Neutral, (4) Agree and (5) Strongly Agree was used to understand respondent‘s degree of agreement with each statement. 3.6.2 Interview In this method six questions were asked and conversation between the researcher and the key respondents (seven leaders of selected sectors) was done. Therefore, this method allowed face-to face conversation and hence it used to control ambiguities between interviewer (researcher) and interviewee. In this study semi-structured interview was used to collect data from sectors selected leaders. 24 3.7 Reliability and Validity According to Bryman, (1988) reliabilityis defined as consistency of measurement or stability of measurement over a variety of conditions in which basically the same results should be obtained. Cronbach‘s alpha coefficient is the most popular and commonly used technique to estimate reliability or internal consistency of assessments and questionnaires in the behavioral sciences coefficients. A pre-testing of the questionnaires was done by using10%of sample population in study public sectors employees, since they are not part of the scope of the study. Then, the final questionnaire was pre-tested to a sample of 31 employees which was selected from the sectors. Consequently, ambiguous questions were revised based on the feedbacks obtained from the pilot survey. There are different methods of reliability test, for this study Cronbach‘s alpha was considered. For testing the reliability of the data instrument Cronbach‘s Alpha (α) was employed. According to a general rule, internal consistency is said to be acceptable when 0.8>α ≥ 0.7,the reliability is said to be goodwhen 0.9>α≥ 0.8,Further,α≥ 0.9showsexcellentinternal consistency among the items (Cheema and Abbas, 2017).The result is presented as follows: Table 3.2 Reliability Test Study variables Number of items Cronbach's Alpha value Result Hiring 5 0.882 Good Training 6 0.858 Good Career opportunity 5 0.850 Good Performance appraisal 5 0.889 Good Compensation 6 0.878 Good Employee performance 6 0.893 Good Overall reliability 33 0.957 V.good Source: Pilot test, 2023 As revealed in Table 3.2, the results of Cronbach‘s alpha reliability test of all study variables showed that all the values were above 0.80 showing that the instrument was reliable. Thus, all explanatory variables and performance are reliable and acceptable in the range ofCronbach‘s Alpha Coefficient. Based on the examination of the research scales and constructs, itcan be concluded that each variable represents a reliable construct. Validity means that we are measuring what we want to measure. There are different types of validity measurements including, face validity and content validity (Bryman, 1988). Validity test was assured when the questionnaire was prepared based on extensive reading of literature review. 25 Undertaken preparing the questionnaire with a guidance of the advisor and information from different sources the study tried to avoid the ambiguous or vague wordings to ensure that respondents were read and answer the question consistently on different occasions in the same context. 3.8 Method of Data Presentation and Analysis Several statistical tools used for data analysis, in order to make the analysis suitable for effective decision-making (Sreejesh, 2014). The statistical Package for Social Sciences (SPSS) version-25 was used to analyze data for descriptive and inferential statistics. Descriptive data were analyzed for frequencies, percentages and, meanwhile inferential statistics was analyzed for correlations and regressions. In this study, correlation and multiple linear regression analysis was applied to explain the relationship and the effect of each independent variable on the dependent variable respectively. Regression is a technique that can be used to investigate the effect of one or more predictor variables on an outcome variable. Regression allows you to make statements about how is one or more independent variables is predicting the value of a dependent variable. 3.8.1 Model specification According to Gujirat, (2001) to analyze the relationship between dependent and independent variables the following multiple linear regression model was applied Yit = β0 + ΣβXit + εit Where: Yit represents the dependent variables for time period t. β0 is the intercept. βK represents the coefficients of the Xit variables Xit, represents the explanatory variables for time period t. εit is the error term. Based on the above general empirical research and other similar researches this study was adopted the following equation to investigate the effect of HRM practice on employee performance in the study area. Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + ε Where: Y = Dependent variable (Employee performance) β0 = Constant term β1 = Coefficient of hiring (x1) β2= Coefficient of training (x2) 26 β3= Coefficient of career opportunity (x3) β4= Coefficient of performance appraisal (x4). Β5= Coefficient of compensation (x5). 𝜀 = error term In addition, the data gathered from interview were analyzed in narrative way. 3.11 Ethical Consideration According to Kumar (2005) ethical issues concerning research subjects are mainly privacy, anonymity, voluntary and informed consent. The privacy of information was obtained from the research respondents as well as the anonymity of the research subjects was respected. The participants were participated voluntarily and at no one time they coerced. The anonymity of the respondents was adhered to as no personal information, such as names. In the study the researcher-maintained objectivity, and professional standards through scientific process and no falsification, alteration or misrepresentation of data for biased or other purposes. Finally, all reference materials for this study acknowledged with appropriate citation. 27 CHAPTRE FOUR RESULT AND DISCUSSION The purpose of this study was to investigate the effects of human resource management practices on employee‘s performance the case of EnoreEnere and MegerWoreda public sectors in Gurage Zone.To explore this, the researcher followed various steps such as data collection, coding, feeding the data in to SPSS V-25, analyzing using different statistical approaches such as descriptive statistics, correlation analysis and multiple regression analysis to test the significances and measure the effect of each independent variables on the dependent variable. The primary data was collected through questionnaire from the current employees in each sector. In this chapter response rate, demographic background of respondents, results of descriptive and inferential analysis, and discussion of results are presented as follows: 4.1 Response Rate Kimmel (2009) noted that response rate is the total percentage of people who respond to a survey. As indicated in table 4.1, out of 306 questionnaires distributed, 292 were correctly filled & returned. This constitutes a response rate of 95.4 percent, which is more than a half of targeted sample. The researcher found this proportion to be adequate for data analysis and for the purpose of the interpretations of the findings. Coopper and Schindler (2011) noted that the return rates of above 50% are acceptable to analyze and publish, 60% is good, 70% is very good while above 80% is excellent. Based on this assumption, the response rate in this study was considered to be excellent for the study. The response rate was shown in table 4.1 below. Table 4.1: Response Rate Respondents Questionnaires administered Questionnaires correctly filled and returned Response rate Employee respondents 306 292 95.4% Source: Own survey, 2023 4.2 Demographic Characteristics of Respondents In this study the respondents‘ profile was organized in terms of gender, age level, educational qualification, and service years. The result of demographic characteristics of respondents is summarized and presented in Table 4.2. 28 Table 4.2 Background of Respondents Item Description Frequency Percent Sex of respondents Male 162 55.5 Female 130 44.5 Total 292 100.0 Age of respondents 20-30 53 18.3 31-40 155 53.2 41-50 75 25.7 51-60 3 .9 above 60 6 1.8 Total 292 100.0 Educational qualification Primary 3 .9 Secondary 5 1.8 Certificate 8 2.8 Diploma/TVT 78 26.6 Degree 178 61.0 Master 20 6.9 Total 292 100.0 Monthly salary in ETB 1000-2500 15 5.0 2501-4000 32 11.1 4001-5500 40 13.6 5501-7000 45 15.4 7001-8500 53 18.3 8501-10000 28 9.6 10001-11500 41 14.0 above 11500 38 13.0 Total 292 100.0 Work experience in public sector below 2 years 29 10.0 2-5 years 102 34.9 6-9 years 136 46.6 10-15 years 22 7.6 above 15 years 3 1.0 Total 292 100.0 Source: Own survey, 2023 The results presented in Table 4.2 revealed that majority, 55.5% of the respondents were male, while 44.5% were female. The dominance of the male respondents was attributed to the fact that public sector of the study woreda recruitment more men in technical jobs compared to the women. 29 Furthermore, majority (53.2 %) of the respondents were within the age group of 31-40years, followed by 25.7% who were within the age group of 41-50 years, while the respondents within the age group of 20-30 years represented by 18.3%.The remaining 0.9% and 1.8% of respondents were in age group of 51-60 and above 60 years respectively. The dominance of the respondents within the age group of 31-40 years implies that they are youngster enough to work hard and work for the company which would imply seeking for better means of improving sales performance. Concerning to educational qualification, the result revealed that majority (61%) of the respondents were Bachelor Degree holders, followed by 26.6% who were Diploma holders and 6.9% who were Master holders. The remaining 2.8%, 1.8% and 0.9% respondents were certificate, high school and primary education completers. The dominance of the respondents with the Bachelor Degree signifies that the public sectors prefer to employ educated employees who understand the importance of HRMP for their performance. Coming to monthly salary, large proportion (18.3%) of respondents have monthly income of 7,001-8,500 ETB, 15.4% respondents have monthly income of 5501-7000ETB and 14.0% respondents have monthly income of 10,001-11500 ETB, and. Also, 13.6% are having monthly income of above 11, 500 ETB. Furthermore, 29.7% of respondents have monthly income of below 5500 ETB. This implies that most of respondents‘ current salary was not considered current economic situation of the country. This influences commitment of employees on their job Regarding to work experience, majority (46.6%) of the respondents had 6-9 years of working experience, 34.9% of them had 2-5 years of experience while 7.6 % had 10-15 years of working experience and the remaining 10% and 1% respondents below 2 years and above 15 years of work experience respectively. The dominance of the respondents with the working experience of above 5 years implies that the public sector prefers to recruit and retain employees with high level of experience in the sector for purposes of competitive advantage. 4.3 Descriptive Analysis of study variables This section presents level of implementation of five HRM practices namely hiring, training, career opportunity, performance appraisal and compensation in EnoreEnere and Meger Woreda public sectors. According to Alsayyadet.al (2006), the mean range values are interpreted as the mean score 1- 1.8 is considered as very low, the mean score from 1.81-2.6 is considered as low, 30 the mean score 2.61-3.4 is considered as average/moderate/, the mean score 3.41- 4.2 considered as high and the mean score 4.21-5.00 considered as very high as illustrated by comparison bases of mean of score of five-point Likert-scale instrument. This mean ranges shows that the lower the mean, the more the respondents disagree with the items and the higher the mean, the more the respondents agree with the items. Hence, the researcher used these mean range values for rule of thumb in order to interpret responses of independent and dependent variables. Accordingly, the detail of the result is presented as follows: 4.3.1 Hiring Practice This section focuses on the description of the independent variable hiring based on five items. These five attributes of hiring opportunity are prepared based on reviewing previous published journals .The data is summarized and presented in Table 4.3. Table 4.3 Hiring Practice in the Selected Public Sectors Items Agreement level in percent N Mean Std. Dev. SD DA N A SA The hiring decisions in Enore Enere and Meger Woreda Public service are determined by the candidates‘ ability to undertake the technical aspect of the job requirements 5.8 38.0 19.9 28.4 7.9 292 2.94 1.101 Public service is able to attract suitable applicants to fill its vacancies 5.1 40.4 15.4 32.2 6.8 292 2.95 1.098 Recruitment and selection process inpublic service is clear and transparent 6.8 34.9 15.8 39.4 3.1 292 2.97 1.069 The sectors employs are the most qualified candidates 9.2 24.7 28.1 27.4 10.6 292 3.05 1.147 The sector has formal orientation and familiarization process designed to help new recruits understand the organization 12.0 25.3 18.5 36.0 8.2 292 3.03 1.193 Total percentage and aggregate mean 7.78 25.82 19.54 32.68 7.32 292 2.99 1.122 Source: Own survey, 2023 From Table 4.3, the aggregate mean of all five items of hiring in the study area indicate 2.99 with standard deviation 1.122, which lies between the mean range of 2.61-3.4 and it falls in the moderate mean section. This implies that (25.82%) of the respondents disagreed and 7.78% of them strongly disagreed with items of hiring, while32.68 % of the respondents agreed and 7.32% of them strongly agreed with these items. The remaining 19.54% were neutral. This finding showed that the hiring decisions in Enore Enere and Meger Woreda public service is not 31 fully determined by the candidates‘ ability to undertake the technical aspect of the job requirements and it lacks to able to attract suitable applicants to fill its vacancies according to views of respondents. On the other hand, number of respondents (39.4% and 36%) respectively believed that recruitment and selection process in the study woreda public service is clear and transparent, and the sectors have formal orientation and familiarization process designed to help new recruits understand the organization. However, still numbers of respondents (28.1%) are unclear on weathered the sectors employs are the most qualified candidates or not. Similarly, response from key informants‘ (leaders of the study sectors) interview revealed this fact. Firstly the researcher asked the leaders that how their organizations hire employees? Most of them responded that ―recruitment and selection process in their woreda public service is clear and transparent, formal orientation is given by woreda public service and each sector about their job and rules & regulations of public servants to help new recruits understand the organization. On the other hand, public service not widely used technological vacancy announcement to attract suitable applicants to fill its vacancies‖. 4.3.2 Training Practice This section focuses on the description of the independent variable training based on six items. These six attributes of training practice are prepared based on reviewing previous published journals. The data is summarized and presented in Table 4.4. Table 4.4: Training Practice in the Selected Public Sectors Items Agreement level in percent N Mean Std. Dev. SD DA N A SA In my sector training needs are identified through a formal performance appraisal mechanism 3.8 36.6 25.4 27.4 6.5 292 2.96 1.026 In my sector training programs are designed and developed based on the analysis of employee‘s skill, knowledge and attitude gaps 5.8 41.1 20.5 28.1 4.5 292 2.84 1.040 My sector provide extensive training programs for employees in all aspects 5.5 40.8 29.8 20.2 3.8 292 2.76 .96185 In my sector employee training is used to improve staff technical performance 6.5 30.8 21.9 32.2 8.6 292 3.05 1.110 My sector evaluates effectiveness of training after training program 8.2 32.9 24.7 25.0 9.2 292 2.94 1.131 I feel better equipped to tackle unexpected events with skill and confidence 5.8 25 20.5 34.9 13.7 292 3.25 1.148 Total percentage and aggregate mean 5.93 34.53 23.8 27.97 7.72 292 2.97 1.069 Source: Own survey, 2023 32 From Table 4.4, the aggregate mean of all items of training in the study area indicate 2.97 with standard deviation 1.069, which lies between the mean range of 2.61-3.4 and it falls in the moderate mean section. This implies that large proportion (34.53%) of the respondents disagreed and 5.93% of them strongly disagreed with items of training, while 27.79 % of the respondents agreed and 7.72% of them strongly agreed with these items. The remaining 23.8% were neutral. This finding showed that organizations training needs are not properly identified through a formal performance appraisal mechanism, training programs are not designed and developed based on the analysis of employee‘s skill, knowledge and attitude gaps, the study sectors lack to provide extensive training programs for employees in all aspects and most sectors do not evaluate effectiveness of training after training program. However, a number of respondents (32.2% and 34.9%) respectively believed that when organizations train their employees, it used to improve staff technical performance and they feel better equipped to tackle unexpected events with skill and confidence when they participate in training program. Similarly, response from key informants‘ (leaders of the study sectors) interview revealed this fact. Regarding to training practice the researcher interview that ―does your organization provide adequate training for its employees? If yes or no how/why? Out of the seven leaders six of them said no, due to lack of budget they did not provide adequate short term trainings. Furthermore most of leaders said that ―in most public sectors in the Woreda organizations employees training needs are not properly identified, training programs are not designed and developed based on the analysis of employee’s skill, knowledge and attitude gaps and most sectors lack to provide short term training programs for employees in all aspects due to shortage of budget and lack of commitment of sector leaders‖.This indicates that the study sectors did not provide adequate training for employees. However, without giving proper short and long term trainings it is difficult to achieve organizational goals. 33 4.3.3 Career Opportunity Practice This section focuses on the description of the independent variable career opportunity based on five items. These five attributes of career opportunity are prepared based on reviewing previous published journals. The data is summarized and presented in Table 4.5. Table 4.5: Career opportunity Practice in the Selected Public Sectors Items Agreement level in percent N Mean Std. Dev. SD DA N A SA Leader identifies career path for employees in my organization 3.4 30.5 18.8 36.0 11.3 292 3.21 1.101 I received information regarding job postings that are available in the organization to aspire me 5.5 25.8 20.9 36.0 7.9 292 3.11 1.088 My organization use career paths through the most junior position and end with the most senior position 3.8 33.2 19.9 28.4 14.7 292 3.17 1.153 I have given written job description from my leader /director/ 4.1 34.2 20.9 33.2 7.5 292 3.06 1.068 My organization designed favorable systems that provide opportunities for me to develop and improve my skills, knowledge and new technologies 4.8 25.0 22.9 38.0 9.2 292 3.22 1.071 Total percentage and aggregate mean 4.32 29.74 20.68 34.32 10.12 292 3.15 1.096 Source: Own survey, 2023 From Table4.5, the aggregate mean of all items of career opportunity in the study area indicate 3.15 with standard deviation 1.096, which lies between the mean range of 2.61-3.4 and it falls in the moderate mean section. This implies that large proportion (34.34%) of the respondents agreed and 10.12% of them strongly agreed with items of career opportunity, while 29.74% of the respondents disagreed and 4.32% of them strongly disagreed with these items. The remaining 20.68% were neutral. This finding showed that a number (36%) of leaders of most sectors identified career path for employees, number of respondents (36%) received information regarding job postings that are available in their organization to aspire them, and most study sectors (38%) have designed system that provide opportunities for them to develop and improve their skills, knowledge and new technologies, but the systems are not fully functional according to views of respondents. On the other hand, a number of public sectors (33.2%) in the woreda did not properly use career paths through the most junior position and end with the most senior position and a number of sectors (34.2%) did not give written job description for their employees. 34 Similarly, response from key informants‘ (leaders of the study sectors) interview revealed this fact. Concerning to trends of career opportunities of workers in the study area the key informants asked that what kinds of career opportunities are designed for employees in their organization. Most of them responded that ―the career opportunities in most public sectors in the Woreda administration was not attractive, because most organizations did not give written job description for their employees, most of them did not properly apply employees career structure accordance JEG manual due to shortage of budget and unclear response of implementation of career structure from SNNPRS regional offices‖. All these results indicated that the career opportunities of workers was unsatisfactory. This hinders employees motivation and committeemen. 4.3.4 Performance Appraisal Practice This section focuses on the description of the independent variable performance appraisal based on five items. These five attributes of performance appraisal are prepared based on reviewing previous published journals. The data is summarized and presented in Table 4.6. Table 4.6: Performance AppraisalPractice in the Selected Public Sectors Items Agreement level in percent N Mean Std. Dev. SD DA N A SA In my sector there is a formal and written performance appraisal system 3.8 27.4 23.6 36.3 8.9 292 3.19 1.054 The objectives of the performance appraisal system are clear to me 6.2 25.0 21.9 39.0 7.9 292 3.17 1.084 Performance evaluation criteria and standards of my organization are based on job description 4.1 32.5 20.9 32.9 9.6 292 3.11 1.092 I openly discuss the performance appraisal result with appraiser and provide performance-based feedback and counseling 6.2 25.3 22.3 37.0 9.2 292 3.18 1.100 Corrective measures have taken when the result of performance appraisal is under the expected standard 3.1 37.3 19.5 36.3 3.8 292 3.02 1.006 Total percentage and aggregate mean 4.68 29.5 21.64 36.3 7.88 292 3.13 1.067 Source: Own survey, 2023 From Table 4.6, the aggregate mean of all items of performance appraisal in the study area indicate 3.13 with standard deviation 1.067, which lies between the mean range of 2.61-3.4 and it falls in the moderate mean section. This implies that large proportion (36.3%) of the respondents 35 agreed and 7.88% of them strongly agreed with items of performance appraisal, while 29.5%oftherespondents disagreed and 4.68% of them strongly disagreed with these items. The remaining 21.64% were neutral. This finding showed that in most (36.3%, 39%, and 32.9%,) respectively sectors there was a formal and written performance appraisal system, the objectives of the performance appraisal system are clear to employees, performance evaluation criteria and standards of their sector are based on job, and most of respondents (37%) openly discuss the performance appraisal result with appraiser and provide performance-based feedback and counseling. However, a corrective measure has not properly taken when the result of performance appraisal is under the expected standard according to views of respondents which is represented by (37.3%) of respondents. Similarly, response from key informants‘ (leaders of the study sectors) interview revealed this fact that most of leaders responded that their organization openly discuss the performance appraisal result with appraiser and provide performance-based feedback and counseling. But it does not consistently take corrective actions based on performance appraisal policy of public sector. 4.3.5 Compensation Practice This section focuses on the description of the independent variable compensation based on six items. These five attributes of compensation are prepared based on reviewing previous published journals. The data is summarized and presented in Table 4.7. Table 4.7 Compensation Practice in the Selected Public Sectors Items Agreement level in percent N Mean Std. Dev. SD DA N A SA My sector provides a competitive compensation and benefits package when compared to other organizations of public sectors 3.8 25.3 21.2 38.4 11.3 292 3.28 1.079 My pay is appropriate when it is compared with that of other workers with similar duties/responsibilities within the organizations 5.5 31.5 13.7 38.7 10.6 292 3.17 1.148 Sometimes my sector compensates me for extra duties and responsibilities 4.5 22.6 19.9 38.7 14.4 292 3.36 1.114 My sector recognize and reward employees appropriately based on individual performance in the year 3.4 31.5 17.1 27.7 20.2 292 3.29 1.205 I feel my sector compensates me fairly for the work I do 5.5 36.6 16.4 31.5 9.9 292 3.14 1.132 I am satisfied with the amount of reward and benefits I receive 4.8 38.0 14.4 32.9 9.9 292 3.15 1.130 Total percentage and aggregate mean 4.58 30.92 17.12 34.65 12.72 292 3.23 1.135 Source: Own survey, 2023 36 From Table4.7, the aggregate mean of all items of compensation in the study area indicate 3.23 with standard deviation 1.135, which lies between the mean range of 2.61-3.4 and it falls in the moderate mean section. This implies that large proportion (34.65%) of the respondents agreed and 12.72% of them strongly agreed with items of compensation, whereas still a number of employees (30.92%) of the respondents disagreed and 4.58% of them strongly disagreed with these items. The remaining17.12% was neutral. This finding showed that a number of respondents (38.4%) believed that the sector provide a competitive compensation and benefits package when compared to other organizations of public sectors, their pay is appropriate when it is compared with that of other workers with similar duties/responsibilities within the organizations and Sometimes their sector compensate them for extra duties and responsibilities. This result implied that public sectors applied JEG salary payment structure and few sectors like health sector compensate for extra duties and responsibilities. On the other hand, most sectors in the study Woreda did not recognize and reward employees based on individual performance in the year, most employees (36.6%) feel their sector did not compensate them fairly for the work they do and most respondents (38%) are dissatisfied with the amount of reward and benefits they received. Similarly, response from key informants‘ (leaders of the study sectors) interview revealed this fact. Relating to reward management the key informants interviewed that do you think that compensation packages of your organization satisfied its employees? How? Most of them responded no. Also they explained that ―their organization used JEG payment structure (job grade and determined salary). However, all sectors did not compensate employees fairly for the work they do and the current public servants salary scale was not competitive with other private sectors salary scale and not competitive with current economic situation of the woreda in particular and the country in general. Furthermore, they said most sectors did not recognized their top performer employees accordance with public service & human development office recognition application manual due to lack of budget & lack of concentration of political leaders (decision makers) in the woreda‖.This indicates that reward management practice of the study area needs improvements. 37 4.3.6 Employee’s Performance in the Study Woreda This section focuses on the description of the dependent variable employee performance based on six items. These six items are prepared based on reviewing previous published journals which are related to study predictors of HRM practice. The da