THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON ORGINIZATIONAL PERFORMANCE: THE CASE OF LION INSURANCE COMPANY S.C

Abstract

This study seeks to assess the effect of human resources management practices on organizational performance of Lion Insurance Share Company. This research studied human resources management practices in the area of Training & Development, Performance Appraisal, and Compensation Management. Explanatory survey design was used while a questionnaire was used to gather primary data. The study sample in terms of the respondents covered randomly selected 156 employees of Lion Insurance Share Company at main office and branch offices in Addis Ababa. The data collected was analyzed with the aid of descriptive statistical techniques such as frequencies, percentages and mean score. More so, correlation and multiple linear regressions were used to examine the relationship between study variables using Statistical Package of Social Sciences Version 22. The findings of the study revealed that the combined effect of various human resource management practices influenced organizational performance positively. The result of regression also indicates that all predictor variables (performance appraisal, employee training & development and compensation management) have statistically significant contribution on organizational performance. The adjusted R² of 0.481 indicates 48.1% of the variance in organizational performance can be predicted by human resource management practiced by the company. Thus, it can be concluded that improved human resource management practices are significantly influencing organizational performance. Therefore, the management of Lion Insurance Share Company should improve its human resource management practices as a way of improving the company performance.