Abstract:
The purpose of this study was to examine the effect of sustainable strategic human resource management on firm performance in the case of firms which are listed at the Nairobi Securities Exchange. The study specifically sought to determine the influence of human resource planning, career management, reward system, performance management and ascertain the moderating effect of size, age and sector of firm on the relationship between sustainable strategic human resource management and firm performance. The study was anchored on the resource based view theory, the human capital theory and the shareholder value maximization theory.
The research philosophy adopted in this study was positivism while the research design used was a cross-sectional survey since it best helped the researcher in understanding how the chosen independent variables affected the dependent variable. The study population constituted all the 68 firms listed at the NSE as at May 2017. The target population included the head of human resources and finance directors in all the listed firms since they were better placed and conversant with the subject of this study and were involved in the development of the policies and review of performance. The sample size comprised of 136 respondents and data was collected through structured questionnaires to meet the objectives of the study. Responses were tabulated, coded and processed by use of a computer Statistical Package for Social Science (SPSS) version 20.0 programme so as to analyze the data. Both descriptive and inferential statistics techniques were used to analyze the data. The Pearson‘s coefficient of correlation was applied to measure the degree of influence of each independent variable (HR planning, career management, reward management and performance management) on the dependent variable which was performance of firms listed at the NSE.
To test hypotheses, simple linear models were used to test significance between each
independent and dependent variable, while multiple regression models were used to test the moderating variable. The study findings revealed that the relationship between human resource planning and firm performance was positive and statistically significant and hence rejected the null hypothesis. Also revealed that the relationship between career management and firm performance was positive and statistically significant and therefore, the null hypothesis was rejected. The relationship between reward system and firm performance was found to be positive and statistically significant and thus, the null hypothesis was rejected. Further, the study revealed that the relationship between performance management and firm performance was positive and statistically significant and hence, the null hypothesis was rejected. Size, age and sector of the firm had a statistically significant moderating influence on the performance of firms listed at the NSE and therefore, the study rejected the null hypothesis.
The study concluded that the type and strategy of firm, succession planning, matching skills with jobs and skills inventory are human resource planning indicators influencing the
performance of firms listed at the NSE. Moreover, career development and planning, career mentors/ counseling, career centres and firms planning for employee growth and progression are key career management determinants for the performance of firms listed at the NSE. The study also concluded that recognition, paid leave and vacations, remunerations, cash bonus and travel allowances are key rewards that influence the performance of firms listed at the NSE. Further, individual goals and company strategy being communicated widely, the appraisal process, monitoring progress on goals and feedback/ formal documentations are performance management indicators that influence the performance of firms listed at the NSE. Age, size and sector of the firm impacts firms‘ outcomes like turnover, performance and commitment. This study concluded that age, size and sector of the firm have a moderating influence on the performance of firms listed at the NSE.
It is therefore recommended that firms should continue to practice and maintain effective
human resource planning as it plays a fundamental role in achieving the objectives of the
organizations. Career management practices should be widely adopted by NSE listed firms as doing so would lead to improved performance. Firms‘ reward systems should include recognition, paid leave and vacations, remunerations, cash bonus and travel allowances among others to enhance outstanding performance in the workplace and that firms need to have a clear communication strategy that will enable them educate staff on issues that affect them in the organization.