HUMAN RESOURCE MANAGEMENT SKILLS REQUIRED BY SMALL BUSINESS OWNERS FOR SUCCESSFUL OPERATION IN NASARAWA STATE

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1-5 chapters |




ABSTRACT

This study surveyed the human resource management skills required by small business owners for successful operation in Nasarawa State.  The study surveyed 310 small business owners out of a population of 1,386 registered with Corporate Affairs Commission, Nasarawa State.    Four  research questions and  two  null hypotheses guided the study.    Data were collected using a structured questionnaire.   The instrument was a five point scale questionnaire which was subjected to face validation and a reliability of 0.91 was obtained signifying that the instrument was reliable.  Data collected were analyzed using mean to answer the research questions while one-way-Analysis of Variance (ANOVA) was used to test the hypotheses at 0.05 level of significance. It was found that small business owners in Nasarawa State require human resource management skills for successful operation of their businesses.  This study also revealed that experience and qualification were sources of differences in the mean ratings of the small business owners on human resource management skills required for successful operation.   It was, therefore, recommended among others that small business owners  and  potential entrepreneurs should  adopt  the  use  of  human  resource management skills in order to achieve success in their businesses.  Also, it was recommended that small business owners who do not have human resource management skills should embark on on-the-job training, workshop and seminars so as to acquire the required skills.

CHAPTER ONE

INTRODUCTION

Background of the Study

For many years, it has been said that capital outlay is a major factor for any developing industry, but this no longer holds true.  The workforce which is the human resources and the firm’s ability to recruit and maintain a good work force among other factors that does constitute a necessity for production.

Human resources are  indispensable  in  the  life  of any  business  organization. Human resources also known as manpower refers to the totality of the energies, skill, knowledge and  experience available  in  an organization (Yaro 2012).    According to Robbins (2001) Human resources is the managerial, scientific, engineering, technical and other skills which are employed in creating, designing, developing, organizing, managing and operating productive and service enterprises. Human resources are the most valuable resources in every organization apart from other resources such as capital.   All other resources in an organization without the human resources are passive factors.  The human resources organize and utilize all other resources to achieve the set objectives of the organization.    However,  it  is  only  through  effective  management  that  the  human resources can perform their functions diligently.

Management according to Lawal (2005) is the process of planning, organizing, leading  and  controlling  the  efforts  of organization  members  and  of using  all  other

organizational resources to achieve stated organizational goals.  In the same vein, Ejiofor

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(2009) described management as the art of working, particularly through people for the achievement of the goals of an organization.   In trying  to  achieve these goals, the manager has to map out his strategy, find people and the materials to do the job, assign different people to accomplish different jobs, ensure that these jobs are being done as planned.  In other words, management is the art of getting things done through people.  In the context of this work, management is the process by which managers create, direct, maintain and operate purposive organization through systematic and coordinated cooperative human effort.  Management of human resources plays a   tremendous role in enhancing the quality and efficiency of business.   The organizational climate and processes are usually sound when the employees in the organization are well coordinated through effective and efficient human resource management.

Human Resource Management (HRM) is currently used interchangeably with personnel management which is the process of managing people in organizations. Human Resource Management as defined by Dessler (2009) is the process of acquiring, training, appraising and compensating employees, and of attending to their labour relations, health and safety, fairness and concerns.   Nwakanobi (2009) also sees Human Resource Management as an art of employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.  In the context of this study, Human Resource Management is defined as a strategic,  integrated  and  coherent  approach  to  the  employment,  development  and wellbeing of the people working in the organization.  The objectives of an organization cannot be realized unless an effective strategy for the proper management of its human resources is developed. The  purpose of Human Resource Management according to Lawal (2004) is to ensure that the presence of the right number of employees with the

right level of skills, is in the right place at the right time to perform the right activities in order to achieve the objectives of the organization.   Human Resource Management is needed to ensure the optimum use of the human resources currently employed in an organization.  Effective management of human resources in an organization encompasses strategic planning, recruitment and placement, training, development and compensation of employees.  Appropriate skills are very important requirements for effective operation of any business organization especially small scale business enterprises.

A skill is defined by Garry (2002) as the ability to do something well arising from talent, training or performance. Thus, skill is an action that involves the application of knowledge in anticipation of some outcome. The level of performance in business most times depends on the level of human resource management skills of the small business owner.

Small business enterprise, according to Abas (2000) is defined as those entrepreneurial units in business operations which operate and serve at a limited scale in limited vicinity, with limited means for operations, usually owned and controlled by single individual as the owner, manager and sometimes owned as family business.  CBN (2003) in its credit guidelines, classified small business as those businesses with annual income/assets with less than half a million naira.   Oyetunji (2010) stated that small business enterprises remain a dominant engine for economic growth in Nigeria because of their role in job creation, stimulation of entrepreneurial skills and private ownership of business.   The success of a small business organization would greatly depend on the human resource management skills of the manager of the business.

Asumei (2010) points out that Human Resource Management skill is the term used to describe formal practice and policy necessary to execute all management tasks relating to  personnel issues, especially employment/hiring, education, evaluation and rewarding of employees and provision of safe, ethically acceptable and fair environment for them. These Human Resource Management skills include strategic planning skills, job recruitment and placement skills, training and development skills and compensation skills.

Strategic planning skill is the pattern of decision in a company that determines and reveals its objectives, purpose or goals and products the principal policies and plans for achieving these goals and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be and the nature of the economic and non economic contributions it intends to make to its shareholders, employees, customers, and communities. Recruitment and placement skill is the process of searching for prospective employees and stimulating them to apply for jobs in the organization, they are then selected by ascertaining their qualification, experience, skill and knowledge to ensure their suitability to the job, then induction and orientation is carried out to enable the new employees to rehabilitate in the their new surroundings. Training and  development skill is  the process by which the employees learn skills, knowledge, abilities or attitudes to improve organizational and personal goals, they are then developed by improving, moulding, changing and developing the skills, knowledge, creative ability, aptitude and attitude based on present and future job and organizational requirement.  Compensation skill is the ability of managers to provide equitable and fair remuneration to the employees.   It includes wage and salary administration, incentive, fringe benefit etc (Dessler 2009).

Human resource management skill is the expertness of a business manager to achieve organizational goals.  It includes all the strategies, policies, plans, processes and practices business managers use to attract and engage, manage, develop and reward the people who work for them.  The level of performance in a business most times depends on the level of human resource management skill of the business manager.  Aku (2002) describes a business manager as the person that oversees the day-to-day operations of the business.  In this study, the business manager is the owner of a small business enterprise who makes good use of his employees to perform whatever task that may be necessary to achieve organizational goals. A business enterprise is any organization which engages in economic activities such as manufacturing, commercial or rendering services with a view to making profits (Nzewi 1995).

In addition, Yaro (2012) contends that every owner of small enterprises aspires to have successfully organized enterprise which is competitive in the market and to realize high  profits  with  employees  who  have  high  level  of  motivation  in  regards  to  the successful operation of the enterprise. The author, however, indicated that most of such enterprises in Nasarawa     lack the human resource management skill which is a key element in maintaining a competitive edge in the market. Studies on Human Resource Management indicates that inadequate and inefficient management of employees in small firms has resulted in low productivity and poor labour turnover rates which is one of the leading causes of small firm failures (Ade 2009).  A human resource management skill in small business is an issue of great concern.  Some of the small business owners do not know or are aware that they need HRM skills to boost their productivity.    Similarly, the level of investment required to maintain and sustain the workforce can be disputable if its accompanying benefits for the firm are not clear. In practical terms therefore, small

business managers who wish to make use of the Human Resource Management skills will help small business owners to consider how employees values and preferences be identified, what rewards are most likely to be valued by employees, in what ways can rewards be tied to performance and what training resources are required to ensure that employee effort can result in effective performance.   As a result, this study seeks to examine the human resource management skills required by small business owners for successful operation in Nasarawa State.

Statement of the Problem

Employees of many small business enterprises are most times lowly productive, underutilized, produce inadequately, poorly motivated and consequently perform below their true capability leading to low productivity, low profitability and  competitiveness in the business.  Many research results show that the poor productivity, lack of motivation in small business organizations in Nasarawa state are poorly done leading to industrial conflicts and shut down of businesses.   The extent to which small business owners manage their human resources would go a long way to reduce the rate of closures and industrial dispute that occur in the organizations.

The preliminary study carried out by the researcher in Nasarawa State revealed that many owners and managers of Small businesses in the state pay little or no attention to their employees behaviors, welfare and skill acquisition.  The strategic planning skills which help business owners to be able to improve his strength, weaknesses, opportunities and threats are hardly taken note of.   Business owners look at the present and do not strategize for the future. They sometimes recruit under age or people not qualified for a position due to finance.  They do not train or develop their workers and some of them do

not compensate their workers to go in line with the work they are doing.   It was also observed  that  the  rate  of  staff  disengagement,  resignation  and  face-offs  in  small businesses is going higher in the state.   This has led to failure of most of the small businesses in the state and the overall productivity of those businesses that are still in business. The capability of the small business owners in strategic planning, recruitment, selection,  training,  development,  performance  appraisal,  compensation  and  so  on, therefore remains doubtful.   Considering the role of human resources in the life of a business and the importance of small scale business in the general economic development in Nigeria, it becomes imperative to determine the HRM skills required by business enterprises for successful business operation in Nasarawa State.

Purpose of the Study

The major purpose of this study is to determine the human resource management skills required for successful operation of small business enterprises in Nasarawa State. Specifically the study seeks to determine:

1)         the   strategic   planning   skills   required   by   small   business   for   successful operation.

2)         the  recruitment  and  placement  skills  required  by  small  business  owners  for successful operation.

3)         the  training  and  development  skills  required  by  small  business  owners  for successful operation..

4)         the  compensation  skills  required  by  small  business  owners  for  successful operation.

Significance of the Study

The findings of this study would be of great benefit to training and education authorities, small  business  owners, potential entrepreneurs, students and  the  general public.

This research work would assist training and education authorities to better equip graduates with the skills required in the job market.

The findings from the study would be useful to small business owners as they would learn the HRM skills required for effective management of their employees. This could help business owners to identify the areas of deficiency in the management of human resources in their business which would help them to seek out ways for improvement.   The findings of this study would also help small business managers to explain why people behave the way they do and determine ways to motivate the employees in their organization so as to achieve maximum production.

The understanding of the findings would equally guide potential entrepreneurs who may want to venture into small business on how to recruit and place employees in their organizations so as to yield maximum profit.  The findings would show to a great extent that the human resource function in any organization is responsible for creating the conditions in which people make the greatest contribution to the success of the enterprise. The  knowledge  gained  from  the  findings  would  educate  the  general public  of  the problems facing the sub-sector which can be overcome and will lead to the development of the sub-sector through effective management of the human resources of the organization.

Research Questions

The following research questions were formulated to guide the study:

1)         What   are   the   strategic  planning   skills   required  by   business  owners  for successful operation?

2)         What  are  the  recruitment  and  placement  skills  required  by  business  owners for successful operation?

3)         What are the training and development skills required by business owners for successful operation?

4)         What are the compensation skills required by business owners for  successful operation?

Hypotheses

The following null hypotheses were formulated for the study and would be tested at 0.05 level of significance:

1)        Experience is not a significant source of difference in the mean responses  of business managers on the human resource management skills required       for  successful operation of small business enterprises

2)         Qualification is  not  a significant source of difference  in the  mean responses of business managers on the human resource management skills required for successful operation of small business enterprises.

Delimitation

This study is delimited to the Human Resource Management skills required by business managers for successful operation of small business enterprises in Nasarawa State. The study is to specifically determine the strategic planning skill, recruitment and placement skill, training and development skill and compensation skill required by managers in small business enterprises.



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HUMAN RESOURCE MANAGEMENT SKILLS REQUIRED BY SMALL BUSINESS OWNERS FOR SUCCESSFUL OPERATION IN NASARAWA STATE

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