An Empirical Study of Recruitment and Selection Methods Employed by the Indian Banking Industry

CHAPTER I: INTRODUCTION

1.0 Introduction

The success of an organisation or business is directly associated with the performance of employees in each and every firm. Hence, recruitment and selection of good candidate is an essential role of Human Resource (HR) department. HR of the firm they failed to recruiting the right candidate it leads to underachievement of firms (i.e. workplace failure). In order to overcome this, better selection procedures need to be followed by HR department of every organisation. Specifically banking sector in India facing some issues of transformational change, and higher attrition rate and further the demand of experienced and qualified people is higher. Hence, the banking sector in India undertakes specific efforts to provide a positive work environment to their employees. Such initiatives are undertaken to ensure that an employee hired by an organization continues to serve the organization for extended periods without thinking of switching jobs. The focus here is on setting up policies and procedures that consider the needs of employees improve job satisfaction and eliminate the need to recruit continuously new staff and offer training (Nazia & Begum, 2013). In this aspect, the present study attempts to identify the recruitment and selection methods in Indian banking sector.

1.1 Background of the study

Recruitment involves selection of potential candidates as per the policies laid down in this regard to provide employment opportunity. With an aim to multiply the business, the need is to replace the vacant post with highly skilled people having enough experience. The procedure of recruiting is no doubt a complex task. The reason, it becomes a matter of concern to find a suitable replacement, i.e. in recruiting specialized expertise (CIPD, 2009). In this scenario, the responsibility is on the part of the employer to assign the tasks to those who could handle it efficiently. However, the concern is in selecting the candidates willing to join the organization as per the vacant posts. Thus, in this regard, the employer has another option, i.e. resort to external recruitment and inexpensive procedure. There are numerous recruitment procedures to which recruiters implement as per the requirement. The most widely implemented procedure is through advertising, i.e. recruiter advertises for the vacant post. In addition, there are other procedures followed. Therefore, the focus is on HR practices involving recruitment and selection. The aim is to attain organizational development with minimal investment. As a result, the organization will accrue profit (Tanveer et al., 2011). Since the emphasis is on realizing productivity, the need should be from the perspective of recruitment, i.e. the candidate selection should meet the goal of the organization. Thus, the need for two-way procedure arises during recruitment. There are several methods involved in selecting the right candidate such as aptitude test, first round interviews, interview with regards to skills, background verification, assessment selection, job offer, etc. However, the employee’s decision is recognized as a decision of management; it is accepted that recruitment of employees is now seen more often as a shared or a two- way procedure. The employee’s recruitment and selection procedure are more complex in banking sector, especially in India, Therefore, the present study attempts to ascertain the most valuable measures of the initial screening process for recruitment in Indian banking sectors.

1.2 Statement of the Problem

Recruitment is a process of examining and attracting the essential candidates based on the availability of job. It is a continuous process because of the departure of staff, promotion, changes in business location and requirement which is common in all kinds of firms. Every organization vies for selecting the right talent so as to yield better performance. However, by resorting to the unconventional method of recruiting might not be advantageous. Thus, recruitment inaccurate is a complicated task. The aim is to meet the challenging tasks of industry for rendering quality services. Hence, a wrong decision in recruitment would lead to repercussions in terms of performance and productivity with respect to time. In addition, it would make an impact on the delivery of service to customers. Finally, the firm has to bear the loss in terms of production. Managing manpower is undoubtedly a challenging task at the organizational level as well as for making strategic decisions. This is the reason; the emphasis is put on human resources in a manner that would meet the objectives of the organization. Hence, it becomes incumbent on the part of management to ensure the policies and strategies in place so as to attract right candidate to meet objectives of the organization. Although several studies carried out the research in recruitment and selection process in India in general (Nartey, 2012; Dash, 2011; Ishrat, 2013), and further few of the studies discussed the recruitment in specific to policies and strategies (Motsoeneng, 2011; Reynolds, 2011), however, those studies only focus on banking industry in view of employee retention (Dash, 2011), thus, there is a lot of inconsistencies were observed in recruitment and selection procedures of recruitment process in Indian banking firms while the present study attempts to explore the selection procedures of the recruitment process in Indian banking industry.

1.3 Aim

The main aim of the study is to examine the impact of recruitment and selection methods on employee retention in the banking industry.

1.4 Research Objectives
  • • To explore the selection procedures of the recruitment process in Indian banking industry.
  • • To ascertain the most valuable measures of the initial screening process for recruitment in Indian banking sectors.
  • • To find out the final selection method which is frequently used in the selection process with respect to the employee’s levels (like senior, middle, junior….)
  • • To examine factors that affect recruitment and selection process in Indian banking industry.
1.5 Research Questions

Based on the study objective, the following research questions are framed

RQ1: Which selection procedures of the recruitment process are more appropriate in Indian banking industry?

RQ1: Which initial screening process for recruitment is very effective in Indian banking industry?

RQ1: Which final selection method is frequently used in the selection process?

RQ1: What are the factors affect the recruitment and selection process?

1.6 Proposed Methodology

The present study was chosen the research method is a quantitative method in order to analyse the impact of recruitment and selection methods on employee retention in Indian banking industry. A survey has been carried out with recruitment firms and Human Resource executive who handle the recruitment procedure. The questionnaire contains both open-ended and closed-ended questions. For data collection process, the study used primary data method by using questionnaire which has been distributed to HR executives and recruitment firms. After data collection procedure, the study made a data analysis by using SPSS software. Throughout the entire research, the study had maintained the ethics. The data analysis has been carried out by conducting frequency, percentage analysis, and ANOVA, regression and correlation analysis.

1.5 Conclusion

There have been various differences between the leadership styles of UAE and that of western leadership style. Cultural factors (religion, language, rules of behavior) and authoritative approach of the UAE managers are responsible for these differences. In general, there are too many management directives in the UAE. Particularly, the UAE banking sector has a well controlled structure and standardized operations and thus transformational leadership is found to be best suitable for enhancing the performance of the banking staffs in such well organized environment.

1.7 Significance of the study

The present study supports to understand the impacts involved in recruitment and selection process on employee retention in the banking industry and also helpful to analyse the role, function and contribution of the HR section within the recruitment and selection process of the banking industry in India. In addition, this study provides best alternative approaches for firms to retain best talents using recruitment and selection as a tool and procedure. The selection and recruitment process which is important and extremely effectual has been identified in this study. The present study gave a solution to identify the right candidates in banking firms.

1.8 Plan of the study

The present study covers five chapters are as follows:

Chapter 1: Introduction: This chapter provides the overview of the whole dissertation.

Chapter 2: Literature review: This chapter reviews the previous studies with regards to employee retention and impacts of employee recruitment and selection process. Finally, this chapter has identified the gap and ended with a conclusion.

Chapter 3: Research Methodology: This chapter covers the methods adopted in the study includes research strategy, design, population and sample size, data collection procedure and data analysis

Chapter 4: Results and Findings: This chapter carried out different analysis and interpreted the data in order to answering the research questions.

Chapter 5: Conclusion and Recommendations: These chapters provide the conclusion on the basis of the analysis; further this chapter identified the study limitations and had provided strategies and recommendations for future.

CHAPTER II: LITERATURE REVIEW

2.0 Introduction

Recruitment is the first stage in the process after that selection, and final stage is placement process (Naveen & Raju, 2014). Recruitment and selection practices are essential one in every firm especially in banking sectors as the sector want well-qualified individuals to handle all the works. Therefore, banking made a suitable policy to recruiting and selecting the suitable employees. In these contexts, the banking sector in India is one of the chief employment providers in the financial sector. The rate of attrition is higher (30%) in newly recruited staff due to higher workload, sub-optimal pay package and poor working conditions (Muralidharan & Venkatram, 2013). In addition, improper employee mix, acquisition of talent in specialized areas, higher attrition rate and further novel branch opening make talent gap. It was fulfilled by better recruitment and selection practices. Hence, the present chapter collects the reviews in this aspect by using different keywords for search include Recruitment and selection practices OR selection procedure OR recruitment banking in various databases such as EBSCO, google scholar, etc. The present chapter categorizes into different sections:

2.1 Concept and definitions of recruitment and selection

This section discusses the concepts and definitions of recruitment and selection as well as employee retention. In the majority of the firms, recruitment and selection form a core part of the central activities underlying human resource management namely, the acquisition, development and reward of workers. This selection process forms an important role in human resource managers practices in different organizations (French & Rumbles, 2010). The recruitment and selection methods are two different terms which are interlink with each other (Bratton & Gold, 2007). For the purpose of defining recruitment, authors have put forward numerous definitions over two decades. Previously, Recruitment was defined by Rynes (1991) as “encompassing all organisational practices and decisions that affect either the number, or type of individuals that are willing to apply for, or to accept a given vacancy”.

The concept of employee recruitment typically involves practices that impact number and kinds of employees who have applied for a job and whether or not they accept it. Saks et al. (2007) stated that “Recruitment involves actions and activities taken by an organisation in order to identify and attract individuals to the organisation who have the capabilities to help the organisation realize its strategic objectives. In particular, such activities should generate a pool of desirable candidates and enhance their interest in and attraction to the organization (Karemu et al., 2014)”. Mullins (2010) further stated that “the HRM function is to remain effective, there must be consistently good levels of teamwork, plus ongoing co-operation and consultation between line managers and the HR manager”. This definition holds true to the fact that it is a vital part of the recruitment process for the presence of specialist HR managers including those that are external; add to the wealth of updated skill set and perception on recruitment which for instance can be noted in the most legal aspects of the same.

As a part of the larger HRM approach, the recruitment process is conducted in a series of stages. The best HRM strategy has retained the employee as in long-term. Hence, employee retention is a major role of HRM. Thus, the employee retention is defined as the ability of a business organisation to maintain and retain the most desirable employees (especially those who occupy critical job positions) for a long time in the organisation. The strategy is also meant to retain essential employees from being offered more lucrative offers from rival firms, especially those employees with a more specialised knowledge. From this aspect, it shows that HR played a major position in recruitment and selection process. The below figure shows the typical strategy of HR in recruitment and selection process

2.2 Recruitment and selection process and development of organization

This section talks about the recruitment and selection process and development of an organization which is suitable for the present study. Firstly, section explains the recruitment process as the process of acquiring and employing personnel as per the requirement of an organisation. This process itself involves whom to hire, where from and the mode that can be used for hiring such as advertisements online as well as newspapers, consultancies and campus selections. In this regard, the selection is a part of the recruitment process and deals with the choosing of whom to hire for the concerned job (Beardwell & Claydon, 2007; Breaugh & Starke, 2000). To employ the best people with the best skill set, identifying the most optimum method of recruitment and ensuring that the company has a competitive edge in the market along with the ability to retain the most competitive of workers plays a vital role in strategic marketing. This also enables the organisation to set the right targets.

2.2.1 Role of HRM in recruitment and selection process

According to Mullins (1999), Human Resource Management (HRM) encompass this process, the main role of HRM is to provide training, placement, benefits and bonuses, compensation, along with ensuring that the employee stays in the organisation. Besides this, they should also lend support to the organisation in choosing the most appropriate candidate to fill vacancies. HRM has thus evolved to support various systems such as recruitment, selection, employment, appraisals, placements, compensations, health, safety and security. In addition, according to Dessler (2000) stated that the role of HRM is to identifying the types of candidates who are required for the job, screening of the application , taking measures to ensure that the right candidate is chosen, sending the candidate application to higher authority, the candidates through a selection interview and finally make a decision as to which candidate is the most viable for the job to make an eventual job offer (Djabatey, 2012). Hence, the next section focuses on the detailed view of the process of recruitment.

2.2.2 The process of recruitment

There are several process of employee recruitment process occurred in different firms which were evident in few studies. A review by Miyake (2002) discusses that job advertisements include advertisements related interviews were given by email, newspapers and magazines. This is one of the most common processes of recruitment; some employees are hired on the basis of an employee referral. Studies showed that not only do the referred employees work for a longer period of time in the company, but they are also the ones who are least considered for dismissal. These types of employees constitute to the low voluntary and involuntary turnovers respectively. Miyake (2002) is also of the opinion that people recruited through the word of mouth stay longer as they have a clearer idea of what the job entails. Five studies (CIPD, 2007; Birago, 2014; Bullhorn, 2014; Novo Group, 2013; The Centre for Spatial Economics, 2009) were reviewed for the same purpose and they revealed that the average turnover for the advertising mode of recruitment was at 51%, with 37% for spontaneous applications and a 30% for employee referral. The main idea behind the high numbers for employee referral is the hypothesised to ‘better information’, which in argument stated that the people were better informed as to the job, the firm, and a clear, realistic approach to their own suitability to the role and their future job prospects. The next section focuses on selection decision.

2.2.3 The selection Decision

The selection process is one which includes a broad range of techniques from the most traditional methods such as interviews, application forms and employee referral to the most recent techniques such as aptitude tests, psychological evaluations, assessment centres and curriculum vitae, samples of work, etc. All these techniques have their own set of advantages and disadvantages which taken against each other derives the need for comparison to elucidate the main credits of the method along with a psychometric analysis. In a study conducted across seven European countries to assess the various techniques of selections that are being employed (Bertolino & Steiner, 2007). Structured interviews emerged as the most common method of selection, however even though the validated tests such as assessment centres, work samples and group exercises were not so common. The factors that make a certain selection test operative and thereby advanced in technique finds its basis on it being a well-founded as well as a validated concept (Miyake, 2002).

2.3 Previous studies

2.3.1 Challenges of recruitment and selection

This section talks about the challenges of recruitment and selection, For instance, the study of Kaplan and Norton (2004) discussed that the key to effective recruitment is HR planning. However, the main drawbacks in the recruitment are the lack of an HR plan. Meticulous HR planning eventually leads to the conversion of this planning to strategies and policies of the business organisation, which is especially true in the case of the recruitment and selection process. Some other challenges faced by HR management at the time of recruitment is there is a necessary to include identifying the current labour market, hiring people with the right subset of skills for the appropriate job, hiring the right number of people required for the organisation, and also carry out all proceedings at optimum financial cost. It has been shown that the most competent that the HR management is then the recruitment efficiency also is increased. The study of Zinyemba (2014) identified challenges include brain drain, high labour turnover, scarcity of skills and expertise in the labour market, and unemployment. Other challenges include costs associated with recruitment. Smaller companies compete with bigger companies which can better absorb the costs associated with recruitment and are also capable of paying better salaries. Lack of human resources planning, geographical location of jobs and use of information technology in advertising are other challenges that employer organizations face when recruiting and selecting employees. These challenges have led to a lack of transparency in the recruitment process, untrustworthiness of employees, and favouritism involved with both external recruitment and internal promotions. Better management of the recruitment and selection process assists the organization in making realistic decisions about a prospective candidate. Better management implies proper human resource planning and writing accurate job descriptions to ensure that precedence is given to the competencies necessary for the achievement of the company’s objectives (Zinyemba, 2014). Bohlander, Snell and Sherman (2001) argue that while people have always been central to organizations, they have now taken on an, even more, central role in building a firm’s competitive advantage. They reiterate the fact that success increasingly depends on the organization’s people-embodied expertise, which includes the knowledge, skills and abilities embedded in an organization’s employees (Buhasio, 2012). Also, the presence of an effective HR management shows that they not only reduce the time of a vacancy but also that the vacancy is filled with a better quality of employees in the long run (Richardson, 2012; Isaiah, 2012). Other discoveries from past research showed that all of the above is possible only if the HR management team is both proficient as well as devoted. Research in Human Resource Management (HRM) has established that the success of any organization is highly influenced by the caliber of its Human Resource (HR), which in turn, is affected by the organization’s human resource management practices.

2.3.2 Changing context of Recruitment and selection decisions

A traditional method of management which has been to rule with an iron fist has fast been facing a decline. In light of that more organisations have been adopting a multidisciplinary approach to management to stay abreast of competition in the market (Browning et al., 2009). Besides this, organisational restructuring as a whole has taken place and with it has destroyed the older techniques so far employed. Literature is suggestive of the fact that all the process of recruitment and employment should focus on acquiring employees who are aligned with the organisation's goal. In order to maintain their competitive edges, the organisations need to acquire a more transparent and comprehensive system (Bingley & Westergaard-Nielsen, 2004). It has also been observed that many organisations are abandoning the system of jobs that are based solely on functional areas and adopting more diverse teams made up of motivated individuals, who are focused and those that work under their own control. While Burton suggests that the main success or failure of the organisation depends on the workforce and the way they work, Cran (2007) in contrast suggests that employees need to be more adaptable to the ever-changing operational and client demands. But, Burton further states that with the increase in the use and complexity of technology, the time spent on the completion of projects are reduced and thereby come to be more dependent on the individual worker as the projected competitive advantage. This theory by Burton received substantial support from Delery and Doty (1996) who took it further by stating that in the current business world where technology takes over, wherein a downsizing has started to occur with regard to both cost as well as manpower, personnel who are more adaptable to work in a ‘virtual’ environment that lacks the traditional structure of an organisation must be selected. Furthermore, that even with the virtual array of the business world, the success of an organisation does come from the individual manpower.

2.3.3 Recruitment and selection practices and performance in banking sector

2.3.3.1 Recruitment and selection practices and performance in banking sector of developed countries

The present section focused on studies with respect to recruitment and selection process in the aspect of developed countries. For instance, Piotrowski and Armstrong (2006) reported the pre-employment selection and recruitment methods among 51 larger firms in the US. The data collection was made by online pre-employment selection methods. Their finding showed that the majority of the firms followed the personnel and traditional recruitment methods. In this study, personality testing is more popular among 20 percent of firms, honesty integrity and violence potential was also found more popular in few firms at the time of recruitment process. Thus, the study focuses on recruitment and selection practices in general firms and not focused on the banking industry. In contrary to this, the different view was analysed in terms of cultural value perspective is Singh (2014) in firms of selected countries such as U.K., Japan, and India. This study observed the cultural values have an impact the selection and recruitment practices effectiveness in selected firms due to a different culture. Their study noticed that the work culture of India and Japan are similar but in the UK it's different. Further this study finding it is evident that culture is a significant aspect of making HR policies and practices of the firms. However, this study failed to address the main role of HR in recruitment and selection process in different work culture. Another study like Begum et al. (2014) investigated the relationship between recruitment and selection process and organisational citizenship behavior among 57 participants in six commercial banks in China by use of structured questionnaires. Analysis of this study revealed that the selection and recruitment process used in the private banking sector of China had a significant impact on employee consciousness behaviour. As the banking sector in China reveals poor recruitment methods such as opportunity that is not fairly and equally distributed to all applicants, jobs given to relatives of higher cadre workforce, lack of hiring of professional qualification and limited use of portals for job openings. The study recommends that globally used effective and fair methods of recruitment have a positive impact on the employees’ behaviour. From the three different countries perspective, there are different methods of selection and recruitment process handled by HR management of banks. However, they failed to focus on some perception.

2.3.3.2 Developing countries

This section reviews the previous studies with respect to HRM practices in recruitment and selection in developing countries. For instance, Wirtz et al. (2008) determined the managing role of human resource practices in the airline industry at Bangladesh. In line with this, a case study of one of the largest commercial banking services, Basic Bank, in Bangladesh as Tabassum (2011) to evaluate the existing selection and recruitment methods used for effective recruitment and suggestion for any lapses in the same. It was observed and recorded that Basic Bank uses an extensive method for recruitment that consists of a thorough screening of the Curriculum Vitae of a potential candidate, recruitment tests, face to face interviews and background checks. Also, that Basic bank does not encourage the use of the employee referral system as a means of recruitment but rather relies heavily on external means such as advertisements, etc. The study recommends that reviewing the current system of recruitment may eventually lead to better employee retention. Another study showed the effectiveness such as Djabatey (2012) assessed the effectiveness of recruitment and selection process across 100 participants in HFC bank in Accra, Ghana. The study comprised the use of questionnaires for the assessment and revealed that advertisements of job and employee referrals were the most effective methods of recruitments that elicited the maximum response. In addition, the study showed that these methods also vastly increased the employee performance. Not only were the methods effective but were also riddled with several challenges and the study has thus recommended that the recruits be treated fairly and also appraised in a regular fashion to improve performance. The latest study of Islam (2014) explored the selection and recruitment process of Dhaka Bank Ltd, Bangladesh. This is a case study of the specific bank that elucidates the aspects of selection and recruitment through observation, Face to face interviews with the existing employees of the bank of all cadres and by active participation in the recruitment process itself. The observational analysis, in this case, reveals that in a specific selection method by announcing a job opening at the many bank CVs are received. However, only a few are chosen for the written test without a fair opportunity to all applicants. Besides this, the recruitment process was time-consuming with the lack of financial organisation for the recruitment budget which recommends the need to employ a more structured recruitment process.

However, another study analysed the impact of specific HRM practices like Majumder (2012) on bank employees’ satisfaction in the private 100 banking industry in Bangladesh. The questionnaire was used to encompass job design, responsibilities, reward, motivation, recruitment, and selection. The study concluded that HRM techniques do not satisfy the employees equally. However, the employees were seen to be especially satisfied with the recruitment process which was by external methods like advertising and that it was effective and fair. Further work may be done to improve the functioning of the human resource department in the private banking sector so as to ensure better employee satisfaction. Based on the effectiveness and impact of HRM practices. The following studies developed models in different perceptions. Similar to this, Mudashiru et al. (2013) discussed the use of selection and recruitment strategies and its overall impact on the organizational structure and functioning of the bank. The study was a questionnaire-based survey wherein 250 questionnaires were administered to the participants at First Bank Plc., in Lagos, Ibadan, Ilorin, Offa and Osogbo of Nigeria. The quantitative analysis revealed that the current recruitment process which consisted of posting jobs on manual job boards and then internally informing employees of the job opening for recommendation to friends and family, that it is worthwhile to invest in using technology for the recruitment process such as in-house website, online job portals, etc. It states that such measures not only lead to employment of a better-organised workforce but also impacts the success of the bank in the market. The study also recommends that the system is transparent, fair and efficient.

The world of private banking is fairly nascent but has fast been on the rise. To achieve a competitive edge banks have now come to use many innovative approaches to the process of recruitment and selection. Sule (2012) identified and evaluated the recruitment strategies of three private banks in Tamale, Ghana. The author employed questionnaires as a survey tool administered to 40 participants in banks such as Barclays, Guaranty Trust Bank, and Agricultural development bank. From the study findings we were able to elucidate that the banks used several methods for the recruitment process but methods like job advertisements, walk in interviews, employment agencies, employee referrals, and campus placements were deemed the most popular strategies. In line with this, a study by Mudashiru et al. (2013) explored the methods employed by the largest commercial bank in Nigeria wherein it was found that the bank only used traditional methods such as an announcement on the job board for openings, information to employees regarding openings for a referral to family and friends. This study concluded that while these methods enabled progress for the existing employees, the incorporation of technology in the recruitment and selection process may lead to the hiring of the workforce with a professional education such as MBA, etc. Other studies such as the ones conducted by Tabassum (2011), Kaur and Bansal (2014), Gupta and Jain (2014) deemed that the external form of recruitment namely advertising was the most popular choice that also led to good employee retention. Bayisa and Satya (2015) assessed the role of the human resource department in the private banking sector of Ethiopia. The study was designed as a cross-sectional study with self-administered questionnaires to select personnel in private banks. The study findings revealed that company size, benefits to the human resource department and the educational level of the managers all correlated to the fact that the human resource department does, in fact, play a strategic administrative role in the private banking sector.

2.3.3.3 India

This section discusses the recruitment and selection practices in Indian perspective. For instance, the study of Shrivastava and Gupta (2013), reported the HR practices in both private as well as public sectors of the bank in Indore among 37 employees. Study findings showed that there is no difference between the HR practices employed in both sectors, but that such practices are common. In addition, HR practices that were employed included recruitment and selection process such as employee referrals, advertisements and recruitment tests.

In line with this, the study of Kaur and Bansal (2014) identified the recruitment methods in both public and private sector banks among 10 banks (5 private and 5 public) with 500 participants in Punjab. Both qualitative, as well as quantitative findings, described that the majority of the participants stated that recruitment test and advertising as the most common method of recruitment followed by the use of employment agencies with the least ranking for employee referrals. In the same year, study like De (2014) evaluated the recruitment methodology at Yes Bank in Delhi/NCR for the recruitment of sales manager. This observational case study has thus revealed that private banks both internal (employee referrals) as well as external (job portals, consultancies, campus placements, advertisements, etc.) recruitment methods are in use. The quantitative analysis has showed the use of all methods along with the traditional practice of good judgement leads to effective recruitment.

Later, Gupta and Jain (2014) discusses the role of recruitment policies with respect to 29 district Central Cooperative Banks. Cooperative banks they rely on external sources of recruitment such as advertisements etc. but can use employee referral as a means of recruitment. The main drawback identified in the case of these banks is that professionals do not generally prefer these banks because of their poor remuneration offered for which Gupta recommends a stable internal finance with external competitiveness so as to better the recruitment process. After that, Kour and Gakhar (2015) discussed the possible approaches that are in use in public as well as private sector banks with reference to selection and recruitment process in the North zone of India amongst 7 banks, which includes Delhi and Chandigarh including 32 human resource experts. Recruitment through employee referrals, hiring of professionals, assessing the service attitude, social networking profiles is some of the practices that the study findings have revealed. From the above studies, it is evident that the methods of HR practices include advertising, employee referrals, the hiring of professionals is highly effective in firm success.

2.4 Human resource development

This section talks about the HR development in different firms. According to Schuler and Walker (1990), the success of businesses depends upon the ability of an organisation to recruit motivated personnel who in the face of challenge respond adequately both for the present as well as the future. Moreover, this personnel should be capable of creating a competitive edge in the work environment by displaying ability as well as a desire to absorb the necessary from other working professionals, the consumers, clients, suppliers, etc. so as to build and forge a relationship that is long-term in nature. In addition, the study of Schuler and Walker (1990) also suggests that when companies hire frequently, it displays the fact that they consider new talent and skill as a top priority. This also provides an opportunity to the external world regarding the company’s goals, aspirations and also what all they have to offer in terms of the workplace environment, opportunities to excel in the said field, etc.

Although this structure used for recruitment is not a current one, studies have suggested that the main goal of the human resource management should be to acquire and ensure that the new talent favour the company. Walker also believes that for the company to attain the best values, the most important contributory factor would be a competent and devoted workforce. Drucker (1999) stated that “The most valuable asset of a 20th-century company was its production equipment.” He further goes on to explain that training and development play an important role in the HRD management. It is suggested that training and development should not only be used as the beginning or induction of a new employee chosen on qualification for the company but also that training and development is a lifelong process. This further led to the shift in tracking what the trainer extends to what the learner actually acquires. Although, it is deemed that training and development are not the most effective method that contributes to the overall performance of both the company as well as the individual. Training and development hence, should be a process that is constantly changing and adapting as and when issues of error or success arise to arrive a more sustainable structure.

Human resource development as a whole when considered encompasses issues of workforce demographics, the implementation of the right workforce, the hurdles faced acquiring this workforce, who are sound, motivated and equipped to understand and align with the companies’ need. Other challenges faced by the human resource managers are whether to hire for the present need of the organization or to hire for the future needs of the company, how to hire effectively so as to achieve the company’s goal long term and not just for specific jobs. It is said that these issues are not just theoretically but are issues being tackled by many organisations (Djabatey, 2012).

2.5 Research Gap

Several previous studies discussed the recruitment and selection practices and performances in banking sector in both developed countries like (Begum et al., 2014) China and US (Piotrowski & Armstrong, 2006) while in some developing countries like Bangladesh, Ghana and Nigeria (Mudashiru et al., 2013; Bayisa & Satya, 2015; Majumder, 2012) and specifically in India (Shrivastava & Gupta, 2013; Gupta & Jain, 2014). However, those studies discussed the role of recruitment methods, challenges and changes in the decision making of recruitment selection process in different banking sectors. Thus, they failed to focus on the in-depth knowledge of employees at the time of recruitment and selection process specifically in Indian banking sector. Managing manpower is undoubtedly a challenging task at the organizational level as well as for making strategic decisions. In order to attain the challenging task of HR in selected banks is essential. However, included studies show that all the studies were collected by using survey method. In line with this, the present study also used questionnaire method for data collection

Although several studies carried out the research in recruitment and selection process in India in general MNCs (Nartey, 2012; Dash, 2011; Ishrat, 2013), few studies discusses the recruitment policies and strategies of Public service and administration (Reynolds, 2011; Motsoeneng, 2011), however, few studies only focus on banking industry (Dash, 2011), thus, there is a lack of in-depth of information as well as studies in specific to banking sector is limited in India as per our knowledge. Hence, the present study attempts to do a survey with respect to challenges and practices of recruitment and selection methods in Indian banking industry.

2.6 Conclusion

This chapter provides the detailed view of previous studies with respect to recruitment and selection process with respect to the banking industry in the context of both developed and developing countries and specifically in India. The following chapter provides an overview of research methodology adopted in this study.

CHAPTER III: RESEARCH METHODOLOGY

3.0 Introduction

The present chapter discusses the research methods being adopted in this study. Hence, the first section discusses the research design followed by philosophy chosen, research strategy, research approach, further discusses the target population and sample size, sampling method, significantly data collection procedure, study validity and reliability, research ethics and data analysis and finally ends with the conclusion of this chapter. Exploratory research was used to conduct the study,due to determine the type of approach is suitable to attain the research objective. This type of research is the initial research that forms the fundamental of more conclusive research hence it supports to determine the sampling methodology, research design and data collection method (Singh, 2007). In this aspect, the present study used this approach in order to explore the selection procedures of the recruitment process in Indian banking industry. Further the study made quantitative analysis by using survey method.

3.1 Research purpose and design of the study

In any kind of research, research purpose is important to get an idea of “why” the research is being conducted (Shuttleworth, 2008). Meanwhile, research design is considered as a blueprint for any research. It formulates the strategy which is applicable for data collection as well as support to how the research has to be carried out in a logical way (Labaree, 2015). Since the purpose of the research is to ascertain the most valuable measures of the initial screening process for recruitment in Indian banking sector. Later, the design of the present study is ‘onion’ framework which was formulated by Saunders et al. (2007). The below figure depicted the adopted research methods in this study.

3.2 Research Philosophy

Research philosophy supports the investigator to get data about the data collection methods, analysis procedure and how it reflects in present trend. It covers three types such as positivism, interpretivism and realism. The rationale behind positivist thinking is that there is an independent truth that is external to human actions, hence, cannot be reduced to being a figment of human imagination (Trochim, 2006; Easterby-Smith et al., 2008). While the interpretivist philosophy can be succinctly described as anti-positivist (Hatch & Cunliffe, 2006) where it focuses on theory building and views on various realities and knowledge is related to, and influenced by the person who has attained the knowledge (Denzin & Lincoln, 2003). Thirdly, realist takes both positivism andinterpretivism . Since the present study adopted positivism philosophy in order to explore the selection procedures of the recruitment process in Indian banking industry. This philosophy was adopted to identify the relationship of variables established. However, few relevant studies adopted the positivism paradigm to determine the relationship of variables (Msoka Caroline & Msoka Elizabeth, 2014; Shaheen & Farooqi, 2014).

3.3 Research Strategy

Research strategy supports the researcher to ensure that there are adequate resources is enough to complete the research within a specified time (Krishnaswamy, 2004). In general, there is two types of research strategy viz., qualitative and quantitative method strategy. The qualitative methodology was conducted based on human perspective in a real world setting (Saunders et al., 2000). This type of methodology adopts interviews. While, quantitative methodology adopts scientific method of investigation where the data is collected using structured questionnaire (numerical way of investigation) and analyzed utilizing statistical software (Myers, 2000). However, there are several past studies adopted questionnaire method in order to obtain the specific research objective especially in order to obtain the various selection, recruitment and initial screening process (Shaheen & Farooqi, 2014; Msoka Caroline & Msoka Elizabeth, 2014; Tseng, 2010). Based on the study similarities, the present research aimed to examine factors that affect recruitment and selection process in Indian banking industry, through answering closed-ended questions. This methodology would enable the researcher to understand the different methods of recruitment and selection methods employed by selected Indian banks.

3.4 Research approach of the dissertation

The association between theory and research can be approached in a different way as described by Saunders et al. (2012, p.144). There are two types of approaches that researcher can usually undertake namely, deductive and the inductive approach. In the deductive approach, a hypothesis is developed based on the literature review and subsequently tested using survey methodology and often referred to as a "top-down" approach (Saunders et al., 2009; Gabriel, 2013) while the inductive approach is referred as bottom-up approach (Bryman & Bell, 2011, p. 4). In comparison to deductive approach, the inductive method aimed to generate theory based on the observations and findings obtained through the data collection. In general, Bryman and Bell (2011, p. 13) related to an inductive approach to the qualitative research while the deductive approach to the quantitative choice of methodology. Secondly, already published studies are available on selection and recruitment practices across the country. Thus, it is possible to identify the relevant variables and develop the hypothesis. Some past studies in terms of adopt deductive method (Masinovic, 2010; Holm, 2010; Cowan, 2013; Ababio & Eshun, 2011; Mokaya & Kipyegon, 2014). Hence, the researcher adopted the deductive method and also tested it empirically in an Indian setting by using survey method.

3.5 Target Population and Sample Size

HR managers who are working in Indian banking industries are recruited for the study. Choosing a sample is reliant on the character of the investigation, scrutiny of the populace and extent of the sample utilized. Miles and Huberman (1994) stated that the intent of the investigation is very crucial to decide the sample and the extent of the sample. Thus, the study used a sample size of 82 HR managers from selected banking industries in India.

3.6 Sampling Method

Several sampling procedures are available for data collection. Some of them include judgment sampling, systemic sampling, convenience sampling, random sampling techniques and many more. However, the present study used convenience sampling method was used to select respondents. Basically, this type of method is applicable for selecting higher employees based on their accessibility convenience and researcher proximity. This type of sampling method comes from non-probability sampling. The majority of the researcher prefer this method as a fast, reliable, useful in pilot study and inexpensive method. It has few disadvantages gives some biased results, misrepresentation of data and incomplete conclusions. However, collection of data can be feasible in short duration of time. The study prepared as the list of larger organizations in the first phase, followed by identifying employees (HR directors) whoever willing to participate in the study through personal calls.

Table 1: Sampling at different levels

Stage of Research Type of sampling Target population Reasons
Pilot study Convenience HR directors To ensure reliability of the questionnaire
Survey Questionnaire Convenience sampling HR director or managers / executives Based on the convenient and response rate.
3.7 Data Collection

Primary and Secondary data are the two types of data collection methods. In this study, primary data collection methods are used. Primary data collection method improves the quality and reliability of the study not by minimizing the errors but also by reducing the impact of the researcher’s opinions on the findings of the study.

3.7.1 Primary Data

3.7.1.1 Questionnaire

As per Creswell (2001), questionnaires are considered as the most cost-efficient data collection tool that enables in gathering large volumes of data at a short span of time. A survey-based methodology was carried out through approaching HR managers in selected banking firms in India. A questionnaire has developed comprising of close-ended questions.

3.7.1.2 Mode of questionnaire

The questionnaire was in the form of closed-ended questions in which respondents were asked to make one or more choices from a list of possible responses and also a rating scale where the respondents were given a continuum of labelled categories that represented the range of responses. The questions were designed in a manner that provided answers to the objectives of the study. Clear and simple words were used to construct the questions, in an effort to make them easier to understand and answer. The questionnaire was pre-tested before it was used to gather information in order to determine if the content and sequencing of questions were correct. Any alterations that needed to be made were then done before the research was conducted. The questionnaire was categorized into different sub-sections are as follows:

Source: Author (2016)

The questionnaire consists of different sub-sections such as recruitment method focus on the method of recruitment of senior, junior, middle and entry level of employees. Secondly, selection procedures cover various items, thirdly, initial screening methods covers Which of the following methods are used for initial screening? Based on ranking score; fourthly, final selection covers what type of assessment methods does your organization follow for screening the candidates for final selection. Fifthly section focuses on selection approaches, the sixth section covers the level of awareness in selection methods, the seventh section covers recruitment and selection decisions, the eighth section focuses on recruitment policy and HR planning, ninth section nine questions cover unemployment rate. In addition, the tenth section covers quality of selection process and advertisement, while the eleventh section comprises of Job perception and reference. The questions based on experience and educational qualifications cover on twelfth section and interview performance as the section number 13. Finally, question covers the personal information and internet usage. The above interview questions was made based on the research objectives and questions of the research study.

3.7.2 Secondary data

Several sources like annual reports, websites, newspapers, magazines, etc. are used for collection of reviews with respect to the objective.

3.8 Pilot Study

The questionnaire was pilot tested among three human resource managers and based on their feedback certain questions were converted into closed-ended format. The further pilot study helped to enhance the quality of the questionnaire through the flow of content, spelling and grammar errors and timing (Saunders et al., 2009).

3.9 Reliability and validity

In this study reliability was ensured by giving an appropriate time to fill out the questionnaire. In addition, a questionnaire was reviewed by the colleagues and professor. However, validity was done in the development of the questionnaire where items in the questionnaire were developed based on the detailed literature review and objectives developed. Further pilot testing also ensured the validity of a tool (Saunders et al., 2009).

3.10 Research Ethics

Saunders et al. (2007) have defined ethics as “the appropriateness of your behaviour in relation to the right of those who become the subject of your work, or are affected by it” (p.34). Keeping this in mind, the survey has been carefully designed to avoid questions that could generate expected or biased responses. Further, confidentiality of all respondents has been maintained at all stages of the research process i.e. from data collection, analysis to final conclusions have been performed with the highest standards of integrity.

3.11 Informed consent

Informed consent is referred to be the significant factor for a research study. Therefore, this practice has been implemented in this research study to assure the study’s reliability. The research expert has clearly elucidated the study’s aims and rationale to all the respondents.

3.12 Data Analysis

It is examined that the data gathered for the present study seems to be quantitative in nature. Therefore, various methods are employed at the end of the study in order to analyze the data include Statistical package is used to examine the collected data. Inferential and descriptive statistics was used to explain the fundamental model in the data (Lawrence, 2006). Percentage analysis is employed to evaluate the sequence of data and also to predict their relationship. Further, Cronbach’s Alpha is used to measure the reliability by evaluating coefficients of reliability (Abdel Fattah, 2008). The Cronbach’s Alpha value varies between 0-1. The researcher identified that Cronbach’s Alpha can be evaluated for the entire scales employed in the questionnaire. The chi-square test is generally employed to compare the collected data with the expected data from the point of the specific hypothesis. In addition to this , regression analysis was carried out.

3.13 Conclusion

This chapter discussed the methodology adopted during the study as well as the aspects of reliability and validity of data. All attempts were made to ensure that errors were minimized and that the appropriate sample was obtained by the respondents, and thus the findings of the study can be accepted with a reasonable degree of confidence. Once the data had been collected, analyses were conducted on the data. These would be covered in the following chapter.

CHAPTER IV: RESULTS

4.0 Introduction

The chapter encompassed the analysis and interpretation of statistical survey. The survey was conducted through a questionnaire. The target population of the study was Human Resources of Indian banking organizations. The questionnaire was distributed via online mode. The data was analyzed through SPSS 20.0 version. The research was performed to find out the solutions of following four objectives.

  • (i) To identify more appropriate selection procedures of the recruitment process in Indian banking industry.
  • (ii) To extract very effective initial screening method in the recruitment process of Indian banking sectors.
  • (iii) To find the final selection methods which are used in the selection process with respect to the employee’s levels (like senior, middle, junior….)
  • (iv) To examine the factors that more influences the recruitment and selection process in Indian banking sectors.

Initially, frequency analysis was carried out to find the demographic information of respondents. Descriptive statistical measures of factors affecting recruitment and selection process were used to ascertain the average response to each question of the questionnaire. Respondents’ level of agreement (strongly agree to strongly disagree) in relation to selection procedures revealed that which selection procedures of the recruitment process is more suitable in Indian banking sectors. The effective level of the initial screening process is carried out through the descriptive statistics. From the mean value of the descriptive statistics, we could observe that which initial screening method is effective in banking sectors. The frequency distribution of final selection identified which final selection method is often used in the selection process with respect to various levels of employees. The internal linear relationship between the factors affecting recruitment and selection process was analyzed through correlation analysis. This analysis concludes which factors are direct relationships with recruitment and selection process. Finally, the association between the dependent and independent variables was calculated by multiple regression analysis. In the study, recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience and educational qualifications and interview performance are considered as independent variables and overall recruitment and selection process is considered as a dependent variable. Through regression analysis, we could know which factors do more influence recruitment and selection process in Indian banking sectors.

4.1 Frequency distribution

Table 2: Frequency distribution of gender (n=82)

Gender Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
Male 9 7 15 6
Female 5 8 17 15

Frequency distribution of gender of respondents is clearly depicted in Table 1. From the analysis, the majority of the male (15) and female (17) respondents reported that the recruitment and selection practices were good while 15 female and 6 male respondents stated that the recruitment and selection practices were very effective. In addition, 7 male and 8 female respondents reported that the recruitment and selection practices of Indian banking industry were not effective.

Table 3: Frequency distribution of age group (n=82)

Age group Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
< 20 5 - 2 4
21-30 5 4 6 -
31-40 - 5 8 2
41-50 4 6 8 7
> 50 - - 8 8

Table 2 presents the frequency distribution of age group of respondents. The findings reveal that a maximum number of above 31 years age group respondents stated that the recruitment and selection practices of Indian banking industry were good and very effective. In addition, a minimum number of below 20 (n=2) and 21-30 (n=6) years age group respondents stated that the recruitment and selection practices were good.

Table 4: Frequency distribution of type of organization (n=82)

Type of organization Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
Public Sector 14 10 25 4
Private Sector - 5 7 17

Table 3 shows the frequency distribution of type of organization. The analysis exhibits that the majority of the respondents (n=25) who are working in public banking sector stated that the recruitment and selection practices of Indian banking sector were good while the respondents (n=17) who are working in private banking sector reported that the recruitment and selection practices of Indian banking sector were very effective.

Table 5: Frequency distribution of number of staffs working in the organization (n=82)

No. of staff Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
< 100 4 5 2 -
101-200 10 2 4 6
201-300 - 8 7 3
301-400 - - 8 8
> 400 - - 11 4

Table 6: Frequency distribution of years of experience (n=82)

Experience Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
Less than one year 9 7 - -
1-6 years 5 - 21 4
13-18 years - 8 1 11
19 years - - 11 6

Frequency distribution of years of experience of respondents is clearly depicted in table 6. A maximum number of respondents (n=21) who have 1-6 years of experience reported that the recruitment and selection practices of Indian banking sector were good while the respondents (n=11) who have 13-18 years of experience stated that the recruitment and selection practices of Indian banking sector were very effective.

Table 7: Frequency distribution of awareness of formal policy for the recruitment and selection of employees (n=82)

Experience Evaluation of recruitment and selection practices
Indifferent Not effective Good Very effective
n
Yes 7 10 24 17
No 7 5 8 4

Table 7 shows the frequency distribution of awareness of formal policy for the recruitment and selection of employees. The statistical findings connote that the majority of the respondents who have the cognizance of recruitment and selection of employees stated that the recruitment processes of Indian banking industry were good (n=24) and very effective (n=17).

Table 8: Frequency distribution for bank performance in relation to recruitment

Demographic characteristics II Frequency (n) Percent (%)
Job analysis
Yes 28 34.1
No 54 65.9
Does the bank have any agent(s) that recruits and selects employees?
Yes 31 37.8
No 51 62.2
Are job vacancies made open to the general public?
Yes 51 62.2
No 31 37.8
Method of recruitment
Radio advertisement 41 50.0
TV advertisement 53 64.6
Newspaper advertisement 82 100.0
Professional associations 26 31.7
Employee agencies 38 46.3
Employee referrals 39 47.6
Others 18 22.0
Equal opportunities
Yes 53 64.6
No 29 35.4
Common constraints
Budget constraints 40 48.8
Large number of backfilling 32 39.0
All the above 10 12.2
Ratio of selected candidates finally joined
40% and below 14 17.1
40-50% 25 30.5
More than 50% 43 52.4
Does the organization reimburse the travelling cost incurred by the candidate for appearing in the interview
Yes 28 34.1
No 54 65.9
% of candidates leave within 6-12 month
1-5 39 47.6
5-10 20 24.4
10-15 14 17.1
15-20 9 11.0

Table 8 reveals that most of the respondents agreed that their banking organization did not perform the job analysis before advertising vacancies for employment and did not have any agents for recruits and selects employees. Also, almost all the respondents reported that their bank announced the job notification in the newspaper followed by, Television (65%), Radio (50%), employee referrals (48%), employee agencies (46%) and so on. A maximum number of respondents stated that their banking organization provided equal opportunities for all the employees. Most of the respondents reported that 50 percent and above-selected candidates finally joined in their organization while a minimum number of respondents reported that 40 percent and below selected candidates joined in their organization. In addition, the majority of the respondents’ banking organization did not reimburse the travelling cost incurred by the candidate for appearing in the interview. Most of the respondents stated that 1-5 percent of candidates left from their organization within 6-12 month.

Table 9: Frequency distribution of recruitment method

Recruitment method Senior Middle Junior Entry Most common
%
Company website 11.0 32.9 23.2 15.9 17.1
Word of mouth 4.9 28.0 32.9 18.3 15.9
Career /job fairs 14.6 13.4 24.4 23.2 24.4
Social Networking Sites 20.7 28.0 9.8 24.4 17.1
Television 15.9 14.6 19.5 11.0 39.0
Local press 23.2 31.7 12.2 12.2 20.7
Recruitment poster 18.3 26.8 23.2 17.1 14.6
Employee referral 29.3 18.3 15.9 20.7 15.9
Organizational Notice board 9.8 24.4 40.2 14.6 11.0
Resume banks e.g. Naukri 22.0 14.6 14.6 19.5 29.3

Table 9 presents the frequency distribution of recruitment method. From the analysis, most of the respondents stated that middle-level employees were selected through the company website, social networking sites and local press followed by, junior level employees were selected by word of mouth, organizational notice board and career/job fairs, senior level employees were selected through employee referral and most common recruit employees through television and resume banks.

Table 10: Frequency distribution of selection procedures

Items on selection procedures Frequency (n) Percent (n)
Use of written job descriptions Disagree 17 20.7
Agree 42 51.2
Strongly agree 23 28.0
Psychological tests Neutral 10 12.2
Agree 49 59.8
Strongly agree 23 28.0
Interview panels Agree 32 39.0
Strongly agree 50 61.0
Formal selection procedures Agree 49 59.8
Strongly Agree 33 40.2
Formal selection procedures Disagree 5 6.1
Neutral 6 7.3
Agree 29 35.4
Strongly agree 42 51.2
Formal selection procedures Disagree 17 20.7
Agree 43 52.4
Strongly agree 22 26.8

Table 10 shows the frequency distribution of selection procedures in the banking organizations. From the analysis, 50 respondents strongly agreed the selection procedures ‘interview panels’ while 32 respondents agreed. Analogously, 33 respondents strongly agreed the ‘formal selection’ procedures’ while 49 respondents agreed. It concluded that cent percent of recruitment in banking sectors through interview panels and formal selection procedures. In addition, some respondents agreed on the following selection procedures: (i) use of written job descriptions, (ii) psychological test, (iii) one-to-one interview and (iv) application form. It unveiled that some banking organization additionally followed the selection procedures namely, use of written job descriptions, psychological test, one-to-one interview and application form.

Table 11: Descriptive statistics of initial screening tools

Initial Screening Tools Mean SD
Application form 2.95 1.28
Weighted application form 3.12 1.14
Resume, curriculum vitae 3.29 1.37
Biographical info blanks 2.89 1.43
Reference checks 3.43 1.52
Astrology, Graphology 2.76 1.47
Honesty and integrity tests 2.83 1.32
Online screening tests 2.76 1.47
Realistic job previews 2.93 1.11
Technical/ability/aptitude tests 3.20 1.54

Table 11 presents the descriptive measures of initial screening tools. The mean scores of all initial screening tools are around 3. It concludes that all banking sectors provide neither highest nor lowest priority to the initial screening tools namely, (i) application form, (ii) weighted application form, (iii) resume, curriculum vitae, (iv) biographical info blanks, (v) reference checks, (vi) astrology, graphology, (vii) honesty and integrity tests, (viii) online screening test, (xi) realistic job previews and (x) technical/ability/aptitude tests.

Table 12: Frequency distribution of final selection

Final selection Senior Middle Junior Entry Most common
%
Interviews-Structured 52.4 19.5 15.9 9.8 2.4
Work sampling exercise - 56.1 14.6 29.3 -
Reference checks 34.1 40.2 11.0 14.6 -
Interview-behavioral 14.6 34.1 13.4 24.4 13.4
Interviews-situational 36.6 12.2 25.6 25.6 -
Cognitive ability test 8.5 26.8 23.2 32.9 8.5
Assessment centerst 58.5 13.4 15.9 12.2 -
Personality test 46.3 53.7 - - -
Mechanical aptitude 29.3 40.2 19.5 11.0 -
Clerical tests - 18.3 51.2 30.5 -
Average number of methods 5 5 6 5 2

Table 12 shows the frequency distribution of final selection procedures. The majority of respondents stated that senior level employees were finally selected through interviews-structured and assessment centers. Likewise, work sampling exercise was used to select middle, junior and entry level employees. The middle-level employees were selected via reference checks, personality test, mechanical aptitude and interview-behavioral. Entry and junior level employees were selected through cognitive ability tests and clerical tests respectively. In addition, the most common final selection methods in Indian banking sectors was cognitive ability test and interview behavioral. Junior level of employees was selected through approximately six tests while the senior and middle level of employees was selected through five tests.

Table 13: Descriptive statistics of selection approaches

Selection Approaches Mean SD
Assessment Centres 1.34 0.48
Selection Interviews 5.00 0.00
Cognitive ability tests 4.50 0.50
Psychological testing 4.27 0.45
Personal history information 4.59 0.50
Reference checks 4.27 0.45
Letters of recommendations 2.62 1.50

Table 13 shows the descriptive statistics of selection approaches. From the analysis, a maximum number of respondents provide the first rank (Mean=5) to selection interviews. It specifies that the banking sectors give the first priority to selection interviews. In addition, the banking sectors give the highest priority to the following selection approaches (i) cognitive ability test (Mean=4.50), (ii) psychological testing (Mean=4.27) and (iii) personal history information (Mean=4.59) while least important to reference checks, assessment centres and letters of recommendations.

Table 14: Frequency distribution of level of awareness in selection methods

Level of awareness of selection methods Frequency (n) Percent (%)
Employment interviews Somewhat aware 28 34.1
Extremely aware 54 65.9
Reference Somewhat aware 26 31.7
Moderately aware 56 68.3
Personal history Moderately aware 20 24.4
Extremely aware 62 75.6
Cognitive ability tests Somewhat aware 28 34.1
Moderately aware 34 41.5
Extremely aware 20 24.4
Personality tests Somewhat aware 9 11.0
Moderately aware 17 20.7
Extremely aware 56 68.3

Table 14 shows the frequency distribution of level of awareness in selection methods. The statistical findings indicate that most of the respondents stated that their organizations’ human resources possessed extremely awareness related to employment interviews, personal history, cognitive ability tests and personality test.

4.2 Recruitment and selection methods adopted by the banks

Table 15: Ranking of recruitment and selection decision

Recruitment and selection decision Mean (*) SD Rank
The organization does not encourage the influence of external factors during the selection process 4.20 (A) .59 1
The organization has a policy which guides in recruitment activities 4.17 (A) .58 2
The organization recruits immediately positions are declared vacant 3.95 (A) .61 3
There is transparency in the short listing of job candidates 3.85 (A) .55 4.5
All Divisional/Departmental heads are involved in the selection process 3.85 (A) .57 4.5
The staff is made aware of an existing vacancy or vacancies 3.80 (A) .62 6
The organization acknowledges all application letters as a sign of seriousness on its part 3.67 (A) .59 7
The organization fills vacant positions from internal and external sources 3.48 (N) .72 8
Only candidates with the relevant skills are considered during the selection process 3.45 (N) .76 9

(*) denotes Labels, ‘A’ denotes Agree and ‘N’ denotes Neutral

Table 15 provides the ranking of recruitment and selection decision. The ranking is based on the mean values of statements. The findings unveil that the majority of the respondents were agreed (Mean>3.5) the following recruitment and selection decision statements namely, The organization does not encourage the influence of external factors during the selection process, The organization has a policy which guides in recruitment activities, The organization recruits immediately positions are declared vacant, There is transparency in the short listing of job candidates, All Divisional/Departmental heads are involved in the selection process, The staff is made aware of an existing vacancy or vacancies and The organization acknowledges all application letters as a sign of seriousness on its part. In addition, the statement ‘The organization does not encourage the influence of external factors during the selection process’ has the first rank and the statement ‘Only candidates with the relevant skills are considered during the selection process’ has the last rank.

Table 16: Factors affect recruitment policy and HR planning

Recruitment policy and HR planning Mean (*) SD Rank
Size of the firm 4.28 (A) .76 1
Image or goodwill of the bank 4.18 (A) .57 2
Political and environmental factor 3.90 (A) .56 4
Cost of recruitment 3.78 (A) .61 5
Labor market condition 3.46 (N) .71 7
Growth and expansion 3.45 (N) .70 8
Supply and demand 3.09 (N) 1.02 9

(*) denotes Labels, ‘A’ denotes Agree and ‘N’ denotes Neutral

The above table identifies the most affecting factors that influence recruitment policy and HR planning. From the analysis, it is observed that size of the firm is the most important factor that influences the recruitment policy and HR planning as agreed by the majority of the respondents. However, supply and demand are the least important factor that influences the policy and planning. There are other factors like image and goodwill, political environment, the cost of recruitment; labor market condition and future growth also influence the recruitment policy and planning.

Table 17: Ranking of unemployment rate

Unemployment rate Mean (*) SD Rank
Recruiter or HR department people 4.24 (A) .58 1
Competitors policy 4.06 (A) .59 2
Unemployment rate 3.99 (A) .48 3
Control authority interference 3.74 (A) .66 4
Top management or directors interference 3.73 (A) .69 5

(*) denotes Labels; ‘A’ denotes Agree

Table 17 presents descriptive statistics with a ranking of the unemployment rate. The findings reveal that a maximum number of respondents were agreed (Mean>3.5) all the statements of the unemployment rate. In addition, the statement ‘Recruiter or HR department people’ has the first rank and the statement ‘Top management or directors interference’ has the last rank. Hence, the factors viz. competitors’ policy, unemployment rate, HR department people, control authority interference and top management affect the recruitment and selection process of Indian banking sector.

Table 18: Ranking of quality of selection process and advertisement

Quality of selection process and advertisement Mean (*) SD Rank
Advertising or promotional effort of the bank 4.06 (A) .59 1
Quality of selection process 3.99 (A) .48 2

(*) denotes Labels; ‘A’ denotes Agree

Table 18 shows the descriptive statistics with a ranking of quality of selection process and advertisement. The findings revealed that the majority of the respondents were agreed (Mean>3.5) all the statements of the quality of selection process and advertisement namely, advertising or promotional effort of the bank and quality of selection process. It exhibits that advertising effort of the bank is one of the factors affect the recruitment and selection process.

Table 19: Ranking of job performance and reference

Job performance and reference Mean (*) SD Rank
Candidates’ perception regarding the job/position 3.78 (A) .61 1
References used by the candidate 3.45 (N) .70 2

(*) denotes Labels, ‘A’ denotes Agree and ‘N’ denotes Neutral

Table 19 presents the descriptive statistics with a ranking of job performance and reference. The analysis unveils that most of the respondents were agreed (Mean>3.5) the statement ‘Candidates’ perception regarding the job/position’ while neither agreed nor disagreed (3

Table 20: Ranking of experience and educational qualifications

Experience and educational qualifications Mean (*) SD Rank
Educational qualifications 4.18 (A) .57 1
Experience 3.46 (N) .71 2

(*) denotes Labels, ‘A’ denotes Agree and ‘N’ denotes Neutral

Table 20 shows the descriptive statistics with a ranking of experience and educational qualifications. From the analysis, the majority of the respondents were agreed (Mean>3.5) the statement ‘Educational qualifications’ while neither agreed nor disagreed (3

Table 21: Ranking of interview performance

Interview performance Mean (*) SD Rank
Allegation / complain against the candidate 4.10 (A) 0.76 1
Interview performance 3.16 (N) 0.66 2

(*) denotes Labels, ‘A’ denotes Agree and ‘N’ denotes Neutral

Table 21 shows the descriptive statistics with a ranking of interview performance. From the analysis, the majority of the respondents were agreed (Mean>3.5) the statement ‘Allegation / complain against the candidate’ while neither agreed nor disagreed (3

4.3 Correlation Analysis

The relationship between two variables is measured by correlation analysis. The relationship may be positive or negative or no-relation. Positive relation means if one variable increased in value, it would enhance the values of another variable. Negative relation means if one variable increased in value, it would decline the values of another variable.

Table 22: Correlation analysis between factors affecting of recruitment and selection process

F1 F2 F3 F4 F5 F6 F7
F1 1 .455** .462** .741** .773** .364** .897**
F2 1 .822** .135 .526** .285** .692**
F3 1 .229* .478** .136 .636**
F4 1 .408** .019 .559**
F5 1 .575** .865**
F6 1 .575**
F7 1

**p<0.01, *p<0.05

Where F1-Recruitment policy and HR planning, F2-Unemployment rate, F3-Quality of selection process and advertisement, F4-Job perception and reference, F5-Experience and educational qualifications, F6-Interview performance, F7-Overall recruitment, and selection process

Table 22 provides the linear relationship between the factors affecting recruitment and selection process. The findings indicate that recruitment policy and HR planning is positive linear relationship with quality of selection process and advertisement (r=0.462, p<0.01), unemployment rate (r=0.455, p<0.01), job perception and reference (r=0.741, p<0.01), experience and educational qualifications (r=0.773, p<0.01), interview performance (r=0.364, p<0.01) and overall recruitment and selection process (r=0.897, p<0.01). Likewise, unemployment rate is relationship with quality of selection process and advertisement (r=0.822, p<0.01), experience and educational qualifications (r=0.526, p<0.01), interview performance (r=0.285, p<0.01) and overall recruitment and selection process (r=0.692, p<0.01). The factor ‘quality of selection process and advertisement’ is a positive relationship with job perception and reference (r=0.229, p<0.05), experience and educational qualification (r=0.478, p<0.01) and overall recruitment and selection process (r=0.636, p<0.01). Finally, there is a linear relationship between the following factors namely: job perception and reference Vs. experience and educational qualification, job perception and reference Vs. overall recruitment and selection process, experience and educational qualification Vs. interview performance, experience, educational qualification Vs. overall recruitment and selection process and interview performance Vs. overall recruitment and selection process.

4.4 Regression Analysis

Table 23: Association between factors affecting recruitment and selection process

Independent variables Unstandardized Coefficients Adjusted R-square F-change t-value p-value
Beta (β) Rank
(Constant) .207 .086 0.966 383.40 2.421 .018
Recruitment policy and HR planning .397 .041 9.717 .000**
Unemployment rate .202 .033 6.050 .000**
Quality of selection process and advertisement .079 .032 2.456 .016*
Job perception and reference .047 .021 2.170 .033*
Experience and educational qualifications .106 .025 4.169 .000**
Interview performance .117 .014 8.257 .000**

Dependent variable: Overall recruitment and selection process **p<0.01, *p<0.05

Table 23 presents the association between the factors affecting recruitment and selection process using multiple regression analysis. Here, recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience and educational qualifications and interview performance are considered as independent variables and overall recruitment and selection process is considered as a dependent variable. The statistical significance values specify that overall recruitment and selection process depends upon all independent variables. However, the level of significance (p<0.01) indicates that recruitment policy and HR planning, unemployment rate, experience and educational qualifications and interview performance make huge impact on overall recruitment and selection process than the effect of job perception, reference, quality of selection process and advertisements. In addition, 97 percent of variations (adjusted R-square=0.966) in overall recruitment and selection process is due to all independent variables.

4.5 Summary of the findings

The statistical findings indicate that the majority of the respondents were female and belonged to 41-50 years’ age group. The respondents worked in the public sector and had the experience 1-6 years in the organization. Also, the respondents had the awareness related to the formal policy of the recruitment and selection of employees and their organizations were very effective regarding recruitment and selection practices. Their organization did not possess any agent that recruits and selects employees and job vacancies were made open to the general public. Most of the organization announced the job notification in the newspaper and provided equal opportunities for all the employees. The majority of the respondents reported that 50 percent and above-selected candidates finally joined in their organization. Also, the organization did not reimburse the traveling cost incurred by the candidate for appearing in the interview. All respondents’ organization followed the selection procedures namely; interview panels and formal selection procedures while a small number of the organization followed the following selection procedures: (i) use of written job descriptions, (ii) psychological test, (iii) one-to-one interview and (ii) application form. The most of the organizations provide the priority to the initial screening methods namely, resume/curriculum vitae, reference checks and technical ability, aptitude test. Senior level employees were finally selected through interviews-structured and assessment centers. Similarly, work sampling exercise and personality test were used to select middle-level employees. Also, junior and entry level employees were finally selected via clerical tests. Finally, overall recruitment and selection process depended upon recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience, and educational qualifications and interview performance

CHAPTER V: DISCUSSION AND CONCLUSION

5.0 Introduction

The present study objective is to explore the selection procedures of the recruitment process in Indian banking sector. Further study focuses on ascertaining the most valuable measures of the initial screening process for recruitment and examines the factors that influence the recruitment and selection process in Indian banking industry. Finally, the study found out the final selection method which is frequently used in the selection process with respect to the different levels of employees like junior, middle and senior employees. In order to attain these objectives, the present chapter focused on providing the details of an overall summary of findings and based on this made discussion with previous literature. Later, the section made the conclusion from the analysis and discussion. The final section identifies the study limitations and provides recommendations for the future. Hence, the research considers the target study population are human resource managers of Indian Banking sector. The survey method was used via online mode. Further carried out different analysis such as frequency, multiple regression analysis, and correlation analysis. In this view, a researcher could understand the factors that impact the recruitment and selection methods in the banking sector in India.

5.1 Overall Summary of the Findings

The overall statistical findings revealed that the majority of the respondents who participate in the study were female and belonged to the age group of fewer than 20 years of age group. The respondents who are working in the public sector with the experience of 1-6 years. The number of staffs working in their organization is greater than 400 staffs. The further study identifies the level of awareness of formal policy for recruitment and selections of employees’ shows majority of them are well-aware about the policy measures. The respondent’s organization did not possess any agent for recruitment and selection of employees and job vacancies were always made open to the general public. Most of the organization announced the job notification through newspaper followed by TV advertisement and those organizations provide equal opportunities for all their employees. However, the organization felt common constraints in the budget. In addition to this, the participants who want to join immediately in the organization where they attend interviews. These findings give the idea of the recruitment and selection practices adopted by the banking sector. The further majority of them felt the organization does not reimburse their traveling cost for appearing in the interview. It shows the lack of policy of HR of selected firms. Thus, this situation does not reflect in their working status of employees. The study findings reveal that the number of candidates leaving their working organization is only 1-5 percent. It shows the good sign of recruitment and selection procedure.

Additionally, the banking sector majorly adopted the selection procedures is interview panels method and formal selection procedures. The study identifies the most valuable adopted initial screening methods include resume or curriculum vita, reference checks and technical ability as well as an aptitude test. After screening process, the final selection methods of selecting the employees are varied based on their level of experience. For instance, senior level employees were finally selected through interviews-structured and assessment centers. Similarly, work sampling exercise and personality test were used to select middle-level employees. Also, junior and entry level employees were finally selected via clerical tests. In order to deeply analyze the factors which influence the recruitment and selection process in Indian banking industry, study identifies the factors such as recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience, and educational qualifications and interview performance

5.2 Discussion with Previous Literature

This section talks about the discussion of findings with previous studies.

5.2.1 Evaluation of recruitment and selection practices

Objective 1: To explore the selection procedures followed by the Indian banking industry at the time of recruitment process

The statistical findings of the study indicated that the majority of the respondents were female with the age group of less than 20. Chitra (2012) revealed that their study participants are the majority of them are female. This shows that in India, majority of the females are working in different sectors especially in banking. The respondents worked in the public sector and had the experience 1-6 years in the organization. In line with our study, the study of Nartey (2012) showed the experience of their participants have 1-6 years. This shows the constant working pattern of employees in banking. Firms have the necessity to examine the advantages and disadvantages involved in recruiting of personnel via external or internal sources means whether the employees are recruited on the basis of formal or informal systems. Hence, the researcher needs to understand the bank had any formal policy for recruiting and selection process of employees. Thus, the study finds out the respondents had the well-aware about the formal policy of the recruitment and selection practices. However, the study of Miyake (2002) argued that the opinion of people recruited through the firm made the word of mouth stay longer as they have a clearer idea of what the job entails. From this, it is observed that firm adopted the policy in terms of employee referrals. Further study reveals that there is no job analysis was made by selected Indian banking sectors in terms of outlines their roles, responsibilities and duties for specific work before advertising the vacant position. In line with our finding, the study of Hawthorne (2004) showed that the job analysis methods in selection practices. In addition, this was found out the organization did not possess any agent in recruiting and selecting employees. In contrary to our finding, study of Armstrong (1991) showed the majority of the firm used employment agencies for the recruitment process. In India, the number of employment agencies is higher accordingly, the number of individuals passed out in colleges is higher. This creates a problem among employment agencies specifically banks prefer the specifically qualified candidates; this has been done via conducting several competitive exams. Further job vacancies were made open to the general public based on the number of people and requirements wanted. This is the major role of HR department (Richardson, 2012; Isaiah, 2012), Similar to this, the study of Nartey (2012) revealed the same concept.

Our study findings observed that most of the organization announced the job notification in the newspaper and provided equal opportunities for all the employees. Selection is a part of the recruitment process and deals with the choosing of whom to hire for the concerned job (Beardwell & Claydon, 2007; Breaugh & Starke, 2000) which is made via proper source. The majority of the respondents reported that 50 percent of candidates are joined in their selected organization. This shows the interest of the candidate and availability of job in banking sector. Also, the organization did not reimburse the traveling cost incurred by the candidate for appearing in the interview.

5.2.1.1 Recruitment method

Several studies in the past showed the different kinds of recruitment methods followed by different firms in worldwide (Piotrowski & Armstrong, 2006; Wirtz et al., 2008; Begum et al., 2014). This study analysis reported that most of the respondents stated that middle-level employees were selected through the company website, social networking sites and local press followed by, junior level employees were selected by word of mouth, organizational notice board and career/job fairs, senior level employees were selected through employee referral and most common recruit employees through television and resume banks. In line to this, Djabatey (2012) reported that the advertisements of job and employee referrals were the most effective methods of recruitments that elicited the maximum response.

5.2.1.2 Selection procedure

All respondents’ organization followed the selection procedures namely; interview panels and formal selection procedures while a small number of the organization followed the following selection procedures such as the use of written job descriptions, psychological test, one-to-one interview and application form. Similar to this, Zinyemba (2014) showed the employees are selected by job descriptions.

5.2.2 Measures of initial screening process

Objective 2: To ascertain the most valuable measures of the initial screening process for recruitment in Indian banking sectors.

The present study reports that the most of the organizations provide the priority to the initial screening methods namely, resume/curriculum vitae, reference checks and technical ability, aptitude test. Senior level employees were finally selected through interviews-structured and assessment centers. Similarly, work sampling exercise and personality test were used to select middle-level employees. Also, junior and entry level employees were finally selected via clerical tests. Several studies in the past showed the same result as Dessler (2000), Bertolino and Steiner (2007) and Djabatey (2012) showed employees are selected on the basis of aptitude test, psychological evaluations, assessment centers and curriculum vitae.

5.2.3 Final selection methods of recruitment and selection process

Objective 3: To find out the final selection method which is frequently used in the selection process on the employee’s levels (senior, middle and junior)

The majority of respondents stated that senior level employees were finally selected through interviews-structured and assessment centers. Likewise, work sampling exercise was used to select middle, junior and entry level employees. The middle-level employees were selected via reference checks, personality test, mechanical aptitude and interview-behavioral. Entry and junior level employees were selected through cognitive ability tests and clerical tests respectively. Also, the most common final selection methods in Indian banking sectors was cognitive ability test and interview behavioral. Junior level of employees was selected through approximately six tests while the senior and middle level of employees was selected through five tests. Buhasio (2012) reported that final selection was made based on knowledge, skills and abilities of employees through various assessment.

5.2.4 Factors that affect recruitment and selection process

Objective 4: To examine factors that affect recruitment and selection process in Indian banking industry

From the analysis, it is observed that size of the firm is the most important factor that influences the recruitment policy and HR planning as agreed by the majority of the respondents. However, supply and demand are the least important factor that influences the policy and planning. There are other factors like image and goodwill, political environment, the cost of recruitment; labor market condition and future growth also influence the recruitment policy and planning. However, several studies showed different factors (Bhoganadam & Rao, 2014) employment background, medical tests, group discussions, salary, hours of working, brand image, etc. Finally, overall recruitment and selection process depended upon recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience and educational qualifications and interview performance was observed.

5.3 Conclusion

Every firm recruitment and selection practices play an important role. The study revealed that the recruitment and selection methods in Indian Banking industry are effective. From the study findings, it is observed that information panels and formal selection procedure are the best selection procedures of the recruitment process which is suitable for Indian banking industry. Further, resume, curriculum vitae, reference checks and technical ability, aptitude test are the best effective initial screening process in banking sectors and the final selection method which is often used in the selection process is conducting structured interviews and work sampling exercise. Based on this test, the selection is proceeding further. Finally, from the analysis it is evident that overall recruitment and selection process depended upon recruitment policy and HR planning, unemployment rate, quality of selection process and advertisement, job perception and reference, experience and educational qualifications and interview performance. Employees’ recruitment and selection in any firm to a greater extent describe their performance and also their great significance if the firms want to attain their target.

5.4 Limitations and recommendations for future research

From the study findings, it is understood that recruitment and selection practices are of more significance to each and every firm via the human resource planning and development regarding their strategies and planning. However, the study gives few recommendations such as motivate the employees by providing incentives. Further, the firm needs to follow the existing policies that are available for recruiting people. After recruitment, senior employees would give proper training to their employees in future to attain their goals. The study is limited only to Indian banking sector; hence, the future study should focus on other countries to get an in-depth knowledge.

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