IKENGA, CHIKE PETER
1.1 Background to the Study
This research attempts to analyze the influence of Human Resource Management on organizational performance by focusing on the relationship between three of Human Resource indicators on organizational performance, with the presence of incentives as moderator, in service organization in Nigeria, which is a developing African country. Boxall (1995) contended that Human Resource (HR) practices vary in different societal contexts and none best practice can be applied universally. Thus, it is suggested that organization should define the desired performance outcome as HR practices are different according to the performance measures (Khatri, 2000). It is interesting to note that information technology, employees training, and incentives showed a strong and significant relationship with organizational performance. This could be due to the fact that in most developing countries, the employees are not as highly paid as those workers in developed counties, thus the workers are more concerned with HR practices which could subsequently increase their earnings (Bashir & Khattak, 2008). Hence, incentives given to the employees are found to directly affect the organizational performance rather than moderating the relationship between HR practices and performance. Considering the fact that information technology, employees training, and incentives are directly affecting the organizational performance, these practices are important indicators which must be linked with performance to have better organizational performance. On the other hand, information technology is also found to be instrumental in achieving better firm performance. As commented by Dave and Wayne (2005), information technology plays an important role in many global firms. In the same vein, Sorge et al. (1995) had discovered unbreakable link between information technology and organizational performance. They concluded that the advent of technology has indeed helped many of the firm to turnaround in the aspect of performance. As stated by Preece (2000) and concurred by other researchers (e.g., Abernathy & Utterback, 1978; Foster, 1986; Hill & Rothaermel, 2003) information technology increases effectiveness and outputs by cutting short transaction time for tasks. The result was also supported by Mullins (2002) that training is the key element in influencing the performance of an organization. On the other hand, as stated by Bloor (2008) employees do not respond simply to financial incentives as other kinds of non-financial incentives such as trust, duty, reputation within peer groups and communities etc. are equally important. This could probably due to the fact that ‘high powered’ incentives such as from market transactions, and ‘low powered’ incentives found in bureaucratic setting (Frant, 1996) which could have contributed to this result. In the same vein, incentives were not found to moderate the relationship between HR practices and organizational performance. This is most likely due to the fact that the willingness to perform and achieve better organizational performance is influenced by conformity to collectivity-oriented behavior, which is common in most organizations. In addition, this research is further supported by past researchers (e.g., Costigan, Insinga, Berman, Kranas, & Kureshov, 2007) in a cross-cultural study that employees’ affect-based trust behavior is associated with employees’ enterprising behavior; hence incentives offered by the companies do not moderate the relationship between HR practices and their level of performance in the organizations. Interestingly, the findings have demonstrated that employee training and performance appraisal correlate with better organizational performance. This is...