CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

In today‟s increasingly competitive business environment, organisations keep evolving ways of ensuring their continued survival and improving organisational performance on a sustained basis. Human resources are considered the most important asset of an organization, but very few organizations are able to fully harness its potential. Pfeffer (1994) argued that human capital has long been held to be a critical resource in most firms. Lado and Wilson (1994, p.

701)    define a human resource system “. . . as a set of distinct but interrelated activities, functions, and processes that are directed at attracting, developing, and maintaining (or

disposing of) a firm‟s human resources. Companies are now trying to add value with their human resources and human resource (HR) department has been set up in order to manage their human capital, where as organisation in last decade, managed their human capital through personnel department which is only a small division of the company. The process of managing the human capital is called human resource management (HRM). Traditionally, management of this system has gained more attention from service organizations than from manufacturing organizations. However, to enhance operational performance, effectively managing this system is equally important in both types of organizations. Needless to say, sophisticated technologies and innovative manufacturing practices alone can do very little to enhance operational performance unless the requisite human resource management (HRM) practices are in place to form a consistent socio-technical system. For this reason, manufacturing organizations need to carefully evaluate their existing HRM practices and modify them, if needed, so that employees can effectively contribute to operational performance improvement. This lack of attention is surprising when one considers human

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resources‟ critical role in achieving superior performance in competitive priorities, such as low cost, quality, delivery, flexibility, and innovation.

Nigerian organizations have started realising the importance of HRM. Cheah et al. (2003) stated that Nigerian managers realised that HRM had to be effective to bring about organisational stability and harmony. Besides, they also stated that the diversity of the composition of the modern workforce in Nigeria requires more appropriate and imaginative HRM solutions. As several scholars have noted that managing people is more difficult than managing technology and capital (Barney, 1991; Lado & Wilson, 1994), principally, in a country like Nigeria which is a developing country with more labour than capital, failure in managing human capital and maintaining the harmony within an organisation will create fatal problems to the organisations.

Nigerian government has envisioned as a developed nation by 2020. Government has also recognised that human resource management can play an important role for the said vision. Managing human resources has become critical to the success at all companies, large and small, regardless of industry (Ulrich, 1997). Stavrou-Costea (2005) also argued that the effective human resource management can be the main factor for the success of a firm. Today the most of the companies believed that without efficient HRM programmes and activities companies would not achieved and sustained effectively (Schuler, 2000). Consequently most of the organisations, domestic companies and multinational companies in Nigeria nowadays tend to focus more on HRM and also treated HRM as a key of success. In as much as the policies are there, the organisations still do not implement them.

Considering the need for HRM practices, Effective Human Resources Management (HRM) provides a means, through which an organisation attracts, retain, develop, motivate and adequately compensate employees for a sustained growth and increased competitiveness.

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Thus, this research is expected to become, in an important part, a meaningful guideline for human resource management practitioners and other stakeholders to see the critical role of Human Resources Management in the success or failure of companies and ensuring the efficient and effective functioning of companies as against their competitors.

1.2 Statement Of The Research Problem

The increasing competitive business environment has made every business to strive towards the improvement of organisational performance in all aspects, human resource management is one of them and in absence of it, problems could arise.

The following are problems identified with this research work:

1.    Strategic human resource policies put in place and failure to implement these policies by the management has contributed to poor performance in companies in Nigeria.

2.  Weak organisational culture, disregard for the value of workers‟ remuneration and resistant

to change the overall culture of the organisation by the management has led to poor performance in companies in Nigeria.

3.  lack of involvement of the employees in decision making, quality circles and team work in organisations led to poor human resource management which also affects organisational performance in Nigeria.

4.  Negligence on the part of board of directors and laziness on the part of the human resource manager in the performance of their responsibilities to the organisation in selecting the right

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person for the right job, job training and job satisfaction has contributed to poor human resource management and ultimately poor performance in organisations in Nigeria.

1.3 Objectives Of The Study

Generally, this study seeks to explore the relationship between human resource management and organisational performance.

The specific objectives are set out as follows:

1.To examine the impact of different human resource policies on organisation‟s performance and find out why organisations hesitate to implement them in Nigeria .

2.To review organisation‟s culture and whether the investment and value of workers‟ remuneration are fitted into organisation‟s performance criteria in Nigeria.

3.   To facilitate employee involvement and participation in decision making quality circles and team work all of which contributes to effective performance of organisations in Nigeria.

4.   To examine the responsibilities of the board of directors and human resource managers in the areas of job selection, job training and job satisfaction which contributes to good human resource management and performance in organisations in Nigeria.

1.4 Research Questions