In
the last couple of years, organizations especially in Africa have been hit with
the undisputable fact that the creation of competitive advantage lies in
people. Organizations have increasingly recognized the potential for their
people to be a source of competitive advantage. Not too long ago, so called HR
functions was the preserve of “Personnel Managers” whose duties were to recruit and
select, appraise, promote and demote. These superficial duties could be
performed by any manager, it therefore never seemed necessary to employ an
expert in the form of a human resource manager let alone create a whole
department dedicated to HRM. Little attention was paid to human resource
management issues and its impact on organisational performance. The emphasis on
traditions and socio-cultural issues injected an element of subjectivity in
„personnel manager‟
functions such as recruitment and selection, performance appraisal, promotion,
demotion, and compensation. In today’s competitive and rapidly changing
business world, organisations especially in the service industry need to ensure
maximum utilisation of their resources to their own advantage; a necessity for
organisational survival. Studies have shown that organisations can create and
sustain competitive position through management of non-substitutable, rare,
valuable, and inimitable internal resources (Barney, 1991). HRM has transcended
from policies that gather dust to practices that produce results. Human
resource management practices has the ability to create organisations that are
more intelligent, flexible and competent than their rivals through the
application of policies and practices that concentrate on recruiting,
selecting, training skilled employees and directing theirbest efforts to
cooperate within the resource bundle of the organisation. This can potentially
consolidate organisation performance and create competitive advantage as a
result of the historical sensitivity of human resources and the social complex
of policies and practices that rivals may not be able to imitate or replicate
their diversity and depth. Lately, organisations are focused on achieving
superior performance through the best use of talented human resources as a
strategic asset. HRM policies or strategies must now be aligned to business
strategies for organisational success. No matter the amount of technology and
mechanisation developed, human resource remains the singular most important
resource of any success-oriented organisation. After all, successful businesses
are built on the strengths of exceptional people. HRM has now gained
significance academically and business wise and can therefore not be relegated
to the background or left in the hands of non-experts. Attention must be paid
to the human resources organisations spent considerable time and resources to
select. Armstrong (2009) defines Human Resource Management (HRM) as a strategic
and coherent approach to the management of an organisation‟s most valued assets;
that is, the people working there who individually and collectively contribute
to the achievement of its objectives. Moreover, Human resource management
practices can be defined as a set of organisational activities that aims at
managing a pool of human capital and ensuring that this capital is employed
towards the achievement of organisational objectives (Wright and Boswell,
2002). The adoption of certain bundles of human resource management practices
has the ability to positively influence organisation performance by creating
powerful connections or to detract from performance when certain combinations
of practices are inadvertently placed in the mix (Wagar and Rondeau, 2006). So
if we think human resource management as just the services any manager may
provide in recruiting and selecting, appraising, training and compensating
employees, then we rather would have to take the backseat for those who
understand the influence HRM has on corporate performance to take the centre
stage. Research has recorded a positive relationship between human resource
management practices and corporate performance. Thus in order to stimulate
corporate performance, management is required to develop skilled and talented
employees who are capable of performing their jobs successfully (Klein, 2004).
Achieving better corporate performance requires successful, effective and
efficient exploit of organisation resources and competencies in order to create
and sustain competitive position locally and globally. HRM policies on
selection, training and development, performance appraisal, compensation,
promotion, incentives, work design, participation, involvement, communication,
employment security, etc must be formulated and implemented by HRM specialist
with the help of line managers to achieve the following outcomes: competence,
cooperation with management, cooperation among employees, motivation,
commitment, satisfaction, retention, presence, etc In fact, Ahmad and Schroeder
(2003) found a positive influence of human resource management practices
(information sharing, extensive training, selective hiring, compensation and
incentives, status differences, employment security, and decentralization and
use of teams) on organisational performance as operational performance
(quality, cost reduction, flexibility, deliverability and commitment). In
furtherance of this assertion, Sang (2005) also found a positive influence of
human resource management practices (namely, human resource planning, staffing,
incentives, appraisal, training, team work, employee participation, status
difference, employment security) on organisation performance. The study wishes
to study the effect of human resource on the performance of government
establishments using the ministry of finance Enugu as the case study.

1.2       STATEMENT OF PROBLEMS