This dissertation examines how human resources are managed at selected Ethiopian private companies, how Ethiopian human resource management practice is evolving and how it can be improved. The examination is qualitative and exploratory, since no comparative research on human resource management has yet been conducted at Ethiopian profit or non-profit organizations. An understanding of Ethiopian human resource management practice makes it possible to improve Ethiopian human resource management practice, and thus to increase employee productivity. The study took place at four manufacturing and four service companies in Addis Ababa, all representative of their sector. The research claim is that Ethiopian human resource management practices differ from human resource management practices in the West, due to differences in cultural factors, economic systems, political systems, and legal and industrial relations. For this reason, Ethiopia s culture, politics, economy and legal and industrial relations have been analyzed. The main finding of this study is that the importance of human resource management is not uniformly understood at all the case-study companies. Although the multinational companies based in Ethiopia see their human resources as the companies most important asset, as human capital, the local companies generally do not. The fact that respondents claim that Ethiopia has limited experience in industrialization might explain why human resource management in Ethiopia is rudimentary and still has a long way to go. With this dissertation the researcher wants to contribute to improving Ethiopian human resource management practice. Moreover, this dissertation may be used as a framework for similar research in other sectors or for more specific in-depth research. This dissertation may also serve as a knowledge base for company managers, business consultants, academics and government officials of countries with a national culture similar to Ethiopia s (for example Kenya, Tanzania and Zambia), countries undergoing (or which have undergone) a recent transition to a free market economy, and countries facing similar macro-economic developments.