Human Resource Management Practices and Organizational Performance: A Case of Selected Real Estate Firms in Nairobi, Kenya
Ooko, Susan Akinyi
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Most research that demonstrate the link between human resource management practices and organizational performance tend to focus on other sectors other than real estate yet understanding this relationship in the real estate sector in the developing world is equally important. This study was motivated by the desire to fill this gap in knowledge. The objective of the study was to establish the relationship between human resource management practices and organizational performance in selected real estate firms based in Nairobi, Kenya. The human resource management practices that were investigated were; employee resourcing, training, compensation and performance appraisal. The study adopted a survey method using a population of 238 employees drawn from four real estate firms based in Nairobi, Kenya. A sample of 119 employees was selected using stratified and simple random sampling techniques. Data was collected using a Likert scale based questionnaire. The study employed two sets of questionnaires for management and non managerial employees. Pilot testing was conducted to obtain some assessment of the questions validity and the likely reliability of the data. Data analysis involved statistical computation for averages, percentages and correlation and regression analysis using Statistical Package for Social Sciences (SPSS) and Ms Excel. The analyzed data was presented using tables, charts and graphs. The study findings showed that both the management and the non management staff agreed that their organizations adhered to the recruitment and selection policy every time they hired employees, the recruitment and selection policy clearly defined job descriptions and specifications and that the interview process and other selection instruments were effective. The study findings also revealed that both the management and non management staff of the selected real estate firms in Kenya agreed that their organizations had a training policy applicable to all employees, the training was linked to the firm’s business strategy and that the staff training needs were identified through formal performance appraisal mechanisms. The study also found that the selected real estate firms in Kenya linked their employees pay with organizational performance and made efforts to offer compensation benefits that were satisfying. In addition, the study found that performance appraisals were carried out periodically and were not just a formality, the staff received specific and accurate feedback during performance appraisal and that in the organizations, promotion and incentives were purely based on performance appraisal. The study concluded that the selected real estate firms had adopted effective human resource management practices in the area of employee resourcing, training, compensation and performance appraisal. The study also concluded that there existed significant positive relationship between employee resourcing, training, compensation, performance appraisal and organizational performance of the selected real estate firms in Kenya. The study recommends that real estate firms in Kenya should enhance their employee resourcing strategies especially in the areas of talent identification, recruitment and selection. The study also recommends that real estate firms in Kenya should institute a fully fledged training and development sections within their human resource department that would be charged with the responsibility of continually identifying the employees’ skills and competence gap areas that require to be addressed. Further, to continually motivate the staff, real estate firms in Kenya should use a competitive compensation scheme, comprising of both financial and non financial rewards that reflect the value of their staff to the organization.