THE IMPACT OF HRM PRACTICES ON FIRM PERFORMANCE: AN EMPIRICAL STUDY IN THE ELECTRICITY COMPANY OF GHANA

Abstract

This study investigates the impact of Human Resource Management (HRM) practices on firm performance, focusing on the relationship between HRM practices and firm performance within the Electricity Company of Ghana. Utilizing a quantitative approach, data was collected from a sample of employees to analyze demographic features, including gender, age, and departmental distribution. The findings reveal that HRM practices such as Recruitment and Selection, Training and Development, Performance Management, Compensation and Rewards, and Employee Engagement significantly influence firm performance.

The study highlights that a majority of respondents rated HRM practices positively, with mean values exceeding 4.00 on a scale of 1-5, indicating high levels of employee satisfaction with these practices. Notably, Performance Management and Compensation Rewards exhibited the strongest relationships with firm performance, with coefficients of 0.13 and 0.12, respectively. The regression analysis further confirms that these HRM practices positively affect overall performance, thereby enhancing organizational outcomes.

Additionally, the research identifies challenges in implementing HRM practices, including limited resources and lack of leadership support, which hinder optimal performance. Recommendations for improvement include fostering strong relationships between HR managers and employees, investing in training and development, and aligning HRM strategies with organizational goals.

This study contributes to the understanding of HRM’s role in enhancing firm performance and provides valuable insights for HR practitioners and policymakers aiming to improve organizational effectiveness in the Electricity Company of Ghana.