The Mediating Effect of Human Resource Management Practice on the Relationship between Corporate Governance and Organizational Performance of Insurance Companies in Kenya

Abstract

Human resource management practice is conceptualized as a set of internally consistent policies and practices designed and implemented to ensure that a firm’s human capital contribute to the achievement of its business objectives. These human resource management practices are posited to play a very important role in ensuring overall organizational performance. This study sought to assess the mediating effect of human resource management practice on the relationship between corporate governance and organizational performance of insurance companies in Kenya. The philosophical foundation of this study was positivism, where quantitative data was used. Cross-sectional survey design was adopted for this study. The study population comprised of 52 insurance companies in Kenya as at December 2017. Census method was used to obtain the number of senior management where a CEO and Human Resource Managers were used from each insurance company. This study utilized primary that was collected using questionnaires. The results indicated that there exist a partial mediation effect on the mediating role of human resource management practices on the relationship between corporate governance and organizational performance. The study concluded that there exist a partial mediation effect on the mediating role of human resource management practices on the relationship between corporate governance and organizational performance. The study recommends on developing training programs for the managers on the need for good corporate governance and mechanisms of improving organization performance through creating competitive advantage. The decision makers will utilize the study findings to human resource practices to entrench governance principles in the insurance industry. Keywords: Human Resource Management Practice, Corporate Governance, Organizational Performance, Insurance Companies & Kenya.