HUMAN RESOURCE PRACTICES ON CORPORATE SUSTAINABILITY (A CASE STUDY OF UBA, ENUGU METROPOLIS)

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

In the 21st century, sustainability and sustainable development – applied as synonyms for ‘long-term’, ‘durable’, ‘sound’, and ‘systematic’ – have become a critical issue for the world and for business in particular. Companies have found the need to develop more sustainable business models, in which the HR function has a key role to play. The understanding of sustainability in theory and practice has been influenced by three main groups: ecologists, business strategists, and the United Nation’s World Commission on Environment and Development (WCED, 2011), called the ‘Brundtland Commission’. Ecologists’ view on sustainability is said to have been coined in 1712 by the German nobleman Hans Carl von Carlowitz, and referred to the sustainable production of wood. In the 1970s, the term was adapted by the ecological movement concerned with the over-exploitation of natural and environmental resources. While ecologists focus on sustainability’s ecological dimension – the protection of the natural environment – the traditional goal of business strategy scholars is economic sustainability of organizations. Business strategists link the term ‘sustainability’ with ‘sustainable competitive advantages’. The Brundtland Commission added a social dimension to the ecological and economic ones, defining sustainable development as a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Since its dissemination, the notion of sustainability has been associated with ecological issues in business practice primarily. In the recent years however, the focus on the social dimension of sustainability has become increasingly important.

The diffusion of research and practice such as ‘Corporate Social Responsibility’ or ‘Corporate Sustainability’, in practice and research, has contributed to the interest in sustainability linked to Human Resources issues. Achieving competitive advantage and improving organizational sustainability relative to competitors are the main goals that business firms should strive to attain. Human resource management derived from the personnel management, considered as the effective management of employees, encourages the leadership that motivate people, draws on their talents, drives their participation in decision making, and takes in consideration their expectations and needs (Ehrlich, 2011). Human resource management practices has the ability to create firms 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 their best efforts to cooperate within the resource bundle of the organization. This can potentially consolidate firm sustainability 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 able to imitate or replicate their diversity and depth. Thus, in order to stimulate corporate sustainability, management is required to develop skilled and talented employees who are capable of performing their jobs successfully (Klein, 2010). Corporate sustainability is considered as the final result that firms seek to achieve positively (Ghosh and Mukherjee, 2006). Positive corporate sustainability can be created and sustained through the best exploit of human resources as an organizational intangible asset (Wright, 2008). Many scholars such as Sang (2009) investigated the influence of human resource management practices on firm sustainability and they found a positive relationship between those practices and firm sustainability. Nigerian banking sector is considered as the most important service sector affecting Nigerian economy. It is growing very rapidly and continuously contributing to the gross domestic product that consisted of 80% services and 20% goods. The global economic crisis in 2008 had posed several threats on Nigerian banking industry, and to avoid these threats, banks management have declared a new policy which states a proactive approach on the development of human resources to the international standards. Aside from that, banks management have focused on achieving superior bank sustainability through the best use of talented human resources as a strategic asset where the global economic is down turning. Based on the aforementioned, this study emerged as an attempt to investigate the influence of human resource management practices on corporate sustainability in Nigerian commercial banks.

1. STATEMENT OF PROBLEM

Human resource managements faced many challenges of bringing in the trained employees in the organization that fulfil their expectations and requirements regarding work, as long as to fulfil the requirements of organizational performance. Thus, the manager’s constant concern is to develop new concepts to make better human resource management practices and develop new standpoints that can be helpful in obtaining expected results and improve organizational performance. Mainly the research on HRM practices done in developed countries. It is attention-grabbing to found the effect of HRM practices on organization’s output in developing countries. This study will act as a small contribution in the field of HRM, by emphasizing the effect of HR management practices on corporate sustainability.

1.3 AIMS OF THE STUDY

The major purpose of this study is to examine human resource practices on corporate sustainability. Other general objectives of the study are:

1. To examine the influence of human resource practices on corporate sustainability.
2. To examine the importance of human resource practices on corporate sustainability.
3. To examine the effect of human resource practices on corporate sustainability.
4. To examine the contributions of human resources practices in organizational performance.
5. To examine the relationship between human resources practices and corporate sustainability.
6. To examine adequate practice of human resource management for corporate sustainability.
   1. RESEARCH QUESTIONS
7. What are the influences of human resource practices on corporate sustainability?
8. What is the importance of human resource practices on corporate sustainability?
9. What are the effects of human resource practices on corporate sustainability?
10. What are the contributions of human resources practices in organizational performance?
11. What is the relationship between human resources practices and corporate sustainability?
12. What are the adequate practices of human resource management for corporate sustainability?

1.5 RESEARCH HYPOTHESES

H₀: There is no significant effect of human resource practices on corporate sustainability.

H₁: There is no significant relationship between human resources practices and corporate sustainability.

1.6 SIGNIFICANCE OF THE STUDY

Banking will need employees with special skills and abilities, right attitudes and behaviours to make these happen. Organisational sustainability culminating into effectiveness, efficiency, success and development depend on the optimal utilisation of human resource. It is a recognized fact that HR occupies a unique and sensitive position in the banking industry; therefore a study of this nature will help the selected banks to appreciate the impact of HRM of organisational performance. This study will propose appropriate HRM strategies, policies, processes, programmes and practices and the possible outcomes in the rural bank settings. This study will prompt policy makers and implementers to pay due attention to HRM practices and the role of HRM strategies in achieving organisational goals. The academic significance of this work is to add to existing theories on HRM, serve as reference to those engaged in other related studies and create the leeway for another to further research into HRM and organisational performance. The findings and recommendations will provide a solid basis for banks to properly manage their human resources and serve as an opportunity for the selected banks to improve performance with existing workforce.

1.7    SCOPE OF THE STUDY 

The study is based on human resources practices on corporate sustainability, case study of UBA

1.8 LIMITATION OF STUDY

Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8 DEFINITION OF TERMS

Human Resource Management Practices: HR practices are basically organization’s actions which are responsible for administer the group of human assets and make sure that these assets are working to fulfil the organization’s objectives.

Staffing Practices: Hiring methods of employees through refined recruitment and selection methods which are used to select very best potential employees. In fact, research point out that screening and then finally selection of candidates.

Incentives: Incentives are usually in monetary rewards forms or other types of incentive-based compensation which are stock option, share  ownership (partnership)  and additional benefit like bonuses and rewards that are usually given to improve their performance.

Training Programs: Training programs are basically those activities which help to achieve the organization’s goals by adding the satisfaction and better output of employees; it would also helps to equip employees with knowledge and expertise that are necessary to  perform that specific job.

Firm performance: For this study the organization’s performance shows its profitability, growth of its sales and revenue and employee turnover.