The Impact of Outsourcing Human Resources Function on Organization Performance.

Masawanga, Hawa Timbula (2015) The Impact of Outsourcing Human Resources Function on Organization Performance. Masters thesis, The Open University Of Tanzania.

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Abstract

This study explored the impact of outsourcing human resource function on organization performance, while focusing on Tanzania Cigarette Company (TCC). TCC was the company that was outsourcing Human Resources (HR) services from Erolink Company Limited. The methodology used was case study design and involved the use of questionnaire, interview and documentary review. The study also used secondary data concerning profitability of the TCC from 2001 to 2013. Data was analyzed by statistical package for social science (SPSS) in which descriptive analysis, chi-square test, t-test and regression analysis was performed. The study claimed that HR outsourcing program at TCC was somehow effective. The study founded that HR outsourcing has both pros and cons on organization performance. Some of the greatest pros were control of operating costs, correcting poor financial performances, improve company focus, improve efficiency and many more. Meanwhile most popular cons of outsourcing were staff dissatisfaction and demoralization, confidentiality leaks and loss of intellectual property rights, reduction of in-house technique and expertise. Furthermore some factors which could support effectiveness of HR outsourcing program at TCC were standardization of the HR functions, automation of the HR functions, availability of resources, sharing of information between Erolink and TCC while factors that could hinder effectiveness were lack of integration of TCC and Erolink management systems, lack of regular meeting between Erolink and TCC managers and lack of co-operation between TCC and Erolink in business process improvement and innovation. The study concluded that HR outsourcing has positive implication on organization performance since the program was associated with growth of the company.

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