College of Business and Economics

Masters of Business Administration

(MBA)
Graduate Program

The Impact of Human Resource Management Practice on Organizational

Commitment and Organizational Performance in the Public Sector, Ethiopia

By:
Ayanaw Yeneneh (GSR/3969/12)

A thesis submitted in accordance with the requirements for the degree of Masters
of Business Administration (MBA) at the College of Business and Economics,
Addis Ababa University

Advisor
Tsegabrhan Mekonen (Ph.D.)

Examiners
1. Mesfin Fikre (Ph.D.)
2. Mesfin Workineh (Ph.D.)

AAU
Addis Ababa, Ethiopia.
July, 2021
Addis Ababa University

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 College of Business and Economics
Masters of Business Administration
(MBA)
Graduate Program

The Impact of Human Resource Management Practice on Organizational

Commitment and Organizational Performance in the Public Sector, Ethiopia

By:
Ayanaw Yeneneh (GSR/3969/12)

A thesis submitted in accordance with the requirements for the degree of Masters
of Business Administration (MBA) at the College of Business and Economics,
Addis Ababa University

Advisor
Tsegabrhan Mekonen (Ph.D.)

Examiners
1. Mesfin Fikre (Ph.D.)
2. Mesfin Workineh (Ph.D.)

AAU
Addis Ababa, Ethiopia.
July, 2021

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 Declaration

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 Certification

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Ayanaw.Y Page v
 Acknowledgment
This paper is accomplished with kind cooperation of many individuals and I am highly honored to
appreciate their contributions. First and for most, I would like to give my glory and praise to the
Almighty GOD for his invaluable cares and supports throughout the course of my life and helped
me since the inception of my education to the completion of this study.

Second, I am grateful to express my heartfelt gratitude to my advisor, Dr. Tsegabrhan Mekonen,

who has taken all the trouble with me with his precious comments and guidance during the course
of this study. His contribution to my life was great especially during this research process as well
as in the project management course.

Third, I would like to thank my examiners, Dr. Mesfin Fikre and Dr. Mesfin Workineh, for their
genuine evaluation and constructive feedback to my study.

Fourth, I would like to express my deepest gratitude to the general managers, directors, department
heads and supervisors as well as employees who are working in the 24 public sector offices in the
Federal and Addis Ababa City Administration level in Ethiopia, for their honest cooperation in the
data distribution and collection process of my study.

Last but not least, my deepest thanks go to all instructors at Addis Ababa University, College of
Business and Economics, who thought me different courses in the program as well as my
colleagues for their beyond price exceptional support and encouragement that gave me strength to
conduct this study.

Thank you all!!

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 Abstract
The aim of this study was to investigate the impact of human resource management practice on
organizational commitment and perceived organizational performance. The nature of this study
was a cross sectional survey design with a quantitative approach. The population of this study was
employees working in public sector organizations in Ethiopia. A total of 375 questionnaires with a
95% response rate were collected from public sector employees working in 24 Federal and Addis
Ababa City Administration offices in Ethiopia using convenient sampling technique. A
standardized five-point Likert scale questionnaire was used to gather the necessary data. The
Pearson correlation and multiple linear regression as well as a partial least square methods were
used in the data analysis process. The Pearson correlation analysis result at the 0.01 level (2-
tailed) levels, clearly shows that there is a moderate level association between four HRM practices
(training and development, performance appraisal, promotion, recruitment and selection) and
organizational commitment. But the least link is obtained between employee compensation
management practice and organizational commitment. Moreover, the regression analysis result
shows that all the five HRM practices namely recruitment and selection, performance evaluation,
training and development, compensation management and promotion have the ability to influence
organizational commitment. The result also revealed that a positive and moderate link between the
four HRM practices (training, recruitment and selection, promotion, and performance evaluation
practices) and organizational performance, while there is a weak link between compensation
management practices and organizational performance. Similarly, the multiple regression analysis
result revealed that, all the five HRM practices namely recruitment and selection, performance
evaluation, training and development, compensation management and promotion practices have
the ability to influence organizational performance. The result shows that there is a moderate and
positive correlation between all organizational commitment elements (normative, continuance and
affective) and organizational performance. The Partial least square and Soble calculation result
shows that organizational commitment significantly mediates the relationship between HRM
practices and organizational performance. It can be concluded that there is a positively linear
relationship between HRM practice, organizational commitment and organizational performance.
Bearing in mind the positive link between HRM practices on the organizational commitment and
organizational performance schemes, public sector organizations should give greater emphasis on
establishing effective HRM practices in their organizations.
Key words: HRM Practices, Organizational Commitment, Organizational performance

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 Table of Contents

Declaration ........................................................................................................................................ iii

Certification ...................................................................................................................................... iv
Acknowledgment ............................................................................................................................... v
Abstract ............................................................................................................................................ vii
List of Tables .................................................................................................................................... xi
List of Figures .................................................................................................................................. xii
Acronyms ........................................................................................................................................ xiii
Appendices ...................................................................................................................................... xiv
CHAPTER ONE ................................................................................................................................ 1
1. INTRODUCTION ...................................................................................................................... 1
1.1. Background to the Study ..................................................................................................... 1
1.2. Statement of the Problem .................................................................................................... 3
1.3. Research Questions.............................................................................................................. 5
1.4. Objectives of the Study........................................................................................................ 5
1.5. The Scope of the Study........................................................................................................ 6
1.6. The Significance of the Study ............................................................................................. 6
1.7. Limitation of the Study ........................................................................................................ 7
1.8. An Organization of the Study .............................................................................................. 7
CHAPTER TWO ............................................................................................................................... 8
2. LITERATURE REVIEW ........................................................................................................... 8
2.1. Theoretical Review ................................................................................................................. 8
2.1.2. The Influence of Scientific Management Theory ............................................................. 9
2.1.3. The Influence of Behavioral Science.............................................................................. 10
2.1.4. Global Changes in People and Organizations ................................................................ 10
2.1.5. HRM Theories and Models ............................................................................................ 10
2.1.6. HRM Practices ................................................................................................................ 12
2.1.7. The HR system ............................................................................................................... 14
2.1.8. HRM and performance ................................................................................................... 14
2.1.9. The HRM black box phenomenon.................................................................................. 14
2.1.10. HRM Models ................................................................................................................ 15
[Link]. The Input-Output Model of HRM ............................................................................. 15
[Link]. The hard and soft versions of HRM practices ........................................................... 16

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 [Link]. The Harvard model of HR management.................................................................... 16
2.1.11. Organizational Commitment ........................................................................................ 16
2.2. The Ethiopian HR Proclamations .......................................................................................... 16
2.4. Empirical Review .................................................................................................................. 18
2.5. Conceptual Framework...................................................................................................... 20
2.6. Hypotheses......................................................................................................................... 21
CHAPTER THREE ......................................................................................................................... 24
3. RESEARCH DESIGN AND METHODS ............................................................................... 24
3.1. The Research Design ......................................................................................................... 24
3.2. Research Approach ............................................................................................................ 24
3.3. Population .......................................................................................................................... 24
3.4. Sampling Procedure & Sample Size .................................................................................. 25
3.5. Questionnaire Development .............................................................................................. 27
3.6. Method of Data Analysis ................................................................................................... 27
3.7. Ethical Considerations ....................................................................................................... 28
CHAPTER FOUR ............................................................................................................................ 29
4. DATA PESENTATION, ANALYSIS AND INTERPRETATION ........................................ 29
4.1. Response Rate.................................................................................................................... 29
4.2. Respondents Background Information .............................................................................. 31
4.3. Reliability and Validity Tests ............................................................................................ 34
4.3.1 Reliability ........................................................................................................................ 34
4.3.1 Validity Test .................................................................................................................... 36
Table 4.4: Validity Statistics .................................................................................................... 36
4.4. Correlation Analysis .......................................................................................................... 36
4.4.1. Correlation s between HRM Practices and Organizational Commitment ...................... 37
HRM Practices and Normative Commitment (H1a, H2b H3c, H4a, H5a) .............................. 38
HRM Practices and Continuance Commitment (H1b, H2b H3b, H4b, H5b) .......................... 38
HRM Practices and Affective Commitment (H1c, H2c H3c, H4c, H5c) ................................. 39
Table 4.6: Correlations between HRM Practice and Organizational Commitment ................. 40
4.4.2. Correlations between HRM Practices and Organizational Performance (H1d, H2d, H3d,
H4d, H5d) ................................................................................................................................. 41
4.4.3. Correlations between Each Types of organizational commitment and organizational
performance .............................................................................................................................. 43

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 4.4. Regression Analysis .......................................................................................................... 49
4.4.1. Regression Result of HRM Practices and Organizational Commitment ........................ 50
4.4.2. Regression Result of HRM Practices and Organizational Performance ........................ 52
4.4.3. Regression Result of Organizational Commitment and Organizational Performance ... 54
4.5. Mediation Analysis (H4) ................................................................................................... 56
4.4. Sectorial Differences ......................................................................................................... 58
CHAPTER FIVE ............................................................................................................................. 61
5. DISCUSSION, CONCLUSION AND RECOMMENDATION ............................................. 61
5.1. Discussion .......................................................................................................................... 61
HRM Practices and Organizational Commitment .................................................................... 61
HRM Practice and Organizational Performance ...................................................................... 63
Organizational Commitment and Organizational Performance ............................................... 64
HRM practices-organizational commitment and organizational performance links ................ 64
5.2. Conclusion ......................................................................................................................... 65
5.3. Recommendation ............................................................................................................... 66
Reference ......................................................................................................................................... 68

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 List of Tables

Table 2.1: Summary of Previous HRM Studies ---------------------------------------------------------------22

Table 3.1: Respondents proportion-------------------------------------------------------------------------------27

Table 4.1: Response Rate in Each Office-----------------------------------------------------------------------33

Table 4.2: Background Information-----------------------------------------------------------------------------24

Table 4.3 Reliability Statistics-----------------------------------------------------------------------------------37

Table 4.4: Validity Statistics-------------------------------------------------------------------------------------39

Table 4.5: Correlations between HRM Practices and Organizational Commitment---------------------41

Table 4.6: Correlations between HRM Practice and Organizational Commitment----------------------44

Table 4.7: Correlations between HRM Practices and Organizational Performance----------------------45

Table 4.8: Correlations of Organizational Commitment and Organizational Performance-------------47

Table 4.9: Correlations of Organizational Commitment and Organizational Performance-------------48

Table 4.10: Summary of Correlations results between variables------------------------------------------50

Table 4.11: Summary of Hypothesis Testing Results-------------------------------------------------------

Table 4.12: Model Summary of HRM practice and OC ---------------------------------------------------52

Table 4.13: Coefficients of predictors of OC----------------------------------------------------------------53

Table 4.14: Model Summary HRM Practice and OP------------------------------------------------------55

Table 4.15: Coefficients of predictor of OP----------------------------------------------------------------55

Table 4.16: Model Summary of OC and OP---------------------------------------------------------------57

Table 4.17: Coefficients of predictors of OP---------------------------------------------------------------57

Table 4.18: Soble test result----------------------------------------------------------------------------------59

Table 4.19: analysis of sectorial differences---------------------------------------------------------------61

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 List of Figures
Figure 2.1: The HRM black box phenomenon----------------------------------------------------------------17

Figure 2.2: HRM and performance Link-----------------------------------------------------------------------18

Table 2.1: Summary of Previous HRM Studies --------------------------------------------------------------22

Figure 2.3: Conceptual Framework-----------------------------------------------------------------------------25

Figure 4.1: Response Rate----------------------------------------------------------------------------------------32

Figure 4.2: Organizational proportion of respondents--------------------------------------------------------36

Figure 4.3: Scatterplot Diagram of HRM practice and organizational commitment---------------------45

Figure 4.4: Scatterplot Diagram of HRM practice and organizational performance---------------------46

Figure 4.5: Scatterplot Diagram of Organizational commitment and organizational performance----49

Figure 4.6: Hypotheses Testing Summary---------------------------------------------------------------------

Figure 4.7: Mediation model-------------------------------------------------------------------------------------59

Figure 4.8: Partial Least Square result of mediation ---------------------------------------------------------60

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 Acronyms
AACCSP: Addis Ababa City Administration Civil Service Proclamation

EPSHRDM: Ethiopian Public Service and Human Resource Development Minister

FCSP: Federal Civil Service Proclamation

HRM: Human Resource Management

SPSS: Statistical Packages for Social Science

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 Appendices
Appendix II: Questionnaire---------------------------------------------------------------------------------------78

Appendix II: SPSS results----------------------------------------------------------------------------------------83

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 CHAPTER ONE
1. INTRODUCTION

1.1. Background to the Study

The global dynamic of a hyper competitive work environment has created needs for more
effective management of human resources, as service requirements increase and as economic
factors decreases the size of the workforce. The appropriate management of people in the
organization is credited to play a crucial role in the public sector organization, as these
organizations‟ operations usually involve service delivery and interpersonal contact, requiring
positive employee engagement as prerequisite for performance (Steyn, 2017).

The field of human resource management is relatively a new discipline focused on managing
people resources in any organization and the people dimensions of the organization are
considered the key assets in the HRM field of study. According to Armstrong (2014), HRM is
concerned with management of the most valued assets i.e., people towards the achievement of
organizational objectives. Similarly, Burke & Cooper (2006) defined that HRM is the
management of the relationships between employee to employee and employee to management.

The practices of HRM encompasses all activities used to manage employees in an organization
such that HR planning; recruitment and selection; orientation, induction and placement;
performance appraisal; training and development; compensation management; morale and
motivation; employee discipline administration; organizational safety; industrial relations;
collective bargaining; as well as grievances handling. HRM practices are a set of organizational
policies and activities required to perform the routines of human resources in an organization,
e.g., recruitment and selection, training and development, performance appraisal and
management, compensation management, career management as well as employee relations
management in an organization (Armstrong, 2014).

HRM practices are a set of activities, policies and procedures comprehended with the HR
management function towards management of people resources in an organization. HRM
practice consists of all managerial activities and decisions about people, such as HRP, staffing,
performance management, employee training & development, compensation management,
employment relations, and maintaining health and well-being (Armstrong and Taylor, 2020 and

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Collings, 2018). HRM practice includes all those managerial decisions and activities about the
employment affairs of organizations (Boxall and Purcell, 2016).

Particularly, the subject of HRM practice in the public sector has become a major eye-catching
research topic throughout the world, e.g., Knies and Leisink, (2018; Boselie (2019);
Konstantinidis and Oikonomidou (2019); Borst (2020); Ahbabi (2019); Kravariti (2020); Hussen
(2019); Lin and Wang (2020); Berberoglu (2018), and Tabiu (2016).

Accordingly, different scholars have confirmed that the context of managing human resources in
the public and private sector organizations is not the same. The public sector‟s mission is to
deliver an effective public service not maximize revenue (Knies and Leisink, 2018). Also, the
pressure of the public sector is to deliver public services where the privately owned organization
is to increase shareholders‟ business value and worth (Armstrong and Taylor, 2020). The
government administers, own, fund, and control the public sector organizations (Boselie, 2019).

But the main question is „how HRM practices impacts organizational commitment and
organizational performance?‟ Typically, the major impacts and contributions of HRM practices
can be seen by augmenting HRM activities to employee and organizational outcomes
(Armstrong and Taylor, 2020). The influence of HRM practice can be related to organizational
commitment as well as organizational performances (Boxall and Purcell, 2016).

The major contribution of HRM is related with enhancing organizational performance by

providing insight on the performance issues affecting the organization and its employees
(Armstrong, 2014). The notion behind the practice of HRM makes an impact is that people are
the organization‟s key resource and organizational performance largely depends on them. This
implies, the good human resource policies have an effect on human resource management
practices and these in turn influence staff attitudes and behaviors as well as organizational
performance (Storey, 2009). HRM practices are designed and implemented in such a way that
human resource plays a significant role in achieving the goals of the organization (Delery and
Doty, 1996). Human resource management practices, aim to achieve two sets of objectives:
improve employee performance and enhance organizational effectiveness (John and Jeffrey,
2000). Similarly, the Guest, (1990), model of HRM clearly shows that a set of integrated HRM
practices can achieve superior individual and organizational performance.

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The social exchange theory is used in a large number of social science disciplines such as
management, sociology and social psychology. The model states that employees will reciprocate
their contribution to the organization if they perceive that the organization has treated them well.
The theory argues that obligations are generated through a serious of interactions between parties
who are in a state of reciprocal interdependence. The relationship involves over time into
trusting, loyal and mutual commitments as long as response or actions the parties abide by
certain rules of exchange and involve reciprocity or repayment rules such that the action of one
party leads to a response or actions by the other party through their level of commitment (Sake,
2006).

Accordingly, within the public service sector, performance outcomes are closely related to
individual employee behavior. Armstrong (2014), argued that HR can contribute to enhancing
organizational performance by providing insight on the performance issues affecting the
organization and its employees. Schuler and Jackson, (1987), stated that HRM practices are a
process of attracting, motivating, and retaining employees to ensure the survival of the
organization.

Overall, HRM function has a very important role in an organization and managers need to set up
an effective HRM system in an organization. Armstrong, (2016), illustrated that getting the best
out of people is primarily the responsibility of managers and HR specialists to exercise effective
leadership and create conducive work environment to achieve high organizational and employee
performance as well as encourage people to do everything expected of them. Hence, the main
motive of conducting this study was to investigate the impact of HRM practices on
organizational commitment and perceived organizational performance in the public sector,
Ethiopia.

1.2. Statement of the Problem

The context of management in the 21st century is challenging that poses difficulties for managers
in the public and private spheres. Specifically, public sector organizations all over the world face
serious challenges and the reform attempts in these organizations have not been very successful
(Fourie, 2017). On the other hand, the problem related to low commitment of employees has a
negative impact on organizational outcomes. According to Richman, (2006) and Bates, (2006),
commitment level among employees is one serious declining stage as most of the employees

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nowadays in most organization. It has been reported that majority of employees today will not
significant be committed if they receive less support, award and recognition from their respective
managers. The low-level commitment among employees could bring undesirable organizational
outcomes, such as customer dissatisfaction, lower productivity, and unprofitability.

Previous researchers have confirmed that one of the highest challenges facing public sector
organizations is on establishing an effective HR system and manage the human resources in an
organization. The HR management function of the governmental owned organization in
developing countries is not properly established. Characterized by inefficiencies to undertake HR
doings, e.g., lack of right recruitment & selection system, lack of effective performance
management standards, incapability to manage employee relations, lack of attracting and
retaining talent people, low salary level, and insufficient management by supervisors (Knies and
Leisink, 2018). Therefore, these problems are forcing public sector organizations to set up
effective HR systems as well give effective services to the people.

However, most previous studies conducted in privately owned organizations in highly advanced
countries such as in the U.S.A, e.g., Wright (2005), Huselid, (1995), Arthur, 1994, and
MacDuffie, (1995), and the UK, e.g., Boselie (2019), Ahbabi, (2019); Guest and Conway,
(1997), Patterson, (1997), Wood and De Menezes, (1998). It is rare to see abundant studies in the
Ethiopian context related to HRM practice, employee engagement and organizational
performance. According to Gould, Williams, (2003), there are insufficient public sector HRM
researches available in developing countries. Insufficiency of studies in public-sector
organizations indicates weak attention on HRM, and poor organizational service image in the
sector (Osborne and Pasterik, 1997 and Wildavasky, 1988).

In light of these challenges discussed above, efforts to develop a sound HR management system

in the public sector has real importance towards enhancing the organizational commitment as

well as meet superior public sector performance. Therefore, the goal of conducting this research

was to examine the impact of HRM practices on organizational commitment and organizational

performance, in public sector organization in Ethiopia.

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1.3. Research Questions
The broad question of this study was „how HRM practice impacts organizational commitment
and organizational performance, in the public sector domain? The following questions were
addressed in this paper:

1. What is the relationship between HRM practices (Recruitment and selection,

performance evaluation, training and development, compensation management and
promotion) and organizational commitment?

2. What is the relationship between HRM practices (Recruitment and selection,

performance evaluation, training and development, compensation management and
promotion) and perceived organizational performance?

3. Does organizational commitment mediate the link between HRM practices

(Recruitment and selection, performance evaluation, training and development,
compensation management and promotion), and perceived organizational performance?

4. What kind of differences and similarities exist between HRM practices (Recruitment
and selection, performance evaluation, training and development, compensation
management and promotion), organizational performance and perceived organizational
performance is mediated by organizational commitment at federal and regional public
sector organizations in Ethiopia?

1.4. Objectives of the Study

1.4.1. General Objective

The aim of this study was to examine the relationship between the HRM practice, organizational
commitment and perceived organizational performance, in the public sector organizations in
Ethiopia.

1.4.2. Specific Objectives

The specific objectives of the study were:

1. To determine the relationship between HRM practices (Recruitment and selection,

performance evaluation, training and development, compensation management
and promotion) and organizational commitment.

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 2. To measure the relationship between HRM practices (Recruitment and selection,
performance evaluation, training and development, compensation management and
promotion) and perceived organizational performance.

3. To determine the association among HRM practices (Recruitment and selection,

performance evaluation, training and development, compensation management and
promotion), and perceived organizational performance is mediated by
organizational commitment.

4. To determine the differences and similarities of HRM practices (Recruitment and

selection, performance evaluation, training and development, compensation
management and promotion), organizational performance and perceived
organizational performance is mediated by organizational commitment at federal
and regional public sector organizations in Ethiopia.

1.5. The Scope of the Study

HR management is essential to both public and non-public sector organizations. However, this
study was delimited on investigating the relationship between HRM practice, organizational
commitment and organizational performance, in the randomly selected 20 Federal public sector
organizations in Ethiopia. The study employed five HRM practices, namely, employee
recruitment & selection, performance management, training & development, compensation
administration, and promotion.

1.6. The Significance of the Study

In recent years, several public sector organizations are adopting HRM initiatives besides re-
engineering the organization. Public sector domain researchers need to set up new HRM
systems, models, and theories.

Accordingly, the study investigated the best link between HRM practices, organizational
commitment as well as organizational performance in the public sector organizations.

 First, this study will give better insights to public service organizations about the impact
of HR management practice on employee attitudes, behaviors, and organizational
performance in public sectors.

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  Second, the result of this study will show the links among HR management practices,
organizational commitment, and organizational performance issues in the public sector.

 At last, this study will give an opinion to public sector administrators to revise their HR
policies and practices in line with the proper link of HRM practice, organizational
commitment as well as organizational performance.

1.7. Limitation of the Study

This study was conducted to investigate the relationship between HM practice, organizational
commitment and organizational performance in the public sector organizations in Ethiopia. Due
to the inaccessibility of some regional public sector organizations in the country, data was
collected only from public sector organizations available in Addis Ababa city using convenient
sampling method. Those public sector organizations outside Addis Ababa were not included as a
sample. Furthermore, due to the difficulty of getting the complete list of public sector employees
in each office, proportion and randomization were not performed.

1.8. An Organization of the Study

The study was structured with five chapters. The first section describes the introduction, the
problem statement, and goals. Chapter two contains the theoretical and empirical reviews.
Further, the third and fourth chapters depict the method and data analysis. The last chapter
explains the discussion, conclusion and as well as suggestions for major future works.

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 CHAPTER TWO
2. LITERATURE REVIEW
This chapter discusses the theoretical and empirical literature review on the concepts of human
resource management, organizational commitment and organizational performance.

2.1. Theoretical Review

2.1.1. Basic Concepts of Human Resource Management
There has been considerable debate among scholars regarding to the exact definition of human
resource management (Stredwick, 2005 and Storey,2019). Even though there are technical
differences regarding the definition of HRM, the definition provided by different scholars
commonly relies on the „people‟ resources in an organization.

The field of human resource management is relatively a new discipline focused on managing
people resources in any organization. The people dimensions of the organization are considered
the key assets in the HRM field of study. It is concerned with management of the most valued
assets- the people towards the achievement of organizational objectives The practices of HRM
encompasses all activities used to manage employees in an organization such that HR planning;
recruitment and selection; orientation, induction and placement; performance appraisal; training
and development; compensation management; morale and motivation; employee discipline
administration; organizational safety; industrial relations; collective bargaining; as well as
grievances [Link] practices are a set of organizational policies and activities required to
perform the routines of human resources in an organization, e.g., recruitment and selection,
training and development, performance appraisal and management, compensation management,
career management as well as employee relations management in an organization(Armstrong,
2014).Human resource management is the management of the relationships between employee to
employee and employee to management

Similarly, Wendell, (1970), defined the term as a management of people resources in an

organization. It focused on managing people in an organization using policies and systems
(Collings & Wood, 2009). The term human resource management the process of recruiting,
selecting, developing, utilizing, rewarding and motivating human resources in an organization It

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is the management of work and people towards a desired end. It is a fundamental activity in any
organization in which people are available (Boxall, 2016).

Moreover, Northcott (2001) considers human resource management as an extension of general

management, that of prompting and stimulating every employee to make his significantly
contribution to the purpose of a business.

According to Flippo (1966), human resource management is the planning, organizing, directing
and controlling of the procurement, development, resources to the end that individual and
societal objectives are accomplished.

Collings (2018), has defined the term human resource management as a set of interrelated
activities established to enhance the task performance of employees in an organization.

According to Graham (1978), the purpose of HRM is using employees‟ abilities towards
achievement of organizational objectives and enhancing the psychological and material reward
of employees from their work.

Scholars such as Boselie (2019), argued that the term HRM has gained acceptance in both
academic and commercial circles since 1980s. Accordingly, the field of HRM is the generic and
popular term than personnel management and refers to any system of managing people in an
organization. The basic assumption related to the role of HRM is on its influences on the
performance dimensions of employees and organizations as well as getting a competitive
advantage. He noted that the premise related to „HRM makes an impact‟ is that good HR policies
have an influence on HR management practices and these again influence staff attitudes and
behaviors as well as organizational performance.

It was during the 1980s that the field of HRM comprehended with the philosophical arenas of
behavioural sciences and industrial relations. Accordingly, the history of HRM was begun at the
time of the industrial revolution in the late eighteenth century when companies started to
establish modern people management systems (Armstrong, 2016).

2.1.2. The Influence of Scientific Management Theory

The birth of scientific management theory was contributed a substantial influence for the birth of
human resource management in an organization. Armstrong, (2016), stated that the work of F.W

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Taylor in the early twentieth century was contributed a lot towards the beginning of HRM in an
organization. Some of the HRM practices such as job design and analysis, employee selection
and training were developed during scientific management theory.

Though the present management is still benefiting from the scientific management theory, it was
not free from criticism. The main criticism was related to the fact that it ignored the human
elements in the work place. The theory was mainly focused on production efficiency in an
organization. Despite the theory is important towards improving organizational efficiency, it
ignores the human elements in the workplace and view people as machines (Armstrong, 2016).

2.1.3. The Influence of Behavioral Science

The behavioural science theory of Elton Mayo in the 1930s and 1940s indicated that the way
people felt about their jobs influenced how they did their work. The theory contributed to the
development of HRM concepts such as motivation, job satisfaction, group dynamics and
leadership style. Those involved in managing people now have to consider how individual
differences among employees affect the management style required. People are different in terms
of what they expect from their jobs and how committed, satisfied and motivated they are, and
may need to be treated differently. This requires a more flexible approach from managers.

2.1.4. Global Changes in People and Organizations

The global influence during the 1980s and 1990s, pushed companies to focus on their people
resources. Following the time of worldwide changes, many business leaders started to consider
their people resources as the most valuable assets as well as sources of competitive advantages.
During the time, many companies started to change their management styles as well as started to
manage their people resources as efficiently and effectively. Due to technological developments,
change occurs more quickly now, and an organization has to be able to adapt to the changing
environment in order to survive. An organization‟s ability to adapt to change relies heavily on its
employees (Armstrong, 2016).

2.1.5. HRM Theories and Models

Following the popularity of the subject matter, different scholars developed different theories
and models in the HRM sphere. According to Armstrong (2016), there are various HRM models

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and practices in different organizational settings. As good HRM practice has an influence on the
employee and organizational performance (Armstrong, 2016).

[Link]. Organizational Behavior Theory

The organizational behavior theory contributed a lot towards the development of human resource
management systems and theories. According to Armstrong, (2016), organizational behavior
theory deals with how people behave at individual, group and organizational levels. It is a way of
thinking about individuals, groups and organizations. It also deals with how organizations
function in terms of their structure, processes and culture. Similarly, Nadler, (1980) stated that
organizations are complex social systems and managers are supposed to perform their jobs
within the complex social systems. In addition, managers are responsible to influence their
employees‟ behavior in a desired direction, usually towards the accomplishment of a specific
task or performance goals. They need to understand the patterns of employees‟ behavior predict
the outcomes as well as control behavior over the course of time

[Link]. Social Exchange Theory

The social exchange theory stated that the contribution of employees‟ performance is reciprocal
and they will better perform if they perceive that the organization has treated them well
(Armstrong, 2016).It is widely used in a large number of social science disciplines such as
management, sociology and social psychology. The theory argues that obligations are generated
through a serious of interactions between parties who are in a state of reciprocal
interdependence. The relationship involve over time into trusting, loyal and mutual commitments
as long as response or actions the parties abide by certain rules of exchange and involve
reciprocity or repayment rules such that the action of one party leads to a response or actions by
the other party through their level of commitment (Sake, 2006).

[Link]. Contingency theory

The contingency theory of HRM stated that HRM practices are dependent on organization‟s
environment and circumstances. The theory mainly focused on finding the „best-fit‟ between
HRM strategies and practices and situations (Armstrong, 2016).

According to Paauwe (2004), HRM policies and practices can be used as an independent variable
and the employee and organizational performance will vary according to the influences such as

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the size of the company, age and technology, capital intensity, degree of unionization,
industry/sector ownership and location.

2.1.6. HRM Practices

Developing and practicing an effective HRM practices is a mechanism of crafting a sound HRM
system in an organization (Aslam, 2014). HRM practices are organizational activities used to
produce a pool of human talent to ensure that the resources are utilized for the fulfillment of
organizational goals (Schuler and Jackson (1987), Schuler and MacMillan (1984), Wright and
Snell (1991).

[Link]. Recruitment and selection

Employee recruitment is the process of attracting a pool of candidates to a particular job position.
The HR task during recruitment process is setting the recruitment plans in line with the job
analysis information including personal specifications and job descriptions, and post vacancies
on the company‟s website, newspapers, notice boards or any other mechanisms. Accordingly, a
person specification/job specification, defines the knowledge, skills and abilities (KSAs)
required carrying out the role, the types of behavior expected from role holders (behavioral
competencies) and the education, qualifications, training and experience needed to acquire the
necessary KSAs (Armstrong, 2016).
On the other hand, selection is the process of assessing the suitability of candidates to the
organization as well as job behavior. The main activities of selection process are filling the
application forms, conducting tests and interviews, and references (Armstrong, 2016).

[Link]. Performance Management and Evaluation

According to Armstrong, (2016), the term performance is a matter not only of what people
achieve but how they achieve it. In addition, the Oxford English Dictionary confirms this by
including the phrase „carrying out‟ in its definition of performance: „The accomplishment,
execution, carrying out, working out of anything ordered or undertaken.‟ High performance
results from appropriate behavior, especially discretionary behavior, and the effective use of the
required knowledge, skills and competencies. Performance management must examine how
results are attained because this provides the information necessary to consider what needs to be
done to improve those results (Armstrong, 2016).

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Therefore, performance management is a systematic process for improving organizational
performance by developing the performance of individuals and teams. It is a means of getting
better results by understanding and managing performance within an agreed framework of
planned goals, standards and competency requirements.

[Link]. Training and Development

The term training can be considered as investment in organizational human assets. According to
(Waterman, 1994), training and development encompasses three main activities: training,
education, and development. Firms that offer training and employee development are making a
visible investment in employees. Among its positive outcomes, this investment increases
employability for the individual employee.

[Link]. Compensation Management

Compensation is the sum of all kinds of payments both financial and non-financial to employees.
Reward management is concerned with the formulation and implementation of strategies and
policies, the purposes of which are to reward people fairly, equitably and consistently in
accordance with their value to the organization and thus help the organization to achieve its
strategic goals. It deals with the design, implementation and maintenance of reward systems
(reward processes, practices and procedures) that aim to meet the needs of both the organization
and its stakeholders.

[Link]. Promotion and Career Management

According to Miller and Wheeler (1992), lack of meaningful work and opportunities for
promotion significantly affected employees' intentions to leave an organization. Organizations
were able to improve their employees' retention rate by adopting job enrichment programs and
enhancing their advancement opportunities. Besides promotion opportunities, the evaluation
criteria used in the promotion and reward system also had significant effects on employees‟
turnover intentions (Quarles, 1994). Ineffective performance appraisal and planning systems
contributed to employees' perceptions of unfairness and they were more likely to consider
leaving the organization (Dailey and Kirk, 1992).

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2.1.7. The HR system
The HR system is a set of interrelated and jointly supportive HR activities and practices creates
the HR system in an organization. According to Becker and Huselid (2006), argued that the HR
system is the key HR asset and it is the best method of implementing the firm‟s HR strategies.

2.1.8. HRM and performance

Several studies have been carried out showing that good HRM practice and firm performance are
correlated; e.g., Guest, (2000), Patterson, (1997), and Purcell, (2003). The influence of HRM
practice can be related to organizational commitment as well as organizational performances
(Boxall and Purcell, 2016).

Armstrong, (2014), stated that the major impacts and contributions of HRM practices can be seen
by augmenting HRM activities to employee and organizational outcomes. It is related with
enhancing organizational performance by providing insight on the performance issues affecting
the organization and its employees. According to (Storey, 2009), the concept behind the practice
of HRM makes an impact is that people are the organization‟s key resource and organizational
performance largely depends on them. This implies, the good human resource policies have an
effect on human resource management practices and these in turn influence staff attitudes and
behaviors as well as organizational performance.

HRM practices are designed and implemented in such a way that human resource plays a
significant role in achieving the goals of the organization (Delery and Doty, 1996). Human
resource management practices, aim to achieve two sets of objectives: improve employee
performance and enhance organizational effectiveness (John and Jeffrey, 2000). Similarly, the
Guest, (1990), model of HRM clearly shows that a set of integrated HRM practices can achieve
superior individual and organizational performance.

2.1.9. The HRM black box phenomenon

The black box phenomenon shows the ambiguity of measuring the causalities between HRM
practices and performance as illustrated in Figure 2.1. This is the situation in which, while it may
be possible to observe HRM inputs in the form of HR practices and to measure firm performance
outputs, it may be difficult to ascertain, through research, what happened in between what the
HRM outcomes were that converted the input of HR practices into firm performance outputs.

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Alvesson, (2009), suggested that research does not proceed beyond attempts to find an empirical
association between HR practices and organizational performance. The phenomena are in a black
box, only input and output are registered and what is happening remains clouded in the dark.

Figure 2.1: The HRM black box phenomenon

Source, (Armstrong, 2016)

2.1.10. HRM Models

[Link]. The Input-Output Model of HRM

The most notable model of HRM is the Guest (1987), an input-output model of HRM. This
model clearly illustrated the links between HRM practices with employee outcomes such as
organizational commitment and employee motivation. The model clearly shows that a set of
integrated HRM practices can achieve superior individual and organizational performance. The
basic query of this model is „how HRM practices influence employee characteristics?‟ Employee
characteristics are employee engagement, commitment, employee motivation, and skill. Second,
these features enhance organizational performances in the form of product quality, productivity,
customer service, as well as financial result (Guest, 1990).

For this purpose, the author used the expectancy theory to show the link between HRM practices
with performance. The expectancy theory describes the link between employee motivation and
performance in an organization.

Figure 2.2:HRM and performance Link (Source: Guest, 2000).

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[Link]. The hard and soft versions of HRM practices
The model of Storey (1989), clearly distinguished the hard and soft versions of HRM practices.
According to this model, the hard side of HRM consists of the quantitative, rational, and
economical aspects. On the other hand, the „soft‟ version of HRM deals with qualitative aspects
such as communication, motivation, and leadership.

[Link]. The Harvard model of HR management

The Harvard model of HR management, produced by Beer, (1984), shows the associations
between business strategy, HRM practice, and organizational performance. The model describes
the associations between HRM practice, employee commitment, psychological involvement,
personal performance, and organizational performance. Accordingly, HR management consists
of all actions that affect the relationship between an employee and the organization. They
believed that today, many pressures are demanding effective organizations human resources.

2.1.11. Organizational Commitment

According to Meyer and Allen (1997), organisational commitment represents a multidimensional
concept intended to capture complicated human psychological and behavioural response in the
workplace organizational commitment can be divided into three subcomponents namely,
affective, continuance and normative commitment. Affective commitment refers the individual‟s
attachment to social relationships and to the organization. Continuance commitment includes
social roles or positions from which individuals derive their perception of the cost associated
with leaving the organization and the rewards related to participation in the organization.
Normative commitment includes the internalization of norms and values and on inner
convictions. It results in an individual‟s feeling of moral obligation to remain with the
organization.

2.2. The Ethiopian HR Proclamations

The public sector includes all government subsidiaries (government departments /ministries,
commissions, agencies, authorities), the public enterprises and the social security and national
defense. Sectors can be also classified as legislative executive and the judiciary (Treu, 1967).

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In Ethiopia, the HR laws and regulations are centralized at federal and regional levels. The
following Table 2.1 summarized the HR proclamations of Federal and Addis Ababa City
Administration offices.

Title FCSP No. 1064.2017. AACCSP No. 6/2008

Structure Section 2 (5) of the document states Section 2 (4) states that, „any
that, „any government institution shall government offices shall undertake
study its organizational structure, and studies and decide the organization
submit to the Ministry for approval‟. structure and staffing plan, and submit
to the Commission for approval‟.
Salary Section 2 (7) states that, „the Ministry, Section 2 (6) states that, „the
Scale in collaboration with the concerned commission shall prepare a salary scale
government institutions, upon to be applicable in civil services in
undertaking studies prepare salary general and submit to the Cabinet for
scale and submit same to the Council approval as well as supervise its proper
of Ministers, and supervise its proper implementation‟.
implementation upon approval.
Human Any government institution shall, Section 2 (12) states that, „any
Resource based on its strategic plans, study and government office, based on its strategic
Planning implement short, medium and long- plan shall prepare and implement short,
term human resource plans. Section 2 medium and long term HRP‟.
(11)
Recruitmen Section 2 (13) states that, „the Section 2 (13) states that, „the
t and Ministry shall issue directives on the Commission shall issue directives on the
Selection Recruitment and selection criteria of Recruitment and selection criteria of
civil servants. civil servants‟.
Promotion Section 2 (25), states that, the Ministry Section 2 (24) states that, the
shall issue detailed directives on other Commission shall issue directives on the
conditions applicable to the promotion promotion of civil servants.
of civil servants.
Internal Section 2 (26) states that, „a Section 2 (27) states that, „a government
Transfer government institution may, whenever offices may, whenever necessary, based
necessary, based on a transparent on a transparent procedure, transfer a
procedure, transfer a civil servant to civil servant to another similar position
another similar position of an equal of an equal grade and salary‟.
grade and salary‟.
Performanc Section 2 (31) states that, „the Section 2 (32) states that, „the
e Ministry shall issue directives on Commission shall issue directives on
Evaluation performance evaluation. performance evaluation.

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Leave Section 2 (37) states that, „the Section 2 (35) states that, „the Ministry
Ministry shall issue directives on the shall issue directives on the conditions
conditions of leave‟. of leave‟.
Training Section 2 (59) states that, „the ministry Section 2 (59) states that, „the
shall prepare a training policy for civil Commission shall prepare a training
servants‟. policy for civil servants‟.
Source: AACCSP No. 6/2008 and FCSP No. 1064.2017, reviewed in 2021

2.4. Empirical Review

The field of HRM in the public sector has been used as eye-catching research topic for more than
three decades. The most notable previous studies researches in most developed countries e.g., in
U.S.A, are: Wright (2005), Huselid (1995), Arthur, 1994, and MacDuffie (1995), and in UK,
e.g., Boselie (2019), Ahbabi (2019); Guest and Conway (1997), Patterson (1997), Wood and De
Menezes (1998). It is rare to see abundant studies in the Ethiopian context related to HRM
practice, employee engagement and organizational performance.

Particularly, Gould, Williams (2003), was conducted different studies related with HRM
practice, employee and organizational outcomes in the public domain. He found that there are
insufficient public sector HRM researches available in developing countries. Insufficiency of
studies in public-sector organizations indicates weak attention on HRM, and poor organizational
service image in the sector.

Moreover, Guest, (2000), Patterson, (1997), Purcell, (2003), Boxall and Purcell (2016), collected
different studies related with the influence of HRM practice can be related to organizational
commitment as well as organizational performances.

Similarly, Storey (2009), was conducted a study to investigate the relationship between HRM
practices and organizational performance. The result of his study shows that the good human
resource policies have an effect on human resource management practices and these in turn
influence staff attitudes and behaviors as well as organizational performance

In the African context, Steyn, R., Bezuidenhout, M.L. and Grobler, A., (2017), were conducted a
comparative study between private and public sector organizations towards human resource
practices and affective organizational commitment. The main purpose of their study was purpose

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to specify the HR practices–OC relationship, within South Africa, and specifically across various
sectors. The result of their study shows that the slight practically significant mean scored
differences were detected among HRM practices provided per sector. They have also found that,
a positive link between effective HR practices and OC was found within each of the three
sectors, but this relationship was sector-specific.

In addition, Teclemichael Tessema and Soeters (2006), conducted a study to investigate the
HRM–performance link in the Eritrean civil service. In their study HRM outcomes were used as
mediating factors between HRM practices and employee performance. The result of their study
shows that the Eritrean economic and political environment within which HR practices operate
has not been conducive in maximizing the impact of HR practices on performance.

The aim is to do this research in Ethiopia, and in the public sector. In many respects Ethiopia is a
unique country in terms of Governance. According to the Report of UNDP (2019), more than
109 people are living in Ethiopia. It is the second most populous country in Africa next to
Nigeria. Different studies (e.g., Tafesse and Zigiju, 2016), reported that the civil service
arrangement has a long history and started since the regime of emperor Minilic II in 1907. Most
employees in Ethiopia are working with public sector organizations as most modern
organizations are in the public sector (Tafesse and Zigiju, 2016 and Horwitz et al., 2009).
Despite, civil service reforms tested so far, most of them were ineffective and far from meeting
targets.

As a result, the overall trends of public sector organizations in Ethiopia are seen as inefficient
and they have a traditional HRM system (Zigiju, 2016 and Worku, 2019), due to the fact that
they are directly copied from the practices of other countries abroad (Semaw and Aminu, 2009).

Armstrong supports the idea of Semaw and Aminu and stated that adopting and copying other
countries HRM practice is not a solution and HRM cannot be presented in the form of a
universal process for improving the way people managed in organizations (Armstrong, 2016).
The HRM practices of public sector organizations in Ethiopia are not properly established and
most employees in the sector are not satisfied, not committed and not engaged, and the
performance of the sector is inefficient (Ijigu, 2015). Therefore, this problem pressures the
Ethiopian government to set up an effective HRM system integrating an employee attitudes and
behaviors as well as organizational performance.

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In light of these challenges discussed above, efforts to develop a sound HR management system
in the public sector has real importance towards enhancing the attitudinal and behavioral
outcomes of employees and meet superior public sector performance. Momemi et al., (2012),
suggested that, particularly in the 21st century, HR practitioners recognize the importance of HR
practices and their influence on the employee job satisfaction, an engagement, commitment and
organizational performance. Therefore, the goal of conducting this research is to examine the
effect of HRM practices on the employee attitudes, behavioral, and organizational performance,
in public sectors. Besides, the study will give to our understanding of the public sector HR
management system and practices investigating the link between HR management practice,
organizational commitment, and organizational performance in the public sector context.

2.5. Conceptual Framework

The next conceptual model represents the relationship between HR management practices, (e.g.,
staff recruitment & selection, performance appraisal, training & development, compensation
administration, and promotion), organizational commitment and public domain organizational
performance.

The conceptual framework of this study was established based on the input-output HRM model
of Guest, 1987); social exchange theory of (Sake, 2006) and Organization commitment model of
(Allen and Meyer, 1990) and public leadership-performance model of (Bass et al, 2003 and Kim
2005, and Brewer and Selden, 2000). The model proposes that HRM (recruitment and selection,
performance evaluation, training and development, compensation management and promotion)
has a relationship with organizational commitment of employees, as well as organizations
performance, in public sector context.

It is noted that there are diversity across studies in the particular HRM practices covered (Becker
and Gerhart, 1996, Deyer and Reeves, 1995 and Wright and Gardner, 2003), due to the notion
that organizational strategies are linked to different sets of HRM practices (Bown and Ostroff,
2004). Nevertheless, there is much commonality as studies typically cover a substantial the five
core dimensions of HRM practices which have been utilized in the most public sector
organizations (Wall and Wood, 2005). Even though, bundle of HRM practices in sum has been
taken as HRM practice by some researchers such as (Gould Williams, 2003, Graton & Truss,
2003, Wood, 1999, Dyer and Reeves, 1995 and Matchington and Grugulis, 2000), it is difficult

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to see the relationships of HRM practices with employee and organizational outcomes. In this
study therefore, individual HRM (recruitment and selection, performance evaluation, training
and development, compensation management and promotion) were considered as an independent
variable and the individual and organizational performances was dependent variable.
Organizational commitment will be used to mediate the relationship between HRM practice and
organizational performance. In this case, organizational performance will be measured through
responses of individual perception of organizational public service performance.

The conceptual framework of this study is presented by the following figure:

Figure 1.1: Conceptual Framework

Source: Researcher‟s own conceptualization, 2021.
In addition, testing the relationships between HRM and performance benefits from the control of
third factors, and also from examination of the effect of individual component practices relative
to each other and to measures of overall HRM (Wall and Wood, 2005). The employee attitudinal
dimension of employee (organizational commitment) and will be used to mediate the relationship
between HRM practices and organizational performances. Organizational commitment might act
as mediators to investigate causalities between HRM-performance relationships (Wright, 2005).

2.6. Hypotheses
To address the research questions and based on the conceptual framework developed in chapter
two section 2.3, the following research hypotheses were established and tested in this study.
The research hypotheses of the study were:

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 1: The relationship between HRM practices (Recruitment and selection, performance
evaluation, training and development, compensation management and promotion)
and organizational commitment (normative, continuance and affective).

Hypothesis 1a: There is positive relationship between recruitment and selection practice
and organizational commitment (normative, continuance and affective).

Hypothesis 2a: There is positive relationship between performance evaluation practice and
organizational commitment (normative, continuance and affective).

Hypothesis 3a: There is positive relationship between employee training and development
practice and organizational commitment (normative, continuance and affective).

Hypothesis 4a: There is positive relationship between compensation management practice

and organizational commitment (normative, continuance and affective).

Hypothesis 5a: There is positive relationship between promotion practice and

organizational commitment.

2: The relationship between HRM practices (Recruitment and selection, performance

evaluation, training and development, compensation management and promotion) and
perceived public sector organizational performance.

Hypothesis 1b: There is positive relationship between recruitment and selection practice and
perceived public sector organizational performance.

Hypothesis 2b: There is positive relationship between performance evaluation practice and
perceived public sector organizational performance.

Hypothesis 3b: There is positive relationship between training and development practice and
perceived public sector organizational performance.

Hypothesis 4b: There is positive relationship between compensation management practice

and perceived public sector organizational performance.

Hypothesis 5b: There is positive relationship between promotion practice and perceived
public sector organizational performance.

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 Hypothesis 3: There is positive relationship between organizational commitment
(normative, continuance and affective) and perceived public sector organizational
performance.

Hypothesis 4: The association among HRM practices and perceived organizational

performance is mediated by organizational commitment (normative, continuance and
affective).

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 CHAPTER THREE
3. RESEARCH DESIGN AND METHODS

3.1. The Research Design

Research philosophy contains important assumptions about the way in which a researcher views
the world, and it underpins the research strategy and methods the researcher chooses as part of
the strategy (Saunders et al, 2007). The purpose of this study was to investigate the impact of
HRM practice on organizational commitment and perceived organizational performance, as
perceived by respondents in the public sector organizations in Ethiopia. The nature of this study
is cross sectional survey design. Cross-sectional studies often employ the survey strategy
(Easteby (2008) and Robson, 2002). The cross sectional survey design is most widely used in
social sciences, education, psychology, political science, and business in which instruments such
as questionnaire and interviews can be used to gather information from groups of individuals and
permit the researcher to measure their attitudes and opinions toward some issue at one point in
time (Donald, 2006); are popular as they allow the collection of a large amount of data from
sizeable population in a highly economical way (Mark Saunders et al, 2007); made inferences to
generalize from a sample to a population about some characteristics, attitude, or behavior of the
population when the data can be collected at one point in time (Creswell, 2014).

3.2. Research Approach

The nature of this study was a quantitative approach. According to Kothari (2017), a quantitative
approach is essential to measure data in numerical form. In this study, the relationship between
separate HR management practices, organizational commitment and perceived organizational
performance was investigated.

3.3. Population

A population is a set of all items in a study (Kothari, 2017 and Donald Ary et al., 2018 and
Yogesh Kumar, (2019). Accordingly, the population of this study was employees working in all
government sector organizations that are administered under the government human resource
administration proclamation in Ethiopia. According to the report of Capital Ethiopia News later,
(2020), there are 1, 400, 000 government employees working in 20 Minister Offices, 108 Federal
level offices and 122 regional offices in Ethiopia.

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3.4. Sampling Procedure & Sample Size

Sampling is the process of obtaining information about an entire population by examining only a
part of it (Kothari, 2004). It is a small group or a portion of a population that is observed
(Donald, 2006). In this study, 14 federal and 10 Addis Ababa city Administration office public
sector organizations were chosen from the Federal public sector organizations of Ethiopia using
convenient sampling method. Once, conveniently accessible government organizations were
selected, 400 questionnaires were distributed for employees to fill the questionnaire by asking
their permissions.

Table 3.1: Respondents

Federal Public Sector Organizations in Ethiopia

No Organization Distributed

1. Ethiopian Anti-corruption Commission 11

2. Ethiopian Ministry of Education 15
3. Ethiopian Federal High Court 7
4. Ethiopian Ministry of Finance & Eco. Development 22
5. Ethiopian Ministry of Foreign Affairs 25
6. Ethiopian Insurance Corporation 13
7. Ethiopian Science and Higher Education Minister 5
8. Ethiopian Ministry of Labor and Social Affairs 7
9. Ethiopian Public Health Institute 10
10. Ethiopian Public Procurement & Property Administration Agency 5
11. Ethiopian Plan Commission 7
12. Ethiopian Shipping and Logistics Services Enterprise 17
13. St. Paulos Millennium Medical College 19
14. Ethiopian Technology and Innovation Institute 5
Addis Ababa City Administration Public Sector Organizations
15 Addis Ababa Education Bureau 7
16 Addis Ababa Finance & Eco Development Office 26

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 17 Addis Ababa Health Bureau 12
18 Addis Ababa Housing Agency 5
19 Addis Ababa Land Administration Bureau 23
20 Addis Ababa Micro and SE Development Agency 5
21 Addis Ababa Revenue Authority 50
22 Addis Ababa Public Service and HR Bureau 34
23 Addis Ababa TVET Agency 25
24 Addis Ababa Trade and Industry Bureau 45
Total 400
Source: Researcher‟s own survey result, 2021.

The main reason of using the convenient sampling was due to the fact that it saves time, cost and
energy. Besides, all selected public sector organizations have homogeneous characteristics since
they are administered by uniform HRM policies and regulations of Ethiopian Public Service and
Human Resource Development Minister. According to Kothari, (2017), convenience sampling is
a method of selecting the representative elements in a study based on the ease of access.

The sample size of this study was determined by using the sample size formula of Yamana and
Taro, (1967). Therefore, the sample size of this study was determined by using the simplified
sample size formula of Yamana and Taro, (1967) as follows:

n = ____N___-------------------------- (e1)
(1+N (e) 2)
Where;
n=sample size
N=population of the study
e= margin of error determined by researcher (assuming a 95% confidence level and
p value of 0.05).
Source: Yamane and Taro, (1967).
n = ____1,400,000___
(1+1,400,000 (0.05) 2)
n = 1,400,000_
3,501
n≈400

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3.5. Questionnaire Development

A five-point Likert scale self-administered questionnaire adopted from some previous studies
was used to gather the necessary data. Accordingly, the five items recruitment and selection scale
of (Tessema & Soeters, 2006 and Demo et al. 2012); the ten items employee training and
development scale of (Tessema & Soeters, 2006); the six items employee promotion practice
scales of (Tessema & Soeters, 2006 and Demo et al. 2012), and the six items compensation
management practice scale was adopted (Tessema & Soeters, 2006) and used in the study.

Organizational commitment measures: The original three forms of 5-point organizational

commitment measurement scale (affective, normative and continuance) developed by (Allen &
Meyer, 1990) were used to measure employees‟ level of organizational commitment.

Perceived Organizational performance: There is no general theory about performance and a

number of approaches and models, often built on specific disciplinary perspectives, such as
economics, psychology or production management (Guest, 2011). However, it is too difficult to
integrate an „Objective‟ performance measurement in a large survey research and such
measurement scales are not available (Alonso and Lewis, 2001). Employees‟ perception of the
overall organization-level performance is valuable way to capture the interface between attitudes
and performance (Delaney and Huselid, 1996). Where the „hard‟ quantitative data are not
available, we may wish to resort to measures of attitudinal and behavioral measures (Guest,
2011). For this reason, organizational performance was measured through responses of
individual perception of organizational public service performance. In this regard, employees
were asked their opinions about how they perceived their organizations' performance.
Accordingly, the ten items self-reported perceptions of organizational performance scale
developed by (Delaney & Mark, John and Huselid, 1996) were used to capture the performance
of organizations in the public sector.

3.6. Method of Data Analysis

The Pearson correlation, multiple linear regression and a partial least square methods were used
in the data analysis process. To determine if certain elements of HRM practices predict
organizational commitment and organizational performance, multiple linear regression analyses
were performed, with HR practices as the independent variable and organizational commitment

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and organizational performance as the dependent variable. Accordingly, the standardized
regression for the predictors of OC and OP were shown as follows:
HRM Practices and Organizational Commitment
OC = α0 + β1RS + β2PE+ β3TD + β4CM + β5PM ---------------- (e2)
HRM Practices and Organizational Performance
OP = α0 + β1RS + β2PE+ β3TD + β4CM + β5PM ---------------- (e3)
Where:
α0= Constant
Dependent Variables:
OC = Organizational commitment
OP=Organizational performance
Independent Variables:
RS = Recruitment & Selection
PE = Performance Evaluation
TD = Training & Development
CM = Compensation Management
PM=Promotion and career management

3.7. Ethical Considerations

It is critical responsibilities of a researcher to fulfill all the ethical aspects of his/her study
(Kumar, 2019). This paper, therefore, was considered all the necessary AAU ethical issues in the
topic formulation, collection of data, analysis of data, as well as discussions and interpretations
of findings. Further, the researcher told respondents as the data collected is confidential.

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 CHAPTER FOUR
4. DATA PESENTATION, ANALYSIS AND INTERPRETATION

The main aim of this study was to examine the relationship between HRM practice,
organizational commitment and perceived organizational performance, as perceived by
respondents in the public sector organizations in Ethiopia. The nature of this study was cross
sectional survey design with quantitative approach. A total of 400 questionnaires were
distributed to 14 federal level and 10 Addis Ababa City Administration level public sector
offices using convenient sampling technique. Out of the distributed questionnaires, 375
questionnaires were properly collected and filled and analyzed. Pearson correlation, multiple
regressions the Partial Least Square modeling techniques were used to manipulate the collected
data.

4.1. Response Rate

According to (Lindemann, 2019), the response rate affects the reliability as well as accuracy of
the result of the study.

Figure 4. 1: Response Rate

6%

Collected
Not Collected
94%

As it is depicted in the above Figure 1, out of 400 distributed questionnaires, 375 questionnaires
were properly collected with the response rate of 94%. According to Lindemann (2019), a
response rate of 60% and above is acceptable in a survey research.

In addition, the number of questionnaires distributed to each office and collected from
respondents is summarized in Table 4.1.

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Table 4.1: Response Rate in Each Office

Federal Public Sector Organizations in Ethiopia

No Organization Distributed Returned Response

Rate

1. Ethiopian Anti-corruption Commission 11 11 100%

2. Ethiopian Ministry of Education 15 13 87%

3. Ethiopian Federal High Court 7 7 100%

4. Ethiopian Ministry of Finance & Eco.

22 20 91%
Development

5. Ethiopian Ministry of Foreign Affairs 25 22 88%

6. Ethiopian Insurance Corporation 13 11 85%

7. Ethiopian Science and Higher Education

5 2 40%
Minister

8. Ethiopian Ministry of Labor and Social Affairs 7 7 100%

9. Ethiopian Public Health Institute 10 9 90%

10. Ethiopian Public Procurement & Property

5 5 100%
Administration Agency

11. Ethiopian Plan Commission 7 7 100%

12. Ethiopian Shipping and Logistics Services

17 16 94%
Enterprise

13. St. Paulos Millennium Medical College 19 18 95%

14. Ethiopian Technology and Innovation Institute 5 5 100%

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Addis Ababa City Administration Public Sector Organizations

15 Addis Ababa Education Bureau 7 7 100%

16 Addis Ababa Finance & Eco Development

26 25 96%
Office

17 Addis Ababa Health Bureau 12 11 92%

18 Addis Ababa Housing Agency 5 5 100%

19 Addis Ababa Land Administration Bureau 23 22 96%

20 Addis Ababa Micro and SE Development

5 5 100%
Agency

21 Addis Ababa Revenue Authority 50 47 94%

22 Addis Ababa Public Service and HR Bureau 34 33 97%

23 Addis Ababa TVET Agency 25 24 96%

24 Addis Ababa Trade and Industry Bureau 45 43 96%

Total 400 375 94%

Source: Researcher‟s field survey result, 2021.

4.2. Respondents Background Information

Table 4.2: Background Information

Frequency Percent Cumulativ
e Percent
Organizational Federal Level Public sector 153 41 41
proportion of organizations
respondents Addis Ababa City 222 59 100
Administration public sector
organizations
Total 375 100.0

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Gender Female 130 34.7 34.7
Male 245 65.3 100.0
Total 375 100.0
Age Below 20 years old 4 1.1 1.1
2o to 30 years old 212 56.5 57.6
above 30 to 40 years old 107 28.5 86.1
above 40 t0 50 years old 37 9.9 96.0
50 and above years old 15 4.0 100.0
Total 375 100.0
Marital Status Married 200 53.3 53.3
single 161 42.9 96.3
Other 14 3.7 100.0
Total 375 100.0
Educational level Certificate 2 .5 100.0
Diploma Holder 20 5.3 5.3
First Degree Holder 199 53.1 58.4
Masters Degree 152 40.5 98.9
Ph.D Holder 2 .5 99.5
Total 375 100.0
Experience Less than 1 year 28 7.5 7.5
1 to 3 years 92 24.5 32.0
above 3 to 6 years 86 22.9 54.9
above 6 to 9 years 40 10.7 65.6
above 9 years 129 34.4 100.0
Total 375 100.0
Monthly income Less than 2500 3 .8 .8
(in Eth. Birr) 2,500-3500 30 8.0 8.8
above 3,500-4500 30 8.0 16.8
above 4,500-5,500 53 14.1 30.9

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 above 5,500-6,500 34 9.1 40.0
above 6,500 225 60.0 100.0
Total 375 100.0
Source: Researcher‟s field survey result, 2021.
Regarding the organizational proportion of respondents, presented in Figure 4.2, the survey was
performed on 24 different public sector organizations in Ethiopia. Accordingly, majority (59%)
of respondents were Addis Ababa city Administration offices, while the remaining (41%) were
federal level public sector offices in Ethiopia.

Figure 4.2: Organizational proportion of respondents

Series1 Series2
222

153

47 43
25 33
20 22 16 18 22 24
11 13 7 11 11
0 0 0 0 0 20 70 90 50 70 0 0 50 7 0 0 50 0 50 0 0 0 0

Source: Field survey result, 2021.

Moreover, Table 4.2 shows that 35% of respondents were females while 65% were males.
Therefore, the sex proportion of the respondents in Ethiopian public sector organizations was
imbalanced and skewed toward males. Hence, the result of the study shows that the Ethiopian
public sector organizations are dominated by men.

Ayanaw.Y Page 33
 Furthermore, 1% of the respondents fall within the age of below 20, while majority (57%) are
within the ages of 20 years to 30 years, while 29% are within the ages of above 30 years to 40
years, while 10% are within the ages of above 40 years to 50 years, and the remaining 4% falls
within the ages of above 50 years. Hence, it can be concluded that majority of employees in the
Ethiopian public sector organizations falls between 20 to 30 years old. In addition, the result
presented in Table 4.1 shows that majority (53%) are married, while 43% of there are single and
the remaining 4% are under the other categories.
Regarding to the educational level of respondents presented in Table 4.2, majority (53%) of
respondents are first degree holders followed by masters, diploma, certificate and Ph.D. levels
with a percentage result of 41%, 5%, 0.5% and 0.5% respectively. Therefore, the result implies
that majority (53%) of employees in public sector organizations in Ethiopia are first degree
holders.

The background result shown in Table 4.2 indicates that majority (34%) had working experience
of above 9 years in the public sector, while 25% had experience of between one to three years,
23 % of respondents‟ work experience falls between above three years to six years, followed by
above six to 9 years and less than 1 year with the percentage result of 11% and 8 years of
experience. Therefore, it can be concluded that majority (34%) of public sector employees in
Ethiopia have working experience of above 9 years.

Regarding the monthly income of respondents, the result presented in Table 4.2 shows that the
monthly salary of majority (60%) of respondents are above ETB. 6,500, followed by 4,500-
5,500, 5,500-6,500, 2,500-3500, and less than 2500 with a percentage of 14%, 9%, 8%,8% and
1% respectively. Hence, it can be concluded that majority of public service employees in
Ethiopia earn a monthly salary of above ETB. 6,500.

4.3. Reliability and Validity Tests

4.3.1 Reliability
Table 4.3 Reliability Statistics
Scale Items Cronbach' Cronba Mean Std. Number N
s Alpha ch's Deviation of items
for each Alpha
for all

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HRM Employee Recruitment and Selection 0.814 0.855 9 375
3.1291 .73219
Practices Practices
Scale Performance Evaluation Practices 0.853 2.8960 .82905 7
Employee Training and Development 0.906 7
2.8834 .93305
Practices
Compensation Management Practices 0.853 2.4436 .89230 6
Employee Promotion and Career 0.851 6
2.7404 .84837
Management Practices
Organizati Normative Commitment 0.783 0.774 2.9753 .72776 8 375
onal Continuance Commitment 0.832 2.9464 .75209 9
Commitm 0.706 8
Affective Commitment 2.8888 .65050
ent Scale
Organizati Organizational Performance 0.920 0.920 11 375
onal
3.0470 1.0750
Performan
ce
Source: Researcher‟s Field survey result, 2021.
Table 4.3 above shows the reliability analysis result of items used to gather data from

respondents. Accordingly, the Cronbach‟s alpha coefficients result were 0.814, 0.853, 0.906,

0.853, 0.851, 0.783, 0.832, 0.706 and 0.92 for employee recruitment and selection practices,

performance evaluation practices, employee training and development practices, compensation

management practices, employee promotion and career management practices, normative

commitment, continuance commitment, affective commitment, and organizational performance

respectively.

In sum, the reliability coefficients of all items used were above 0.7, the minimum coefficient was

observed 0.706 and the items were reliable. According to Hair, et al., (2006), an item with

Cronbach‟s alpha coefficients of 0.6 is reliable.

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4.3.1 Validity Test
The Pearson Correlation analysis result indicated in the following table 4.4 shows that all the
items used in the study were significant at the 2-tailed 0.01 level.

Table 4.4: Validity Statistics

Items RS PE TD CM PR NC CC AC OP Total

Employee Recruitment Pearson 1 .686**

and Selection Practices Correlation

Performance Evaluation Pearson .600* 1 .736**

Practices Correlation *

Employee Training and Pearson .502* .55 1 .777**

Development Practices Correlation * 1*

*

Compensation Pearson .303* .49 .48 1 .658**

Management Practices Correlation * 9* 3*

* *

Employee Promotion Pearson .447* .47 .49 .480 1 .697**

and Career Management Correlation * 1* 6* **

* *
Practices
Normative Commitment Pearson .276* .33 .33 .336 .404 1 .640**
Correlation * 1* 9* ** **
* *

Continuance Pearson .342* .31 .45 .321 .313 .523 1 .677**

Commitment Correlation * 2* 5* ** ** **
* *

Affective Commitment Pearson .324* .35 .39 .198 .222 .377 .495 1 .592**

Correlation * 1* 6* ** ** ** **
* *

Organizational Pearson .477* .39 .49 .327 .406 .461 .515 .46 1 .726**

Performance in the Correlation * 4* 3* ** ** ** ** 5*

* * *
Public Sector
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher‟s Field survey result, 2021.
The aggregate Pearson correlation result presented the last column in Table 4.4, shows that all
items are valid in the 0.01 significance level (2-tailed). In addition, the Pearson correlation
results are above the critical as well as greater than the critical value i.e., 0.05.

4.4. Correlation Analysis

In this research, there were 12 hypotheses formulated to test the relationship between HRM
practices, organizational commitment and organizational performance. Accordingly, Table 4.5

Ayanaw.Y Page 36
below shows the Pearson correlation result on the link between HRM practices, organizational
commitment (continuance, affective and normative), and organizational performance. The degree
of correlation coefficients between variables was labeled based on the classification of Taylor
(1990). Accordingly, the correlation coefficients < .35, .36 to .67, and .67 to 1 were classified as
low or weak, moderate and high-level correlations respectively.

4.4.1. Correlation s between HRM Practices and Organizational Commitment

Table 4.5: Correlations between HRM Practices and Organizational Commitment

CC AC NC Total OC
Employee Pearson .342** .324** .276** .391**
Recruitment and Correlation
Selection Practices Sig. (2-tailed) .000 .000 .000 .000
N 375 375 375 375
Performance Pearson .312** .351** .331** .409**
Evaluation Correlation
Practices Sig. (2-tailed) .000 .000 .000 .000
N 375 375 375 375
Employee Training Pearson .455** .396** .339** .496**
and Development Correlation
Practices Sig. (2-tailed) .000 .000 .000 .000
N 375 375 375 375
Compensation Pearson .321** .198** .336** .360**
Management Correlation
Practices Sig. (2-tailed) .000 .000 .000 .000
N 375 375 375 375
Employee Pearson .313** .222** .404** .392**
Promotion and Correlation
Career
Management Sig. (2-tailed) .000 .000 .000 .000
Practices N 375 375 375 375
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher‟s field survey result, 2021.

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HRM Practices and Normative Commitment (H1a, H2b H3c, H4a, H5a)

Table 4.5 indicates the moderate level correlation and positive associations between employee
promotion practice and normative commitment with the Correlation coefficient of .404.
However, the result shows that there is a positive but weak relationship between employee
training and development, compensation management, performance evaluation, employee
recruitment and selection practices and normative commitment with the correlation coefficient
result of .339, .336, 0.331 and 0.276 respectively. The result implies that there is a positive and
moderate level of relationships between employee promotion practice and normative
commitment, while there is a positive but weak relationship between employee training and
development, compensation management, performance evaluation, employee recruitment and
selection practices and normative commitment.
Moreover, the p value for this correlation is 0.000 which is less than 0.01 therefore it is
significant at 1% level. Hence, we have to reject the null hypothesis and accept the alternative
hypothesis that favors the positive association between all HRM Practices and normative
commitment.

HRM Practices and Continuance Commitment (H1b, H2b H3b, H4b, H5b)

Table 4.5 indicates the moderate level correlation and positive associations between employee
training and development practice and continuance commitment with the Correlation coefficient
of .455. However, the result shows that there is a positive but weak relationship between
employee recruitment and selection compensation management practices, performance
evaluation practices, and employee promotion practices with continuance commitment with the
correlation coefficient result of .342, .342, 0.321 and 0.213 respectively. The result implies that
there is a positive and moderate level of relationships between employee training and
development practice and continuance commitment, while there is a positive but weak
relationship between recruitment and selection, compensation management practices,
performance evaluation practices, and employee promotion practices and continuance
commitment.
Moreover, the p value for this correlation is 0.000 which is less than 0.01 therefore it is
significant at 1% level. Hence, we have to reject the null hypothesis and accept the alternative

Ayanaw.Y Page 38
hypothesis that favors the positive association between all HRM Practices and continuance
commitment.

HRM Practices and Affective Commitment (H1c, H2c H3c, H4c, H5c)

The third item in Table 4.5 shows the relationship between HRM practice and affective
commitment. Accordingly, the result revealed that there is a moderate level correlation as well as
positive associations between employee training & development and affective commitment with
the Correlation coefficient of .396. However, the result shows that there is a positive but weak
relationship between employee performance evaluation, recruitment and, selection practices,
employee compensation management practices and performance evaluation and affective
commitment with the correlation coefficient result of .351, .324, 0.22 and 0.198 respectively.
The result implies that there is a positive and moderate level of relationships between employee
training & development practice and affective commitment, while there is a positive but weak
relationship between employee performance evaluation, recruitment and, selection practices,
employee compensation management practices and performance evaluation and affective
commitment.

Moreover, the p value for this correlation is 0.000 which is less than 0.01 therefore it is

significant at 1% level. Hence, we have to reject the null hypothesis and accept the alternative

hypothesis that favors the positive association between all HRM Practices and affective

commitment.

Generally, the correlation coefficient results in four HRM practices (training and development,

performance appraisal, promotion, recruitment and selection) presented in Table 4.5 are dropped

from .36 to .67, while the weak level correlation result (.360) is obtained on the relationship

between employee compensation management practice and organizational commitment.

Therefore, the result revealed that there is a moderate level association between four HRM

practices (training and development, performance appraisal, promotion, recruitment and

Ayanaw.Y Page 39
selection) and organizational commitment. But the least link is obtained between employee

compensation management practice and organizational commitment.

Moreover, Table 4.6 below shows the overall relationship between HRM practice and

organizational commitment. Accordingly, the Correlation result of .537 was obtained in the

relationship between HRM practice and organizational commitment. It implies that there is a

positive and moderate relationship between HRM practice and organizational commitment.

In addition, the p value for this correlation is 0.000 which is less than 0.01 therefore the

relationship between HRM practice and organizational commitment is significant at 0.01 level

(2-tailed) levels. Therefore, we have to reject the null hypothesis and accept the alternative

hypothesis that favors the positive association between HRM practice and organizational

commitment.

Table 4.6: Correlations between HRM Practice and Organizational Commitment

HRM Practice Organization

in the Public al
Sector Commitment
HRM Practice in the Public Pearson Correlation 1 .537**
Sector Sig. (2-tailed) .000
N 375 375
Organizational Pearson Correlation .537** 1
Commitment Sig. (2-tailed) .000
N 375 375
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Researcher‟s Field survey result, 2021.

Furthermore, the scatter plot diagram in Figure 4.3 below shows the positive relationships
between HRM practice and organizational commitment.

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Figure 4.3: Scatterplot Diagram of HRM practice and organizational commitment

4.4.2. Correlations between HRM Practices and Organizational Performance (H1d, H2d,
H3d, H4d, H5d)

Table 4.7: Correlations between HRM Practices and Organizational Performance

Items Organizational
Performance in the Public
Sector
Employee Recruitment and Selection Pearson Correlation .477**
Practices Sig. (2-tailed) .000
N 375
Performance Evaluation Practices Pearson Correlation .394**
Sig. (2-tailed) .000
N 375
Employee Training and Development Pearson Correlation .493**
Practices Sig. (2-tailed) .000
N 375
Compensation Management Practices Pearson Correlation .327**
Sig. (2-tailed) .000
N 375
Employee Promotion and Career Pearson Correlation .406**
Management Practices Sig. (2-tailed) .000
N 375
N 375
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher‟s field survey result, 2021.

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The analysis result presented in Table 4.7 depicts the Correlation coefficient of 0.493, 0.477,
0.406, 0.394 and 0.327 for employee training and development practice, employee recruitment
and selection practices, employee promotion and career management practices, employee
promotion and career management practices, performance evaluation practices, and
compensation management practices respectively. It implies that there is a positive and moderate
link between the four HRM practices (training, recruitment and selection, promotion, promotion,
and performance evaluation practices) and organizational performance. But, there is a weak link
obtained between compensation management practices and organizational performance.
Therefore, the result shows the positive relationship between HRM practice and organizational
performance.
In addition, the p value for this correlation is 0.000 which is less than 0.01 therefore it is
significant at 1% level. Therefore, we have to reject the null hypothesis and accept the alternative
hypothesis that favors the positive association between all HRM practice and organizational
performance.
The scatter plot diagram in Figure 4.4 depicts the positive relationships between HRM practice
and organizational performance.

Figure 4.4: Scatterplot Diagram of HRM practice and organizational performance

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4.4.3. Correlations between Each Types of organizational commitment and organizational
performance
Table 4.8: Correlations between Each Types of Organizational Commitment and Organizational
Performance
NC CC AC OP
Normative Commitment Pearson Correlation 1 .523** .377** .461**
Sig. (2-tailed) .000 .000 .000
N 375 375 375 375
Continuance Pearson Correlation .523** 1 .495** .515**
Commitment Sig. (2-tailed) .000 .000 .000
N 375 375 375 375
Affective Commitment Pearson Correlation .377** .495** 1 .465**
Sig. (2-tailed) .000 .000 .000
N 375 375 375 375
Organizational Pearson Correlation .461** .515** .465** 1
Performance in the Sig. (2-tailed) .000 .000 .000
Public Sector N 375 375 375 375
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher‟s field survey result, 2021.
The result presented in Table 4.8, the correlation coefficient results of .515, .465 and .461 for
continuance, affective and normative commitment levels respectively. It therefore means that
there is a moderate and positive correlation between all organizational commitment elements
(normative, continuance and affective) and organizational performance.
Table 4.9: Correlations between Each Types of Organizational Commitment and OP
Organizational Organizational
Commitment Performance in the
Public Sector
Organizational Commitment Pearson 1 .599**
Correlation
Sig. (2-tailed) .000
N 375 375
Organizational Performance in Pearson .599** 1
the Public Sector Correlation
Sig. (2-tailed) .000
N 375 375
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher‟s field survey result, 2021.

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Moreover, Table 4.10 above shows the overall relationship between Organizational commitment
and organizational performance. Accordingly, the Correlation result of .599 obtained in the
relationship between the two variables. Therefore, it can be concluded that there is a positive and
moderate relationship between Organizational commitment and organizational performance.
In addition, the p value for this correlation is 0.000 which is less than 0.01 therefore the
relationship between Organizational commitment and organizational performance is significant
at 0.01 level (2-tailed) levels.
The following figure 4.5 shows the positive associations between HRM practice and
organizational performance.

Figure 4.5: Scatterplot Diagram of Organizational commitment and organizational performance

Ayanaw.Y Page 44
 Table 4.10: Summary of Correlations results between variables
RS PA TD CM PR NC CC AC HRM OC OP
Employee Recruitment and Pearson Correlation 1
Selection Practices Sig. (2-tailed)
N 375
Performance Evaluation Pearson Correlation .600** 1
Practices Sig. (2-tailed) .000
N 375 375
Employee Training and Pearson Correlation .502** .551** 1
Development Practices Sig. (2-tailed) .000 .000
N 375 375 375
Compensation Pearson Correlation .303** .499** .483** 1
Management Practices Sig. (2-tailed) .000 .000 .000
N 375 375 375 375
** ** **
Employee Promotion and Pearson Correlation .447 .471 .496 .480** 1
Career Management Sig. (2-tailed) .000 .000 .000 .000
Practices N 375 375 375 375 375
Normative Commitment Pearson Correlation .276** .331** .339** .336** .404** 1
Sig. (2-tailed) .000 .000 .000 .000 .000
N 375 375 375 375 375 375
Continuance Commitment Pearson Correlation .342** .312** .455** .321** .313** .523** 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 375 375 375 375 375 375 375
** ** **
Affective Commitment Pearson Correlation .324 .351 .396 .198** .222** .377** .495** 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000
N 375 375 375 375 375 375 375 375
HRM Practice in the Pearson Correlation .723** .809** .803** .734** .757** .442** .458** .389** 1
Public Sector Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000
N 375 375 375 375 375 375 375 375 375
Organizational Pearson Correlation .391** .409** .496** .360** .392** .790** .864** .750** .537** 1
Commitment Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000 .000
N 375 375 375 375 375 375 375 375 375 375
Organizational Pearson Correlation .477** .394** .493** .327** .406** .461** .515** .465** .546** .599** 1
Performance in the Public Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
Sector N 375 375 375 375 375 375 375 375 375 375 375
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Field survey analysis result, 2021

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The summary of hypotheses testing in Figure 4.6 shows that there is a positive association

between HRM Practice, organizational commitment and organizational performance. All the five

HRM functions have a positive link with organizational commitment variables (normative,

continuance and affective). Similarly, all HRM elements have positive link with organizational

performance. In addition, all the three types of organizational commitment variables (normative,

continuance and affective), have positive relationships with organizational performance. Finally,

a organizational commitment significantly mediates the relationship between HRM practice and

organizational performance.

Figure 4.6: Hypotheses Testing Summary

Source: Analysis result, 2021.

Ayanaw.Y Page 46
Table 4.11: Summary of Hypothesis Testing Results

Hypotheses Decisi Sig.

on Level

Hypothesis 1a: There is a positive relationship between recruitment and Accepte 0.01 level
(2-tailed).
selection practice and organizational commitment (normative, d
continuance and affective).
Hypothesis 2a: There is a positive relationship between performance Accep 0.01 level
(2-
evaluation practice and organizational commitment (normative, ted
tailed).
continuance and affective).
Hypothesis 3a: There is a positive relationship between employee Accep 0.01 level
(2-
training and development practice and organizational commitment ted
tailed).
(normative, continuance and affective).
Hypothesis 4a: There is a positive relationship between compensation Accep 0.01 level
(2-
management practice and organizational commitment (normative, ted
tailed).
continuance and affective).
Hypothesis 5a: There is a positive relationship between promotion Accep 0.01 level
(2-
practice and organizational commitment. ted
tailed).
Hypothesis 1b: There is a positive relationship between recruitment and Accep 0.01 level
(2-
selection practice and perceived public sector organizational ted
tailed).
performance.
Hypothesis 2b: There is positive relationship between performance Accep 0.01 level
(2-
evaluation practice and perceived public sector organizational ted
tailed).
performance.
Hypothesis 3b: There is positive relationship between training and Accep 0.01 level
(2-
development practice and perceived public sector organizational ted
tailed).
performance.
Hypothesis 4b: There is a positive relationship between compensation Accep 0.01 level
(2-
management practice and perceived public sector organizational ted
tailed).
performance.
Hypothesis 5b: There is a positive relationship between promotion Accep 0.01 level
(2-
practice and perceived public sector organizational performance. ted
tailed).
Hypothesis 3: There is a positive relationship between organizational Accep 0.01 level

Ayanaw.Y Page 47
 commitment (normative, continuance and affective) and perceived ted (2-
public sector organizational performance. tailed).
Hypothesis 4: The link between HRM practices and perceived Accep 0.01 level
organizational performance is mediated by organizational commitment (2-
ted
(normative, continuance and affective). tailed).
Source: Field survey result, 2021.
Hence, from the above table 4.11 of hypothesis test result, the researcher accepted all hypotheses
as follows;

 Hypothesis 1a is accepted and concluded that there is a positive relationship between

recruitment and selection practice and organizational commitment (normative,
continuance and affective).
 Hypothesis 2a is accepted and concluded that there is a positive relationship between
performance evaluation practice and organizational commitment (normative,
continuance and affective).
 Hypothesis 3a is accepted and concluded that there is a positive relationship between
employee training and development practice and organizational commitment
(normative, continuance and affective).
 Hypothesis 4a is accepted and concluded that there is a positive relationship between
compensation management practice and organizational commitment (normative,
continuance and affective).
 Hypothesis 5a is accepted and concluded that there is a positive relationship between
promotion practice and organizational commitment.
 Hypothesis 1b is accepted and concluded that there is a positive relationship between
recruitment and selection practice and perceived public sector organizational
performance.
 Hypothesis 2b is accepted and concluded that there is a positive relationship between
performance evaluation practice and perceived public sector organizational
performance.
 Hypothesis 3b is accepted and concluded that there is a positive relationship between
training and development practice and perceived public sector organizational
performance.

Ayanaw.Y Page 48
  Hypothesis 4b is accepted and concluded that there is a positive relationship between
compensation management practice and perceived public sector organizational
performance.
 Hypothesis 5b is accepted and concluded that there is a positive relationship between
promotion practice and perceived public sector organizational performance.
 Hypothesis 3 is accepted and concluded that there is a positive relationship between
organizational commitment (normative, continuance and affective) and perceived
public sector organizational performance.
 Hypothesis 4 is accepted and concluded that organizational commitment significantly
mediates the relationship between HRM practices and perceived organizational
performance.

4.4. Regression Analysis

To determine if certain elements of HRM practices predict organizational commitment and

organizational performance, linear regression analyses were performed, with HR practices as the
independent variable and organizational commitment and organizational performance as the
dependent variable. The results of this analysis are shown in Table 4.12.

In this study, the regression analysis of this study was made using the multiple analysis
coefficients of Version 27 SPSS software. Accordingly, the B column values were used to
indicate the kind of correlation between the independent and dependent variables. According to
Huck (2004), Dhakal (2018), Stephanie (2018) and Dhakal (2018), a positive sign of B indicates
a positive slope with negative correlations, while the negative sign of B shows a negative slope
with negative correlations.

Moreover, the „R‟ and „R2‟ column values were used to determine the quality of the prediction of
the dependent variable and the proportion of variance in the dependent variable that can be
explained by the independent variables respectively. According to Dhakal (2018), Stephanie
(2018) and Dhakal (2018), the quality of the prediction of the dependent variable and the
proportion of variance in the dependent variable that can be explained by the independent
variables represented by the „R‟ and „R2‟ column values respectively. The high difference
between the values of R-squared and adjusted R Square indicates a poor fit of the model.

Ayanaw.Y Page 49
4.4.1. Regression Result of HRM Practices and Organizational Commitment

A multiple linear regression analysis was performed to find out the predictors of OC as

conceptualized in the model. Accordingly, Table 4.12 shows the coefficient for the predictors of

OC.

The standardized regression Model is:

OC = α0 + β1RS + β2PE + β3TD + β4CM + β5PM

Where:

α0= Constant

Dependent Variables:

OC = Organizational commitment

Independent Variables:

RS = Recruitment & Selection

PE = Performance Evaluation

TD = Training & Development

CM = Compensation Management

PM=Promotion and career management

Table 4.12: Model Summary of HRM practice and OC

Mod R R Adjust Std. Error of Change Statistics
el Squ ed R the Estimate R Square F Change df1 df2 Sig. F
are Squar Change Change
e
1 .549a .301 .291 .48300 .301 31.762 5 369 .000
Source: Field survey analysis result, 2021.
a. Predictors: (Constant), Employee Promotion and Career Management Practices,
Employee Recruitment and Selection Practices, Compensation Management
Practices, Employee Training and Development Practices, Performance Evaluation
Practices
b. Dependent Variable: Organizational Commitment
The regression analysis result presented on table 4.12, shows that all the five HRM practices
namely recruitment and selection, performance evaluation, training and development,

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compensation management and promotion have the ability to influence organizational
commitment (R2=0. 291). It implies that 29% of variations in the organizational commitment is
explained by HRM practices.
Table 4.13: Coefficients of predictors of OC
Model Unstandardized Standardized t Sig 95.0%
Coefficients Coefficients Confidence
Interval for B
B Std. Beta Lower Upper
Error Bound Bound
1 (Constant) 1.617 .119 13.585 .000 1.383 1.851
Employee Recruitment .094 .045 .120 2.082 .038 .005 .182
and Selection
Practices
Performance .053 .043 .077 1.245 .214 -.031 .137
Evaluation Practices
Employee Training .181 .035 .294 5.106 .000 .111 .251
and Development
Practices
Compensation .057 .035 .088 1.616 .107 -.012 .126
Management
Practices
Employee Promotion .077 .037 .114 2.087 .038 .004 .150
and Career
Management
Practices
a. Dependent Variable: Organizational Commitment
Source: Field survey analysis result, 2021.
The multiple linear regression result in Table 4.13 depicts that out of the five HRM practices the
three namely; employee recruitment and selection practices p(.038)<0.05, employee training
and development practices p(.000)<0.05 and employee promotion practices p(.038)<0.05 are
statistically significantly to the prediction of organizational commitment, but the remaining
HRM practices, namely; employee performance evaluation practices p(.214)>0.05,
compensation management practices p(.107)>0.05 are not statistically significantly to the
prediction.
Hence, the highest contributing predictor is employee training and development practices
(0.294), followed by employee recruitment and selection (0.120), employee promotion practice
(0.114), employee compensation management practice (0.088), and employee performance
appraisal practice (0.077) respectively.

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The fitted Regression Model is:
OC = 1.617 + .094RS + .053PE + .181TD + .057CM +.077PM ---------------- (e4)
Where:
α0= Constant
Dependent Variables:
OC = Organizational commitment
Independent Variables:
RS = Recruitment & Selection
PE = Performance Evaluation
TD = Training & Development
CM = Compensation Management
PM=Promotion and career management

4.4.2. Regression Result of HRM Practices and Organizational Performance

A multiple regression analysis was performed to find out the predictors of organizational
performance as conceptualized in the model. Accordingly, Table 4.14 shows the coefficient for
the predictors of OC.
The standardized regression Model is:
OP = α0 + β1RS + β2PE + β3TD + β4CM + β5PM
Where,
α0= Constant
Dependent Variables:
OP = Organizational performance
Independent Variables:
RS = Recruitment & Selection
PE = Performance Evaluation
TD = Training & Development
CM = Compensation Management
PM=Promotion and career management
Table 4.14: Model Summary HRM Practice and OP
Mo R R Square Adjusted R Std. Error Change Statistics
de Square of the R Square F Change df1 df2 Sig. F
l Estimate Change Chang
e
1 .575a .330 .321 .65987 .330 36.402 5 369 .000
a. Source: Field survey analysis result, 2021.

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 b. Dependent Variable: Organizational Performance in the Public Sector

c. Predictors: (Constant), Employee Promotion and Career Management Practices,

Employee Recruitment and Selection Practices, Compensation Management Practices,
Employee Training and Development Practices, Performance Evaluation Practices

The summary of regression analysis result presented on table 4.14, shows that all the five HRM
practices namely recruitment and selection, performance evaluation, training and development,
compensation management and promotion practices have the ability to influence organizational
performance (R2=0. 330). It implies that 33% of variations in the organizational performance is
explained by HRM practices.
Table 4.15: Coefficients of predictor of OP
Model Unstandardiz Standa t Sig. 95.0% Confidence
ed rdized Interval for B
Coefficients Coeffic
ients
B Std. Beta Lower Upper
Error Bound Bound
1 (Constant) 1.011 .163 6.214 .000 .691 1.330
Employee .296 .062 .271 4.817 .000 .175 .417
Recruitment and
Selection Practices
Performance -.006 .058 -.006 -.099 .921 -.121 .109
Evaluation Practices
Employee Training .232 .048 .271 4.794 .000 .137 .328
and Development
Practices
Compensation .051 .048 .057 1.073 .284 -.043 .146
Management
Practices
Employee .119 .051 .126 2.353 .019 .020 .219
Promotion and
Career Management
Practices
Source: Field survey analysis result, 2021.
a. Dependent Variable: Organizational Performance in the Public Sector
The multiple linear regression result in Table 4.15 depicts that out of the five HRM practices the
three namely; employee recruitment and selection practices p(.000)<0.05, employee training and
development practices p(.000)<0.05 and employee promotion practices p(.019)<0.05 are
statistically significantly to the prediction of organizational performance, but the remaining

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HRM practices, namely; employee performance evaluation practices p(.921)>0.05, compensation
management practices p(.284)>0.05 are not statistically significantly to the prediction.
Hence, the highest contributing predictor is employee recruitment and selection practices (.296),
followed by training and development (0.232), employee promotion practice (0.119), employee
compensation management practice (0.051), and employee performance appraisal practice (-
0.006) respectively.
The fitted Regression Model is:
OC = 1.011+ .296RS -.006PE + .232TD + .051CM + .119PM ---------------- (e5)
Where,
α0= Constant
Dependent Variables:
OP = Organizational performance
Independent Variables:
RS = Recruitment & Selection
PE = Performance Evaluation
TD = Training & Development
CM = Compensation Management
PM=Promotion and career management

4.4.3. Regression Result of Organizational Commitment and Organizational Performance

Table 4.16: Model Summary of OC and OP

Model R R Adjusted Std. Error of Change Statistics
Square R Square the Estimate R Square F df1 df2 Sig. F
Change Change Change
1 .599a .359 .354 .64375 .359 69.317 3 371 .000
Source: Field survey analysis result, 2021.

a. Dependent Variable: Organizational Performance in the Public Sector

b. Predictors: (Constant), Affective Commitment, Normative Commitment, Continuance
Commitment
The regression analysis result presented on table 4.16, shows that all the three organizational
commitment variables namely normative commitment, continuance commitment and affective
commitment have the ability to influence organizational performance (R2=0. 359). It implies
that 40% of variation in the organizational performance is explained by organizational
commitment.

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 Table 4.17: Coefficients of predictors of OP
Model Unstandardized Standardized t Sig. 95.0%
Coefficients Coefficients Confidence
Interval for B
B Std. Beta Lower Upper
Error Bound Bound
(Constant) .574 .178 3.230 .001 .224 .923
Normative
.247 .054 .224 4.539 .000 .140 .354
Commitment
1 Continuance
.295 .056 .277 5.253 .000 .184 .405
Commitment
Affective
.300 .060 .244 5.031 .000 .183 .418
Commitment
a. Dependent Variable: Organizational Performance in the Public Sector

The multiple linear regression result in Table 4.17 depicts that all the thee organizational
commitment variables (normative, continuance and affective) p(.000)<0.01 are statistically
significantly to the prediction of organizational performance.

Hence, the highest contributing predictor is continuance commitment (0.277), followed by

affective commitment (0.244), and normative commitment (0.244) respectively.

The fitted Regression Model is:

.574 + .247NC+.295CC+.300AC----------------------------------------------------- (e5)

Where,

α0= Constant

Dependent Variables:

OP = Organizational performance

Independent Variables:

NC = Normative commitment

CC= Continuance commitment

AC =Affective commitment

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4.5. Mediation Analysis (H4)
The linear regression coefficients and the standard errors were used as inputs to determine the
mediation role of organizational commitment. The Soble test calculator developed by Sobel
(1982) and the online Soble calculator developed by Soper (2021) were used to test the
mediation role of organizational commitment between HRM practices and organizational
performance.

A mediation variable can be used as a third variable to bridge the relationship between the
dependent and independent variables. In this case, three conditions must be fulfilled. First, the
independent variable must be shown to affect the mediator. Second, the independent variable
must be shown to affect the dependent variable. Third, the mediator must affect the dependent
variable (Baron, 1986 and Hair, 2014).

According to Sobel (1982), the formula used to calculate the mediation role of the third variable
is:

--------------------------------------------- (e6)

Where;

a =the regression coefficient for the relationship between the independent variable and the
mediator,

b =the regression coefficient for the relationship between the mediator and the dependent
variable,

SEa= the standard error of the relationship between the independent variable and the
mediator, and

SEb = the standard error of the relationship between the mediator variable and the dependent
variable

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Figure 4.7: Mediation model

Source: Field sketch, 2021.

Where,

HRM= human resource management practices

OC=Organizational commitment

OP=Organizational Performance

Table 4.18:Soble test result,

Input Test Name Test statistic Std. Error: P value

a 0.474 Sobel Test 9.29155623 0.04264775 0.00

b 0.836 Aroian Test 9.27851447 0.0427077 0.00
Sa 0.039 Goodman test 9.30465314 0.04258772 0.00
Sb .058

Where;

a= regression coefficient of the independent variable & mediating variable

b= regression coefficient of the mediating variable & dependent variable

Sa = standard error of the independent variable & mediating variable

Sb = standard error of the mediating variable & dependent variable

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The Soble calculation result presented in Table 4.18 shows that, organizational commitment
significantly mediates the relationship between HRM practices and organizational performance
with p value of 0, which implies significant mediation. Similarly, the PLS coefficient results
shown in Figure 4.8, shows that organizational commitment significantly mediates the
relationship between HRM practices and organizational performance. Hence, the mediation
analysis result shows that organizational commitment is a predictor of the performance of public
sector organizations. It means the performance of public sector organizations if there is high
level of organizational commitment in the organization.

Figure 4.8: Partial Least Square result of mediation

Source: Field survey analysis result, 2021.

4.4. Sectorial Differences

Table 4.19: analysis of sectorial differences

Descriptive Statistics
Items Federal Level Public Sector Addis Ababa City Sectorial
Organizations Administration Public Differences
Offices
N Me Std. Vari N Me Std. Vari Me Std. Vari

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 an Deviati ance an Devi ance an Devi ance
on ation ation
HRM Practice in the 222 2.88 0.62 0.38 153 2.77 0.67 0.45 0.11 -0.05 -0.07
Public Sector
Employee 222 3.23 0.75 0.56 153 3.06 0.71 0.51 0.17 0.04 0.05
Recruitment and
Selection Practices
Performance 222 2.98 0.78 0.6 153 2.84 0.86 0.74 0.15 -0.09 -0.14
Evaluation Practices
Employee Training 222 2.96 0.96 0.92 153 2.83 0.91 0.83 0.13 0.05 0.09
and Development
Practices
Compensation 222 2.41 0.87 0.75 153 2.47 0.91 0.83 -0.1 -0.04 -0.08
Management
Practices
Employee 222 2.84 0.79 0.62 153 2.67 0.88 0.78 0.16 -0.1 -0.16
Promotion and
Career Management
Practices
Organizational 222 2.94 0.47 0.22 153 2.94 0.64 0.41 0 -0.17 -0.18
Commitment
Normative 222 2.93 0.62 0.39 153 3 0.79 0.63 -0.1 -0.17 -0.24
Commitment
Continuance 222 2.94 0.69 0.47 153 2.95 0.79 0.63 0 -0.11 -0.16
Commitment
Affective 222 2.94 0.6 0.37 153 2.85 0.68 0.46 0.09 -0.08 -0.1
Commitment
Organizational 222 3.09 0.75 0.56 153 3.01 0.84 0.7 0.08 -0.09 -0.14
Performance in the
Public Sector
Valid N (listwise) 222 153
Source: Field survey result, 2021.

A descriptive analysis was performed to determine if there was a difference between federal and
regional level public sector organizations in terms of HRM practice, organizational commitment
and organizational performance. The result was shown in Table 4.19.

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Accordingly, a big mean difference (0.11) was found on the HRM practice between federal
offices and city administration level. Particularly, the recruitment and selection practice,
performance appraisal and management practice, training and development practice as well as
promotion and career management practices of federal offices are better than the city
administration level with the mean difference of 0.17, 0.15, 0.13 and 0.16 respectively. But, the
result shows that the compensation management practices of Addis Ababa city administration
offices are better than federal level offices with a mean difference of -0.1. From the aggregate
result show in Table 4.18 it can be concluded that the HRM practices of federal level public
sector offices are better than Addis Ababa city Administration level.

The descriptive statistics result presented in Table 4.19, shows that, there is no mean difference
in terms of organizational commitment at federal and Addis Ababa city administration level.
However, there is relevant mean difference in terms of normative commitment and affective
commitment. The affective commitment levels of federal level employees are better than Addis
Ababa city administration level public sector employees. But, the result of the study shows that
the normative commitment level of federal level public sector employees are less than Addis
Ababa City Administration level public sector employees.

The result of the study presented in Table 4.19 shows that, the performance of federal level
public sector organizations is better than Addis Ababa city administration level.

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 CHAPTER FIVE

5. DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1. Discussion
Several previous researchers such as Guest (2000), Patterson (1997), Boxall& Purcell, (2016),
Wright (2005), Huselid, (1995), Arthur, (1994), Boselie (2019), Ahbabi, (2019); Guest, (1997),
Patterson, (1997), and Wood, (1998), have argued that effective HRM practice will reflect better
employee as well as organizational performance. Accordingly, this paper was conducted to
investigate the relationship between HRM practices, organizational commitment and
organizational performance in the public sector domain in Ethiopia. The nature of this study is
cross sectional survey design with a quantitative approach. A survey was conducted in 24 public
sector offices in Ethiopia. To determine the relationships between variables, correlation analysis
and multiple regression analysis techniques were employed, taking HR practices as the
independent variable, organizational performance as the dependent variable as well as
organizational commitment as a mediating variable.

This study found pertinent results on the relationship between HRM practice, organizational
commitment and organizational performance in the public sector domain. In this study,
considerable results for the hypothesis were found that supports the positive associations
between HRM practice, organizational commitment and organizational performance.
Accordingly, the three major findings of this study were discussed as follows:

HRM Practices and Organizational Commitment

Organisational commitment represents is a set of human psychological and behavioural

responses in the workplace. It can be divided into three subcomponents namely, affective,
continuance and normative commitment. More specifically, continuance commitment includes
social roles or positions from which individuals derive their perception of the cost associated
with leaving the organization and the rewards related to participation in the organization (Meyer
and Allen, 1997). The result of the study shows that there is a positive and moderate relationship
between HRM practice and continuance commitment. The Pearson correlation analysis results
for employee training and development practice, recruitment and selection compensation
management practices, performance evaluation practices, and employee promotion practices
with continuance commitment shows .455., 342, .342, 0.321 and 0.213 respectively. It revealed
that there is a positive and moderate level of relationships between employee training and

Ayanaw.Y Page 61
development practice and continuance commitment, while there is a positive but weak
relationship between recruitment and selection, compensation management practices,
performance evaluation practices, and employee promotion practices and continuance
commitment.

Normative commitment includes the internalization of norms and values and on inner
convictions. It results in an individual‟s feeling of moral obligation to remain with the
organization (Meyer and Allen, 1997). In this study, employee promotion practice, employee
training and development, compensation management, performance evaluation, employee
recruitment and selection practices and normative commitment with the correlation coefficient
result of .404, .339, .336, 0.331 and 0.276 respectively. It indicates that there is a moderate level
correlation and positive associations between employee training and development practice and
normative commitment. However, the result shows that there is a positive but weak relationship
was obtained between employee training and development recruitment and selection
compensation management practices, performance evaluation practices, and employee promotion
practices with continuance commitment.

Affective commitment refers the individual‟s attachment to social relationships and to the
organization (Meyer and Allen, 1997). Related to the relationship between HRM practice and
affective commitment, employee training & development, employee performance evaluation,
recruitment and, selection practices, employee compensation management practices and
performance evaluation and affective commitment with the correlation coefficient result of .396,
.351, .324, 0.22 and 0.198 respectively. The result indicates that there is a moderate level
correlation as well as positive associations between employee training & development and
affective commitment. More specifically, there is a positive but weak relationship between
employee performance evaluation, recruitment and, selection practices, employee compensation
management practices and performance evaluation and affective commitment.

Moreover, the regression analysis result shows that all the five HRM practices namely
recruitment and selection, performance evaluation, training and development, compensation
management and promotion have the ability to influence organizational commitment (R2=0.
291). It implies that 29% of variation in the organizational commitment is explained by HRM
practices. Particularly, employee recruitment and selection practices p(.038)<0.05, employee
training and development practices p(.000)<0.05 and employee promotion practices
p(.038)<0.05 are statistically significantly to the prediction of organizational commitment, but

Ayanaw.Y Page 62
the remaining HRM practices, namely; employee performance evaluation practices p(.214)>0.05,
compensation management practices p(.107)>0.05 are not statistically significantly to the
prediction of organizational commitment.

Generally, the result shows that there is a positive link between HRM practice and organizational
commitment. Similarly, Kaplan, (2018), stated that HRM practice has a positive relationship
with organizational commitment.

HRM Practice and Organizational Performance

Several studies (e.g., Guest, 2000, Patterson, 1997, and Purcell, 2003), have been carried out
showing that good HRM practice and organizational performance are positively correlated.
Similarly, Armstrong, (2014), stated that the major impacts and contributions of HRM practices
can be seen by augmenting HRM activities to employee and organizational outcomes. According
to Storey, (2009), the concept behind the practice of HRM makes an impact is that people are the
organization‟s key resource and organizational performance largely depends on them.
This study has also produced similar results on the relationship between HRM practice and
organizational performances. The Pearson correlation analysis result shows that there is a
positive relationship between HRM practice and organizational performance. More specifically,
the Correlation coefficient were 0.493, 0.477, 0.406, 0.394 and 0.327 for employee training and
development practice, employee recruitment and selection practices, employee promotion and
career management practices, employee promotion and career management practices,
performance evaluation practices, and compensation management practices respectively. It
indicates that there is a positive and moderate link between the four HRM practices (training,
recruitment and selection, promotion, and performance evaluation practices) and organizational
performance, while there is a weak link between compensation management practices and
organizational performance.

Similarly, the multiple regression analysis result revealed that, all the five HRM practices
namely recruitment and selection, performance evaluation, training and development,
compensation management and promotion practices have the ability to influence organizational
performance (R2=0. 330). It implies that 33% of variation in the organizational performance is
explained by HRM practices. Particularly, the three HRM practices namely; employee
recruitment and selection practices p(.000)<0.05, employee training and development practices
p(.000)<0.05 and employee promotion practices p(.019)<0.05 are statistically significantly to the
prediction of organizational performance, but the remaining HRM practices, namely; employee

Ayanaw.Y Page 63
performance evaluation practices p(.921)>0.05, compensation management practices
p(.284)>0.05 are not statistically significantly to the prediction of organizational performance.

Generally, the result indicates that there is a positive relationship between HRM practice and
organizational performance. Many previous researchers such as, Hosain, 2017, Otoo, 2019,
Tzabbar, 2017, Taamneh, 2018, Zakaria, 2018) found the same result with this study.

Organizational Commitment and Organizational Performance

The influence of HRM practice can be related to organizational commitment (Boxall and Purcell,
2016). The Pearson correlation result of this study shows that there is a moderate and positive
correlation between all organizational commitment elements (normative (.515), continuance
(.465) and affective (.461) and organizational performance in the public sector organizations.
The highest contributing predictor is continuance commitment followed by affective
commitment, and normative commitment correspondingly.

Furthermore, the regression analysis shows that all the three organizational commitment
variables namely normative commitment, continuance commitment and affective commitment
have the ability to influence organizational performance (R2=0. 359). It implies that 40% of
variation in the organizational performance is explained by organizational commitment. The
result depicts that all the three organizational commitment variables (normative, continuance and
affective) p (.000) < 0.01 are statistically significantly to the prediction of organizational
performance in which the highest contributing predictor is continuance commitment (0.277),
followed by affective commitment (0.244), and normative commitment (0.244) respectively.

Generally, this study shows that there is a positive relationship between organizational
commitment and organizational performance. Previous researchers such as Al Zefeiti, 2017, and
Andrew, 2017 also found the same result that shows the positive link between organizational
commitment and organizational performance.

HRM practices-organizational commitment and organizational performance links

The mediating analysis was made to check whether organizational commitment bridges the link
between HRM practice and organizational performance. Accordingly, the Partial least square and
Soble calculation result shows that organizational commitment significantly mediates the
relationship between HRM practices and organizational performance. It means the performance
of public sector organizations can be improved if there is high level of organizational

Ayanaw.Y Page 64
commitment in the organization. Aktar, and Pangil, 2018, stated that organizational commitment
significantly mediates the relationship between HRM practice and organizational performance.

5.2. Conclusion

The main purpose of this study was to investigate the impact of HRM practice on organizational
commitment and organizational performance in the public sector domain in Ethiopia.
Accordingly, pertinent results about the relationship between HRM practice, organizational
commitment and organizational performance were found. In this study, considerable results for
the hypothesis were found supporting the positive links between HRM practice, organizational
commitment and organizational performance. In line with the discussion made above, this study
has three major findings. First, there is a moderate level association between four HRM practices
(training and development, performance appraisal, promotion, recruitment and selection) and
organizational commitment. But the least link is obtained between employee compensation
management practice and organizational commitment. Moreover, the regression analysis result
shows that all the five HRM practices namely recruitment and selection, performance evaluation,
training and development, compensation management and promotion have the ability to
influence organizational commitment. The three HRM practices namely; employee recruitment
and selection practices, employee training and development practices and employee promotion
practices are statistically significantly to the prediction of organizational commitment, but the
remaining HRM practices, namely; employee performance evaluation practices, compensation
management practices are not statistically significantly to the prediction.

Second, the result revealed that there is a positive and moderate link between the four HRM
practices (training, recruitment and selection, promotion, and performance evaluation practices)
and organizational performance, while there is a weak link between compensation management
practices and organizational performance. Similarly, the multiple regression analysis result
revealed that, all the five HRM practices namely recruitment and selection, performance
evaluation, training and development, compensation management and promotion practices have
the ability to influence organizational performance. Particularly, the three HRM practices
namely; employee recruitment and selection practices, employee training and development
practices and employee promotion practices are statistically significantly to the prediction of
organizational performance, but the remaining HRM practices, namely; employee performance
evaluation practices, compensation management practices are not statistically significant to the
prediction. The highest contributing predictor is employee recruitment and selection practices),

Ayanaw.Y Page 65
followed by employee training and development, employee promotion practice, employee
compensation management practice, and employee performance appraisal practice respectively.

The result shows that there is a moderate and positive correlation between all organizational
commitment elements (normative, continuance and affective) and organizational performance in
the public sector organizations. The highest contributing predictor is continuance commitment
followed by affective commitment, and normative commitment correspondingly. Furthermore,
the regression analysis shows that all the three organizational commitment variables namely
normative commitment, continuance commitment and affective commitment have the ability to
influence organizational performance.

The Partial least square and Soble calculation result shows that organizational commitment
significantly mediates the relationship between HRM practices and organizational performance.
It means the performance of public sector organizations can be improved if there is high level of
organizational commitment in the organization.

5.3. Recommendation

Deliberate and well directed efforts to improve upon existing HR practices in Ethiopian public
sector organizations in the light of effective HRM practices will certainly be in the best interest
of the public sector. Therefore, it is recommended for Ethiopian public sector organizations to
purposesignificant apply effective HR systems to ensure betterment of the employees as well as
organizational performance, and overall benefit to the society.

Bearing in mind the positive link between HRM practices on the organizational commitment and
organizational performance, public sector organizations should give greater emphasis on
establishing effective HRM practices in their organizations. Particularly, public sector
organizations can be more benefited from the employee training and development practices as
far as it is investigated highly correlated and regressed HRM function in this study.

As it was investigated in the study, all HRM practices positively correlated with organizational
commitment variables. Particularly, as an aggregated correlation result indicated, the highest
correlation was observed between HRM practices and organizational commitment, followed by
employee performance appraisal and management practices, employee promotion and career
management practices, employee recruitment and selection practices, and compensation
management practice respectively. Therefore, the researcher would like to recommend that

Ayanaw.Y Page 66
Ethiopian public sector organizations should establish effective HRM practices in order to
enhance the level of employees‟ organizational commitment.

It is also found that there is a positive relationship between all HRM practices and organizational
performance. Particularly, employee training and development practice was found the highest
relationship with organizational performance followed by employee recruitment and selection
practices, employee promotion and career management practices, employee promotion and
career management practices, performance evaluation practices, and compensation management
practices respectively. Hence, Ethiopian public sector organizations should establish effective
HRM practices in order to enhance their organizations performance.

Moreover, the correlation result shows that, all the HRM practices are independently and
positively correlated with organizational commitment and organizational performance variables
at 1% levels which denotes highly significant. Therefore, Ethiopian public sector organizations
should enhance the level of employees‟ organizational performance in order to improve the
performances of their organizations.

Last, the result of the study pointed out that the HRM practices of federal level public sector
offices are better than Addis Ababa city Administration level. Therefore, the Addis Ababa City
Administration HRM offices should revise their HRM practices in order to enhance the level of
organizational commitment and organizational performances.

Limitations and Suggestions for Future Researches

Due to the inaccessibility of some regional public sector organizations in the country, data was
collected only from public sector organizations available in Addis Ababa city using convenient
sampling method. Those public sector organizations outside Addis Ababa were not included as a
sample. Furthermore, due to the difficulty of getting the complete list of public sector employees
in each office, proportion and randomization were not performed. Hence, future researchers need
to incorporate regional public sector organizations using random sampling technique to enhance
the representativeness of the sample. In addition, it will be more interesting if researchers will
incorporate other variables such as job satisfaction and employee engagement in the link
between HRM practices and organizational performances. Last, future researchers need to
investigate the HRM practices and employee and organizational outcomes in the private sector
organizations.

Ayanaw.Y Page 67
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APPENDIX- I

College of Business and Economics

Department of Masters of Business Administration
(MBA)
Graduate Program
Questionnaire
To be filled by selected public sector employees in Ethiopia.

Dear respondents: -
This questionnaire is designed for preparing a thesis on the title of “The impact of Human
Resource Management Practices on Organizational Commitment and Perceived
Organizational Performance in the Public Sector Organizations in Ethiopia” in Addis Ababa
University, College of Business and Economics. The purpose of this questionnaire is to collect
relevant data for the study. The objective of this research is to measure the relationship between
human resource management practices, organizational commitment and perceived organizational
performance in the public sector organizations in Ethiopia. The outcome of the study will be
used in order to suggest possible solutions for problems identified while conducting the study. I
would like to assure you that the information you provide will be used only for the purpose of
achieving academic award and the information you provide is confidential. Your involvement is
regarded as a great input to the quality of the research results. Hence, I kindly request you to
spent some of your precious time to fill the questionnaire as frank as and reasonable as possible.
Your honest and thoughtful response is invaluable.
Thank you for your participation
Best regards,
Ayanaw Yeneneh Wongelu
([Link]@[Link], +251933884400 (0934470843)
MBA student at Addis Ababa University, CBE
Department of MBA

Ayanaw.Y Page 77
General Instruction

This questionnaire contains two sections and 6 pages that will be expected to take

approximately 20 to 25 minutes to complete. Please provide your responses to the questions

based on the instructions under each section.

Section I: Demographic profile of respondents

Please indicate the following by ticking (√) on the spaces in front of the response options:

1. Name of the organization: ________________________________________________

Federal Public Sector Organizations in Ethiopia
1. Ethiopian Anti-corruption Commission
2. Ethiopian Ministry of Education
3. Ethiopian Federal High Court
4. Ethiopian Ministry of Finance & Eco. Development
5. Ethiopian Ministry of Foreign Affairs
6. Ethiopian Insurance Corporation
7. Ethiopian Science and Higher Education Minister
8. Ethiopian Ministry of Labor and Social Affairs
9. Ethiopian Public Health Institute
10. Ethiopian Public Procurement & Property Administration Agency
11. Ethiopian Plan Commission
12. Ethiopian Shipping and Logistics Services Enterprise
13. St. Paulos Millennium Medical College
14. Ethiopian Technology and Innovation Institute
Addis Ababa City Administration Public Sector Organizations
1. Addis Ababa Finance & Eco Development Office
2. Addis Ababa Health Bureau
3. Addis Ababa Housing Agency
4. Addis Ababa Labor and Social Affairs Bureau
5. Addis Ababa Land Administration Bureau
6. Addis Ababa Micro and SE Development Agency
7. Addis Ababa Revenue Authority
8. Addis Ababa Public Service and HR Bureau
9. Addis Ababa TVET Agency
10. Addis Ababa Trade and Industry Bureau

Ayanaw.Y Page 78
 2. Gender: Male Female

3. Age: Below 20 31 - 40 Above 50

20 - 30 41 - 50

4. Marital Status: Married Single Other

5. Educational level:

Diploma holder First Degree Holder

Master‟s degree PhD holder

6. How many years in total have you worked in the organization?

Less than 1 year 4 to 6 years 10 years or more

1 to 3 years 7 to 9 years

7. Monthly income (in Eth. Birr)

1500-2500 2501-3500 3501-4500

4500-5500 5501-6500 above 6500

Instruction: Below are lists of statements related to the impact of human resource management
practices on organizational commitment and perceived organizational performance in the Public
Sector Organizations in Ethiopia. Please indicate whether you agree or disagree with each
statement by ticking (√) on the spaces that specify your choice from the options that range from
„strongly disagree‟ to „strongly agree‟. Each choice was identified by numbers ranged from 1 to
5 respectively.

Section 1: HRM Practices in the Organization

No. Items Scale
1 2 3 4 5
1.1. Recruitment and Selection Practices
1 The organization has written and operational recruitment and selection policy
2 The organization has clear job description and specification
3 The organization has attractive salary scales that can attract qualified applicants
4 The organization considers high role of merit in recruitment and selection process

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5 The organization has a good image that attract qualified applicants
6 The selection tests of the organization are conducted by skilled and unbiased/impartial
people.
7 The organization used various selection instruments (E.g., interviews, tests, etc.).
8 The organization discloses to the candidates‟ information about the stages and criteria of the
selection process.
9 The organization communicates the candidates about their performance at the end of the
selection process.
1.2 Performance Evaluation Practices
1 The organization has written and operational employee performance evaluation system
2 The organization performs employee performance evaluation periodically.
3 Employee performance evaluation results has linked with salary and promotion increases in
the organization
4 The organization discusses the criteria/competencies of performance evaluation with
employees.
5 The organization provides feedback for employees about results of performance evaluation
6 Employee performance evaluation is considered as important task by superiors in the
organization
7 Performance evaluators of the organization are knowledgeable
1.3. Training and Development
1 The training policy of the organization is clearly written and operational
2 The organization has continuous training needs assessment program
3 The organization has written & operational trainee-selection procedure
4 The government is committed to training in the sector.
5 The training of the organization is linked to other HR programs
6 The organization monitor and evaluate training programs continuously
7 The organization‟s training is important to develop the skills necessary related to my duties
1.4. Compensation management practices
1 The organization has attractive compensation system
2 The salary system/scale of the organization is internally equitable
3 The salary system/scale of the organization is externally equitable offered in the market
4 The organization‟s salary system/scale reflects performance
5 The organization‟s salary system/scale encourages better performance

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6 The organization‟s salary system/scale reflects the standard of living
1.5. Promotion Practices
1 The organization has written and operational promotion policy
2 Employees in the organization have the opportunity to be promoted with greater pay and/or
responsibility
3 The promotion process used by my organization is fair for all employees.
4 The organization provides priority to merit in promotion decision
5 The organization provides priority to seniority in promotion decision
6 Employees have more than one potential position they could be promoted to within the
organization.
Section 2: Organizational Commitment in the Organization
2.1. Normative Commitment [NC] Items
1 I think that people these days move from organization to organization too often.
2 I do not believe that a person must always be loyal to his or her organization.
3 Jumping from organization to organization does not seem at all unethical to me.
4 One of the major reasons I continue to work in this organization is that I believe loyalty is
important and therefore feel a sense of moral obligation to remain.
5 If I got another offer for a better job elsewhere, I would not feel it was right to leave my
organization.
6 I was taught to believe in the value of remaining loyal to one organization.
7 Things were better in the days when people stayed in one organization for most of their
careers.
8 I do not think that to be a „organization man‟ or „organization woman‟ is sensible anymore.
2.2. Continuance Commitment [CC] Items
1 I am not afraid of what might happen if I quit my job without having another one lined up
2 It would be very hard for me to leave my organization right now, even if I wanted to.
3 Too much in my life would be disrupted if I decided to leave my organization now.
4 It wouldn‟t be too costly for me to leave my organization now.
5 It wouldn‟t be too difficult for me to leave my organization now.
6 Right now, staying with my organization is a matter of necessity as much as desire.
7 I feel that I have very few options to consider leaving this organization.
8 One of the few serious consequences of leaving this organization would be the scarcity of
available alternatives.

Ayanaw.Y Page 81
9 One of the major reasons I continue to work for this organization is that leaving would
require considerable personal sacrifice another organization may not match the overall
benefits I have here.
2.3. Affective Commitment [AC] Items
1 I would be very happy to spend the rest of my career with this organization.
2 I enjoy discussing about my organization with people outside it.
3 I really feel as if this organization‟s problems are my own.
4 I think that I could easily become as attached to another organization as I am to this one.
5 I do not feel like „part of the family‟ at my organization.
6 I do not feel „emotionally attached‟ to this organization.
7 This organization has a great deal of personal meaning for me.
8 I do not feel a „strong‟ sense of belonging to my organization.
Section 3: Perceived Organizational Performance
1 The organization has better performance over the past 3 years to that of other public service
organizations that do the same kind of work.
2 The organization provides quality products and/or services to its customers.
3 There is development of new products and/or services in the organization
4 The organization has the ability to attract essential employees.
5 The organization has the ability to retain the essential employees.
6 The number of customer complaints within the last period has reduced strongly.
7 Reputation of our organization in eyes of the customers has improved.
8 Absenteeism is in organization relative to competition is low.
9 There is satisfaction of customer in the organization.
10 There is a good relation between managers and employees in the organization.
11 There is a good relation among employees in general.
KEY; 1 Implied ‘strongly disagree’, 2 implied ‘disagree’, 3 implied ‘neutral’, 4 implied ‘agree’
and 5 implied ‘strongly agree’
Thank you!!

Ayanaw.Y Page 82
Appendix II

Statistical Results

T-Test

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Employee Recruitment and

375 3.1291 .73219 .03781
Selection Practices
Performance Evaluation
375 2.8960 .82905 .04281
Practices
Employee Training and
375 2.8834 .93305 .04818
Development Practices
Compensation Management
375 2.4436 .89230 .04608
Practices
Employee Promotion and
375 2.7404 .84837 .04381
Career Management Practices
Normative Commitment 375 2.9753 .72776 .03758
Continuance Commitment 375 2.9464 .75209 .03884
Affective Commitment 375 2.8888 .65050 .03359
Organizational Performance in
375 3.0431 .80095 .04136
the Public Sector

One-Sample Test
Test Value = 0
t df Sig. (2- Mean 95% Confidence Interval of the
tailed) Difference Difference
Lower Upper
Employee Recruitment and
82.758 374 .000 3.12910 3.0547 3.2034
Selection Practices
Performance Evaluation
67.645 374 .000 2.89600 2.8118 2.9802
Practices
Employee Training and
59.844 374 .000 2.88343 2.7887 2.9782
Development Practices
Compensation Management
53.031 374 .000 2.44356 2.3530 2.5342
Practices
Employee Promotion and
62.553 374 .000 2.74044 2.6543 2.8266
Career Management Practices
Normative Commitment 79.170 374 .000 2.97533 2.9014 3.0492
Continuance Commitment 75.865 374 .000 2.94644 2.8701 3.0228
Affective Commitment 85.998 374 .000 2.88881 2.8228 2.9549
Organizational Performance in
73.573 374 .000 3.04305 2.9617 3.1244
the Public Sector

Ayanaw.Y Page 83
T-Test

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

HRM Practice in the Public

375 2.8185 .64937 .03353
Sector
Organizational Commitment 375 2.9372 .57379 .02963
Organizational Performance in
375 3.0431 .80095 .04136
the Public Sector

Ayanaw.Y Page 84
Descriptive

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

HRM Practice in the Public

375 1.00 4.60 2.8185 .64937
Sector
Employee Recruitment and
375 1.00 5.00 3.1291 .73219
Selection Practices
Performance Evaluation
375 1.00 5.00 2.8960 .82905
Practices
Employee Training and
375 1.00 5.00 2.8834 .93305
Development Practices
Compensation Management
375 1.00 5.00 2.4436 .89230
Practices
Employee Promotion and
375 1.00 5.00 2.7404 .84837
Career Management Practices
Organizational Commitment 375 1.16 4.72 2.9372 .57379
Normative Commitment 375 1.00 5.00 2.9753 .72776
Continuance Commitment 375 1.00 5.00 2.9464 .75209
Affective Commitment 375 1.00 4.63 2.8888 .65050
Organizational Performance in
375 1.00 5.00 3.0431 .80095
the Public Sector
Valid N (listwise) 375

Ayanaw.Y Page 85
Regression
a
ANOVA

Model Sum of Squares df Mean Square F Sig.

b
Regression 35.444 1 35.444 150.770 .000

1 Residual 87.688 373 .235

Total 123.133 374

a. Dependent Variable: Organizational Commitment

a
Coefficients

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 1.601 .112 14.338 .000

1 HRM Practice in the Public
.474 .039 .537 12.279 .000
Sector

a. Dependent Variable: Organizational Commitment

b. Predictors: (Constant), HRM Practice in the Public Sector

a
Coefficients

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 1.145 .155 7.400 .000

1 HRM Practice in the Public
.673 .054 .546 12.583 .000
Sector

a. Dependent Variable: Organizational Performance in the Public Sector

b. Predictors: (Constant), HRM Practice in the Public Sector

a
Coefficients

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) .588 .173 3.394 .001

1
Organizational Commitment .836 .058 .599 14.439 .000

a. Dependent Variable: Organizational Performance in the Public Sector

b. Predictors: (Constant), Organizational Commitment

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Appendix III
Cooperation Letter

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