ABSTRACT
This study examined the relationship between innovative Human Resource Management practices
and Employees Performance in the Nigerian Healthcare Sector.Skill-based training,
selective hiring, Alternative work arrangement, fair compensation, performance
appraisal and decentralization/autonomy proxied innovative HRM
practices against Employees' performance. The study employed cross-sectional
research design and primary source of data collection with the aid of
questionnaire. The questionnaires were distributed to the employees of eight
pharmaceutical companies. Data was analyzed by use of descriptive statistics
coupled with inferential statistics including Correlation, ANOVA and Multiple
Regression. To test the formulated
hypotheses, all tests and analysis were conducted at 5% level of significance
using the STATA version 13. Findings revealed that the selected innovative
human resource management practices, skill-based training, selective hiring,
alternative work arrangement, fair compensation, performance appraisal and
decentralization/autonomyhave a positive and significant effect on
employees’ performance. In general, IHRM practices and performance management
systems practices was found to help employees meet their set targets, provide a
measure of employee performance as well as increase employee competency as well
as organizational productivity. The research concluded that innovative human
resource management practices can enhance employee performance.The study therefore recommended that Companies should devise policies that tackle
human resource malpractices especially in recruitment and selection, trainings
and development, compensation, performance appraisal and decentralization. In
addition, the
human resource personnel in the healthcare industry should conduct annual
performance appraisals, give specific and accurate feedback after every
appraisal process and institute corrective measures after every appraisal.
Companies and their HRM departments should institute a sound communication
policy that ensures that the interpersonal communication between supervisors
and juniors is accurate, clear and consistent and open up the upward
communication channel by dismantling the highly authoritative relationship
between subordinates and supervisors. More research is needed on the impact of
innovative HRM practices and employees’ performance in other firms within and
outside the Health sector of Nigeria.
TABLE OF
CONTENTS
Cover page - - - - - - - - - i
Title page - - - - - - - - - ii
Declaration - - - - - - - - - iii
Certification - - - - - - - - iv
Dedication - - - - - - - - - v
Acknowledgement - - - - - - - vi
Abstract - - - - - - - - - vii
Table of contents - - - - - - - - viii
List of Tables and Figures - - - - - - - xiii
CHAPTER
ONE: INTRODUCTION
1.1 Background
to the Study 1
1.2 Statement
of the Problem 5
1.3 Objectives
of the Study 7
1.4 Research
Questions 7
1.5 Hypotheses
of the Study 8
1.6 Significance
of the Study 8
1.7 Scope
of the Study 9
1.8 Limitations
of the study 10
1.9 Operational
Definition of Terms 11
CHAPTER
TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual
Review 13
2.1.1 Innovative
Human Resource Management (IHRM) 13
2.1.2 Nature
of IHRM and Practices 17
2.1.2.1
Incentives 18
2.1.2.2 Skill-Based
Employee Training 19
2.1.2.3 Job
Security 21
2.1.2.4 Self-Managed
Teams (Autonomy) and Decentralization 22
2.1.2.5 Fair
Compensation 23
2.1.2.6 Selective
Hiring (Recruitment) 25
2.1.2.7 Performance
Appraisal 27
2.1.2.8 Alternative
Work Arrangement 32
2.1.3 Innovative
Approaches to HRM in Workplaces 35
2.1.4 Innovative
HRM Practices Category 37
2.1.5 Innovative
HRM Practices Implementation 38
2.2. Performance 40
2.2.1 Employees’
Performance 41
2.3 Theoretical
Framework 46
2.3.1 Ability
– Motivation – Opportunity (AMO) Theory 46
2.3.2 Expectancy
Theory of Performance Management 48
2.3.3 Technology
– Organization – Environment (TOE) Theory 50
2.3.4 Resource
– Base View (RBV) Theory 51
2.4 Empirical
Review 52
2.4.1 Skill-Based
Training and Employees’ Performance 52
2.4.2 Alternative
Work Arrangement and Employees’ Performance 54
2.4.3 Fair
Compensation and Employees’ Performance 57
2.4.4 Autonomy/Decentralization
and Employees’ Performance 58
2.4.5 Performance
appraisal and Employees’ Performance 60
2.5 Literature
Gap 59
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Research
Design 61
3.2 Population
of the Study 62
3.3 Sample
and Sampling Technique 63
3.4 Instrument
of Data Collection 64
3.5 Validity
of Research Instrument 65
3.6 Reliability
of Research Instrument 66
3.7 Model
Specification 67
3.8 Method
of Data Analysis 68
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction
70
4.2 Description
of the Sample 70
4.2.1 Respondents’
demographic profile 71
4.3 Responses
to Research Objectives 74
4.3.1 Responses
to Research Objective one 74
4.3.2 Responses
to Research Objective two 76
4.3.3 Responses
to Research Objective three 78
4.3.4 Responses
to Research Objective four 80
4.3.5 Responses
to Research Objective five 82
4.3.6 Responses
to Research Objective six 84
4.4 Hypothesis
Testing 88
4.5 Discussion
of results 93
4.6 Summary
of findings 97
CHAPTER
FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction 98
5.2 Summary
of Findings 98
5.3 Conclusion 99
5.4 Recommendations 99
5.5 Suggestions
for further research 100
5.6 Contributions
to knowledge 101
References
103 Appendix I 111
Appendix
II 116
LIST OF
TABLE(S)
Table 1: Breakdown
of Study Population 64
Table
2: Sample Size Distribution 66
Table
3: Results of Cronbach Alpha Coefficients 69
Table 4.1: Questionnaire distribution and retrieval analysis 81
Table 4.2: Respondents’ socio-demographic profile 82
Table 4.3 Responses to research Question one 85
Table 4.4 Responses to research Question two 87
Table 4.5 Responses to research Question three 88
Table 4.6 Responses to research Question four 90
Table 4.7 Responses to research Question five 93
Table 4.8 Responses to research Question six 94
Table 4.9 Responses to dependent variable 96
Table 4.10 Model Summary 99
Table 4.11 Analysis of Variance 101
Table 4.12 OLS results 102
Table 4.13 Summary of research hypothesis 106
LIST OF FIGURE(S)
Figure 1: Conceptual Model of the Study 45
Figure 4.1: Pie chart representation of responses to objective one 66
Figure 4.2: Pie chart representation of responses to objective two 68
Figure 4.3: Pie chart representation of responses to objective three 71
Figure 4.4: Pie chart representation of responses to objective four 92
Figure 4.5: Pie chart representation of responses to objective five 94
Figure 4.6: Pie chart representation of responses to objective six 96
Figure 4.7: Pie chart representation of responses to dependent variable 98
CHAPTER ONE
INTRODUCTION
1.1
Background
to the Study
World
over, employee performance has been a concern of every firm whether public or
private and thus its importance cannot be overemphasized. Though, traditionally,
the importance of performance was viewed as a concern for the private sector
only, there has been a notable change to this view over the last couple of
decades, where both private and public sectors embrace and value performance
alike (Tursunbayeva, 2019). One of the key objectives of any organization is to
optimize its performance, which is believed to translate into better profits
and satisfied customers for the profit-making organizations which are either
product or service oriented (Sharma & Dhar, 2015). Non-profit organizations
also endeavor to enhance employee performance to enable them deliver their
mandate. To perform, all these organizations, whether profit or non-profit
making, need to develop a strong internal workforce to address various challenges
that they frequently face as they strive to improve employee performance. The
importance placed on employee performance and the new strategic role of human
resources has changed the way human capital is viewed in many organizations.
Due to cost and nature of human capital, in the traditional approach, little
attention was paid to it. However, this view has changed due to the realization
among researchers and practitioners of its importance at assisting the
organizations to achieve competitive advantage (Marina & Giner, 2014).
In an
age of complex supply chains and globalization, creating an effective work
environment to harness the power of diversity is a critical ingredient for
organizational success. Modern Innovative Human Resource management (MIHRM)
Practices emphasize developing employees through skill-based training, HR
technology, and the effective hiring process of employees to achieve
organizational effectiveness. In the modern business environment, human
resources (HR) is an indispensable asset for organizational success and
effectiveness; as employees are the crust of every organization. Human resource
is people who offer their talents, creativity, knowledge, skills, and other
capabilities to organizations. It is regarded as the scarcest, crucial, most
valued asset, and productive resource that creates the largest and
longest-lasting benefits for an organization (Igweh, 2019). This valued asset
has the potential to increase the value of the organization more than other
resources. Significant scholarly articles have been published about Human
Resource (HR) best practices and all agree that for it to qualify as a best
practice, it must create a win-win situation for the employer and employee.
Newman,
Nielson, Smyth & Hirst (2018) argue that most organizations are faced with
the problems of employees’ effectiveness in terms of developing strategies to
develop and promote modern innovative practices of hiring skilled workforce,
improving operating systems or marketing traditional infrastructure. The
traditional methods of operating organizations (Lundvall, 2008) are less
effective in the motivation and development of employees’ knowledge,
capabilities, talents, and creativity. An effective organization is energetic
to success. However, studies show that only 15% of the companies have an
organization that helps them to outperform in a competitive environment. An
organization with high employee performance is known by five important
attributes namely; compelling leadership and direction, accountability,
talented workforce, front line execution and high work performance culture. A
high performance culture comes only through the opening of the innovative human
resource practices. Innovative HR practices have been defined as “the
international introduction and use of any unused concept, practice, process or
system is designed to influence or adapt the behavior of employees with the aim
of achieving improved organizational performance, recognized and implemented by
human resource practitioners”. They are likely to subsidize to improved
performance only in three conditions, when employees possess knowledge and
skills lacked by managers, when employees are motivated to apply this skill and
knowledge through discretionary efforts, and when firm businesses or production
strategy can only be achieved when employees contribute such discretionary
effects. Significant progress has been made linking innovative HR practices,
such as system high performance work practices to organizational performance.
Research
has suggested that not only do innovative HR practices results in tangible
organizational results but they also assist organizations in developing
innovative solutions as need arises. Examples of innovative practices for
fourteen HR Practice Categories 1. Employee acquisition strategies 2. Employee
retention strategies 3. Compensation and incentives 4. Benefits and services 5.
Rewards and recognitions 6. Technical training 7. Management development 8.
Career planning and development practices 9. Performance appraisals 10.
Potential development 11. Succession planning 12. Employee relations with a
human face: treating employees with concern 13. Employee exit and separation
management 14. Adopting responsibility for socially relevant issues (Kumar,
2017).
The
healthcare sector in Nigeria is faced with rigid changes and uncertainty
exacerbated by globalization and liberalization. To create an environment that
fosters a positive relationship between employees and employers, organizations
need to adopt best modern HR practices such as employee job security, effective
hiring process, a work environment that fosters team building and
self-managing, fair/competitive compensation, skill-based training, innovative
culture that promotes fairness enterprise, wide and effective communication.
Organizations enriched with motived, innovative, and committed employees can
achieve any competitive goals and challenges. In the modern century, the
success of managers entirely depends on the effective managing of human
resources (Budhwar &Debrah 2001). Similarly, Kianto, Saenz & Aramburu
(2017) are of the view that the era of cutthroat competition ineffective
management of the human resource is no longer feasible. To remain competitive
globally, it is important to establish modern innovative human resource
practices. Companies who excel in implementing these MIRHM Practices have found
ways to engage employees’ outstanding performances for a long term through
employee shared plans, developing and communicating effective career paths, and
establishing a reputation for long term employee retention.
In the
views of Samma, Madeeha, Amna, Mabbasher & Talat (2019) Modern innovative
HRM practices have provided many insights for the field of strategic management
and led to developments in the economics of organizations, firm
competitiveness, and the working dynamics of employees. Modern-day
organizations are faced with stiff competition for survival and success due to
liberalization and globalization which has exacerbated the demand for
excellence.To be relevant in a globalized world, HR practitioners should not
focus on the traditional HRM activities, however modern HR best practices such
as E-recruitment and selection, skill-based training and development,
fair/competitive compensation and employee security should be established and
integrated into the operation of organizations to achieve optimal
effectiveness. To achieve human resources best practices, companies must have
solid human resource management practices and departments. The journey to drug manufacturing
started in Nigeria with May and Baker Nigeria PLC which was founded in 1944 as
Nigeria's first pharmaceutical company (Pharmapproach, 2020). The
pharmaceutical companies in Nigeria are reforming and altering their ways of
doing business in job-related tasks and duties to make it more inspiring,
encouraging, motivating, and competitive for employees in a globalized economy.
Emphasis is shifting from the traditional primary responsibility of HRM on
hiring, selection, staffing, and compensation. Waheed (2019) opines that the
rapid growth in technologies is drastically changing the organizational climate
in some emerging economies such as Pakistan and India. The instability,
complexity, and unpredictability in its business environment according to a
study conducted by Cooray (2016) put Pakistan at position 119 of 128 countries
according to Global Innovation Index (GII). Based on the foregoing, his study
seeks to examine the effect of various innovative human resource management
practices on employees’ performance in the Healthcare sector of Nigeria.
1.2
Statement
of the Problem
Human resource is one of the most critical assets in a
firm; therefore, organizations are investing in the enhancing competitiveness
of this asset. Unlike the traditional approach that assessed the performance of
the firm financially, modern techniques also assess the performance based on
human resource practices and employee performance (Singh et al., 2015; Chashmi
& Fadaee, 2016). In organizations facing increasing global competition and
changes in their environment, Human Resource Development (HRD) is more relevant
than before. Such external pressures ask for employees that have the skills,
knowledge and ability to perform optimally. The facilitate that, organizations
may need to apply innovative Human Resource Practices. By using innovative HR
policies and practices, organizations aim at ensuring the autonomy and skill
enhancement of employees to enable them perform to perform well in changing
circumstance (Agarwala, 2003).
The healthcare sector of the economy is one of the
most important sectors of the economy due to the key services they offer.
Pharmaceutical companies in Nigeria have come a long way in providing
dependable high-quality pharmaceutical products to professionals, healthcare
for the population, adequate access to essential drugs to patients in various
communities in Nigeria, and other West African countries which have contributed
immensely to the economic growth and development of the nation (Igweh, Kifordu
& Egbule, 2020). Despite these laudable achievements, these companies are
faced with various challenges. The key challenges confronting Nigeria’s
pharmaceutical companies include counterfeit medicines, poor healthcare
infrastructure (power, water, transportation, and cost of distribution). The
unfavorable government fiscal and monetary policies, resulting in the reduction
of the capital base of many manufacturing companies, currency devaluation
coupled with high-interest rates increase the cost of production. Also, the
companies are faced with the challenges of an effective hiring process about
having an equitable and fair compensation for employees. Training and
retraining are key to organizational growth and success. The unstable
social-economic environment generated by crime and corruption makes our
indigenous companies many consumers oriented. This has distorted our economies
of scale and the technological requirement for the manufacturing of drugs
compared to pharmaceutical companies in other advanced economies.
The majority of the researches based on the
researcher’s knowledge, on the role of innovative HRM Practices on employee
performance are conducted in firms outside Nigeria. Therefore, a study in the
Nigerian context will fill the research gap, on how innovative HRM
Practicesaffect employee performance. Therefore, this research seeks to
determine the effect of selected innovative HRM Practices on employee
performance.
1.3 Objectives
of the Study
This
study investigated the relationship between Innovative Human Resource
Management Practices and employees’ performance in the Nigerian Healthcare
Sector. The intended specific objectives were to:
1. Assess
the relationship between skill-based training of employees and employees’
performance.
2. Determine
the impact of an alternative work arrangement onemployees’ performance.
3. Examine
the effect of selective hiring on employees’ performance.
4. Determine
the relationship between fair compensation and its effect on employees’ performance.
5. Examine
the extent which performance appraisal affect employees’ performance.
6. Examine
the extent to which decentralization and autonomy affect the employees’ performance.
1.4 Research Questions
In line
with the intended specific objectives, the following research questions were
raised to guide the study:
1.
How does skill-based
training of employees affect employees’ performance?
2.
Does an alternative
work arrangement have any effect on the employees’ performance?
3.
Does selective hiring
have any effect on employees’ performance?
4.
To what extent does fair
compensation affect employees’ performance?
5.
To what extent does
Performance appraisal affect employees’ performance?
6.
To what extent does
decentralization and autonomy affect employees’ performance?
1.5 Hypotheses
of the Study
The following research hypotheses were formulated and expressed in
their null forms
HO1:
Skilled based training has no significant relationship with employees’ performance.
HO2:Alternative
work arrangement has no significant relationship with employees’ performance.
H03: Selective hiring has no
significant effect on employees’ performance.
HO4:
Fair compensation has no significant relationship with employees’ performance.
HO5:Performance
appraisal has no significant relationship with employees’ performance.
HO6:Decentralization
and Autonomy have no significant relationship with employees’ performance.
1.6 Significance of the Study
This
study will provide in-depth knowledge as regards Innovative Human Resource
Management Practices and employees’ performance to understand the synergistic
effects for Nigerian Healthcare Sector with the likelihood of been applied in
Nigeria. Thus, the study’s results will be of
importance to management of Pharmaceutical Companies, government and
researchers alike.
Firstly,
Management of Pharmaceutical Companies, the study will offer them with a grasp
on the perception of Innovative Human Resource Management Practices
and employees’ performance. Again, it will offer
them with diverse strategies to partake in Innovative
Human Resource Management Practices required to
enhance the productivity, output and efficiency of their employees, growth and
general quality of work and commitment.
Secondly,
the study will assist governments in formulating policies aimed at improving
the operational regulations and the expansion of the HealthCare sector.
Furthermore, proposedtheoretical models may help organizations to understand
aspects of Innovative HRM practices much better and develop effective
innovative HR policies.
The
results of this study will also assist human resources personnel as well as
managerial staff in satisfying their employees and comprehension of the problem
areas ongoing in their company’shuman resource processes and elimination of the
cumbersome elements in Human Resource Development.
1.7 Scope of the Study
This
study seeks to assess the relationship between Innovative Human Resource
Management Practices and employees’ performance of Nigerian Healthcare Sector.
The dependent variable is employees’ performance while independent variable is
Innovative Human Resource Management Practices.
In
addition, structured questionnaire will be obtained on the perception of
respondents on measures of Innovative Human Resource Management Practices,
Human Resource Development and employees’ performance. The questionnaire will
be designed on a 4-point scale of strongly agree, agree, disagree and strongly
disagree and likened to those employed by prior researchers such as Khan, et al, (2022); Alin, et al, (2021); Santulli, et al, (2020); Hassan and Lukman (2020);
Abdelrahman and Elgiziry (2019).
1.8 Limitations of the Study
1. Variables
considered: Given that no study can explore all the variables that relates to
a subject matter and in addition to the fact that innovative human resource
management practice is a multi-facet construct, measuring these IHRM practices
and their effects on employees’ performance was a major challenge the study was
faced with. To overcome this limitation, the study covered six conventional
measures of IHRM practices (skill-based training, selective hiring, alternative
work arrangement, fair compensation policy, performance appraisal and job
decentralization/autonomy).
2. Limitation
in terms of scope: This study intends to focus on the entire healthcare
sector in Nigeria, the challenge here is centered on data availability and
consistency. To overcome this major challenge, the study intends to cover a
sample of pharmaceutical companies in Nigeria.
3. Data Source:
In this study, we were limited to the information provided by the
respondents which in turn constituted our data for the analysis. The validity
and reliability of these information given by the respondent and that were
further converted to data for the study can only be proven by the employees.
1.9 Operational
Definition of Terms
1. Innovative
Human Resource Management (IHRM): Innovative HRM practices have been
defined as “the international introduction and use of any unused concept,
practice, process or system is designed to influence or adapt the behavior of
employees with the aim of achieving improved organizational performance,
recognized and implemented by human resource practitioners” (Kumar &
Archana, 2017).
2.SelectiveHiring:
The process of identifying, selecting and recruiting the new workers based
on specific skills advantageous to the Job (Cook, 2016)
3. Training: A process of enhancing the employee knowledge,
skills, abilities and efficiently to enable them to increase their performance
in specific task or tasks (Barbazette, 2006)
4. Compensation:
Monetary or non-monetary exchange to the employees in exchange to the
services provided to the organization (Boxall, 2015)
5. Decentralization:
Decentralization in business is when daily operations and decision making
power are delegated by top management to middle and lower level managers and
sometimes even team members.
6. Performance
appraisal: Analysing the employee performance against the set goals, or
achievement targets (Boxall, 2015).
7. Alternative
Work arrangement: This is a work arrangement that includes flexible work
schedules, job sharing of one position between several employees, having a
regular work location at a place other than a campus work site as well as telecommuting.
8. Employee
performance: How staff achieve set organizational goals, fulfil duties and
responsibilities and comply with the policies and procedures (Barbazette,
2006).
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