Relationship Between Strategic Human Resource Management Practices and Firm Performance of the Multinational Manufacturing Companies in Kenya: the Mediating Role of Technology

Abstract

The human resources of an organisation can be a source of competitive advantage, provided that the policies for managing people are integrated with strategic business planning and organizational culture. The key objective of this study was to investigate the nature of the relationship between an organization's human resource strategic orientation and its performance with specific focus on multinational manufacturing companies in Kenya. This study generated current knowledge on the mediating influence of technology on relationship between SHRM practices and performance in Kenya from a sample of respondents comprising of HRM managers and production managers.

The study was necessitated by a need to question the veracity of the link between Human Resource Management (HRM) and performance. Analysis of data relating to the question of a link between Strategic Human Resource Management (SHRM) and performance reveals there is uncertainty as to the direction of the link. This study sought to determine the extent to which strategic human resource management is practiced among multinational manufacturing firms in Nairobi, the influence of strategic human resource management practice on their performance, and the relationship and veracity of the link between strategic human resource management and firm performance as moderated by extent of technological deployment. Descriptive survey design was used and the data was cross-sectional.

From a population of 92 firms, 50 were selected for the study. A total of 36 firms responded in the survey (response rate of 72%). Questionnaires were used to collect data from the firms. The questionnaires were addressed to human resource managers and operations managers. The study found that the overall mean score for strategic human resource management practice was 4.08 suggesting that generally it was highly practiced in the industry. The study found that there was a low negative correlation between strategic human resource management practice and performance (r = 0.049). Technology moderated the relationship as r increased by 12.8% from 0.002 to 0.130 with the introduction of technology in the model.

The study concludes that multinational manufacturing corporations in Kenya practice strategic human resource management to a high extent given the higher mean scores for the overall practice. The study also concludes that strategic human resource management has a low influence on performance of multinational corporations in Kenya. It is also concluded that technology moderates the relationship between strategic human resource management and performance. The study recommends need for multinational corporations to enhance their strategic human resource management practices as far as flexible work designs are concerned.