An investigation of the nexus between human resources competency and firm’s performance: a case of commercial banks in Tanzania

With growing emphasis being placed on Human Resources (HR) competencies as a means to increase firm’s performance, this study seeks to determine important Human Resources competencies that influence commercial bank performance in Tanzania. Human Resources competency was measured using five domains which are: strategic contribution, personal credibility, business knowledge, HR delivery and internal consultation skills. Firm performance was measured using three domains which are: financial performance, market performance and firm growth. This study employed a multiple regression model to assess the influence of HR competencies on the commercial bank performance in Tanzania. The study sampled and interviewed 58 employees from 6 commercial banks in Tanzania. Out of these 58 employees, 22 employees were HR professionals. Standardized coefficients of multiple regression analyses were used to determine which HR competencies are most or less important in influencing commercial bank performance. The findings show that strategic contribution is the most important HR competency in influencing commercial bank performance in Tanzania. The findings further reveled that internal consultation skills is the least important HR competency among the five competencies that influence commercial bank performance. HR deliver competency is slightly important than business knowledge and personal credibility. These findings recommend that there is a need for HR professionals to provide significant input into the bank’s strategy, which is an important HR competency in influencing the bank performance.