HUMAN RESOURCE MANAGEMNET PRACTICE AND

PROBLEMS

THE RESEARCH PAPER SUBMITTED AS PATIAL FULFILLMENT

FOR REQUIREMENT OF BA DEGREE IN MANAGEMENT.

JIMMA UNIVERSITY

BUSINESS AND ECONOMICS COLLEGE

DEPARTMENT OF MANAGEMENT

MAY,2007/2015

JIMMA, ETHIOPIA

I
 ACKNOWLEDGEMENT

First of all I would like to thanks my God and his mother ST. Marry who
made me possible to compete this paper successfully. Secondly my advisory
Wendmu A. who contributing necessary Information as well as forgiving
advice to do this research paper. Next I would like to thanks for business
and economics college especially department of management for designing
such program through which student develop their knowledge. Lastly but
not least I would like to thank for my entire friend who help me to do this
research

I
 ABSTRACT

This study attempts to examine the current HRM practice and problems of
commercial bank of Ethiopia.The study has attempted to address research
question/ problems mentioned in statement of the problem and objectives of
the study. Both primary and secondary data would be used to conduct this
research. Good deals of textual concepts on the relevant topics were
consulted, analyzed and interpreted using some statistical technique such as
tabulation and percentage. Based on the analyzed and interpretation
conclusion were made. Finally recommendations, which could solve the
problem identified, were stated accordingly.

II
Contents Table of Content
ACKNOWLEDGEMENT.................................................................................I
ABSTRACT ..................................................................................................II
ACRONOMY .................................................................................................................................. V
CHAPTER ONE........................................................................................... 1
INTRODUCTION ......................................................................................... 1
1.1 BACK GROUND OF THE STUDY .................................................................................. 2
1.2 BACK GROUND OF THE ORGANIZATION ............................................................. 3
1.3 STATEMENT OF THE PROBLEM.................................................................................. 5
1.4 OBJECTIVE OF THE STUDY ......................................................................................... 5
1.4.1 Specific Objective ...................................................................................................... 5
1.5 SIGNIFICANCE OF THE STUDY ................................................................................... 6
1.6 DELIMITATION OF THE STUDY ................................................................................... 7
1.7 LIMITATION OF THE STUDY ......................................................................................... 7
CHAPTER TWO .......................................................................................... 8
2. LITERATURE REVIEW........................................................................... 8
2.1 INTRODUCATION ............................................................................................................. 8
2.2 HUMAN RESOURCE MANAGEMENT ACTIVITY ....................................................... 8
2.2.1 Recruitment ................................................................................................................ 9
2.2.2 Methods of Recruiting .............................................................................................. 9
2.2.3 Factors Governing Recruitment........................................................................... 11
2.2.4 Selection .................................................................................................................... 12
2.2.5 Orientation ................................................................................................................ 13
2.2.6. Performance Appraisal.......................................................................................... 14
2.3 TRAINING AND DEVELOPMENT ............................................................................ 16
2.3.1 Employee Compensation ....................................................................................... 18
2.3.3. Human Resource Planning (HRP) ........................... Error! Bookmark not defined.
2.3.4 JOB ANALYSIS AND DESIGN………………………………………20
Chapter three.............................................................................................................................. 25
3. RESEARCH METHODOLOGY .............................................................. 25
3.1 REAERCH DISING……………………………………………………………………………………………………………………29
3.2 METHOD OF DATA COLLECTION ............................................................................. 25
3.3 SAMPLE SIZE AND SAMPLING TECHNIQUE .......................................................... 25
3.3METHOD OF DATA PRESENTATION AND ANALYSIS ............................................ 25
CHAPTER FOUR .................................ERROR! BOOKMARK NOT DEFINED.

III
DATA PRESENTATGION AND ANALYSIS ........... ERROR! BOOKMARK NOT
DEFINED.
4.1 GENERAL CHARACTERISTICS OF THE POPULATION ........................................ 26
4.2 ANALYSIS AND INTERPRETATION ............................................................................ 28
4.3 EMPLOYEES OPINION ON LABOR RELATION OF THE BANK ..... Error! Bookmark
not defined.
4.4 INTERVIEW ANALYSIS .................................................................................................. 31
CHAPTER FIVE ........................................................................................ 34
CONCLUSION AND RECOMMENDATION ................................................. 34
5.1 CONCLUSION .................................................................................................................. 34
5.2 RECOMMENDATION ..................................................................................................... 34
REFERENCE ........................................................................................................................... 36
APPENDIXE ......................................................................................................................... 37

IV
ACRONOMY
HRM=Human Resource Management

CBE= Commercial Bank of Ethiopia

HR= Human Resource

P/HRM= Personnel / Human Resource Management

V
 CHAPTER ONE

INTRODUCTION
Human resource management is the functions performed in organizations
that facilitate the most effective use of employees to achieve organizational
and individual goals. There things should be sternest about HRM at the
outset.

 It is action oriented: effective HRM focuses on activities rather than on

record- keeping, written procedure, as rules eaten HRMuses rules,
records, and policies, but it strings action. HRM players the solution
of employment problems to help to achieve organizational objectives
and facilitate employee development and satisfaction.
 It is individually oriented: whenever possible HRM to each employee
as an individual and offer services and programs to meet the
individual needs.
 It is future Oriented: effective HRM is concerned with helping an
organization to achieve its objectives in the future by providing for
competent, well- motivated employers (William F.Glueck p: 7).

Organizations are the most inventive social arrangements of our age of

civilization. People are the common elements in every organization. They
create the strategies and innovation. For which organization are created.
This means, it is people who create the strategies that produce a nations
valued products and services (William B. whether and David, 1993, p: 6)

As it can be understand from the above definitions, most of the author has
rated that human resource management is the base of all activities in
relation to management of people.

1
1.1 BACK GROUND OF THE STUDY
The history of HRM can be traced to England, when masons, carpenters,
leather workers, and other crafts people organized themselves in to guilds.
They used their unity to improve their work condition. The field further
developed with the arrival of the industrial revolution in the latter part of the
18th century, which laid the basis of a new and complex industrial society.
(Ivancevich)

The renowned father of scientific management Frederick W. Taylor was

contributing very important of study to HRM. He studied worker efficiency
and attempted to discover the “one best way” and the one fastest way to do a
job. The other is the drastic changes in technology, the growth of
organization, the rise of unions, and government concern and intervention
concerning working people resulted in the development of personal
department in 1920’s (Ivancevich)

The HRM function today is concerned with much more than simple filling,
housekeeping, and record keeping. When HRM strategies are integrated
within the organization, HRM plays major role in clarifying the firms human
resource problem and solution to them. It is oriented toward action, the
individual, worldwide interdependency and the future.

Today organization can only improve productivity by integrating human

resource with other activities and imputes. In fact, some problem are create
like socio- economic, political, institutional and other related factors have
adverse effect on the proper function of human resource in the organization.
Thus, acquiring advance technology without qualified HR is like driving a
new brand car without level and the necessary driving license.

Therefore based on the above cases, the researcher tries to understate the
study on HRM practice and problems of commercial bank of Ethiopia on
Jimma main branch.

2
 1.2 BACK GROUND OF THE ORGANIZATION

After the victory of fascist Italy, the state bank of Ethiopia was established
by a proclamation issued in August 1942. Although the intension was to
establish it as full commercial bank, year later, in 1943, it was given
additional central banking duties and became fully operational hence, the
year is marked as the birthdates of today’s commercial bank of Ethiopia
(CBE), thus, the state bank of Ethiopia provide central banking and
commercial banking functions until 1963 with the issuance of the monetary
proclamation in 1963, the national bank of Ethiopia and the CBE were
established to handle commercial banking and national banking functions
respectively.

. In 1963 CBE was legally established as a share company to take over the
commercial bankingactivities of the state bank of Ethiopia and to carry on
all types of banking business and operations. Following the event of a
socialist regime in the country in 1974, the commercial bank of Ethiopia
was merged with Addis Ababa bank, which was a private bank, and
nationalized in line with the socialist form this had on added strength to
CBE, through the general policy environment had not been supportive of
commercial banking operations. During the command system that lasted for
about 17 years, CBE had been the sole commercial bank in Ethiopia and
more instrument of the central planning and socialist ownership policy of
the government.

After the country shifty from a command economy to market-oriented

economy due to a policy redirection, a new banking proclamation enacted in
1994 created several new opportunities for a private sector to be involved in
the banking sector.

CBE has several branches throughout the country among them Jimma main
branch which is located in Jimma can be mentioned. Thisbranch comprising
to employees to give a remarkable service to the society to overcome the
problem of financial institution around Jimma zone.

Therefore based on the above cases, the researcher tries to undertake the

3
Study on HRM practice and problem of commercial bank of Ethiopia Jimma
main branch.

4
1.3STATEMENT OF THE PROBLEM
Human resources activities play a major role in ensuring that any
organization will survive and prosper. It is a primary source than any other
resources like financial, material, etc. Nothing can be done without
participation of human resources. The quality of its services heavily depends
on the quality of human resources.

Managers should give more intension to HRM because it significantly affects

the organization. The success or failure of any organization is highly
dependent up on how it efficiently and effectively utilizes the existing
resources.

A number of organizations face the problem of having well qualified staff and
providing regular training to their staff. So, this paper tries to investigate
problems of HRM in commercial bank of Ethiopia. Finally, the study tries to
explore possible solutions to overcome problems identified and to promote
the existing human resource practice.

In, general, this study tries to answer the following basic questions which
can considered as a research guide for the study.

 How is recruiting and selection process are done

 How promotion and transfer are carried out?
 Is there any appropriate orientation for the newly
employed staff members?
 What methods are employed to evaluate performance of
individual members?
 What the problem related to human resource activity?

1.4 OBJECTIVE OF THE STUDY

The main objective of the study is to make general assessment on HRM

practice and problems of commercial bank of Ethiopia Jimma main branch.

1.4.1 Specific Objective

- To recommend possible solution for the problem

-to assess how the requirement and selection process are done?

5
- To identify how promotion and transfer are carried out?

- To identify problem concerning HRM practice.

-To assess what method of employee to evaluate performance of individual

member.

1.5 SIGNIFICANCE OF THE STUDY

The study would give the following benefit

 The problem that was identified in the study would help the
organization to see the problems that affect employee’s morale. As a
result, the organization should give due consideration to the employee
in order to improving the rule of efficiency.
 When we see the importance of the study to the community or society,
If the problem of the organization (CBE) is solved then indirectly the
problem of the society are solved because the organization is the agent
of the society
 For the researcher it is help full in that it out lines your thinking
about what you would be investigating and for the sake of getting
bachelor degree.
 The researcher was also hope that the finding of this study would
support the other researcher who is interested to conduct further
study in the area.

6
1.6DELIMITATION OF THE STUDY

The study focus on HRM practice and problems and it confined only to CBE
Jimma main branch. On the other hand CBE has many branch at the
national level conducting the study at the overall branches requires large
amount of money and time and beyond the researcher capacity. Therefore,
the researcher focused on the investigation on one of the branches that
located in Jimma.

1.7 LIMITATION OF THE STUDY

Identifying and investigating all the HRM practice and problems requires
extensive research. Therefore it is impossible to perform deep research work
on the issue.

Lack sufficient information, unwillingness of the bank manager.

7
 CHAPTER TWO

2. LITERATURE REVIEW

2.1 INTRODUCATION
People; human resource making organization more aware of human
resource; being in the people business these words and thoughts are
common in our modern society.

Human resource management is the management of an organizational work

force of human resource. It is responsible for the attraction, selection,
training assessment and rewarding of employees while also overseeing
organizational leadership and culture and ensuring compliance with
employment and labor law (Wikipedia, the Free encyclopedia)

Human resource management is now expected to add value to the strategic

utilization of employees and that employee programs impact the business in
measurable ways. (HR.about. Com)

HRM is also a strategic and comprehensive approach to managing people

and the work place culture and environment (www.siliconindia.com)

2.2 HUMAN RESOURCE MANAGEMENT ACTIVITY

Human resource management encompasses those activity designed to
provide for and coordinate the human resource of an organization. The
human resource of an organization represents one of its largest investments.
( Lioyd L.byars and Leslie W. Rue 1997).

Today it would be difficult to imagine any organization activity and

sustaining effectiveness without efficiency human resource management
program and activity (Ivancevich 1998)

The following are some of the activity of the HRM that included in this
proposal

8
  Recruitment
 Selection
 Orientation
 Performance appraisal
 Training
 Compensation

2.2.1 Recruitment
Recruitment refers to organizational activity that influences the number of
and type of applicants who apply for a job and whether applicants accept
jobs that are offered. Thus, recruitment is directly related to both human
resource planning and selection (Ivancevich, 1998).

Recruitment is the phase which immediately precedes selection. It’s purpose

is to pave the way for the select on procedures by producing, ideally, the
smallest number of candidates who appear to be capable either of
performing the required task of the job from the outset or of developing the
ability to do so within a period of time acceptable to the employing
organization. The main point that needs to be made about the recruitment
task is that the employing organization should not waste time and money
examining the credential of people whose qualification do not match the
requirement of the job (Shaun Tyson & Alfred York, 1997, 3rd edition).

2.2.2 Methods of Recruiting

Once an organization has decided it needs additional or replacement
employees, it is faced with the decision of how to generate the necessary
applications. The organization can look to sources internal to the company
and if necessary, to sources external to the company.

A. Internal Recruiting

9
Job posting organization can make effective use of skills inventories for
identifying internal applicant for job vacancies. In the past, job posting was
little more than the use of bulletin boards and company publication for
advertising job openings. Today, however, job posting as became one of the
more innovative recruiting techniques being used by organization. Many
companies now see job posting as an integrated component of an effective
career management system. Job posting is a lasting of job opening that
includes job specification, appearing on a bulletin board or in company
publications.

Before going outside to recruit, many organizations ask present employees

to encourage friends or relatives to apply some organizations even offer
“finder’s Fees” in the form of monetary incentive for a successful referral.
When used wisely, referral of this kind can be a powerful recruiting
technique. Organization must be careful, however, not to accidentally violate
equal employment laws while they are using employee referrals (Ivancevich, ,
7th ed).

B.External recruiting

When an organization has exhausted its internal supply of applications, it

must turn to external sources to supplement its work force.

A number of methods are available for external recruiting. Various media

are used, the most common being help- wanted advertisement in daily
newspaper. Organization also advertisesfor people in trade and professional
publications, other media used are billboards, subway and bus cards, radio,
telephone and television (Ivancevich, 7th ed).

The other external recruiting method is college recruiting. College recruiting

process is similar in some ways to other recruiting. However, in college
recruiting, the organization sends an employee, usually called recruiter, to a
campus to interview candidates and describes the organization to them.
Conceding with the visit, brochures and other literature about the
organization are often distributed (Ivancvich,)

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2.2.3Factors Governing Recruitment
Given its key role and external visibility, recruitment is naturally subjected
to influence of several factors. This includes external or well as internal
factors.

I. External Factors

a) Supply and demand of specific skill in the labor market

If the demand for a particular skill is high in relative to supply, an extra

ordinary recruiting effort may be needed. For instance, the demand for
programmer and financial analysis is likely to be high than their supply or
opposed to the demand for non-technical employees.

b) Unemployment rate

When unemployment rate in given area is high, the company recruitment

process may be simpler. On the other hand, as unemployment rate drops,
recruiting effort must be increased and new sources explored.

c) Political and legal consideration

Reservation of jobs for minorities, physically handicapped, children on

socially and politically oppressed and other back word class (OBCS) is a
political decision.

d) Sons of soil

Political leaders clamor theta preference must be given to people of their

respective states in matters of employment.

e) Company’s image /organizational over all reputation/

It is the perception of the job Seeker about the company that matter in
attracting qualified prospective employees.

f) Location of the organization

11
 II. Internal factors

a) Recruiting policy of the organization

Most organizations have a policy of recruiting internally (from own

employees) or externally. Another related policy is having temporary and
part time employees. An organization hiring temporary and part time
employees is in a labor advantageous position in attracting sufficient
applicants.

b) Quality of HRP

-effective HRP greatly facilitate the recruiting effort.

c) Cost of recruiting

Recruiters must operate within budgets. Careful HRP & forethought by rec)
Growth and expansion recruiters can minimize recruitment cost (class
Handout)

2.2.4 Selection
Selection is the process by which an organization chooses from a list of
applicants the person or persons who best meet the selection criteria for the
position available, considering current environmental condition. Although
this definition emphasize the effectiveness of selection, decision about whom
to hire must also be made efficiently and within the boundaries set for the
equal employment opportunities legislation. Thus, there are actual multiple
goals associated with an organization selection or process
(Ivancevich,2ndedition, 1998)

In another way selection is the process of choosing the individual who can
successfully perform the job from the pool of qualified candidates, job
analyses, HRP and recruitment are necessary prerequisites to the selection
process, (Lloyd L.Byars and Lesie W. Rue, Fifth edition 1997)

12
Selection Criteria

If a selection program is to be successful, the employee characteristics

believed necessary for effective performance on the job should be stated
explicitly in the job specification. The criteria usually can be summarized in
several categories, education, experience, physical characteristics, basically,
the selection criteria should list the characteristics of prevent employees
who have perverted well in the position to be filled (glueck).

Reliability and validity of selection criteria

The main purpose of selection is to make delusions about individuals. One

attempt to predicts, which candidate will be successful is to give applicants
tests or stimulations; if these selection tools are to be useful they must be
dependable or reliable.

In addition to having reliable selection decisions information it is important,

legally and organizationally, have to valued information. Validity refers to
the extent to which score or measure is accurate predictor of success
(stredick, 2000).

2.2.5 Orientation
Orientation is the HRM activity that introduces new employees to the
organization and to the employees’ new task, managers, and work groups.
Any orientation is designed to make the person more comfortable,
knowledgeable and ready to work within the firm culture, structure and
employee mix. Thus, examining the back group of the employees is
important in designing the proper type of orientation program. (Ivancevich,
2nd edition 1998)

According to L. byars and Leslie W. Rue orientation is the introduction of

new employees to the organization, their work units, and their job
employees receive orientation from their co- workers is usually unplanned
and un officially, and it often provides the new employees with misleading

13
and inaccurate information. This is one of the reason the official orientation
provided by the organization is so important.

An effective orientation program has immediate and lasting impute on the

new employee and can make the difference b/n his or her success of failure.
(lioyd L.byars and Leslie W.Rue, 1997, fifth edition)

The Purpose of Orientation

Effectively done, orientation serves a number of purposes. In general, the

orientation process is similar to what sociologist call socialization,
socialization occurs when a new employee learn the norms, values, work
procedure, and patterns of behavior.

To Reduce Turnover

Over half of new hires may leave their jobs within the first six months in
some organizations if the orientation is not proper.Some other benefit of
better orientation include the following

- Stronger loyalty to the organization

- Creator commitment to the organization value and goals
- Lower absenteeism
- Higher job satisfaction
- enhance interpersonal skills
- To create initial allocable improving (Ivancevich and glueck 2000).

Once an organization successfully recruiting, selects, and orientation

employees, the next step is placement. The allocation of people to job is
placement is the assignment of an employee to a new different job. It
includes the initial assignment of new employee and the promotion,
transfer, or demotion of present employees (William and davis, 1989).

2.2.6. Performance Appraisal

Performance appraisal isthe HRM activity that is used to determine the
extent to which an employee is performing the job effectively. In many
organizations two appraisal systems exist side by side. The formal and
informal supervisors often think about how well employees are doing, this is
14
the informal system. It is influenced by political and interpersonal processes
so that employee who are liked better than others have an eye by contrast,
a formal performance appraisal is a system set up by the organization to
regularly and systematically evaluate employees performance. (Ivancevich)

According to Lloyd L. Byers and Leslie W. Rue. Performance appraisal is the

process of determining and communicating to an employee how he or she is
performing on the job and ideally establish a plan of improvement. When
properly conducted, performance. Appraisal not only determine employees
know how well they are performing but also influence their future level of
effort and task direction one of the most common uses of performance.
Appraisal is for making administrative decision relating to promotion,
firings, Layoffs and merit pay, increase.

Performance management systems are attempts to monitor, measure report,

improve and reward employee performance. Performance appraisal is the
procedure of evaluating how well employees do their jobs compared with a
set of standards and communicating that information to those employee
evaluation, performance review, performance evaluation and result
appraisal. In general terms, performance appraiser how two roles in
organization, and these roles often reseed as potentially conflicting.

1. One role sis measure performance for the purpose of rewarding or

otherwise making administrative derision about employees.
2. Another role is development if individual potential. In this have the
manger is featured as a counselor than a judge, and the atmosphere
is often different. (Balkin and cardy, 1995,).

Almost all organization practice performance appraisal in one form or the

other to achieve one or more objectives. Their objectives may vary from
organization to organization and also in the same organization form time to
time. Patz (1975) he conclude the following two objectives of appraisal.

1st performance appraisal was considered as development technique in the

hands of manager, aimed at calling attention to a sub ordinates behavior
flows in order to improve his administrative ability.

15
2nd Performance appraisal was viewed as a necessary which be for assigning
management potential.

Pats further void that the implicit purpose was to force along line or
unwilling bosses to face up to difficult task of relating employee behavior or
actual results”

2.3 TRAINING AND DEVELOPMENT

Training is, in short, an attempt to improve current or future performance.
The following specific points are important to know about training.

 Training is the systematic process of altering the behavior of employee

in direction that will achieve organization goals.
 Training is related to present job skills and abilities
 A formal training program is an effort by the employer to provide
opportunities for the employee to acquire job –related skills, attitudes
and knowledge (Ivancevich, 2nd edition 1998)

Helping employees to become effective in their job is one of the fundamental

important tasks in personal management that any work organization has to
undertake. Employers depend on the quality of their employee’s
performance to achieve organizational aims and objectives; employees have
motivational needs for development, recognition, status, achievement etc
that can and should be met through job satisfaction.Training aims to
achieve short-term specific organizational objectives (Shaun Tyson and
Alfred York, 3rd edition, 1997)

Training is always a mean to an end and not ends in itself. Training is

formal and informal instruction designed to improve the individual,
performance at work, so that he or she can achieve his or her performance
standards. Training needs any derive from appraisal reports or be assessed
on all new entrants to the posting question (Shaun Tyson and Alfred York .
3rd edition, 1997)According to (Saiyadain, 1995,) the objective of training
differ according to the employees belonging to different levels of
organization. The basic objective of training, however is designed to improve
knowledge, skills and altitude, and thus equip the individual to be more

16
effective in his recent job or prepare him for a future assignment however,
individual shown should not be taken as on end. From the point of view of
an organization, individual growth is a means to organizational
effectiveness.

Importance of Training

- It established a sound relationship between the work force and

his/her job.
- It upgrades skills and prevent above since
- To keep place with changing technology
- It develop health, constructive attitude
- It properly employees for future assignments
- It increase productivity
- It minimize operational errors
- It enhances employees confidence and morale
- It brings down employee turnover and absenteeism

Moreover, training can improve the relation between the employees and their
immediate supervisor. It who helps in under sanding and implementing
organizational policies (Ivancevich 2000,).

Rao (1985) defines human resource developmental as “a process in which

the employees of an organization are continuously helped in a planned way
to acquire or sharpen capabilities required to perform values taken
functions associated with their percent and future expected roles; develop
their general enabling capabilities or individuals. So that they are able to
discover and exploit their own inner potential for their own and or
organizational development purpose and develop an organizational culture
when superior subordinate relationship team work and collaboration among
different sub-unite are strong and contribute to the organizational health,
Byronism and pride or employees”.

Figure 2.1 Summarizes the Difference Between Training and

Development.
17
 Training Development
Focus Current job Current & future job
Scope Individual employees Work group or
organization
Time frame Immediate Long term
Goal Fix current skill deficit Prepare for future work
done

2.3.1 Employee Compensation

Compensation is the HRM function that deals with every type of reward
individual receive in exchange for performing organizational task. It is the
chief reason why most individual seek employment. The objective of
compensation function is to create system of rewards that is equitable to the
employer and employee alike. The desired outcome is an employee who is
attracted to the work and motivated to do a good job for the employer.
(Ivancevich, page 307-309 1998, 2nd edition)

According to Lloyd L. Byary and Leslie W.Rue compensation refers to all the
extended rewards employees receive in exchange for their work composed of
the base wage or salary, any incentives or bonuses, and any benefit

Employees are the backbone of any organization. The attainment of

organizational objectives largely depends when employees are motivated to
work. Among other things, employees are motivated to work when they are
provided fair financial and non- financial compensation for work rendered to
the organization (Gomez- Meja, Balkin and cardy 1995,).

In general, there are two types of compensation. There are

i) Financial /direct and Indirect/

ii) Non-financial

1) Financial compensation

Direct compensation: - salary, wages, incentives, and stock options.

18
Indirect compensation: - paid time away from work, insurance and health
promotion, employee services and retirement income,

2)Non- financial compensation: - includes any satisfaction, which

employees receive from the job, such as the need for reorganization,
responsibility andpersonal growth.

The objective of compensation administration is to establish fair and

equitable rewards to the employees. So that they are motivated to do the job
in abetter way for the organization. There are other objectives of corporation
can be categorized as:-

- Acquiring qualified personnel

- Retain current employees
- Ensure equity
- Required desired behavior
- Comply with legal regulations

Importance of Compensation

To Employees:

- It is the primary source of income for employees and the family

- It is a fair for the work employed performs and the benefit they provide
for the employees.
- It determines employees social status
- To attract can able employees to the organization
- To motivate them towards superior performance level
- To retain their service for an extended period of time (John M.
Ivanchuich, 2000,).

2.3.3. Human Resource Planning (HRP)

Human resource planning is the procedure by which an organization ensures that it has the right
number and kind of people, at the right place, at the right time, capable of effectively and efficiently
completing those tasks that will help the organization to achieve it overall objectives. (Class
Handout)

Human resource planning involves forecasting the organizational future demand for employees,
forecasting the future supply of employees within the organization and devising programs to correct
the discrepancy between the two, HRP includes the estimation of how many qualified person are
necessary to carry out the assigned activities, how many people available, and what, if anything,
19
must be done to ensure that personnel supply equals personnel demand at the appropriate time in
the future. (Class Handout)

HRP is both a process and asset of plans. It is how organization assesses the future supply of and
demand for HR, in addition an effective HR plan also provide mechanism to eliminate any gaps that
may exist between supply and demand. Thus HR determines the number and type of employee to be
recruited in to the organization or paved out of it (Ivancevich p.145, 2nd edition 1998)

HRP is the process of getting the right number of qualified people in to the right job at the right time
“put another way, HRP is the system of matching the supply of people internally and externally with
the opening the organization expect to have over a given time frame. (Lioyd. L. Byars and Leslie
W.Rue p.116, 1997 fifth edition)

20
How HRP Related to Organizational Planning

HRP involves applying the basic planning process to the HR needs of

the organization. To be effective, any human resource plan must be
derived from the long term and operational plans of the organization.
In essence, the success of HRP depends largely on how closely the
human resource department can integrate effective people planning
with the organization business planning process. Unfortunately, HRP is
often inadequately tied to overall corporate planning (Lioyd.L.Byaru
and revile w.Rue p: 116, 1997).

Reasons for Human Resource Planning

According to ivancevich all organization performs human resource

planning, either formally or informally. The formal employment
planning techniques are described in this research because informal
methods are typically unsatisfactory for organizations requiring skilled
human resource in a fast-changing labor marked.

The reasons for formal employment planning are to achieve.

- More effective and efficient use of people at work

- More satisfied and better developed employees

- More affective equal employment opportunity planning

21
Before going outside to recruit, many organizations ask present
employees to encourage friends or relatives to apply some
organizations even offer “finder’s Fees” in the form of monetary
incentive for a successful referral when used wisely, referral of this
kind can be a powerful recruiting technique. Organization must be
careful, however, not to accidentally violate equal employment laws
while they are using employee referrals (Ivancevich, page 210-211, 7th
ed).

2.3.4 Job Analysis and Design

Organizations have evolved because the overall missing is objectives of

most institutions are too large for any single person to accomplish. The
corner stone of the organization is the set of job performed by
employees. The set of jobs is what provided the input

2.3.3Job Analysis and Design

Organizations have evolved because the overall missing isobjectives of most

institutions aretoo large for any single person to accomplish. The corner
stone of the organization is the set of job performed by employees. The set of
jobs is what provided the input needed to accomplish the mission and
objectives.

I. Job Analysis

The process of defining a job interms of the tasks or order and specifying the
education, straining and responsibility needed to perform the job
successfully. In other words, analysis is a systematic way to gather and
analyze information content and human requirement of the job, and the
content in which jobs are performed. Job analysis can be described as the
function of human resource management because it is the basis of HR.

22
programmed activities. There are two outputs pervade a systematic job
analysis.

Job Description

 Identification of the task, duties, and responsibilities of a job

 It identifies what is done, where it is done how it in done
 It is indicator of what the job accomplishes what performance is
considered satisfactory in each area of the job description.

Job Specification

It addresses the question “what personal traits and expenses are needed to
perform the job effectively?” job description are a documents that describe
the functions and wettingconditions of job specifications are the human
characteristics necessary to surely perform the job. Job specifications ar
typically subsection of job description (Invancevich and Glueck,)

II. Job Design

The information provided by job analysis, job descript job specifications can
be very useful in designing jobs; that are structuring job elements, duties
and tests in a manner to address optional performance and satisfaction. Job
design was central view of scientific management by (F.w Taylor).

Perhaps the most prominent single element in modern scientific

management is the task idea. The work of every workman is fully planned
out by the management at least one day in advance, and each man receives
in most the complete written instruction describing in detail the task such
he is to accomplish. This talks specific not only what is to be done but how
it is to be done and the exact time allowed for doing it.

23
24
 CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

The research is designed to answer the research question posed and attain the general and specific
objective of the research. The descriptive data analysis and simple random sampling technique was
used to attempt of the bank in human resource management practice and problem.

3.2 METHOD OF DATA COLLECTION

The primary data would be collected by personal interview that conducted to
head, personnel division and also in the form of structured questionnaires
that are distributed to the selected staff members and management group.
The secondary data would be collected from several of academic materials
and unpublished document and other necessary document such as e-book.

3.3 SAMPLING METHOD

In order to obtain the required information for the success of the study,
sample survey of probability sampling would be used.

The sampling technique would be simple random sample technique. This is

the most commonly used method of selecting a probability sample and each
element in the population is gain an equal and independent chance of
selection.

The total population of employee are 80 from this target population the
researcher took are 42 which means 52.5% of the total population.

3.4 METHOD OF DATA ANALYSIS AND PRESENTATION

Primary and secondary data from bank are collected, analyzed and
interpreted using some statistical technique such as tabulation and
percentage.

25
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter deals with the analysis and interpretation of data collection on
the HRM practice of the organization. The information obtained from the
sample population involved in the survey study is the frame work of the
treatment of HRM practice in CBE.The findings are made based on the
answers in the questionnaires filled by the employee and also the interviews
with the general managers.

4.1 GENERAL CHARACTERISTICS OF THE POPULATION

The questionnaires were distributed to randomly selected employees in the
bank. A total of 80employees from those employee the researcher distributed
42 copies of questionnaires were distributed to the employees of the
company. All of the questionnaires which are 42(100%) were filled and
returned. Data have seen collected from employee on the following areas.

Table 4.1 Sex, Age, Years of Service, Educational Level and martial
statues

No Items Respondents
No %
1 Sex
i) Male 28 66.6%
ii) Female 14 33.4%
Total 42 100%
2 Age
i) 18-24 15 35.74%
ii) 25-34 18 42.85%
iii) 35-44 5 11.9%
iv) 45-54 4 9.52%
v) 55-64 2 4.76%
vi) 65 and above - -
Total 42 100%
3 Years of service
i) 1-2 18 42.85%
ii) 3-5 20 47.61%
iii) 6 and above 4 9.52%

Total 42 100%
26
4 Educational level
i) College diploma 16 38.09%
ii) First degree 24 57.14%
iii) Second degree 2 4.76%
iv) Third degree - -

Total 42 100%
5 Marital status
i) Married 26 61.9%
ii) Unmarried 16 38.1%
Total 42 100%

As shown intable 4.1 employee sample population comprise of 66.6% male

and 33.4% Female, out of These 35.74% of them are within the age of 18-24,
30.95% are between 25-34, 19.047% of them are 35-44, and 9.52% of them
are between 45-54, 4.76% of them are between 55-64. With record to the
respondents year of service% o42.85 of them fall between 1-2 years,
47.619% of them are between 3-9 and 9.525% of them are 6 and above
years.

Concerning to the educational level of employee respondents, 38.095% are

college diploma, 57.14% of them are First degree holders 4.762% of them
are second degree holders. The marital statusindicate that 61.9% ofthe
respondents are married and 38.1% is unmarried employee.

This information which indicates that the majority of the workers are male
and fall between 18-24years when we see the educational level of employee
the majority of the respondents are qualified first degree. Hence, the large
portion of these respondents have a lot of information about HRM practice
that undertaken in their organization and answer obtained from them are
most likely to be reliable. In General the above information show that most
of employee are married, which indicate that there is stable work condition
and the probability of employee turnover is less. Andthe highest number
indicate that the employee are young which is (42.85%) of the employee, this
show that the employee is highly productive.

27
4.2 ANALYSIS AND INTERPRETATION
4.2.1 Employees Attitude on Orientation and Placement

4.2 Orientation Program Table

Have you gained formal orientation when Respondents

you joined the bank for the first time? No %
71.42%
i) Yes 30
ii) No 12 28.58%
Total 42 100

Table 4.2 deals with the responses concerning whether or not employee
respondents given any orientation program. Responding this 71.42% of
respondents given a positive reply and 28.58% of the respondent replied
“no”. From this finding it is clear that the highest percent of the respondents
take orientation, this implies orientation has major contribution or how fast
the organization achieve its objectives and to be competent within the
environment. The respondents were also asked about the placement.

Table 4.3.1 Selection of Employees (placement)

Do you believe that the bank select the Respondents

right person for the right job? No %

i) Yes 24 57.14%
ii) No 18 42.86%
Total 42 100%

As shown above 57.14% of CBE (commercial bank of Ethiopia) respondents

said it is appropriate with their profession and ability while %42.86 of the
respondents said “no”.

28
Table 4.4 Training program

Have you ever got any training since you Respondents

have joined the bank? No %
i) Yes, several times 12 28.57%
ii) Just a few once 16 38.09%
iii) Just a few additional one 4 9.52%
needed
iv) not at all 10 23.8o%

Total 42 100%

When we analyzed table 4.4 we can say 76.26% of respondents has a chance
to participate in the training program, where as 23.80% of them has no
chance to participating in training programs. Therefore it can beside
majority of the respondents have never participated in training opportunity.

Table 4.5 Job Analysis and Design

In your opinion do you believe that Respondents

your job is properly and adequately No %
analyzed?

i) Yes 30 71.4%
ii) No 12 28.6%
Total 42 100%

The above

Table 4.5 indicate a significant proportion (71.4%) of respondents believe

that their job is properly analyzed and designed.

29
Table 4.6 Performance Evaluation

Is Performance evaluation practiced to all Respondents

employees all the time? No %

i) Yes 18 42.85%
ii) No 24 57.15%
Total 42 100%
How is appropriate the rate of your
performance evaluation with your
discharge of responsibility.

I) High 8 19.04%
II) Medium 20 47.61%
III) Low 14 33.35%
Total 42 100%
Have you ever get any chance to see your
performance evaluation report
I) Yes 30 71.42%
II) No 12 28.58%
Total 42 100%

As shown item number one of table 4.6, almost all of the respondents about
42.85% replied that there is a performance evaluation practice in their
organization all the time. While few respondents 57.15% said that there is
not performance evaluation being practice to all employees.

Item number 2 indicates that respondents who knew the existence of

performance evaluation practice were asked the evaluation rates given to
them as compared with their work and responsibility. 19.04% of the
respondents said the evaluation result were appropriate while 47.61% and
33.35% of the respondent replied that the rate were acceptable, and were
not appropriate respectively. From this it is clearly seen that the evaluation
practice has some problems.

Item number 3 alsoindicate that respondents who know the existence of

performance evaluation got any chance so see their performance evaluation
report or not. 71.42% of them answered that they have got the chance to see
while 28.58% of them are not. This information indicates that almost

30
employees get their evaluation resulted which is good for them to improve
their weakness and strong doings in the organization.

Table 4. 7 Compensation and Benefits

How much are you satisfied with the salary you earn Respondents
when compared with the job are engage in? No %
i) Yes, quit adequate 10 23.80%
ii) Need some interment 18 42.85%
iii) Not appreciate at all 12 28.57%
iv) Other 2 4.78%
Total 42 100%

As shown in table 4.7, in comparison to the job they are engage in most of
respondents around 23.8o% are replied the salary needs some increment.
While 42.85% of them are said the payment is not appropriate at all and
28.75% of respondents replied the payment is quit adequate. This
information therefore, indicates that most of the employees of Bank are not
satisfied with what they are engage in.

4.4 INTERVIEW ANALYSIS

Interview was held with general manager of the organization, and also two
question prepare for him.

The following section presented information obtained through interview. The

interview was conducted with the general manager.

According to the responded of general manager, towards human resource

planning, he has stated that the bank has HRP based on forecasting future
needs for employees of various types, comparing these needs with the
present work force and determine the numbers and types of employees.

He also mentioned about human resource development program. He

describes that orientation programs are given to new entrant about the rules
and regulations of the bank, compensation and other related activities of the
organization.

31
Towards the performance evaluation of employees he describes that the
bank uses the result of performance appraisal to promotion, transfer and
salary increment. Concerning HRM problems, he said, the bank does not
have enough training program, problems related with current salary scale,
and absence of common understanding between manager and employees.

Concerning disciplinary action, he has stated, if the staff member where

conduct is contrary to the established rule and regulations of the bank,
he/her will be penalized based on the disciplinary action policy.

Based on the interest to conduct human resource research, the bank wants
to conduct a research in salary &benefit, promotion, career development
such as training.

32
33
CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

The primary purpose of is study has been explore some problems that
hinder effective human resource management practice in commercial bank
of Ethiopia. Based on the Basic question raised in the chapter one of the
paper, the following conclusions and recommendation are given.

5.1 CONCLUSION
The following conclusions are made based on the analysis and finding of the
study.

1. The majority of the workers are males about 66.6% and fall between
the ages of 25-34 (42.85%) years. 7.14% of the employees have first
degree educational qualification and 4.76% of the second degree. In
other words, most of the respondent 95.23% of them are college
diploma and first degree.
2. The ultimate goal of establishing a training program is to improve the
ability and performance necessary to undertake the job effectively. By
keeping this assumption in mind, it is believed that training could
develop the workers skill and facilitates the introduction of new
methods and increase efficiency by reducing work load.
3. It was relevant that performance evaluation is good to all employees
and the largest portion of the respondent who was evaluated their
performance stated that evaluation result was medium as compared
with their work and responsibility.
4. It was the opinion of the majority of employees that the salary scale of
the bank needs some increment as compared with the job they engage
in

5.2 RECOMMENDATION

1. Since the success and failure of the bank is largely depend on the
qualities of its employees, the need for a well-organized employee
training problem was not made effectively to all employees and not

34
 that much effective in improving the ability and performance system
of evolution should be designed to see the individual improvement and
work on limitation of the training program.
2. To maintain qualified and experienced workers, organizations should
attractive salary scale and compensation and benefit program. But in
CBE employees are seen leaving and complaining about their salary
scale and disagreement with management. Therefore, to capture and
clear qualified workers, it is inevitable to improve the salary scale and
the awareness of employees about good relationship between
management groups and employees of the bank.
3. The human resource planning activity should be better in assessing
vacancy that can be filled through promotion and transfer but there is
no consideration of promotion and transfer practice in planning the
required man power and this underestimates the promotion and
transfer of human resource management practice within the bank. To
have proper staffed employees CBE’s man power planning activity
should first look for the required employees from promotion and
transfer sources.
4. In general, to be successful in such highly globalized and competitive
environment, human resource management should be considered as
the most important thing. Consequently, the greatest effort must be
exerted for the improvement of its practice.

35
 REFERENCE
-J.M. Ivancevich: Human Resource Management 2nd, edition, 1998

Printed in USA
- Lloyd L. Byars and Leslie W, Rue, Human resource Management 5th
edition, 1997, printed in USA.
- Shaun Tyson and Alfred York: Human RM 3rd, edition, 1997 Martins

the printers LTD Berwich upon Tweed.

- Gomez- Mejia, Balkin and cardy (1995). Managing Human resource,

printed in USA.

- John M. Ivancevich, William F. Gluck (2000), Foundation of Personnel

Human resource Management 4th ed, Boston.

- Class Handout
- John Stredick, (2000) an introduction to Human resource
Management 1st ed Credit Britain.
- William B. whether and keith Davis (1989) Human Resource and
PersonnelManagement 4th ed. Singapore.
- William F. Glueck (1982) Personnel a diagnostic Approach 3rd edition,
Texas Business Publication.

36
 APPENDIXE
JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Questionnaire for staff members

Greeting to all whom this questionnaire would appear! I would like to

express my heart full appreciation in advance for the cooperation you show
in completing the questionnaire sparing from your precious time.

of commercials bank of Ethiopia Jimma main branch) Topics:- assessment

of human resource management practice and problems(the case study.

General institution:- You are kindly requested to make mark in the

√ you may take
boxes provides and write your response on the spare given
more than one alternative where necessary you can use extra paper if the
space provide is not enough your honest and frank answer are appreciated.

Parte one

General information

1. Age category:A. 18-24 B. 25-34 C. 35-44

D. 45-54 E. 55-64 F. 65 & above
2. sex: A. Male B.Female
3. Marital status A. Married B. Unmarried
4. Years of service in the bank A. 1-2 B. 3-5
C. and above
5. Level of education A. College Diploma B. First Degree
C. Second Degree D. Third Degree
6. Do you enjoy your job? A. Yes very much B. Not happy at all
C. In different

37
D. Other comment _________________________________________________

_____________________________________________________________________

7. How much satisfied are you with the salary you earn when compared
with the job you are engage in?

A. Yes, quit adequate B. Need some increment

C. Not appreciate at all D. other __________________

_______________________________________________________________________

8. Do you have a job description in your organization? Why?

A. Yes B. No

Why _______________________________________________________________

9. Do you believe that the bank select the right person for the right job?

A. Yes B. No

10. Have you guinea formal orientation when you joined the bank for the
first time? A. Yes B. No

11. Have you ever got any training since you have joined the bank?

A. Yes, several times B. Just a few, once

C. Just few additional once needed D. Not at all

12. Do you believe that the banks performance appraisal system is fair?
A. Yes B. No

13. If not fair, why not?______________________________________________

_________________________________________________________________

__________________________________________________________________

14. Is performance evaluation practiced to all employees all the time?

A. Yes B. No

38
15. Have you ever got any chance to see your performance evaluation
report? A. Yes B. No

16. How is appropriate the rate of the performance evaluation with your
discharge of responsibility?

A. High B. Medium C. Low

17. Which is the following reason for the leasing of workers form the
bank?

A. Problems related with salary scale

B. Disagreement with the management

C. Improper handling and care for the staff

D. Other__________________________________________________________

18. Do you believe that human resource policies are well communicated
to you? A. yes very much B. No

C. Other ___________________________________________________________

19. On which area of human resource do you believe the bank need to
conduct research?

A. human resource planning

B. human resource development

C. employee internal relation

D. causes for the leasing of employees

E. There is no need at all

F. Other ____________________________________________________________

39
APPEDEXE B
Interview question for the manager
1 Would you tell me is there any human resource development program in
the organization?
2 Would please describe about human resource planning?

40