Influence of Human Resources Management Practices on Manufacturing Small and Medium Enterprises (SMEs) Performance in Dar es Salaam

Michael, Nyello F. (2024) Influence of Human Resources Management Practices on Manufacturing Small and Medium Enterprises (SMEs) Performance in Dar es Salaam. Masters thesis, The Open University of Tanzania.

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Abstract

Manufacturing SMEs theoretically play important roles in the economy but most of them do not perform well due to various factors, human resource management (HRM) practices being considered the critical ones. Thus, there was a need to examine the influence of HRM practices on manufacturing SMEs performance due to the fact that conceptualization of the selected variables particularly performance and employment engagement was narrow. And furthermore, the influence of HRM practices on manufacturing SMEs performance had to be studied from the social system perspective because the relationship are determined by different actors’ actions and roles. Specifically, the study focused on examining the influence of employees’ communication, employees’ development, employees’ reward, organisation support, and employees’ engagement on the manufacturing SMEs performance located in Kinondoni Municipality. This study adopted the Social System Theory (SST) which argues that the relationship among employees and the organisation is built and influenced by the internal structure and internal practices. This study used cross-sectional study design and involved 388 respondents who were chosen using the stratified sampling technique. Questionnaires were used to collect the primary data while percentages, Mean scores multiples regression were used as data analysis techniques. The findings revealed that employees’ communication and employees’ engagement had insignificant positive influence on the manufacturing SMEs performance while employees’ development, employees’ reward and organizational support were found to have significant positive influence on the manufacturing SMEs performance. Based on the findings, the study recommends for the manufacturing SMEs to have a clear plan on how to develop its employees, strategically design rewards packages, both financial and non-financial, to improve organizational performance, and develop a clear strategy for organisational support in order to improve organizational performance. Likewise, the study suggests that policy makers should integrate HRM issues particularly enhancing the capacity of manufacturing SMEs to innovatively develop employees’ development programmes, employees’ reward systems and creation of conducive environment for providing organisational support in the National SMEs Development Policy Framework.

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