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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

[email protected]

Shazia Nauman

Department of Business Administration

Lahore Leads University

Lahore, Pakistan

[email protected]

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

2

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


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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


6

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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