Human Resource Management Practices and Performance of Firms Listed on the Nairobi Securities Exchange

Abstract

Most research demonstrating the link between Human Resource Management Practices (HRMP) and firm performance has focused on the private sector, yet understanding this relationship in publicly listed firms, in the Developing World setting is equally important. The role of HRMP on firm performance of the Nairobi Securities Exchange (NSE) listed
firms has not been established using the selected variable, yet theory has demonstrates that HRMP can have an effect on firm performance. This study was motivated by the desire to fill this gap in knowledge. The objective of the study was to establish the relationship between HRMP and firm performance. The research design was cross sectional descriptive
survey. Data was collected using a self-administered questionnaire, from a population of 60 NSE listed firms. The response rate was 60%. Simple linear regression was used to analyze the data. The results of the study show a statistically significant relationship between HRMP and performance of firms listed on the NSE. The findings of the study are consistent with the findings of other empirical studies which have established a significant link between HRMP and firm performance. It was recommended that firms have to ensure that the HRMP that they adopt assist them to attain and sustain a superior competitive advantage in their operations.

Key words: Human Resource Management Practices (HRMP); firm performance