| dc.description.abstract | This study investigated the influence HRM practices on the performance of SMEs in Kisumu
Municipality. HRM is the management function that implements strategies and policies
relating to the management of individuals. The importance of SMEs in job creation and
revenue generation is now universally accepted. They have emerged as reliable instruments
for poverty alleviation and employment and income guarantee, with a positive impact far
beyondthe individual client. Their growth and development, and performance in general, are
therefore significant not only to the individual beneficiaries, but to the country as a whole.
But the performance of SMEs in Kisumu Municipality has been poor. They have become
unstable, and their profit margins and sales turnover have decreased. One way to turn this
around is to ensure that SMEs adopt and practice prudent HRM practices, but the actual
influence of HRM practices on the performance of SMEs have not been investigated. Most
studies on SMEs in Kisumu have consistently avoided this subject and failed to address the
issue of HRM vis-avis performance. There was therefore need to determine the influence of
HRMpractices on the performance of SMEs in order to identify suitable HRM practices that
could increase their performance, and those that make negative contributions to the
performanceof SMEs in Kisumu Municipality. The specific objectives were to determine the
influence of recruitment and selection; training and development; performance appraisal;
employeeinvolvement and employee compensation on the performance of SMEs in Kisumu
Municipality. Guided by the ecological theory, the study was conducted through a cross
sectionalsurvey, on a stratified proportionate random sample of 260 SMEs selected from 777
SMEs in Kisumu Municipality. Data was collected using questionnaire and interview
methods,analyzed using percentages and means, and simple and multiple regression analysis
techniques,and presented in tables and figures. The study found 'out that the overall average
performanceofSMEs in Kisumu Municipality is 60.71% (0" = 13.59). The study also found
that recruitment and selection (F, = 143.46 > F(l, 206); to = 11.97 > t (206); Adj. R2 = .408);
trainingand development (F, = 158.656> F (1,206); to = 12.596> t (206); Adj. R2 = .432); and
performanceappraisal (F, = 396.834 > F (1,206); and to = 19.921 > t (206); Adj. R2 = .657) are
significant determinants of the performance of SMEs in Kisumu Municipality. However,
employee involvement (F, = 1.019 < F (1,206); to = 1.010 < t (206); Adj. R2 = .000); and
employeecompensation (F, = 0.282 < F (1,206); to = 0531 < t (206); Adj. R2 = -.003) are not
significant determinants of the performance of SMEs in Kisumu Municipality. The overall
prediction model [pi = 114.2 + S.4SRS + 4.49TD + 10~9PA] explains 72.4% (Adj.R2 =
.724) of the variance in the performance of SMEs. The study concludes that HRM practices
have a significant influence on the performance of SMEs in Kisumu Municipality, and the
better the HRM practice, the higher the performance. But more specifically, the study
concludesthat recruitment and selection; training and development; and performance are the
HRM practices that influence the performance of SMEs. The study recommends the
development of guidelines for recruitment and selection of new staff; development of a
curriculum and training manuals and a work plan to ensure that staff of SMEs attend
trainings; and sensitization on the importance of regular performance appraisals. The study
also recommends empowering trade unions to compel SMEs to allow employee involvement
in decision making. Lastly, the study recommends promotion of reasonable employee
compensation structures in all SMEs. Finally, the researcher recommends that a study be
conductedon a wider scope in Kisumu County, and in all municipalities in major towns in
Kenyato increase its generalizability. | en_US |
