LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Literature review is a systematic analysis of documents containing information about the problem being studied. This chapter looks at the different opinions of different scholars on staff selection, its processes and organisational performance.
2.1 The Concept of Staff Recruitment
According to Marching and Wilkinson, (as cited in Bloisi, 2007) recruitment is a belittled and underestimated feature of the Human Resources portfolio. Selection which is the immediate activity after recruitment is usually given a lot more attention. It has been pointed out that whatever the achievements of selection procedures, they are heavily influenced by the success or otherwise of recruitment. This means that once the recruitment process is successful and effective, there is a high chance of the selection process taking after it to become successful. It is very hard for the failures of the recruitment process to be overcome during the selection process. This is because if recruitment which entails attracting the pool of applicants fails or is ineffective, then the people who are finally employed during the selection process will be ineffective as well.
As other terminologies in human resources and other disciplines of life, there are different ways in which different people have defined the term “recruitment”. There is the broad definition and the narrow definition. The broad definition sees recruitment as embracing both the different activities of attracting applicants to an organisation and the selection of people to fill vacancies (Bloisi, 2007). The narrow definition limits the range of activities to those involved in attracting people to apply for employment in an organisation (Bloisi, 2007).
Maund, (as cited in Bloisi, 2007) is in agreement with the broad definition. She simply defines recruitment as choosing suitable applicants for job vacancies. By this definition, she has included the selection process as an activity under the broad umbrella of recruitment. Bratton and Gold (2003) on the contrary believe that recruitment only entails the generation of the pool of applicants suitable for the job. They further state that selection comes immediately after recruitment whereby human resource managers use specific instruments to determine the best fit for the job.
Recruitment involves strategic methods of searching for prospective manpower and attracting them as well as drawing to them to apply for the vacant position(s) in the organisation (Arogundade, 2005). Recruitment according to Graham & Bennett (1998) is the first activity when it comes to filling a vacancy; it includes the investigation of the supposed vacancy, the consideration of the sources where suitable applicants can be gotten from, making contact with those candidates and attracting applications from them.
According to Oredein, (n.d), recruitment refers to the process of seeking potential job applicants in the labour force. This is the narrow form of definition of recruitment. It only speaks of the process of hunting or searching for people who might be good fits for the job. Onstenk (as cited in Alebiosu & Akintayo, n.d) is of the opinion that every organisation must be able to attract sufficient and suitable potential employees to apply for vacancies in the organisation. The duty of the recruitment process is to make sure that there is a sufficient pool of applicants to choose from. This means that once a vacancy is noticed or anticipated, the methods used by the organisation to attract applicants must be far reaching, it must cover a wide range of places where every and anybody that might be suitable for the job can be informed about that vacancy and can therefore apply.
In every organisation, there should be policies put in place concerning recruitment. Recruitment policies constitute the code of conduct which the organisation is prepared to follow in its search for possible recruits in the market place (Cole, 1986). The policy of an organisation on staff recruitment should be built on its long term human resource needs – how to attract, recruit and retain the best talents (Onasanya, 1999). What guides the human resource manager when recruiting are basic factors like what means should be used to attract certain kinds of people for certain kinds of jobs, how to attract them and in the long run, what to do to keep them from leaving after being employed. The principles of recruitment policies according to Oredein (n.d) are:
• To find an employee that is best qualified person for each job
• To retain the best and most promising candidates
• To offer promising careers and security
• To provide facilities for personnel growth on skill and knowledge
• To provide opportunity for empowerment
• To be compatible with public policies
There are certain bases that a recruitment policy should cover when it is being created. For example, the recruitment policy should be able to flow in line with organisational objectives. The recruitment policy should be able to specifically lay down what is needed in every applicant in terms of what number is needed, their qualifications, working experience etc. There should be criteria for recruitment which helps to cut down the large number of people who might apply for a certain job which eases down the activity of short listing candidates. The sources from which the pool of applicants is to be gotten from in line with certain jobs should be clearly stated. The recruitment policy must also take into account the supposed cost of recruitment. A good recruitment must conform with the human resource policy of the organisation and also to the job analysis (Oredein, n.d).
The strict adherence to the recruitment policy of an organisation is very important because it enhances the good reputation of that organisation. The function of the recruitment policy is to advance the organisation’s objectives in terms of getting the right people for the job and also in so doing, getting emissaries for the organisation. This is so because in following those policies, the applicants that were rejected or selected will have good things to say about that organisation but on the contrary, when applicants are not treated right for example, application letters of applicants are not replied, keeping applicants waiting for interviews, failing to inform applicants when they are unsuccessful, this gives applicants the opportunity to spread criticisms about that organisation (Cole, 1986).
2.1.1 Stages of Recruitment
Bloisi (2007) is of the opinion that recruitment occurs in two main stages: the formative work and the recruitment practices which consists of the sources and methods of recruitment. There are three and four activities within each stage of recruitment respectively. Within the formative stage, there is the evaluation of the prospects of hiring new staff and the recognition of vacancies. There is also the deciding of the ways to manage the vacancy and lastly, the production of a job analysis which consists of job description and job specification.
2.1.2 Formative stages
1. The first activity in the formative stage discusses what triggers the recruitment process and a simple answer to that is that there is likelihood of securing new staff. Whether an organisation is looking towards getting more staff, mostly likely through expansion or restructuring, or replacing staff members who are leaving, the organisation still has to perform the first activity of reviewing its options.
2. The second activity which is managing the vacancy is all about who is to take charge of the recruitment and selection activities, the line manager or the human resource manager. Once this is decided, the recruitment and selection processes can begin.
3. The last activity in the formative stage is the job analysis and it is explained thus by the CIPD (as cited in Bloisi, 2007: 109)
Before recruiting for a new or existing position, it is important to invest time in gathering information about the nature of the job. This means thinking not only about the content (i.e. tasks) making up the job, but also the job’s purpose, the outputs required by the job holder and how it fits into the organisation’s structure. It is also important to consider the skills and personal attributes needed to perform the [tasks] effectively.
This is what Onasanya (1999) refers to as assessing the job. According to him, the existence of the supposed vacancy needs to confirmed, the need for that position to be filled has to be evaluated, this is to affirm if there is a special function of that position or if that position can be merged with another which in fact, is cost beneficial in the sense that money will not have to be spent on advertising, recruiting and special training and orienting a new candidate. When this is done, job analysis then comes to play. A job specification which describes what exactly the job entails and the man specification which describes what basic educational degree the applicant should bag and also what physical attributes that applicant should have as well should be created. This is pertinent in the search for applicants. It directs the human resources manager as to what type of applicant he is searching for.
In the words of Marchington and Wilkinson (2005) (as cited in Bloisi, 2007, 109):
Job analysis is important because it provides the information on which two significant recruitment documents are based: the job and person specifications. The job description summarizes the job’s purpose and the activities contributing to that purpose together with lines of responsibility. The person specification identifies the characteristics deemed necessary for someone holding that job.
Cole (1986) and Bloisi (2007) both recognize two well known classifications for personnel specification or requirements: the Seven-Point plan (Physical make-up, attainments, general intelligence, specialized aptitudes, interests, disposition and circumstances) developed by Professor Rodger and the Five-Point plan (Impact on others, Acquired Qualifications, Innate abilities, Motivation and Adjustment) developed by J. Munro Fraser. These are the guidelines that help human resource managers when they are creating the man specification. Both professor Rodger and J. Munro Fraser have compiled a list of characteristics that they believe are necessary for a person who wants to hold a particular job. For example, a television presenter is required to have the physical make up according to Professor Rodger, that will attract more viewers, and according to J. Munro Fraser, she/ he is to be able to have a positive impact on the client or customer for the betterment of the organisation.
Several techniques of job analysis include diaries and logs, observation and interviews which fall under qualitative techniques and them, questionnaires and hierarchical task analysis under quantitative techniques.
2.2.3 Recruitment Practices
The next stage of recruitment is the recruitment practices. There are two types of recruitment according to Dessler (2003), Bloisi (2007), Oredein (nd), Arogundade (2005), Onasanya (1999): the internal and the external. These two categories can be further divided into sources and methods. The sources refer to the parts of the labour market from which applicants are sought while the methods refer to the actual techniques in use to make individuals conscious of vacancies and to make those vacancies look appealing to them.
2.2.4 Internal Sources of Recruitment
According to Arogundade (2005), internal source of recruitment is that method which entails searching for suitable candidates for the job from within the organisation. On the other hand, Onasanya (1999) noted that there are certain factors to be considered when it comes to decision making about internal sourcing and they are the consideration of whether the position can be filled by promotion or if a lateral transfer can fill the vacancy.
There are certain advantages and disadvantages of this type of recruitment. Among the advantages include the fact that it is a cheap way of recruiting, it boosts employee morale, it gives enlightenment to the employees on the mode of operation of the organisation, it makes the selection process a lot easier and it helps employees in building their career within the organisation. As there are advantages, there are also disadvantages and they are the perpetuating of existing ways of thinking, this means there is no inflow of new ideas, it assumes the best person for the job already works in the organisation, it does not create an avenue for diversity especially if the employees already working in that organisation were not diversified in the first place and rejecting current employees that apply can lead to confidence issues and in a way, it may prevent an organisation from hiring competent personnel (Bloisi, 2007, Kinicki & Williams, 2003) & Arogundade, 2005).
2.2.5 External Sources of Recruitment
External recruitment being the opposite of internal recruitment means that the pool of applicants attracted to fill identified vacancies is gotten from outside the organisation (Arogundade, 2005).
Part of the external sources of recruitment are the organisation’s resources which encourages current employees to suggest suitable candidates, educational sources which allows the organisation to search out potential candidates from schools through career fairs etc, government agencies which uses to help of the government who have the mind of alleviating the rate of unemployment in the society through some formed agencies for example The National Directorate of Employment (NDE) in Nigeria, commercial agencies who unlike the government agencies have a fee for their recruitment services, Recruitment advertising agencies, temporary and contract staffing agencies, social organisations, employment referrals, unsolicited applicants, permanent employment and executive search engines, cyber agencies and newsprint and other media sources.
External source of recruitment also has its own advantages and disadvantages. As its advantages, it gives the organisation a better opportunity of filling up vacancies with qualified people, it gives room for innovation and free flow of new ideas and it is a fairer and more objective method of recruiting. Its disadvantages include the fact that the process is very expensive, it has higher risks because the people hired are less well known and it can be very burdensome to carry out if it is not specifically handled by qualified human resource personnel.
Rifkin (1995), one of the proponents of the factors of recruitment divided them into two categories; the endogenous (internal) and the exogenous (external) factors.
Image of the organisation is a factor that captures how the good image of an organisation naturally attracts potential candidates. Good image is usually built by a number of overt and avert actions by the management which earns good will from the public. Another factor is image of the job, the location of the organisation, the good public image of the job is built up by better compensation and working conditions, this is advanced by giving regular promotions and creating a clear career path for the employees. The size and growth of the organisation is something that attracts right talents to an organisation.
Biological factors refer to the gender ratio, age group, educational level that affects the type of people that apply for a job in particular organisations. Economic situation of the country determines how much or how less people will apply for jobs at particular points in time, the economic conditions are people’s per capita income, state of infrastructure, proximity of other organisations offering employment, some socio-cultural factors can be a major influence when it comes to recruitment in an organisation. Also, industrialization within the geographical area and beyond existence of cluster of industries will have profound influence on employment market recruitment.
2.3 The Concept Selection of Personnel
It has been said that the most important human resource decision a human resource manager can make is the decision of who to hire. The aim of effective selection is to decipher or discern who the right people for the job(s) by matching their individual abilities and experiences with the requirements of the job (Robbins & Judge, 2009).
According to Vecchis (1991), selection of personnel is that systematic process of picking from a large pool of applicants gotten through an effective recruitment process. This process also entails classifying and removal of unqualified persons that have applied and the short listing of the qualified candidates for subsequent selection processes and then the final placement of the job (Arogundade, 2005).
Selection is the next activity after recruitment; it is the process of whittling down the applicant pool by using screening tools such as tests, assessment centres, and background and reference checks (Dessler, 2000).
The objective of selection is to simply match certain people to certain jobs. This was the simple definition that was applied in the twentieth century, but as time went on into the twenty-first century, the scope of selection became broader; it included not just matching people to jobs but also to look at the potential range of matches for the person, be it in future works, mobility in and out of the organisation, interaction with a wide range of potential colleagues, and fit with the current and social environment of customers, and the physical environment (Roberts, 1997).
Selection can, in another view, be seen as a process of rejection as it rejects a number of applicants and select only a few applicants to fill the vacancy. Thus, selection function may be a negative function rather than a positive function (Ajala & Oluwatade, 2006). The guiding principle during the selection process is that the best man should be picked to fill the vacancy, that is, that man that can most successfully perform the job.
According to Eze, (2004) & Arogundade, (2005), there are two types of personnel selection: subjective and objective personnel selection. Subjective personnel selection is that unscientific method of selection whereby candidates are picked based on personal standards of the human resource manager or anyone in charge of the selection process. Some of those standards are brown envelope syndrome, favouritism, gender discrimination, tribalism etc. On the other hand, objective personnel selection is the scientific method which uses standardized techniques in other to find the right man for the job. Objective method of personnel is the best method because while the subjective method can cause low productivity and high level of redundancy, objectivity produces the greatest chance that the best for the job will be chosen (Arogundade, 2005).
2.3.1 The traditional and contemporary methods of selection
The traditional selection process describes the combined use of three methods of selection: application forms, interviews and references (Bloisi, 2007). Application forms act as a reference document used for contact addresses, it also captures the basic candidate data needed by employers and it provides information that can be used during subsequent interviews. Interviews serve as a mechanism that aids the final decision of employers on who the best suited person for the job is. Reference is the element of selection that seeks a third party assessment of the applicant’s skills, abilities and character.
The contemporary selection process for some organisations completely replaces the use of traditional approach while some use it to strengthen the traditional process. Biographical profiling, psychological testing and assessment centres are the combined methods of contemporary selection. Biographical profiling gathers more information ranging from age, gender, to personal history, relationship status etc that application forms and referrals can get and it is based on the belief that the future actions of a man can be predicted by his past. Psychological testing can be divided into two main types: those designed to measure the applicant’s ability and the other to measure psychological disposition. It aims at finding out the best the applicant can do. Assessment centres refers to the employment of work-related tests to assess the aptitude and skills of candidates applying for a job over a specific period of time (Bloisi, 2007).
2.3.2 Stages in the selection process
There are certain standard procedures taken during the selection process and they are: filling of application forms, short listing, selection tests (psychological tests), interview, reference checks, medical tests, final selection, placement, induction and orientation (Arogundade, 2005 & Onasanya, 1999).
1. Giving out application forms is the first step of selection. An application form is a fact finding document that is used to obtain basic personal information about the applicant like name, date and place of birth, schools attended, degrees attained, previous employments and experience (Arogundade, 2005 & Onasanya, 1999).
2. Short listing is the elimination of applicants that for one reason or the other might not be the best fit for the job. The personnel manager arranges to meet with applicants. It is a brief interview session where the personnel manager gathers more information about the applicants. Some criteria considered when short listing are physical defects, qualification, experience, age, frequent changing of jobs etc. (Onasanya, 1999).
3. Selection tests or psychological tests, according to Onasanya (1999), are carried out to forecast the capabilities of candidates in a particular job. Psychological tests are standardized tests designed to measure certain aspects of human characteristics by sampling human behaviour (Cole, 1986). There are four basic types of tests discussed according to Onasanya (1999) & Arogundade (2005) and they are efficiency or achievement tests, aptitude tests, intelligence tests and personality tests. Efficiency/ achievement tests are carried out to measure the depth of knowledge acquired from schools attended, achievement, dexterity and experience of candidates in a particular skill. Aptitude tests are designed to discover the individual abilities and potentials for acquiring knowledge and skills. Intelligence tests simply try to test the alertness of the applicant, it measures the thinking, verbal, special and numerical abilities of the candidate. Onasanya (1999) posits that it is disadvantageous to hire over-intelligent people because they might be quick to leave if the job seems not challenging enough. Personality tests are used to know the personality traits of the candidates, his temperament, ability to adapt to changes, environment and conditions, his motivating factors etc.
4. Interview is a more in-depth meeting between the employer and the candidate different from the short listing process. Interviews draw out more information about the applicant for the employer and do so for the applicant too. Interviews can be classified into four (Arogundade, 2005 & Onasanya, 1999): the structured and the unstructured interview, and the single assessor, the panel and the group interview. The structured interviews is that type of interview where there are already set questions and the interviewer goes ahead to ask those questions without deviation. The unstructured interview on the other hand asks questions in a non-planned format, this gives the applicant the opportunity to express himself well.
The single assessor interview is that type of interview that gives the shy candidate a better chance of succeeding because the candidate only has to come face to face with one interviewer, most likely, the personnel manager. The panel is made up of more than one interview, this, in a way largely ensures objectivity in the selection process. A group interview comes in form of a group discussion where about six applicants sit at a round table and discuss specific problems or case studies and they are being judged by a group of interviewers.
5. Reference checks can also be background checks. References seek a third party assessment of the applicants’ skills, abilities and characters (Bloisi, 2007). These references usually come from past employers. A reference is a document in which the referee expresses his opinion concerning specific enquiry about a person and addressed to the person seeking the reference (Onasanya, 1999).
6. Medical tests are specific requirements of the Labour Act 1974. The organisation wanting to employ bears the costs of the pre-employment medical examinations.
7. The last stage of selection is the actual and final selection. When the final decision as to whom the best fit for the job is, that person is offered employment. After the new employee has been placed in the organisation, he undergoes a period of orientation and induction. The employee is placed under watch to assess him as he works, to see if he fits into the organisational structure. If after the end of the probation period which lasts for a month at the least or six months at the most, the employee is found worthy, he is then inducted and placed into his new department (Onasanya, 1999).
2.4 The Concept of Organisational Performance
Organisational performance is a frequently used term in academic literature but the conceptualization of the term has proven to be very difficult because it has a lot of diverse meanings in relation to diverse fields of study. According to Hofer & Carton (2006), performance first of all is a contextual concept associated with the phenomenon being studied. This means that performance is dependent on the context it is being use. Most popular context is the financial context. Financial performance refers to any financial change in an organisation resulting from managerial decisions. This opens up the door for a distinction between performances. There is the positive or high performance and the negative or low performance. Once the financial change is incremental, that means organisational performance is high and vice versa.
The concept of organisational performance is based upon the idea that an organisation is the voluntary association of productive assets, including human, physical and capital resources, for the purpose of achieving a shared purpose (Carton & Hofer, 2006).
The basic element of organisational performance is the organisation itself. An organisation is the coming together of valuable resources which include manpower, machineries and money. What determines the performance of an organisation is the achievement of a shared purpose. Every organisation is created with a certain objective or goal in which it is supposed to achieve, an organisation is seen to be performing when it is able to use available manpower coupled with limited resources to achieve those set goals and objectives.
Organisational performance is the “definition and progressive achievement of tangible, specific, measurable, worthwhile, and meaningful goals” (Enos, 2007). There are some certain components that make up organisational performance, components like a well-defined, specific or measurable goal or objective. It is important to have specific goals because it helps in deciding where an organisation is heading to and what the aim or purpose of creating that organisation is. Just setting goals does not automatically guarantee the success of an organisation or the improvement of its performance but rather, the commitment towards the achievement of such goals is key (Enos, 2007).
In years past, there have been several attempts at defining organisational performance. For example, in the 1950’s, according to Georgopoulos and Tannenbaun (as cited in Gavrae, Ilies & Stegerean, 2011) organisational performance was simply defined as the extent to which organisations fulfilled their objectives.
This is a very simple and self-explanatory definition. This definition just states that organisational performance is directly proportional to fulfilment of objectives. This means that when an organisation completely performs all of its designated objectives, this means that it has reached the maximum level of organisational performance. The shortcoming of this definition is that there is no time boundary or limitation as to the when the designated objectives are to be completed. A goal or objective is to be time-bound; this means that for whatever goal an organisation sets out to accomplish there must be a time target to which the goal must be accomplished. If the organisation is not able to meet up to the time set, then the organisational performance cannot be said to be at its maximum.
Yutchman and Seashore in the 1970’s (as cited in Gavrae, Ilies & Stegerean, 2011) defined organisational performance as the organisation’s ability to exploit its environment for accessing and using the limited resources.
This definition rests the performance of the organisation solely on the head of the organisation, the Chief Executive Officer or the entrepreneur as the case may be. It is the job of the manager or CEO to create the organisation, situate that organisation in a place where its objectives can be maximally attained and dictate how the limited resources should be put to use. This simply portrays the employees in the organisation as people who just carry out orders from above. This means that without the input of the employees, any wrong judgment call by the manager can lead to the total damnation of that organisation. The performance of the organisation is solely dependent on the business, managerial and entrepreneurial acumen of the CEO.
In the years between 1980’s and 1990’s, Lusthaus and Adrien (as cited in Gavrae, Ilies & Stegerean, 2011) discussed organisational success and high performance in line with the accomplishment of its set goals (effectiveness) using a minimum of resources (efficiency).
This definition simply states that an organisation will be tagged successful and a highly performing organisation if it can use to its advantage whatsoever limited resources at its grasp to achieve its already set goals. This definition is perfect but for the lack of time constraint in achieving those set objectives. According to Lasthaus and Adrien, the profit made by that organisation is a major indicator of its performance. The higher the profit, the higher the performance and vice versa.
Organisational performance relates to how successfully an organized group of people with a particular purpose perform a function. According to her, she says that high organisational performance is when all the parts of an organisation work together to achieve great results being measured in terms of the value delivered to customers (Louise James, 2012).
Louise James has given a broad definition of organisational performance. From her definition, it can be concluded that every organisation has a set of functions that it was created to perform and the success or failure of the organisation and its employees at performing those functions effectively is what determines organisational performance. She also measures the level of organisational performance by the value of services or goods that customers or clients of the organisation receive. This means that if the customers or clients of an organisation are satisfied and have received their money’s worth in full, then that organisation can now be said to have a high organisational performance.
There are several indicators or means of measuring organisational performance but there are four major ones and they are:
Relevance: this refers to the degree to which the organisations stakeholders or investors or clients think the company is relevant to their needs.
Effectiveness: this refers to the degree to which the organisation is successful in achieving its strategy, mission and vision.
Efficiency: this refers to how well the organisation uses its resources (financial, human, physical, information).
Financial Viability: this refers to how viable, feasible or worthwhile the organisation is not only short term but also in the long run (Gavrae, Ilies & Stegerean, 2011).
Every organisation is created to achieve one objective or the other; it can be created to provide services and goods for people within the arena of the organisation and even beyond. The organisation is created to satisfy the needs of the people outside the organisation, not the needs of the manager of the organisation or the employees within the organisation. These people are called the stakeholders or clients. Before an organisation can be said to be highly performing, the clients must be truly satisfied with the organisations services and the stakeholders must be willing to keep investing.
The effectiveness of an organisation can be measured when that organisation is able to achieve the set objectives to the greatest maximum. Since every organisation is created to achieve some certain objectives, the organisation can be said to be highly performing when the organisation gets to achieve those set objectives.
Efficiency is an indicator of organisational performance that works hand in hand with effectiveness. Efficiency goes further to dictate that an organisation can be said to be highly performing when the organisation uses minimum resources to achieve maximum objectives. This means that an organisation can be said to be efficient when it is able to use the less than appropriated resources to a task to achieve that task all the same.
Financial viability as indicate above by Lasthaus and Adrien using the word profit is a major determinant of the performance of the organisation. Most organisations are created to make profit and profit can be made when organisations are effective, efficient and can retain their customers and shareholders.
All these four work hand in hand to determine the degree of organisational performs that organisation records.
2.5 Staff Selection and Organisational Performance
Human resource practices have been undervalued in times past. Guest (as cited in Paauwe, Guest & Wright, 2013) says, “After hundred years of research studies, we are still in no position to assert with any confidence that good HRM has an impact on organisational performance.”
Huselid in 1995 had a groundbreaking study which showed “high performance works systems” as a set of human resources activities was related to turnover, profits and market value of the firm.
Most studies have tried to discuss the totality of human resource practices in relation to organisational performance. Boselie (2005) identified that there have been up to twenty six practices that have been used in different studies, but in order of popularity, the most used practices in studies are training and development, contingent pay and reward schemes, performance management which also includes performance appraisal, and effective recruitment and selection (Paauwe, Guest & Wright, 2013).
In order to discuss the relationship between human resource practices, specifically the selection practices and organisational performance, there is the need to also discuss the wellbeing of employees of that organisation. This is because human resource is centred on people, that is the manpower/ employees, this means that employee psychological, attitudinal and behavioural outcomes as well as employee well being are major elements of human resource that affects organisational performance (Paauwe, Guest & Wright, 2013).
A definition of employee work related well being by Warr (1987) is the total quality of an employee’s subjective experience and functioning at work. The subjective experience often referred to as happiness well being, discusses job satisfaction while functioning at work discusses the physiological and psychological aspects of employee health at work. It is critical to not that although discussing the important role the wellbeing of employees plays in affecting organisational performance; it is not the only determinant. The skills, knowledge and abilities of employees in an organisation play another key role in the improvement of organisational performance. The right mix of people with the skills, knowledge and abilities suitable for jobs in an organisation can only be gotten through an effective recruitment and selection process.
The nature of the personnel of any organisation is a determinant factor of the success or failure of such an organisation in achieving her set goals and objectives. This is because, if a right workman is placed on the right job, he will enhance the productivity of the organisation whereas, if a wrong workman is put on the wrong job, he will retard the productivity of the organisation. It is therefore a vital function of personnel specialist to device objective means of searching, choosing and placing the right man on the right job (Arogundade, 2005).
According to Moses Kanter (as cited in Alebiosu & Akintayo, n.d), recruitment is the process of discovering the sources of manpower to meet the requirement of the staffing schedule, to employ effective measures for attracting that manpower in adequate numbers, to facilitate effective selection of an efficient working force and to help the organisation its stated objectives. Elliot (as cited in Onasanya, 1999), also says that one of the worries of an organisation is obtaining a good staff. He goes further to state that having a good staff gives an organisation the essential foundation for success.
The selection practices will determine who is hired. If properly designed, it will identify competent candidates and accurately match them to the job. The use of the proper selection device will increase the probability that the right person is chosen to fill a slot. When the best people are selected for the job, productivity increases. One of the most important single determinant factors for the success of an organisation is quality of manpower employed by such an organisation. (Umunna & Ahamefuna).
2.6 Theoretical Framework
Human capital is an important element of the tangible assets of an organisation (Baron & Armstrong, 2007). Human Capital was originated by Schultz (1991), an economist who proved that the yield on human capital investment through education and training in the United States was larger than that based on investment in physical capital (Baron & Armstrong, 2007).
The concept of human capital has its origins in the economic literature. Becker (1964) defined human capital as the knowledge, information, ideas, skills, and health of individuals’ (Becker, 2002: 1). Comparing human capital to financial or physical capital, he notes that all are forms of capital in the sense that they are assets that yield income and other useful outputs over long periods of time. On the other hand, the uniqueness of human capital stems from the fact that people cannot be separated from their knowledge, skills, health or values in the way they can be separated from their financial and physical assets (Becker, 2008).
According to Chatzkel (as cited in Baron & Armstrong, 2007) said that “it is human capital that is the differentiator for organisations and actual basis for competitive advantage.” Human capital as defined by Ehrenberg & Smith (as cited in Baron & Armstrong, 2007), “conceptualizes workers as embodying a set of skills which can be rented out to employers. It is the knowledge and skill a worker has which come from education and training that generates a certain stock of productive capital.
As Chatzkel (as cited in Baron & Armstrong, 2007), points out that an organisation is basically an extension of human thought and action. It is the employees that create value in an organisation; they are the one that possess the knowledge, skills and abilities that enable the organisation to achieve organisational goals and objective. Bontis et al (as cited in Baron & Armstrong, 2007, 8), posited that:
Human capital represents the human factor in the organisation; the combination intelligence, skills and expertise that gives the organisation its distinctive character. The human elements of the organisation are those that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long term survival of the organisation.
The human capital theory describes manpower as a very critical element in an organisation. The human capital refers to the attributes or qualities that an individual or in human resource terms, manpower possesses. These are the elements that human resource managers use as a determinant as to who gets the job or not. The “human capital” as in the knowledge and skills have to be in line with the job description and job specification of that particular job.
The premise in the human capital theory, according to Armstrong (2006) is that people and their collective skills, abilities and experience, coupled with their ability to deploy these in the interests of the employing organisation, are now recognized as making a significant contribution to organisational success and also constituting a significant source of competitive advantage.
The returns in human capital is expected to be improvements in performance, productivity, flexibility and the capacity to innovate which should result from enlarging the skill base and increasing levels of knowledge and competence.
1. ‘Careers Advice’ (CV Template Master, 2016) <https://www.cvtemplatemaster.com/careers-advice/> accessed June 1 2016
2. ‘Human Capital’ (Wikipedia, 2016) <https://en.wikipedia.org/wiki/Human_capital> accessed June 1 2016
3. ‘Human Capital Definition’ (Investopedia, 2016 <https://www.investopedia.com/terms/h/humancapital.asp> accessed June 2 2016
...(download the rest of the essay above)