does recruitment and selection process impacts...
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Does Recruitment and Selection Process Impacts Organizational Performance? A case of Telecom Sector of Pakistan
Sarah Abbas Gondal
Department of Business Administration
Lahore Leads University
Lahore, Pakistan
Shazia Nauman
Department of Business Administration
Lahore Leads University
Lahore, Pakistan
Abstract— Relationship between human resource
management and organizational performance has
grown very much over past decades. Generally, there
is a universal consent about human resource
management having a direct and positive
relationship with organizational performance. Yet,
few studies have addressed how direct relationship
occurs. More specifically, recruitment and selection
process is often either wholly absent as a topic or is
regarded as being of relatively marginal importance.
The current study aims to investigate the impact of
Recruitment and Selection process on Perceived
Organizational Performance (POP) and Perceived
market Performance (PMP) in the telecom sector of
Pakistan. Data was collected from 155 employees
working in five telecom sector companies of Pakistan
i.e Mobilink, Telenor, Zong, Warid and Ufone. To
analyze data, the statistical tools Descriptive
Statistics, Cronbach Alpha, and Regression were
used. Results demonstrated that recruitment and
selection process was positively related with
perceived organizational performance and perceived
market performance. This implies that organizations
using recruitment and selection process in a well
manner on a wider scale undoubtedly creates higher
performance. Based on significant research findings,
theoretical and practical implications were also
discussed. This study adds to the extant literature by
giving empirical insight into the relationship between
recruitment and selection process and perceived
organizational performance.
Keywords: Selection and Recruitment process,
Perceived Organizational Performance (POP),
Perceived market Performance (PMP), telecom sector
1 Introduction The business and professional communities concern
and acknowledgement of the importance of Human
Resource Management (HRM) practices have
achieved a lot of concentration when they eventually
realized the fact that it is the people who make
organizations successful not the buildings.
Success of any organization increasingly depends on
people their knowledge, skills and abilities of an
organization’s employees, Boohene (2011). If an
organization develops appropriate variety of HR
policies and processes and implement them in a
better way, then HR will make a considerable
influence on firm performance, Boohene (2011).
Relationship between human resource management
and organizational performance has grown very
much over past decades. Generally, there is a
universal consent about human resource management
having a direct and positive relationship with
organizational performance Yet, few studies have
addressed how direct relationship occurs. Some
studies just calculate to what extent human resource
management and organizational performance relate in
order to discover a direct relationship. Different
research studies attempt to explain relation by
measuring different levels of performance, (Mustapha
2013).
The main aim of recruiting and selection process is to
acquire at the best cost, the quantity and quality of
workforce to meet up the requirements of human
resource. The method of selection/recruitment can be
classified in to four phases: (a) advertisement
Proceedings of 2nd International Multi-Disciplinary Conference 19-20 December 2016, Gujrat
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practices (b) obtaining applications (c) original
verification of applications and (d) final collection
conclusions, Chapman(2003).
In Pakistan’s context, previous researchers (Ahmed
& Shahzad,2011; Masood .2010; Shahzad, Bashir &
Ramay,2008) studied the effect of HR practices on
perceived organizational performance and focused on
only three human resource practices (compensation
practices, performance evaluation and promotion
practice). This study takes recruitment and selection
process and see how this HR practice impact
organizational performance.
Today’s business environment in Pakistan requires
HR to play its effective role. Fair recruitment process
and retaining the talented employees has become
biggest challenge for the telecom sector of Pakistan.
A study done in telecom sector of Pakistan revealed
that the hr practices carried out in effective way can
increase the employee’s retention (Haider, 2015).
Another study which investigated the issues and
problems faced by telecom sector of Pakistan in
recruitment. The results of the study revealed that
prejudice has its higher affect and considered as a
major issue in employee recruitment in Pakistan
whereas the moderately faced issues are culture,
Interview, environment as well as reference (Malik,
2012).
2 LITERATURE REVIEW A base on which any business stands is human
resource management. In current complex scenario
and the competitive world, it has become extremely
difficult to choose ideal candidate for the working of
the organization. Guthrie (2004) Organizational
performance refers to what extent an organization
achieves its corporate objectives. There are several
signs for measuring organizational performance
they're dependent on the objectives of the
organization. For some organizations performance
measuring methods are: creativity, profitability, high
rate of production, effectiveness, quality, etc.
(Chukwu, 2012).
Sing (2004) has investigated the HR practices effect
on perceived organization performance in the private
sector of India. The HR practices included
Recruitment and selection whereas organizational
performance was measured with perceived
organizational performance and perceived market
performance. The study clearly indicated that the
recruitment and selection has positive relation with
perceived organizational and market performance.
Organizational performance is divided into two
sections a. Perceived Organizational performance, b.
Perceived Market performance. .Following the
previous work done in the same context of research
(Singh, 2004; Delaney, 1996) the present study also
used these two variables to measure the perceived
firm performance. The first is ‘Perceived
Organizational performance' and 2nd as ‘Perceived
Market performance. These both factors provide a
broad review of perceptions of organizational
performance.
1. Organizational performance: The organizational
performance variable included such aspects as item
quality, client satisfaction, new product growth,
ability to attract workers, ability to maintain workers,
and relations between administration and employees.
2. Market performance: The marketplace
performance variable included aspects like marketing
of items or solutions, growth in revenue, profitability
and market share.
Researcher Kauhanen(2006) found out that
businesses obtain superior performance if they use
the non-financial performance indicators. However,
Ittner (2003) study results showed that businesses
making more usage of non-financial measurement of
performance have higher satisfaction and earnings.
Joseph (2009) opined that the variables of perceived
organizational performance are market share, quality
of items or services. To measure usefulness of the
company thus involves management‘s better
dependence on non-financial procedures (e.g. market
share, customer care, successful use of R&D,
performance and quality etc) in a highly uncertain
situation. HRM techniques when better implemented
influence the marketplace efficiency of the business
(Singh, 2004).
The HR system has directly impact on staff skills and
inspiration and the structure and work design. These
facets affect staff behavior, which results in improved
running performance. That pushes gains and
development, which result in industry value (Wright,
2004). HRM practices have the potential to enhance
and keep organizational performance (Schroeder,
2003).
Joseph(2009) state that there are substantial
associations between HRM practices and
performance of the organization; that the proper
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positioning of HRM is also fosters company
performance. Katou (2008) investigated HRM
practices effects on organizational performance in
production sector of Greece. The outcome suggested
that HRM techniques are linked with company
strategies may affect organizational performance
through HRM outcomes. Bogdanova(2008) explained
that HRM techniques take to develop and allocate
individual money in perfect ways to be able to
achieve long-term goals; they provide the better
conditions and other benefits that will enhance
employees’ performance and job satisfaction.
Based on the aforementioned discussion, the
following hypotheses are proposed:
H1: Well planned recruitment and selection process
has positive relationship with perceived
organizational performance
H2: Well planned recruitment and selection process
has positive relationship with perceived market
performance.
3 RESEARCH METHODS
The present study is a quantitative research which
seeks to investigate and analyze the impact of
recruitment and selection process on organization
performance. The data was collected through the
questionnaire distributed to the employees,
conveniently available and willing to fill the
questionnaire from different departments’ namely
marketing, Hr and Administrative staff of the telecom
companies. The sample for the study is 155
respondents.
Measures:
The study includes one independent variable
Recruitment and Selection process. To measure
recruitment and selection practices, ten items scale
was adopted from (Masood, 2010). The respondents
ranked on five point likert scale ranging from1=
Strongly Disagree, 2=Disagree, 3=Undecided, 4=
Agree, 5=Strongly Agree.
To measure the Perceived Organizational
Performance six item scale and Perceived Market
Performance four items scale adopted from (Singh,
2000).
Cronbach’s Alphas
Table 1 depicts the cronbach alpha’s value
for all the variables understudy.
Table 1: Cronbach’s alpha
Variables in model Alphas
Perceived Organization
performance (6 items)
0.785
Perceived Market Performance (4
items)
0.776
Recruitment and Selection Process
(15 items)
0.916
All values are above 0.7 thus indicating internal
consistency of the measures.
Descriptive Statistics
Table 2 shows the descriptive statistics.
Variables Mean SD
Perceived Organization
performance (6 items)
3.8903 .60405
Perceived Market
Performance (4 items)
4.0048 .71480
Recruitment and Selection
Process (15 items)
4.0916 .63059
N = 155
The above table shows the mean values of the
variables ranging from (3.9 to 4.0 on a five point
likert scale). All the means are fairly high.
Correlation
Correlation was run to check the initial results.
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Table 3: Correlation
Variables 1
PO
P
2
PM
P
3
R&S
P
Perceived
Organization
performance
1
Perceived Market
Performance
.584
**
1
Recruitment and Selection
Process
.500
**
.600*
*
1
**. Correlation is significant at the 0.01 level (2-
tailed).
Regression Analysis
OLS regression was run to see the impact of
recruitment and selection processes on Perceived
Organizational Performance (POP) as shown in table.
Table 4: Regression Analysis
Β t- Value Sig.
(Constant) 1.932 6.958 0.00
POP .479 7.132 0.00
R .500a
R2 .250
Adj. R2 .245
F value 50.870
As shown in above table, regression coefficient (β) of
Recruitment and selection process (RSP) is 0.479 and
its significant value is 0.00 which shows that
Recruitment and selection process have positive and
significant impact on Perceived Organizational
Performance. Further it implies that 1 unit change in
compensation practices causes 47.9% change in the
Perceived Organizational Performance. R value of
0.500, shows a good level of prediction. R square is
0.250 which implies that our independent variable
Recruitment and Selection process explains 25% of
the variability of our dependent variable Perceived
Organizational Performance. The value of adjusted R
square for compensation practices is 0.245 which
shows that independent variable i.e. Recruitment and
selection process has 24.5% influence on dependent
variable i.e. employee performance. In the Table, it is
signified that level of significance is 0.000 which is
less than 0.05 which shows that model is significantly
a good fit.
Regression Analysis
OLS regression was run to see the impact of
recruitment and selection processes on Perceived
Market Performance (PMP) as shown in table.
Table 5 : Regression Analysis
Β t- Value Sig.
(Constant) 1.223 4.030 0.00
PMP .680 9.271 0.00
R .600a
R2 .360
Adj. R2 .356
F value 85.951
As shown in above table, regression coefficient (β) of
Recruitment and selection process (RSP) is 0.680 and
its significant value is 0.00 which shows that
Recruitment and selection process have positive and
significant impact on Perceived Market Performance.
It means that 1 unit change in compensation practices
causes 68% change in the Perceived Market
Performance.R is known as the measure of quality of
the prediction of the dependent variable. A value of R
Proceedings of 2nd International Multi-Disciplinary Conference 19-20 December 2016, Gujrat
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0.600, shows a good level of prediction. R square is
0.360 which shows that the independent variables
explain 36% of the variability of our dependent
variable. The value of adjusted R square for
recruitment and selection process is 0.356 which
shows that independent variable i.e. recruitment and
selection process has 35% influence on dependent
variable i.e. Market performance. In the Table, it is
signified that level of significance is 0.000 which is
less than 0.05 which shows that model is significantly
a good fit.
4 DISCUSSION
The study contributes to understanding of impact of
recruitment and selection process on perceived
organizational performance in Pakistan. The results
of the study presented empirical base for the
existence of a positive and statistically significant
influence of recruitment and selection process on
perceived organizational and market performance in
telecom sector of Pakistan.
The first research hypothesis was about relationship
between recruitment and selection process and
perceived organizational performance. Well defined
Recruitment and selection process, based on fair
selection, and done with the opinions of the experts
have direct and significant relation with perceived
organizational performance. The recruitment and
selection process involved the fair and standardized
test to measure candidate competencies has
significant correlation with employee performance
and Perceived Organizational Performance. Results
are in line with the findings of (Khan 2010, Holzer
1987; Sels et al. 2003; Datta 2003; Singh 2004;
Katou 2008; Arthur 1994; Huselid & Becker 1995;
MacDuffie 1995; Huselid & Becker 1996; Youndt et
al. 1996; Ichniowski, Shaw & Prennunshi 1997;
Appelbaum et al. 2000). Various researchers
(Budhwar, 2010; Katou, 2008; Teseema 2006)
supported the argument of Tseng et al. (2009) that to
select right candidate who possess the skills required
for doing job in order to achieve organizational
performance is the result of well planned recruitment
and selection process.
The second research hypothesis was about
relationship of recruitment and selection with
perceived market performance and results indicated
positive and significant relationship between them.
The study results are supported by previous
researches (Arthur 1994; Huselid & Becker 1995;
MacDuffie 1995; Huselid & Becker 1996; Youndt et
al. 1996; Ichniowski, Shaw & Prennunshi 1997;
Appelbaum et al. 2000).
Recruitment and selection of the greatest methods
gain universal acceptance and paves means for high
performance of the organization. Recruiting provides
larger significance to be attached to fit between
individual and culture of the company. The results
show that the well planned recruitment process and
usage of selection tools appropriately and knowledge
based tests, along with relevant training if needed
leads to higher organizational performance.
5 CONCLUSION
This study investigated the effects of recruitment and
selection process on perceived organizational
performance as well as perceived market
performance in Telecom Sector of a developing
economy, Pakistan. This study empirically validated
the results of previous studies with respect to this
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connection. The study emphasize the importance of
recruitment and selection practices to achieve and
maintain higher performance in transforming
business environment as well as to integrate HRM
with the strategy of the organization which could
directly support the achievement of company goals.
In order to achieve competitive advantage in the form
of competent workforce the organizations should
make investment in recruitment and selection process
and strategic approach should be pursued to HRM.
Those organizations tend to perform high who have a
fair systematic approach towards recruitment and
selection process, employees participate in decision
making and where the adequate trainings are being
given to the employees. These high performer
organizations attract local and foreign investors who
further invest and play their role in substantial growth
in the economic sector in Pakistan.
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