Relationship Between Human Resource Strategic Orientation and Performance of Medium Manufacturing Firms in Nairobi, Kenya

Abstract

Human resource management science has evolved over time given the observed vitality of HR department in creating effective synergies and a work force capable of guaranteeing the growth and profitability of the organization. Empirical results have shown that HRSO is indispensable in the contemporary business environment characterized by stiff competition, dynamic industry trends and ever shifting consumer needs. The study explored HRSO orientation as a major determinant of organization performance. Successive studies have shown that most companies employ soft or hard HR orientation; manifested in the form of employee training, control, motivation and remuneration. The findings of the study showed a positive correlation between firm performance and the HRSO orientation of 46 medium manufacturing firms sampled in Nairobi. The dependent variables measured were company profits, employee retention rate, product market share, and the overall stock price of the sampled firms. While there was a positive correlation between soft and hard HR orientation on performance, the study concluded that company stock price and product market share are not dependent on the firm’s HR orientation. The findings of the study show a direct link between HRSO orientation and performance. The findings support assertion that the association between HRSO and performance is mediated by the organization’s commitment to employee training, motivation, reward and inclusion.