Strategic Human Resource Management Practices And Performance Of Parastatals In Kenya

ABSTRACT

Worldwide, the public sector plays a central role in any country‟s socio-economic development. The sector has however been affected by globalization, public sector reforms, regional and international partnerships, climate change, information, communication and technology and human resource development, among other factors. In an increasingly changing global environment, the mandate, structure and operations of public sector must be reshaped and productivity enhanced to make it more focused, efficient and responsive to the needs of those it serves. This research sought to examine the extent to which strategic human resource management practices influence performance of parastatals in Kenya. The specific objectives were to establish the relationship between strategic human resource management practices and organizational performance, examine the relationship between strategic human resource management practices and human resource capabilities, determine the relationship between human resource capabilities and organizational performance and to assess the extent to which public sector culture influence on the relationship between strategic human resource management and organizational performance. The philosophical foundation of the study was positivism. The study utilized both the descriptive research design and explanatory research design which was cross-sectional survey in nature. The study population comprised of all the 185 parastatals in Kenya as outlined in the report of the presidential taskforce on parastatal reforms of 2013. Self-administered questionnaires were used to collect primary data. Descriptive statistics were computed to describe the characteristics of the variables in the study while multiple regression analysis was used to establish the nature and magnitude of the relationships between the independent and dependent variables. The findings indicate that there is a significant positive relationship between training and parastatals‟ performance in Kenya, performance management has a significant positive relationship with performance of parastatals while compensation has a significant positive relationship with Parastatals performance in Kenya. Human resource capabilities partially mediate the relationship between strategic human resource management practices and parastatals‟ performance in Kenya, public sector culture was found to be an explanatory variable in explaining the relationship between organizational performance and strategic human resource management practices. However recruitment was found not to have significant relationship with organizational performance. The findings supported the theoretical foundation of the resource based view theory that competitive advantage comes from the internal resources that are possessed by an organization. The recommendations are; human resource managers should offer a variety of trainings to their staff, policy makers should create an adequate performance management framework that will effectively link performance of parastatals to national development goals and hence adequately link individual performance to institutional performance. Finally on compensation the study recommends that the boards of parastatals set specific levels of remuneration of executives and senior staff in consultations with the parent Ministry and the State corporations Advisory Committee.