ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

SCHOOL OF COMMERCE
MASTER’S OF HUMAN RESOURCE MANAGEMENT

Assessment of Strategic Human Resource Management

Practices: The Case of Commercial Bank of Ethiopia
By, Tekalign Asresahegn

Advisor, Abraraw Chane (PhD)

A Thesis Submitted to School of Commerce in Partial

Fulfillment of the Requirements for the Degree Master’s
of Arts in Human Resource Management

Addis Ababa University School of commerce

Addis Ababa, Ethiopia
June, 2019
 Declaration

I the undersigned, hereby declare that the work contained in this thesis is my own original work
and has not been presented previously in its entirety or in part at any university for a degree and
that all the sources of materials used for the study have been dully acknowledged.

Name ____________________________

Signature _________________________ Date________________________

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 Approval
Addis Ababa University
School of graduate studies

This is to certify that the thesis prepared by Tekalign Asresahegn, entitled: Assessment of
Strategic Human Resource Management Practices: The case of Commercial Bank of Ethiopia
submitted in patial fulfillment of the requirements for the Degree Master‟s of Arts in Human
Resource Management complies with the regulations of the University and meets the accepted
standards with respect to originality and quality.

Signed by the Examining Comitee:

Advisor:____________________________ Signature ________________Date______________

Internal Examiner:_______________________Signature______________ Date______________

External Examiner:_____________________Signature_______________Date______________

---------------------------------------------------------------------------------------------------------------------
Chair of Department or Graduate Program Coordinator

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 Acknowledgements

First and foremost, I thank the Almighty God for his support and protection in all aspects of my
life.
I would like to express my sincere gratitude to my advisor Abraraw Chane (PhD), for his
guidance, review of the work and constructive comments.
I want to extend my gratitude to my beloved Wife Hiwot Abate and my Son Yotor Tekalign, for
sacrifying their valuable family time, support, feedback and Editing.
I would like also to appreciate Commercial Bank of Ethiopia Management Staff and Employees, for
providing me the necessary information and to all the interview and questionnaire participants for
their cooperation and support.
And finally my gratitude for my Mother Shitaye Worku, friends and all the family members for their
encouragement & support; and all who have contributed to this work in one way or the other.

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 Acronyms
CBE Commercial Bank of Ethiopia

HRBP Human Resource Business Partnering

HRM Human Resource Management

HR Human Resource

NBE National Bank of Ethiopia

SHRM Strategic Human Resource Management

VP Vice President

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 Table of Contents
Declaration ....................................................................................................................................... i

Approval...........................................................................................................................................ii

Acknowledgements .......................................................................................................................... iii

Acronyms ........................................................................................................................................ iv

List of Tables ................................................................................................................................. viii

List of Figures .................................................................................................................................. ix

Abstract ............................................................................................................................................. x

CHAPTER ONE; INTRODUCTION ...............................................................................................1

1.1 Background of the Study .........................................................................................................1

1.2 Statement of the Problem ........................................................................................................3

1.3 Research Questions .................................................................................................................4

1.4 Objectives of the Study ............................................................................................................4

1.4.1 General Objectives ............................................................................................................4

1.4.2 Specific Objectives ............................................................................................................4

1.5 Significance of the Study..........................................................................................................5

1.6 Scope of the Study ...................................................................................................................5

1.7 Limitation of the Study ............................................................................................................6

1.8 Definition of Terms..................................................................................................................6

1.9 Organization of the Study ........................................................................................................6

CHAPTER TWO; REVIEW OF RELATED LITERATURE ..........................................................8

2.1 Availability of Literature .........................................................................................................8

2.2 The Concept of SHRM ............................................................................................................8

2.3 Why SHRM ........................................................................................................................... 10

2.4 Integration of HRM ............................................................................................................... 11

2.5 Consistency of HRM Practices............................................................................................... 13

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 2.6 Devolvement of HRM ............................................................................................................ 14

2.7 Employee Commitment ......................................................................................................... 16

2.8 Conceptual Frame work ........................................................................................................ 18

CHAPTER THREE; RESEARCH DESIGN AND METHODOLOGY .......................................... 20

3.1 Research Design and Approach ............................................................................................. 20

3.2 Population and Sample .......................................................................................................... 20

3.3 Data Source and Types .......................................................................................................... 22

3.4 Data Collection Instruments .................................................................................................. 23

3.4.1 Questionnaire .................................................................................................................. 23

3.4.2 Interview ......................................................................................................................... 24

3.4.3 Document Review............................................................................................................ 24

3.5 Validity and Reliability .......................................................................................................... 24

3.6 Data Analysis......................................................................................................................... 25

3.7 Ethical Consideration ............................................................................................................ 26

CHAPTER FOUR; DATA ANALYSIS AND INTERPRETATION ............................................... 27

4.1 Response rate of Respondents................................................................................................ 27

4.2 Demographic Characterstics of Respondents......................................................................... 28

4.3 Descriptive Statistics .............................................................................................................. 30

4.3.1 Devolvement of HR Practices .......................................................................................... 30

4.3.2 Employee Commitment ................................................................................................... 32

4.4 Mean Distribution of Variables ............................................................................................. 37

4.5 Interview Results ................................................................................................................... 39

4.5.1 Integration of HR Strategy .............................................................................................. 39

4.5.2 Consistency of HRM Practices ........................................................................................ 41

CHAPTER FIVE; SUMMARY CONCLUSION AND RECOMMENDATIONS ........................... 46

5.1 Summary of Major Findings ................................................................................................. 46

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 5.2 Conclusions ........................................................................................................................... 48

5.3 Recommendations ................................................................................................................. 49

5.4 Suggestion for Further Research ........................................................................................... 50

References ....................................................................................................................................... 51

Appendix 1- Interview Guideline Questions .................................................................................... 54

Appendix 2- Questionnaire ............................................................................................................. 55

Appendix 3- Letter from the University .......................................................................................... 60

Appendix 4- Letter from CBE Head office ...................................................................................... 61

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 List of Tables

Table 1:The Total Population and Sample of the Study ............................................................... 22

Table 2:Cronbach‟s alpha Coefficient result ................................................................................ 25

Table 3:Questionnaire Response Rate .......................................................................................... 27

Table 4:Demographic Characterstics of Respondent .................................................................... 28

Table 5: Responses of Line Managers regarding HR Devolvement............................................. 31

Table 6:Line-mangers response regarding Affective Commitment.............................................. 33

Table 7:Summary of responses regarding Continuance Commitment ......................................... 35

Table 8:Summary of respondents perception regarding Normative Commitment ....................... 36

Table 9: Mean Distribution of Variables ...................................................................................... 37

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 List of Figures

Figure 1: Strategic Definition of HRM .......................................................................................... 9

Figure 2: Conceptual Frame Work of the Study ........................................................................... 19

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 Abstract
Now a days the introduction of strategic human resource management in the world has shifted
the basis of competitive advantage from tangible physical resources to intangible knowledge
based assets. Having this in mind, The study have been conducted to assess the strategic human
resource management practices of commercial bank of Ethiopia. The study addresses all the
research questions and objectives stated in the objectives of the study. To undertake the study
Descriptive research Design were employed. Both qualitative and quantitative Approach (mixed
approach) were adopted. The data were collected from both primary and secondary sources .
The primary source of data were collected from 106 sample respondents by using self-
administered questionnaire and from five HR managers by Interview. Accordingly the data
gathered by survey questionnaire were analysed by the help SPSS software. The findings
revealed that CBE practiced HR integration to a higher extent, Consistency of HR practices to a
lower extent, Devolvement of HR to line manager to a lower extent and averaged level of
employee commitment. This implies that CBE practiced SHRM practices to alower Extent. Based
on the findings CBE should implement strategic human resource management practices
consistently acrros the different stations they have in order to boost productivity and the overall
performance of the bank.
Key Words: Strategic Human Resource management, HR integration, Consistency of HR, Devolvement,
Commitmnet

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 CHAPTER ONE

INTRODUCTION

This chapter consists of the background of the study, statement of the problem, objectives of the
study, research question, significance of the study, limitation of the study, scope of the study,
definition of basic terms and finally organization of the paper.

1.1 Background of the Study

Now a days the introduction of strategic human resource management in the world has shifted
the basis of competitive advantage from tangible physical resources to intangible knowledge
based assets. In a sense of strategic human resource management knowledge has become the
major driver of business performance by creating core capability to an organization (Dermol,
2014). Thus, the logic behind the concept of strategic human resource management is linking
such organizational core capabilities with business strategy so as to win competitive advantage
against the rivals. It is the alignment of organizations‟ strategic human resource management
function as a strategic partner to organizational growth in the formulation and implementation of
the organization‟s strategies through human resource activities such as recruiting, selecting,
training and rewarding of personnel.

The existence of strategic human resource management practices in an organization can be

assured by the extent to which organization‟s goals are achieved through people by means of
integrated HR policies and practices, by the consistency of HRM practices to each other, by the
devolvement of HRM to line management and finally by high employee commitment towards
the achievement of organizational goals (Armstrong, 2009). Internal Consistency is a key
concept in Strategic Human Resource Management theory. The field of SHRM focuses on
developing internally consistent HRM practices to build employees‟ knowledge, skills, and
abilities in an effort to support competitive strategies and achieve business objectives.

Globally the service sectors have been facing unique challenges with the wave of privatization
and globalization. The recent trend of globalized competitive business focused on the
formulation and execution of SHRM in consideration of its substantial effect on the financial
performance of the organization. Thus, organizations in the service industry need to adopt

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strategic HR approaches to survive and be sustainable in the business arena. In the service sector
the fundamental aim of strategic HRM is to generate strategic capability by ensuring that the
organization has the skilled, engaged and well-motivated employees so as to create high level of
commitment in order to provide quality service (Grant, 1996).

More specifically, competition in the banking industry has mainly focused on service quality and
operational Excellency. Since service quality is a derivation of high level of employee
motivation, the management of people in the banking sector needs special attention among
others. The concept of strategic human resource management in the banking industry assured the
alignment of such valuable, rare, and inimitable resources being an integral part of the business
strategy as to create better performance against competitors (Barney, 1992). To achieve
competitive success through people involves changing our way of thinking about employment
relationships. It means successfully working with people, and seeing HR as a source of
competitive advantage rather than as merely a cost (Pfefer, 1994).

Banks in the Ethiopian case are ideally tried to implement strategic human resource management
practices. The central theory of SHRM revealed that successful organizations in implementing
SHRM practices depend on a close fit or alignment between business and human resource
strategy (Armstrong, 2009). According to some empirical studies conducted by Abraraw, 2015
on selected large business organizations in Ethiopia, it was found that there was a moderate level
of HR and business strategy integration. Even though very few studies are conducted regarding
SHRM practices in Ethiopian context, a lot of untapped areas are available which needs further
studies. Thus having this in mind, the study has undertaken a thorough asessment on the SHRM
practices followed by the dominant bank in the country, Commercial bank of Ethiopia (CBE). In
this study the researcher has viewed strategic human resource management practices from four
dimensions. The first one is by looking HR strategy alignment with business strategy of the bank
secondly by exploring HRM practices consistency to each other thirdly the devolvement of HRM
to line manager and finally by measuring the level of employee commitment.

Commercial Bank of Ethiopia (CBE) is one of the leading banks in Ethiopian banking industry.
CBE was first established as a state bank of Ethiopia in 1942. CBE has more than 1280 branches
throughout the country. Now CBE has a total asset of birr 565.5 billion as at June 30, 2018. It
has about 18.8 million account holders and more than 33,000 employees. More over CBE was

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pioneer to introduce various foreign money transfer agents in 1990s and currently it is working
with 20 money transfer agents (CBE‟s Annual Performance Report, June 30, 2018).

1.2 Statement of the Problem

In a knowledge-based economy, different globalization forces and technological discontinuities
are causing organizations to rethink the way they do business and how to be profitable. As it is
clearly shown from the mission statement of CBE, “realizing the best of stakeholders value by
deploying motivated, skilled and disciplined work force”, managers are aware that beyond the
state of the art of technology the main source of achieving organizational objectives are from
proper management of its employees. However, having an appropriate system of attracting,
retaining and managing the organizations human resources in line with the corporate business
strategy are in question.

According to National Bank of Ethiopia Annual Report 2017/18, There were high level of
employee movement among the existing banks in the country. This is mainly due to banks are
focused on snatching scarce skilled labor from the market through alluring them with attractive
benefit packages. Since CBE are market price follower, unless the deployment of other HR
strategic options in the future, the snatching will adversely affect the market position of the bank.
And also acquiring and maintaining highly qualified staffs is becoming difficult in the market
due to the stiff competition among the existing banks. Thus this demand the bank to review its
HR policies to stay in the market as well as to achieve its vision, “To become world class
commercial bank by the year 2025‟.

In the past seven years CBE has been investing in acquiring new potential employees and
maintaining existing staffs in order to build sufficient successor pool by developing and
implementing various policies and strategies concerned with human resource (CBE Annual
performance report 2017/18). However a survey conducted by Senait, 2017 on Employee
commitment revealed that there is high level of potential successor‟s turnover, moderate
employee engagement, low morale, and reduced employees‟ desire to learn and apply new skill.
This helped the researcher to think there is some sort of gaps in the organization with respect to
the concept of strategic human resource management practices and need additional assessment in
the area.

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Therefore, this study is carried out to assess the overall SHRM practices followed by CBE. Even
though a number of studies conducted with different titles on CBE, still there is little research has
been undertaken regarding the assessment of SHRM practices in the bank. The study assessed SHRM
practices of the bank by looking in to four strategic dimensions. Namely, HR integration with
business strategy, consistency of HRM practices to each other, devolvement of HR to line manager
and level of employee commitment.

1.3 Research Questions

The study addresses the following research questions;
1. To what extent do the HR Strategy of CBE is integrated to its business strategic plan?

2. To what extent do the different HRM practices are consistent to each other?

3. To what extent do the HRM systems of the Bank are Devolved to line managers?

4. What is the level of employee commitment towards achieving organizational goals in the
Bank?

1.4 Objectives of the Study

The general and specific objectives of this study are as stated below.

1.4.1 General Objectives

The general objective of the study is to assess strategic human resource management practices of
Commercial Bank of Ethiopia.

1.4.2 Specific Objectives

The specific objectives of the study that can lead to achieve its general objective are to:

1. Assess the extent to which the overall HR and Business strategy are integrated.
2. Examine the extent to which HRM practices are consistent to each other.
3. Identify the degree to which HRM system involves and shared responsibility to line
managers rather than HR specialists.
4. Measure the level of employees commitment towards achieving a particular task
effectively.

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1.5 Significance of the Study
The undertaking of this study is primarily helpful for the researcher, beside the academic
qualification, by creating the exposure to broaden the understanding of SHRM practices with a
kind of practical look.

Moreover, the findings of the study are believed to be significant to Commercial Bank of
Ethiopia. The results will enable the management to establish or amend the existing HR policies
and maintain strong human resource management strategies in alignment with the corporate
business strategies of CBE. And also the overall findings of this research will contributes to other
similar organizations as a tool to customize the suggested recommendations in to organizational
context to improve their HR related strategic gaps.

Finally, it can also serve as an ingredient for future studies in the area for reference.

1.6 Scope of the Study

Concerning methodological scope, the study used both quantitative and qualitative research
approach. The reason for using mixed approach is the nature of the research questions and adopts
both primary data collection techniques (Questionnaire and interview).

Conceptually, the study covered only those four principles of strategic Human Resource
Management practices. Namley, HR Integration, Consistency of HRM Practices, Devolvement
of HR to Line Manager and Employee Commitment. Even if various conceptual theories
available in the literature regarding SHRM practices, the study conceptual scope is limited to
these SHRM practices.

Geographically, the study concentrated only in Addis Ababa Area offices i.e. Head Office and
four Districts of the Bank. The logic behind to this is it‟s difficult to cover all areas and offices
throughout the country and the study assumed that the sample respondents will represent the
whole population.

The Time frame work of the study was mainly relied on the university schedule. And also since
the study were assessing a certain practices followed by the bank, the data used in the study were
from the establishment of the bank.

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1.7 Limitation of the Study
This study has encountered the following limitations and constraints:
Limited availability and access to documents related to HR and Business strategy of the Bank
due to confidentiality. And also lack of willingness among respondents to fill the questionnaire
with due care and return ontime. Time constraint of some interviewees and survey respondents
due to busy office works. However with the help of the support letter from the university and
with the support of some relatives in the bank, the study has got the opportunity to collect both
the primary and secondary data.

1.8 Definition of Terms

Strategic HRM is an approach that defines how the organization‟s goals will be achieved through
people by means of HR strategies and integrated HR policies and practices (Armstrong, 2009).

Integration of HRM refers to the involvement of HRM in the formulation and implementation of
organizational strategies and the alignment of HRM with the strategic needs of an organization
(Chaddie, 2001).

Internal consistency of HR practices refers to the degree to which all HR practices of a SHRM
system are consistent and complementary (Baron and Kreps, 2005).

Devolvement of HRM refers to the degree to which HRM system involves and gives
responsibility to line managers rather than HR specialists (Cooke et al, 2003).

Employee commitment is the psychological state that characterizes an individual strength and
involvement in a particular task in a given organization (Allen and Meyer, 1997).

1.9 Organization of the Study

This thesis paper is organized under five chapters. The first chapter deals with introduction
which includes research background, statement of the problem, research questions, objectives of
the study, significance of the study, scope of the study, limitation of the study, definition of terms
and finally organization of the study.

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The second chapter is composed of review of related literature. In this chapter there is concepts
of SHRM, integration of business and HR strategy, consistency of HRM practices, devolvement
of HR to line manager, employee commitment, why SHRM and conceptual frame work.

Chapter three is about research design and methodology. In this chapter also there are different
sub topics which describes the methodology of the overall thesis paper. Research approach and
design, population and sample, data source and type, data collection procedure, ethical
consideration, validity and reliability and data analysis are the main sub topics that has been
raised in this chapter.

The fourth chapter is data analysis and interpretation. The collected data from both primary and
secondary sources are properly analyzed in this chapter.

The final chapter is composed of the summary of findings, conclusion and recommendation for
the study. In this part proper conclusion of the overall part of the paper and some
recommendations are presented based on the research findings.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Availability of Literature

Despite a considerable body of organizational literature that has been conducted to assess
Strategic human resource Management practices in commercial bank of Ethiopia as well as the
industry, there are very little literature regarding this concept due to it is new to the whole world
and our country as well. Although most of the researches around the world were undertaken on
the relationship between SHRM and firm performance, little has been done to examine SHRM in
the banking industry. The rationale for the study is therefor to address this gap.

2.2 The Concept of SHRM

In the 1990s the increasing forces of globalization and stiff competition through technological
innovation changed the bases of organizational effectiveness from the traditional use of human
resources to the more strategic version of human resource management.

Different scholars in the late 20th century was defined Strategic Human Resource Management in
different perspectives. Among the many definitions in the literature, Batt, 2007 stated that
SHRM is the process of developing HR strategies that are integrated with business strategy
vertically and horizontally with one another. It is the macro-organizational approach of viewing
the role and function of Human Resource Management. In this definition all HRM practices in
the organization are linked and have a direct impact on the overall corporate business strategy of
the organization. It is looking holistically towards the traditional HRM. The main focus on this
definition is to achieve organizational objectives through people management.

Another interesting definition was proposed by Holbeche, 2004, who have said “Strategic HRM
has a clear focus on implementing strategic change and growing the skill base of the organization
to ensure that the organization can compete effectively in the future”. By this definition
employees in the organization have looked as they are strategic resource, not costs, and their
contributions will affect the organization goals.

Schuler (1992) defined Strategic human resource management in a manner that this study has
framed; it is about integration and adaptation. According to her, SHRM is largely deals about

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ensuring three major concerns in an organization firstly; ensure human resource management is
fully integrated with the strategy and strategic need of the firm second HR policies cohere both
across policy areas and across hierarchies and finally HR practices are adjusted, accepted and
used by line managers and employees as part of their everyday work.

Moustaghfir, 2014, defined SHRM in connection with HRM practices. SHRM is a set of
managerial activities related to developing and maintaining highly qualified work force that
excel organization effectiveness in order to achieve organizational objectives. It is about giving
HR manager more responsibility of working towards organizational mission in partnership with
other line managers and to make sure that they have the required knowledge and human
capabilities. Hence HR managers become accountable for the achievement of organizational
goals and operational objectives. And also Cole (2004) emphasize that „the HR function brings
in the strategic value of people in organization by making contribution to value added and
contribution to competitive advantage.‟

To strength this concept Cascio, 2012 argued that in strategic thinking HR Managers should be
appraised based on the value they added to the organization in terms customer satisfaction, cost
reduction, quality standard, productivity ratio, and other performance oriented indicators. Thus
as it is indicated in Figure 1 below, the strategic objective of HRM is mainly focused on ensuring
the capacity of such an organizational function to attract, retain, and develop human resources to
ensure the efficient and effective materialization of the organizational vision and goals.

Attract

Retain Develop

Figure 1: Strategic definition of HRM (Moustaghfir, 2014)

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2.3 Why SHRM
Various scholars have been stated about the rationalitiy of Strategic Human resource
management in an organization. According to Bailey (1993) SHRM is about the capitalization of
potential source of profitability for an organization. Managers can use HR practices such as the
development of selection, appraisal, training and compensation systems, to attract, identify and
retain high-quality employees. Thus, a firm which develops a valid selection system and has
attractive HR programmes, such as higher than normal compensation packages and numerous
development opportunities, can attract, select and maintain the highest quality resource pool.

The first basic purpose of SHRM for an organizations is to focus on actions that distinguish an
organization from its competitors (Balkin and Logan, 1988). In SHRM, organizations more focus
is solely on the companies human asset. But previously HR function has consistently faced a
battle in justifying its position. However now a days sustained competitive advantage derived
from the resources and capabilities a firm controls that are valuable, rare, imperfectly imitable,
and not substitutable. These resources and capabilities can be viewed as bundles of tangible and
intangible assets, including firms‟ management skills, its organizational processes and routines
alongside the information and knowledge it controls (Barney, 1991).

As stated by Ulrich,1998, the strategic HR framework aims to leverage HR practices to build

critical capabilities that enable an organization to achieve its goals. Strategic HRM offers both
financial and non financial benefits to an organization.

SHRM further design the foundation of organization to achieve efficient business benefits,
business structure, organization culture, employees values propositions and effective
communication strategic plan for HRM (Miles and Snow, 1978). And also consistent SHRM
practice brings enhanced business decision making, keep track of down turns, down falls and
major organizational risks.

According to Schuler, 1992 SHRM provides new innovations by adding smoothness in

workforce morale and capabilities. In doing so it brings motivated employees, development of
flexible work force, employees‟ empowerment and positive work environment.
In order to higher the employees‟ performance graph, companies need to boost their employees
motivation. This can be achieved by proper implementation of integrated reward management
like annual increamental, employee of the month, employee of the year and promotions are the

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tactics to appreciate loyal employees. The HRM strategic plan also included the activities to
make flexible workforce development. Strategic HRM includes the policy to convert work into
flexible one. Flexibility in employee‟s shifts, schedules and work location allow them to work
freely. These relaxations will generate more quality in their work & performance. Moreover,
Strategic HRM, developed more enthusiasm in employee behavior. The employee‟s development
includes some courses, training sessions and short lectures that will change employees into more
skilled assets. These skill assets will be used in future to enable an organization to have
competitive advantage against business competitors.

Finaly, Strategic Human Resource Management, encourage positive work environment within
the organization. This environment will eventually brings rise in the employee‟s progressive &
productive work graph. The positive work environment ensures the favorable benefits in
organizational aspects.

2.4 Integration of HRM

Integration of HRM refers to the involvement of HRM in the formulation and implementation of
organizational strategies and the alignment of HRM with the strategic needs of an organization
(Chaddie, 2001). He argued that HR to be a strategic partner for an organization, HR managers
should be involved in strategic decision making together with other senior managers. This would
provide an opportunity for HRM to represent its concerns and influence business strategy beyond
decision making. The involvement includes the membership of HR managers in the senior
management teams to participate in the formulation of corporate strategy. The overall themes of
SHRM are the integration of all HRM functions, adherence to broad organization goals and
responsiveness to the external environment (Armstrong, 2009).

According to Miles and Snow, 1978, in today‟s management practices, all business functions try
to link their work methods and practices with firm strategy to achieve higher organizational
performance. The integration can be either of vertical or Horizontal. According to the „Best-fit‟
approach of contingency theory vertical integration is the alignment between the organizations
business and HR strategy and horizontal integration is to ensure that the different elements of the
HR strategy fit together and are mutually supportive (Armstrong, 2009).

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Further Robbins, 1998 as cited in Greer, 2012, this integration is more elaborated by four
aspects, the first one is integration among HR practices, refers to the existence of linkage among
HRM practices and the overall strategy of the organization namely, strategic recruitment and
selection, strategic training and development, strategic reward and strategic performance
appraisal. All these HR functions and processes tried to integrate with both horizontally HR
strategies and vertically business strategies and goals. This kind of integration has been
categorized under internal fit. The second one is integration between HR system and other
systems in an organization. This refers to the creation of organizational fit between HR system
and other departmental strategies working with the achievement of common organizational
objectives. The third one is integration between the HR system and business strategy. This can
be a strategic fit between Porters competitive business strategy and HR strategy in order to
incorporate those HR practices as a tool to achieve organizational objectives. Schuler and
Jackson (1987) evidenced empirically this concept on the basis of their research that
„effectiveness can be increased by systematically melding human resource practices with the
selected competitive strategy‟. The last one is integration between HR system and the
environment that an organization operates with. This is the existence of environmental fit to
respond quickly for the changes happened in the competitive market.

Greer, 2012 also listed that the benefits of HR integration for organizations are it brings
diversified solutions for organizational problems, ensure the participation of HR in goal setting,
ensure organizational abilities to accomplish goals and implement strategy by means of HR,
Prevent the formulation of strategy based on personnel preference and finally facilitates
concurrent consideration of strategic plans and managerial succession.

According to Schuler and Jackson, 1987, the extent to which the strategic integration can be
practiced and evaluated by the representation of HR manager in to the board, the presence of
written HR strategy and involvement of HR manager in the formulation of corporate strategy. To
achieve strategic integration and alignment of HRM with business strategies, a documented
HRM strategy would also be useful as it can make more concrete the role and authority of HR
managers in corporate decision making and increase capacity to cope with externalities such as a
tight labor market (Deborah, 1995). Based on the above concepts the presence of HR integration
will be tested in CBE so as to generate reasonable inference about the topic.

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An empirical survey conducted by Abraraw 2015 in 156 large scale business organizations in
Ethiopia, revealed that there were a moderate level of HR integration with business strategy. And
also the result shows that the integration was varied from sector and size of the organization and
most of service providers in Ethiopia have better accomplishment regarding HR integration.
Thus the rational for this study is to expand the knowledge regarding this concept by laying
additional empirical study for future studies in Ethiopian context by taking a single experience of
CBE.

2.5 Consistency of HRM Practices

SHRM is mainly deals about the prevalence of internally consistent HRM practices in an
organization. Consistency refers to the extent of those individual practices are complimentary to
each other and applied uniformly. In order to measure their levels of consistency the main
questions raised was do this individual practices are really supportive to each other? Practically,
if the HR strategy were derived from the corporate strategy and fully integrated, without any
doubt the individual HR practices will be consistent to each other (Armstrong, 2008). So this was
one of the reasons for the researcher to use internal consistency as a tool to measure the existence
of SHRM practices in an organization.

In a various literature including Baron and Kreps (2005), there are three aspects of internal
consistency are identified namely, single employee, among employee and temporal consistency.
Single employee consistency refers to the various HRM practices must be consistent to a single
individual in an organization. For an individual regarding his performance and ability gained by
extensive training must be aligned with the compensation package provided by the organization
so as to create high level of motivation and commitment unless turnover intention will be high.
Among employee consistency also the above mentioned HR practices should be consistent for a
group of people who are in in similar situation in an organization. It is the uniformity of HR
practices for different individuals in an identical situation. Temporal consistency refers to the HR
philosophy should be consistent and continuous over a given period of time. The way an
individual treats today must agree with yesterday as to create some level of confidence on HR
practices in the minds of employees.

Internal consistency has five major benefits for an organization Baron and Kreps (2005). First it
allows the HR practices of an organization to be technically interdependent, allow operations to

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follow the same basic principle, it allows social learning in the sense of social norms in an
organization, it allows better initial matching of employees to work setting and finally it
promotes distributive justice in an organization.

Previous studies revealed that in large business industries in Ethiopia it was found that a
moderate level of HRM practices internal consistency. Further the study depicted the finding
based on the above three aspects of internal consistency. As stated by Abraraw, 2015 there was
average level of single-employee consistency due to low level of integration between HRM
activities and long term HR vision. Regarding among-employee consistency it was found that
there is low level of consistency due to the prevalence of informal promotion practice and a
widespread nepotism at the top. Same is true for temporal consistency, since for the last ten years
the introduction of change management in the country forced HRM philosophies to change
overtime. This and related factors are liable for the low level of temporal consistency in the past
studies. However, currently a lot of changes have been takes placed in the business environment
due to the force of globalization and the stiff competition among the existing firms, so it is being
logical to undertake an additional assessment in the subject matter.

2.6 Devolvement of HRM

As it is stated by Cooke et al (2005) devolvement refers to the extent to which the HRM systems
are involves and give responsibility to line managers. He asserted that SHRM is an efficient
function that involves line managers in the affairs of HRM activities directly and give primary
responsibility to certain HR practices. According to the concept Proponents of Beer et al 1984,
every line managers have responsibility for the management of HR in his own custody. The
designation of HR policies lies on the HR specialists whereas the implementation and follow up
goes to line managers. Further this theory was framed by Boxall, 1992 and named the Harvard
framework of SHRM. As stated in the theory „line managers should accept more responsibility
for the alignment of HR policies and competitive strategy and HR specialists has the
responsibility of setting HR policies.‟ The effective implementation of HR strategies depends on
the involvement, commitment and cooperation of line managers.

And also Purcell et al (2003), argued that that „it is the front-line managers who bring HR
policies to life, and act accordingly.‟ Since frequent contacts with employees are lies with line
managers, it is logical to give the responsibility of managing HR to line manager as to easily

Assessment of SHRM Practices on CBE Page 14

identify gaps and take remedial actions. In similar fashion Schuler and Walker, 1990 assured that
people related business problems are efficiently solved by joint activities of HR and line
managers.

According to Guest, et al, 2003, currently devolvement of HR to line manager has got great
recognition in line with the expansion of the concept strategic human resource management. He
identified that the reason for this popularity was the benefit that an organizations enjoyed from
proper implementation. Involving line managers to HRM practices has the following major
benefits for an organization. First and for most some kind of problems that are easily solved by
line managers will be complex to handle and comprehend by top management, the time duration
for a problem to be identified and solve in a certain jurisdiction can be comparatively fast by line
managers, since line managers has frequent and constant contact with employees it is easy to
motivate and control, helps the organization to prepare successors by developing the exposure to
decision making and finally it reduces cost. More over the devolution helped the organization to
transform easily from the traditional management-employee relation through unions to a
strategic and direct management employee relation without unions. This can be facilitated by the
existence of bondage through frequent interaction between line managers and respective
employees.
As it is stated by various scholars the measurement of the level of devolvement is being
challenging and debatable. However according to Schuler, 1992 to some extent the level of
devolvement can be measured by three mutually inclusive indicators these are, the extent to
which line managers are involved and take certain responsibility of HR practices, the proportion
of HR staffs for the total number of employees, and the degree to which line managers are
trained to undertake HR related responsibilities. She argued that line managers should receive
continuous support and extensive training from HR specialists regarding HRM practice.

More empirically, Abraraw, 2015 found that there is low level of HR devolution to line manager
on selected business organizations in Ethiopia. According to him the reason for this result was
highly due to the national culture of maintaining the status-quo, high risk avoidance organization
culture and low level of decentralization. However, Decentralization is one of the values that
CBE has being followed for the last nine years. But, the extent of decentralization in CBE was
not well researched. Thus one of the rationality of this study was to measure the extent of
decentralization practice of CBE interms of devolution of HR practice to line manager.

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2.7 Employee Commitment
One of the indicators that predict the existence of strategic human resource management in an
organization is based on high level of employee commitment (Schuler and Walker, 1990).

According to Allen and Mayer, 1997, Employee commitment “is a psychological state that
characterizes the employee‟s relationship with the organization and has implication for the decision
to continue membership in the organization.”

It is known that high level of employee‟s commitment has a positive relationship with employee
effectiveness as well as organizational performance. The central theory of resource based view is
empowering organization employees to a high level of commitment as to make them a strategic
resource by exploiting their core capabilities which are rare, inimitable and difficult to substitute
for the achievement of organizational objectives (Grant, 1996).
Mowday, et al, 1982 saw organizational commitment as a strong belief in an organization‟s
goals, and values, a willingness to exert considerable effort on behalf of an organization and a
strong desire to remain a member of the organization. Since there is strong belief on
organization‟s goals and exert maximum effort, the probability of achieving such goals become
larger through high level of commitment. So it is logical to use high level of employee
commitment as a predictor to SHRM existence in an organization.

Allen and Meyer, 1997 identified three component models of employee commitment. These are
Affective commitment; emotional attachment of employees resulting from positive experience,
continuance commitment; fearing the opportunity cost of leaving the organization, and normative
commitment; feeling of obligation to continue. Thus the study were tested the level of employee
commitment in CBE by using these three types of commitment together.

Affective Commitment

The most prevalent approach to organizational commitment in the literature is an effective or

emotional attachment of an individual to the organization such that strongly commited
individual is identifies with, is involved in and enjoy membership of an organization (Kanter,
1968). It is about affective attachment of an individual to the organizations goals and values. If
an individual is affectively commited to an organization, he/she will continue their membership
because emotionaly they want to. According to Allen and Meyer, 1990, it can be said that an

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individual are affectively commited if they believe in the goals and values of an organization, if
they have positive work attitude, if they demonstrate high level of performance and desired to
remain with the organization.

Mathieu an Zajac (1990) in their study identified that regardless of what companies do, some
employees display greater organizational commitment than others. This can be found as a result
of certain factors in an organization like personal characterstics, attitudes and relashinships.
Personal characterstics are age, gender, education, perceived competence, protestant or puritan
work ethic, job attitudes, job satisfaction and organizational citizenship behavior.

Continuance Commitment

It is about the simoultinious effect of what an individual investment to an organization and

perceived lack of alternatives. The investment may expressed interms of any thing which is
valuable for an individual like organizational benefit, position, pension plan, association and
collusion (Allen and Mayer, 1990). Most of the time it ocured when individuals base their
relationship with the organization on what they are receiving in return for their efforts and what
would be lost if they were to leave. It is mainly about the opportunity cost of leaving the
organization expressed interms of financial or non financial aspects.

Normative Commitment

It is about an individual remain to an organization based on expected standards of social

behavior or social norms (Kanter, 1968). Most of the time this type of individuals are expressed
by their obedience, cautiousness and formality. Moreover they reflect their moral imperative and
ethical obligation rather felt attachment.

Researchers suggested that most of the time morally obliged and commited employees are tend
to display the same attitudes and behaviours as those who are affectively commited.

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2.8 Conceptual Frame work
The conceptual framework of the study was developed based on the objectives of assessing the
overall strategic human resource management practices of Commercial Bank of Ethiopia. Since
the study was designed to assess the SHRM practices of CBE qualitatively, the conceptual
framework of the study only shows the variables of the study rather than to creat some
relationships. According to Barney, 1992 the concept behind strategic human resource
management is about aligning organization core capabilities, would achieved by efficient
utilization of human resource, with porters‟ three generic bases of business strategy so as to win
the competitive concerns. Thus, the alignment issue has been considered as one variable.

Moreover, The existence of strategic human resource management practices in an organization

can be assured by the extent to which organization‟s goals are achieved through people by means
of integrated HR policies and practices, by the consistency of HRM practices to each other, by
the devolvement of HRM to line management and finally by high employee commitment
towards the achievement of organizational goals (Armstrong, 2009). Therefore, with reference to
literature review and the research problem the above four critical concepts are considered as a
variable for the assessment as shown in figure 2.

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 Figure 2: Conceptual frame work of the study

Business and
HR strategy
integration

Consistency of Devolvement
HRM
SHRM of HRM to
Practices line Manager

High Employee
Commitment

Source: Own construct based on Literature

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 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

This chapter discusses the research design that was used in this study. The chapter further
describes the study population, sampling design, data collection methods, instrument design and
the data analysis procedures applied. The measures used to ensure validity and reliability of the
study instruments is also discussed. In addition, it presents the measures adopted to ensure that
the study is done in an ethical manner.

3.1 Research Design and Approach

Cooper and Schindler (2003) summarizes the essentials of research design as an activity and a
time based plan; always based on the research question; guides the selection of sources and types
of information; framework for specifying the relationship among the study variables and outlines
the procedures for every research. The research design is therefore the blueprint that enables the
investigator to come up with solutions to problems and guides in the various stages of research.
The nature of this study is descriptive design which involves precise procedure and data source
specification to assess the overall SHRM practices of Commercial Bank of Ethiopia. Thus the
study used both qualitative and quantitative (mixed) research approach in collecting and
analyzing data. The reason for this is qualitative approach used to analyze the interview results
and supplement and strengthen the quantitative aspects. More over according to Creswell, (2011)
the purpose of using such a mixed methods approach is to gather data that will not be obtained
by adopting a single method and for triangulation so that the findings with a single approach
could be substantiated with others wherever possible.

3.2 Population and Sample

Sampling is the process of selecting units or individuals from a population which can be included
in the study, for instance, to answer interview questions or respond to survey questionnaires
Dawson, (2002). There are two main types of sampling procedures: probability sampling and
non-probability sampling. Probability sampling involves selecting elements randomly in that the
selection of any one element is independent of the selection of the other elements. Unlike the

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case of probability sampling, in non-probability sampling the probability that an elementary unit
in the population included in the sample is unknown. Instead of objective approach the
researcher follow subjective approaches. Individual elementary units are selected not based on
chance but on personal intuition feeling, judgment, convenience etc. Choosing the type of
sampling technique depends upon the area of research, research methodology, and preference of
the researcher (Dawson, 2002).
The study used both the probability and non-probability type of sampling. The probability type
of sampling used in this study is stratified sampling whereas the non-probability type of
sampling is convenience sampling technique. Stratified sampling technique means selecting the
sample based on the homogeneity of the sample from the population and heterogeneity of the
element in the sample size. Commercial bank of Ethiopia has different offices and branches
throughout the country. The head office and four districts are located in Addis Ababa. Among all
the sample of the study shall be taken from head office, district and branches located in Addis
Ababa city only. This is mainly due to three factors first, the nature of the study which required
more data from head office and district offices second, their geographical location are more
convenient to the study and finally the homogeneity of all districts and branches throughout the
country regarding HR strategy.
The population or target groups are line-managers and HR-mangers who work under head office,
district and city branches. All HR managers under the selected district and head office were
considered for Interview due to their importance and small in number.
Since the four districts in Addis Ababa are homogeneous in characteristics, Two districts were
selected by simple random sampling. Based on proportionate stratified sampling technique a
sample branch were selected from the randomly selected districts.

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Table 1:The Total Population and Sample of the Study

Location Line Manager HR Manager

Population Sample Population Sample
Head Office 20 14 3 3
East Addis District 78 56 1 1
North Addis District 59 43 1 1
Total 157 113 5 5
Source: CBE Human Resource Record as of December 31, 2018

It is very important to determine the sample size with great care because sample size and
precision of information are highly related. Thus, using a sample size formula of (Israel, 2013)
below by taking a margin error of 5% and a confidence interval of 95%, 113 respondents were
chosen from 157 line Managers for questionnaire. According to Creswell, (2011) a higher
number of sample size will provide better generalization about the whole population and vice
versa. The whole 5 HR managers were considered for interview due to their importance and
small in number.
n = N/ [1+ (N*e2)] = 157/ [1+ (157*0.052)] ~ 113 Respondents.

Where:
n - The sample size,
N - The population size, and
e - The level of precision (e = 0.05)

To maintain a representative of the sample for each stratum the study used proportionate
stratified sampling technique. Accordingly, 14 respondents from head office, 56 from East Addis
Ababa district and 43 from north Addis district were chosen. Then to select respondents from
each group, the study used lottery sampling technique to give equal chance to the members in the
category.

3.3 Data Source and Types

The study used both primary and secondary source of data for its successful accomplishment of
the study. Primary data refers informations collected by the researcher himself and is collected

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for the first time. These Includes the actual information received from individuals directly
concerning the problem of the study. Hence the primary data was collected from sample
respondents by using self administered questionnaire and quantitatively measured on five point
likert scale. Moreover, The study has also used semi-structured interview to collected relevant
informations to answer the first two research questiones and analysed qualitatively. The
secondary data source of the study were published and unpublished, personal and public
documents. Accordingly the secondary data used includes HR strategy of the bank, Websites,
Business magazins, Accadamic Journals and Books. Generally primary data sources of this
research are Questionnaire survey and semi-structured interviews, whereas secondary data
sources are reviews of documents, literatures and Internet.

3.4 Data Collection Instruments

Regarding primary data collection, the study used self administered questionnaire and semi-
structured interviews.

3.4.1 Questionnaire
Questionnaire developed by the researcher were both open-ended (to get new information from
respondents) and closed-ended (to get uniform answers from respondents). On open ended
questions, the respondent are asked to provide his own answer to the question while on closed
ended questions, the respondents are asked to select his answer from among a list provided by
the researcher. Closed ended questions are very popular in quantitative type research since they
provide uniform responses and easy to analyse quantitatively (Dawson, 2002). Accordingly,
Different questions were developed for line mangers to reach their respective insights. Questions
related to devolvement of line manager were developed by the researcher himself in reference
with Schooler and Jackson‟, 1987 criterion whereas questions related to Commitment were
standard questions adapted from the revised Allen and Meyer, 1990. All the questionnaires were
distributed to 113 respondents by the researcher himself after preliminary discussions on the
purpose of the study. The questionnaire was composed of four parts, The first part of the
questionnaire were closed ended questions asked about demographic characterstics of the
participants like gender, age, experience and educational background whreas the second and
third parts contains closed ended questions answered in a five point likert scale. The final part

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were open ended questions and purposely incorporated to gather new ideas from the sample
respondents.

3.4.2 Interview
Semi-structured Interviews are also used as the main sources of primary data to collect
informations regarding HR intergration and Consistency of HRM practices. According to Cooper
and Shendler, 2003 most of the time interview can describe the respondents own behavior on
some relevant areas by demonstrating the degree of consistency between actual practices and
policy of the organization. Hence to gather informations on HR integration and consistency it is
better to conduct interview to get the actual practice rather than being restricted on reviewing the
HR Policy of the bank. Accordingly, five HR managers from the three offices were selected and
given ten interview guidline questions ahead to made the interview scheduled and be ready on
the subject matter. All of them were interviewed as per the schedule. The way the interviews
conducted were face-to face and recorded after informing the confidentiality. Thus based on their
consent it was recorded by mobile apparatus and played back during interview result analysis.

3.4.3 Document Review

The researcher has also reviewed documents, internet and the bank website to get additional
source of data and for understanding about the subject matter and the banks profile. On top of
that, HR strategy of the bank, Annual Reports, Business magazins, Accadamic Journals and
Books were reviewed.

3.5 Validity and Reliability

Sekaran, (2009) identified three type of validity namely content, criterion-related and construct
validity. Content validity ensures that the measure includes an adequate and representative set of
items that tap the concept under study. The more the scale items cover the concept, the greater
the content validity. Hence, to ensure the study free from bias and being valid, the researcher
adapted standard questionneir of Allen and Meyer, (1990) that measured organizational
commitment. And also the other questionnaire and interview guidline questions were developed
by reffering reliable sources such as published books and articles. Moreover, all the instruments
were forewarded for two experts in the field of HRM and my advisor to provide their comments
on the item.

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Reliability refers to the degree to which an instrument measures the same way each time under
the same condition with same subject (Sekaran, 2009). It is about the consistency of the data
collected. To make sure the reliability, the researcher deliberately incorporated reversed
questions and some questions had re-asked in different places. Further more, Cornbach‟s alpha
reliability test had been conducted by using SPSS software. According to Creswell (2011),
Cornbach‟s alpha is a coefficient of reliability used to measure the internal consistency of a scale
and expressed interms of a number between 0 and 1. And also Zikmund, 2010 argued that a
scale with coefficient between 0.6 and 0.7 represent fair reliability. Hence, for this study the
Cronbach‟s Alpha reliability test has been conducted and all the variables of SHRM scale were
found above the acceptable range for further analysis as shown in table 2.

Table 2:Cronbach’s alpha Coefficient result

Variables Cronbach's
Alpha N of Items

Devolvement HR to line manager .868 9

Affective Commitment .817 8

Continuance Commitment .741 6

Normative Commitment .732 6

Source: own survey result, 2019

3.6 Data Analysis

After the data has been collected properly the process of editing, coding and classifying were
done so that it would be suitable for further analysis. Since this study is descriptive type of
research the collected data was analysed by using tables, figures, percentages, graphs, charts, and
frequency. Apart from tables and graphs, mean and standard deviation also used to analyze the
data obtained through the questionnaire quantitatively. During the process Age, Gender,
Experience and education background were treated as control variables and to show the
demographic characteristics of respondents. The analysis also involved coding the responses,
tabulating data and performing statistical computation. The descriptive statistics were calculated
and analysed by the help of Statistical Package for Social Sciences (SPSS) software Version 21.0

Assessment of SHRM Practices on CBE Page 25

and described interms of frequency, mean, percent, and standard deviation. The results of
statistical computation were interpreted in reference of various literatures including reliability.

The interview result also analysed qualitatively so as to answer the first two research questions.
Accordingly, by playing back the recording of interview, the researcher tried to analyse the data
carefully in comparison with previous findings and various theories.

3.7 Ethical Consideration

The ethical issues considered in the study includes: informed consent (by informing the
respondents regarding the background of the study, including the importance of the data to be
gathered from them) and issues of confidentiality (by ensuring the respondents that all of the
information in this study will solely be used for academic purposes only.

In addition, the researcher is sure about all of the responses from the sample are given merit,
whether the researcher agree or not to their individual responses. The researcher were not
disclose any personal information of the respondents, which was explained in the conduction of
the questionnaire and interview directly to the respondents.

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 CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

This chapter is composed of various sub topics that deals about the finding of the study. The
collected data both from primary and secondary sources were analyzed properly by using tables,
graphs and figures. In the first sub topics response rate of respondebts were presented. Next the
findings from interview results for integration and consistency of HRM practices are analyzed
qualitatively. And also the first two research questions which are the extent of integration and
consistency of HRM practices has got their answers. The last sub topics are about descriptive
statistics of survey questionnaires analysed by using SPSS are discussed.

4.1 Response rate of Respondents

As it is presented in the methodology part of the study, semi structured interview and self-
administered questionnaires are prepared to collect relevant primary data from sample
respondents. Accordingly, 113 questionaires were distributed to respondents who worked under
Head office, East Addis and North Addis Ababa District line managers. Out of 113 questionaire
respondents a total of 106 questionaires were filled and returned by sample respondents. Whreas
7 respondents are not returned the questionnaire on time. The reason not to participate in the
study are not clearly identified but refused to return. However, according to Cooper & Schindler
(2003) a response rate of more than 50% of the total samples will provide adequate
generalization about the characterstics of the study problem. Thus, as it is indicated in Table 3
below, the response rate of the sample respondents were above the acceptable rate, 93.8%.
Table 3:Questionnaire Response Rate

Description Number of responses

Head Office East Addis North Addis Total
Distributed 14 56 43 113
Returned 14 52 40 106
Response Rate 100% 94.8% 94.9% 93.8%
Source: Own survey result, 2019

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4.2 Demographic Characterstics of Respondents
The demographic characterstics of respondents were described under based on sex, age, their
respective work experience and education background.

As it is indicated in Table 4 below, among the total 106 line managers 88 (83%) were male and
the rest 18 (17%) were female. This implies that the largest proportion of line managers in CBE
are composed of male population and we can say that less attention has given in empowering
female employees to management position.

Table 4:Demographic Characterstics of Respondent

Cumulative
Category
Frequency Percent Valid Percent Percent
Gender MALE 88 83.0 83.0 83.0
FEMALE 18 17.0 17.0 100.0
Total 106 100.0 100.0
Age 26-35 45 42.5 42.5 42.5
36-50 53 50.0 50.0 92.5
>50 8 7.5 7.5 100.0
Total 106 100.0 100.0
Experience 1-6 19 17.9 17.9 17.9
7-10 28 26.4 26.4 44.3
11-15 33 31.1 31.1 75.5
16-20 19 17.9 17.9 93.4
21-30 7 6.6 6.6 100.0
Total 106 100.0 100.0
Education diploma 2 1.9 1.9 1.9
BA 56 52.8 52.8 54.7
Masters 48 45.3 45.3 100.0
Total 106 100.0 100.0
Source: Own survey result, 2019

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When we look at the respondents age category, half of the sample responses i.e 53 (50%) were
found between the age of 36 to 50 years. This implies that most of CBE line mangers are under
the adult age category and matured staffs. The next higher number of respondents 45 (42.5%)
were found under the youngest and productive age groups (26-35). The remaining 8 (7.5%)
respondents were fall under the age of more than 50 years. Generally the largest proportion of
CBE line managers are staffed with productive age groups thus the bank has greater opportunity
to build potential successors for top level management positions.

As it is clearly indicated in Table 4 above the majority of respondents 33 (31.1%) work

experience were fall under relatively longer service years between 11-15 years. Following 28
(26.4%) of respondents work experience were from 7 to 10 years. And also 19 (17.9%) of the
respondents were covered by each from 1-6 and 16-20 work experinace category equally. Finaly
the lowest proportion of respondents work experience was found under 21-30 category which
was 7 (6.6%).

When we look at the educational qualification of sample respondents more than half constitute
56 (52.8%) of Sample respondents were first Degree holders. Where as 48 (45.3%) respondents
has Masters Degree. The rest 2 (1.89%) sample respondents has college diploma. Generally this
implies that the sample population in the study has better educational background and the
majority of line managers in CBE are BA and Masters degree holders.

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4.3 Descriptive Statistics

The primary data collected by survey questionnaire were analysed quantitatively by using
frequency, mean and standard deviation.

4.3.1 Devolvement of HR Practices

Regarding devolvement of HRM practices, the results obtained from descriptive statistics under
Table 5 below reveald that almost all of the respondents were replied very low. Except the
responsibility of appraising the performance of respective employees, under all parameters the
result obtained from survey questionnaire was found below average.

On the participation of Line-managers to the banks recruitment activity, 87 (82%) of respondents

response was found low and very low. This implies that the recruitment process of the bank were
solely performed by HR specialists under district and head office HR departments. Similarly 83
(78.3%) of respondents also replied they are not involved either in candidate selection or
facilitation of training program for their respective employees. Majority of the respondents about
67 (63.2%) were not had the responsibily of rewarding highly performed employees under their
jurisdiction.

More surprisingly, the only HR practice that are devolved to Line managers in the bank were
performance Appraisal. About 69 (65.1%), of respondents replied the primary responsibility of
performance appraisal resides on line managers to a greater extent. 27 (25.5%) of respondents
were replied the devolvement of performance appraisal were to a moderate extent. The rest 10
(9.5%) of them were not accepted the devolvement of performance appraisal and rated to a lower
extent.

The other core measurement for the devolvement of HR to line manager was the level of line
managers knowledge about HR practices and the facilitation of training to undertake HR related
responsibilities. However, as per the survey result, Majority of respondents constitute 59 (55.7%)
were not ever received training to undertake HR related responsibilities. 30 (28.5) of respondents
received training to a moderate extent.

But among the sample respondent the rest 17 (16%), replied that they have received training to a
higher extent. Generally the above result implied that, CBE were not aggressively capacitated

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line managers to undertake HR related responsibilities since it was solely performed by HR
specialists.

Table 5: Responses of Line Managers regarding HR Devolvement

Items Very Low Moderate High Very

Low High
F % F % F % F % F %
Your level of participation in the 71 67 16 15.1 14 13.2 5 4.7 - -

banks recruitment process.

Rate your levels of involvement on 65 61.3 18 17 8 7.5 15 14.2 - -

candidate selection.
Your direct involvement on the 42 39.6 41 38.7 11 10.4 8 7.5 4 3.8

facilitation of training.
Your involvement on rewarding 16 15.1 51 48.1 28 26.4 10 9.4 1 .9

highly performed employees.

The responsibility on the appraisal of 4 3.8 6 5.7 27 25.5 43 40.6 26 24.5
employee‟s performance under your
supervision.
The degree to which you have 27 25.5 32 30.2 30 28.3 17 16 - -

received training to undertake HR

related responsibilities.
Your direct involvement on the 41 38.7 21 19.8 26 24.5 12 11.3 6 5.7

facilitation of employees health and

safety.
Your involvement in the industry 45 42.5 23 21.7 21 19.8 13 12.3 4 3.8

relation.
Work force Expansion/reduction 61 57.5 22 20.8 14 13.2 9 8.5 - -

decision.
Source : own survey result, 2019

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And also the results for facilitation of health and safety, industrial relation and work force
reduction/expansion decisions were found below average.
As per December 31, 2108 human resource record of CBE, the proportion of HR specialists to
the total employees was found very low, its 3.6%. Eventhough most previous studies were in
support of lower HR specialists proportion have greater opportunity for devolvement of HR, the
above results showed that CBE did not utilized those opportunities of devolvement.

Generally, from the above result we can say that devolvement of HRM in CBE were practiced to
a lower extent. This findings were also consistent with Abraraw, 2015 contention, in Ethiopia
there is low level of HR devolution to line-manager as a result of wide spread practice of
maintaining the status-quo, low level of decentralization and high risk avoidance culture.

4.3.2 Employee Commitment

The existence of strategic human resource management practices in the bank can be also tasted
by the level of employee commitment (Schuler and Walker, 1990). Hence the study has
measured the level of CBE line managers commitment based on the three dimensions of
commitment.

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Affective commitment

Table 6:Line-mangers response regarding Affective Commitment

Items Strongly Disagree Neutral Agree Strongly

Disagree Agree
F % F % F % F % F %
I am very happy being a member of 6 5.7 11 10.4 37 34.9 52 49.1 - -

this organization.
I really feel as if this organization‟s 7 6.6 27 25.5 23 21.7 48 45.3 1 .9

problems are my own.

I think that I could easily become as 1 .9 36 34 36 34 21 19.8 12 11.3

attached to another organization as I

am to this one. “R”
I do not feel like „part of the family‟ - - 17 16 17 16 46 43.4 26 24.5

at my organization. “R”
I do not feel „emotionally attached‟ to - - 21 19.8 30 28.3 42 39.6 13 12.3

this organization. “R”

This organization has a great deal of 5 4.7 21 19.8 40 37.7 40 37.7 - -

personal meaning for me.

I do not feel a „strong‟ sense of - - 8 7.5 35 33 39 36.8 24 22.6

belonging to my organization. “R”

I enjoy discussing about my 1 .9 25 23.6 30 28.3 38 35.8 12 11.3

organization with people outside it.

Source: own servey result, 2019

Affective commitment of employees in the above Table 6 measured the perception of sample
respondents their emotional attachment (Affective commitment) to the bank. Accordingly, from
a total of 106 sample respondents 52 (49.1%) of them were found very happy of being a member
of CBE. Whereas 37 (34.9%) of respondents were neutral and the rest 17 (16.3%) of them were
disagreed and will leave the bank if they get another offer.

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The highest number of respondent 46 (43.4%), 42 (39.6) and 39 (36.8%) in the reversed
questions agreed that they were not felt the bank as part of the family, they were not emotionally
attached, and they were not felt strong sense of belonging to CBE. Hence, this implies that the
above proportion of respondents are not Affectively commited to the bank.

Continuance Commitment

Other dimensions of Employee commitment is Continuance commitment, it is about line

managers willingness to continue with the bank in fear of loosing the investment they made and
the cost associated with leaving (Kanter, 1968). Accordingly Table 7 below showed that 48
(45.3%) of the respondents were not worry about the loss of investment they made to the bank if
they leave. 23 (21.7%) of them keeped neutral. But the rest 35 (33%) are willing to continue
working in fear of lost investment. Hence this implies that majority of CBE bottom line
managers could not worry about the loss of investment and leave the bank if they get another
offer.

Generally, in almost all continuance commitment parameters the result obtained from sample
respondents were found unsatisfactory. As a result we can say that CBE bottom line managers
have something uncomfortable with the established HRM policies and their implementations as
well.

Assessment of SHRM Practices on CBE Page 34

Table 7:Summary of responses regarding Continuance Commitment

Items Strongly Disagree Neutral Agree Strongl

Disagree y Agree
F % F % F % F % F %
I worry about the loss of 18 17 30 28.3 23 21.7 27 25.5 8 7.5
investments I have made in this
organization.
If I wasn‟t a member of this 32 30.2 40 37.7 26 24.5 7 6.6 1 .9
organization, I would be sad
because my life would be disrupted.
I am loyal to this organization 11 10.4 17 16 38 35.8 40 37.7 - -
because I have invested a lot in it,
emotionally, socially, and
economically.
I often feel anxious about what I 14 13.2 33 33.1 40 37.7 17 16 2 1.9
have to lose with this organization.
Sometimes I worry about what might 19 17.9 32 30.2 41 38.7 8 7.5 6 5.7
happen if something was to happen to
this organization and I was no longer a
member.
I am dedicated to this organization 15 14.2 46 43.4 25 23.6 12 11.3 8 7.5
because I fear what I have to lose in
it.
Source: survey result

Normative Commitment

Table 8 Summarises the results obtained from respondents regarding indebted obligation and
moral imperative dimensions. 42 (39.6%) of the respondents staid Neutral regarding what the
bank has done for them. Further 34 (32%) were disagreed the reason of their commitment is due
to moral indebtedness. But differently the rest 30 (28.3%) respondents were agreed on they feel

Assessment of SHRM Practices on CBE Page 35

indebted obligation. This implies that majority of bottom line managers has average perception
on indebted obligations.

Regarding the bank treatment, 55 (42.4%) of respondents were disagreed that the bank treated
them by deserving their loyality. While 27 (25.5%) of them agreed and 8 (7.5%) were strongly
agreed. Whereas 26 (24.5%) keeped neutral. This implies that the bank were not treated bottom
line managers in such a manner that consider their loyality.

Table 8:Summary of respondents perception regarding Normative Commitment

Items Strongly Disagree Neutral Agree Strongly

Disagree Agree
F % F % F % F % F %
I feel that I owe this organization 10 9.4 24 22.6 42 39.6 28 26.4 2 1.9
quite a bit because of what it has
done for me.
My organization deserves my 14 13.2 31 29.2 26 24.5 27 25.5 8 7.5
loyalty because of its treatment
towards me.
I feel I would be letting my co- 15 14.2 28 26.4 48 45.3 13 12.3 2 1.9
workers down if I wasn‟t a member
of this organization.
I am loyal to this organization 3 2.8 8 7.5 27 25.5 55 51.9 13 12.3
because my values are largely its
values.
This organization has a mission that 1 .9 12 11.3 24 22.6 53 50 16 15.1
I believe in and am committed to.
I feel it is „morally correct‟ to 1 .9 17 16 29 27.4 40 37.7 19 17.9
dedicate myself to this organization.
Source: Own survey Result, 2019

When we look at the moral imperative and their attachement to the banks over all mission and
values, 68 (64.2%) and 69 (65.1%) of respondents were moraly loyal to the bank due to the
uniformity of their values and missions with the bank as well. Thus based on Table 8 above we

Assessment of SHRM Practices on CBE Page 36

can generalize that CBE bottom line managers are relatively Commited to the bank as a result of
indebted obligations and moral imperative.

4.4 Mean Distribution of Variables

The descriptive statistics was used to examine the mean and standard deviation of the responses
obtained from respondents in the Devolvement and Employee commitment scale. Thus the mean
and standard deviation of the variables are presented in Table 9 below.

Table 9: Mean Distribution of Variables

Std.
Variables N Minimum Maximum Mean Deviation
Devolvement of LineManager 106 1.00 4.00 1.7358 .90028

Valid N (listwise) Total 106 1.00 4.00 1.7358 .90028

Affective Commitment 106 1.50 4.50 3.3019 .77974

Continuance Commitment 106 1.00 4.50 2.6651 .88834
Normative Commitment 106 1.00 5.00 3.2217 .88930

Organizational Commitment 106 3.0629 .85246

Source: Own survey result, 2019

The researcher used the mean score measurement of Kothari (2004) for description of the
participants mean score as low, moderate and high. Accordingly, Mean score of less than 2.69 is
described as low, mean score of between 2.70 and 3.49 is described as moderate and mean score
of greater than 3.50 is described as high in five point scale.

Descriptively, the average response of Line managers regarding their participations on HR

practices of the bank has the lowest mean score value of 1.73 ( Std. Dev., 0.90) on a five point
scale even if performance appraisal has relatively higher mean score of 3.76 (Std. Dev., 1.01).
And also the results from providing training for line managers to undertake HR related
responsibilities has a lower mean score value of 2.35 (Std.Dev., 1.03). This implies that, CBE
has totally reserved HR practices merely for HR specialists across the bank.

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Differently, the results obtained from descriptive statistics for Affective Commitment has an
average mean score value of 3.30 ( Std Dev., 0.77). This implies that in CBE line managers are
moderately emotionaly attached to the bank.

As it can be shown in table 10 above, Further the mean score values for Continuance
commitment was found very low and it was 2.66 (Std. Dev., 0.88). Hence this implies that, if line
managers in CBE has got another offer, they will leave the bank without any doubt.

Similarly, The results for Normative commitment also found average level, it was 3.22 ( Std.
Dev., 0.88).

Generally, The level of organizational commitment in CBE were found averaged, 3.06 (Std.
Dev., 0.85). This implies that the results for organizational commitment were found moderate
due to the absence of strategic human resource management practices in the bank as it was
evidenced from the above other SHRM dimensions result. And also the result from
organizational commitment implied that there are other factors that made the result averaged and
it will be investigated by further researchers.

Overall the mean distribution of variables summarized in Table 10 showed that, in all parameters
the responses obtained from sample respondents for HR devolvement were below average. Thus,
based on the above descriptive statistics result we can say that in CBE Devolvement of HR to
line manager were implemented to a lower extent.

And also the level of employee commitment in the bank were not that much satisfactory. And it
was some what consistent with previous studies conducted by Senait, 2017, the level of
employee commitment in CBE were found very low due to poorly implemented HRM practices.
Therefore, we can say that the bank has to revise the existing HR policies and practices and
adopt other strategic options as much as possible to boost employee commitment especially that
of line managers.

Assessment of SHRM Practices on CBE Page 38

4.5 Interview Results
As it is clearly stated in chapter three the study used semi-structured interview as the main source
of primary data. For this purpose five HR managers were selected from Head office, East Addis
and North Addis districts to answer ten interview guide line questions. Accordingly the interview
results were analysed here under so as to answer the first two research questions as planned.

4.5.1 Integration of HR Strategy

In assessing the HR integration practice of the bank the study has adopted Schuler and Jacksons‟,
1987 evaluation criterion for the presence of Strategic Human Resource Management practices
in the bank. Namely, the presence of written HR strategy, board membership of HR director
(membership of senior management team in Ethiopian context) and finaly the involvement of
HR director in the formulation of corporate strategy.

For the first criterion, the interview result revealed that, Commercial Bank of Ethiopia has a
written HR Strategy which are solely derived from the corporate business strategy of the bank.
On top of that, the study has got a chance to review the HR strategy and corporate business
strategy of the bank. Accordingly, both the HR and Business strategies were formulated in
consultant with Francfurt School of Finance and management. In the corporate business strategy,
there exist different initiatives including HR in such a way to achieve those strategic pillars of
the bank. In the HR initiative various responsibilities were given to the HR department to work
in collaboration with other departments for the accomplishment of shared objectives. Further
more, The bank is pursuing an aggressive business growth strategy, opening more than 100
branches per year. This has resulted a significant increase in employee headcount. This increase
in branches and employees has resulted in the need to have a head office and district HR
organization that is charged with the responsibility for effectively acquiring and managing the
banks talent according to established guidelines and procedures. To ensure that talent
management and development activities are harmonized and standardized across the bank, head
office and district human resource business partnering (HRBP) teams have been established. The
teams will support the transformation of the CBE‟s talent acquisition, management and
development activities by ensuring that HR initiatives and activities are implemented effectively
and swiftly throughout the bank. It was said that the underlined assumption behind the
establishment of HRBP is to make HR professionals work closely with business leaders/line

Assessment of SHRM Practices on CBE Page 39

managers to achieve shared organizational objectives, in particular designing and implementing
HR systems and processes that support strategic business aim.
Thus in reference with the above interview result and document review we can conclude that
CBE has a well designed written HR strategy to a greater extent.

For the second criterion, As per the interview result, since the bank is fully owned by Ethiopian
government, CBE‟s board of director members are political nominiees from different
government institutions. Not only the HR vice president but also the president of the bank has no
seat on the board. During the last five years, the president were served as the minutes man of the
board but at this time as per the directives from National Bank of Ethiopia any one from the bank
can‟t be able to a member of the board. However, the function of the board in Ethiopian context
were merly reserved for approval and controlling purpose. Strategy formulation and
implementations are solely performed by senior management teams of the bank. From the banks
organizational structure, Chief HRM, Vice president HRM and Vice president HRD are found
on the top level organizational hierarchy and among the senior management teams of the bank.
This allowed CBE HR Chief and Vice presidents to have a bargaining power in the strategy
formulation process and to create two-way linkage between the HR and Business strategy. In
support of this finding, Holbeche (2004) argued that a two-way linkage represents a potential
model in which HR experts determine certain external or internal developments that are put on
the table of the senior management teams. These two way HR issues can become part of the
overall business strategy. The new business strategy in return pushes the HR strategy towards
certain HR interventions that help the bank to achieve its objectives. Therefore based on the
above interview results CBE HR Chief and Vice presidents are a member of Board of directors
to a lower extent and are a member of senior management team to a greater extent.

Regarding the participation of HR director in the formulation of corporate strategy, Since CBE‟s
HR diretors are a member of top management teams, They got greater opportunity to underpin
the HR interest and make decision in the strategy formulation process. According to Ulrich,
1998 most organizations failed in integrating their HR functions due to HR directors doesn‟t hold
a sit at a strategic planning table. Further more Organizations should develop their HR strategy
as an integral part of formulating the high-level corporate strategy rather than developing it in
parallel with or after the corporate strategy. In this sense strategic HRM bridges corporate level
strategy and HRM tightly integrating HR with the business. Thus, as per the interview result, HR

Assessment of SHRM Practices on CBE Page 40

Higher officials in CBE are actively participated in the strategy formulation process of the bank
from the scratch. And also not only participating but also they can make decision to a higher
extent.

Additionaly, most of the interview respondents were agreed on the presence of other predictors
of HR integration, like HR professionals capability, HRM budget, intense competition and
relative HR department size. According to them, more than 50% of HR specialists in the bank
has Masters Degree in HR and trained a lot to perform HR related activities effectively and
efficiently. And also the bank established independent HRBP department for all the nine districts
throughout the country to broaden the size and support line managers to the maximum closest. In
previous studies, it has been showed that capable HR specialists are more likely to integrate HR
by running HRM activities efficiently, train line managers in HR issues, develop cybernetic HR
system and procedure, and perform beyond the routine administrative activities (Wright and
McMahan, 1992). Regarding the presence of intense competition one of the interviewee
explained that „private commercial banks in Ethiopia are competing CBE interms of HR by
alluring our employees with attractive benefit package and they invest up to 40% of their total
income for this purpose.‟

To sum up, based on the above criterion it is likely to say CBE meet the vertical integration of
HR strategy with corporate Business strategy of the bank to a higher extent. Moreover the
vertical integration helped the bank to integrate the HR strategy horizontaly with other
departmental strategies like finance and marketing since they shared common objectives from
the corporate strategy.

The findings of this study are consistent with previous study undertaken by Abraraw, 2015
reveald that service providers in Ethiopia are highly integrated while manufacturing
organizations are low. The reason for this was customers active participation in the service
provision process makes service providers sensitive to customers‟ needs, monitor these needs,
and use flash-points from customers to guide their job behaviors.

4.5.2 Consistency of HRM Practices

Consistency of HRM practices are the most relevant predictor for the existence of strategic
human resource management practices in an organization. This is mainly because individual HR

Assessment of SHRM Practices on CBE Page 41

practice have limited ability to generate competitive advantage in isolation of other synergetic
practices.
In this study the consistency of human resource management practices in CBE were assessed
based on Baron and Kreps, 2005 aspects of internal consistency. The interview guidline
questions were developed in such a way to show the existing practices followed by CBE
regarding single-employee consistency, among-employee consistency and temporal consistency.

According to the interview result, HR activities by nature have a precedence relationship. I.e. the
result of one HR activity can serve as an input for other HR activities. For instance, the result of
the performance appraisal process in CBE serve as a criteria in the selection process for
promotion and in doing so, this system applies the same way for same position employees (no
consistency problem in applying this). However , the bank has faced consistency problems in
integrating performance management system and reward management. This is mainly due to the
compensation package of the bank is not contingent to individual performance. As a result,
highly performing employees were disappointed and forced to leave the bank.

The other areas that the bank has faced problem of consistency were in implementing the HR
procedure among the different HR stations across the country. The recently implemented
organizational structure of the bank allowed to establish HR business partnering department for
each districts all over the country. Each district has an autonomous authority to recruit, select,
train and appraise respective employees independently. In this regard some sort of variations
have been noticed from district to district due to poorly implemented HR procedure. For this
phenomenon they raised as an example, in selection process one district may prepare interview
to select among candidates and the other may not follow same procedure and select only by
written exam.

Single employee consistency

It is about the assessment of various HRM activities are mutualy supportive to each other in the
minds of a given individual. Regarding single employee consistency of HR practices the bank
has experienced diferrent situation from time to time. According to one of the interviwee, the
bank reward policy can not recognized individual performance rather it appreciate team based
accomplishment of the branch or head office organ. Theoretically, a given reward management
system should recognize (must be contigent) to individual performance so as to enhance

Assessment of SHRM Practices on CBE Page 42

productivity and to create feelings of consistency for an individual (Armstrong and Murllins,
2007). Thus, The above HR practice of CBE contradict to the concept of single employee
consistency. This is mainly due to high performance employee from the team may considered as
low and rewarded negatively, as a result it created inconsistency for that a given individual and
vice versa.
And also as per the interview result, some HR practices were not consistent with each other. For
instance, the banks persormance management system were not serve as an input for training. As
an evidence an individual scored poor performance in the appraisal system were not been
prepared for training program so as to boost his/her performance. In the contrary, also an
individual who scored higher in the appraisal system were not been rewarded independently.

The poorly implementation of HR practices in the bank also considered as a predictor for the
absence of single employee consistency. When an individual moved from district to district due
to promotion or other reason, they noticed variation of operation among HR practices. This
implies that, in the bank there are some sort of gap in monitoring whether HR practices are
implemented based on HR procedure consistently across different sub offices.

Among Employee Consistency

When we look at among employee consistency of HR practices, it is about the employees social
comparison and feelings of distributive injustice regarding HR policy and practices. In doing so
the interview result were much more complicated and contradict each other. However, the
researcher has tried to minimize the complication and reached to some consensus.

According to the interviwee, There is no policy wide discrimination practice of any type in the
bank. For instance the benefit package allotted for all grade levels in the bank are only from the
point of job grade levels. Employees who have same grade levels has enjoyed the same benefit
regardless of wheher it is a member of core or support departements, clerical or non clerical
stafs. But regarding affirmative actions, they replied that women who scored the same result as
men would be given a priority to be employed or promoted. And also women would be given a
priority in transfer cases. Thus from the above interview result we can say that there is no policy
wide discrimination in CBE that will create the feelings of distributive injustice on employees.

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Most of the time the issue of distributive injustice in an organization has been raised in the areas
of recruitment and selection especially for promotion. With regard to recruitment and selection
activities all the interview respondents replied that candidate selection activities are undertaken
solely based on the banks HR policy and procedure. Currently, performance management system
of the bank served as an input for selection process by having 50% weight of the total criterion.
On the other hand sometimes managers recommendation also used as an input by having a
smaller weight depending on the situation.

However, in the open ended question of the questionnaire, most respondents raised the
prevalence of nepotism in the bank. According to them, practically the bank has well structured
HR policy and procedure but the problem is lack of proper implementation. Informal way of
doings outweigh the formal one and individual role is bigger than the established system. In the
newly established organizational structure different promotional assignments were taken placed.
However, the process were not been transparent rather high level managers recommendations
were taken in to account. Moreover, all most all the newly organized top level management
teams were filled from external sources especially from one private bank.

Thus, Most likely the results obtained from line mangers has higher probability for distributive
injustice practice in the bank. This result were evidenced by Wasbeek‟s (2004) assertion that
nepotism was widely practiced in Ethiopia due to they mistrust people other than their group.
And also he said that in Ethiopian local companies the promotion process was informal and
nepotism was very common.

So from the above interview result we can say that in CBE among employee consistency were
practiced to a lower extent.

Temporal Consistency

According to the interview result, CBE has changed its HR policies and procedures three times
for the last five years. The reason for this frequent changes on HR philosophies were the
introduction of core banking, balanced score card and best HR management practices. Moreover,
the bank has started bilateral consultation agreement with frunckfurt school of finance and
management to streamline operations and for the implementation of various best practice

Assessment of SHRM Practices on CBE Page 44

approachs. As a result, different changes were taken placed in the bank frequently during the past
five years including HR policy.

The interview result for temporal consistency was found in contradiction with Baron and Kreps,
2005 contention, an organization should not change their HR philosophies frequently so as to
maintain temporal consistency of HR practices. An individual treated today must not vary from
yesterday. Therefore the above interview result implied that there is low level of consistency in
the HRM policy of the bank over time.

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 CHAPTER FIVE

SUMMARY CONCLUSION AND RECOMMENDATIONS

In the first section of this chapter the summary of major findigs from the previous chapter are
presented. Then the conclusions drawn from the major findings also presented. Finaly based on
the major findings and conclutions, recommendations are forwarded to address the identified
problems.

5.1 Summary of Major Findings

The primary objectives of this study was to assess the strategic human resource management
practices of CBE. Accordingly, as per the descriptive statistics and interview result the following
major findings were identified.

Regarding demographic characterstics, Majority of the participants in this study were dominated
by male (87%); Most of them are adult (50%) with age range between 35 and 50; also 52.3% are
BA Degree holders and 31.13% have a work experience of 11-15 years.

From the descriptive statistics, Devolvement of line managers has a lower mean score value of
1.73 (Std. Dev., 0.90 ). And also the degree of line managers received training to undertake HR
related responsibilities were found below average with a mean score values of 2.35 (Std. Dev.,
1.03). The number of HR people proportion with other employees in the bank were found
15.86%. Since relative HR specialists number in the bank are very small, the bank has better
ground for devolvement of Line managers.

The level of employee commitment in the bank were found an average with a mean score of 3.06
(Std. Dev., 0.85) according to Kothari, (2004) clasification. In detail, the mean score value of
Affective commitment were found 3.30 (Std. Dev., 0.77). And also continuance commitment
mean scores were 2.66 (Std. Dev., 0.88). finally the normative commitment of sample
respondent were found 3.22 (Std. Dev., 8.88).

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As the name indicates strategic human resource management theory mainly focused on the
alignment of human resource management practices with the corporate business strategy. The
findings from Strategic human resource management dimensions were obtained from semi-
stractured interview and self administed interview. Thus from the interview result, integration of
HR strategy with business strategy of the bank were found aligned to a higher extent. This result
was evidenced by the presence of written HR strategy, Membership of HR director to the senior
management team, the participation of HR VPs in the formulation of Corporate business strategy
of the bank, Relative higher HRM budget, high level of skilled and professional HR staffs, the
support from top management and the presence of intense competition, especially on HR.

Regarding consistency of HR practices, the researcher analysed the data obtained from Interview
and open ended questions qualitatively with respect to Single employee, Among employee and
Temporal consistency. Accordingly, CBE has faced a problem of consistency on HR procedure
implementations. The various HR practices in the bank has been implemented with a significant
variation across the different stations in the country. As a result employees are felt inconsistency
of practices from district to district and head office organs, since they are not follow same basic
principles. Moreover, lack of internal fit between HR practices also noticed in the bank. For
instance, recruitment and reward, Performance management and reward, training and
performance management, health & safety and training were not congruent with each other.

Due to the prevalence of wide spread nepotism practices in the bank, among employee
consistency of HR practices were adversely affected. This can be evidenced by the newly
implemented organizational structure were filled by subjective judgment of higher officials
rather the laid rules and procedures.

As a result of frequent changes in the banks HR policies and procedures for the past five years,
the bank has failed to fulfill the criteria of temporal consistency.

In general, The finding of this paper were much more different from previously conducted
studies on the area and also assessed and measured the practice of SHRM in Ethiopian context
especially in CBE so as to put benchmark for further studies.

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5.2 Conclusions
Based on the data presented and analysed in chapter four the following conclusions were reached
regarding the assessment of SHRM practices in Commercial Bank of Ethiopia by addressing four
specific objectives, HR integration, Consistency, Devolvement and level of Commitment.

As it can be clearly seen from the organizational stracture of the bank, Chief HR were being a
member of senior management teams. Indoing so CBE can be abled to participat their HR VPs
and directors in the formulation of Corporate business strategy. This also helped the bank to
incorporate the interest of HR in the formulation process and the creation of two-way linkage
between HR and business strategy. Further the stif competition in terms of HR from local
privately owned banks were forced CBE to incorporate HR practices as a strategic initiatives to
excel the overall performance and achieve organizational objectives. Moreover, the support from
top management to HR, relative Higher HR budget, and Skilled & competent HR professionals
are also contributed a lot for HR integration. Thus based of the above Criterion of HR integration
we can conclude that CBE aligned its HR strategy to a higher extent.

Studies conducted by Murline, 2007 reaveled that the internal fit between HR practices have a
greater impact on employees expectation and ultimately affected productivity and organizational
effectiveness. In CBE under the three aspect of consistency dimensions the results has found
unsatisfactory. Therefore we can conclude that HR practices in CBE are consistent with each
other to a lower extent and it will have a greater effect on the banks overall opertational
effectiveness unless solved by other strategic options.

Currently, Devolvement of HRM to line managers has gained great recognition in multinational
companies. The responsibility to ensure the strategic vision of the organization is mainly passed
to line managers. And also, the organizations‟ HR are the most important resources to achieve
the organizations‟ visions. Hence, to achieve the strategic vision of the organization, line
managers need to have the authority and responsibility on HRM decision-making, which requires
both a devolvement of power on behalf of HR function and an increase in the skills and
understanding of the line managers with respect to HR activities. However, the results obtained
from descriptive statistics contradict to this reality and found that below average. Hence we can
conclude that Devolvement of HRM to line mangers in CBE were practiced to a lower extent.

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Referring to the level of employee commitment the data revealed that under all the
Organizational Commitment dimentions respondents scored average. This result has a
multiplication effect on the banks over all employee commitment. Since the respondents were
line managers, motivated and commited line mangers will inspire the employees under his
supervision to be motivated and commited towards the achievement of common goals, but if
he\she is not commited the reverse is true. Therefore, we can conclude that CBE line managers
are commited to a moderate level and will leave the bank if they got another offer.

Finaly, based on the above findings we can conclude that CBE implemented SHRM practices
very poorly. Thus in order to enhance productivity and organizational performance and
ultimately be competitive in the stiff local as we as international market, CBE should improve
the existing HR practices and implement the following suggestions provided by the researcher in
the next section.

5.3 Recommendations
Based on the major findings and conclusions reached, the following recommendations are
forwarded to the bank so as to improve the overall strategic human resource management
practices of CBE.

From the findigs it was found that CBEs‟ vertical HR integration was good. However, the study
identified some areas were still available for further improvement. For instance the internal fit
(alignment) between HR practices should be revised in such a manner that the output of one HR
practice must served as an input for the other and vice versa. The result of performance appraisal
must be an input for; need based training, contingent reward, selection and labor relation. The
reward practices of the bank should also take in to consideration various factors attributed for
fairness like market price and inflation rate.

The bank should participate its HR professionals to local as well as international HR related
conferences and seminars to create the exposure for hunting best practices across the world and
to maintain sufficient HR knowledge pool.

In order to avoid, inconsistency of HRM practices across the bank and establish uniform way of
operations, CBE should create continuous monitoring system whether HR practices are
implemented and practiced in alignment with HR policies & procedures or not. Further frequent

Assessment of SHRM Practices on CBE Page 49

assessment also must be undertaken to ensure the different stations are following same basic
principles.

Recruitment and selection activities of the bank should be free from bias and merly objective to
rules and procedures. So in order to maintain consistency among employees, Personal interests
and political affiliations must be avoided. Further the process should be transparent and public
across all over employees of the bank to minimize distributive injustice. Finally strong and
continuous post selction evaluation system must be also established and implemented.

Since line managers are in frequent contact with employees, participation of line managers in HR
practices should be ideal. Thus the bank should involve line managers to take HR related
responsibilities to a greater extent. In doing so extensive training must be provided to line
managers to ensure capability of performing HR practices with no doubt.

In this research, it is assumed that the average level of employee commitment in the bank were
attributed to absence of strategic human resource management practices. Thus the bank will
enhance the level of employee commitment when they implement the above SHRM initiatives
consistently. Additionaly, the bank should also conduct need based assessment to identify gaps
between what the bank provided and what the employee expected to maintain high level of
organizational commitment.

5.4 Suggestion for Further Research

This study is conducted to assess strategic human resource management practice of CBE by
taking four SHRM dimentions. Thus further research can be conducted by incorporating other
factors that affect the implementation of SHRM in an organizations. Further research can also be
conducted in other sectors other than the bank to examine the implications and compare the
findings. And also further research can be conducted quantitatively to show the impact of SHRM
in relation with organizational performance. Therefore the undertaking of further research in the
area is crucial to develope the concept of SHRM since it is new for our country and the world as
well.

Assessment of SHRM Practices on CBE Page 50

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Bailey, T. (1993) Discretionary Effort and the Organization of Work: Employee Participation
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Appendix 1- Interview Guideline Questions
ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
SCHOOL OF COMMERCE
MASTER’S OF HUMAN RESOURCE MANAGEMENT

INTERVIEW GUIDLINE QUESTIONS FOR HR INTEGRATION AND CONSISTENCY

1. Do you think that HR strategies are derived from corporate business strategy and their
implementations are in line with overall corporate strategy? If yes, how/to what extent?
2. Do the HR head is involved in the strategic business planning process? If yes to what
extent?
3. Do you think that CBE is working under intense competition business environment? If
yes, how it is expressed in terms of HR?
4. Does the bank have a highly professional and sufficient HR staffs?
5. Do you think is there a fit between HRM practices and other departmental business
strategies? How do you express?
6. Do HR directors are involved in key organizational decisions? To what extent? Do he/she
is a board member of the bank?
7. How do you evaluate the support from the top management to HR?
8. Have you ever changed your HR policies for the last five years? If yes, how do you rate
the frequency?
9. Is there policy wide discrimination in the bank even if it is positive? Like affirmative
actions…
10. Do you believe that all human resource activities in the company (selection, training,
compensation, appraisal, and employee relations) are fully integrated with one another
(support each other)? And how do you evaluate their consistency with respect to single
employee and among employee?

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Appendix 2- Questionnaire
ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
SCHOOL OF COMMERCE
MA IN HUMAN RESOURCE MANAGEMENT

QUESTIONNAIRE TO BE FILLED BY LINE-MANAGERS OF CBE HEAD QUARTER,

DISTRICT AND BRANCH LEVEL

Researcher – TekalignAsresahegn
Contact address - +251912089887
Email – tekalignasresahegn@gmail.com
Research Topic: Assessment of Strategic Human Resource Management Practices: The case of
Commercial Bank of Ethiopia.

Dear Respondents,
I am a graduate student at Addis Ababa University School of commerce, currently conducting a
research for the completion of my Master‟s Degree in Human Resource Management. The
purpose of this questionnaire is to assess the overall Strategic Human Resource Management
(SHRM) practices of commercial bank of Ethiopia. I want to assure you that the information you
provide will be solely used for academic purpose. No other person will have access to the data to
be collected. The completion of the research substantially depends on your cooperation and of
the information you give in this questionnaire. Therefore, I kindly request you to respond to each
question carefully and oblige. Finally, I would like to express my earnest appreciation for your
generous time, honest and prompt responses.

General Information

 There is no need of writing your name.

 In all cases where alternative answers are available mark “X” on the appropriate box.
 This questionnaire has three parts; for part III please try to describe as per the questions
raised on the space provided for this purpose.

Assessment of SHRM Practices on CBE Page 55

Part I – Respondents Background Information (Please mark ( X ) on the box)

1. Gender Male Female

2. Age 18 -25 26 – 35 36 – 50 Above 50

3. Number of years you have worked in CBE (in years)
1–6 7 – 10 11 – 15 16 – 20 21-30 Above 30 years
4. Education qualification
College Diploma BA/BSC Degree Master‟s Degree PHD
If any other, please specify.
Part II – Devolvement of HRM to Line Manager Dimensions:
You are kindly requested to rate the extent to which you are involved in the Human Resource
Management (HRM) activities below based on the 5-scale Likert scale 1- Very Low to 5- Very
High.
KEY
[1] – Very Low [VL]
[2] – Low [L]
[3] – Moderate [M]
[4] – High [H]
[5] –Very High [SA]

Item SHRM Dimensions Scale

No. Devolvement of HR to line manager VL L M H VH
1 2 3 4 5
1 Your level of participation in the banks recruitment
process.
2 Rate your levels of involvement on candidate
selection.
3 Your direct involvement on the facilitation of
training.
4 Your involvement on rewarding highly performed
employees.

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5 The responsibility on the appraisal of employee‟s
performance under your supervision.
6 The degree to which you have received training to
undertake HR related responsibilities
7 Your direct involvement on the facilitation of
employees health and safety
8 Your involvement in the industry relation
9 Work force Expansion/reduction decision

Part III – Level of Commitment Dimensions:

You are kindly requested to answers your perceptions based on the 5-scale Likert scale 1-strongly
disagree to 5-strongly agree.

KEY
[1] – Strongly Disagreed [SD]
[2] - Disagreed [D]
[3] - Neither Agreed nor Disagreed [NAD]
[4] – Agreed [A]
[5] - Strongly Agreed [SA]

Item SHRM Dimensions Scale

No. Level of Commitment SD D NAD A SA
1 2 3 4 5
1 I am very happy being a member of this organization.
2 I really feel as if this organization‟s problems are my
own.
3 I think that I could easily become as attached to
another organization as I am to this one. “R”
4 I do not feel like „part of the family‟ at my
organization. “R”
5 I do not feel „emotionally attached‟ to this
organization. “R”

Assessment of SHRM Practices on CBE Page 57

6 This organization has a great deal of personal meaning
for me.
7 I do not feel a „strong‟ sense of belonging to my
organization. “R”
8 I enjoy discussing about my organization with people
outside it.
9 I worry about the loss of investments I have made in
this organization.
10 If I wasn‟t a member of this organization, I would be
sad because my life would be disrupted.
11 I am loyal to this organization because I have invested
a lot in it, emotionally, socially, and economically.
12 I often feel anxious about what I have to lose with this
organization.
13 Sometimes I worry about what might happen if something
was to happen to this organization and I was no longer a
member.
14 I am dedicated to this organization because I fear what
I have to lose in it.
15 I feel that I owe this organization quite a bit because
of what it has done for me.
16 My organization deserves my loyalty because of its
treatment towards me.
17 I feel I would be letting my co-workers down if I
wasn‟t a member of this organization.
18 I am loyal to this organization because my values are
largely its values.
19 This organization has a mission that I believe in and
am committed to.
20 I feel it is „morally correct‟ to dedicate myself to this
organization.

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Part III – Open-ended Questions
1. Regarding part II questions, are there any other areas of HRM Activities that you are directly
involved or have primary responsibility?
__________________________________________________________________
_________________________________________________________________
__________________________________________________________________
2. If your answer is negative for part II questions, what are the factors that hinder your
involvement from the above HRM Practices? Like HR Policy…
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. Any other comment regarding the over all HR practices of the bank.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

Thank you so much!!!!

Adapted from; Organizational commitment: Allen and Meyer, Journal of Occupational

Psychology, 1990

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Appendix 3- Letter from the University

Assessment of SHRM Practices on CBE Page 60

Appendix 4- Letter from CBE Head office

Assessment of SHRM Practices on CBE Page 61