Why is it important to understand performance as a part of recruitment and selection?

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International Journal of Innovation and Economic Development
Volume 3, Issue 3, August 2017, Pages 32-43

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Impact of Recruitment and Selection Strategy on Employees’ Performance: A Study of Three Selected Manufacturing Companies in Nigeria

DOI: 10.18775/ijied.1849-7551-7020.2015.33.2003
URL: http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.33.2003

1Zirra Clifford Tizhe Oaya,  2Ogbu James Ogbu, 3Ojo Grace Remilekun

1 Department of Business AdministrationFaculty of AdministrationNasarawa State University, Keffi, Nigeria
2, 3 Department of Business Administration, Nasarawa State University, Keffi, Nigeria

Abstract: Employee performance is vital to all business enterprises in both developed and developing economies. The increase in the rate of business failure, closure and employees poor performance in terms of productivity in Nigeria is alarming. For organization to be sustained, employees have crucial roles to play in order to ensure that organizations attain competitive advantage over the competitors across the globe. The study examined the recruitment and selection strategy on the employee performance in the real sector using descriptive survey research design. The inferential statistics used is the “one sample T-test” to find the level of relationship between recruitment/selection strategy and employee performance. The study revealed that the use of recruitment agency and internal employee recommendation in the recruitment/selection process enables organization to recruit committed and productive employees while the recruitment through the influence of host community leads to organizational inefficiency. The study therefore, recommends that Organizations can make use of employment agencies in the act of recruitment and selection but should be open to disclose the job description and responsibility to them. Acceptance of referred candidates from committed and active employees for employment was also recommended as it enhances mentoring, monitoring, obedience and coaching among employees. It was also advised that recruitment/selection should be based on the capability of the candidates to perform the job responsibilities than consideration based on host community influences.

Keywords: Recruitment and selection, Agency, Employee referral, Employees, Performance

Impact of Recruitment and Selection Strategy on Employees’ Performance: A Study of Three Selected Manufacturing Companies in Nigeria

1. Introduction

Manufacturing organizations in the past primarily focused on productions and sales but due to the dynamism and competition in the market place, organizations in this 21st century are looking forward to sustain a competitive advantage by combating the challenges of improving qualities of products, productivity and service delivery. This stance can only be attained through employee performance while the key of attaining and sustaining this is by selecting and retaining the right people for the right position in an organization.

Organizations nowadays are more concentrating on acquiring appropriate human capital because the employees are the most valued and most precious assets of an organization. It is the individual performance of employees that will converge to form the overall performance of the organization. While recruiting the employees, organizations have to devise a strategy to carefully recruit the most suitable employees because they create the competitive advantage for the organizations. The word recruitment has become a thing of concern to many organizations in order to get a rightful candidate that can effectively fill the vacant position in the organizations due to the increase in competitions (Adeyemi, Dumade and Fadare 2015). In an emerging economy like Nigeria business organizations are to advance modern recruiting and selection strategy that will enhance quality of service delivery due to the entries of multinational companies and the growth in communication technology which lead to the development of e-commerce. It is obvious now that e-commerce has made consumer in one country to have access to products across the globe. recruitment and selection

Djabatey (2012) opined that this scenario lends credence to the increasing attention being paid to the people aspect of organizational assets because the development of people, their competencies and the process of the total organization are the pivot of human resource management. Similar to this development is the contention in National University of Ireland (2006) that the continued growth and development of an enterprise depends on its ability to recruit and select high quality personnel at all levels in respective of the cost of such action.

A sound manpower plan programme logically follows a well drawn-up recruitment strategy. In fact, the quality of the organizational performance depends upon the quality of employees which is determined by recruitment policies and practices in the organization. Casio (2002) stated that recruitment and selection starts with a clear statement of objectives of the firm based on the types of knowledge, skills, abilities and other characteristics. For organization to request for application, objectives must be established and used for the selection process. The position to be filled must be defined in terms of job description and job specification. recruitment and selection

Success of the enterprise is directly linked to the performance of those who work for that enterprise. under-achievement of target can be a result of failures in the workplace , hiring the wrong people or inability to anticipate fluctuations in hiring needs, it is important that mindful efforts are put into human resource planning in an organization Djabatey, (2012). It has also been argued that in order for the enterprise to build and sustain the competitive advantage, proper staffing is critical (Djabatey, 2012). Thus, according to Ekwoaba etal (2015) “recruitments and selections have become essential in organizations because individuals need to be attracted on a timely basis, in sufficient numbers and with appropriate qualifications”.

“The more effectively organizations recruit and select candidates, the more likely they are to hire and retain satisfied employees. In addition, the effectiveness of an organization’s selection system can influence bottom-line business outcomes, such as productivity and financial performance” (Ekwoaba etal 2015).

1.1 Statement of the Problem

In Nigeria, there has been increase in the rate of business failure, closure and poor organizational performance due to low productivity of employees and commercial globalization. Despite the conflict between the stakeholders and the employees, employees have critical roles to play in ensuring the organizations achieve competitive advantage over the competitors for the achievement of goals and objectives. recruitment and selection

The performance of manufacturing sectors which is recently nick named the real sector in Nigeria has been poor, it have witnessed relatively low performance when compares to their counterpart in other developing nations like Nigeria. The recent retrenchment of workers across many manufacturing industries and the death of many newly introduced products in Nigeria are the evidence of poor performance. The above problem motivated the researcher to examine the impact of recruitment and selection strategy on the employee performance in the real sector.

1.2 Objectives of the Research

The general objective of the research is to determine the recruitment and selection strategy that increase employees’ performance to achieve and sustain organizational efficiency.

The main objectives of the study are to examine the following.

1. The relationship between the use of employee referral method and employee commitment in manufacturing organization
2. The relationship between the use of Employment Agency method and employee productivities
3. The relationship between host Community influenced recruitment method and employee’s job efficiency

The following research questions were formulated for the study.

1. What is the relationship between the use of Employee referrer method and employee commitment in manufacturing organization?
2. What is the relationship between the use of Employment Agency method and employee productivities?
3. What relationship exist between the use host Community influenced recruitment method and employee’s job efficiency

Below are the formulated hypotheses for testing.

1. H01 there is no significant relationship between the use of employee referrer method and employee commitment in manufacturing organization
2. H02 there is no significant relationship between the use of employment agency method and employee productivities
3. H03 there is no significant relationship between the use of host community recruitment method and employee’s job efficiency

2. Literature Review

2.1 Conceptual Framework

Recruitment is the discovering of potential candidates for actual or anticipated organizational vacancies. It can also be seen as act of linking/bringing together those with jobs vacancy and needs to fill the vacant with those seeking for the vacant job. The ideal recruitment effort will attract a large number of qualified applicants. It should also provide information so that unqualified applicants can self-select themselves out of job candidacy. A good quality recruiting program advert should catch the attention of the qualified and not the unqualified through effective job specification and explanation. recruitment and selection

Recruitment and selection are the two phases of the employment process but there is a difference between them. The first is the process of searching the candidates to fill identifies vacant and stimulating them to apply for jobs in the organization while the later involves the series of steps by which the candidates are screened in order to choose the most suitable persons for vacant positions. The basic aim of recruitments is to create collection of talent candidates to enhance selection of best candidates for the organization, by attracting more and more prospective employees to apply in the organization while the basic purpose of selection process is to choose the right candidate to fill the different positions in the organization. The recruitment process is immediately followed by the selection process, where the final interviewers and the decision makers makes the decision and the official appointment.

Cloete (2007) stated that recruitment is all about making sure the qualified people are available to meet the job needs of the government. Ineffective recruitment prevents any chance for effective candidate selection because when recruitment falls short, selection must proceed with a pool of poorly qualified candidates. He further opined that the task of recruitment is to generate a sufficient pool of applicants to ensure that there are enough people available with necessary skills and requirements to fill positions. recruitment and selection

Leopold (2002) defined recruiting as a “positive process of generating a pool of candidates by reaching the „right‟ audience, suitable to fill the vacancy”, he further stated that once these candidates are identified, the process of selecting appropriate employees for employment can begin through the means of collecting, measuring, and evaluating information about candidates‟ qualifications for specified vacant positions.

Sangeetha (2010) opined that recruitment process involves the sourcing, advertising and interviewing of future employees, however the selection process entails the staffing and training of new employees on the roll of their new job. Organization needs careful time and consideration to sustain competitive advantage in developing strategy on recruitment and selection process. Decisions made in the recruitment and selection process or stage will impact on the company in the future. Bad decisions made in the selection process can create serious costs for an organization vise versa.

Purcell and Wright (2007), in their study highlighted five different questions an organization has to answer to have an effective recruitment strategy to ensure survival and success. The questions are “Whom to recruit?”, “Where to recruit?”, “What recruitment sources to use?”, “When to recruit?” and “What message to communicate?” the above question is patient to get appropriate answer before establishing recruitment strategy.

2.1.1. Concepts of Selection

Selection is the second step in the process of man power planning and acquisition. It is the process of choosing the appropriate candidate that matches the job requirements in the organization. Selection process in large organizations may be lengthy and will be wider for manufacturing organizations and differs from one industry to other depending on the task and competitiveness of the industry. The end result of every selection process is divided into two classes as selected and not selected while the selected will move ahead for placement the later will be rejected.

Neeraj (2012) defined selection as the process of picking individuals who have relevant qualifications to fill jobs in an organization. It is much more than just choosing the best candidate. “It is an attempt to strike a happy balance between what the applicant can and wants to do and what the organization requires”. Selecting the right employees is important for three main reasons: performance, costs and legal obligations (Neeraj 2012).

The essentials and Prerequisites for Selection include picking individuals possessing relevant qualifications, matching job requirements with the profile of the candidates, using a multiple tools and techniques to find the most suitable candidate who is the most suitable of achieving success on the job.

2.1.2. Employee Referral

Employee referral is the situation where the existing employee of an organization recommends an external candidate for employment in the organization. Employee who recommends a candidate to his organization will be assured of the candidate’s moral and physical capability to do the specified job because on the success of the candidate is his own success vise versa.
Employee referral programs differs, in some cases the referred workers receive special consideration in the application process and others where existing employees receiving significant financial bonuses for referring his friend to be hired Stephen etal (2013). Stephen etal (2013) study shown that there are some significant behavioral differences between referred and non- referred workers, even though referred and non-referred workers look similar on most observable characteristics. recruitment and selection

2.1.3. Recruitment/Selection Agencies

Recruitment agency is the organization that takes contract the responsibilities of recruiting and selecting employees for an organization for an agreed consideration. The agency will usually take. The responsibility for advertising the position, receiving application and conducting the first round of interviews before providing employers with a short list of candidates. Agency will only be successful in locating the right applicant if it is equipped with accurate description as specified in job specifications by the organization (Florea, 2014).

2.1.4. Merit/Demerit of using Recruitment Agencies

Florea (2014) argued that merit and demerit of the use of recruitment agencies to a firm is the same thing with that of external recruitment sources which he listed be: qualified personnel, wider choice of candidates, fresh talent, competitive spirit among candidate, less chance of favoritism and the disadvantages of the use of agencies recruitment sources are dissatisfaction among existing staff, lengthy process, costly process, chances of wrong selection; increase in labor turnover. It is also important to note that using recruitment agency enable the management to concentrate on responsibilities maximize efficiency.

2.1.5. Host Community Influencing Recruitment

This It is a situation where the community where organization is located tries to impose certain employees on such organization for immediate employment. Such employees are usually not allowed to pass through any rigorous recruitment process. In some situations, they do not even submit application for consideration before the issuance of letter of employment. The Youth Leader in that community or the Community Development Committee (CDC) Chairman or the Chief of the area at times only compile names of the would-be employees and submit to such organization not even for consideration but for immediate employment. recruitment and selection

This host community influencing recruitment includes the activities of Staff Union which is an organization of workers whose principal purposes include regulation of relations with employers, safe guarding of members interest or a federation of such organization (Trade Union and Labour union). Staff union some time turns to pressure group in our organizations and thereby assuming certain power and role unofficially. Union tends to exercise such power over and above the recruitment processes of organizations. The Trade Union and Labour Relations Act allow trade dispute in cases connected with “engagement or non-engagement, or termination or suspension of employment, or the duties of employment, of one or more workers in organization.

Host community influence also includes government regulations, at times government usually came up with statutory laws to regulate recruitment of employees in both private and public enterprise. We have many of such law both at State and Federal level of government of the host nation. For instance, in Nigeria, Rivers State House of Assembly enacted a law called Employment Edict of Year, 2000. The decree made it compulsory on all businesses operating in the State to have at least 40 percent of their workforce as the indigene of Rivers State. More so, the lower level staff of all enterprises within the State must all be indigene of Rivers State.

2.2 Empirical Frame Work

Ongori, Henry and Temtime (2009) stated in their paper that the recruitment and selection practices of small and medium enterprises enable them to improve their human resources practices and organizational efficiency.

Olatunji and ugoji (2013) in a study of personnel recruitment on organizational development: a survey of selected Nigerian workplace using primary data to study certain recruitment procedures adopted in organizations and revealed that the recruitment procedures used in the organization influence personnel behaviour and performance though the study did not use any variable to measure organizational development or performance rather it measures the perception of male and female toward recruitment. recruitment and selection

Adeyemi, Dumade and Fadare (2015) in the study of the influence of recruitment and selection on organizational performance using questionnaire to study a sample of only twenty respondents of Access Bank branch. The study indicated that, advertising of job vacancies to general public, use of employment agent(s), the study also show that employee referrals are mostly the mode for recruiting potential employees, it was also realized that the method used in the recruiting and selection process was very effective. The study made use of a very small sample which cannot be generalized to represent the entire access bank employees.

Jonathan et al (2012) in their study of the effect of recruitment and selection of employees on the performance of small and medium enterprises in Kisumu Municipality- Kenya the study showed a significant effect between recruitment/selection and SMEs performance, that recruitment and selection accounts for 72.4% of the variance in the performance of the SMEs and the better the recruitment and selection, the higher the performance of the SMEs.

According to Raphael (2010) planning for future job and employee needs as well as the way the organization performs within its various functions is an essential aspect. Marcus (2010) studied the effect of selection process to the performance of public institutions in Tanzania and revealed that there is direct correlation between selection process and the performance of public institutions. recruitment and selection

Mustapha etal (2013) opined that the aim of recruitment goes beyond mere filling of vacancies to include individual development and achievement and building a strong organization where effective team work, and the individuals needs are realized at the same time. The study argued that to achieve this aim, the organizations must adopt recruitment policies that are internally consistent and which are also consistent with the objectives of the organization and the expectations of the larger society. recruitment and selection

The study of Opayemi, and Oyesola (2013) established the relevance of some personal attributes or socio-demographic factors as influencing perception of the link between selection interview, selection test and employee performance. The study revealed that employees in the age range of 20-25 years reported the highest mean score on perception of the link between selection interview, selection test and employee performance. Therefore, recruitment/selection interview and recruitment/selection test are good predictors of employee performance, if conducted in a standardized form.

Adeyemi etal (2015) also opined that employees should all be treated fairly in the recruitment and selection process and be appraised constantly to ensure that they improve upon their performance.

Ekwoaba, Ikeije and Ufoma (2015) in a study of the impact of recruitment and selection criteria on organizational performance revealed that recruitment and selection criteria have significant effect on organization’s performance that the more objective the recruitment and selection criteria, the better the organization’s performance.

Kepha, Mukulu and Waititu (2012) used descriptive research designs to study the influence of recruitment and selection on the performance of employees in research institutes in kenya a sample size of 256 employees of the population drawn from all Government owned research institutes, the study revealed that the correlation between employee performance and recruitment and selection were highly significant at 0.374 (P=0.000).

Ahiauzu, (1999) also concur with this by saying that “what we see as tools, machines, production methods and techniques, which constitute hard and soft technologies are merely manifestation of what had earlier existed in the minds of men, in the form of ideas, that had become crystallized from human thoughts” therefore the issue of employees recruitment process into organizations is very paramount to the continuous existence of an organization hence the failure of the employee is the failure of the organization.

Stephen, Cowgill, Hoffman and Housman (2013) studied impact of hiring through referral using novel and detailed productivity and survey data from nine large firms in three industries revealed that employee referrals allow firms to select workers that better suit for particular jobs in the organization that firms benefit from referrals predominantly by selecting workers with a better fit for the job, as opposed to referrals selecting workers with higher overall quality. The study shows that employee referrals enhances monitoring and coaching and makes work environment more enjoyable as they work with friends because workers refer others like themselves, not only in characteristics but in behavior. recruitment and selection

2.3 Theoretical Framework

This study is based on the theory of Resource Based View (RBV) which states that sustainable competitive advantage is achievable when organizations have human resource pool which cannot be imitated or substituted by competitors (Barney, 1991). Resource Based theory also entails that firms should constantly evaluate their workforce to ensure that they have the right people with the right skills in the right places to ensure sustained competitive advantage. Firms should make-up for the shortfall by employing appropriate recruitment and selection criteria (Barney, 2001). The theory maintained that the major source of any firm’s strength or weakness is from the caliber of the people employed and the quality of their working relationships. In addition to this assertion, in support of Resource Based theory, Neeraj (2012) revealed that firms which recruit and retain exceptional individuals have the capability of generating human capital advantage.

3. Methodology

3.1 Research Design

The descriptive survey research design was used for the study. Descriptive survey is a process of collecting data in order to answer questions concerning the current status of the subject in the study (Mugenda and Mugenda, 2003).

The population of the study is the employees of three selected multinational firms (Cadbury Nig Plc, P.Z Nig. Plc and Unilever Nig. Plc) in Abuja and Lagos branches in Nigeria.

Due to unavailability of exalt population of staff in those branches, Purposive sample technique was used to select a sample of 25 employees in each branches to make a total of 50 employees selected from each multinational firm above for the study. In totality, 150 employees formed the sample of the study.

3.2 Method of Data Collection

The research instrument used for this study is primary in nature. Questionnaires were designed in a five–point likert scale ranging from: 5 =strongly agree 4=agree 3=undecided 2=disagree 1=strongly disagree. Before distribution of the questionnaire to the respondents, the purpose and procedures of the study were explained to the respondents and verbal consent was obtained from them since they are all adults whose ages are 18 years and above. This is consistent with suggestion of Thomas, Nelson and Silverman (2005).
The inferential statistics used is the one sample T-test. It was adopted to find the relationship between “recruitment and selection strategy” (which was measured by employee referral method, the use of employment agency method and the use of host community member recruitment method) and dependent variable “employee performance” (which was measured by employee commitment, employee productivities and employee’s job efficiency).

4. Data Analysis and Interpretation

Statistical Test of Hypothesis
The three hypothesis used for the paper was tested at 95% confidence level (or 5% level of significance) and the probability value (PV). The decision rule is that, if the PV is less than 0.05, we reject the null hypothesis. However, if the PV was found to be greater than 0.05, we accept the null hypothesis.

Hypothesis One: H01: There is no significant relationship between the use of Employee referral recruitment method and employee commitment

Table 1: T-test Result for the use of Employee referral recruitment method and employee commitment

Source: Authors’ Computation, 2017

From table 1, it was discovered that the t-statistic value gave 21.85, and a PV of 0.000. Since the PV of 0.000 is less than 0.05 at 5% level of significance, we thus reject the first null hypothesis, and conclude that there is a significant relationship between the use of employee referral recruitment method and employee commitment.

Hypothesis Two: H02: There is no significant relationship between the use of employment agency method and employee productivities

Table 2: T-test Result for the use of employment agency method and employee productivities

Source: Authors’ Computation, 2017

From table 2, that the t-statistic value gave 19.857, and a PV of 0.000. Since the PV of 0.000 is less than 0.05 at 5% level of significance, we then reject the second null hypothesis, and conclude that there is a significant relationship between the use of employment agency method and employee productivities

Hypothesis Three: H03: There is no significant relationship between the use of host community recruitment method and employee’s job efficiency

Table 3: T-test Result for the use of the use of host community recruitment method and employee’s job efficiency

Source: Authors’ Computation, 2017

From table 3, it was discovered that the t-statistic value gave 1013, and a PV of 0.564. Since the PV of 0.564 is greater than 0.05 at 5% level of significance, we thus accept the third null hypothesis, and conclude that there is no significant relationship between the use of host community recruitment method and employee’s job efficiency,
Discussion of Findings

The findings in the table one discovered a t-statistic value that gave a value of 21.85, and a PV of 0.000. Since the PV of 0.000 is less than 0.05 at 5% level of significance, we thus reject the first null hypothesis, and conclude that there is a significant relationship between the use of employee referral recruitment method and employee commitment. It shows that employees that were employed through a recommendation of an employee in the organization are more committed on the job. This finding is in line with Stephen, Cowgill, Hoffman and Housman (2013) that revealed that employee referrals enhances monitoring and coaching and makes work environment more enjoyable. It also allows firms to select workers that better suit for particular jobs in the organization. Firms benefit from referrals predominantly by selecting workers with a better fit for the job.

Result from table 2, gave t-statistic value of 19.857, and a PV of 0.000. Since the PV of 0.000 is less than 0.05 at 5% level of significance, we then reject the second null hypothesis, and conclude that there is a significant relationship between the use of employment agency method and employee productivities. This how shows that the use of employment agency enables organization to treat every candidates fairly in the recruitment/selection process. It helps in selecting the best and unbiased applicants through the outlined selection procedure. This finding is in agreement with that of Adeyemi etal (2015) that fairly treated employees through the recruitment and selection process ensures employee performance.

The findings in table 3, discovered the t-statistic value that gave 1013, and a PV of 0.564. Since the PV of 0.564 is greater than 0.05 at 5% level of significance, we thus accept the third null hypothesis, and conclude that there is no significant relationship between the use of host community recruitment method and employee’s job efficiency. This implies that recruitment through the host community don’t give organization a wide choice of selecting suitable candidates for employment that can ensure organizational efficiency. The finding is contrary to the theory of corporate social responsibility which states that recruitment of employees from the host community ensures efficiency.

5. Conclusion and Recommendations

The study concludes that organization’s strength or weakness comes from the caliber of its employees and a good recruitment strategy enables organization to get suitable and qualified employees that can enhance performance. The use of recruitment agency and internal employee recommendation in the recruitment/selection process enables organization to recruit committed and productive employees while the recruitment through the influence of host community leads to organizational inefficiency.

In consideration of the research findings, the study recommends the followings.

1. Organizations can use employment agencies in the act of recruitment and selection but should be open to disclose the job description and responsibility to enable them select best suitable candidates for them.
2.  It was also recommended that firms should consider employing through an active and committed employee recommendation as it enhances mentoring, monitoring, obedience and coaching among employees and thereby increase productivities of employees. It also makes work environment more friendly and enjoyable as workers work with friends because employees refer others like them.
3. The study also recommends that firms should recruit based on the capability of the candidates on performing the job responsibilities than consideration based on host community influences to ensure that effective candidate is employed to perform the specified duty effectively.

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Appendix

Table one: Summary of Respondents

What is the relationship between recruitment and selection and employee performance?

How does recruitment and selection contribute to high performance?

How does recruitment affect performance?