The effect of human resource management on financial performance of small-scale enterprises in Pallisa :

Abstract

The study was carried out with the purpose of examining the effect of human resource management practice on financial performance of small-scale enterprises in Pallisa. The objectives for the study aimed at determining the effect of compensation system, performance appraisal, and selection systems of employee on financial performance small scale enterprises; qualitative and quantitative techniques in designing the research were used and A total of 40 respondents participated in the study and were selected using random sampling method. The data was collected using questionnaires and interviews and presented using tables, graphs and pie charts for easy analysis. The study also highlighted some of the negative and positive effects that have been registered in financial management as a result of human resource management in SMEs which includes ie increases work motivation, attracts talented employees, develops organization competence, tracks employees’ values, very costly to conduct, time consuming, Result into increased cost, leads to loss of liquidity. The study therefore signified that there was appositive effect of human resource management practice on financial performance of SMEs.