Being thesis submitted in the department of business administration and marketing, school of management

Figure 2.1: Human Resource Management Practices

Source: Decenzo and Robbins, (1999)
Edralin (2010) regrouped these into five HRMP; recruitment and selection, training and development, compensation, performance management, as well as employee relations. The study of the HRM practices identified by these authors shows that they can be summarised into six essential human resource management practices, if we add job design in Zakaria, et. al (2011), which is missing in the Edralin (2010) summary. Hence, in this study, we focused the six basic HRM functions; recruitment and selection, training and development, job design, performance appraisal, compensation and industrial relations. These are in turns discussed below:
2.1.1.2.1 Recruitment and Selection Function

Recruitment and selection, staffing, employment, hiring are often being used loosely to describe the same concept in human ressource management. However, the most common and encompassing ones are recruitment and selection or staffing function. Recruitment and selection function, according to Noe, Hollenback, Gerhart and Wright (2012), refers to the activities of recruiting and selecting potential employees for vacant positions. Okeke-Uzodike and Subban (2015) describe this function as including all activities such as selection, promotion and placement, which are either related to external hiring of personnel or internal movement of employees across positions. This therefore involves the elements of recruitment, selection and placement. Recruitment element refers to the process of seeking and attracting the right candidates or potential applicants to a vacant position from both internal and external job market (Oredein, 2007). Moses and Kanter (1993) see it as the process required to discover the sources of staffing job schedules, to employ effective measures for attracting the potential staff in the required number to facilitate effective selection of an effective and efficient working force and to help the organization achieve its stated objectives. Selection, on the other hand, is the process of determining the right person with the right attitude to fit well in a defined job, and hence with a greater likelihood of success on the job, from among those that were attracted by the recruitment sub-process (Okeke-Uzodike & Subban, 2015). Placement, on the other hand, involves the matching of the right person to the right existing vacant position.

The aim of recruitment and selection function is to enhance a firm’s stock of human capital by means of selective recruitment of employees (Snell & Dean, 1992) for corporate competitive performance. It is by this function that employers endeavour to get the best person who can fully contribute their expertise to develop organisation and enhance its competitiveness (Hazlina, Ahmad, Aizzat, Naurdin & Zainal, 2012). Thus, through recruitment and selection function, employers can achieve competitive advantage by attracting and retaining more capable people than it rivals or competitors. Oredein (2007) stress that if an organization is able to find and employ staff who consistently fulfill their roles and are cabable of taking on increasing responsibilities, they are immeasurably better placed to exploit opportunities and deal with the threats arising from their operating environment than competitors who are just struggling to build and maintain their workforce.
Recruitment and selection affect the potential of an organization to have employees with ability and motivation to be creative, which has been associated with administrative and technological innovations (Jiang, 2012). This is in line with Schmelter, Mauer, Borsch and Brettel (2010), who contended that the recruitment and selection activities have the entrepreneurial objective of forming an appropriate resource base of human capital that is in line with entrepreneurial orientation. According to them, recruitment and selection is not simply about filling job positions. It is a mechanism through which organizations identify, define and assess individuals against structures of necessary or desirable competencies or behavioural frameworks. It allows management to gradually modify and hence determine the behavioural characteristics and competences of the workforce in line with the entrepreneurial objective of the organization. To Alan (2007), it is a tool of using the best practice to find the people who meet the specific criteria to fit in with the culture of the organization; who will be content to build a career with the organization and who will absorb the goals of the organization. This is in line with Armstrong (2009) description of the process as people-resourcing, which is concerned with how an organisation meets her needs for certain skills and behaviors, including entrepreneurial work behavior and skills.
Recruitment and selection is affected by many external factors such as gender ratio, age, and educational levels, economic conditions and the levels of industrialization, as well as internal organizational factors such as the nature of job, size and growth of the organization, status of HRM among others. Hence, Oredein (2007) stresses that, as a result of these, progressive organizations often develop and consistently follow defined and clear recruitment policies across the organization. Such recruitment policies often stress the importance of achieving the objectives of finding employees who are best qualified for each job, retaining the best and most promising ones, offering promising careers and job security, and providing facilities for personal growth, on-job-skill and knowledge. Further, she contends that recruitment policy should contain organisation’s objective for recruitment, identification of recruitment needs, criteria for shortlisting, and sources of recruitment and cost of recruitment as a way of maximizing the achievement of this objective.
To achieve the above objectives effectively, Williamson (2000) proposes that, as small firms grow, it is necessary to develop increasingly formal methods in employees’ staffing processes. By this, they can maintain their growth and improve abilities to attract employees who can produce good quality business output required for competitive business and entrepreneurial performance. In this respect, Deshpande and Golnar (1994) point out that the hiring approach of successful entrepreneurial firms tends to be characterized by providing realistic job description and communication of both the positive and negative aspects of job. Leung, Zhang, Wong and Foo (2006) add that as these firms grow, they have strong tendencies to use informal approach to acquiring the core employees through networks. Leung, et.al, (2006) added that, at the beginning, founders of entrepreneurial firms usually hire generalist who can and will put the required efforts into and feel very passionate about new ventures. Later, when the firm begins to grow, more seasoned professionals are employed who, through their knowledge and skills, can accelerate the business and foster its growth (Zotto & Gustafsson, 2008).
2.1.1.2.2. Training and Development Function

Acccording to Ojo, Oyeniyi and Adeniyi (2007), no matter how much an organization carefully screens applicants for and before selection, there will always remains a gap between what employees know and what they should know for optimal and effective job performance. This is because, according to them, changes in technology, population characteristics, tastes, level of competition and consequent changes in job contents create competence gaps which require constant updating of knowledge, skills and attitude. Besides, there are specific works which require customization of skills and that not all newly hired employees acquire social skills required for effective performance, aside from their basic job or generic job knowledge or skills (Tahir, Yousafzai, Jan & Hashim, 2014). These create the need for constant remediating training and development interventions.

Training and development is the human resource management tool by which the above gaps are filled. Fajana (2006) describes training as the process of developing skills, learning concepts, rules and attitudes required to increase effectiveness on a particular job. It is a planned process for the purpose of modifying the attitude, knowledge and skill or behaviourial traits of people through learning experiences that are designed to achieve effective performance in a range of activities. Development, on the other hand is about continuous and often conceptual learning experiences that bring about growth. It is concerned with the development of long term performance potential in broad areas. Nuray (2016) describes it as building the capacities of organisations’ members over a defined period to manage changes, to predict, plan, understand and monitor changes and hence to prepare for future responsibilities. Thus, training and development are planned activities that are executed to facilitate learning related to the job knowledge, skills and behaviours of employees for current and future responsibilities (Noe, Hollenback, Gerhart & Wright, 2012).
Training and development also helps to develop and improve organisation culture through building positive perception and feeling about the organisation and its values (Adeniji, Osibanjo & Abiodun, 2013). This is done through planned experiences that are designed to bring about permanent changes in individual’s knowledge, skill and attitude (Dash, 2011). This is why McNamara (2008) refers to training and development as the systematic process of altering the knowledge, attitudes and behavior of employees so as to increase their effectiveness in supporting the achievement of organizational goals.
To achieve its objective maximally, training has to be systematic. Such training, according to McNmara (2008), would pass through a systematic training cycle which starts with the identification and analysis of training needs, the translation of these needs into training goals to be achieved during the training programme, the formulation of the training programme based on these goals, implementation of this programme and then the evaluation of the training programme. Khanka (2008), elaborating on this, includes organization analysis, task/role analysis, manpower analysis, development of the statement of training needs, setting training objectives, development of measures of job proficiency, development of training policies, plan, procedures and record, planning and designing of training programmes, conduct of the training programmes, follow up and evaluation, validation of training, ensuring feedback of results and revision as may be necessary.
Akinseye (2015) identifies two approaches to training: reactive and proactive approaches respectively. Reactive training approach tries to identify and find related training and development solutions to current needs and problems in the organization such as low output or productivity, low quality of output, high wastages, error or scraps, and so on. In proactive approach, training is conducted in order to prepare for future needs or to stay ahead of competition through related training and development interventions. Training for entrepreneurial work behavior or corporate entrepreneurship can be in this category.
Training and development is of the proactive category when it fosters the creativity and initiative of employees and help to prevent manpower obsolence (Arnoff, 1971). As a result, acccording to Nasurdin, Ahmed and Lin (2012), well trained employees can develop, share and use their knowledge and creativity to produce services or products required by customers and understand the system for the development of product or service innovations in the organisation. Hence, fast growing firms and organisations, compared with their slow growing counterparts, tend to put stronger emphasis on training and development of their employees (Nasurdin, et al., 2012). They take initiatives to update and improve their employees’ knowledge and skills so as to produce superior and competitive outputs through entrepreneurial work behaviour.
Edralin (2007) identifies two types of training in terms of their objectives. These are those that are meant to increase the technical skills of employees and those that are aimed at developing identification with and commitment to the values and culture of the organization. He contended that training leads to entrepreneurial work behavior when they are not only designed to increase technical skills but also to facilitate the adoption of organization values, mission and culture such as entrepreneurial work behavior. This would induce the recipients’ ability to apply their discretionary efforts to develop and use their technical skills in the interest of the organization entrepreneurially. It may therefore be concluded that training and development efforts would be most effective when they are designed to increase desirable technical competence as well as values consistent with effective achievement of organisation’s objectives through entrepreneurial work behavior (Iqbal, Ahmad, Afeeeq & Javaid, 2013).
2.1.1.2.3. Performance Appraisal Function

Performance appraisal is the process by which organisations assess the extent to which employees are performing their jobs well (Noe, Hollenback, Gerhart, & Wright, 2012). Fajana (2002) describes it as the process instituted to review how far the set objectives have been achieved, what attributes have characterized the job performance, and what are the performance potentials of the individual employee in meeting the goals and objectives of the organization in the future. This process, according to him, provides information concerning employees progress in performing their jobs roles in three areas; historical review of past performance, distribution of present rewards in relation to past performance and determination of training, development and motivational needs for the future. This involves the procedure of setting work standards, estimating the employee’s performance relative to standards and providing feedbacks to the employee so as to motivate him or her to eliminate a type of performance (or behavior) or to continue to perform in certain ways (Denler, 2008). Thus, according to Fajana (2002), performance appraisal is used for discussing performance, identification of training needs, updating job description, getting appraisee’s feeling about their jobs, their superior and the organization they work for, obtaining information about hidden work problems, setting job targets and objectives and rewarding performance.

Approaches to performance appraisal include free written reports, controlled written report, ranking, grading or forced choice rating, critical incident, self-rating, alphabetical or numerical rating and behaviourally anchored rating scales. Fajana (2002) considers that each of these approaches has advantages and disadvanges. He therefore recommends the incorporation of several approaches to try to balance the advantages with disadvantages so as to enhance the objectivity and effectiveness of performance appraisal exercises. However, in combining the different approaches, he emphasizes the need to consider, not just the complexity of the organization, but also the issue of the reliability, validity, acceptability and fairness of the method or instrument for collecting information. Reliability refers to the consistency of the instrument over time and across different raters.Validity concerns the need for the items in the instrument to include all or most of the important and related job behaviors, performance and potentials. Acceptability relates to the need for the appraisee to accept the approach while fairness pertains to the fact that nothing should be done to obtrude the privacy of individuals concerned.
The objectives of performance appraisal cover the result to be achieved as well as the behavior expected to achieve this result. This is because, according to Fajana (2002), it is concerned with the extent to which an individual, a unit or department is carrying out assignments or tasks correctly and successfully. It is therefore both a result-oriented activity as well as a behaviour-oriented activity. The behaviour oriented approach centers on the employees behaviours that are needed to perform the job effectively while the result oriented appraisal emphasis the upshot or impact of these behaviours. Performance, in this context, therefore refers to the result to be achieved as well as the behavior expected to achieve this result. Fajana (2002), in this connection stress the need for organizations to develop a systematic performance appraisal, incorporating these elements ( results and the behavior to achieve the results), in order to develop their employees capabilities, ensure appropriate behaviourial response, communicating problems and discovering areas requiring remediating human resource management interventions. The process involved in performing these activities provides information for taking decisions on training, reward, promotion, placement, work scheduling, and manpower budgeting for the purpose of stimulating appropriate work behavior for achieving organization goals most effectively (Olatoye & Ojo, 2007). It is in this way that performance appraisal can become a tool for monitoring, changing and promoting desired employee behavior, generally and entrepreneurial work behavior in particular (Densler, 2008).
It should however be noted that the primary focus of performance appraisal is often in the realm of past performance, and hence often undertaken when it would have been too late to make necessary adjustment to prevent current performance problems. In addition, performance appraisal have, as a consequence, been bedeviled by different practical problems including the lack of understanding about the objectives by management, appraisers and the appraises, lack of senior management support, tendency to regard appraisal as a means of disciplining subordinates, rather than as a means of helping them to do a better work and to progress on their jobs, inadequate or hasty preparations for the exercise, regarding appraisal as a once a year exercise, lack of courage to appraise objectively, the tendency of dwelling more on weakness, rather than counseling and agreeing on steps to improve on weaknesses and making appraisal more confidential to appraises than it should be (Fajana, 2002). Performance appraisal scores are often at variance with productivity level . This is often because, apart from the absence of professional expertise in most performance appraisal processes, most employers are interested in the final output of the employees’ productivity rather than focusing on how to improve those traits that can further increase productivity (Banjo, 2000). Emphases were on employee traits, deficiencies, abilities, past performance, salaries and promotion. As a result, in most cases, it could not effectively achieve its critical objective of providing a two-way feedback between employees and their supervisors, developing and improving their performance, documenting their performance and serving as basis for organization decisions (Zaitouni, 2011). However, emphasis is now on present performance, future goals, employee participation and the responsibility of the manager to ensure and manage the process which delivers performance (Omusebe, Kimanichege & Musiega, 2013). This has led to a shift of focus from just appraising performance to managing performance (performance management) so as to ensure effective achievement of these objectives (Per-Mattila & Mikael, 2001).
Perfomance management(PM) is a circular process of the development of performance objective, perfomance measures and measurement development, performance support, perfomance measurement, and corrective performance support to ensure expected level of performance (Jones, Morris & Rockmore, 1995). Amstrong (2009) sees it (PM) as comprising three main processes, including performance and development agreement, managing performance and performance review and assessment. In this way, appraising performance (review) becomes an element of performance management and a tool of fostering entrepreneurship in organisations. This approach also shifts more responsibility for achieving performance objective to the supervisor, rather than the subordinates, as in the performance appraisal, narrowly conceived as performance review. The subordinate officers to be appraised are perceived as resources which are to be maximised and accounted for by the superior officer. Fajana (2002) contended that while performance appraisal focus on the extent to which an individual is carrying out assigned duties as well as joint action that can be taken by both the superior and the subordinate to manage observed variance between set standards and actual performance, performance management (PM) deals with the processes and activities of the organisation that enhance the design, development and implementation of performance. PM embraces all formal and informal methods adopted by an organisation and its managers to increase the commitment of individual to productivity and corporate performance. In other words, performance appraisal, narrowly conceived, is reactive while within performance management framework, it is proactive and therefore useful for promoting entrepreneurial work behaviour.
2.1.1.2.4. Compensation Management Function

Compensation, remuneration or rewards are often being used interchangeably. Remuneration or reward refers to giving employees benefits in return for what they did or achieved. It may be in the form of salary or basic pay, incentive or fringe benefits or a combination of these (Osibanjo, Adeniji, Falola & Heirsmac, 2014). This then serves as a basis for motivation to work, continue to work or to work better than before or to work or behave in certain ways. This is because reward motivates learning by creating pleasurable association that thereby becomes inducements to repeat the desired act. As a result of being pleasant, it is therefore capable of generating interest and enthusiasm (Omomia, Akanbi & Adewale, 2008) which promotes creativity and entrepreneurial behavior.

Belcher (1979) describes compensation as a contractual, double input-output exchange between a worker and the employer. The input of wages and the output of productivity and services occur on the employers’ side. According to Fajana (2002), in this double input-output exchange process, the employer offers basic pay as output for the worker’s input of availability for work, qualifications, experience and potential productivity. The employer also offers benefits of various qualities to the workers, based on the latter membership of the employers’ organization. Thus, Lim and Ling (2012) are of the ``` view that employees could be compensated for performance, experience, qualification or seniority or availability. Zaitouni (2011) considered that effective compensation system is the one that link employees’ performance to expected reward, rather than just experience, availability, qualification or seniority. This would enable the system to more directly influence behavior and consequently organization performance.
Armstrong (2009) refers to the management of employees’ compensation as being concerned with the formulation and execution of strategies and methods to compensate people equitably, consistently and fairly in accordance with the organization value. It comprise of a system of managerial practices through which financial and non-financial elements are flexibly combined and directed at enabling employees to be motivated for high production and commitment to the organisation. It includes incentives or pay that have been planned to motivate individuals to join, remain and perform optimally, over a period of time, in an organisation (Snell & Dean, 1992). Thus, a compensation system has the potential to attract talented employees leading to enterprising and achieving organisation. It may also lower the motivation of existing employees, leading to high and costly labour turnover and hence, high cost of doing business.
Despite this potential, Scheepers (2009) study shows that, the design of many compensation systems is inconsistent with the requirement of promoting corporate entrepreneurship. Hazlina, Ahmad, Aizzat, Nasurdin and Zainal (2012), therefore stress the need for small and medium scale enterprises (SMEs) to offer equitable compensation policy that attracts and retains entrepreneurial employees as well as motivates them to perform their work-related activities efficiently and effectively. In line with this, Schuler and Jackson (1987) report that organizations that employs innovative techniques tends to offer higher compensation because of the capacity of this to attract qualified, adaptable, inventive and talented individuals, essential for their advancement through enhanced performance. Further to this, entrepreneurial firms are willing to reward creativity, innovation, willingness to take risks, proactive behaviour, tolerance for ambiquity and uncertainty and cooperation (Zotto & Gustafsson, 2008). Their reward systems are usually varied and based on bonuses which include both profit and stock sharing ( Zotto & Gustafsson, 2008) and promote a feeling of ownership and shift some risk of ownership to employees (Barringer, Jones & Neubaum., 2005). Hence reward do not necessarily follow or reflects employees status in entrepreneurial firms. Entrepreneurial firms provide a multi-dimensional reward, based on the pay off from acting in uncertain environments, which includes market innovations, the responsibility associated with having a stake in the business and her customer satisfaction which add up to the percieved feeling of reward(Snell & Dean, 1992).