Human resource risk minimization practices and performance of commercial banks in Kenya

Abstract

This study aimed at elucidating the relationship between HR risk minimization practices and the performance of commercial banks in Kenya. Studies show that the performance of commercial banks is highly threated by HR related risks, which they have to overcome to sustain their performance. The risks come against the realization that banks are key contributors to the Kenyan economy at more than 7% of its GDP. The HR Risk Minimization practices that were of interest to this study were headhunting, show cause letters, prosecution, and termination of duties. The study was supported by both the Expected Utility Theory and Miles and Snow’s Organizational Strategies Model. The study targeted 38 banks that were eligible for a census survey with a total of 228 respondents, who were bank employees, participating in study. Descriptive and inferential statistics were used to analyze the data. The association among variables was established using Pearson's Product Moment Association Coefficient (r), and the hypothesis was tested using analysis of variance (ANOVA), correlation analysis, and multiple regressions. The results indicated that, a weak (R=0.396 >0.5), positive and linear relationship between HR Risk Minimization practices and the performance of commercial banks in Kenya. Further, the p-value of 0.000 led to the conclusion that the relationship was statistically significant. This study recommends the establishment of mechanisms of determining the effectiveness of organizational HR risk minimization mechanisms. The study also challenges scholars in various management fields to deleve in research on HR related risk management, given their unpredictable nature. The study also recommends continuous development and review of policies and guidelines on the management employee related risks such as such policies are the CBK’s Prudential Guidelines of 2013.