| dc.description.abstract | Outsourcing is the practice where the organization procures the service of external entity or personnel for non-core functions in order to minimise expenditure and improve professionalism. The concept of Human Resource Outsourcing facilitates a firm to rivet its attention to core business. Despite its importance, firms continue experiencing lose and closure of their businesses for incidence 3,2 and 1 commercial banks either went into receivership or closed several branches in the years 2014, 2015, and 2016 respectively. This has raised concern by various stakeholders. Globally studies have been carried out focusing on the relationship between human resource outsourcing and organizational performance; in tourism, education sector and in the manufacturing industries. In Kenya studies have been carried out on the relationship between outsourcing and organizational performance; in hotel industries, manufacturing and in the education sector. However, there is limited study on human resource outsourcing specifically on training, human resource information systems, recruitment and selection and payroll system in commercial banks which is the focus of this study. The main objective of the study was to establish the relationship between human resource outsourcing on organizational performance. The specific objectives were; to establish the relationship between training and organizational efficiency, to establish the effect of human resource management systems and organizational effectiveness, to determine the effect of recruitment and selection on organizational skilled manpower, and to investigate the effect of payroll on organizational competitive advantage. The study employed descriptive research design, the total population was 200 employees, sample size of 50 employees. The study adopted agency, social exchange and knowledge based theory of a firm theories. The response rate was 90% thus the reliability and validity of the study. The study revealed that human resource outsourcing affects organizational performance as indicated by r = 0.935 which confirms the significance of the interaction of variables. Training affects organizational skilled manpower by r2 = 0.606, outsourcing recruitment affects organizational effectiveness by r2 = 0.360, outsourcing payroll affects organizational competitive advantage by r2 = 0.440, and outsourcing human resource information systems affects organization efficiency by r2 = 0.872. The study concluded that human resource outsourcing has positive significant effect on organizational performance. The study recommended that for organization to improve its performance, it has to outsource its non-core functions; training, recruitment and selection, human resource information systems and payroll system. The study May be beneficial to commercial banks and policy makers who may be interested to expand their studies beyond the variables under review. | |
