Contributions of Strategic Human Resource Management Practices to Financial Performance of Savings and Credit Co-operative Societies in Public Universities in Nairobi
The concept of strategic human resource management became popular in the 1980's with the development of Harvard Business school two models integrating strategy and human resource management. These models identified mission strategy, organization strategy, and human resource management as core elements necessary for a firm to function effectively. In the models, human resource management comprises of planning, recruitment, selection, placement, and appraisal, compensation, and employee relations. One of the measures of competitive effectiveness is good financial performance. The study focussed on Chuna and Kenversity saccos of the University of Nairobi and Kenyatta university respectively. Sacco societies are affected by the fast changes taking place in the general business environment such as competition, financial constraints, technological advancement, political, and legal requirements. The aim of this study was to relate the contributions of the above strategic human resource practices to the financial performance of sacco societies of public universities. Specifically, the study focused on strategic human resource planning, strategic recruitment and selection process, strategic training and recruitment programs, remuneration and employee relations. A survey research design was used in the study. Such a design is instrumental in determining the current status of the population with respect to certain variable which is strategic human resources practices. The study used both qualitative and quantitative approaches. Employees and committee members of the respective SACCO societies form the target population. There are forty five employees and twenty eight committee members. A sample size of thirty six respondents which is forty nine percent of the target population was used. Stratified sampling technique was used to determine the number of respondents from each stratum. The actual respondents were selected using simple random sampling method. Data was collected by use of questionnaires, analysed using SPSS (Statistical package of social sciences) and findings presented by use of descriptive statistics such as pie charts, tables, frequency distributions, and percentages. The research findings showed a lack of strategic human resource planning. However there is competitive and transparent recruitment and selection process, training programs are in the form of seminars and workshops, and time off to attend classes. Salaries are determined by employee qualifications, scale and the market. The sacco manager and selected executive committee members are responsible for employee grievances and disciplinary measures. The financial performance of the two sacco societies under the study showed improvement as measured by annual profits, dividend payout, deposits, and membership growth, The researcher concludes that the practice of strategic human resource management has contributed to the improvement in the financial performances of the two sacco societies over the period. It is recommended that further study to be done to determine the relationship, if any, between employee gender and the financial performances of these societies.