ADDIS ABABA UNIVERSITY

SCHOOL OF GRADUATE STUDIES

The Assessment of HRD Practices and Challenges in Improving

Organizational Performance in the Public Sector
(The Case of Ethiopian Investment Commission)

A Thesis Submitted to School of Graduate Studies of Addis

Ababa University in Partial Fulfillment of the
Requirements for the Degree of
Masters in Public Management and Policy
(Development Management)

By: Yilak Yilma

Advisor
Dr. Frehiwot G/Hiwot

November 2016
Addis Ababa

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 ADDIS ABABA UNIVERSITY
SCHOOL OF GRADUATE STUDIES

The Assessment of HRD Practices and Challenges in Improving

Organizational Performance in the Public Sector
(The Case of Ethiopian Investment Commission)

BY: Yilak Yilma

Advisor: Dr. Frehiwot G/Hiwot

A Thesis Submitted to the School of Graduate Studies of Addis Ababa

University in Partial Fulfillment of the Requirements for the Degree of
Master’s Public Management and Policy (Development Management) in the
Department Of Public Administration And Management

June 2018
ADDIS ABABA

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 ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF PUBLIC ADMINISTRATION

AND DEVELOPMENT MANAGEMENT

The Assessment of HRD Practices and Challenges in Improving

Organizational Performance in the Public Sector
(The Case of Ethiopian Investment Commission)

BY: Yilak Yilma

Approved by Board of examiners

___________ __________ __________

Name of Advisor Signature Date

___________ __________ __________

Internal Examiner Signature Date

___________ __________ __________

External Examiner Signature Date

___________ __________ __________

Chairperson Dept. Signature Date

Graduate committee

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 Acknowledgements

First and foremost „Glory be to God the Almighty‟, who gave me enormous endurance from the
beginning to the end of my task. Next to God, there are numerous people, without whom,
completing this thesis would not have been successful. First and foremost, I am grateful to the
support, guidance and encouragement from my advisor, Dr. Frehiwot G/hiwot.

I am appreciative of the support and assistance from my families and wife Nani , my son Eyuel
Yilak, I am also extremely grateful to Musse Abebe for his assistance while I was analyzing the
data using SPSS software.

Finally, I am very obliged to express my indebtedness to my sister, Sirgut Yilma for her moral
and material support without whom I wouldn‟t have been succeefull in my study. Thank you
Emuye..

May God bless you all!

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 LIST OF ACRONYMS AND ABBREVIATIONS

ASTDC American Society for Training and Development Conference

BRICS Brazil, Russia, India, China and South Africa
BSC Balanced Scorecard
CB Capacity building
CD Career Development
CIPD Charted Institute of Personnel for Development
CSB Civil Service Bureau
EDB Education Bureau
FDI Foreign Direct Investment in Ethiopia
FEDB Finance and Economic Development Bureau
FMCB Federal Ministry of Capacity Building
HB Health Bureau
HR Human Resource
HRD Human Resource Development
HRD- SA Human Resource Development-South Africa
ILO International Labor Organization
LDCs Least Developed Countries
OD Organizational Development
PA Performance Appraisal
PSCBP Public Sector Capacity Building Program
ROPA Result Oriented Performance Appraisal
SNNP South Nation Nationalities and Peoples
SPSS Statistical Package for Social Science
UNDP United Nation Development Program

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Table of Contents
Acknowledgements .......................................................................................................................... i
Acronimus .......................................................................................................................................ii
Table of Contents............................................................................................................................iii

List of Tables...................................................................................................................................v

List of Figures.................................................................................................................................vi

CHAPTER ONE ............................................................................................................................. 1

INTRODUCTION .......................................................................................................................... 1
1.1 Background of the study ........................................................................................................ 1
1.2 Statement of the problem ....................................................................................................... 4
1.3. Research Questions .............................................................................................................. 6
1.4. Objective of the Study .......................................................................................................... 6
1.4.1. General Objective .......................................................................................................... 6
1.4.2. Specific Objectives ........................................................................................................ 6
1.5. Significance of the Study ..................................................................................................... 7
1.6. Scope of the Study................................................................................................................ 7
1.7. Limitations of the Study ....................................................................................................... 7
1.8. Organization of the Study .................................................................................................... 8
CHAPTER TWO ............................................................................................................................ 9
REVIEW OF LITERATURE ......................................................................................................... 9
2.1. Introduction .......................................................................................................................... 9
2.2. An Overview of Human Resource Development ................................................................. 9
2.2.1. Historical Perspective of Human Resource Development .......................................... 10
2.3. Components of Human Resource Development Practice .................................................. 11
2.4. Strategic Perspective of Human Resource Development ................................................... 12
2.5. Processes of Human Resource Development practice ....................................................... 13
2.6. Principles of Human Resource Development .................................................................... 14
2.7. Benefits of Human Resource Development ....................................................................... 15
2.8. Challenges for Human Resource Development ................................................................. 16
2.9. Theory of Human Resource Development ......................................................................... 20
2.9.1. Economic Theory of Human Resource Development ................................................. 20
2.9.2. Psychological Theory of Human Resource Development ........................................... 20
2.9.3. Systems Theory of Human Resource Development .................................................... 21
2.10. 1. Best Experiences from Other Countries ....................................................................... 24
2.10. 2. Human Resource Development in Ethiopian Context ................................................. 26
2.10.3. Background of Ethiopian investment commission (EIC) ............................................. 27

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 2.10.4. Institutional framework ............................................................................................. 28
CHAPTER THREE ...................................................................................................................... 31
3. RESEARCH DESIGN AND METHODOLOGY .................................................................... 31
3.1. Research Philosophy Selection .......................................................................................... 31
3.2. Research Design and Strategy ............................................................................................ 31
3.4. Data Types and Sources ..................................................................................................... 33
3.5. Data Collection Instruments ............................................................................................... 33
3.6. Sampling Design Procedures and Sample Size Determination .......................................... 34
3.8. Data Presentation and Analysis Methods ........................................................................... 35
3.9. Ethical Considerations........................................................................................................ 35
CHAPTER FOUR ......................................................................................................................... 36
DATA PRESENTATION, ANALYSIS, INTERPRETATIONAND DISCUSSION .................. 36
4.1. Introduction ........................................................................................................................ 36
4.2. Response Rate on Questionnaire ........................................................................................ 36
4.3. Reliability Test Result ........................................................................................................ 36
4.4. profile of the Respondents............................................................................................. 37
4.5. Descriptive Statistics of Scale Type Questionnaire ....................................................... 40
4.6. Measuring Employees‟ Awareness towards HRD Concepts ............................................. 40
4.7. The Practice of Human Resource Development ................................................................ 43
4.7.1. Employees‟ Perception in the Practice of Training and Development ........................ 44
4.7.2. Career planning and development ............................................................................... 48
4.7.3. Organizational Development ....................................................................................... 51
4.7.4. The Practice of Performance Appraisal ..................................................................... 52
4.8. Respondent‟s Perception How HRD Is Administered? ..................................................... 54
4.9. Challenges of Human Resource Development................................................................... 56
5.2. Conclusion.......................................................................................................................... 60
Annexes 1...................................................................................................................................... 73
Annexes 2...................................................................................................................................... 78
Annexes 3...................................................................................................................................... 79

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 List of table

Table 4.1: Cronbach's alpha for each filed of the questionnaire .............................................. 34
Table 4.2: Demographic characteristics of the respondents ................................................... 35
Table 4.3: Respondents‟ awareness of HRD concepts .......................................................... 38
Table 4.4: Summary of respondents‟ awareness of HRD ..................................................... 40
Table 4.5: Statistical review of training and development practice ........................................ 41
Table 4.6: Statistical Summary of training and development practice .................................. 45
Table 4.7: Statistical review of career development ............................................................... 46
Table 4.8: Statistical review of organizational development .................................................. 48
Table 4.9: Descriptive statistical review of performance appraisal practices ......................... 49
Table 4.10: Statistical review of how HRD practice Is administered .................................... 51
Table 4.11: Challenges of HRD practices ............................................................................... 53

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List of Figure

Figure 1: FDI in Ethiopia……………………………………………………………..………29

Figure 2: Summary of the overall research design and methodology…………………………...32

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Abstract

Organizations, whether they be private, public or NGO, must operate among in cooperation
with people. This is especially true within the service sector such as public organizations. This
study was to assess human resource development practices and challenges at Ethiopian
investment commission. And suggest possible solutions to curb the problems in human resource
development practice of the organization. This study employed mixed research method where
both qualitative and quantitative data were used in the assessment. The study used both primary
and secondary data sources. Survey research design was employed taking a sample of 95
respondents selected through simple random sampling technique to collect data through
questionnaire. Besides, focus group discussion and interview were used to consolidate and verify
the information. Data were analyzed and interpreted using descriptive statistics based on SPSS
16.0 and qualitative technique. The finding of the study showed that the employees have good
awareness towards HRD concepts and they were able to relate those concepts with HRD.
However, as the results proved Ethiopian Investment Commission were not in a good track in
practicing training and development, career development, organizational development and
performance appraisal. The finding also indicated that the commission were not in a position to
doing personal analysis and confronted with the variety of challenges in the practice of HRD.
Generally, based on the findings the Investment Commission did not have good HRD system. To
minimize problems in the practice of HRD first and foremost. HR should get due attention since
it is an engine for other resources. In Meeting HR need, the HRD practices should also focus on
career development and post training evaluation should be exercised in order to increase the
effectiveness of the program. Moreover, to overcome the challenges of HRD practice there is a
need for skilled human and financial resources, to differentiate high and low performers by
using performance criteria and providing the necessary technical and interpersonal support to
make HRD process more sustainable

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 CHAPTER ONE
INTRODUCTION
1.1 Background of the study
We live in a complex and rapidly changing world. As such, the public service sector experiences
inescapable yet precipitous changes and the learning and developmental needs of public servants
therefore evolve rapidly. To that end, the role of human resource development (HRD) programs
in responding promptly and effectively to changes is essential for success (Kerrigan &Luke,
1987).Human resource development (HRD) is the process of developing human competencies
knowledge, skills, attitude, potentials and practice) through different mechanisms(Training,
management development, performance appraisal, counseling, organizational development,
career planning and development), and time bound organized learning experiences to improve
the productivity of the people in order to achieve organizational goals effectively (Agrawal,
2002: 4).

According to Haslinda (2009a), human resource is organizations greatest asset because without
it, everyday organization activities such as managing public service, communication and dealing
with customers could not be completed. This shows that the employees and the potential they
possess are key drivers of the organizations success. Moreover, Kebede and Sambasivam (2013),
in their findings indicated that organizational change impacts not only the organization‟s
activities but also employee‟s knowledge and competencies. Similarly, as noted by Haslinda
(2009b), in order to maximize organizational effectiveness and to ensure the employee‟s
potential, capabilities and talents must be developed and updated.

According to Jacobs and Jones (1995), human resource development (HRD) is a continuous
process which matches human knowledge and skill with organizational objectives. Charles
(2006), argued HRD as the integrated use of training and career development efforts to improve
individual and organizational effectiveness. HRD also develops key competencies that enable
individuals to perform current jobs and that will allow them to adapt quickly to new challenges
and opportunities (Anyim et al., 2011).

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HRD has become a widely used term, but conceptions of the term vary widely. The broad notion
of HRD, which is a subset of the grand theory of human development, includes not only
education and training, but also access to sources of a degree of self-determination (Werner &
DeSimone, 2011). HRD is the integrated use of training, organization, and career development
efforts to improve individual, group and organizational effectiveness (Kelly, 2006).

HRD develops the key competencies that enable individuals in organizations to perform current
and future jobs through planed learning activities (Biransnav and Rangnekar, 2009). From
managerial perspective, HRD refers to improving employs skills, knowledge, & ability as means
of improving a firm‟s efficiency or productivity (Blanchard & Thacker, 2013). As the demands
on organizations develop, it‟s critical that organization implement training and development,
career development and performance appraisal system activities to insure that their staff has the
requisite knowledge, skills, abilities, and other characteristics to adopt to these challenges
(Pynes 2009: 310).

For Stephen (2009), the main purpose of HRD is to develop employee‟s skills and competences
in line with organizational objectives and there need to be a feasible transfer of development
programs in to workplace. A study by Andersen (2007) stated that learning organizations have
become kind of collective term for development strategies that attempt to create consistence
between employee‟s competence and development of institutions. Bertucci (2006) outlined that
governments should aim at building learning organizations to fasten service delivery and they
need to identify salient human talents and skills in the strategic manner.

Moreover, Swanson and Holton (2009) examined HRD as the combination of training and
development, organizational and career development efforts and performance appraisal that help
to improve organizational effectiveness. Thus, the complexity nature of the entire globalization
process, gave rise to lead dependence on HR which is creative factor of new value to the public.
Study by Saad et al. (2013) revealed that developed countries have good HRD performance
through training, career development and have clear awareness how HRD facilitates the
organizational activities compared with the developing ones. Moreover, studies have been
conducted in relation to HRD for example, Ashkezari and Aneen, 2012; Habib, 2012;
Saraswathi, 2010 & Sundarajam, 2009 in LDCs. Their findings showed that HRD has been

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encountered by problems like: lack of training and career development, limited organizational
development, lack of effective performance appraisal, lack of employee‟s motivation and
awareness, lack of clear strategies and limited managerial capacity in the public sector.

As CIPD (2006), the public sector in Africa has been impeded by different challenges to
modernize services to diversified needs of the public. Wachira (2012) identified critical
challenges hindering HRD in the continent like: paying attention for professional development,
allocating sufficient budget, aligning HRD to strategic priorities, promoting learning culture.
Besides, Habib (2012) outlined challenges of HRD in Africa as developing comprehensive HR
strategy, promoting a positive working environment, accepting modern technological changes
and promoting positive work force attitudes. Having these facts, when we come to Sub-Saharan
African countries context there are challenges like lack of training and in the development of
skills and the ability to make use of the available human resources (Anyim et al., 2012). It can be
argued that in the Sub-Saharan African region public sector needs to increase the skilled labor
pool and to develop communities. This involves the fusion of human resource development
strategies and policies that will be suitable for developing socio-economies in the region and
fasten service delivery.

Coming to Ethiopia, the government recognizes that good sector policies depend on building HR
capacity if it is to be implemented successfully at proposed time. In 2001, the country launched a
broad National Capacity Building Program (NCBP) which is an extremely wide ranging and
encouraging program which needs commitment from all public sectors to upgrade employee‟s
potential (Adebabay and Perkins, 2010). The government identified inter-dependent programs
which led to the creation of a Federal Ministry of Capacity Building (FMCB) to coordinate and
provide strategic guidance to the overall programs especially, HRD. However, as an empirical
study conducted by Gebrekidan (2011), the Ethiopian public sectors face inefficiency and poor
service delivery resulting from limited focus on HRD. Therefore, different investigations are
needed why this so. There are such inefficacies and poor service delivery. Accordingly the
purpose of this study

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1.2 Statement of the problem
The effective and efficient use of limited recourses calls for a skilled and competent workforce,
among others. If an organization is to have a skilled and competent workforce, it must have
effective Human Resource Development (HRD) programs (Mathis, Jackson, and Valentine
2014.)
In today‟s competitive world, HRD is the fundamental factor for achieving organizational
objectives and becoming international discourse (Ashkezari and Aneen, 2012). Based on HRD-
South Africa (2013), discussion countries should practice a systematic strategy for HRD in
support of development. This is because the growing complexity of the workforce accelerated
through the dynamic impact of globalization on national economy has just the quest of HRD at
the center of public policies and development strategies. Similarly, Livingstone and Raykov
(2005) supported that learning and development of employees is the key factor for the expansion
of the global economy and innovation in the public sector. According to Kebede and
Sambasivam (2013), human knowledge increasingly becomes a crucial factor for competitive
success understanding factors that contribute knowledge to workplace environment are essential
to every organization.

Since, every organization is made up of people developing their skills, motivating them to high
level of performance and ensuring that they continue to maintain their commitment is essential to
achieving organizational objectives (Abdullah, 2009). Once employees have been recruited and
selected the next important step is to help them on converting their abilities into skills that
contribute to the organization‟s goals (Kebede and Sambasivam, 2013).

However, ineffective practice of HRD can result different problems such as reduced employee‟s
aspiration to learn and apply new skills, decrease employee‟s productivity, low morale, higher
employee turnover and low performance of organizations (Edgar and Geare, 2005). Problems in
HRD systems appear when the capacity building practices are failed to accommodate the
organizational and employee‟s needs. Therefore, in improving organization‟s and employee‟s
satisfaction, upgrading the skills, knowledge and attitudinal behavior of employees in the
organization is vital (Edgar and Geare, 2005).

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According to Federal Civil Service Proclamation No. 515/2007, in Ethiopia, HRD is the critical
issue to deliver the required service to the public. Therefore, there is the need of strong advocacy
work on HRD in the civil service. This is, because the implementation of government policies
and strategies is highly dependent on competent, qualified and skillful employees. When the
capacity of the civil service to discharge its responsibility is low in HRD, the implementation of
government policies and strategies will fall in a trap. Hence, effective practice of HRD is the
cornerstone for institutional building at all levels of public sector to enhance performance.

According to Markos (2013), the public sector reform program in Ethiopia has shown some
improvements particularly, in the areas of civil service both at federal and regional levels.
However, the reform program is entangled with different challenges such as lack of
accountability, transparency, and low level of HRD. From these challenges HRD is the one that
cripples the capacity of the implementation process and participation from the side of different
stakeholders in public sector. Abebe (2008), also in his study on human management function
decentralization at SNNP revealed that little attention is put on HRD function because of lack of
proper training and development in public sectors. Likewise, Adebabay (2010) and Gebrekidan
(2011), in their respective systematic review in some federal public sectors indicated that HRD
for effective implementation in public sector in the country is not as required and forwarded
studies need to be conducted.

Coming to the study areas, sufficient published works are not available in relation to the
practices and challenges of HRD. Thus, the existence of such limited researches throughout the
country and absence of studies in Ethiopian investment commission areas initiated the researcher
to raise the issue under consideration. Therefore, these study extends few previous researches in
HRD and utilization practices, which subsequently affect both individual and organizational
performance.

The necessity of applying a strong human resource management in general and a sound human
resource development practice in particular has not yet been realized and didn„t bring any
meaningful results, other than its being theoretical knowledge. Similarly, Ethiopian Investment
Commission (EIC) has been a victim of such problem and so were its clients, the government
and its other development assistants weren't gaining satisfaction with the service it had been

5
providing. To properly utilize the available human resource development with the intended
benefit, HRD practice becomes crucial.

Therefore, this study has attempted to examine some general aspects human resource
development practices and challenges of Ethiopian investment commission so that it has a
significant contribution.

1.3. Research Questions

The rationale behind this study revolves around the following basic research questions:
1. What is the current status of employees‟ awareness about the concepts of human resource
development in Ethiopian Investment Commission?

2. What are the current human resource development practices in the commission?

3. How human resource development is administered?

4. What are the challenges that impede human resource development practices in Ethiopian
Investment Commission that need to be overcome?
5. What are the possible solutions to enhance HRD practices in EIC?

1.4. Objective of the Study

1.4.1. General Objective
The overall objective of the study was to assess the existing human resource development
practices and challenges prevailing in the Ethiopian investment commission
1.4.2. Specific Objectives
The specific objectives of the study include:
1. To portray the status of the employees‟ awareness towards the concepts of human
resource development practices in the commission.

2. To assess the current human resource development practices in the study areas.

3. To explore how human resource development is administered in the commission.

4. To identify the challenges encountering the practice of human resource development in

the commission.

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1.5. Significance of the Study

A study on human resource development practices and challenges is one important aspect of
development research. Thus, the importance of this research can be pointed out from different
beneficiaries view:

 The primary importance of the study will assist the policy formulating bodies and
decision makers to give due emphasis to HRD and devise different mechanisms in order
to scale up and continuously upgrade the employees‟ expertise to improve organization‟s
performance.

 The study areas will use it as a guideline to address problems and improve their
understanding in the practices of HRD and other organizations which have similar
problems can also extrapolate its findings.

 Finally, it might serve as a reference for further researchers for those who have an
interest in relation to this area and it helps the researcher to acquire knowledge and skills.

1.6. Scope of the Study

This study tried to assess human resource development practices and challenges. This research
will be conduct in Ethiopian Investment commission under assessing human resource
development practices and challenges. The commission may be challenges by different
problems, but the researcher do not pays any attention to those challenges that are not related
with the topics of the study. The researcher is also compiles and collects data only from
Ethiopian investment commission excluding regional agencies.

1.7. Limitations of the Study

Inaccessibility of investment commission officials and experts for interview was a huge
challenge for this study, in addition to these most of the respondents were unwilling to give
information due to lack of sufficient time and other reasons. Furthermore, in some cases, the
experts were reluctant to give the available documents on the issue. Eventhough these limitations
are inevitable, the researcher tried to handle the difficulties by different mechanisms such as

7
briefly explaining to the respondents the purpose of the study to be for academic, applying
efficient use of time and other resources and attempting to triangulate data to avoid data
inconsistency and exploring different data sources for empirical literatures.

1.8. Organization of the Study

The study is organized in to five sections. The first chapter is an introductory part, which
includes background of the study, statement of the problem, objectives of the study, research
questions, significance, and scope of the study. The second chapter deals with the theoretical
framework in which relevant literature is reviewed in relation to fundamental theories and their
applicability vis-à-vis the problem under study. In which some of the major concepts in the study
are clarified and components of HRD are assessed. Chapter three is concerned with the
methodological part of the study. The analysis and discussions of major findings are indicated in
the fourth chapter. In the fifth chapter conclusions, recommendations and implications of the
study are made. Lastly, the references and appendices sections are attached.

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 CHAPTER TWO

REVIEW OF LITERATURE

2.1. Introduction

This chapter primarily clarifies basic concepts and definitions pertaining to the study subject.
Moreover, the chapter discusses and presents about different concepts so as to give
comprehensive understanding about HRD. Accordingly, an overview, historical perspective,
components, processes, principles, a strategic perspective, benefits, challenges, theories,
empirical evidences and best experiences of some countries and the case in Ethiopia in relation
to the subject under study are discussed.

2.2. An Overview of Human Resource Development

According to Singh (2012), HRD implies that the talents and energies of employees in an
organization as potential contributors in turn this has a critical role for the creation and
realization of the organization‟s visions and goals. It is also the process of increasing knowledge
and capacities of the people in a given organization. According to McLean (2001), HRD is
conceptualized as any process or activity either short or over the long term that helps to develop
employees‟ work based knowledge, expertise, productivity, and satisfaction for personal,
organizational, community and country at large. Based on Singh (2012), in the national context,
HRD is considered as a process by which the people in various groups are helped to get new
knowledge continuously and make them self-reliant.

HRD is continuous process with a set of systematic and planned tasks in which organizations
design to provide its members with opportunity to learn necessary skills to meet short and long
term organizational goals (Harris et al., 2006). Bhupendra (2009) also indicated that, HRD as a
systematic and planned activity includes training and development, career planning, and
performance appraisals for organizational development. Similarly, Harris (2008) described HRD
as well organized learning activity to improve organizational performance and personal growth
organized by an organization.

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As Matthews et al. (2000), though the existence of automated activities in the organizations
worldwide human resource development is a prominent issue to adapt the real experiences what
are going on. Thus, HRD is a subject playing paramount significance at a national level and it is
much more of sensitive issue that due attention should be given by both developed and
developing countries to attain organizational development through modernizing its employees‟
skills (Michael, 1995). Furthermore, Deb (2010) stated that it is not sufficient to address people
as strategic asset of the organization but to believe that they are the real and the most important
asset of any organization and employees with their potential bringing oversize value. Hence, to
be survivor in the present scenario of competition, the organizations have to design some
appropriate HRD strategies to build their workforce in the organized manner. Finally, Rao
(2005) highlighted that HRD as an activity and as a process plays a crucial and noteworthy role
in identifying the hidden potential of the workforce employed in the organization is vital.

2.2.1. Historical Perspective of Human Resource Development

As indicated by Rao (2005), the early part of the century witnessed a concern for improved
efficiency through careful design of work. Emphasis of improved efficiency had been shifted to
the availability of the managerial focused on the demands. These encompass technical personnel,
responses to the new legislation and regulatory framework of the government increased concern
for the quality of work. HRD has been growing at a very fast pace in the recent past. Formally it
was introduced by Len Nadler in 1969 in American Society for Training and Development
Conference (ASTDC). In public sector HRD as a concept it was introduced in 1980s (Rao,
2005). HRD focuses on the developmental aspect of HR with the pragmatic and a flexible
approach. Therefore, the intended purposes of HRD efforts are to gain competitive advantage
through a superior workforce (Pattanayak, 2005).
As stated by Rao (2005), HRD concept has passed the following seven chronological sequences.
The first one is the commodity concept in which HR was seen as a commodity that could be
bought and sold and wages were decided on the basis of demand and supply forces. Secondly,
the factor of production concept that labor is treated as any other factors of production. The
Third one is the good will concept it states welfare measures like safety, first aid, rest room to
boost up the morale of workers, and enhancing their performance in the organization. The fourth
concept is the paternalist in which management assumes a fatherly and protective attitude
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towards employers and signifies to satisfy various needs of employees. Fifthly, the humanistic
concept which deals about how to improve the productivity, physical, social and psychological
needs of workers. The sixth concept is about human resource concept which considers
employees as the most valuable assets of an organization and continuous effort to realize
organizational goals and aspiration of employees. The last concept is the emerging concept
HRD. It states about how employees should be accepted as partners in the progress of an
organization to have a feeling that the organization is their own.

2.3. Components of Human Resource Development Practice

To attain a total all-rounded development HRD is important for matching the individual skill
with organizational needs (Jacobs & Jones, 1995). HRD promotes dignity of employment in an
organization and provides opportunities for teamwork and personal development need for a
career development. Hence, Singh (2012) found that a well-planned system is a central part of
HRD in every organization. HRD components which are important for better functioning of a
given organization are the following:
 Training and development: According to Khan (2012), training involves providing the
employees the knowledge and skills needed to a particular current job or task while
development is preparing employees for future work responsibilities, increasing
capacities and help them to perform their current job. Hence, a competitive success of an
organization is achieved through the skills and potentials of the people that they possess
(Leimbach et al., 1998). Training will improve the employee‟s performance and
productivity. Apart from recruiting, selecting, orienting and placing employees in jobs do
not ensure success. In most cases, there may be gap between employee knowledge and
skill and what the job demands that could be filled through training programs (Abdullah,
2009). Training can be given internally and externally. Internally, could be on-the-job at
the work station and off-the job through lecture and demonstration, while externally, by
universities and colleges to develop depth expertise (Gomez-Mejia, 2007)

 Career Development (CD): Kebede and Smbavasima (2013) argued that no HRD
function can be acceptable to the people of any organization, if it fails to provide
opportunities for individual employees to have bright career prospects. It is for the

11
 purpose of HRD integrating career planning and development with it. Proper career
planning also leads to career development. It develops the career of every individual
executive, which results in adequate growth of the career of every employee (Abdulahi,
2009). Hence, successful planning is closely linked with career planning and
development (Van Dijk, 2004). Upton & Egan (2003) noted that career development
focuses on the alignment of individual subjective career aspects and the more objective
career aspects of the organization in order to achieve the best fit between individual and
organizational needs as well as personal characteristics and career roles.
 Organizational development (OD): It focuses on the performance of the organization as
a whole (Singh, 2012). According to French and Bell (1999) it is a long-term effort
supervised and assisted by top managers, to improve an organization‟s vision, learning,
and problem-solving processes. As outlined by Singh (2012), this can be done through an
ongoing, collaborative management of organization culture to enhance the effectiveness
of an organization and the well being of the employees. Moreover, OD involves tasks that
should be attended to both organizational variables (such as: structure and systems) and
employees variables (such as: competence, skills and attitudes) (Vijay, 2007).
 Performance appraisal (PA): is an important part of HRD, which enables organizations
to understand where their employee stand, what is expected from them, what they
actually do, where they lack capacity and how they can be updated (Boswell, 2002). PA
is a review and an assessment of an employee‟s performance of assigned duties and
responsibilities. PD serves several purposes in the organizations for instance; it provides
tools for acknowledging good performance, identifying areas in need of improvement and
providing guidelines to justify management decisions (Akuoko & Baffoe, 2012).
Therefore, PA is more than simple checklist actions whether activities are performed or
not that organizations sought to review their effectiveness and make further management
decisions.
2.4. Strategic Perspective of Human Resource Development
HRD is seen as the human capital that organizations should protect core competencies through
investment in training and development because the value of employees to the organization is
pertained to the uniqueness and value of their capabilities and skills (Sambasivam & Kebede,
2013). HRD is well achieved through a strategic approach, a position consistent with resource-

12
based and human capital strategies to meet organizational goals (Lepak & Snell, 1999). This
enables organizations to mix different knowledge components, connect previous and current
knowledge and combine internal and external knowledge to ensure sustained and continuous
competitive advantage (Davenport, 2003).
HRD as a development policy process which includes formulation, adoption and implementation
of policies, the monitoring of their effects and their adjustment followed by organizations
(Dussault, 1999). Policymakers need to define explicit policy objectives based on a rigorous
analysis of the initial situation and of the feasibility of change in the short, medium and long
term. As stated by the same author in any organization, explicit objectives, supported by the
public are crucial. These put policy-makers in a stronger position to negotiate with the
stakeholders to shape HR policies. At the macro level, HRD requires a mix of strategies to
achieve its objectives (Anyim et al., 2012). If it is really need-oriented, stakeholders must be
involved at all stages of the policy-making, from problem identification and needs assessment, to
the definition of objectives and priorities as well as of strategies (Swanson & Holton, 2009).
Therefore, planning, coordination of policy-making, regulation, monitoring and information are
also strategically important to the well functioning of HRD.

2.5. Processes of Human Resource Development practice

As revealed by Harris et al. (2006), in today's changing environment, employees at all levels
need additional capacity building and opportunity to managers to develop their management
thinking. In this respect, organizations are required to be engaged in continuous employee‟s
management development programs. Harris et al. (2006) identified five HRD processes which
encompass needs assessment, identify and design objectives, implementing actual programs and
conducting evaluation and follow up.
 Needs assessment: this is the first task that an organization takes to identify human
resource development needs (Charles, 2006). Since human resource development is a
need-oriented effort, determining the level, type and duration of the training and
development is of prime importance at this stage of the process (Bhupendra, 2009).
Therefore, the dominant framework for identifying organization's HRD is needs
assessment focusing on organizational analysis, task analysis and person analysis.

13
  Identify and design objectives: Once HRD needs are clearly identified, the next
process is to establish objectives. An objective is a specific outcome that the employee
capacity building program is intended to be achieved (Scarpello & Ledvinka, 1988).
 Instructional method and media: The instructional method and media depend on the
program content and in turn developed by human resource development need
identification and established objectives (Werther & Davis, 1996). The objective is to
teach specific skill, provide needed knowledge, or try to influence attitudes the content,
method and media must match with the job requirement of the organization and the
learning style of the participant.
 Implementation of the HRD Program: As Harris et al. (2006), HRD program is aimed
at enabling organizations to achieve objectives and the program is set up after having
clear-cut objectives in mind. Moreover, providing answers to questions like what skills
are going to be taught, what kind of employee development is sought, what long or short
term objectives are proposed will determine the design and details of the programs
(Chatterjee ,1995).
 Evaluation and follow-up: Is the final phase of HRD program to verify the success of
the program, i.e. whether employees in the program do the jobs for which they have been
equipped (Bhupendra, 2009). It is most commonly interpreted in determining the
efficiency and effectiveness of a program in relation to the desired goals and objectives.
HRD is doing an investment in people to update their competence (Ahuja, 1988). As
indicated by Milkovich and Boudreau (1991), the major reason for management
investment in HRD program is that to capacitate employees to perform better to meet
organizational objectives. Therefore, evaluation is a crucial mechanism to assess the
effectiveness and efficiency the organization.

2.6. Principles of Human Resource Development

The principles stated below must be kept in mind while framing a HRD system so as to have a
proper and regular development of the human resource in every organization.
 Development of organizational capability: according to Deb (2010), the whole
development of employees and the organization are the basis of ideal human resource
development system. The competencies include overall development of the work force

14
 in all aspects, such as: technical, psychological, physical or moral development should
be in an organized manner.
 Potential maximization: HRD system plays an important role to identify the
employee‟s hidden potential that enables them to be competent enough to utilize their
ultimate knowledge that can help to achieve organizational objectives (Habib, 2012).
 Autonomy maximization: this is the degree of independence offered to employees at
work so that they could be able to handle their responsibility to some extent. A proper
HRD system must provide certain level of autonomy to its employees enabling them of
handling duties on their own (Singh, 2012).
 Maximum delegation: this principle implies that in an organization responsibility
delegation i.e. sharing responsibilities of authorities with subordinates should be prevail
to develop a cohesive and a congenial environment (Deb, 2010).
 Participative decision-making: according to (Habib, 2012) this shows that top
managers should encourage the participation of their subordinates in the system of
human resource development to create favorable working environment where the
employees are free to discuss their issues and their suggestion should be welcome.
 Change management: as to this principle though usually people resist change, it is the
inevitable thing in this universe. To be tough in the competition an organization and its
human resource need to be as much flexible in getting itself adapt to the changing
scenario. The balance between the organizational culture and the changing culture is
maintained through good HRD system (Deb, 2010).
 Periodic Review: according to Swartz (2010), this indicates that training and
development, career planning and development, performance and potential appraisal,
counseling as HRD functions that should be reviewed and renewed regularly at certain
periodic intervals to capacitate the employees in an organization.

2.7. Benefits of Human Resource Development

Henry Ford the pioneer in the field of management states, “Take out my building, take out my
machines and all capital but leave my men with me I will become Henry Ford again” This
statement of Henry Ford highlights that human resource plays a crucial role in an organization
(quoted in Wachira, 2012). In this competitive globalization, HRD has immense function in

15
meeting the challenging requirements of highly competent and skilled human resources. In this
regard, component of human resource which transforms other resources to be productive can
benefit the growth of the country (Gupta, 2008). Therefore, HRD fosters individual capability
through practices strengthening organizational capacity to achieve a competitive advantage
(Padaki, 2007). Haslinda (2009a) revealed that the purposes of HRD are said to capacitate the
nature and extent of HRD activities being practiced in a give organization. Its purposes are
centered on learning and performance perspective both benefiting the individual and the interests
of stakeholders. In a wider sense, the purposes HRD centered on economic, social and the ethical
benefits. HRD centrally focuses on training, development and learning with organizations for
individual development to achieve organizational strategies and competence.
Yussuf and kasim (2003) stated that, the role HRD play is crucial in promoting and sustaining
growth and contributes significantly to economic development in terms of increased employees‟
productivity and plays a dominant role to make the economy more innovative, productive and
competitive through the existence of more skilled human capability. Swanson and Holton (2009)
further asserted that the organizations have been created by human beings and can soar and
crumble, and HRD is intricately connected to the fate of any organization. Human expertise is
developed and upgraded through HRD processes and should be applied for mutual long term and
short term benefits. With appropriate HRD program, people become more committed towards
their job; people are assessed on the basis of their performance (Deb, 2010). Therefore, HRD is
considered as the key to better relations and greater profitability and higher productivity for any
organization.
2.8. Challenges for Human Resource Development
An emerging knowledge economy creates major challenges for HRD in the organizations. The
major challenges that confront the HRD function in organizations in meeting their objectives are
the following.
Aligning HRD to Strategic priorities: If HRD practitioners want to make an impact and help to
drive the success, then they need to focus more on strategy-perhaps avoid addiction to delivery
of training programs. They should seek to understand the need of the organization more in order
to deliver a learning agenda that enables achievement of goals (Charles, 2006). A Strategic HRD
as that development arising from a clear vision about people‟s ability and potential to provide
competitive advantage to an organization (Ozcelik & Ferman 2006). It is employee development

16
that arises out of the need to actualize the often heard statement by organizations that people are
our greatest assets. Strategic HRD is driven by the organization‟s goals and operates within these
goals to develop human capital and is thus a purposeful way of matching people to the
organization. The central focus should be to expand the learning capability that can help generate
the knowledge base of the organization and enhance both competitive and collaborative
capability (Harrisson & Kessels, 2004).

Building knowledge-productive learning culture: According to Harrison and Kessel (2004),

the effectiveness of HRD in contributing to culture change rests on its practitioners' alertness and
responsiveness. To new needs in the workplace, on their ability to raise awareness of the
importance of a culture of learning. That means, in practice for managers and other employees,
and on their production of relevant interventions that can form part of culture's new context. To
do this, they require a deep knowledge of culture, of its historical roots, and of its typical impact
on workplace behaviors and performance.
Developing managerial and leadership capability: This is another basic challenge that the
organizations face in meeting their desired goals. In knowledge economy managers and team
leaders increasingly have to master strategizing, organizing and HRD processes relevant to
innovative organizational forms (Harrison &Kassel, 2004). Hence, HRD professionals should
design and help to implement management development strategies to build interacting types of
core competences like: strategic capability, flexibility and learning orientation.
Upholding Cultural Values and Norms: If a developing country is to succeed in developing
skills of its HR, in a way that serves its real and correct development needs most effectively, its
plan must respect the cultural values and norms which people are strongly attached to (Habib,
2012). This will secure a stronger commitment on the part of those targeted by the development
efforts than it would be the case otherwise. It is therefore essential that government
administrations be careful when reviewing its development options, not to ignore the fact that the
attitude and reaction of people toward its HRD plan (Wachira et al., 2012).
Understanding of different needs and interests: According to (Wachira, 2012) the best
national HRD plan is one that is designed to best serve the special needs and interests of the
country and its sectors. Hence, national HRD planning should be objective, providing means to
eventually set the stage for achievement of priorities, goals, and interests that truly make a

17
difference as far as the fate of the country and the well being of its people are concerned (Habib,
2012). Therefore, planning is not a chance for planners only to show professional and skilful
they are but also how ethical, realistic and precise their judgment and choices can be.
Allocating sufficient financial resources and using it wisely: Financial resources can only be
available by a limited amount. But the amount must be adequate to achieve the goals of HRD.
Also it is essential not to misuse the financial resources. In short, the failure to continue the HRD
course of action after starting it must not be allowed. It is very important to be able to continue
financing HRD at all times and regardless of volatile swings in financial budget levels (Habib,
2012).
Developing comprehensive HR strategy: As indicated by Wachira (2012), the best national
HRD is one that is part of a comprehensive national HR strategy. Good national HR strategies
begin with identifying national work needs and work requirements. Strategic planning is the best
means through which selection can be made. Also effective HR strategy provides for HRD
programs that invest in learning through training. According to Harrison and kessel (2004), the
identification of training needs and policy; and the details relating to training content, scope, and
overall thrust should be entirely in the hands of those who will supervise its beneficiaries.
Moreover, career broadening should be a prime focus in HRD programs in order to secure
flexibility to quickly adapt to changes in the work environment. Therefore, effective HR strategy
provides for effective HRD through competition among workers for career progression, effective
performance review process for knowledge transfer and effective leadership.
Utilizing HR assessment technology to plan HRD: HR assessment technologies have
developed to a very advanced stage now days. It can be beneficial, therefore, to initiate a
particular HRD program that serves the national HRD strategy through application of suitable
HR assessment technology systems. Such systems are designed to assess the selection, appraisal
and development and coaching of workers (Habib, 2012). These systems are best used in
conjunction with a process whereby workers‟ experience, education, qualifications, competence
and trainability can be assessed.
Promoting positive work force attitudes toward HRD: An attitude is a psychological stand of
a person in relation to an issue. National HRD programs need to be designed with recognition
that members of work force attitudes toward HRD constitute an essential factor for HRD
success. As Wachira (2012), positive attitudes among members of the work force constitute a

18
condition for absorbing the programs requirements; and that is important for smooth program
execution. It is central that work force members realize their personal needs for change and
improvement, and be conceived of the direct and clear link between these needs and the designed
HRD programs (Habib, 2012).
Accepting modern technological changes and developments: As Wachira et al. (2012),
technological advances are changing the way people doing things. Current requirements are for
more professional and technical tasks and fewer activities. Therefore, national HRD programs
need to be built on realization that flexibility, skills, and professionalism are essential
requirements to face up to modern work challenges. Since the nature of most aspects of
nowadays work requires a high level of skill and versatility HRD programs in developing
countries should be committed to invest heavily in training and career development (Wachira, et
al., 2012). To do this utilizing knowledge and experience accumulated locally, intensifying
training of the work force in up-to-date skills necessary for planned assignments, developing
long-term career potential and creating a positive work environment which motivates and
promotes productivity are crucial.
Creating positive working environment: According to Habib (2012) the creation of a positive
work environment is an essential requirement in every organization to upgrade HRD. This
ensures that workers have a strong sense of their value and contribution. It should encourage
commitment on workers‟ part, increase retention, and facilitate mobility and versatility.
Government organizations should promote national HRD practices indicative of their emphasis
on creating positive work environment. As Swartz (2010), a positive work environment
encourages, with caution, risk taking; allows for flexible work schedules and offers different
options to employees.
Sustaining the effort: Human resource development is not one going effort. It is an ongoing
process. Government organizations concerned with HRD should on an ongoing basis, review,
discuss, and monitor the identification of changes in work force development and training needs
(Habib, 2012).

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2.9. Theory of Human Resource Development
2.9.1. Economic Theory of Human Resource Development
Business traced its roots in the early stages of human civilization in one form or the other every
business activity is necessarily an economic activity. To give and to take has been the two
aspects over which the base of business lies. In the earlier period of time, it was carried out on
individual basis, but with the passage of time it turns out in the shape of a formal and an
organized structure (Randall, 1987 & Torraco, 1999). An organization is an organic entity
through which business is carried out primarily for achieving economic objectives of the
organization. Moreover, the economic theory holds the critical position in the evolution of the
concept of HRD in context of an organization. Economics is the study of how scarce resources
are optimally utilized and how these scarce resources are allocated. It consists of certain concepts
of efficiency which could help in designing a framework for ensuring maximum societal well-
being. Thus, economics is considered to be one of the theories of human behavior (Deb, 2010).

2.9.2. Psychological Theory of Human Resource Development

From the organizational point of view psychology is concerned about the individual behavior at
work. This theory asserts that the behavior and mental process of employees and their effect
organizational system performance. For an organization to be effective and well-organized in the
competitive edge and global scenario, it must take great care of maintaining a cohesive working
environment. This is undertaken where the working conditions are integrated with the talents and
skills of the HR. The application of psychological tools to solve problems of the employees
working in the organizations facilitates their integration with the organizational climate and
results in enriched and enhanced performance (Deb, 2010). According to (Deb, 2010), this
theory operates at the individual level as well as at a group and at organizational level. It explains
the way how the perceptions, attitudes, behavior of an individual can affect upon the
technologies, internal sub-systems, processes, goals and objectives of the organization
(Passmore, 1997). Therefore, understanding the psychological perspective is critical to the
organizational performance. Because it brings key skills and perspectives that effectively
facilitate change in culture and shifts in strategy to address the complex challenges and risks
facing organizations. Moreover, to nurture the organizational effectiveness, there is a need to
strike a balance between the individual needs and goals with that of the organization. Human
considerations such as adapting with the dynamic changes of time, organizational decisions

20
based on the performance of the employees, perceived equity has immense impact on individual
performance and ultimately over organizational performance (Passmore, 1997).

2.9.3. Systems Theory of Human Resource Development

It sees the world in terms of systems where each system is a”whole‟ that is more than the sum of
its parts, but also itself a part of larger system (Deb, 2010). System theory is the trans-
disciplinary study of the abstract organization of phenomena, interdependent of their substance
type or spatial or temporal scale of existence. This theory is an interdisciplinary field which
studies the systems as a whole and explanation of how the interrelationships among inputs,
processes, outputs, and feedback affect internal subsystems with set goals derived from and that
contribute to the mission of the overall system (Randall, 1987 & Torraco, 1999).
According to (Lynham et al., 2004), organizations interact with the external environment and
maintain a synergy between the internal affairs of the organization and the external environment;
it is termed as an open system based on the assumption that an organization or an individual
cannot develop in vacuum. Therefore, organizations have to expose themselves to the external
world for growth and development. In the organizational context, HRD is a sub-system and a
system of its own because human resources are the prime movers of all other physical resources
and transform those input resources into valuable output in the form of product and/or services.
This transformational process involves a host of HRD processes, because of the reason that
human efforts are required to augment the performance by familiarizing changes in human
behavior (Deb, 2010).

2.10. Empirical Studies

A study by Swarajya (2005), entitled with human resource development in selected public
enterprise in India has dedicated the knowledge in and often neglected area human resource
development in public sector enterprises. The researcher has assessed the efficiency of human
resource development processes undertaken in the selected study areas. The study identified the
key problems occurred in the course of implementation of HRD programs and ascertained the
attitudes of employees towards these programs. The study found that no much worthwhile work
was done in the study areas for developing and upgrading the competencies, skills, knowledge,
abilities, experience, welfare, motivation, career development of employees. Sundararajam

21
(2009) has observed the emerging trends of human resource development practices on the basis
of survey of employees working in few cooperative organizations the overall HRD climate as
neither good nor bad. The study identified that the employees shown unfavorable attitude
towards human resource development policies and practices. The researcher said that HRD
climate should be improved in the competitive environment. As the overall conclusion indicated
by the study human resource has not been properly implemented.

The study carried by Ganesh Anjali (2007), concerned with training needs identification in
public sector has identified that evaluation of training activity is very important namely in
resource deployed and inputs provided. So as to make training conducive, goal oriented, need
based, cost effective and duly modified from time to time on the basis of evaluation procedures
require critical need identification. The researcher more indicated that the quality of training
depends on the expertise of trainers, training methodology, training needs analysis, training
evaluation procedures, supportive policies and strategic objectives. Moreover, the study found
out the employees‟ lack of attitude towards training and training endeavors did not yield the best
results. Finally, the research concluded that the employees‟ attitude, trainers‟ competence level,
teaching methodology and top management support in conducting need base training play a vital
role in organizational success.

Study survey conducted by Shefali and Thakr (2007), towards performance appraisal as tool of
human resource development in few organizations. The researchers have found certain
weaknesses and strengths of the system. They suggested that some measures for achieving the
objectives of performance appraisal system. They stated that many of public organizations have
tailored their appraisal systems efficiently manage the performance of human resource
development in the era of intense competition; however, many changes have not been made in
the system. The only changes that have been made by the organizations were the introduction of
self-appraisal system according to the observations taken by the researchers. Sundararajam
(2007) has conducted empirical study on employees‟ attitude towards training and development
in private sector industries. The study came with certain conclusions about employees mind set
towards training and development. The researcher found that training and development related
programs are essential in the study areas. Moreover, the finding indicated that the employees‟
motivation to attend in the training programs provided by the management for employees‟

22
competence development and organizational development play a paramount role in every
organization.

Kumar (2007) has carried out a comprehensive research in the changing pattern of human
resource development practices under globalization in one of Indian organizations. The
researcher conducted the study with the objectives of knowing and highlighting the practices of
human resource management adopted by the organization to deal with the competitive situation.
On the basis of data collected and situation observed the study has found the following human
resource management practices in the study area these include training, orientation,
compensation, working environment, performance appraisal and promotion. The HRD practices
adopted are properly matched according to needs of present time. To scale up human resource
development the researcher suggested human resource manager should have term approach and
be proactive rather than reactive and give due emphasis for HR activates.

According to the suggestions given by the researcher, improvement in rules and policies,
competency of HR managers, business knowledge and HR expertise are vital to meet
organizational goals. Pooja (2008) has also done on empirical study on the dimensions of human
resource development climate enhancing organizational commitment in public organizations to
measure human resource development climate in terms of various dimensions like participation,
succession planning, training, performance appraisal in relation to organizational commitment.
The study found out that the positive perception of employees increases the performance of
organizations. Saraswathi (2010) has undertaken a comprehensive comparative study on human
resource development climate in few public organizations. The researcher evaluated the human
resource development in terms of performance appraisal, motivation, training, potential
appraisal, career planning, rewards and employees welfare in the study areas. After
comprehensive study the researcher found that the good human resource development climate
was prevalent in the organization, however, the extent of HRD climate prevailing in the
organizations seem to be different. Kayani (2008) has identified the challenges of human
resource development to pace with globalization based on the following points: performance
appraisal, induction in -service education, organizational difference, service stature difference.
As the study stated, limited performance appraisal, unclear human resource development
strategies, organizations difference capability in induction in -service education and learning are

23
major challenges. Major findings of the study revealed, that experience difference, organizational
difference, working in unisex or co-education, service stature difference have a significant
impact on human resource development climate.

Study has also conducted by Kebede and Sambasivam (2013), with the objective of investigating
the strategic orientation, practices and managers‟ awareness towards the concepts of HRD in
Ethiopia. In doing so, the researchers tried to analyze the data that have been collected in the
study areas. The findings of the study revealed that the managers of organization as aware of
career development as the component of human resource development. The study also signify
that managers were equipped the concept of performance appraisal as one part of human
resource development. The findings also stated that HRD plays a support strategic role and
shaping the overall strategy of the organization.

The study made by Antwi, Analoui and Cusworth (2007), on HRD challenges facing
decentralized local governments in Africa empirical study from Ghana. Decentralization and
human development have become important dimensions on Ghana‟s socio-economic
development particularly on its public sector reforms. Study sought to investigate and identified
the HRD challenges facing the local governments in the context of public sector reform. The
study revealed that HRD is the critical issue in improving good local governance and provision
of high quality public services. The researchers found that the country‟s public sector reforms
have significantly influenced the strategic direction of human resource policies of the
decentralized local government service. And the research highlighted that the main human
resource capacity challenges manifest three dimensions such as policy skill and performance
motivation induced. Finally the study forwarded that addressing HR capacity challenges have
enormous financial and strategic implications in developing and transition economies.

2.10. 1. Best Experiences from Other Countries

Brazil

HR policies are usually cooperative globally in Brazil. The government is recognizing

modifications in an increase the competences of workers lead to the production processes (Dias
et al, 2011). Brazil is one of an emerging country in which the supply of HRD was small, and
some fluxes exist to balance the market before a decade. But now it enjoys good HRD standing

24
in South America (Tome, 2008). Its internal coordination with BRICS is very positive as it seeks
to attract different experiences. Brazilian training is rigorous, especially that on behalf of
modernization. Organizations are working hard toward HRD with little prior HR experience and
a long dependence on US models; they have initiated several attractive nation-building projects
(Kolachi & Shah, 2013). The government is building its HRD through open access, interaction,
and flexible manner. They have a built-in strategic approach that they are implementing while
taking full advantage. Training and development is one area in which they are working hard to
keep pace with other BRICS coordinators (Tome, 2011). They are also working on quality
management which is a relatively new concept to them. Generally, Brazil has started to focus on
specific HRD initiatives in coordination with its government.

Russia
Russia‟s HR is considered still among the best in the world and has become an important issue
for HRD professionals (Wuellner, 2013). The Russians are working at a much higher HR level
and their personnel administration has been very strong. Russia‟s HRD began when twenty
Moscow firms offered training in HRD-related strategies and management models (kolachi &
Shah, 2013). Knowledge-based training was provided in Russian, which helped them to
understand the issues facing their culture and launched the process in the right direction. Russia
enhanced its HRD initiatives on an international scale and decided to implement them on a
massive national scale. The day is not far off when it will dominate the planet. It is
technologically, economically, and globally integrated. Its leaders are driving their people to
build their HR skills. They have evaluated the best training trends, best educational activities and
have covered most development domains in the process of revealing to the world the
effectiveness of their HRD activities. As kolachi and Shah (2013), today‟s Russia‟s competency
is very high in many areas, especially in invention, design, and manufacturing. The government
has also been very active in building education and HRD with large investments that foster
intellectual capital development.

India

25
HRD is the main engine of growth and development in India. Due to this reason the country has
strong HRD strategy that leads organizational development (Dutt, 2010). India is one of HRD
builders and in expertise attraction among the BRICS countries. Since its independence, and
particularly during the 1950s and „60s, India sent students to top universities. Through this
process, they learned the best training methods and management techniques. This has led to India
acquiring positions in the middle hierarchies. Its internal coordination with the BRICS is very
healthy and has attracted Brazilian investment and Chinese expertise. It possesses both
competency and competiveness, which are attracting world attention. The nation‟s educated
people are branding the country globally. While HRD is not the only development vehicle, India
is working on it to equip Indians with skills in various fields (Kolachi and Shah, 2013).

South Africa

As kolachi and shah (2013), South Africa is the world‟s biggest emerging market, with many
resources and initiatives through fostering a competitive youth in all sectors. Its internal
coordination is good, especially with BRICS. According to HRD Strategy for South Africa
(2010–2030) (HRD-SA) it is through collective ownership and mobilizing effort the government
has been working a lot to achieve the goals by optimizing the efficacy and outcomes of HRD
with respect to the country‟s development agendas. Its education is getting quality (HDI, 2011).
South Africa‟s HRD initiatives have occurred through technical developments. They have
innovated in business and the IT sector. The government is designing the Strategic Framework
for the Development of Human Resources (SFDHR) in the public service which addresses the
focused demand for HRD (Clark, 2011).

2.10. 2. Human Resource Development in Ethiopian Context

As indicated in Federal Civil Service Proclamation No. 515/2007 in Ethiopia under capacity
building HRD needs consorted and integrated efforts which are taken as critical to enhance the
capacity of the civil service to implement government policies and strategies effectively and
efficiently. HRD is the major task for scaling of best practices and to promote activities in the
public service delivery system. To establish government structures with strong implementing
capacity needs continuous HRD for implementation of the Civil Service Reform Program
(CSRP) at all levels of the government structure is important issue (Adebaby & prinks, 2010). So

26
as to strengthen the reform agenda; awareness creation is one that civil servants develop attitude
towards serving the public. To understand government‟s policies and strategies and capable to
implement government by ensuring efficiency, effectiveness, accountability and transparency
HRD plays a dominant role in the public sector.

The government is giving due attention to HRD. To this end various measures including
legislative frameworks and establishing modern HRD systems will be taken to upgrade the
implementation capability of the civil service on top of the leadership development programs.
Hence, HRD program enables civil servants responsive to public demand to implement
government policies in effective manner (MoFED, 2011). According to MoFED (2012) survey
some of government institutions have shown gains in efficiency and effectiveness. However,
most institutions are at earlier stage and need more interventions due to low level of HRD.

2.10.3. Background of Ethiopian investment commission (EIC)

The principal Government agency responsible for most aspects of FDI in Ethiopia is the EIC
which has the lead remit for promoting, coordinating, managing and monitoring all types of
inward investment including joint-ventures. EIC reports to the Board of Investment (BOI)
chaired by the Prime Minister. The General Manager of EIC is one of the seven Board Members
of BOI. EIC is still a relatively young agency in comparison with its regional and international
investment promotion competitors. It is seriously under resourced; has not yet evolved a strategic
planned approach to its promotion activities and is constrained by a current lack of operational
integration with the emerging strategies of the other key Government ministries and agencies.

A number of other Government agencies and private sector organizations are involved alongside,
EIC in delivering or contributing to Ethiopia's investment promotion effort. In the State sector,
these include the Ethiopian Privatization Agency (EPA), established through Proclamation
87/1994 to privatize over 200 state enterprises accounting for some 20 per cent of GDP. The
Ministry of Trade and Industry; the ministries and agencies associated with specific sectors such
as mining and tourism; the Ministry of Foreign Affairs; the Development Bank of Ethiopia; and
the ministries dealing with taxation remits including customs. Of these EPA is potentially the
most important as it regards FDI as an important privatization mechanism. The Regional

27
Investment Promotion Agencies, known as investment bureaus, also have an important
contribution to make in identifying, defining and promoting specific investment project
opportunities and in encouraging FDI into their region (Ethiopian Investment Commission, June
2015).

2.10.4. Institutional framework

The investment proclamation of 2012 and the regulations on investment incentives and
investment areas reserved for domestic investors of 2012 are the main legal framework for both
foreign and domestic investment in Ethiopia.

The Ethiopian investment commission (EIC) is an autonomous government institution

accountable to the investment board. The prime minister chairs the board. A commissioner who
is also member of the board heads the EIC.

The EIC has restricted itself recently with a view to promoting more FDI and improving the
services it renders to investors.

The major activities of the EIC and the one-stop shop services it renders to foreign investors are
the following:

 Promoting the country‟s investment opportunities and condition to foreign and

domestic investors;
 Issuing investment permits, business licenses and construction permits,
 Notarizing memorandum and articles of association and amendment;
 Issuing commercial registration certificates and effecting renewal, amendment,
replacement or cancellation;
 Effecting registration of trade or firm name and amendment, replacement or
cancellation.
 Issuing work permit, renewal, replacement, suspension or cancellation.
 Grading first grade construction constructors;

The EIC also provides additional services on behalf of investors‟ request to facilitate the
acquisition of land and utilities (water, electrical power and telecom services), to process loan
and residence permit applications, to get approval of environmental impact assessment (EIC)

28
studies for their investment projects as well as for the issuance of tax identification number
(TIN).

FDI flow into Ethiopia

For the past many decades, the flow of foreign direct investment towards Ethiopia was
intrinsically very minimal. However, as indicated in figure 1, it relatively showed better
progress, particularly beginning from 1997. As result, by the year 2013 inward FDI capital stock
in Ethiopia reached close USS 5.9 billion, which is about 104-fold higher than the value recorded
in 1996 (figure 1 a)
Similar, in recent years, particularly starting from the late 2000s, the number of FDI operational
projects in Ethiopia has grown noticeably. Currently, nearly 2,200 projects are operating in the
country in the country as compared only 106 in the year 2000 (figure 1c)

29
As depicted in figure 1, foreign direct investment stock in Ethiopia was increasing substantially
over the past consecutive years. However, the net inflow of foreign direct investment in Ethiopia
was characterized by higher fluctuation year on year basis. As shown in figure 1b, in the years
1999, 2005, 2007, 2008 and 2012, the net inflow of FDI towards Ethiopia drops substantially.
The decline in FDI inflow during 1999 and 2005 was associated with the Ethio-Ertrean war and
the disputed general election, respectively. While the decline in 2007 and 2008, and 2012 was
partly due to global financial crisis and global economic recession, respectively.

In spite of the progress witnessed in the recent years, net FDI inflow into Ethiopia still lags
behind when compared to other East African countries such as Sudan, Tanzania and Uganda.

30
 CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

3.1. Research Philosophy Selection

To be familiar with research philosophies is very crucial to identify the most appropriate
methodologies. In turn, most appropriate research methodologies have paramount importance to
gather the relevant data to address the study objectives. According to Creswell (2008), there are
three major research philosophies which include positivism, constructionist and pragmatic that
the researchers should consider in selecting appropriate methodologies for their studies. For this
study the researcher selected the pragmatic one. This is because for the mixed methods
researchers, pragmatism opens the door to multiple methods, different worldviews, and different
assumptions, as well as to different forms of data collection and analysis. As a philosophical
underpinning for mixed methods studies Patton (1990); Tashakkori and Teddlie (1998); and
Morgan (2007), conveyed its importance for focusing attention on the research problem in social
science research and then using pluralistic approaches. That is why pragmatists do not see the
world as an absolute unity (Creswell, 2003). Similarly, mixed method enables researchers look at
many approaches for collecting and analyzing data rather than subscribing to only one way
quantitative or qualitative (Creswell, 2008). Thus, in mixed methods research, investigators use
both quantitative and qualitative data because they work to provide the best understanding of a
research problem.

3.2. Research Design and Strategy

Research design is a blue print for selecting the sources and types of data relevant to the research
questions. It basically, provides answers for such questions like: what techniques to be used to
gather data, and what kind of sampling to be applied? (Zikgmund et al.2003). To collect data the
researcher used survey research design. This is because the survey design is preferable to
conduct research employing large number of people questioning about their attitudes and
opinions towards the specific issue, events or phenomena (Marczyk and Dematteo, 2005). It also
enables the researchers to effectively administer and manage the tasks when the data collection
takes place. With regard to research strategies, the study employed both qualitative and

31
 quantitative ones. Nowadays mixed method is considered as a tool to triangulate the result of
single approach through multiple methods (Johnston, 2010).

Figure 3.2: Summary of the overall research design and methodology

RESEARCH DESIGN

PHILOSOPHICAL VIEW

- Pragmatism DATA TYPES AND SOURCES

RESEARCH APPROACH
- Pluralistic (Mixed)
- Survey Research Design - Primary Data
- Mixed Method - Secondary Data

DATA COLLECTION INSTRUMENT

- Questionnaire – Structured
- Interviews –Unstructured
- FGD- Unstructured

DATA PROCESSING & PROCEDURES

- Data were Edited, Coded and Entered using SPSS

DATA ANALYSIS TECHNIQUES

- Descriptive Analysis
- Qualitative Analysis

Source: Adapted from Creswell (2008) with own modifications

32
3.4. Data Types and Sources

As indicated in the previous section, the study employed both qualitative and quantitative data.
Since, using both types of data is vital to offset the limitations inherent with one method with the
strength of other method (Creswell, 2003). The study used both primary and secondary data
sources to get consolidated data so as to concrete findings. Primary data was collected through
questionnaires, focus group discussion and interviews. The nature of the questionnaires will be
both open ended and close ended. To supplement the primary data, secondary sources were
collected through extensive review of published and unpublished documents. Apart from this,
human resource management guidelines, personnel training manuals and workshop proceedings
about the subject under study were used. Other key documents such as national policies,
development strategies and academic journals related to the study objectives were reviewed to
enrich the findings of the study.

3.5. Data Collection Instruments

To increase the breadth of information obtained from the respondents in relation to human
resource development practices and challenges in Ethiopian Investment Commission. This study
used three types of data collection instruments.

Questionnaires: in this study structured questionnaire prepared in the form of Likert scale was
used to collect the required data in relation to the practices, administration, and awareness of
employees and challenges of HRD from the sample respondents. Such data collection instrument
was developed in order to gather large data and avoid pressure on the respondents (Creswell,
2003).

Interview: is an adaptable way of finding things out. The human language is very useful in
opening of what lies behind people‟s action (Zikgmund, 1994). Interview allows person-to-
person discussion that can lead to increase insights in to respondent‟s thoughts, feelings and
behavior on important issues of HRD. Another advantage that can be derived from the interview
is its flexibility in expressing different viewpoints on the subject under study. Thus, key
informants (Human resource and Training and Development Head and top management
officials) were selected and interviewed on the basis of purposive sampling. Purposive sampling

33
is one of the types of non-probability sampling. This sampling process does not base on chance
but it uses the “expert‟s judgment” to select a representative sample by having specific objectives
in mind.

Focus group discussion (FGD): This was conducted in such a way that after having the
necessary data from the key informants through interview, unclear ideas and information related
to the subject under study were further reviewed. The researcher conducted one focus group
discussion with participantsfrom (Human resource and Training and Development Heads) to
gather relevant and updated data towards the subject under study. Therefore,10 participants were
selected for focus group discussion because of the closeness to the issue under study.According
to Krueger and Richard (1994), participants for focus group discussion are ranged from 8-12
who were not included in questionnaire and interview were selected. The participants were
selected through judgmental method because of their closeness to execute the issues.

3.6. Sampling Design Procedures and Sample Size Determination

The study used Ethiopian investment commission as the study areas with a total number of 178
employees. In the determination of sample size the three criteria were very important to gather
the required data from sample respondents. These included the level of precision, the level of
confidence or risk and the degree of variability in the attributes being measured that enable the
researchers to determine appropriate sample size (Miauous &Michener, 1976). Therefore, by
considering these issues sample size to collect data through questionnaire for this research was
determined by using Yamane‟s (1967) formula.

Where:
n = the sample size
N=the study population
e = the level of precision
1=designates the probability of the event occurring
Therefore:
= = 95

34
By taking the above calculation, in to consideration, the researcher selected 95 sample
respondents from the total employees of the commission. Having selected such number of
sample respondents, the questionnaire was distributed by using simple random sampling (lottery
method). This sampling technique was chosen as it gives each member of population equal
chance of being selected and homogeneity of population characteristics. Therefore, the
application of simple random sampling is appropriate whenever the target population has such
characteristics (Creswell, 2003).

3.8. Data Presentation and Analysis Methods

Data collected through different tools were analyzed and interpreted both quantitatively and
qualitatively. The data collected from questionnaire were analyzed through quantitative
descriptive statistical tools such as percentages and frequencies, mean and standard deviations
using SPSS version 16.0 computer software. While qualitative data obtained through interviews
and focus group discussions were analyzed qualitatively in sentence form. Finally, the results
were discussed and interpreted to draw important conclusions, recommendations and
implications.

3.9. Ethical Considerations

In this study the researcher consciously considered ethical issues in seeking consent, avoiding
deceptions, maintaining the confidentiality, respecting the privacy and protecting the anonymity
of respondents that encountered during the study.

35
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS, INTERPRETATIONAND DISCUSSION

4.1. Introduction

This chapter presents the discussions and analysis of the feedbacks gathered from the
respondents through questionnaire, interview and focus group discussion. The study tried to
assess HRD practices and challenges in Ethiopian Investment Commission. In this chapter the
major findings of the study were analyzed and discussed in line with the stated specific
objectives that lead to draw conclusions and recommendations.

4.2. Response Rate on Questionnaire

For this study, a total of 95 questionnaires were prepared and distributed to the employees to
supplement data collected through questionnaire interview and focus group discussions were
administered by the researcher with key informants and focus group participants in the
Commission under study. From which 95 questionnaires were distributed to the central offices.
Among these questionnaires, 92 employees filled the questionnaires properly and returned, while
3 employees were not able to give their response, that result in a response rate of 97%.

4.3. Reliability Test Result

The reliability test is an important instrument to measure the degree of consistency of an attribute
which is supposed to be measured. As stated by Mahon and Yarcheski (2002), the less variation
of the instruments produces in repeated measurements of an attribute the higher its reliability.
Reliability can be equated with the stability, consistency, or dependability of a measuring tool.
Cronbach's alpha is one of the most commonly accepted measures of reliability. It measures the
internal consistency of the items in a scale. It indicates that the extent to which the items in a
questionnaire are related to each other. It also indicates that whether a scale is one-dimensional
or multidimensional. The normal range of Cronbach‟s coefficient alpha value ranges between 0-
1 and the higher values reflects a higher degree of internal consistency. Different authors accept
different values of this test in order to achieve internal reliability, but the most commonly

36
accepted value is 0.70 as it should be equal to or higher than to reach internal reliability (Hair et
al., 2003).

Table 4.1: Cronbach's Alpha for each of the questionnaire

Field Number of Items Cronbach’s Alpha test

Awareness of HRD concepts 4 0.771
Training and development 7 0.797
Career development 5 0.780
Organizational development 9 0.839
Performance appraisal 8 0.825
Processes of HRD practice 10 0.847
Challenges of HRD 13 0.834
56 0.849
Source: Own computation (2016)

The Cronbach‟s coefficient alpha was calculated for each field of the questionnaire. The table
4.1above, depicts that the values of Cronach‟s Alpha for each field of the questionnaire and the
entire questionnaire. As it can be seen from the Table, for each field value of Cronbach's Alpha
is in the range between 0.771-0.849. This range is considered as high; the result ensures the
reliability of each field of the questionnaire. Cronbach's Alpha equals 0.849 for the entire
questionnaire which indicates very good reliability. So, based on the test the results are reliable.

4.4. profile of the Respondents

This part commences with the analysis of the demographic data gathered from the respondents
using frequencies and percentages. Accordingly, the general respondents‟ characteristics
including: sex, age, marital status, educational level and work experience are presented in Table
4.2.Below

37
Table 4.2: profile Characteristics of the Respondents

Respondents Categories Frequency Percent

characteristics
Sex Male 62 65.3
Female 33 34.7
Total 92 100
Age 18-29 8 8.4
30-45 59 62.1
46 & above 28 29.5
Total 92 100
Marital Status Single 27 28.4
Married 68 71.6
Divorced - -
Total 92 100
Educational level Diploma 12 12.6
Degree 63 66.3
Masters & Above 20 21.1
Total 92 100
Work experience 1 year & below 4 4.2
2-5 18 18.9
6-10 32 33.6
11 & above 41 43.2
Total 92 100
Source: Organized form survey data

From the table 4.2 above, it is possible to deduce the following facts. The overwhelming
majority of the respondents were 62 (65.3%) males and the rest 33(34.7%) were females.

This implies that the commissionswere dominated by male employees and female‟s Participation
was low relative to male.

38
Another description pointed out in the Table 4.2 above, is that the age interval of the
respondents. In this regard, the majority 59 (62.1 %) of the respondents in the commission
were found in the age interval of 30-45 years which signifies that the commission have
mature and well experienced staffs who have productive and potential prospects. Following 28
(29.1%) of the respondents were found in the age of 46 and above and the rest 8 (8.4%) of the
respondents were fall under the age category ranging between 18-29 years. Generally, the
majority of the respondents of the commission were middle aged by taking ILO (2013) as a
reference implying that they could have good productive prospects. With regard to marital
status, as it is indicated in the Table above, the majority of the respondents 68 (71.6%) were
married and the rest 27 (28.4%) were single. This has an implication that if the employees are
married turnover could be slightly reduced as result of settled life.

Educational background of the employees is an important factor in undertaking their respective

responsibilities and to make critical decisions. Considering the respondents level of education, 12
(12.6%) of the total respondents were diploma holders. Whereas, the majority 63(66.3%) and 20
(21.1%) were first and second degree holders respectively. This signifies that the majority of
respondents were first degree holders in terms of their educational level and the commission
should plan for the development of its workers to master‟s level so as to increase of their job
performance.

Table 4.2, also depicts that the work experience of the respondents. The majority of 47.3% of
the respondents have relatively longer service times above 11 years. Following 29.5 % of
them have 6-10 years work experiences and the rest 18.9% ranged from 2-6 years. The rest
24.2% of the respondents were new for the institutions with one year and less than work
experience.

From this we can conclude that most of the commission‟s staffs have good work experiences
which can help them to do their responsibilities effectively and efficiently. In other words,
Ethiopian Investment Commission was in a good track in capturing well experienced staffs. In
general, the results of the demographic characteristics of the respondents indicate that they can
clearly understand and respond to the questions provided to them to gather the primary data.

39
4.5. Descriptive Statistics of Scale Type Questionnaire

In this part descriptive statistics in the form of mean and standard deviation were presented to
illustrate the feedback of the respondents. The feedback of the respondents for the variables
indicated below were measured on five point Likert scale with measurement value 1=
Strongly disagree; i.e. very much dissatisfied with the case described; 2= Disagree, i.e.
Not satisfied with the case described; 3= Neutral, i.e., uncertain with the case described; 4=
Agree, i.e., feeling all right with the case described and considered as satisfied; and 5 =strongly
agree, i.e. very much supporting the case described and considered as highly satisfied. To make
easy interpretation, the following ranges of values were reassigned to each scale: 1-1.8=
strongly disagree; 1.81-2.6 = Disagree; 2.61-3.4= Neutral; 3.4-4.20= Agree; and 4.21-5 =
Strongly Agree (Best, 1977 as cited in Yonas, 2013). To analyze the collected data in
line with the overall objective of the research undertaking, statistical procedures were
carried out using SPSS version 16.0 software. While the results of the interview questions
and focus group discussions were integrated to the responses obtained through questionnaire.

4.6. Measuring Employees’ Awareness towards HRD Concepts

Awareness of the respondents towards human resource development concepts was measured
based on questionnaire provided to them which comprise: training and development, career
development, organizational development and performance appraisal which are crucial for
better performance of every organization. It is possible to say that employees have awareness of
human resource development concepts if they recognize all sub-constructs indicated below as
part of human resource development. Having this lead, the statistical tools such as: mean
and standard deviation were used to analyze the results for all sub-constructs stated in
the following Table.

40
Table 4.3: Respondents’ Awareness of HRD Concepts
Items N Mean Std. Deviation
Training & development 95 4.31 0.698
Career development 95 4.19 0.757
Organizational 95 4.15 0.745
Development
Performance appraisal 95 3.98 0.739
Source: Organized form survey data

The table 4.3 above, shows that the awareness of the respondents towards HRD concepts. The
scored mean value of the employee‟s awareness of human resource development from training
and development standpoint as indicted in the table above was 4.31 with a standard deviation
0.698. This indicates that the respondents strongly agreed with a relative homogeneity in
their responses. We can conclude that the employees of the commission were aware of
training and development as a component of human resource development and they have
excellent understanding of human resource development from training and development
point of view. Kebede and Smbasivama (2013), in their study in public sectors found that
consistent findings concerning the awareness of the organizations staff towards training and
development as a critical HRD aspect. The implication is whenever the employees have good
understanding about training and development they may update themselves to enhance
organizational performance.

As it is also evidenced in the table 4.3 above, the scored mean value of the second sub-
construct, i.e. Employee‟s awareness of human resource development from career development
viewpoint was 4.19, indicating that the respondents agreed on and feel all right with the case
described and the sub-construct‟s standard deviation was 0.757. The results of this analysis
proved that respondents of the bureaus were aware of career development as a component
of human resource development. From this it is possible to deduce that the respondents have
very good understanding and knowledge about career development from human resource
development point of view that could result both individual and organizational improvement.
This has also an implication to the commission to link their plans with career development.
Kilam and Neeraj (2012) found that good awareness and understanding of employees pertaining
career planning and development and it was perceived to be the most important HRD sub-system

41
as it has a very strong bearing on the individual and organizational growth and development in
India which supports this study finding. It is this very sub system of HRD, which greatly
contributes towards individual and organizational goal integration.

The scored mean value for the third sub-construct i.e. employees awareness of human resource
development from organizational development standpoint was 4.15 indicating that the
respondents like the above sub-constructs agreed on this sub-construct. The sub-construct‟s
standard deviation was 0.745, which is low conveying that the relative similarity of the
respondents responses. This implies that staffs of the commission have recognized organizational
development as a component of human resource development. From this description one can
clearly conclude that the respondents were familiar with and have good understanding
about human resource development concept from organizational development point of
view.

Table 4.3 above, displays that the scored mean value for the fourth sub-construct i.e. measuring
employees awareness of human resource development concept from performance appraisal
perspective was 3.98 with a standard deviation of 0.739, which signifies that the respondents
agreed on rating with a relatively high homogeneity in their responses. The scored mean value
of this sub-construct points out that the respondents were well equipped with the concept of
performance appraisal as part of man power development. Most employees of the commission
understood that periodic evaluation of employee‟s performance as part of human resources
development; however, some haven‟t still understood it well. Thus, high proportions of
employees of the commission were able to relate the performance appraisal system with the
outcomes and objectives of human resource development. The research finding by Akuoko
and Baffoe (2012) supports this study finding as to them effective building of employees
competencies helped them to be familiar with performance appraisal in relation to HRD in
the public sectors. With this lead, one can conclude that employees of the commission were
aware of performance appraisal as a component of human resource development in this study.
The implication of employees understanding performance appraisal is that it may have practical
significance for appraisers, appraises, HRD planners and the commission as a whole.

42
Table 4.4: Summary of Respondents’ Awareness of HRD

Item N Mean Std. Deviation

Employees‟ awareness HRD concept 95 4.16 0.735
Source: Organized form survey data

As it is shown in the table 4.4 above, the scored mean value of the major construct i.e.
employees awareness of HRD concepts in the commission was 4.16 which is the average scored
mean value of each sub-construct means. The scored mean value shows that the respondents
of the commission were well equipped with the concepts of HRD i.e. training and development,
organizational development, career development and performance appraisal and the standard
deviation was 0.735. The standard deviation was relatively low indicating that the relative
homogeneity of the respondents in their responses. Based on this finding one can deduce that
employees have good awareness of human resource development from its components
perspective. Sheikh (2009) found that the employees awareness of training and development,
career development, organizational development and performance appraisal in public banks
Pakistan supports this research finding. This could make HRD conducive for both enhancement
of the capacity of employees and achievement of organizational goals.

The information gathered through interviews and focus group discussions with key informants
and focus group participants concerning their understanding about human resource
development concepts confirmed that as they have good awareness and understanding. This
implies that they were clear with training and development, career development; organizational
development and performance appraisal concepts from HRD point of view. Generally,
based on the findings one can infer that the respondents were acquainted with and have better
understanding of human resource development concepts that could enable them better
functioning of their respective work responsibilities.

4.7. The Practice of Human Resource Development

Human resource development practice as a continuous process, which matches organizational

needs for human resources and the individuals need for a career development. It enables the
individuals to gain their best human potential by attaining a total all-rounded development. It
also promotes dignity of employment in an organization and provides opportunities for

43
teamwork and personal development. Hence, a well-planned HRD system must be a central part
of human resource management in every organization. This section, presents the practice of
human resource development from training and development, career development,
organizational development and performance appraisal aspects.

4.7.1. Employees’ Perception in the Practice of Training and Development

It is undeniable fact that the commission‟s productivity is determined by the motivation level and
effectiveness of its workforce. Training and development implies to the systematic process of
developing the competencies relating to the job of employees for the present and future roles
and responsibilities. Today we believe that an organization‟s competitive success is achieved
through people. It follows that the skills and performance of people are critical.

Many organizations spend much money on training, believing that training will improve their
employee‟s performance and productivity. Recruiting, selecting, orienting and then placing
employees in jobs do not ensure success. In most cases, there may be the gap between employees
knowledge and skill and what the job demands. The gap must be filled through training and
development programs. Hence, personnel training and development is one of the major ways that
work organizations attempt to maintain the competency levels of their HRD and increase their
adaptability to changing organizational demands. With regard to the respondents reaction with
the practice of training and development the following statements were given to indicate their
degree of agreement in Table 4.5 below.

Table 4.5: Statistical review of training and development practice

Item N Mean Std. Deviation
Clear training and development programs 95 3.53 0.753
Assessing employees training needs 95 2.57 0.629
Setting performance goals and objectives 95 3.09 0.656
Planning developmental strategies 95 3.03 0.715
Assessing aids for internal and external TD 95 2.17 0.801
Developing strategies for training, schedules & 95 2.37 0.768
modules
Evaluating training efforts 95 1.82 0.702
Source: Organized form survey data

44
As it can be seen from the Table 4.5 above, the scored mean value of the first sub-construct i.e.
the organizations have clear training and development program was 3.53, indicating that
the respondents agreed in their agreement response showing that they feel all right with the case
described. The standard deviation of this sub-construct was 0.753 this implies that the relative
homogeneity of the respondents on their responses. From this result one can infer that the
commission have clear training and development programs that may help to upgrade
employees knowledge and skills to improve their performance and achieve organizational
objectives in the desired way.

The Table 4.5 above also reveals that, the scored mean value of the respondents to the second
sub-construct i.e. the assessment of the employees training needs was 2.57 signifying that
“disagree.” This shows that the respondents were dissatisfied with the case described and the
standard deviation of the sub-construct was 0.629 which is relatively low being evidence for the
relative homogeneity of the responses. Within the training context, needs assessment provides
a picture of skills and knowledge of the people in an organization. Here, training needs
assessment can determine level of optimal performance and standards for excellence, evidence of
individuals actual performance level, attitudes affecting performance and root causes of
performance problems. By systematically, analyzing needs organizations can identify solutions
to performance problems that will provide the best return on training and development
investment (Nancy, 2012). However, in the commission as the finding implies that the existence
of problems with respect to training needs assessment which is a determining factor for
human resource development. This shows that much was not done from this perspective in order
to realize organizational goals.

When we come to the third sub-construct i.e. setting performance goals and objectives the
average scored mean value of respondent‟s response was 3.09 with the standard deviation 0.656.
This shows that the majority of the respondents were “neutral”. The scored mean value of this
sub-construct conveys that the respondents were uncertain or indifferent i.e. setting training
performance goals and objectives which is the crucial factor in facilitating human resource
development. Abdullah (2009), stated in his study once training and development needs are
clearly identified, the next process is to establish or setting performance objectives. Objectives
are specific outcomes that the training and development program is intended to achieve.

45
These objectives define the performance that the trainee should be able to display after training.
However, in the commission with regard to setting performance goals and objectives due
attention was not given as the determinant factor for human resource development. This
may reduce organizational effectiveness and efficiency.

In the table 4.5 above, the forth sub-construct i.e. planning development strategies accordingly
most of the respondents were “neutral” response rate with the scored mean value 3.36 and the
standard deviation 0.715. This implies that large number of the respondents were neither agree
nor disagree towards the commission action in relation to planning developmental strategies
which play a paramount role to capacitate the employees potential. Sanararajam (2009), found
that planning development strategies for HRD as the key factors for employees and continuous
organizational development. From this perspective the commissions are not courageous in
planning good development strategies. The implication is that unless the commission are
designing smart development strategies that it would be impossible to make the
organizations successful.

As it is indicated in the table 4.5 above, the scored mean value rating of the sub-construct i.e. the
assessment of the aids for internal and external training and development was 2.17 signifying
that “disagree” rating scale which indicates that the dissatisfaction of the respondents with the
case described and the standard deviation was 0.801. Moreover, as the information obtained
from interviewees and focus group participants the commissions have limitation in searching
external aids and very low external linkage with to build HRD through training. From this it is
possible to deduce that the commission‟s were lagging behind in assessing aid opportunities
for both internal and external training which is the most critical issue to develop the capacity
of the employees potential and better performance of organizational tasks.

As it can be shown from the table 4.5 above, considering the development of training schedules
and modules in the organizations the respondents‟ scored mean value was 2.37. This shows that
the majority of the respondents were disagree and the standard deviation was 0.768. From this
one can deduce that the commissions have to do a lot of tasks in arranging training schedules and
preparing module guides to facilitate HRD activities. Deb (2010), came up with consistent
findings the study done in public sectors in India due to lack of commitment of the managers in
46
preparing training schedules and guiding materials to facilitate HRD practice that would
have an implication on organizational and individual performance.

When we come to the last sub-construct which is indicated in the table above, is about
evaluation of training efforts. Evaluation is the final phase of the training and development
program. It is a means to verify the success of the program, i.e. whether employees in the
program do the jobs for which they have been trained. The scored mean value response of the
respondents was 1.82 implying that the overwhelming majority of the respondents were
“disagree” with the case described and the standard deviation was 0.702. The scored mean
value displays that the respondents were dissatisfied with the issue. Based on this finding one can
deduce that the commission were very reluctant in evaluating the worth, effectiveness and the
efficiency of training given to the trainees helping them to get feedback for their improvement.
As Ahuja (1998), noted that the concept of evaluation as the determining factor to assess the
effectiveness and efficiency of a program in relation to its objectives. Gupta and Singh (2006)
also pointed out that in their study on the basis of correlation analysis there is a positive
correlation between HRD and evaluation of training and development efforts. From this
perspective it is possible to put an implication that, if the commission‟s are ineffective in taking
training evaluation they could not identify whether they have good performance or not and what
to be taken if the problems occur in their overall tasks.

As per the information obtained from key informants and training and development documents
in the Investment commission showed that they have good training and development programs.
Moreover, the informants replied that the commission were in a good position in identifying
training needs, planning development strategies, setting performance goals and objectives,
assessing aids for internal and external training and evaluating training efforts. But the
information gained from focus group participants displayed that negatively which contradicts
with key informants responses. As per focus group participants in the commission, especially,
post training evaluation was not well conducted and ineffective to help trainees to get feedback
for their improvement and efficiency and to find out to what extent the objective is achieved.
Moreover, according to focus group participants training and development access in the
commission is very limited and focused on only some work units.

47
Table 4.6: Statistical Summary of Training and Development Practice

Item N Mean Std. Deviation

Training & development practices 95 2.22 0.718
Source: Organized form survey data

As Table 4.6 above depicts that, the scored mean value of the major construct i.e. the practice of
training and development in the organizations was relatively low 2.22 with the average
standard deviation 0.718 which represents that the mean of each sub-construct means.
This indicates that, training and development as an important factor for building continuous
human resource development. However, due emphasis was not given by the commission
towards the issue. On the other hand, as the study findings revealed that the training
conducted by the Investment commission was not sufficient and satisfactory. From this fact it is
possible to infer that the commissions were not in a good track in practicing training and
development. This finding is similar with that of Abebe‟s (2008), finding as he confirmed that
training and development is very low in the public sector while he has conducted the study
concerning human resource management decentralization because of lack of commitment,
lack of managerial capacity, inappropriate selection criteria and insufficient budget at
SNNP. Srimannarayana (2006) also found that consistent results that the organizations in public
sector have not been doing better with respect to training due to ineffective training need
assessment.

4.7.2. Career planning and development

No HRD function can be acceptable to the people of any organization, if it fails to

provide opportunities for individual employees to have bright career prospects. It is for the
purpose of HRD integrating career planning and development with it. Proper career planning
also leads to career development. It develops the career of every individual executive
which results in adequate growth of the career of every employee. Hence, successful planning is
closely linked with career planning and development. In this section the study presents HRD
practice from career development aspect based on the information obtained from the
respondents.

48
Table 4.7: Statistical review of career development

Item N Mean Std. Deviation

Well in working to improve career development 95 2.53 0.725
The institution has good career planning and 95 2.60 0.719
development programs
The organization integrates HRD with organizational 95 2.34 0.272
objectives
Good counseling center that benefits all employees 95 1.89 0.758
Average 95 2.34 0.732
Source: Organized form survey data

The Table 4.7 above clearly shows that, the majority of the respondents were “disagree” with
sub-construct i.e. to improve career development of employees with the scored mean
value 2.53. The scored mean value points out that the dissatisfaction of the respondents
with the case described and the standard deviation was 0.725. From this fact one can deduce
that the commission‟s were not in a position to consider continuous employees
professional development to fill the existing gaps. This implies that the commission have
limitations in critically assess their effort to promote career development by any means to
increase the satisfaction level of their employees.

As it is also illustrated in the Table 4.7 above, in the second sub-construct i.e. career planning
and development the respondents response scored mean value was 2.60. This signifies that the
respondents agreement response rating scale was “disagree” response rating scale implying
that the dissatisfaction of the respondents with the issues described and the standard deviation
was 0.719. From this sub-construct one can clearly infer that the commission‟s were not in a
position to consider career planning and development as utmost importance for the growth
of employees in accordance with the education, training, job search and work experience.
Employees should trace their career in light of their individual needs and capabilities.
From this perspective the implication is unless the commission are aware of their potentiality and
capabilities in career planning and development that could help them to exploit the available
opportunities they could not achieve their desired objectives.

49
Human resource development can transform the organization into a human system by
developing their commitment and integrating the individual employees with the organization.
With regard to the third sub-construct i.e. the integration HRD with organizational objectives the
scored mean value response of the respondents was 2.34 with a standard deviation 0.727. From
this analysis it can be deduced that the respondents were “disagree” with integration of HRD
with organizational objectives indicating that they are dissatisfied with the case raised out.
This result signifies that commissions are lagging behind in linking for the betterment of their
performance.

As it is vividly indicated in Table 4.7 above, the respondents were asked to scale the
measurement i.e. the existence of good counseling center that benefits all employees.
They responded having a scored mean value of 1.89 this shows that the respondents were
“disagree” about the career counseling with standard deviation 0.758. This depicts that the
respondents were dissatisfied with the case described. Kola chi (2012), in his comprehensive
investigation found that employees counseling as the determinant factor to build good HRD.

As it is a process of dealing with the emotional problems and issues of the employees to make
them feel light and relaxed at work. It can be expressed in terms of appraisal counseling, career
counseling and disciplinary counseling. It is also being done to enable the employees to have
positive attitude towards work and to improve their performance. However, the commission were
reluctant in handling the psychology of the employees and making them happy at work so that
they could feel gratified while working which ultimately leads to improved and enriched
performance through counseling. Kilam and Neeraj (2012), in their depth assessment in
public sector also found that career planning and development as the most important
component of overall HRD system which helps in individual-organizational goal
integration. But in this study the commission from this ground displays that there are tasks still
remain to be done.

According to the information gathered from interviewees and focus group participants in the
commission they replied that they do have career development in practice in order to create
motivated workforce, to enhance the capacity of both present and future knowledge and
skills, to increase the ability and productivity of employees, increase optimum man task
relationship, to prepare employees to take higher assignments, and to upgrade skills and

50
prevent obsolescence. In addition, as discussants replied that the educational opportunities are
very limited in the commission for career growth and development. However, in practice
explicit tasks were not done in relation to the issue described to upgrade HRD in the
commission. This could limit the commission to cope up global challenges and modern
technological changes and innovations.

4.7.3. Organizational Development

Since organizations are open systems, therefore, it must develop itself by adopting
various changes that come across in the persistently changing environment it emphasizes
on the adoption of appropriate interventions that could cope up with the ongoing activities
of the commission. It provides a framework in which changes in climate and culture of
the organizations takes place. It also enables organizations to harness human potential for
attaining organizational objectives. With regard to organizational development the respondents
were given the following statements to convey their degree of agreement as stated in Table 4.8
below.

Table 4.8: Statistical Review of Organizational Development

Item N Mean Std. Deviation

Top management with required profession 95 3.48 0.679
Culture of openness 95 2.43 0.682
Credibility & fairness of top management 95 3.30 0.728
Encouraging problem solving culture 95 2.23 0.832
Team Spirits 95 2.36 0.661
Defining personnel policies 95 3.50 0.733
Sound recruitment systems 95 2.32 0.743
Compensation and job security 95 2.48 0.722
Using good personnel data 95 3.43 0.714
Average 2.39 0.737
Source: Organized form survey data

From the Table 4.8 above, it is possible to draw the following facts. As it is clearly illustrated in
the Table, the scored mean value of the sub-constructs i.e. Management with required
51
profession, credibility and fairness of top management, defining personnel policies and using
personal data fall between of 3.30-3.50. This shows that the majority of the respondents agreed
with the statements given to them. However, the above results imply that the commission were
lagging behind to do much on these variables to improve the effectiveness and efficiency.

In addition, the Table above reveals that, the scored mean value of the respondent‟s response on
the sub-constructs i.e. encouraging problem solving culture, good team spirit, sound recruitment
system, better compensation and job security which fall between of 2.22-2.48. This depicts that
the overwhelming majority of the respondents disagree and they were dissatisfied with the cases
described. In short, based on the information given the commissions were not well in widening
organizational development from these issues perspective. The implication is that unless the
commission develop problem solving culture, good team spirit, sound recruitment compensation
and security it is difficult to them to build the required human resource and to attain
organizational goals in the desired manner.

Based on the information obtained through interviews, focus group discussions and as
per HRD report about organizational development in the commission pertaining their long-
term effort to improve an organization‟s visioning, empowerment, learning, and problem-
solving processes, through an ongoing, collaborative management of organization culture-
with special emphasis on the culture of intact work teams and other team configurations using
the consultant facilitator role as the majority of the respondents replied was insufficient.
Furthermore, organizations were slow in tackling problems like communication, inadequate
integration, openness, fairness in treating employees, compensation and job security, and
in problem solving culture especially, as reported by focus group participants. This shows that
the information obtained by the questionnaire was somewhat similar with that of the responses of
interviewees and focus group participants.

4.7.4. The Practice of Performance Appraisal

It is an indispensable aspect of HRD to analyze the performance of employees which enables the
organizations to understand where their people stand, what is expected from them and
what they are actually contributing. The purpose of designing the mechanisms of performance
appraisal is to portray the actual position of the past and future employee‟s performance. To meet

52
this, the targets of performance are set which are being desired to be attained by the
organizations. The targets are based on job-related criteria that best determine the success of job.
To measure the practice of performance appraisal the following measurements were
provided to the respondents to indicate their level of consent as indicated in Table 4.9 below.

Table 4.9: Descriptive Statistical Review of Performance Appraisal Practices

Item N Mean Std. Deviation
Good performance appraisal systems 95 2.06 0.738
Assessment where the employees are assigned 95 2.56 0.724
Evaluation what expected from each employee 95 2.28 0.642
Immediate action when employees lack capacity 95 2.53 0.681
Short and long term evaluation 95 2.77 0.677
Acknowledgement for good performances 95 2.49 0.640
Identifying areas in need of improvement 95 2.23 0.725
Average 95 2.41 0.690
Source: Organized form survey data

As it can be clearly understood in the above Table 4.9, the average scored mean value of the
major construct i.e. employees perception towards performance appraisal in the commission was
2.41 which was the scored mean value of each sub-construct means and the standard
deviation was 0.690. This scored mean value displays that respondents were not satisfied
with the appraisal systems which include the measurements: the existence of good
performance appraisal, the assessment of where employees are assigned, what expects from
each employee in his/ her work area, immediate action when employees lack capacity,
short and long term evaluation, acknowledgement for good performance and identifying
areas in need of improvement. This is because as it is depicted in the Table above, the
respondents were disagreeing with the cases described. Based on the finding one can conclude
that the study areas were not in a way taking good performance appraisal in relation to HRD.
Sorab (2006) found that performance appraisal in the public sector has a positive
relationship with human resource development. Accordingly, performance appraisal is
useful for self-development and individual counseling, remuneration, quality feedback,
communication and motivation. However, from this perspective the respondents were not
satisfied with the appraisal system conducted by the Investment commission.

53
As the information gathered through interview and as per review of relevant reports pertaining
performance appraisal in the commission they have used methods like: BSC (Balanced
Scorecard) and ROPA (Result Oriented Performance Appraisal) and attempts have been made to
assess the scientific nature of the process and its implications on the performance and
behavior of the employees. In effect, it was expected to improve the performance; however,
the working environment is not conducive as the findings revealed from the respondents. The
reasons for this were lack of incentives and training, lack of human capacity to set
targets, lack of objective performance criteria and lack of commitment. The response also
illustrated that some employees and department heads were not happy of the result of their
performance.

Performance appraisal equally gives room for open dialogue but, transparency and continuous
follow up is so weak and loose attachment between performance and reward. This was due to
lack of participation, inconsistent implementation and lack of resources as per the interviewees
and focus group participants suggested.

4.8. Respondent’s Perception How HRD Is Administered?

The primary purpose of HRD is to help the organizations to increase its enabling capabilities.
These include development of human resources, development of organizational health,
improvement of problem solving capabilities, development of diagnostic ability so that
problems can be located quickly and effectively and increased employee participation and
commitment. Regarding the respondents reaction the following statements were given to them to
indicate their degree of agreement stated in Table below.

Table 4.10:Statistical Review of How HRD Practice Is Administered

Item N Mean Std. Deviation

Personal analysis 95 2.43 0.679
Job analysis 95 3.55 0.721
Organizational analysis 95 3.67 0.732
Prioritizing needs in practicing HRD 95 1.82 0.757
Identifying and designing HRD objectives 95 3.52 0.701
Clearly defining objectives of HRD 95 3.65 0.774

54
Implementation based on stated objectives 95 2.35 0.668
Evaluation and follow up 95 2.21 0.820
Institution selects good evaluation criteria 95 2.42 0.761
Interpret evaluation results 95 2.33 0.713
Average 95 2.80 0.733
Source: Organized form survey data

As it can be described in the Table 4.10 above, the respondents “agreed” on the sub-constructs
including: job analysis and organizational analysis with the scored mean value of 3.55
and 3.67 respectively, implying that the respondents were satisfied with the cases described.
From this fact it is possible to conclude that the commissions were well in doing job analysis
which implies to the determination of skill and knowledge and the job requires. Moreover, the
commission‟s were better off in organizational analysis which implies that the process of
identifying job-related knowledge and skills that are needed to support the organizations' short-
range and long-range goals. It is quite clear that, unless human resource planning is carefully
examined in line with the commission‟s strategic goals and job plans the required target
could not be achieved.

As it is shown in the Table above, though the commission were good in doing job and
organizational analysis the respondents disagree with personal analysis which is another very
important human resource development need analysis approach. This implies that the
commission lacked concentration on the personal analysis which is used to know the substantive
knowledge and skill possessed by the employee which has an implication on better
performance of organizations. Concerning need prioritization in practicing human resource
development in the commission as it is presented in the Table above, the respondents were
disagree with scored mean value 1.82 and the standard deviation was 0.757. The scored mean
value of the respondent‟s response shows that they were dissatisfied with the case pointed out.
From this one can deduce that the commission were not in a position in doing personal analysis
and prioritizing in the practice of human resource development as per the majority of
respondents suggested. This implies that if the priorities are not set in practicing HRD the
organizations would be lagging behind in meeting their goals.

55
As we can see in the Table above, also the respondents agreed on in relation to identifying and
designing human resource development objectives and having clearly defining objectives
of HRD with the scored mean values 3.52 and 3.65 respectively. This shows that the
commission‟s are good in identifying and defining HRD objectives that could result good
employees competencies and to achieve organizational objectives.

As it presented in the Table 4.10 above, the respondents were dissatisfied with the
implementation or practice of human resource development in line with the stated objectives
with scored mean value of 2.35 indicating that they disagree with the case described and the
standard deviation was 0.668. Based on the findings it is possible to infer that the Investment
commission were not doing in a way that to link the implementation of HRD with the stated
objectives. Like this sub-construct the respondents disagreed concerning the evaluation and
follow-up, in selecting evaluation criteria and in interpreting evaluation results with
scored mean values 2.21, 2.42, and 2.53 respectively as it is pointed out in the Table above.
From this it is possible to deduce that there were a lot of things that organizations have to do in
meeting the issues described. This shows that unless the commission should clearly assess the
issues that could limit them in doing these tasks which have paramount role in building
HRD they may not improve their performance in the desired way.

As the information gathered from the key informants through interview the commission
were doing better in job, organization analysis, identifying and defining objectives, but as per
focus group participants the commission were not in a position or ineffective in taking
personal analysis and prioritizing HRD needs, evaluation and follow up, selecting good
evaluation criteria and interpreting evaluation results to facilitate organizational performance.
This is consistent finding with the response obtained through questionnaire. This implies that the
commission needs to assess their actions extensively unless the employees may develop negative
attitudes that could limit their performance in attaining development objectives.

4.9. Challenges of Human Resource Development

This section assesses and examines the major challenges or constraints that hindered human
resource development practices in the Investment Commission as it was revealed from the
questionnaire, interview and focus group discussions and other secondary sources there were

56
some challenges that encountered the commission in the practice of human resource
development indicated in Table 4.11 below.

Table 4.11: Challenges of HRD Practices

Item N Mean Std. Deviation

Developing comprehensive HRD strategies 95 3.99 0.732
Aligning HRD to strategic priorities 95 4.12 0.667
Developing a positive work environment 95 4.24 0.751
Creating managerial and leadership capacity 95 3.96 0.745
Utilizing HR assessment technology to plan HRD 95 4.14 0.689
Promoting positive work force attitudes 95 4.27 0.736
Allocating sufficient financial resources 95 4.51 0.804
Accepting modern technological changes 95 4.39 0.727
Paying attention to professional development 95 3.99 0.695
In adequate training and development 95 4.57 0.726
Inadequate enforcement and accountability 95 3.92 0.646
Attracting and retaining qualified personnel 95 4.75 0.717
Lack of proper merit system 95 4.18 0.675
Average 95 3.93 0.716
Source: Organized form survey data

As it can be clearly evidenced in the Table 4.11 above, different human resource development
challenges are illustrated which include: developing comprehensive HRD strategies, aligning
HRD strategic priorities, creating positive work environment, developing managerial leadership
and capacity, utilizing HR assessment technology to plan HRD, promoting workforce attitude,
accepting challenges of modern technological changes, paying attention to professional
development, in adequate training and development, lack of enforcement and accountability,
attracting and retaining qualified personnel and lack of proper merit system with the total
average scored mean value of 3.93 showing that the respondents answered the statements
given with agreement rating scale “agree” and the standard deviation was 0.716. From this one
can understand that the sub-constructs indicated in the Table are key human resource
development challenges of the commission that need to be overcome. From this fact it is possible
to conclude that in the commission there were challenges that hindered and constrained the
efficiency and effectiveness of human resource development practices.

57
Habib (2012), found that similar findings with this study designing comprehensive HRD
strategies, linking with strategic priorities, lack of technology, creating positive HRD
climate, promoting positive workforce attitude, lack of sufficient budget and accepting
modern technological changes as the key challenges in public sector in developing countries.
Wachira (2012), also pointed out in his study giving due emphasis for personal and
professional development is considered as the basic challenge that need to be addressed in the
practice of human resource development in Africa which supports the findings of this study.
Moreover, this study came with consistent findings assessed by Gebrekidan (2011), as he
outlined that inadequate training, lack of accountability and enforcement and lack of
good merit system as bottleneck problems that organization should tackle in achieving HRD in
his systematic review conducted in some Africa countries.

In addition, the information gathered through interview, focus group discussion and as per HR
annual report documents confirmed that the similar findings with the information obtained
through questionnaire. Both informants and focus group participants have suggested some
challenges or constraints that impede the commission in the process of implementing human
resource development. Some of these major challenges suggested were lack of sufficient
budget for training and education, lack of accountability and transparency, lack of emphasis
for professional development, accepting modern technological changes, creating an environment
for attracting and retaining qualified personnel, insufficient managerial capacity building
and lack of employees motivation were becoming great challenges for the effective practice
of HRD in Ethiopian Investment Commission.

58
 CHAPTER FIVE

SUMMARY OF THE FINDINGS, CONCLUSION AND RECOMMENDATIONS

This chapter provides the summary of the major findings of the study; it draws conclusions and
forwards recommendations by the researcher.

5.1 Summary of the Major Findings

The findings showed that the employees in the commission have had good awareness about HRD
concepts since they have good understanding of the components of HRD. However, it is not well
practiced in the commission. The study concludes the organization management unable to being
proactive in forecasting human resources needs and also unable to link HRP with strategic
business plan would affect the effort to achieve the company‟s objectives Accordingly, they were
familiar with training and development, career development, organizational development and

59
performance appraisal which are HRD functions and they were able to relate them with HRD.
However, few employees still did not understand these HRD concepts.

The findings of the study proved that the commission‟s have long-term efforts to improve an
organizational development. However, they are lagging behind in solving problems like
communication, openness, fairness in treating employees, compensation and job security and
problem solving culture.

Moreover, some employees were not happy about the results of their performance. Performance
appraisal gives equal room for open dialogue but, transparency and continuous follow up was so
weak and there is loose attachment between performance and reward due to lack of participation,
inconsistent implementation and lack of resources.

As the findings indicated that the commissions were good in doing job and organizational
analysis. This was through the determination of skill, knowledge and the job requires and
identifying job-related knowledge and skills that are needed to support the organizations' short-
range and long-range goals. However, personal analysis was not conducted effectively as a
crucial HRD need analysis approach.

To the end, as the findings revealed that designing comprehensive strategies, aligning HR
with strategic priorities, lack of sufficient budget, lack of technology, accepting modern
technological changes, limited emphasis to personal and professional development, promoting
positive work environment, lack of positive workforce attitude, inadequate training, attracting
and retaining qualified personnel and lack of good merit system were key challenges that
hindered the practice of HRD in study areas.

5.2. Conclusion

The commission have training and development programs; however, they were ineffective in
assessing training needs, setting performance objective, in searching aids for internal and
external training and development, planning training strategies and preparing training schedules
and modules as well as assessing training and development efforts. Especially, post training
evaluation was not well conducted to get feedback for their improvement.

60
The commission have career development in principle, in order to create motivated workforce, to
enhance the capacity of both present and future knowledge and skills, to increase the ability and
productivity of employees, increase optimum man task relationship, to prepare employees to
take higher assignments and to upgrade skills and prevent obsolescence. However, in
practice explicit tasks were not done in relation to the issues described to promote HRD and to
attain development goals.

With regard to performance appraisal, attempts have been made to assess the performance and
behavior of the employees. However, the working environment was not conducive as the
findings revealed. The reasons for this were lack of incentives and training, lack of human
capacity to set targets, lack of objective performance criteria and lack of commitment.

61
5.3. Recommendations

Based on the findings of the study the following recommendations are forwarded:

 The commission management should developed clear HRD program aliened with a well-
defined goal, vision and corporate values that have quantified and measurable targets.
Understanding about the concept and objective of the HRD program since the success
and sustainability of a program more depends on the extent of management quality and
tolerance.
 The commission must develop problem solving culture, good team spirit, sound
recruitment compensation and security to build the required human resource and to attain
organizational goals in the desired manner, so that problems like communication,
inadequate integration, openness, fairness in treating employees will be handled.
 Effective and efficient service delivery can be ensured in the commission if employees
get the required training and development. Thus, conducting on the job and off the job
HRD using selection criteria, creating strong link between performance and reward,
practice of non-monetary incentive such as recommendation letter is essential. Besides,
making the performance assessment system more open and carrying out continuous
follow up, strengthening the monitoring and evaluation role and providing the necessary
technical and interpersonal support makes the HRD process more sustainable.
 The commission should aware employees potential and capabilities in career planning
and development that could help the employees to exploit available opportunities.
 Strategic HRD is driven by the organization‟s goals and operates within these goals to
develop human capital and is thus a purposeful way of matching people to the
organization. The central focus should be to expand the learning capability that can help
generate the knowledge base of the organization and enhance both competitive and
collaborative capability

62
 The identification of training and development needs should start with an assessment of
organization goals, objectives and priorities. Therefore, Ethiopian Investment
Commission shall give meticulous attention to create integrative or interactive linkage
between training and development program and that of planning development strategies
process so that they both rely heavily upon each other and organizational effectiveness
can substantially be improved.
 To overcome the challenges of HRD there is a need for skilled man power, financial
resources; differentiate high and low performers by using performance criteria like
quantity, quality, timeliness and budget spend on doing a job.

63
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 Annexes 1
Faculty of Business and Economics
Department of Public Administration and Development Management
Survey Questionnaire to Be Filled By Employees
Dear Respondents;
This questionnaire is prepared to collect data for the fulfillment of Master of Public Management
and Policy specialized in Development Management. The main aim of this questionnaire is to
study and assessing human resource development practice and challenges in the case of
Ethiopian investment commission. Based on the finding of results, appropriate solutions will be
recommended. I assure you this study is purely academic that will have no any negative effect on
you as an individual or on your organization. The effectiveness of the study depends on your
genuine and frank response that will be kept confidential. I, therefore, request you to fill the
questionnaire honestly and frankly.
Thank you in advance for your cooperation.
Note
 Do not write your name
 For multiple choice questions, please circle the best one.
 For those questions requiring your opinion, please make tick (√) where you feel correct
and write your explanations/opinions when you are requested to explain your idea, make
it clear and precise.

Part I: Respondents Information

1. Gender

Male Female

2. Age category

18 - 24 25 – 35 36 - 45 above 45

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3. Marital status: Single Married Divorced

4. Educational level:

High school completed Certificate holder Diploma

First Degree Masters & above

5. Work experience:

Less than one year 1 - 5 years 6 - 10 years above 10 years

Part II: Please state your level of opinion for each given statement using the following
scales: 1= strongly disagree 2= disagree 3= neutral 4= agree 5= strongly agree

I. Awareness towards the concepts of HRD SDA DA N A SA

1. I am aware of training and development from HRD

point of view

2. I know career planning and development as crucial

part of HRD
3. I acquainted with organizational development from
HRD standpoint

4. I familiar with performance appraisal from HRD

point of view

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II Training and Development SDA DA N A SA

1 The commission has good training and

development programs
2 The commission assesses employee training
needs
3 The commission Set‟s performance goals and
objectives
4 The commission plans developmental strategies
accordingly
5 Assessing the available aids for internal and
external training and development
6 Developing strategies for training, Programs and
modules
7 Evaluating training efforts

III Career development SDA DA N A SD

1 The commission doing Well in working to improve

career development
2 The commission always strife‟s for upgrading
employee‟s potential
3 The commission has good career planning and
development
4 The commission integrates HRD with organizational
objectives
5 There is good counseling center in the commission that
benefits all employees

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IV Organizational development SDA DA N A SA
1 There is Good management with required profession
2 Good culture of openness
3 The commission follows effective cost minimization
system
4 There is Good credibility and fairness of top
management
5 There is Encouraging problem solving culture in the
commission
6 There is Good team spirit
7 The commission use Sound recruitment systems
8 There is a Better compensation and job security
9 The commission uses effective personnel data

V Performance appraisal SDA DA N A SA

1 There is Good performance appraisal systems

2 Assessment where the employees are assigned

3 Evaluation what expected from each employee

4 Immediate action when employees lack capacity

5 Problems not happen during performance appraisal

6 Short and long term evaluation

7 Acknowledgement for good performances

8 Identifying areas in need of improvement

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VI Scale your commission how HRD is administered? SDA DA N A SA

1 Good personal analysis

2 Appropriate job analysis
3 Considering organizational analysis
4 Prioritizing needs in practicing HRD
5 The commission identifies and designs HRD objectives
6 The commission has clearly defined objectives of HRD

7 The commission takes Implementation based on stated

objectives
8 There is Evaluation and follow up
9 The Commission selects good evaluation criteria
10 Interpret evaluation results and feedbacks

VII Challenges of human resource development SDA DA N A SA

1 Developing comprehensive HRD strategies
2 Aligning HRD to strategic priorities
3 Developing a positive work environment
4 Creating managerial and leadership capacity
5 Utilizing HR assessment technology to plan HRD
7 Allocating sufficient financial resources
8 Accepting the challenges of modern technological
changes
9 Paying attention to professional development
10 inadequate training and development
11 Lack enforcement and accountability
12 Attracting and retaining qualified personnel
13 Lack of proper merit system

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 Annexes 2
Faculty of Business and Economics
Department of Public Administration and Development Management

Questions for Focus Group Discussion

1. What is your understanding about the concepts of HRD?

2. How do you see the practice of HRD in terms of training and development, career
development, organizational development and Performance appraisal?

3. How do you think that HRD integrates both employees and organizational needs?

4. How HRD is administered in your organization? Does the bureau considers personal, job and
organizational analyses?

5. What are the challenges that you observe in the practice of HRD in the commission?

6. What strategies can be used to overcome the challenges of HRD?

7. Would you please suggest if there is anything to be changed with regard to the current human
resource development practices of the commission?

8. Is there anything related to HRD practices and challenges which have not covered that you
consider as very important?

78
 Annexes 3
Faculty of Business and Economics
Department of Public Administration and Development Management

Questions for Interview

1. What is your understanding about the concepts of HRD?

2. How do you think the practice of HRD in terms of training and development, career
development, organizational development and performance appraisal?

3. How HRD programs integrate both institutional and employee‟s needs?

4. How all employees are benefited from HRD programs?

5. Do you think the commission is a good place for growth and development of all employees? If
no, why?

6. To what extent do managers at all levels in the commission have appropriate skills in general
managerial principles, communications, group dynamics, and team building?

7. Do you think that the commission allots sufficient funds to carry out HRD programs
effectively?

8. How do you evaluate HRD administration in terms of need assessment, design and identify
objectives, implementation and evaluation?

9. What are challenges in practicing HRD in the commission?

10. What strategies can be used to overcome the challenges of HRD?

11. Would you please suggest if there is anything to be changed with regard to the current human
resource development practices of the commission?

12. Is there anything related to HRD practices and challenges we have not covered that you
consider as very important?

79