Now that human capital contributes to the

Now
days manufacturing industries are trying to attain competitive advantage
through whichever cost because the world has become more competitive and
unstable than there before. This can only be attained through the adoption of
human resource practices which are more innovative (Sparrow et al 1994).
According to Schuler et al (1987) various human resource practices and systems
have defined aspects but irrespective of this they systems should be
attracting, developing, motivate and also should be at a position of retaining
the employees and also ensure perpetual existence of the organization.
According to Delery, (1996) human resource practices are built on a set of
policies and practices which are done in a consistence manner to ensure that
human capital contributes to the achievements of the organization’s goals and
objectives.  On the other hand Minibaeva
(2005) connotes that human resource practices are those policies and strategies
put in place by an organization with an aim of managing human resources by
facilitating firm specific competency development, creation of complex social
relations and organization knowledge development hence leading to sustainable
competitive advantage.

Johnson
et al (2002) indicated that human resource practices should entail of specific
practices, informed policies and philosophies that targets to attract, develop,
motivate and prevent high employee turnover hence leading to effective and
efficient functioning of the firm. Therefore organizations should have organic
systems which are operating in turbulent environment.

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Human
resource practices can also be considered as complex networks of relationships between
workers and managers of different grades within and between teams (Wright
2003). Due to globalization forces and increased awareness pressure has been
put by customers to organizations to ensure high quality of products and
services. Hence this has led to developing high quality strategies which aim at
changing the customer needs and services into goods and services. According to
Porter (2007) when effective and efficient human resource practices like
hiring, personal development, job design, team working, participatory
leadership, life and work balance and also rewards are in place it leads to
attaining of job fit and high experienced employees. 

Storey
(2000) asserts that after organizational entry, in the training, performance
appraisal, recognition and reward stages of the human resource cycle,
organizations continue to manage fit levels. Practices such as training and
development do not only lead to enhancement of skills and knowledge but also
strengthening values which are desirable in the organization and its environs.
Ashleigh (2007) argued that in order to make learners to learn about each other
and also develop trust among each other the organization should provide safe
learning environment to its members. According to Dimba (2010) in order to
attain significant organization outcome and success where employee quality and
productivity are inclusive organizations should conduct proper performance
management. On the other hand employee commitment and job satisfaction forms
the cornerstone of human resource management hence there is need for
organizations to develop and implement effective and efficient performance
appraisal systems to appraise their employees. 

Capelli (2001) noted that the human
resource practices for competitive advantage and staff retention are job
rotation, self-managed teams, team work training, cross training pay for skill/
knowledge, profit/gain sharing, meetings and total quality management. Batt
(2002) came up with human resource management practices for competitive advantage
which are: improved skill level (both training and education), job design
(discretion and team work) human resource incentives (supportive human resource
training, feedback, high pay and security).Wright (2004) came up with several
HRM practices: Employee selection, pay for performance training, and
participative management.

 

According to Dessler (2008) human resource
strategies refers to the specific human resources management courses of action
the company pursues to achieve its strategic aims which may include: using
various tools to build a two way communication, screening potential managers,
fair treatment and security of all employees, promotion internally to give
employees opportunity to attain their full potential, high compensation and flexible work assignments.

According to Abeysekera (2007) most
companies are faced with the great challenge of high rate employee turnover but
for those companies which have effective human resource management systems they
experience totally reduced employee turnover hence this leads to increased
competitiveness. Therefore it is of great importance for various companies to
do an analysis on the competitiveness of other competitors and evaluate how
this will directly or indirectly affect the organization. On the other hand Kok
(2003) connotes that human profession usually influences some of the human
resource practices and this effect is towards the positive side which is
referred to as best human resource management practice and which if well implemented will ensure retention
of staff. According to Chandler (2000), the main issue in human resource
research is whether there is a set of policies and practice that represent a
set of superior approach to managing people and which are associated with
organizational performance and staff retention.

There
are various internal and external factors which influence human resource
management practices in various organizations. This factors differ from one
organization to another (Ozutku 2009). According to Narsimha (2000), having in
place an inclusive human resource management practices in an organization, it
makes the organization to build up a sustainable competitive edge. This implied
that once an organization embraced proper and favourable HRM practices it
will be likely to perform well and therefore attain a competitive advantage in
the market or industry. The best HRM practices are tools and means to better employee treatment
and hence retention

1.1.1
SACCOs in Kisii County

Cooperative societies is one of the sectors
which has got great impact on the lives of Kenyan citizens. SACCOs form part of
the sector and this has brought about unmeasurable impact of the poor citizens
over years in Kenya. SACCOs
in Kenya may be categorized into financial and non-financial cooperatives. Non-financial
cooperatives deal produce marketing on behalf of the members and the examples
of the produce include dairy, coffee, tea, handcrafts among others. On the
other hand non-financial cooperatives comprise SACCOs, housing and investment
cooperatives. In Kisii County there are Seven SACCOs which are registered and
regulated by SASRA and they include Gusii Mwalimu Sacco, Vision Point Sacco,
Wakenya Pamoja Sacco, Kenya Achievas Sacco, Afya Sacco Kisii Branch; Chai Sacco
and Mwalimu National SACCO.

These
institutions have seen transformations both in technology and human resource
utilization which has led to engagement of diverse human resource management
practices to stay competitive given the fast growing and innovative banking
industry which has seen entry of 16 branches of Commercial banks into the
capital of the Town, Kisii. The study aimed at
establishing the influence
of human resource management practices employed by these SACCOs on their
performance.

1.2
Statement of the problem

The
majority of organizations are competing to survive in this volatile and fierce
market environment. Highly motivated employees usually perform excellently and
this forms the foundation for the long term success of organization.
Measurement of employee performance is so critical since it looks into
evolution and the organization’s achievement. Most studies have depicted that
there is a strong relationship which exists between motivated employees and the
effectiveness of an organization. High rate of employee turnover is one of the
greatest challenges which are experienced in most organization and in
organization where employee turnover is minimized there are great chances of
attaining the competitive edge as compared to its competitors. Therefore there
is need for an organization to evaluate those actions of the competitors which
might affect the organization either indirectly or directly.

Many
studies have been conducted on employee turnovers and these studies have
clearly established the factors which makes the employees to leave the
organizations earlier than expected. HRM practices makes one main source of competitive edge and retention of staff. Developing countries are now
considering effective human resource management more crucial component and crucial
role in the country’s
economy and also in the realization of the goals of the vision 2030 (GOK). A
key factor on performance is the human resource practices in particular,
promotions.

Taking
a strategic perspective to HRM practices leads to powerful changes on how employees
are compensated. The various job characteristics have an impact on individual’s
attitudes and recognize that human needs acts as motivational forces. People
are the sum of employees’ efforts that create wealth to allow organizations to
achieve their vision.

Saccos
in Kenya have experienced enormous staff mobility or turnover which has been
facilitated by poor pay, poor structures for compensation and human resource
management and above all political interference. SACCOs
in Kisii County have not been
left out. A number of them have closed shop due to mismanagement and those in
existence are majorly faced with a mass exodus of employee to other financial
institutions like banks and micro-finance institutions.

This
formed the basis of the study which aimed at investigating the relationship
between the HRM practices and staff retention among the SACCOs registered and
regulated by SASRA in Kisii County, Kenya.

1.3
Objectives of the Study

The general objective of this study was to
establish the relationship between human resource management practices and employee retention in selected
SACCOs in Kisii County, Kenya.

The
study was guided by the following specific objectives;

a)     
To determine the relationship between recruitment and
employee retention among selected SACCOs in Kisii County, Kenya

b)     
To establish the effect of
training on employee
retention among selected SACCOs in Kisii County

c)     
To find out the how performance management
influences employee retention among selected SACCOs in Kisii County, Kenya.

d)    
To examine the moderating effect of employee commitment on
the relationship between human resource management
practices and employee retention among SACCOs in Kisii County, Kenya.

1.4 Research Questions

The study
sought to answer the following research questions;

a)      What is the relationship
between recruitment and staff retention in SACCOs in Kisii County, Kenya?

b)     What is the relationship
between training and employee retention in SACCOs in Kisii County, Kenya?

c)      What is the influence of
performance management on employee retention among SACCOs in Kisii County,
Kenya?

d)     Does employee commitment have
a moderating effect on the relationship between human resource management
practices and employee retention in SACCOs in Kisii County, Kenya?

1.5
Significance of the Study

The financial institutions and more specifically SACCOs in Kenya will
benefit from the findings of this study in understanding the current human
resource management practices and how best they can apply them in their
organizations in order to retain their employees. They can compare their
strategic human resource practices with those of their competitors and thus may
be a pointer for them to improve the said human resource practices if they are
to retain their key staff.

 

The government of Kenya will benefit from the findings of this study
in understanding the various human resource practices in place in financial
institutions in the country hence will help them in formulating applicable
regulations and policies in the SACCO Sector which will assist in developing
the financial services sector in the country. The findings of this study will
enable the Kenyan government policy makers in monitoring of the commercial financial
institutions in the country and act as a tool for future rankings and drawing
of ranking tools. The findings of this study will be useful to other scholars
and researchers as they may use the results of this study as a source of
reference.

 

1.6 Scope
and Delimitation of the study

The
study focused on 4 selected SACCOs in Kisii County, Kenya which have been
licensed and regulated by SASRA. According to the SASRA website there are 164  SACCO societies licensed to undertake
deposit-taking SACCO business in Kenya for the financial year ending December
2016. (www.sasra.go.ke).

The Sacco Societies Regulatory Authority
(SASRA) is a statutory state corporation established under the Sacco Societies
Act (Cap 490B) of the Laws of Kenya (the Act) which came into full operation
upon the gazettement of the Sacco Societies (Deposit-taking Sacco Business)
Regulations, 2010 (the Regulations 2010) on 18th June 2010. The core business of the authority
under parliament act 2010 is to register and give license and supervise all
Saccos which were to undertake deposits-taking business in Kenya (which are
popularly known as deposit taking SACCOs). The study relied on small
geographical coverage of the SACCOs given their concentration in the Town and
also given the topic that is open to dialogue. The researcher expects reliable
and friendly response from the target population.

1.7
Limitations of the Study

The limitations which might have underpinned
the study include fear of victimization where some respondents were not willing
to open up and provide the much needed information. However the researcher
sought to create a good rapport with them and ensure that they voluntarily give
the information. The study was also limited due to the fact
that the respondents were busy due to tight schedules; getting information was
a major challenge as it took several weeks to get the information.

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