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Human resource management

practices in a transition economy

Human resource
management
practices

Challenges and prospects

John O. Okpara and Pamela Wynn

57

Department of Management, College of Business,

Bloomsburg University of Pennsylvania, Pennsylvania, USA
Abstract
Purpose The purpose of this study is to examine the extent to which organizations in Nigeria use
various human resource management (HRM) practices, and the perceived challenges and prospects of
these practices.
Design/methodology/approach A combination of quantitative and qualitative research methods
was employed to gather information. Specifically, data were collected from 253 managers in selected
firms. Descriptive data analysis is presented with respect to the use and execution of HRM practices
such as recruitment, selection, performance appraisal and training and development. In addition,
information was collected and analyzed with regard to the challenges and prospects of HRM.
Findings This study provides significant current information on HRM knowledge and practices in
Nigeria. The findings reveal that HRM practices, such as training, recruitment, compensation,
performance appraisal and reward systems, are still in place. However, issues of tribalism, AIDS,
training and development and corruption are some of the challenges identified that need to be addressed.
Research limitations/implications The study was limited to 12 companies in ten cities. A broader
geographic sampling would better reflect the national profile. Another limitation could stem from the
procedure used in data collection method (drop off and pick up). However, extreme measures were taken
to protect the identity of the respondents.
Practical implications The study identified challenges and prospects of HRM in Nigeria.
Organizations should employ requisite HRM practices to achieve excellent organizational performance.
Furthermore, the government may create policies to promote the above practices, since, in the long term,
achieving organizational excellence will reflect positively on the economy. All these may be facilitated
through proactive organizational and national human resource development initiatives.
Originality/value The significance of the present study stems from the fact that very few studies
have explored the impact of human resource challenges and prospects in Nigeria. The results provide
additional insights into HRM practices in Nigeria, a sub-Saharan African country. A region that has been
neglected by management researchers and has therefore been less researched. Also, the insights gained
from this study contribute to the future development of this line of research, particularly in a nonWestern country like Nigeria.
Keywords Africa, Nigeria, Human resource management, Privatization, Developing countries
Paper type

Introduction
In response to the disappointing economic performance in Nigeria in the last two
decades, the government of president Obasanjo launched a liberalization policy to turn
the nations economy toward a market-oriented system. This policy includes a
comprehensive privatization program of state-owned enterprises (SOEs). In his
opening address to the National Council on Privatization, the president stated that
there was a time when publicly owned companies were better than private
organizations for stimulating and accelerating national economic development, and
that those days are over (Bureau of Public Enterprises, 2001). He argued that SOEs
have failed to live up to their expectations and that something must be done to improve
the quality and efficiency of goods and services. Following his speech, he issued an
Executive Order directing the implementation of a privatization program for SOEs.

Management Research News

Vol. 31 No. 1, 2008
pp. 57-76
# Emerald Group Publishing Limited
0140-9174
DOI 10.1108/01409170810845958

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The presidents order marked the end of a mixed economic system (socialist/capitalist)
in Nigeria, and ushered in a new era the era of a market-oriented system.
There are pros and cons to privatization. One of the disadvantages of privatization
is reduction in the labor force. Reduction in labor force occurs because public-sector
companies are traditionally associated with over-staffing (Parker and Hartley, 1991;
Parker, 1992; Haskel and Szymanski, 1994). Other changes have also been reported,
such as in labor relations and employment contracts, as well as compensation
practices, with the introduction of performance pay (United Research, 1990; Parker and
Hartley, 1991; Bishop and Thompson, 1994).
Human resource management (HRM) practices play a primary role in the
privatization process. According to Sathe (1985), when seeking to create culture change
such as privatization, human resource experts have to intervene through recruitment
and socialization of members that fit the new culture, and the removal of members that
deviate from the culture. Coherent human resource policies must be implemented in
order to achieve the consistency in the process of cultural change. Seth (1985) asserts
that human resource policies and activities are also significant management tools to
promote commitment of the labor force to the new organizational culture or, at least, to
help define acceptable corporate behavior in newly privatized organizations.
According to Cunha and Cooper (1998), in the short term, the privatization of a public
company is a process of change in the companys objectives, competitive strategy,
structure and HRM practices. They argued that this process is a necessary adaptation
to the new competitive environment, reflected in a shift of organizational goals towards
shareholder value maximization and profitability.
There are very few studies demonstrating the effectiveness of HRM practices
outside Western countries. Our literature search reveals that to date, very little research
has been done on HRM practices in Nigeria in general, and none on this particular
topic. Thus, gaps exist with respect to understanding human resource practices and
how they are executed in Africa. Nigeria has opened its market to international trade
and investment, and has become a credible player in the international market, thereby
contributing to the need for more information on the management practices in Nigeria.
There is current emphasis on privatization in developing and developed economies
(Euromoney, 1988, 1990; Kapur et al., 1991; Morna, 1988), the influx of foreign direct
investment to help accomplish this objective (Morna, 1988; Novicki, 1987; Steel, 1988),
the potential of HRM to enhance the success of these efforts, and the prevailing absence
of empirical data on HRM practices in Nigeria. Thus, the purpose of this study is to
explore HRM practices, challenges and prospects facing organizations in Nigeria as the
nation makes the transition from a mixed economic system to a market-oriented one.
There are a number of reasons for this study, which can contribute to management
research and literature. First, we argue that with the globalization of the world
economy there is increasing recognition that the efficacy and generalization of HRM
interventions in a non-Western context need to be investigated. Second, the economy of
Nigeria is growing rapidly, and Nigeria has opened its borders to international
business, making it imperative for scholars and practitioners to understand HRM
practices and challenges in Nigeria. Third, it is essential to determine whether HRM
practices and policies developed in the West also hold in a non-Western country.
Fourth, from a practical perspective, the study draws management attention to the fact
that there is a need to develop HRM practices that can enhance the effectiveness and
sustainability of businesses in Nigeria. Finally, from an academic perspective, this
study also provides additional insight into the HRM practices and challenges that will

contribute to the future development of this line of research. Therefore, the present
study is of significant value for practitioners and scholars alike.
Background
The Federal Republic of Nigeria is the most densely populated country in Africa. It is
situated on the coast of West Africa; it has boundaries with the Republic of Benin in the
west, Chad Republic and the Republic of Cameroon in the east, Niger Republic in the
north and the Gulf of Guinea in the south (Okpara, 1996, 2006; Erondu et al., 2004).
Nigeria is home to more than 130 million people with 250 ethnic and religious groups
and more than 500 spoken languages (Erondu et al., 2004). The language of
communication in Nigeria is English, which means that persons of different language
backgrounds communicate in English. Hausa, Yoruba and Igbo are the most widely
used languages (Okpara, 1996, 2006; Erondu et al., 2004).
Nigeria runs a presidential system of government modeled closely after the US
system. The president is the commander-in-chief of the armed forces and serves a fouryear term (CIA World Factbook, 2005). The country is endowed with rich natural
resources, and is the fifth largest producer of crude oil in the world. Unfortunately, the
economy has been plagued by political volatility, corruption and poor macroeconomic
management. However, since its present transition to a civilian-elected government
after May 1999, the development and potential for continuous development in many
sectors of the economy has been outstanding. The government has instituted policies
and practices geared towards embracing a market-oriented system. As a result, Nigeria
is one of 54 developing countries considered to be emerging economies by the
International Finance Corporation in 1999 (Hoskisson et al., 2000). In 2000, Nigeria
received a debt-restructuring deal with the Paris Club and a $1 billion loan from the
IMF. The World Bank Group (2000) indicated that an increase in foreign investment
combined with high world oil prices should push economic growth to over 5 per cent.
There are now over 200 international companies situated in Nigeria (Geo-Jaja and
Mangum, 2000; Jason, 1997; Thompson, 1994).
Conceptual foundation and literature review
The conceptual framework for this paper is based on the pervious literature on HRM
challenges and prospects in general and particularly in developing countries. A
number of studies have identified several HRM practices and challenges managers face
in executing their jobs, and have used these findings to provide theoretical and
practical insights from a developing country context (Ghebregiorgis and Karsten, 2006;
Ghebregiorgis, 2006; Stavrou-Costea, 2005; Jackson, 2004; Kamoche et al., 2004; Flood
et al., 2003; Kamoche, 2002; Anakwe, 2002; Dowling and Schuler, 1990).
Studies have identified several HRM practices, challenges and prospects faced by
HR managers. For example, Ghebregiorgis and Karsten (2006) found that the concept
and knowledge of HRM practices, such as training, recruitment, compensation,
performance appraisal and reward systems, are practiced in Eritrea. Anakwe (2002) in
a study of HRM practices in Nigeria found that traditional HRM functions, such as
training and development, recruitment and selection, performance appraisal, among
others, are very much practiced by HR professionals. In Mozambique firms have
made use of informal workplace training, commonly known as sitting with Nellie or
one-on-one. A significant minority of firms in their study also sponsored courses with
outside training agencies. Few firms made no use of training at all and that very few
firms made use of advertisements or employment agencies (Webster and Wood, 2005).

Human resource
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In a rapidly changing environment, employers should be encouraged to experiment

with innovative new recruitment schemes to ensure increased efficiency and innovation
(Price, 2004, p. 382). It has also been encouraged that other methods of recruitment such
as word of mouth and/or internal recruitment should also be utilized. However, the use of
informal mechanisms for recruitment and selection results in a better fit between new
recruits it is likely to exclude a large pool of competent candidates (Price, 2004, p. 385).
There is a considerable mix in the ways in which HR practices are used by smalland medium-sized enterprises (SMEs and in their relative success (Cassell et al., 2002).
Some HRM functions such as recruitment and selection were used more than any other
practice. The key challenges for HRM include, among others, training and employee
relations. These HRM practices are significantly related to organizational productivity
(Stavrou-Costea, 2005). One may therefore surmise that an identification of HRM
practices, challenges and prospects is essential to organizational productivity.
HR functions and line management
Line managers have traditionally been involved in HR issues as part of their job,
although administrative employee matters were the responsibility of HR professionals.
However, HRM roles are changing. With the transformation of job contents and the
increase in change-driven HR initiatives, line managers today are required to conduct a
series of people-centered tasks in their jobs that are not in their traditional roles but on
the basis of strategic HR planning and in close collaboration with internal or external
HR specialists (Papalexandris and Panayotopoulou, 2005; Storey, 1992; Guest, 1987).
A key to organizational success lies in involving and inviting line management to
actively participate in designing and implementing HR activities. Brewster and Larsen
(2000) indicate various reasons why line involvement in HRM receives increasing
attention. These reasons center around the need for a comprehensive approach to
people management in cost-centered units where decisions have to be made fast and on
the spot. As the operating cost of employees increases, in a cost or profit center based
organization there is pressure to include human resource issues as part of line
management responsibilities (Brewster and Mayne, 1994). Since line managers are
responsible for creating value, they should integrate HR in their work, working in
partnership and holding HR more accountable in delivering organizational dominance
(Ulrich, 1998; Legge, 1995). An enhanced role for line managers hold them responsible
for bottom-line results because of their frequent contact with the customers, which
enables them to present themselves as the voice of the customer. A partnership
approach between HR, line and employees, called an HR triad stresses that it is
everyones responsibility in managing HR issues (Jackson and Schuler, 2002, 2003).
This background sets the stage for issues that will be evaluated in our study.
Method
This section includes a description of the research design, population, sample, data
collection procedures and instruments validation. In order to generate data of
appropriate range and depth, a mixed-method approach using both a questionnaire
survey and in-depth face-to-face interviews was adopted. The mixed method has been
used in a prior study of HRM practices (Cassell et al., 2002).
Research design
Data for this study were collected in the late summer of 2006, using a questionnaire survey
and in-depth interview methods. These methods have been described by researchers as

methodological pluralism, and have been used in conducting research related to developing
countries (Cassell et al., 2002; Ibeh and Young, 2001; Kamath et al., 1987; Bell and Young,
1998). Cross-cultural studies are deemed to have certain challenges due to cultural,
linguistic, business practice and communication differences of research respondents. Mixed
methods help to prevent some of these challenges and provide rich data.

Human resource
management
practices

Population and sample

The population consisted of HRM professionals and line managers employed in the
banks, construction, manufacturing, transportation and oil industries represented in
the A to Z Trade directory of Nigeria. They were selected because they represent
businesses that employ 140 or more people (Okpara, 1996; Aboyade, 1981). These
industries combined accounted for over 95 per cent of the countrys revenue and over
90 per cent of the gross domestic product. The companies include subsidiaries of multinational and privately owned corporations. They were also chosen because they were
convenient to reach by telephone, fax, private, or public transportation. Moreover,
these organizations were in a better position to provide the researchers with the
necessary information regarding HRM policies and practices.

61

Survey method
A random sample of 12 firms from the A to Z directory was successfully contacted via
telephone, letter, or fax requesting their participation. The firms that agreed to take
part in the study formed the research sample. Stratified sampling was used to select
the people surveyed. Stratified sampling allows the researcher to obtain a greater
degree of representativeness thus reducing the probable sampling error and to ensure
that different groups in a population are adequately represented in the sample (Babbie,
1990, p. 94; Nachmias and Nachmias, 1992, p. 179). To avoid loss and delay due to the
weaknesses in the communication and postal system in Nigeria, a drop-off and pick-up
method was adopted (Ibeh et al., 2004; 2001; Okpara, 1996; Yavas, 1987). This method
ensured distribution and collection procedures, which were systematic and controlled
by the researcher. Eight trained research assistants were hired and charged with the
responsibility of distribution and collection of the questionnaire.
Interview method
In addition to collecting data through the questionnaire survey, a qualitative data
collection technique involving one-on-one interviews with selected respondents was
conducted. This stage of research involved the selection of a quota sub-sample of 12
firms for in-depth interviews. These firms are part of the original firms selected for this
study. The actual number of people interviewed was thirty. The 12 firms included five
plastic firms; six banks, six firms in the food and beverage industry, eight from the oil
industry and five transportation firms. Twenty personnel/HRM professionals and ten
line managers participated in the in-depth interviews. Line managers were interviewed
because they too are now involved in human resource activities (Papalexandris and
Panayotopoulou, 2005; Storey, 1992; Guest, 1987).
Instruments
Survey measures
The survey questionnaire was developed based on previous empirical international
HRM research. Cronbachs alpha was used to test the reliability of the measurement
scales (Hair et al., 1989).

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Responsibilities of HR professionals
Responsibility was measured using sixteen items adopted and modified based on
previous research (Delery and Huselid, 1996; Arthur et al., 1995; Cassell et al., 2002;
Webster and Wood, 2005; Anakwe, 2002). The sixteen items related to the activities
performed by HR professionals on a typical day, and the type of services they provided
to other managers or departments, respondents were asked to rate the items using a
Likert scale ranging from Strongly Agree (1) to Strongly disagree (5).
HRM policy and current practices
This category was measured using ten items adopted and modified from Arthur et al.
(1995). The items sought information on specific HRM practices, namely recruitment
and selection, performance appraisal and training and development. Information was
also requested on the types of employee support programs provided or managed by the
organization (e.g. health care, child care, quality of work issues), and how salary
increases and promotions were determined. This was carried out on a five-point Likert
scale ranging from 1 No importance to 5 All important.
Recruitment and selection
Recruitment and selection items were adapted from (Delery and Huselid, 1996; Arthur
et al., 1995; Cassell et al., 2002; Anakwe, 2002; Webster and Wood, 2005).
This was measured using a five-point Likert scale ranging from Strongly Agree
(1) to Strongly disagree (5). For example, (1) HRM professionals play an active role in
determining the qualifications and skills required for a position, (2) HRM professionals
play an active role in initial screening of candidates for a position, (3) HRM
professionals are actively involved in the hiring process, (4) Line managers are actively
involved in the hiring process, (5) HRM professionals are required to advise line
managers on employment-related issues, and so forth.
Challenges of HRM professionals
Seventeen challenges were generated from the literature (Delery and Huselid, 1996;
Arthur et al., 1995; Cassell et al., 2002; Webster and Wood, 2005; Anakwe, 2002). These
challenges include health, HIV/AIDS, managing talent, employee rewards, retention,
training and development, technology, tribalism, nepotism and corruption. Respondents
were asked to indicate the extent to which they face each of these challenges in carrying
out their work. The answers ranged from Strongly Agree (1) to Strongly disagree (5).
Respondents were then asked to indicate any other challenges they faced if none of those
listed applied to their situation. They were also asked to state what they considered to be
the main challenges they faced in accomplishing their work.
Prospects
Twelve major prospects were generated from prior studies (Webster and Wood, 2005;
Anakwe, 2002; Ghebregiorgis and Karsten, 2006; Ghebregiorgis, 2006). Examples of
these prospects include technology, employee assistance programs, health care issues,
flextime, telecommuting, child care and stock options. Respondents were asked to
indicate the extent to which they see each of these potential prospects in the future for
their organization. The answers ranged from Strongly Agree (1) to Strongly
disagree (5). Respondents were then asked to indicate any other prospects they see for
the future that will enhance their work if none of those listed applied to their situation.

They were also asked to state what they considered to be the major prospects they
faced in accomplishing their work.
In-depth face-to-face interviews
We developed semi-structured questions based on the literature (Delery and Huselid,
1996; Arthur et al., 1995; Cassell et al., 2002; Webster and Wood, 2005). One of the
researchers conducted the interview. The following questions were asked:

Human resource
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63

(1) What are the responsibilities of HR professionals in your firm?

(2) What type of training do you offer to new employees?
(3) Do you have employee development programs?
(4) What type of feedback do you get from your training programs?
(5) What methods do you use in recruitment and selection?
(6) What are your current HR policies and practices?
(7) What are the most important challenges you face in doing your job?
(8) What do you consider to be the future prospects for HRM?
Selected interviewees had to be one or more of the following: an HRM professional,
a functional manager, a managing director or a president of a company. The interviews
lasted on average about 45 min and were tape recorded where permitted[1] and later
transcribed. The transcripts were then analyzed using template analysis (Crabtree and
Miller, 1992; King, 1998). The purpose of the template is to generate a list of codes
representing themes identified in the text.
Survey data collection
The survey was administered to 365 HR professionals and line managers in 12
organizations located in ten cities: Aba, Abuja, Awka, Enugu, Umuahia, Onitsha,
Owerri, Lagos, Jos and Port Harcourt. The decision to limit the study to firms in ten
cities since these cities are the major industrial areas spread across the main geopolitical regions, namely Lagos (South-West), Abuja, Jos, (North), and Aba, Awka,
Enugu, Umuahia, Onitsha, Owerri and Port Harcourt, (South-East). The cities were
also selected because it was easy to manage the logistics problems associated with
conducting a nation-wide research in Nigeria.
Of the 365 questionnaires distributed, 253 (69 per cent) usable questionnaires were
returned. Table I shows the number of firms, number of questionnaires sent, and usable

Sector
Banks
Construction
Manufacturing
Oil
Transportation
Total

Number sent

Usable returns

75
78
71
72
69
365

58
51
49
50
45
253

Note: aThe usable response rate is 69 per cent

Percent of usable returns

23
20
19
20
18
100a

Table I.
Selected businesses in
the questionnaire survey
(n 365)

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returns. The majority of the respondents are in the age group 25-45 years old (82 per
cent), while 52 per cent were male and 48 per cent female. Most of the respondents are
in lower management or supervisory positions (40 per cent), and middle-level
managerial positions (60 per cent). With regard to experience, 216 (59 per cent) have at
least five years of working experience. A large percentage of the respondents
(66 per cent) come from organizations that employ at least 120 workers. Finally, there
are 190 (52 per cent) privately owned companies and 175 (48 per cent) subsidiaries or
multi-national companies. Respondents were employed in various industries, including
50 in the oil industry, 51 in construction, 45 in the transportation sector, 49 in
manufacturing and 58 in banking/insurance.
Validation of the research instruments
The instruments were submitted to a panel of experts for validation. The panel was
asked to review the content of the items in each of the instruments and eliminate items
they found to be irrelevant to the study. After some modifications were made, the
instruments were resubmitted to the panel, which then unanimously recommended
the use of the modified instruments for this study. Cronbachs alpha was used to test
the reliability of the measurement scales (Hair et al., 1989).
Pilot test of the instruments
A pilot test was performed in order to establish the highest degree of reliability. The
jury-validated instruments were pre-tested on a small sample (n 45) of randomly
selected managers who are part of the study. The correlation of random split-halves for
internal consistency ranged from 0.85 to 0.90. Also, the step-up formula ranged from
0.85 to 0.98 and the Cronbachs alpha ranged from 0.86 to 0.96. Hair et al. (1989)
suggested the use of Cronbach alpha to test the reliability of the measurement scales.
Criteria for selection of panel members
The following criteria were used to select the nine-member panel that evaluated the
instruments, with each member of the panel satisfying at least three of the following
conditions: (a) must hold a doctoral degree; (b) must have at least ten years of
experience as personnel/HRM director; (c) must have at least ten years of experience in
teaching and research with appropriate publications in personnel/HRM; (d) must serve
on a panel that had previously evaluated an instrument; and (e) is familiar with the
Nigerian management environment .
Data analysis
To explore HRM practices and prospects in Nigeria, the data collected was analyzed
through various statistical procedures including the frequencies, means, mean
differences and standard deviations. In addition, the contents of the responses of the
interview questions were analyzed using template analysis (Crabtree and Miller, 1992;
King, 1998). We also used direct interpretation. According to Stake (1995) direct
interpretation is considered as one of the approaches for qualitative data analysis. This
method involves an evaluation of respondents answers and making meaning from it.
Findings: questionnaire survey
Responsibilities of HR professionals
The means and standard deviations scores and percentages of the respondents
professional responsibilities are shown in Table II. These results suggest that the

Function
Recruitment and selection
Training and development
Formal performance appraisal
Monitor/evaluate HR practices
Administer compensation and benefits
Termination/layoff
Staff welfare services
Union/labor relations
Health and safety issues
Written job description
Formal job analysis
Job sharing
Job rotation
Employee selection tests
Incentive/merit policy
Sexual harassment

Mean

SD

Percent

253
253
253
253
253
253
253
253
253
253
253
253
253
253
253
253

3.79
3.76
3.74
3.69
3.65
3.85
3.75
3.60
3.72
3.77
3.58
3.72
3.69
3.76
3.68
3.73

0.120
0.184
0.178
0.319
0.276
0.318
0.236
0.335
0.321
0.168
0.222
0.123
0.210
0.317
0.251
0.231

81
78
70
41
60
45
30
20
20
80
75
70
45
78
68
10

Note: *Categories range from Strongly Agree (1) to Strongly disagree (5)

managers surveyed in this research, while their scores fall into the moderate area, are at
the extreme end of this category toward the high mean scores of the HR professional
responsibilities scale. Based on the data for this study, it can be suggested that overall, a
modest level of HR functions are practiced by HR professionals surveyed in this study. It
should be noted that recruitment and selection (81 per cent), written job description (80
per cent), training and development (78 per cent) and employee selection tests (78 per
cent) were reported to be the functions most performed by HR professionals.
HRM policy and current practices
Table III shows the means and standard deviations of HRM current practices as
answered by the respondents. The results depicted in Table III show a modest level of
overall HRM current practices in the firms surveyed for this study. Recruitment and
selection, written job description, employee selection tests and training and
development with overall means of almost 90 per cent are considered to be the five
most important HRM current practices.
Recruitment and selection practices
The data in Table IV show that the majority of the respondents indicated that all
recruitment and selection processes are still practiced and are the primary
responsibility of the HR professionals. As shown in Table IV, 80-90 per cent of the
respondents strongly agree and agree with the items indicated in the recruitment and
selection dimension of the instrument.
Challenges of HRM professionals
The results of the descriptive statistics presented in Table V show that the most important
challenges facing HR/personnel professionals are benefit costs of health care and AIDS and
ethics, nepotism, tribalism, bribery and corruption, followed by the implementation of
work/family programs, technology selection and implementation, change management,
staffing and availability of skilled local labor and training and development.

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65

Table II.
Means and standard
deviations of functions
of HR professionals
(n 253)

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Current practices

66

Recruitment and selection

Training and development
Performance appraisal
Compensation and benefits
Staff welfare services
Union/labor relations
Health and safety policies
Written job description
Employee selection tests
Incentive/merit policy
Job analysis

Table III.
Means and standard
deviations of HRM
current practices
(n 253)

Mean

SD

Percent

253
253
253
253
253
253
253
253
253
253
253

2.88
2.75
2.44
2.55
2.15
2.11
2.62
2.78
2.76
2.58
2.10

0.93
0.90
0.75
0.67
0.71
0.74
0.80
0.82
0.78
0.68
0.77

90
84
65
70
58
55
57
88
86
66
59

Note: *Categories range from 1 for No importance to 5 for All important

Current practices

Table IV.
Means and standard
deviations of HRM
recruitment/selection
practices (n 253)

Play active role in determining qualifications skills

Play active role in initial screening of candidates
HR managers are actively involved in the hiring process
Managers are actively involved in the hiring process
Advise functional managers on employment issues
Involved in setting HRM strategies
Involved the final decision of new employee selection
Administer employment test for new candidates
Have employment discrimination policy
HRM directors involved in the final selection
decision of new selection

Mean

SD

Percent

253
253
253
253
253
253
253
253
253
253

3.80
3.71
3.45
3.56
3.35
3.46
3.51
3.74
3.46
3.13

0.63
0.61
0.52
0.66
0.76
0.80
0.71
0.58
0.73
0.651

95
90
92
87
80
86
88
90
85
81

Note: *Categories range from Strongly Agree (1) to Strongly disagree (5)

The respondents were also asked to include other challenges that they face that were
not included in the listed items. Among these were lack of infrastructure
(transportation, road and communication facilities), motivation, poor work attitude and
lack of recognition. In identifying the main challenges faced, recurring themes were
tribalism, bribery and corruption, government regulations and resistance to change.
Some of the main challenges identified seem to be job or company specific and range
from inadequate resources with respect to funds and equipment to the need for
autonomy in executing HR policies, and a lack of connection between HR goals and
organizational goals.
Prospects
The findings in Table VI indicate that the mean scores on the HR prospects range from
(mean 2.66 to mean 2.90). These mean scores tend to technically fall into the
moderate area and are at the extreme end of this category toward the high mean scores
of prospect dimension. Implement work/family programs, employee rewards, child
care, health care issues and flextime (2.87) are indicated as the five most important
areas of HR prospects.

HR challenges
Benefits costs (Health and AIDS)
Change management
Staffing: availability of skilled local labor
Ethics: nepotism, tribalism, and corruption
HR technology selection and implementation
Downsizing
Employee rewards
Labor relations
Self-managed work teams
Legal/regulatory compliance
Training and development
Retention
Implementing work/family programs
Leadership development
Globalization

Min

Max

Mean

SD

Range

253
253
253
253
253
252
253
250
253
253
253
251
253
253
253

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

5
5
5
5
5
5
5
5
5
5
5
5
5
5
5

3.60
3.48
3.45
3.55
3.50
2.99
3.25
2.63
2.17
3.23
3.16
2.66
3.51
2.67
2.52

0.69
0.72
0.66
0.58
0.64
0.57
0.68
0.59
0.66
0.67
0.56
0.59
0.71
0.67
0.64

4
4
4
4
4
4
4
3
3
4
4
3
4
3
3

Note: *Categories range from Strongly Agree (1) to Strongly disagree (5)

Prospects
Health care issues
Flextime
Child care
Sexual harassment issues
HR technology selection and implementation
Employee rewards
Self-managed work teams
Increase training and development
Increase retention
Implementing work/family programs
Leadership development
Globalization

Min

Max

Mean

SD

Range

253
253
253
253
253
253
253
253
251
253
253
253

1
1
1
1
1
1
1
1
1
1
1
1

5
5
5
5
5
5
5
5
5
5
5
5

2.88
2.87
2.89
2.77
2.80
2.89
2.70
2.76
2.66
2.90
2.87
2.85

0.61
0.75
0.64
0.67
0.65
0.62
0.64
0.68
0.70
0.68
0.69
0.63

4
4
4
4
4
4
3
4
3
4
3
3

Note: *Categories range from Strongly Agree (1) to Strongly disagree (5)

Face-to-face interviews
Responsibilities of HR professionals
With regard to the responsibilities of HR professionals, the results were similar to the
questionnaire survey. The most practiced HR responsibilities were recruitment and
selection, written job description, training and development and employee selection
tests. The interview data revealed a variety of HR responsibilities practiced in their
firms, with half of the interviewees suggesting that they are responsible for
recruitment and selection, training and development, written job description among
others. However, some of the interviewees reported that they are assigned to do only
one task (for example, training or written job description).
Training and development
When asked about wide-ranging employee training and development within a firm,
eight out of the 12 interviewees suggested that they had employee training and

Human resource
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67

Table V.
Means and standard
deviations of challenges
facing HR managers
(n 253)

Table VI.
Means and standard
deviations of HR
prospects (n 253)

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68

development in their organization. There was a diverse set of responses ranging from
just sending employees on courses to taking a company-wide view of training,
development and learning. In every company, training was seen as an important
investment. A wide range of different types of training were provided, ranging from
formal apprentice schemes to sending staff on short courses. A typical comment is
below:
We have a good training program in this company. We conduct a needs analysis every year, to
identify our training needs, whatever they are, we address them. We want to invest in our
employees.

Comments about training were often linked to discussions about the general
availability of skills within the firm and the importance of retaining skilled staff. A
number of cautionary tales were provided as to the problems of investing in staff
training, to then see the benefits transferred to another company.
It is frustrating you spend all your money training people and they think they are bright but
relatively they are a liability. As soon as they think that other people recognize they are
brilliant or offer them more money or better position, they will leave.

Recruitment and selection

When considering recruitment and selection procedures, ten out of the 12 interviewees
said they had formal systems for recruiting and selecting new members of staff. They
stated that when selecting new employees they rely on word of mouth or a variety of
other ways, for example, through the local and national job centers and chambers of
commerce. What influenced the decision about how to recruit was the nature of the job.
It was recognized that it was better to advertise for jobs at the managerial level, where
word of mouth was unlikely to produce a suitable candidate. Here are some of the
comments made by in interviewees:
I have been involved in the recruitment efforts in this firm for fifteen years, the most frequent
and effective methods we use in our recruitment efforts here are newspaper announcements
and word of mouth.
I have been the personnel director for this company for eighteen years; we frequently used
newspaper advisements for recruiting new staff. However, in the last five years, methods
such as internal advertising, employment agencies, announcements in professional/trade
publications and visits to university and college campuses have been used, but were less
frequently used.

HRM policy and current practices

When asked about the current policies and practices of HRM in their organizations,
ninety percent of the interviewees indicated that their current most important practices
and policies include: recruitment/selection, written job description, performance
appraisal, training, monitor/evaluate HR practices and administration of compensation
and benefits. These results were similar to the findings of the questionnaire survey.
Another 80 per cent of those interviewed stated that current practices and policies do
not address the issue of AIDS/HIV, and that there should be a policy on how to deal
with employees who have AIDS/HIV. One of the respondents stated that:
We do not have a policy on how to deal with people with AIDS/HIV in this company. In most
cases we do not know what to do when one of our staff is diagnosed with HIV infection. I
think a policy should be put in place to protect the privacy of the staff and his family.

Yet another respondent put this way:

People with HIV are discriminated against. We need to have a policy on how to protect these
people from being abused and harassed by follow workers. People are ignorant on how the
disease is transmitted; we need to have training sessions on how the disease is transmitted or
not transmitted.

Performance appraisal
The interview data revealed a variety of informal systems that were used for appraisal,
with half of the interviewees suggesting that a form of appraisal existed in their firm.
In most cases appraisal was of a fairly ad hoc nature. For example:
They are all having appraisals all the time because I am sitting there and talking with them or
they are sitting there and talking with their colleagues.
The appraisal system has caused us a lot of problems it differs from one department to
another and not a lot of achievement results from it.
I believe in the appraisal system. The appraisal system here is very informal. It is not linked to
anything, such as promotion, salary increases, etc.
Five of the interviewees (out of the 12 who practiced appraisal) expressed a caution about
appraisals and the difficulties they had encountered in implementing them.

Prospects of HRM
When asked about the future prospects of HRM in Nigeria, the majority of the
interviewees indicated that the merit system of recruitment, promotion and salary
increases connotes that the best candidates are selected from among the pool of
qualified candidates rather than recruiting candidates on the basis of nepotism,
favoritism, or other considerations. This is not the case in most of the companies
selected for this study. For example:
Our promotion should be based on merit, which may help us to verify overall performance of
the worker.
Promotion and merit increases here are based on favoritism, nepotism, and in most instances
tribalism.

In terms of productivity improvement programs, respondents indicated that instituting

an employee incentive system helped to boost morale, productivity and dramatically
reduced employee turnover:
Here we started pay-for-performance programs four years ago. Our sales have increased by 12
per cent; performance and productivity have also increased considerably, and our rationale for the
programs is that most people believe that employees should be rewarded for good performance.

With respect to the trends in information technology, respondents stated that in recent
years, training in the use of computers had intensified:
We want to be a leader in our industry on the use of information technology. All the
orientation programs designed for our HR professionals and line supervisors had information
technology as part of the course module. The intent is to proliferate the use of computer
information storage and retrieval, modeling and simulations, etc., in decision-making and
accessing information on the internet and most payroll departments in our regional offices
have been computerized, and records in our headquarters are undergoing computerization.

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In terms of bureaucracy, one respondent characterized it as:

A problem, but with the advances in information technology and empowerment of workers,
we have devised a means of doing things differently to eliminate bottlenecks and red tape.

Another manager summed it up this way:

70

The empowerment of our employees is a number-one priority issue for us. We have
restructured our company, eliminating a number of administrative layers to encourage
employees to play a more active role in the decision-making process as it relates to their work.

Overall, respondents indicated that the challenges facing HRM in Nigeria are
enormous. However, they were optimistic about future prospects as the country makes
the transition to a market-oriented capitalist system. The key to the future prospects of
HRM is working with line managers, top management, government agencies and all
stakeholders, to root out corruption, nepotism and favoritism, invest in technology,
engage in ongoing training and development and above all instigate realistic and
meaningful productivity improvement programs that will boost employee morale,
confidence and gain the trust of management.
Discussion
The purpose of this exploratory study was to investigate HRM practices, challenges and
prospects facing organizations in Nigeria as the country makes the transition from a mixed
economic system to a market-oriented system. The findings of this study reveal that the
following HRM practices are in place in the organizations surveyed: recruitment and
selection, training and development, performance appraisal, monitoring/evaluation of HR
practices, compensation and benefits and termination/layoff. Additional human resource
activities performed by the respondents or their departments include staff welfare services,
union/labor relations and health and safety issues. These findings are consistent with
previous studies on HRM practices in Africa (Ghebregiorgis and Karsten, 2006; Webster
and Wood, 2005; Anakwe, 2002; Arthur et al., 1995; Fitsum and Luchien, 2006).
Training and development activities were found to be one of the most dominant
functions of HR professionals. However, the findings also reveal that most of the people
trained do not stay with the company; once they get the requisite skills, they leave and join
another organization. This high turnover has negative impact on the perceived
organizational performance. In the case of a developing country like Nigeria, stability of
the workforce is critical to sustaining competitive advantage. Some of the respondents
indicated that employees leave for high paying jobs after training, resulting in excessive
turnover. Excessive turnover may lead to low performance and productivity. Higher
turnover may also be an indication, however, that training activities received by
employees are a form of best practices according to the suggestions made by Pfeffer
(1994) and the empirical findings of Delaney and Huselid (1996). As two interviewees put
it, Training and development activities have a positive impact on organizational
performance, over and above all other HR functions. This finding also suggests that
training activities can be considered an element in the first stage of attaining a competitive
advantage as proposed by Barney (1986, 1991, 1995) in his resource base theory.
Our findings are similar to the Western practices, especially those of the USA and
Europe. The reason for this similarity may be the result of management practices in
organizations becoming similar due to the influence of globalization and Western
management theories and practices that dominate Nigerian management practices.

Another reason for the similarity could be because the respondents work in organizations
where Western management practices, including HRM practices, are primarily used.
With regard to the challenges HRM professionals face, issues of tribalism, corruption,
government regulations and resistance to change are some of the challenges identified by
the respondents as issues which must be addressed. These issues have inhibited
management and economic development in Nigeria and stained the countrys image.
Unethical business practices have also tarnished the countrys image, and in 2002, Nigeria
was rated as one of the most corrupt countries in the world (Transparency International
Report, 2002). As a result, the government of President Obasanjo is seriously addressing
the issues by creating agencies to investigate and prosecute corrupt officials, including
elected officials. Other challenges identified are organizationally specific, and range from
inadequate resources with respect to funds and equipment to the need for autonomy in
executing HR policies, and a lack of connection between HR goals and organizational
goals. With respect to linking HRM practices to organizational goals, human resource
planning is the thread that ties together all other human resource activities, integrating
them with the rest of the organization (Kleiman, 2007, p. 56).
It is encouraging to hear from the respondents that the majority of HRM personnel
are using computers and other HRM technology. Respondents indicated that they are
using information technology because they want to improve services, increase
productivity and be more effective in managing human resource activities. This use of
technology is encouraging because human resources information systems and other
technologies have streamlined the processing of data, making employee information
more readily available (Bohlander and Snell, 2004, p. 7).
Although the challenges facing HRM in Nigeria are enormous, we are optimistic
about the future prospects as the country makes the transition to a market-oriented
capitalist system. The key to the future of HRM is working with line managers, top
management, government agencies and all stakeholders, to root out corruption,
nepotism and favoritism, to invest in technology, engage in ongoing training and
development and above all formulate realistic and meaningful productivity improvement
programs that will boost employee morale, confidence and gain the trust of management.
Conclusions
The purpose of this paper is to examine the extent to which organizations in Nigeria
use various HRM practices, and the perceived challenges and prospects of these
practices. This study provides significant current information on HRM knowledge and
practices in Nigeria. Results reveal that HRM practices including training, recruitment,
compensation, performance appraisal and reward systems, are in place. However,
issues of tribalism, AIDS, bribery and corruption, and resistance to change are some of
the challenges identified by the respondents that need to be addressed.
Our sample included organizations from different industries and different sectors of
the economy. As a result, we believe that we were able to identify HRM universal best
practices as suggested by Pfeffer (1994). It is entirely possible that previous studies,
which used samples that represent part of the economys different organizations,
reported results that are different from ours due to the nature of their sample. Our sample
transcends industrial and sectorial analysis and thus provides a truly global picture of
the HRM practices, challenges and prospects in Nigeria. It makes a unique contribution,
in our opinion, to the emerging empirical literature exploring the combined impact of
HRM practices and future prospects in a sub-Saharan African country, a sub-continent
that has been under-researched and neglected by management researchers.

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Implications
Our findings have several implications. First, results reveal that recruitment and
selection, and training and development are the most common HR functions. We
suggest that managers should give attention to other HR activities such as
compensation and benefits, staff welfare services, health and safety issues, incentive
and merit policies. With the AIDS/HIV epidemic in Africa, HRM professionals and
decision makers should be cognizant of this disease and make employees health and
welfare issues a top priority.
With regard to recruitment and selection, the majority of respondents indicated that
they rely on word of mouth when selecting new employees. Other methods advertising
jobs should be used because word of mouth may be unlikely to produce an appropriate
candidate. HR professionals should properly identify those candidates who fit the
needs of the job, the work-team and the organization; this method would enhance
performance. Where appropriate, personnel recruiters should solicit the help of experts
such as executive recruiters, employment agencies and colleges and universities to
identify the right people for the right jobs.
Respondents identified health care, AIDS/HIV, and corruption and nepotism as
major challenges that face HRM in Nigeria. AIDS/HIV is having a destructive impact
on Africa. Organizations should partner with pharmaceutical companies, NGOs, and
governments to provide generic AIDS drugs to get the life-saving medicines to the
people who need them. With corruption and other ethical issues, organizations should
maintain a corrupt-free environment. If a company is known as a corrupt-free
organization, it will enjoy a good reputation, instilling confidence and trust, causing
other firms to wish to do business with that company. Behaving ethically is the right
thing to do because it increases a companys profits in the long run. The appraisal
system should be linked to productivity improvement programs such as performance,
promotion and salary increases. It should also be used to identify employees strengths
and weaknesses. Where there is a weakness, a corrective action in the form of training
should be given to remedy the weakness.
Findings indicate that promotions and merit-based increases are based on
favoritism, nepotism and tribalism. Promotions and merit increases based on
favoritism and similar factors lead to incompetence and poor performance within the
company. Managers should develop a system where promotions and merit-based
increases are granted because of good performance and job-related factors and not on
favoritism or other non-work-related factors. Our research uncovered that the
challenges facing HRM in Nigeria are enormous. However, the key to the future
prospects of HRM is working with line managers, top management, government
agencies and all stakeholders to root out corruption, nepotism and favoritism, invest in
technology, engage in ongoing training and development, and above all instigate
realistic and meaningful productivity improvement programs that will boost employee
morale, confidence and gain the trust of management.
Overall, in order to achieve improved and sustained organizational performance,
HRM activities should be implemented in an environment of employee involvement.
For example, Baird and Meshoulam (1988) proposed that HRM practices must fit with
and support each other (p. 122). Thus, organizations simultaneously use many HRM
practices that may enhance operational effectiveness but in order to achieve
strategic positioning as Porter (1996) suggested, they have to combine HRM practices
in a way that produces a synergistic effect.

Limitations and directions future research

This is an exploratory study to identify HRM practices and challenges in Nigeria. Like all
research, the present study has several limitations. The sample is not a representation of all
businesses in Nigeria because it was limited to 12 firms; therefore, the results cannot be
generalized to businesses that were not part of this study. The research was limited to ten
cities. A broader geographic sampling would better able to reflect the national profile.
Future research may be strengthened by using a more diverse set of businesses
including government agencies. Another approach could be to conduct a longitudinal
nation-wide study to identify HRM practices, challenges and prospects. Future research
should collect data on a longitudinal basis to help draw causal inferences and validate the
findings of this study. Future research would also benefit from a large-scale quantitative
study survey that would add statistical generalizations and strengthen the validity of the
results. As with much research, other important research questions have been identified
during the course of the review process. For example, is Nigeria a presidential
democracy? Should globalization lead to convergence or divergence? Or whether the
firms surveyed history of personnel management? All these are important questions and
are areas of future research; however, they are beyond the scope of this study.
Despite the above-mentioned limitations, this paper makes considerable
contributions. Firstly, it is one of the few approaches to the study of HRM policies and
practices in Nigeria. Secondly, this study provides a reasonable picture of HRM practices
and challenges in Nigeria. Generally, the paper identifies the nature and use of HRM
practices and challenges, which are descriptively and quantitatively rich in detail. It
sheds light on the extant of HRM practices from a developing countrys perspective.
Note
1. In one case, where recording was not permitted, detailed notes were made both during
and directly following the interview.
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About the authors
John O. Okpara is an associate professor of management, strategic and international business in the
college of business at Bloomsburg University of Pennsylvania. His articles have appeared in such
journals as the Journal of Business Ethics, Journal of Business in Developing Countries, Women in
Management Review Journal, African Journal of Business and Economic Research and others.
Pamela Wynn is a professor of management, teaching business ethics and small business
management in the College of Business at Bloomsburg University of Pennsylvania. Her current
research interests include corporate governance, entrepreneurial ethics and small business issues
in developing economies. She has published in such journals as International Journal of Business
and Economic Research and International Journal of Effective Management. Pamela Wynn is the
corresponding author and can be contacted at pwynn@bloomu.edu
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