Effect of Human Resource Management Practices on Employees’ Job Satisfaction in Banking Sector

Abstract

Different research result indicates that there are different factors affecting the satisfaction of employees both internal and external. Among different factors the organizations’ human resource management practice is the major one. This study aimed to assess the effect of human resource management practice on employees’ job satisfaction particularly within private and public commercial banks found in Dessie and Kombolcha Town. Then to reveal the effects of HRM practices the researcher selected five independent variables (training and development, reward and compensation, performance appraisal, employee participation and recruitment and selection) of human resource management practices on the dependent variable (employees’ job satisfaction). The study was conducted in 6 private and 4 public owned commercial banks using purposive sampling (based on their work experience and their willingness to be a part of the stud). Based on Yeman (1967) sample size determination formula, out of the total number of 375 employees 264 samples were determined (189 from public owned commercial banks and 76 samples from private owned commercial banks). This study used explanatory research design since it seeks to establish the relationship and impact of HRM practices on employees’ job satisfaction. To collect data from the respondents the study was used primary sources of data. The 5 point likert scale questioner was used to collect date in this study. To find out the effect of the independent variables on the dependent variable the study used multiple regression analysis. The research found out that out of the five independent variables (reward and compensation, performance appraisal, employee participation and recruitment and selection had a significant and positive relationship with employees’ job satisfaction). Based on the finding, it is better to participate employees in decision making process, establishing good and fair recruitment and compensation practice, enhancing the recruitment and selection process and implementing job related performance appraisal result and linking the result with incentives.