ACKNOWLEDGEMENT
First, let me take this glorious opportunity to acknowledge Allah for His protection and life. Without him, I would not have made it. Second, I would like to acknowledge my supervisors for their commitment to seeing me through this work. They guided and supported all the way through my project. Lastly, I would like to acknowledge my parents for their enormous support.
DECLARATION
I hereby sincerely declare that this work has never been produced anywhere in any institution to any degree. It is an original piece of my work. All the sources borrowed were correctly and duly cited in work
DEDICATION
Let me begin by dedicating this work to my brother who has been supportive through this project. He gave moral support. Also, I would like to dedicate this project to my parents who have always been my source of encouragement. Finally, I would like to dedicate this work to my classmates who supported and encouraged through this project.
ABSTRACT
Effective HRM incentives is an essential element of effective global management and achievement of organizational goals. The study sought to investigate the impact of HRM incentives on performance In Oman Commerce & Industry. The objectives of the study were: to examine how HRM incentives improve performance in Oman chamber of commerce & industry. To investigate how HRM incentives improve organizational service delivery in Oman chamber of commerce & industry, to examine how HRM incentives improve governance in in Oman chamber of commerce & industry. The study employed descriptive survey where twenty respondent was interviewed. The participants were selected randomly. The study established that HRM incentives to employees help in enhancing the performance of the organization. Hence there is productivity and profitability. The study recommends that firms should motivate their employees to provide service effectively.
1.0 CHAPTER ONE: INTRODUCTION
1.1 Background of the study
In every company, Human Resources are deemed as the most vital asset within the firm, though, it is important to note that not all companies can fully reach its potential. According to Mugenda (2003), the system of human resource can be defined as the set of distinct, though it is interacted at developing, attracting as well as maintain the human resources of the company. Usually, the controlling the human resource system has gained extra attention within the companies that deals with the services compared to the opponents that deals with the manufacturing. Nevertheless, in order to improve the effective performance of the company, controlling the HR system remains equally significant in all firms, whether service. It is important to note that, though the service companies with innovative as well as sophisticated technologies, they can do minimal in improving the operational performance unless there are the best practices in the sector of human resource in the company (Aldrich and Langton, 1997). As a result, the service companies require to effectively assess their current practices as well as modify this performance, if required, in order to allow the workers within the company to efficiently contribute to the improvement of the operational practices in the firm.
Admittedly, there exist numerous research in the sector of HR literature examining the best practices in the HR that impact the performance of the company. Nevertheless, other research in the field of HR practices may be found within the operations administration literature. In the view of Petra and Juan (2004), the HR practices have the tendency of addressing the issues which are structural and the logical questions compared to the issues in HR sector. In the recent past, different researcher and scientists have proposed a number of effective practices in the HR management which can sustain as well as improve the performance of the company. Besides, the HR practices consist of emphasis on the recruitment of company workers based on individual qualifications in line with the organizational culture, attitude, behavior, as well as the essential technical skills needed by the company.
The performance of the company consists of the real outputs or rather the results of a firm measured against the company’s objectives and goals. Recently, most companies have tried to sustain the company performance by the use of balance scorecard methods in which, the performance of the company is tracked, and measured using different ways, for example; customer services, community outreach, financial performance, and the worker’s stewardship. Performance measurement can be described as the use of statistical proof to evaluate the progress to the particular defined objectives of the company. It is important to note that many measurements in the performance of the company can be employed in the current companies, and all these measurements have their supporters who believe in them. However, it is common for the companies to use the balanced scorecard in the measurement of the performance in the company, though, there is no version of the model that is considered to be accepted universally. Further, the unique and diversity needed for the different companies recommend that there is no definite size that fits all the approach can do the job of measuring the performance in an organization. Generally, the ideology behind the performance of a company is founded on the concept which the company is the voluntary association of the productive properties, comprising of the physical, capital and human resources, for the function.
1.1.1 Background of Oman Chamber of Commerce & Industry Company
Oman Chamber of Commerce and Industry was established in 15th of May 1973 as a public service for the citizens of the country. One of its main concerns is regulating business and satisfying industrial interests; In addition, it protects the business in different ways. Also, this chamber works with the different available business men to activate the economic situation in the Sultanate of Oman by contributing effectively in performing different development plans that aim to increase the national income sources.
The chamber has several important tasks to start with; the Chamber provides plenty of services as it is considered as a link between the private sector and the governmental sector. It also gives chances for training the workers from the private sector and regulates workshops for the sake of increasing the awareness of the workers and employees about the rules and for managing enterprises. The chamber publishes a magazine every two months which includes important topics about what has happened recently and what affected business positively or negatively. Surveys are written about some statistics of a certain company over what causes either the success or the failure. All members from different regions take place in General Assembly and governorates subject that they have paid the required OCCI fees. The GA approves the final audited accounts. It also gives the directives it deems appropriate to the Board members.
OCCI Board of Directors undertakes its duties in accordance with the laws and regulations. The Board is responsible for guiding and following up the implementation of OCCI roles.As it consists of 15 members, who are elected by the businessman. Ten member from each of the following regions and governorates; Al Batina, AlDhahira, Al Dakhiliya, AlSharqiah, Al Wusta, Dhofar governorate, Musandam, and Buraimi governorate another five-member elected from Muscat governorate represents the area he comes from. According to the OCCI every four years, the board of director undergoes changes. However, ten goals were set by the recent board of director’s member. These goals were as following :Reshaping the role of OCCI and restructuring of its conditions both internally and externally, expand the roles and functions of OCCI branches, activate the roles of the specialized committees, enhancing OCCI relations with business and private sector, consolidating chamber relations with business and private sector, upgrade the services rendered to OCCI affiliates, attracting and encouraging foreign investment, development of the SMEs and supporting the efforts undertaken to promote Omani products. The OCCI was providing services to the customer through ten branches in Oman, these branches located in Muscat, Salalah, Nizwa, Sohar, Al Mushtaq, Sur, Ibra, Kasab, Al Brahimi, Hima, AL Rusali (Muscat) and one external office in Taiwan.
1.2 Statement of the Problem
HRM is one of the main important tools to many organizations since it has the significant role in improving work performance. Moreover, it is very important to study the HRM incentives involving by the companies both for service and operational organizations, which could effectively contribute in enhancing the reputation of the company and also developing the services for the private sector in Oman. Nevertheless, there is no existing proof on how the several HRM best performance adopted by the identified company’s management in Oman impacts the performance of the organizations. Therefore, it is upon this circumstance that this research seeks to examine to what extent do selection and recruitment, reward system, job design, performance management, as well as training and development, impacts performance of the company.
1.3 Purpose of the study
The study sought to investigate the impact of HRM incentives on improving performance in Oman chamber of commerce & industry
1.4 Objectives of the study
The research had the following objectives:
- To examine how HRM incentives improve performance in Oman chamber of commerce & industry
- To investigate how HRM incentives improve organizational service delivery in Oman chamber of commerce & industry
- To examine how HRM incentives improve governance in in Oman chamber of commerce & industry
1.5 Research Questions
- How does the practice of HRM incentives help in improving performance in Oman chamber of commerce & industry?
- How do HRM incentives improve organizational service delivery in Oman chamber of commerce & industry?
- How does how HRM incentives improve governance in in Oman chamber of commerce & industry?
1.6 Importance of the Study
The important of study is derived from the evidence that HRM incentives are very important to all organization as well as to OCCI. It is well-known that the HRM incentives have practical uses in improving the performance. According to the recourses knowledge, there is any research that has been done on this subject on the OCCI. By this study, it can be argued that the results of the study are important because they can help to improve the performance at OCCI. As a result, OCCI can improve the services for Omani firms and the private sector. In addition, OCCI may find useful findings that help to improve the employee performance.
1.5 Hypotheses of the Study
This study seeks to examine the positive hypotheses
- There is a significant effect of incentive on improving performance at OCCI.
2.0 CHAPTER TWO: LITERATURE REVIEW
Chapter two comprises of the evaluation of writings on the ideas of the best HR management practices in different firms. This evaluation is focused on the topic of the research which involves matters revolving around the employment and selection within the firm, the system of reward used within the organization, the design of the jobs in the firm, training and development in the organization and finally the management of the performance within the organization. In addition, there exists another phenomenon that requires attention such as the theoretical framework, conceptual framework, motivational theory and also offering the summary of the literature review.
Over the years, different scholars have come up with different definitions that best fit for the term HRM. According to Banfield and Kay (2008), human resource management (HRM) can be defined as the recent approach in the management of workers in the company, which recognizes the workers in the company as the main element in any organization in Oman. Further, the approach requires being developed as well as utilized in order to support the strategic goals and operations of the company. On the other hand, McKenna and Beech (2008) define the HRM with the relation to what it does. They assert that HRM aims to maximize the performance of the company by adopting various practices that are considered to be the best within the management of the human capital (Vlachos, 2008). Moreover, in the evaluation and understanding these practices, the HRM draws on the theoretical foundations from the different disciple that can make the managers and directors in the department of HRM to better manage the interest of the workers. These disciplines include the sociology and organizational relations, which have developed into a distinctive field of research in the past years. Additionally, McKenna and Beech (2008) argue that HRM is all about the management of performance and that it should be regarded at any moment in the company as the fundamental activity in the company managerial which to some extent makes the basis of the daily procedures of the feedback between the company workers and managers.
2.3 Concept of Human Resource Management Practices
HRM practices can be defined as the company activities which are directed to the management of the sector of the human resource as well as making sure that the available resources in an organization are used towards the realization of the goals and objectives of the company. Tzafrir (2005) point out that there is a solid connection between the high-performance work practices and the various measure of organizational performance. These high-performance practices comprise of the comprehensive worker’s selection and recruitment processes, compensation, incentives, as well as the systems of performance arrangement, extensive worker involvement, and training. Further, many research has been conducted to show that there exists a positive connection between the HRM practices and the various measures of the firm performance. For instance, an important connection has been established to exist between the company use of the HR staffing practices, both the yearly profit as well as the profit development among the across the section of the companies (Ichniowski, Shaw and Prennush, 1995).
In this way, a significant relationship has been shown to exist between the high-performance job practices system and the company performance, and other various elements of the HRM practices (Terpstra and Rozell, 1993). Moreover, HR practices are considered to be the mechanisms through which the qualifications and skills of the employees are developed. These practices are the main means through which the company is able to impact and shape the attitude, behavior, and skills of all the workers in the company, thus aiding the employees in attaining the goals of the organization. Moreover, the HR practices over the years have been designed with the aim of improving the abilities, knowledge as well as the skills of the workers, hence boosting their motivation, while eliminating or preventing the workers from loitering on their jobs, and ensuring that all the valuable employees in the company are retained. In the view of Delery and Doty (1996), HRM activities are able to affect the performance of the company by enhancing the skills and qualities of the employees selected to work in the company. In addition, HR practices improve the effectiveness as well as the performance of the company through identifying, attracting as well as retaining the workers with the required skills, knowledge and capabilities, and ensuring that these workers behave in a way that supports the objectives and mission of the company. Therefore, the efficiency of the HRM practices relies on the way the HR department creates the suitable behaviors and attitude in the company workers (Huselid, 1995).
Besides, the HRM practices impact the skills of the company workers through the development and acquisition of the human capital of the firm. Barney and Wright (1998) assert that human capital is directly connected to all the stock knowledge or rather, it contributes to the productivity of the company workers. The process of recruitment of a company is significant in selecting the qualified candidates who are considered by the company to have the required substantial effect compared to the quality and kind that the recruited workers have (Gooderham, Ringdal, and Parry, 2006).
2.4 Importance of HRM
Admittedly, it is an issue of common knowledge that the current business with the effective HRM practices has seen numerous positive transformation and success in the different businesses which ranges from small to big businesses (Boselie, Dietz and Boon, 2005). Moreover, due to the new and upgraded technological innovations in the market, some business utilize the new process of produce their products and doing the business to become lucrative. Therefore, the companies with the aim of having their company succeed and compete fairly with their opponents in the market, the firm need to adopt the new trend and effective HRM practices. The HRM practices are considered to be critical to the success of the company since the employees in the company are the backbone of the business. Hence the success of the company is fully dependent on the workers. Therefore proper management of the employees will ensure that the company becomes success full in the market. Also, a number of companies today have understood the role and benefit of the effective HRM practices. Hence the management and arrangement of the workers are core in the process of making the business successful (Petra and Juan 2004).
Thus, various specialists have conducted examination concerning the HRM strategies as well as the ways of being successful, and be helpful within the organization. It is important to point out that in order to implement these strategies, the company should put effort, funds, time and design in the related assets. Nevertheless, it is a significant element that should be in all the companies worldwide (Chandler and McEvoy, 2000). The main focus of HRM is the training, relation of workers, incentives, reward and teamwork in the company. Training the workers in the company will ensure that the company attain the goals and objectives it set and also ensure that the products and services offered and quality and matches the expectation of the customers in the market. Further, incentives and reward in the company will make the employees become dedicated and put more effort in their work in the company (Patterson, West, Lawthom and Nickell, 1997). On the other hand, the relation of employees in the company is important in that it encourages sharing of knowledge and skills in the company. Therefore, all the business associations should have an effective HRM plan in order to support all another department approach such as sales and marketing and the operation sector that will assist in accomplishing the goals of the company (Hiltrop, 1996).
2.5. Effective of HRM in the area of business management
There exists a number of critical strategies which the department of HRM must undertake in order to make sure that they strengthen and attains the target of the organization. Though a company, the workers are perceived as a piece of every association, they form the basic and critical element in the company that without which the company cannot operate at all. Actually, the workers in the company are expected to do all the running of the company and projects that they are assigned to at all the times. Therefore, the department of HRM is expected to assist in associating by the workers and selecting and recruiting only skilled workers to the firm. In the view of Beech and others (2009), there are several policies and approaches that the company must apply to support the business strategy. The main effective HRM practice that has been proved to work for the most companies in Oman is the use of incentives. By definition, the incentive is an item, desired action or object which spurs the workers in the company in order to do more of the actions that they were encouraged by the employers by the selected incentive.
2.5.1 Types of incentives
There are different ways to incentivize the employees in any organization as follows:
2.5.1.1 Individual incentive plan
Stand hour plan:this is the situation where the employers require their workers to do an extra job within a short while and putting in consideration of the quality of the work done. This is the kind of the motivation done by paying the workers involved extra cash different from the salary they are paid. In this case, the HRM personnel are required to motivate the workers into working and giving their quality while the actual motivation is the money they are paid by the end of the process. Further, this has enhanced the quality of the work in the company an overall the success of the company.
Bounces: on the other hand, bounces is the additional money that the company pays its workers due to the hard work or the quality of the work. For example, a company may decide to pay 10% higher than the agreed salary for the projects that are achieved successfully (Jayaram, Droge and Vickery, 1999). In this situation, the workers who have worked hard and achieved the desired goals are rewarded for their hard work and to motivate them to work harder and to see that the goals and objectives are achieved (Terpstra and Rozell, 1993).
Merit pay: the merit pay is only the motivation which is money is given to the only employees who have, over the years, worked harder or rather the ones with the higher performance records. This is always considered as the payback from the company to its workers and to encourage them to continue working hard. Moreover, the merit pay is intended to show appreciation to the workers who are dedicated to their jobs and to motivate them to put more effort into making sure that the company is successful (Paauwe and Boselie, 2005). Due to the fact that the HRM department is responsible for the human capital, then it is its mandate to make sure that the workers remained motivated and rewarded for their hard work, to ensure the success and attainment of the goals and objectives of the company.
Award & recognition: this is the recognition given to the workers to motivate them. The award can either be in the form of money or the promotion from the current work post. This will motivate the workers to work harder and dedicate more time and effort to ensuring the success of the company.
Sales incentive plan: especially for sales employee the company insensitive them by pay the employee a percentage of the sales.
The company pays for the team member if they accomplish the goal. Usually, the company set exactly what is the time target and how much the company will pay for the team. In addition, every member of the team should know how much he will get it equally, or the team leader will pay more (Delaney and Huselid, 1996).
2.5.1.3 Enterprise insensitive plan
It involves all organization employees. The company pays for the employee if the goal achieved. Sometimes the company offers bounce or stock for the employee that helps the company because they will the employee will feel like the owner of the company.
2.6 Reason of incentive
The Organizations introduce incentive compensation for essentially four reasons:
2.6.1 Promotes employee identification with the organization’s objectives.
Currently, several companies try to focus the attention of their workers to the objectives of the company. This is very relevant to the company as it ensures the quality of the services offered by the company and overall success to the company. The HRM department ensures this by linking the achievement of the worker to the reward that the employee is given. This has been proven to work as all the employees will strive to complete the set projects successfully in order to receive the set reward.
2.6.2 Encourages individual, team or business unit performance.
The incentive offered to either individuals or rather the team helps in the performance of the projects in the company. The main approach in this is that the particular reward is dependent on the specific outcome of the work by the organization employee or the workgroup (Zheng, Morrison and O’Neill, 2006). The reward comes with the total projects completed by either an individual or the group assigned to conduct it. However, it is significant to state that the reward is equally distributed to the members of the team in case the project was done by the team.
2.6.3 Controls fixed compensation costs.
The main and easy way of controlling the compensation cost is through the designation of the portion of the pay as at risk compensation when the predetermined unit of business, either by a team or individual goals and objectives are not achieved. This, therefore, will make the employees strive and ensure that the set goals and projects are conducted as required. Hence, ensuring the success of the company at large (Lopez‐Cabrales, Pérez‐Luño, and Cabrera, 2009).
2.6.4. Increases remuneration competitiveness.
Due to the competitive nature of the companies, it is significant to adopt the incentives in the organization to motivate the employees to work harder. The reason behind the incentives pay is to ensure that the company compensation practices remain competitive compared to the other opponent companies (Perez, 2005).
The argument that effective HRM practices are not able to contribute to the improvement of the company business performance does not actually make sense. Most significantly, there is no negative effect on the usage of the HRM practices in an organization; rather there are benefits that outweigh the shortcomings or challenges of using the effective HRM practices. Moreover, in spite of the fact that the HRM practices have no direct connection with the business performance, as in it does not directly impact the performance of the company, it has numerous positive impacts in the company. Additionally, the research conducted shows that using the HRM practices in an organization may not affect the performance of the company (Subramony, 2009). However, more research and studies are still needed to make sure that HRM practices do not have the negative effect (Lee, et al., 2010).
The argument that successful HRM practices may contribute to the enhancement of the performance of a company remains convincing to many. Previously, it was a very difficult thing to apply the practices of HRM. However, currently, it’s hard to imagine any business without the HRM practices and the rate of their success as well as competitiveness in the market. Else, how does one expect such companies to perform or to compete with others with the effective HRM practices in the market? Moreover, without the employees who are educated, skilled and motivated, how is a company able to achieve the goals and objectives that they set. Although there is some cost associated to the HRM practices, such as in the training, communication, and motivation of the employees, the organization should mainly focus on the long-term benefits and investment as well as the overall success of the company (McKenna and Beech, 2008).
According to Singh (2004), the proof from the steel company in Taiwan depicts that the existing connection between the practices in HRM department, organization performance, and the business strategy focused mainly on the training and development of the employees, teamwork, and compensation or incentives. The survey conducted was with 236 supervisors who participated in the research and come up with the following results: firstly, HRM practices has a direct connection with the performance and success of the company. From the research, it was a foregone conclusion that for the company to succeed, it has to have effective HRM with the efficient HRM practices for the company to adequately compete with other companies in the market (Bartel, 1994).
Secondly, there is a direct and a close connection established between HRM practices and business strategies. For the business strategy to be successful, the company should have effective human resource management in the company. As Perez (2005) points out, the strategy of any business is interconnected to the performance of the company and success of the company in the market. Lastly, the research established that integrating HRM practices with business strategies will have a positive relationship with the company performance. Additionally, the study depicts that the teamwork, HRM planning as well as training are very crucial practices that must be considered in order to have them applied to all the company. Further, it can be observed that if the company have the effective HRM practices connected to the business strategy, then the performance of the company will be enhanced. To show that for the company to be successful, there must be an effective HRM practices within the organization (Chand and Katou, 2007).
On the other hand, a study conducted by Long and Ismail (2011) to evaluate the existing relationship between the competence of HRM professionals as well as the performance of the companies in Malaysia. The research conducted evaluated the abilities of the HR professionals within the serviceorganizations on Malaysia. The research found that the strategic contribution, HR technology, business knowledge as well as internal consultation possess a crucial correlation with the performance of the companies. This, therefore, means that the HRM practices are able to support and enhance the performance of the companies. Also, another study conducted in relation with the HRM practices and the performance of the organization in Oman by Vlachos (2008) provides evidence on the connection of the HRM practices and the performance of the companies in Oman. The research demonstrated that there is a direct connection between the company performance and the effective HRM practices within the company. Moreover, the study was done with the 87 companies based in Oman that depicted the strong relationship between the company performance and the HRM practices. Furthermore, the research obtained that there is high contribution associated to the HRM practices with the performance of any organization. This is the perfect example in Oman that depicts on how the positive relationship between the performance of the company and the HRM practices results to the success of the company (Singh, 2004).
An alternative study on the issue was conducted by Ingmar and others (2002) in China with the 62 service companies, and it showed that there is a connection between the HRM practices and the general performance of the organization. The research done established that there is a strong connection between the HRM practices and the performance of the company within the companies that the research was conducted in. In addition, it was obtained that the system of the HRM works has hugely affected the company positively. The study clarified that the relationship between the HRM practices and the performance of the organization in the service industries had been the driving force for the success of these companies (Huselid, 1995). Admittedly, even in the department of manufacturing, the HRM practices are significant due to the fact that it is able to fulfil the satisfaction of the workers and still enable the company to produce quality products and services. Therefore, the employees have the responsibility to produce their best and improve the performance of the business (Delaney and Huselid, 1996).
Research conducted by Okpara and Wynn (2008), concerning the challenges and prospects of HRM in developing countries which tested the performance of the HRM link in the Eritreans civil service. In this article, the authors tested how, when and to what extent the HR practices have an impact on the performance at the employee level. Even though performance is a multi-faceted and complicated concept, HRM results were used as mediating factors between HR practices and employee performance in different organizations. The data was gathered among civil servants in Eritrea, Africa’s youngest and poorest country. Despite the results generally being in line with the previous studies in western data, their implications in Eritrea as a country may be different (Tzafrir, 2005). This, therefore, means that the challenges and prospects of HR practices in Eritrean civil service organizations were critically analyzed and discussed. The authors’ opinion was that the Eritrean economic and political environment within which HR practices operates has not been conducive in maximizing the impact of HRM practices on performance. These findings highlighted the situation of most developing countries (Akhtar, Ding and Ge, 2008).
David (1997) conducted a research on human resource management and performance. The study shows that there is a growing body of evidence supporting the relationship between high level of performance or commitment in human resource management (HRM) practices and various measures of organizational performance. However, it is not clear why this relationship exists. This article argues that in order to provide a convincing clarification of this relationship, there is need to enhance theoretical and analytic frameworks in three key areas. These key areas include the nature of HRM particularly the rationale for the specific lists of HR practices, the nature of organizational performance and the linkage between HRM and performance. A model was introduced within which these linkages were to be explored. The existing literature on HRM and performance is reviewed in the light of this analysis to identify the key gaps in knowledge and to help focus further the research priorities (Fey, Carl, and Ingmar, 2001).
A study on the effect of HRM practices, motivation and giving incentives on the employees conducted by Vlachos (2008) This study aims to identify and examine the significance of HRM practices, motivation, and incentives to improve the performance of the employees. The variables determined as factors that affect the performance of the employees were; the HRM practices (X1), motivation (X2) and the provision of incentives (X3). The population of this study was of employees in the sales Department MT PT. Kumia Wijaya, various industries, amounting to 20 people. Techniques used in the data collection were documentation and interviews. The study also involved the use of multiple linear regressions in the analysis of the data. It indicated that the level of the relationship between HRM practices (X1), motivation (X2), and the provision of incentives (X3) on employee’s performance (Y) is very strong. This is because the value of the correlation coefficient R=0.985a is in the interval between 0.80- coefficient of 1.000. While the coefficient of determination R2 = 0.971, indicating that the independent variable (HRM practices, motivation, and incentives) can influence the dependent variable (performance of employees) at 97.1 % while the remaining 2.9 % is influenced by other factors not examined.
According to Singh (2004), evidence from Healthcare management: financial and non-financial incentives to motivate employees. The greatest capitals of every organization are their employees. The organization must give their best to have healthy employees. Because only healthy employees can give their best and only so the organization can be successful. But how can organization motivate them for living healthy? It is a complex problem, particularly in Germany to teach them about living healthy in private life and also during working hours. Most of them do not understand, how important this issue is. More and more organization in Germany presented healthcare in the last years, yet the interest of employees is not so big. There are a lot of possibilities to make this topic more attractive to them (Okpara and Wynn, 2008). Giving them incentives could be a solution. That can be financial and also non-financial incentives.
Arthur (1994) conducted research on doing more with less using Noncash incentives to improve employee performance. This study showed that employees would usually say they would prefer cold cash rather a noncash incentive. However, when the employee’s efficiency is evaluated using cash incentives versus noncash incentives, noncash incentives have proved to be effective at improving performance and employee satisfaction. This study discusses the issues and provides several broad suggestions for successful noncash incentive programs.
2.7 Performance and HRM:
The evaluation of the public companies in Oman concerning the HRM practices and the performance of the companies is very challenging. Further, to add to the challenge is the consistency which exists in the definition of both terms that is the HRM and performance, as well as the non-existence of the clear theory on the ideology of the HRM practices and the general concept of the company performance (Guest, 1997). The main question concerning the performance concerns if the company’s measures are recognized, compared to a number of measures of workers or even the public good. However, comparing the HRM and performance with other countries complicates the matter even further. Though, it is important to note that it is significant to combine the effective HRM practices in order for the company to perform and succeed in the market (Long, 2011). The company should be in a position to have the positive relationship with the workers for the workers to be able to put more effort in their work. Hence, it will relate to the work they produce and the level of the success witnessed in the company (Paul and Anantharaman, 2003).
2.8 HRM in public and private organizations in Oman
The prior study on the HRM practices in the public and private organizations offers a varying opinion on the dissimilarity and the similarity. Further, the traditional concept of the concept pronounces a requirement for the similarity between the private and public sectors (Amstrong and Baron, 1998). Furthermore, the similarity hypothesis is based on the theory which claims that the public organizations implement the similar HRM practices to the private organizations to gain the legitimacy concerning the demands in order for increasing the cost effectiveness (Moideenkutty, 2011). Similarly, the companies within the public sector are seen to signify the softer model of the management as well as HRM practices with the emphasis on the activities of operation, and a reactive function concerning the approaches. Moreover, the public companies are distinguished in the three primary ways from that of the private organization that is, the source of funding, the management as well as ownership. The public firm’s HRM are considered to be associated with the softer norms as well as ideologies of the model employers, hence setting the standards, like equal opportunities as well as training within the workplace, and is observed differ from the hard mode of the HRM within the private firms (Sabariya and Khita, 2011). The company aspect of training, as well as development, enhances the level of performance of the workers because they tend to learn new experiences, skills, and knowledge on the ways they should improve their work (Guest, 2002).
3.0 CHAPTER THREE: METHODOLOGY
3.1 Introduction
The method and procedure to collect and analyze the data for this study will be explained in this chapter. The research design, data collection, data recourses, sample, the research assumptions, and its limitations will be described below.
3.1 Research Design
These study an inductive research method; to induction the HRM incentive in Oman chamber of commerce & industry. The interview was used as the data-gathering tool through the personal interview. The needed data have been collected directly from the participant depending on the opinion of OCCI staff to explore and examine the impacts of HRM incentives on improving performance in Oman chamber of commerce & industry. The present study tries to explore any variance according to interviewee opinion.
3.2 Qualitative Data
According to Singh (2004), ‘Qualitative data refers to all non-numeric data or data that have not been quantified and can be a product of all research strategies.’ The research relied on qualitative data as it is concerned to gather the information related to strategies of HRM incentives at OCCI. In addition, this is related to the lack of information which requires gathering the data which could identify the study requirements rather than a quantitative method. These comparisons between employee observations don’t need any numerical calculations rather than arrange the results according to the responses to the questions raised in the interview.
3.3 Data Collection
There are two main sources of data for the present study, the primary and secondary sources.
3.3.1 Primary sources
In this stage, the researcher is expected to interview all the participant and get their opinions concerning the HRM practices. The primary data could be derived from observations, in-depth and group interviews and questioners (Vlachos, 2008). Since the main purpose of the research is to improve the performance of the OCCI by enhancing the HRM incentive strategies, the research relied on the interview which has been done with some employees. The primary data allows more concentrate and control on the gathered data and the specific areas required for the study. Furthermore, the interpretation of the information is better when conducting this form of study. On another hand, the disadvantages that it consumes long time, the probability of misleading feedbacks and it required extra resources. The main tool in the primary sources that the researcher used is the use of the interview through offering the questionnaire to all the participants in order to gather the required information for the study.
The researcher depended on a primary data in the research by conducting an individual interview with randomly selected OCCI employees. The questionnaire was developed in that the questions were used as a data collection tool, and the implementation of this process was made to take advantage of sampling a small number of participants representing twenty OCCI employees. The questions was written in English Languages and divided into two sections. The first section was designed for top management and the second section was designed for employees. The interview consisted of nine questions which aim to answer the research inquiries. The interview answers were then compared and analyzed in order to provide the results and findings
3.3.2 Secondary sources
On the other hand, secondary sources involve the use of pre-existing data through references to the library and review of different articles, paper, and previous studies as well as skimming through the website. The use of the secondary data is related to few reasons. First, it saves a significant time, effort and money by providing ready content and even already analyzed data surveyed by organizations. Second, it allows reaching the information very quickly as its always available mainly on the website, noting that many organizations provide accurate information and upload in flash for users. On other hand, some disadvantages occur as little information may not meet the research purposed findings. In addition, the data may be biased particularly when collected from governmental organizations. Moreover it is common that some data is not updated while getting the recent will require paying an amount of cash (Singh, 2004). Accordingly, the researcher took advantage of the benefits provided by the secondary data by saving a time, effort and money considering that a restricted time was given in order to meet the deadline of submitting the research. However, the researcher was very careful when gathering the secondary data and depended mostly on academic journals and articles from reliable resources.
3.4 Data analyses:
The Content analysis was used to analyze the data which was gathered from personal interviews. The researchers typed in the text all audio-recorded interviews and sent back to the interviewee to agree and make sure that everything typed in the text is according to their opinions. Then all data collected categorized in code and themes in order to be comparable. A main purpose of this analysis it help in data collected to be reduced, simplified and producing the result at same time. In addition, by using content analysis the researchers will be able to structure the qualitative data collected in a way that satisfies the research objectives. On other hand, human error may occur in content analysis if the researchers misinterpret the data gathered, thereby generating false and unreliable conclusions (Vlachos, 2008).
3.5 Ethical considerations:
The study was subject to certain ethical issues. All participants reported their written acceptance regarding their participation in the research, through a signed Consent form. The purpose of signing the form was to reassure participants that there are a volunteer and free to withdraw any time for any reason. Furthermore, the participants were informed that their answers were treated as confidential and used only for research purpose. In addition, all audio recorded interviews typed in text and send back to interviewee to agree and make sure that everything is according to their opinions.
3.6 Sample.
The sample for this study comprised of employees from Oman chamber of commerce & industry employees. The criteria specify the characteristics that the sample participants must have at least five years’ experience in OCCI to be included in the study. In addition, the sample participants should have at least a degree and willing to participate in the study. The interviews were conducted face to face with both the employees from top managers and employees at the OCCI head office. As mentioned previously in ethical considerations all participants reported their written acceptance regarding their participation in this study.
4.0 CHAPTER FOUR: FINDINGS
This chapter presents findings.
4.1 Importance of HRM incentives to Oman Chamber of Commerce & Industry
The researcher asked the respondents to provide a rating showing the extent to which HRM incentives improve performance in Oman Chamber of Commerce & Industry. Deriving from the responses, it was evident that HRM incentives greatly contributes to performance as well as sustaining the competitive advantage of Oman Chamber of Commerce & Industry. It recorded a mean of 4.05, an indication that the Oman Chamber of Commerce & Industry HRM incentives practices HRM incentives to a great extent. Through HRM invectives, Oman Chamber of Commerce & Industry has the ability to have a clear vision as well as knowledge and insight on the formulation of an adequate performance thus creating a sustainable competitive advantage not on the short-term but long term. Therefore, 55 percent of the respondents showed that the degree of competitive advantage of the Oman Chamber of Commerce & Industry greatly depends on the effectiveness of the HRM incentives practice.
Figure 1: Overall effectiveness of the effective HRM practice in competitive advantage
The researcher also established the effective HRM incentives key capabilities that are helpful in sustaining competitive advantage in the Oman Chamber of Commerce & Industry. 100 percent of the respondents had a common agreement that the five major capabilities are important for the performance of Oman Chamber of Commerce & Industry with a grand mean of 4.24.The researcher found that the key capabilities employed by the manager’s development and communication of the firm’s vision to all employees as well as maintaining and building of an effective organizational culture which had a mean of 4.55.
4.3 Key areas in HRM incentives
| Key Capabilities | Mean | Standard Deviation |
| Embracing new technologies | 4.15 | 0.80 |
| Engagement and effective communication | 4.10 | 0.75 |
| Rewards and bonuses | 4.10 | 0.75 |
| Paid leaves | 4.55 | 0.89 |
| Paid extra working hours | 4.55 | 0.89 |
| Mean | 4.24 | |
Table 1: Key areas in HRM incentives
Regarding relative impact and performance, reward and bonuses play a greater role in performance compared to other key areas of motivation. The researcher asked the respondents to provide a rating of the extent of the impact on how HRM incentives improve organizational service delivery in Oman chamber of commerce & industry. The findings are indicated in the table below.
4.4 Effect of incentives on the performance of the company
| Service Delivery(Performance) | Mean | Standard Deviation |
| Firm’s incentives programs | 4.14 | 0.97 |
| Reward system program | 4.23 | 1.03 |
| Employees’ training | 4.21 | 1.03 |
| Employees’ motivation | 4.20 | 1.03 |
| Grand Mean | 4.03 | |
Table 2: Effect of incentives on the performance of the company
The findings indicate that effective HRM practices are significantly impacts the general performance of the Oman chamber of commerce & industry as it also has a great impact on the level of performance of the employees with a grand mean of 4.03. The important impacts of HRM incentives on the employee’s performance and the performance of the company was noted to be significant in the research as most of the participants agreed to it. These were inclusive of employees’ training, employees’ motivation as well as reward systems’ programs that the company organizes. Firms’ human resources management was found to be another impact of HRM incentives on the performance of the company with a mean of 4.14. Moreover, the reward systems’ programs, employees’ motivation and employees’ training play an important role in improving the firm’s success thus improving the overall firm’s performance and productivity. All the twenty respondents had a common agreement with the cited findings as the above are activities practiced in the Oman chamber of commerce & industry thus helping the firm to achieve its set objectives and goals.
4.5 HRM incentives improve the performance of the company
The researcher found out whether the Oman chamber of commerce & industry had the HRM managers that are concerned about the incentives given to the employees. Only 18 of the twenty participants recorded that the firm had the managers charged with the responsibility of providing the incentives. However, the other two respondents indicated that the managers of the Oman chamber of commerce & industry did not have skills in the incentive management. The researcher required the respondents to indicate their level of agreement or disagreement about various HRM practices regarding the Oman chamber of commerce & industry managers. The table below shows the findings.
| Strongly agree | Agree | Neutral | Disagree | Strongly disagree | |
| Oman chamber of commerce & industry’s success or failure is dependent on its Human resource management. | 18 | 0 | 0 | 1 | 1 |
| Oman chamber of commerce & industry is quick in responding to the effective HRM management as required for the company to succeed. | 18 | 0 | 0 | 2 | 0 |
| The managers of the Oman chamber of commerce & industry have experience, knowledge or skills in the proper management of the employees. | 18 | 0 | 0 | 0 | 2 |
| Independent directors in the Oman chamber of commerce & industry active engage in the formulation of incentive programs. | 10 | 8 | 0 | 2 | 0 |
Table 3: The extent of respondents’ agreements/disagreements
The respondents had a varying views concerning the HRM incentives, and that the HRM practices greatly impact the performance of the Oman chamber of commerce & industry.
4.6 HRM Incentives and job satisfaction
The study sought to investigate the how HRM incentives contribute to job satisfaction in Oman through Oman Chamber of Commerce & Industry. The employees were asked to report on the circumstances under which they would find their employment satisfactory. The predominant view of job satisfaction is linked to satisfaction of employee’s needs/HRM incentives. Moreover, the research was to find out the type of incentives that the OCCI Company provides to its employees. From the observation made, the main type of incentive that the company offers is the individual incentive plan. This consist of the merit pay, money as the main source of motivation and promotion from the current working post to higher working post. This has proved to be vital to the company as since it was adopted, the performance level of the employees have risen, and this has a positive impact on the general performance the company. Further, the interviewed workers in the OCCI pointed out that they prefer promotion to other posts as the motivation to the money provided by the company. According to them, the promotion has a long term benefit compared to the money offered at the end of a project completed successfully.
5.0 CHAPTER FIVE: DISCUSSION
According to the OCCI roles and regulation, it is a regulation that the vacant places that the company require employees, the vacancies are announced through the website and newspaper in order to allow the interested candidate to apply for the job if the person has the required skills and qualifications. Further, the company allows for the set process of interview and recruitment procedures which are in line with the HRM practices. The HR department, therefore, is responsible for the hiring and selecting the employees required in the company. Recently the OCCI do the head handers from other organization companies for some professional jobs like social media specialists.
In regard to the work performance of the employees, there is various variance as per the top manager expectations. In the view of Mr. Omar, an interviewee, the manager of the HRM OCCI pointed out that, “I don’t expect the workers to work much since the workers have been working over the years and with the similar routine, thus making it hard for them to change there working experience.” However, from the observation of the research, there are set of rules that the company has put forward in order to carb the gaps in the working routine. Nevertheless, changing the employees’ routine and experience has become one of the major challenges in the company. All the workers in the company are expected to focus their target on the goals and objectives of the company which are mainly set by the HR managers at the beginning of every year.
For the subject of training of the employees in the company, the HRM department has tried to enhance the skills of the workers by organizing for the training programs in order to boost the skills and experiences of the workers. As per the observation, after such programs, the company organizes for the employees who usually work in the department are set to the head office in order to display the gained skills and experiences. Further, from the interview conducted, there was clear evidence of the lack of coordination which exists between the directory and HRM regarding the training as Mr. Tariq Said, “regarding sending employees for training, I normally keep or either note on my annual reports of the company employees. This mainly assists in the way that when it comes to the training, it is easier to track back to the notes in order to suggest the appropriate training program that will ensure that the workers get the best in accordance with the level of the performance. This has made it easier for the recommendation of new training during the training program to get the effective training process.” This is critical for the company as it helps in getting the effective training program that ensures the company employees attain the required level of performance in the company. It is important to note that the training of the employees should be in line with the HRM practices.
Admittedly, the workers in OCCL and the managers recognized the similarity of the use of incentives as other companies in both the public and the private sector. Further, in line with the incentives, the managers and employees indicated that there is a clear existence of variance due to the fact that the employees from the different region have the different type of motivation. Thus, the HRM should take into consideration of such issues when planning for the training program and incentives in the company. It was further observed that the significant incentive that the company offers even to the community around is the scholarship for the students in secondary and higher education and the workers since to prefer this the most since their children are also considered.
According to Salma, an accountant of the OCCI Company, the promotion she got from the company as a motivation for having successfully completed her project meant a lot to her than having given money. This helped her in boosting her confidence and successful in the work that she is assigned now (Vlachos, 2008). However, putting others into consideration, other people would wish to be given money as the motivation while other will need promotion as incentives as in the case of Salma. Moreover, from the observation from the employees, the study found out that the participation within the external delegations, training programs, incentives, conferences as well as the house loan are deemed as the best incentives in the OCCI Company. This has been proved to work for the employees within the company since it has motivated the worker to put more effort in their work and to successfully complete the projects they are given.
In the recent years, several of these incentives such as paid annual leaves as well as the bonus is given the company workers in accordance with the HRM practices and the annual performance appraisal percentage. The company uses this as the main way to keep their workers’ performance level and their skills in completing the projects given. Furthermore, the research found out that there is a huge benefit in training the workers as non-paid incentives for the employees. In the opinion of Ms. Fatima, the head of economics in the company, “if the working environment permits the workers to acquire knowledge and skills, however, it has proved that it prevents the workers from applying the skills obtained from such training programs to be applied in the daily life. Therefore, I think that without proper implementation, then the training programs are useless and are just weighing the company down for no good cause.” The findings further depicted the importance of effective implementation of the skills gained from such training programs and proper translating the important professional development in both the career and the knowledge. Nevertheless, in line with the processes, the OCCI Company have recently transformed the policies and strategies through providing the required opportunities to the company employees with the higher performance level compared to the old employees with lower qualifications and the ones that are less productive in their line of work.
The results declared that the OCCI Company is considered as the fair employer, but the workload given to the workers at some department is high that requires the company workers to put in extra efforts and spend more time as a result. This, therefore, has been seen to affect the health of the workers and reduce their free time to spend with their families. Further, the interviewees stressed the significance of the incentives in all the strategies of OCCI Company. Additionally, the company over the years have tried to invest in their workers through providing them with the several incentives which motivate the workers to work harder. However, it is important to note that the workers in the OCCI Company understand the challenges which happen in the company and every other company yet the worker’s ion the company is always persuaded to focus on the positive side. Moreover, the company has implemented the house loans without interests for the workers by next year to help in motivating their workers.
The study examined how HRM practices influence the performance in the company. Findings show that effective HRM practices contribute significantly to the level of performance of the company and the general success of the company. In particular, the firm effective HRM practices have evidenced by the mean score of 5.05. A key advantage of effective HRM practices enables the firm to develop a clear vision, knowledge, and insight into the formulation of appropriate organizational strategy capable of achieving the high company performance and success in the company. Findings also showed that majority of respondents agree that the performance and success of the firm depend on the effective HRM practices in the company. Furthermore, the study examined how the HRM practices guarantee key capabilities necessary in the performance of the company and the general success at the firm
Findings showed that nearly all respondents agree that key capabilities of effective HRM practices are critical sustaining the high level of performance. Key capabilities such as development and communication of the company’s vision, investments and use of new technologies, engagement in strategy formulation and implementation, as well as development and use of effective human capital are critical in achieving company performance. These findings are consistent with the assumptions of, whereby the performance of the company only arises when customers have the long-term preference for the products and service provided by an organization. In particular, effective HRM practices have a role in introducing elements and actions within organizational approach as a guarantee for superior products and services. Motivated employees engage in the cost-benefit analysis as a strategy for competing successfully in the market. Companies with the effective HRM practices are commonly deemed the most factor which promotes as well as maintains the performance benefit for the firm; the organization is required to comprehend the capabilities to realize the performance benefit appropriately. In the area of risk management, findings how that effective HRM practices are critical in managing risks associated with the company. In particular, a significant amount of losses at the company was associated with the human resource management which required managers of HR to take action.
6.0 CHAPTER SIX: CONCLUSION & RECOMMENDATIONS
6.1 Introduction
This chapter consists of two sections. The first section presents the limitation of the study. The second section of this chapter presents suggested conclusion and recommendations which depends on analyzing and discussion of the findings.
6.2 Conclusion
Depending on the research finding and discussion, the study proved that there is a significant effect of incentive on improving performance at OCCI. The Oman chamber of commerce & industry is trying to satisfy and incentivized their employees by offering paid and non-paid incentives, the purpose of improving the performances to provide high-quality service for the private sector. However, the researchers studied the OCCI incentives and found out how it affects the employee’s performance. The paid scholarship and appreciation are considered as major factors that incentivized the OCCI employees. Therefore, OCCI must take that into consideration to improve their employees’ performance. In addition, no development standards set for the employees and lack of training procedures.
As a result, the manager expectations of employees work performance are varied and depend on the importance of department. On the other hand, it is worth to mention that the OCCI is modifying some evaluation procedure by the set goals for the employee at the begging of year and the bonus paid according to the performance and the achieved the target. The interview answers declared similarity of incentives like other private sector organization except the employee participating in external delegations; therefore the OCCI should consider that and develop new attractive incentives for the employees. Furthermore, the interviews showed that the employees feel that the professional development in both career and knowledge are very important to them. Thus the OCCI should have the clear career development plane for their employees. Moreover, great attention workloads of some employees because that affects their health.
6.3 Recommendations
Organizational managers should understand that HRM incentives are essential in achieving the forms vision and mission. The company should, therefore, embrace HRM incentives in order to gain competitive advantage. Moreover, the OCCI Company should continue to motivate the employees because it has been proved that the motivated employees work best and increase the level of performance of the company plus the success of the company at large. This will make sure that the company enhances the services they offer to their clients and compete fairly in the market. Further, the study recommends that the companies must get the required insight on the form of incentives that the workers like and work with without problems. Finally, the company should offer relevant motivation and reward to the workers to make sure that they are comfortable working in the company. The company should also consider having the effective communication and HRM practices. Moreover, training programs should mainly be centered on the workers and the skills that they are intended to have. The programs should also have an effective plan on how to implement the acquired skills in their daily work and their life.
6.4 Research Limitation
The respondents may have given biased opinions at the point they were giving the information. Plus the number of the interviewee in the research was quite less which could have given the wrong impression and inadequate information required for the study of the company. Further, the time was another limitation and the high effort required to complete the work. The time provided for the research was quite less hence made it hard for the researcher to interview more employees of the company. Moreover, the relation of the researcher and the employees of the company may have led to the workers of the company giving the biased information for the research. Further, the researcher using the observation as a tool of collecting information was not the best since the employees are able to pretend once they are aware that they are being observed hence making the researcher getting the wrong information. Finally, the lack of pre-existing knowledge and the particular researches on the OCCI Company was a vital challenge in approaching many experiences as well as create an in-depth and full understanding of this field
Appendices
Interview
Thank you for accepting to participate in this interview. Kindly answer the questions appropriately, and in case you do not understand any question you are allowed to ask. The question is mainly asking your views on the effect of the effective HRM practices on the performance of the company and general success of the company. Therefore, it is important to note that the answers you give will help in the achieving the set objectives and goals of this research. Further, your answer will be considered confidential and will be used for the study purposes only.
| 1. | Gender | ||||||
| [ | X] Male [ ] Female | ||||||
| 2. | Age | ||||||
| [ | ] Below 30 | [ ] 31 – 40 | [ | X] 41-50 | [ ] Above 51 years | ||
| 3. | Educational qualification | ||||||
| [ | ] High School | [ ] Diploma | [ | ] Undergraduate | [X] Post Graduate | ||
Department: Company Accountant
4) What is your workload in the OCCI Company?
My workload is very high in the company. I am responsible for preparing the studies and economic research, work of statistical reports on economic relations between the Sultanate and other countries, prepare reports and summaries of the economic topics, provide information about government actions and investment opportunities for investors, among others.
5) What are motivational expectations from your Employer?
There is no clear mechanism for motivation in the company, but it is measured in terms of; the participation in the delegations, participation in the organizational events and conferences, promotion to the employees who have succeeded in the projects, training programs and scholarships as well as modifying the job title of the workers in the company.
6) What incentives were you offered at OCCI?
As I mentioned before, the OCCI Company is working hard to reward and motivate the hard worker by giving priority to participate in the programs that mentioned above.
7) What incentive do you like?
By giving me the opportunity to develop my skill & knowledge through providing me with scholarships or training programs which I need
Why?
Because, there are moments that I need money, but when considering the long term benefits, I tend to like promotions since it has benefits forever.
8) Do you think training, flexi-time, and other non-pecuniary incentives are worth considering?
Definitely yes, but with regard to training or skills development, if there is no practical application of what the employee learned or study at work, I think it is useless to provide it.
I mean if the working environment allows you to acquire knowledge but prevents you from applying it in your daily life at work, I think that training is useless in this case.
9) Do you have opportunities for professional development and are they important to you?
If you mean by “professional development” is learning to earn or maintain professional credentials such as academic degrees to formal coursework, conferences and informal learning opportunities situated in practice. Then yes I have, and it is very important for me. In fact, through my work, I have had this opportunity through the grant which Oman chamber offered for me to study Master degree, which will reflect positively on my work through the knowledge that I will gain.
10) Do you feel that OCCI is a fair employer and offers you the opportunity to enjoy a healthy work-life balance?
The answer to this question depends on human nature; if he finds what he aspires to, he will say that the place of work is fair and healthy and vice versa, but by working here close to five years, I can say that there were serious and persistent attempts to make the workplace a healthy place
10) Is there anything you may like to add?
Nothing
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