An Evaluation of the Effects of Corporate Governance Practices on Employee Performance and Job Satisfaction: A Case of SMEs in Harare Metropolitan Province

Abstract

The study sought to evaluate the effects of corporate governance practices on employee performance and job satisfaction, by examining Small and Medium Enterprises (SMEs) in Harare Metropolitan Province.Seventy-five respondents drawn from SMEs were selected using stratified randomsampling. The study used quantitative and qualitative research methodologies. Structured questionnaires and interviews were used as research instruments to collect primary data from respondents. The reliability of research instrument was tested using Cronbach alpha.The results indicated that good corporate governance practices such as having a board of directors, internal controls, adherence to codes of ethics, disclosures, setting clear performance measures, consulting employees and allowing for autonomy in decision-making stimulate job satisfaction and improved employee performance in SMEs. It was the finding of the study that contrary to literature, transparency in SMEs did not lead to job satisfaction and improved employee performance. The study recommended thatSMEs should have functional boards of directors to improve on oversight, accountability and to promote generation of new ideas. SMEs should strive to improve access to information and should ensure that communication is two-way. It was further recommended that SMEs should improve their internal controls by adopting corporate governance best practices in order to achieve job satisfaction and improve on employee performance