Academic journal article International Review of Management and Business Research

Assessing the Impact of Strategic Human Resource Management on Tangible Performance: Evidence from Nigerian SMEs

Academic journal article International Review of Management and Business Research

Assessing the Impact of Strategic Human Resource Management on Tangible Performance: Evidence from Nigerian SMEs

Article excerpt

Introduction

In the past decades, human resource management has been identified as an important element that aid firm competitive advantage, capable of creating differentiation while contributing to firm overall performance. In recent years, a growing body of research has emerged that go further and argues the importance of strategic human resource management to firm performance. However, the awareness of this concept, particularly among small scale business in developing economies is still lacking, and many still condemn the reality that strategic human resource management has a direct impact on the achievement of small and medium scale business goal and performance improvement within this sector .

Presently, researchers findings are being reported both in management journals and in books, the significant contribution of small and medium scale business to growth, efficiency, and competitiveness in advanced and emerging economy of China, Taiwan, Indian, Japan including the United State (Huang, 1999). Having established that, most of this study was conducted in developed economy, not considering the present global market setting where firms seek for innovative ways of improving their performance. Besides, there is scarcity of empirical research regarding strategic impact of human resource on firm performance in developing economy (Al-Hamadi, Budhwar & Shipton, 2007), and within the context of small and medium scale enterprises in Nigeria (Okpara, 2011). As a result, this study is aimed to fill this gap by examining the impact of strategic human resource management on tangible firm performance.

Despite, its significant position as the giant of Africa, in terms of natural resources, majority of firms predominantly small and medium scale enterprise still underperform while others wind up within first five years of business, only five to ten percent survive to achieve maturity stage, even with available financial resources (Apulu, Lathan & Moreton, 2011; Ayanda & Danlami, 2011; Onugu, 2005), due to lack of strategic human resource planning (Okpara, 2011). Having established that, most researchers' attention has always been limited to exogenous factors such as firm's environment, technology, size, and financial resources. It is uncertain if line managers are actively involved, in modernizing HR functions to be more strategic. Even though human capital has been identified as the most important assets of the firm (Ahmad & Schroeder, 2003). Overcoming these deficiencies, required firm to embrace and develop the value of their human resources practices in order to be more competitive. This question has been achieved in the developed and emerging economy, such as American, Japan, and Taiwan, where SMEs are well-known in engaging the services of strategic human resource management regularly (Huang, 1999), to achieve various performance measures.

Operationalizing firm performance remains an uneasy task for researchers in the field of strategic human resource management (SHRM). Though most literature on organizational research, extensively use performance as the dependent variable. Yet, the concept remains indistinguishable and loosely define constructs (Rogers & Wright, 1998). Even though many studies have endeavored to test how SHRM dimension contributes to firm performance, it is imperative to state that no standardized dimension in examining firm performance (Dyer & Reeves, 1995). For instance, performance indicators such as profitability (e.g. return on investment and return on assets), sales growth and stock market value have been most common despite their conceptual distance from human action. Subject to conflicting argument, in identifying a unified dimension of performance, this study categorizes performance measures into tangible and intangible. For the purpose of this study, tangible performance are performance that can be effectively measured (e.g, increase in firm productivity, return on assets, return on equity, employees turnover, sales growth, employees value and profitability) due to decrease or increase in costs or long term competitive advantage in the market environment. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.