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EFFECTS OF HUMAN RESOURCE MANAGEMENT PRACTICES ON PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA: A CASE OF KIAMBU MUNICIPALITY


Keziah Nyabucha Muniu

MSc. Human Resource Management, Jomo Kenyatta University of Agriculture and Technology, Kenya

Dr. Patrick Karanja Ngugi

Jomo Kenyatta University of Agriculture and Technology, Kenya


ABSTRACT

The SME sector is characterized by dilapidated infrastructure, low adoption of advanced technology, poor market access, low credit access and continued harassment from government institutions that should in the first place protect and nurture it. The purpose of this study is to establish the effect of human resource management practices on the performance of small and medium enterprises. This study targeted SMEs in Kiambu municipality. A sample of 200 SMEs was used. The data collection method was a questionnaire with some open ended questions. A pilot study was conducted to establish the validity and reliability of the questionnaire. The questionnaire questions were based on the research questions that are raised in the first chapter.  The data analysis included both quantitative and qualitative methods. The analyzed data was interpreted, analyzed and presented in tabular forms. A descriptive research design was utilized in the interpretation of the study findings. The study found that employee performance and reward affected performance and that employee training and development contributed to the performance of the business. The study also concludes that motivated employees affected business performance and that methods used to assess employees to be motivated affected business performance. Moreover, the study concludes that employee recruitment affected business performance. Finally, the study concludes that time taken to induct employees and the resources used to train the employee affected business performance. The study recommends that SMEs should adopt HRM programmes so as to increase competitive advantage. The study also recommends that SMEs should embrace extensive recruitment and training procedures, increased employment involvement and incentive compensation so as to achieve higher levels of turnover, higher productivity and better financial performance.


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