The Practice of Aligning HRM to Business Strategy and It's Impact on Performance: At Afar Regional State Service Sector Organizations

The purpose of this paper is to assess the practice of aligning HRM practices to business strategy and its impact on organizational performance in the context of Afar Regional state. Data were collected from 102 organizations using a questionnaire survey in the regions public sector organizations, and analyzed using the descriptive statistics and correlation and regression methods. Analysis of the result revealed that the region has an overall strategic plan derived from the national growth and development plan. There is also strategic HR plan. But the practice of deriving the HR plan from the goals and objectives of the regions strategic plan is not customary. HRM practices (employee selection, compensation, performance appraisal and training and development practices) and organizational performance is causally correlated and it is influenced by the alignment of HR practices. Thus, the contribution of this study for academics and practitioners is that HRM practices associated with business strategies will affect organizational performance as measured by balanced score card elements i. e. customer satisfaction, improved (savvy) financial management system, internal growth and learning and development.