INFLUENCE OF CORPORATE STRATEGY ON RECRUITMENT AND SELECTION PRACTICES AMONG

COMMERCIAL BANKS IN KENYA

BY

JOSEPHINE N. KUDOYI

A RESEARCH PROJECT SUBMITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENT FOR THE AWARD

OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION,

SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI

NOVEMBER, 2013

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DECLARATION I declare that this Research Project is my original work and has not been presented in any

other university or institution for academic credit.

Signature………………… Date……………….

Josephine Kudoyi

D61/66692/2010

Approved by:

Signature…………………. Date…………………

Florence Muindi

Supervisor

Lecturer, School of Business

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ACKNOWLEDGEMENT Above all, thanks to my God because of the unwavering provision, love and protection in

all moment of lack and despair, fear and discouragement. Individually I take the formatting

errors that would be spotted in this script. My special gratitude goes to my supervisor

Florence Muindi and Professor K’Obonyowho tirelessly through their effort and initiatives

guided me through the whole process. I would like to acknowledge all the MBA students,

colleagues, friends and my family especially for their moral and material support for the

completion of this project.

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DEDICATION

This project is dedicated to my family who have been my key asset to success and

supported me emotionally during the draft of the project. They gave me valuable strength

to excel and achieve. I humbly and kindly appreciate their support and prayers that led to

the completion of this project within the stipulated timeframe.

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TABLE OF CONTENTS

DECLARATION .......................................................................................................................... ii

ACKNOWLEDGEMENT .......................................................................................................... iii

DEDICATION ............................................................................................................................. iv

LIST OF TABLES ...................................................................................................................... vii

ABSTRACT .............................................................................................................................. viii

CHAPTER ONE ......................................................................................................................... 1

INTRODUCTION ....................................................................................................................... 1

1.1 Background of the Study ......................................................................................................... 1

1.1.1 Corporate Strategy .................................................................................................. 2

1.1.2 Recruitment and Selection ...................................................................................... 3

1.1.3 Recruitment and Selection Practices ....................................................................... 4

1.1.4 Commercial Banks in Kenya .................................................................................. 5

1.2 Research Problem ................................................................................................................... 6

1.3 Research Objective ................................................................................................................. 8

1.4 Value of the Study ................................................................................................................... 8

CHAPTER TWO ........................................................................................................................ 9

LITERATURE REVIEW ........................................................................................................... 9

2.1 Introduction ............................................................................................................................. 9

2.2 Corporate Strategy .................................................................................................................. 9

2.3 Recruitment and Selection .................................................................................................... 10

2.4 Recruitment Practices ........................................................................................................... 13

2.4.1 Internal Recruitment ............................................................................................. 13

2.4.2 External Recruitment ............................................................................................ 14

2.5 Selection Practices ................................................................................................................ 16

2.5.1 Interviews .............................................................................................................. 17

2.5.2 Psychological Tests ............................................................................................... 18

2.5.3 Assessment Centres............................................................................................... 19

2.5.4 Background Checks .............................................................................................. 21

2.6 Influence of Corporate Strategy on Recruitment and Selection Practices ............................ 21

CHAPTER THREE .................................................................................................................. 24

RESEARCH METHODOLOGY ............................................................................................ 24

3.1 Introduction ........................................................................................................................... 24

3.2 Research Design .................................................................................................................... 24

3.3 Population of the Study ......................................................................................................... 24

3.4 Data Collection ..................................................................................................................... 25

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3.5 Data Analysis ........................................................................................................................ 25

CHAPTER FOUR ..................................................................................................................... 26

DATA ANALYSIS, RESULTS AND DISCUSSION ............................................................. 26

4.1 Introduction ........................................................................................................................... 26

4.2 Demographic Characteristics of Respondents ...................................................................... 26

4.2.1 Position in the Organization .................................................................................. 26

4.2.2 Academic Level of Respondents ........................................................................... 27

4.2.3 Period Employees Worked in the Bank ................................................................ 27

4.3 Corporate Strategies Adopted by the Bank ........................................................................... 28

4.4 Recruitment and Selection Practices ..................................................................................... 30

4.5 Influence of Corporate Strategy on Recruitment and Selection Practices ............................ 31

4.6 Discussion ............................................................................................................................. 33

CHAPTER FIVE....................................................................................................................... 35

SUMMARY, CONCLUSION AND RECOMMENDATIONS ............................................. 35

5.1 Introduction ........................................................................................................................... 35

5.2 Summary ............................................................................................................................... 35

5.3 Conclusion ............................................................................................................................ 36

5.4 Recommendations ................................................................................................................. 37

5.5 Limitations of the Study ........................................................................................................ 37

5.6 Suggestions for Further Research ......................................................................................... 38

REFERENCES .......................................................................................................................... 39

APPENDICES .............................................................................................................................. i

Appendix I: Introduction Letter ..................................................................................................... i

Appendix II: Research Questionnaire ........................................................................................... ii

Appendix III: List of Commercial Banks in Kenya ..................................................................... iv

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LIST OF TABLES

Table 4.1:Academic Level of Respondents ................................................................. 27

Table 4.2:Period Employees Worked in the Bank ....................................................... 28

Table 4.3:Corporate Strategies Implemented by the Bank .......................................... 29

Table 4.4:Recruitment and Selection Practices ........................................................... 30

Table 4.5:Influence of Corporate Strategy on Recruitment & Selection Practices.......31

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ABSTRACT

Human effort has remained the only weapon for competitive companies around the globe. Employees with amix of skill, knowledge and experience give a company a competitive edge compared to its competitors in the market. The major drive behind this study was to investigate the influence of corporate strategy on recruitment and selection practices among commercial banks in Kenya. It involved a cross-sectional survey design among all commercial banks in Kenya and these were forty three banks in total. Respondents to this study were Human Resource Managers from the banks. The study relied on primary data collection where questionnaires were used. The questionnaire was divided into three sections that covered corporate strategies, recruitment and selection practices and the relationship between corporate strategies and recruitment and selection practices. Data was analyzed by use of descriptive statistics such as mean, standard deviation, frequencies and percentages. The chi-square test of association was used to establish the influence of corporate strategy on recruitment and selection practices among commercial banks in Kenya. The findings of the study were presented in tables. The study concluded that if proper mechanism is put in place with regard to investment in corporate strategies focusing on recruitment and selection practices by commercial banks in Kenya, then the banks stand to gain a competitive advantage in the market thus contributing to social economic developments in Kenya. It is recommended that policy makers regulate and provide policies that will facilitate easy adoption of recruitment and selection practices in the banking sector.

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CHAPTER ONE

INTRODUCTION

1.1 Background of the Study Strategies play a critical role in the success of an organization in every sphere of operation and

the banking sector is not an exception. Some key areas where strategy plays a pivotal role

include entering new markets, introducing a new product into the market, corporate branding,

brand marketing, growth and recruitment of employees (Hunger &Wheelen, 2007). Arguing on

the same line, Porter (1985) states that a company’s strategy consists of the business

approaches and initiatives it undertakes to attract customers and fulfill their expectations, to

withstand competitive pressure and to strengthen its market position. These strategies provide

opportunities for the organization to respond to the various challenges within its operating

environment. Firms also develop strategies to enable them seize strategic initiatives and

maintain a competitive edge in the market.

A strategic approach to recruiting becomes more important as labour markets shift and become

more competitive (Mathis & Jackson, 2005). According to Singh and Finn (2003) an

organization’s ability to attract and retain capable employees can be the most important

determinant of organizational effectiveness because recruitment plays a significant role in

enhancing organizational survival and success in competitive and turbulent business

environments.The integration of Human Resource Management (HRM) and business strategy

is possible by the ‘fit’ of human resources through a variety of HRM practices including

recruitment and selection in accordance with the business needs (Legge, 1995; Budhwar,

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2000). Therefore, there is a set priority for organizations to have recruitment and selection

strategically integrated with business strategies. The common obstacle in the lack of

recruitment and selection strategically integrating with business generally revolve around

issues of poor planning and control, resulting in unrealistic timelines, unidentified problems,

poor coordination and a lack of monitoring and control.

1.1.1 Corporate Strategy Corporate strategy refers to overall scope and direction of a corporation and the way in which

its various business operations work together to achieve particular goals. A business

organization exists as a corporate entity that carries out a defined purpose within its industry

and within the marketplace as a whole. It outlines how a business intends to achieve its desired

goals. Corporate strategy enables a business to create a coordinated action that permeates and

directs the different departments, systems and processes that produce its products (Hunger

&Wheelen, 2007). It is the pattern of decisions in an enterprise that determines and reveals its

corporate objectives, produces the principal policies and plans for achieving these objectives,

and, consequently sets the scope, character and results of activities of enterprise and its parts.

The interdependence of objectives, policies and organized action is crucial to the particularity

of an individual corporate strategy and its opportunity to create competitive advantage.

It is the unity, coherence and internal consistency of strategic decisions that position the

enterprise in its business environment and determine its identity, the power to mobilize its

strengths, and likelihood of success in the market place (Andrews, 1987). Corporate strategy

describes a company’s overall direction towards growth by managing business and product

lines; these include stability, growth and retrenchment. A successful corporate strategy results

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in synergic effects of business units’ mix with overall performance that is greater than

individual performance of each unit. The two basic descriptive dimensions of corporate

strategy are how diversified and how vertically integrated an organization is. Diversification

occurs when a company enters a new industry or market and the larger a percentage of sales

are derived from different markets/industries the more diversified a firm can be said to be.

Vertical integration occurs when a firm takes on activities that were formally done by others on

its behalf for instance if it starts distributing products directly to customers; this in a way is a

special case of diversification (Rumelt, 1974).

1.1.2 Recruitment and Selection Recruitment is the process of identifying and attracting potential candidates from within and

outside the organization to evaluate for employment. This begins with identification of the

candidates then proceeds to selection process in which appropriate employees for employment

can be picked (Bernthal, 2013). It is the process of finding and hiring the best-qualified

candidate for a job opening, in a timely and cost effective manner. The recruitment exercise

includes analyzing the requirements of a job, attracting employees to that job, screening and

selecting applicants, hiring and integrating the new employee to the organization. At the

strategic level it may involve the development of an employer brand which includes an

‘employee offering’ (Cappelli, 2000).

Selection is the systematic process of deciding on a specific individual to fill an available

position (Henry &Temtime, 2009). It is a procedure of matching organizational requirements

with the skills and qualifications of people; an effective selection can be done only when there

is effective matching. Selection has also been characterized as the process of collecting and

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evaluating information about an individual in order to extend an offer of employment. Such

employment could be either a first position for a new employee or a different position for a

current employee. This process is performed under legal and environmental constraints and

addresses the future interests of the organization and the individual. The objective of selection

process is to separate from a pool of applicants those who have the appropriate knowledge,

skills and abilities to perform well on the job.

1.1.3 Recruitment and Selection Practices Regarding the recruitment practices, Breaugh (1992) identifies the stages of the recruitment

practice as including job analysis and developing a person specification; the sourcing of

candidates by networking, advertising, or other search methods; matching candidates to job

requirements and screening individuals using various tests; assessment of candidates’

motivations and their fit with organisational requirements by interviewing and other

assessment techniques. The recruitment process also includes the making and finalising of job

offers and the induction and on-boarding of new employees. This varies with size,

organizational culture and many other factors all pegged on the corporate strategy of the

organization.

Selection usually begins when the right calibre of candidates are identified. It is therefore the

process through which organizations make decisions about who will or will not be allowed to

join the organization. Selection process varies from organization to organization, job to job and

country to country. Some of the processes include screening applications and resumes, testing

and reviewing work samples, interviewing, checking references and background.

Organizations use these processes to increase the likelihood of hiring individuals who possess

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the right skills and abilities to be successful at their jobs (Walker, 2009).

1.1.4 Commercial Banks in Kenya The banking industry in Kenya is regulated by the Central Bank of Kenya (CBK) Act Cap 491

and the Banking Act Cap 488. These Acts are intended primarily to facilitate the development

and maintenance of a sound monetary policy (GoK, 1989). The industry comprises of financial

institutions, among them commercial banks and investment banks. Others are either non-bank

financial institutions (NBFIs) or Mortgage finance companies.Kenya currently has 43 licensed

commercial banks and one mortgage finance company. Of these 44 institutions, 31 are locally

owned and 13 are foreign owned.

The government of Kenya has a substantial stake in three of Kenya’s commercial banks. The

remaining local commercial banks are largely family owned. Commercial banks in Kenya

accept deposits from individuals and turn a profit by using the deposits to offer loans to

businesses with a high interest rate (Abigail, 2013). Kenyan banks have realised tremendous

growth in the last five years and have expanded to the east African region. The banking

industry in Kenya has involved itself in automation, moving from the traditional banking to

better meet the growing complex needs of their customers and globalization challenges.It has

been noted that some of the strategies adopted by these commercial banks include market

positioning, innovation and creativity, investing in product research and development for

competitiveness. While doing these, banks ensure that they employ highly qualified and

experienced staff (Kimani, 2011).

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1.2 Research Problem Recent technological advances, globalization, social trends and changes within organizations

have brought new challenges for recruitment and selection (Rowley & Benson, 2002). To

effectively face the new challenges recruitment and selection needs to be integrated with

business strategies (Lam & White, 1998).Corporate strategy includes the commitments,

decisions and actions required for a firm to achieve strategic competitiveness and earn above

average returns. According to Armstrong (2009), strategic human resource management

emphasizes the need for the human resource plans and strategies to be formulated within the

context of overall organizational strategies and objectives and to be responsive to the changing

nature of the organization’s external environment.

Becker, Huselid, and Ulrich (2001), indicate that recruitment and selection decisions

significantly affect an organization’s ability to meet its business planning needs and strategic

objectives both at the corporate and at the business unit levels. It is therefore important to

invest time and energy into recruiting high calibre staff. Banking in Kenya continues to grow

in the bid to improve service delivery, reduce operation cost and encourage economic

development. The banking sector is human capital intensive since it relies heavily on its human

resource capital to offer services to its clients. This implies that the human capital plays a

critical role in order for the banks to meet their goals.

In the recent past we have seen banks like Barclays, Equity, Kenya Commercial Bank (KCB)

among others restructuring their operations in an attempt to establish a strategic fit between the

internal and external environmental factors such as competition and high overhead costs.

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This move has seen many employees in this industry eased out of their jobs and replaced by

modern technologies such as deposit-taking Automatic Teller Machines (ATMs) for improved

efficiency. Several studies have been conducted on recruitment and selection practices and

corporate strategy by various scholars.

A study conducted by Obosi (2010) on the influence of corporate culture on strategy

implementation within commercial banks in Kenya established that the elements of corporate

culture need to be compatible with the strategy implemented. Another study carried out by

Kamau (2011), on influence of corporate governance practices on organisational performance

at Equity bank Kenya concluded that corporate governance influences organizational

performance.

Khalumba (2012) with her study on the influence of human resource management practice on

financial performance of commercial banks in Kenya came to a conclusion that the major

human resource management practices that affected the financial performance included human

resource planning, recruitment and selection, reward management, training and development,

career planning and employees relations. From these studies we can see that none of them

concentrated on finding out how corporate strategy influences recruitment and selection

practices in commercial banking industry in Kenya. This study sought to bridge this gap by

providing answers to the question ‘What is the influence of corporate strategy on recruitment

and selection practices among Commercial Banks in Kenya?’

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1.3 Research Objective The Research Objective was:

i. To establish the influence of Corporate Strategy on Recruitment and Selection Practices

among Commercial Banks in Kenya.

1.4 Value of the Study The findings of this study will increase the existing body of knowledge on the critical role of

corporate strategies in the banking industry with special regard to the recruitment and selection

practices and enhance efficient and effective selection of strategies by the various stakeholders

in the banking industry for human resource attraction and retaining. As a knowledge base, it

may act as a reference point and a basis for further research in the area as a constant

improvement in the re-alignment of corporate strategies to the various banks’ recruitment and

selection practices.

The study will also set foundation for theory building by pointing out ways in which the

corporate strategies can be used to gain competitive advantage among commercial banks in

Kenya including enriching the recruitment and selection practices to give impetus to the

practice by the industry players.

This study hopes to be significant in yielding useful information for policy makers in the

banking sector, human resource managers in the banking industry and other stakeholders on

the magnitude of corporate strategies. It is intended to bring new insights that might be useful

to the managers in changing the attitude and perception of employees within the banking

industry through appropriate human resource recruitment and selection practices that motivate

the employees.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction This chapter focuses on the literature review conducted by the researcher. It includes a review

of the various studies that have been conducted by other researchers on corporate strategy and

recruitment and selection practices.

2.2 Corporate Strategy Mintzberg (1979) argues that strategy is a mediating force between the organization and its

environment: consistent patterns in streams of organizational decisions to deal with the

environment. In the current twenty first century, administrations are facing existing and

dynamic challenges. In the globalized business, companies require strategic thinking and only

by evolving good corporate strategies can they become strategically competitive. A justifiable

competitive advantage occurs when a firm implements a value creating strategy of which other

companies are unable to duplicate the benefits or find it too costly to initiate.

Corporate strategy is all about competitive advantage. In general, strategy is to do with long

term prosperity thus businesses need strategy in order to ensure that resources are allocated in

the most effective way. According to Porter (1985) corporations can choose between three

general strategy types to build competitive advantage: a differentiation strategy, a low-cost

strategy and a third approach which is focus or a niche strategy. An organization that uses

differentiation strategy competes on the basis of its ability to do things differently than its

major competitors do. An organization that uses a low-cost strategy builds competitive

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advantage by producing goods or services at the lowest possible cost. In contrast to the cost

leadership and differentiation strategies, which are based on the creation of competitive

advantage over an entire market segment, focus or a niche strategy recommends concentration

on specific target groups, particular portion of the product spectrum or a narrower geographical

market. Competitors using niche strategy are specialists; they serve a narrow market segment

that can be local or national.

It is debated that corporate strategy issues managers have to deal with can be clustered around

three dimensions: value, composition and management. Dealing with a corporate strategy issue

means dealing with all of these elements. Corporate value deals with the foundation of

corporate strategy, corporate composition deals with the range of business the corporation is

active in and corporate management deals with the division of labour throughout the

corporation and the mechanisms that are employed to carry out corporate strategy

(Anonymous, 2005).

2.3 Recruitment and Selection Recruitment and selection are integrated activities, and ‘where recruitment stops and selection

begins is a moot point’ (Anderson, 1994). Nevertheless, these two areas are different from each

other. ‘Recruitment is the process of attracting individuals on a timely basis, in sufficient

numbers and with appropriate qualifications, developing their interest in an organization and

encouraging them to apply for jobs within it’ (Monday &Noe, 1993). Selection is carried out

by organizations as a means of measuring and establishing the candidate’s potential and actual

performance. It is the process of collecting and evaluating information about an individual in

order to determine whether to employ them or not. Selection evaluates applicants and rejecting

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all but the one most qualified to perform. The emphasis on recruiting and selecting should be to

get the best people from the labour market, people who will steer the organization to prosperity

as Finnigan (1983) puts it “the right people for the right job”.

The importance of recruitment and selection has become increasing apparent to many

organizations across the world. Key issues that are stimulating the potential importance of the

selection decision to organizations have been identified by Beaumont (1993). First, a more

diverse workforce has been induced by demographic trends and changes in the labor market,

which have placed great pressure on the notion of fairness in selection. Subsequently, the

purpose of recruitment and selection has been adjusted.

Organizations are no longer just matching individuals to immediate job requirement. Instead,

organizations are driven by the desire for a multi-skilled, flexible workforce, and an increased

emphasis on teamwork. Last but not least, the process of recruitment and selection is likely to

be more strategic and the notion of strategic selection is caused by the emphasis between

corporate strategy and people management. This implies that recruitment and selection are

linked with the overall organizational strategy and aimed to match the flow of people to

emerging business strategies.

Plentiful of the recent literature on personnel management has emphasized the necessity for the

recruitment and selection of employees who are committed to the goals of the organization.

Recent waves of organization restructuring have dramatically changed and, in many cases,

destroyed existing employment relationships. As traditional autocratic structures flatten and

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organizations utilize multidisciplinary teams to remain competitive, the need for strategic and

transparent systems becomes paramount (Hackman, 1986; O’Reilly et al., 1991; Raghuram and

Arvey, 1996). Increasingly, many organizations are being transformed from structures that are

built on functions and jobs, to those where focused, self-directed work teams, made up of

empowered individuals with diverse backgrounds, are replacing traditional specialised

workers.

Burack and Singh (1995) highlight that firms need adaptable people who can adjust to rapidly

changing customer needs and operational structures, while Pfeffer (1994) argues that

employees and the way they work comprise the crucial difference between successful and

unsuccessful organizations. He goes ahead to state that as technology increases and product life

cycles shorten, the major source of competitive advantage will be the individual worker.

Moreover, Terpstra (1996, p. 16) specifies that, as companies downsize, “delayer” and try to

boost productivity with fewer people, those that remain are being asked to assume more tasks,

roles and responsibilities. He recommends that, as this trend continues, companies will be

asking fewer employees to know more, change more and interact more and thus interest is

increasingly focused on identifying the recruiting sources that are most likely to yield high

quality employees and the selection methods that best predict future job performance. Such

arguments have led Ripley and Riley (1994) to suggest that the critical organizational concern

today is the hiring or promoting of the best qualified people while still meeting all regulatory

requirements.

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2.4 Recruitment Practices Anderson and Shackleton (1986) indicate that the quality of new recruits depends upon an

organization’s recruitment practices, and that the relative effectiveness of the selection phase is

inherently dependent upon the calibre of candidates attracted. Duggan and Croy (2004) state

that a company has two different choices when recruiting an employee; either they hire a

person internally or externally. Internal recruitment may be conducted through the promotion

and transfer of existing employees or through referrals, by current staff members, of friends

and family members. Where this is the chosen method of filling vacancies, job openings can be

advertised by job posting. External recruitment can be carried out through advertisements,

employment agencies, college recruitment, job fairs and encouraging walk-in applications.

2.4.1 Internal Recruitment Existing employees of an organization provide the internal sources of recruitment (Khan,

2008). The advantage of internal recruitment is its ability to create a culture of loyalty and job

security among the employees, which could be hard to achieve otherwise (Molander, 1996).

Internal recruiting also saves time that would otherwise be spent through advertisements and

also is a way of cutting costs that an outside employee would need to become familiar with the

company (Molander, 1996). For an employer who chooses to recruit internally, he has the

advantage of knowing more about the employee’s abilities which means a reduced risk of

selecting an inappropriate employee. Moreover, by applying internal recruitment, the

employees will have incentives to stay in the company in order to climb the carrier ladder

(Lockyer&Scholaris, 2004).

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The main disadvantage of internal recruitment is, logically, the limited supply of candidates to

choose from. Ahrnborg (1997) states that internal recruitment could be a problem for sluggish

companies, due to lack of new influences, and the fact that they maintain their sluggishness and

limit their opportunities for development. This lack of development and new ideas can cause

problems for companies in maintaining their market shares due to threats from competitors and

new products. Another disadvantage is that the person who fills the vacancy is leaving his

position and therefore a new vacancy will be created (Ahrnborg, 1997). With internal

recruitment, employees may feel that they should be recruited because of their experience

although they are not qualified enough.

The main internal recruitment practices are: Promotion which is the most important source of

filling vacancies from within the organization. Promotion involves movement of employees

from a lower level position to a higher level position accompanied by changes in authority,

duties, responsibilities, status and remuneration (Khan, 2008). Transfer is another internal

recruitment practice. Khan (2008) stated that transfer is a lateral movement within the same

grade, from one job to another without any change in remuneration. They are often important

in providing employees with a broad-based view of the organization, necessary for future

promotions.

2.4.2 External Recruitment This refers to methods of recruitment to obtain people from outside the company. External

recruitment enables a company to have a vast supply of candidates from which to choose

employees. According to Duggan &Croy (2004), a problem with external recruitment is that it

can be hard to put words on what specific skills the company needs, and in this way cause

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problems because the consultants misunderstand and hire a person who does not fit for the

task. Another disadvantage with external recruitment is that it could reduce the efforts of the

existing employees, due to lack of the possibility of promotion (Chan, 1996).

Chan (1996) further claims that it does not have to be a disadvantage when a combination of

internal and external is used and in fact could make it an advantage by boosting the employees’

motivation, due to fear of external recruitment. External recruiting methods can be grouped

into two classes: informal and formal. Informal recruiting methods tap a smaller market than

formal methods. These methods may include rehiring former employees and choosing from

among those “walk-in” applicants whose uninvited resumes had been retained on file. Formal

methods of external recruiting entail searching the labour market more widely for candidates

with no previous connection to the organization.

These methods have traditionally included newspaper/magazine/journal advertising, the use of

employment agencies and executive search firms and college recruitment. Job/career fairs and

e-recruiting are currently reaching the job seeker market (Margaret, nd).The external

recruitment practices include: Advertisements which constitute a popular method of seeking

recruits as many recruiters prefer it because of their wide reach. It can be done through the

internet, newspapers, audio or visual media and journals. These advertisements are used to

recruit candidates for all levels in the organization. They need to be prepared professionally to

ensure that the information included is accurate, the appearance is acceptable, and that the

content is legally correct (Melanie, 1996).

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Education institutions are widely used by large and medium-sized organizations that need

highly educated entry-level employees (Ronald, 2002). Direct recruitment from educational

institutions for jobs which require technical or professional qualifications has become a

common practice. A close liaison between the company and educational institution helps in

getting suitable candidates to man various positions. Employment agencies is another form of

external recruitment where companies give contracts to agencies that search, interview and

obtain the required number of people.

Walk-ins is a recruiting method that is gaining importance. It is a term used to describe those

who literally walk into the organization and ask for employment, and also those who send

unsolicited CVs or letters asking for employment. It is an inexpensive method of recruitment,

but its success is questionable because applicants often are unemployed at the time of applying

and apply in response to their own financial needs rather than the requirements of the job. It

could also result in complaints of unfair labour practice (Melanie, 1996).

2.5 Selection Practices Whereas the calibre of candidate is determined by the value of recruitment process, the

selection decision remains a difficult one. Dale (1995, p.159) argues that most mistakes are

caused by the fact that managers generally give little thought to the critical nature of the

decisions. Employers are surprised and disappointed when an appointment fails, and often the

person appointed is blamed rather than recognising the weaknesses in the process and

methodology, even the soundest of techniques and best practice in selection contain scope for

error. Some of these are due to the methods themselves, but the main source is the frailty of the

human decision maker.

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The selection tools available to organizations can be characterised along a continuum that

ranges from the more traditional methods of interviews, application forms and references,

through to the more sophisticated techniques that encapsulate biographical data, aptitude tests,

assessment centres, work samples, psychological testing among others. Each method of

selection has its advantages and disadvantages and comparing their rival claims involves

comparing each method’s merit and psychometric properties. The degree to which a selection

technique is perceived as effective and perhaps sophisticated is determined by its reliability and

validity (Anastasi, 1982; Muchinski, 1986).

2.5.1 Interviews Interviewing is universally used in selection process (Beardwell and Wright, 2003). There are

several important reasons for organizations to employ interviews in selection; first, the

interview is seen as a two way social encounter between the interviewer and the interviewee.

Anderson and Shakleton (1993) have pointed out that interviewing is an effective selection

tool. This is because the interview serves not only as a predictor of suitability, but as an

effector of both parties’ outcome decisions and further behaviour (Anderson and Shakleton,

1993, p.48). However, the nature of the interview may also be a cause of the major source of

errors, being prone to interview bias.

Interviewing has become a trend in selection methods because of their acceptability to

interviewers, especially line managers, peers and candidates (Barclay, 2001). The reason why

the interview is most frequently used can be additionally explained by the time and cost

constrains of other methods such as psychometric tests and assessment centers (Barclay, 2001).

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Although interviewing has been reported as one of the best established selection tools, it

suffers from a number of problems. For instance, the increasing workplace diversity and cross-

cultural interviewing have created challenges for interviewers and interviewees. Many societies

and workplaces become increasingly multicultural (Osman-Gani and Tan, 2002). To conduct

an effective interview, a proper welcome is suggested before assessing competencies for a

given position. Discrimination has a negative impact on employees’ attitudes, which could, in

turn, compromise individual and organizational performance (Snape and Redman, 2003).

Regardless of its problems interviews remain one of the useful selection techniques. It is

necessary for organizations to ensure errors, biases and negative impacts of the interview in

public relations are eliminated as much as possible from the entire selection process.

2.5.2 Psychological Tests ‘Psychological tests can be defined as psychometrics to denote that they are concerned with

identifying the mental characteristics of people (psycho-) and putting a measurement (-metric)

against such characteristics’ (Roberts, 2005, p. 132). The two main types of psychometric

testing most commonly used are tests of ability (achievement tests, aptitude tests, intelligent

tests) and tests of personality (neuroticism, extraversion, openness, agreeableness,

conscientiousness). Among these psychological testing, aptitude tests are often used to measure

candidate primary mental abilities, for example tests on verbal reasoning, numerical ability and

abstract reasoning. These tests if used properly, can contribute substantially to the accuracy and

fairness of selection systems.

It is important to identify that while psychological tests are generally reliable, they are not

perfectly accurate. Applicants’ abilities also change overtime and other skills may be

19

important. Success will often depend on other factors such as interest, personality, motivation,

and opportunity. It is the organizations duty to choose tests carefully by looking for evidence

of reliability and validity. Firms also need to confirm the availability of benchmark comparison

for the particular group in selection and avoid obtaining an over-used test (Marchington and

Wilkinson, 2002). With recent developments, corporations may plan to introduce online testing

in the future, to reduce delivery costs, thus making testing more affordable for lower-paid jobs.

2.5.3 Assessment Centres Owing to the weakness of relying on a single selection technique, organizations are seen to

increasingly combine assessment methods in order to enhance the overall reliability and

validity of the selection process. Am ong these techniques, assessment centres are perhaps

regarded as the most valid of all selection methods (Aaron and Shore, 1990). Assessment

centre is a process that consists of a small group of participants who undertake a series of tests

and exercises under observation, with a view to the assessment of their skills and

competencies, their suitability for particular roles and their potential for development’ (Fowler,

1992, p.244). These centres are used to select the best candidate (s) for the job by observing

and analyzing behaviour in a range of simulated work related situations.

A typical assessment centre is likely to involve one or more interviews, a set of exercises, and

ability or personality test (Roberts, 2005). It usually involves a number of assessors, which

usually is a mix of human resource staff and line managers. Its components include

presentation and written tasks where presentations test candidates’ oral skills and personal

effectiveness. The assessment centres may also involve in-tray exercises to test candidates’

judgement, time management and prioritising skills as well as writing skills. Some of its

20

advantages include: focusing on the key elements of the role and therefore is very specific in

measuring the suitability of candidates; it avoids over reliance on a single technique but allows

assessors to employ a range of methods to gather a balanced picture and more importantly is

that they have an excellent predictive ability in forecasting candidate’s future job performance

accurately. Some studies demonstrated that assessment centres are more effective at predicting

successful candidates than other techniques (Robert, 2005).

Nonetheless, just like any other selection process, assessment centre is not a perfect predictor

of success on the job for every candidate (Caldwell et al, 2003). They are usually expensive to

run and their validity varies according to the criteria they are used to predict. Due to its high

cost, they are most likely to be used in the public sector organizations and by larger private

sector employers. Assessment centres can be time consuming for both the organization and the

applicant.

One will find that it is easier for graduates to devote time to these centres unlike those currently

employed. The centres often engage the involvement of senior managers and training of

assessors which make it time consuming and therefore costly for the organization (Roberts,

2005). Besides this, it is argued that assessment centres are sometimes transparent and it is all

too easy for applicants to ‘act’ in group exercise and other aspects. It is also argued that the

validity of assessment centres simply reflect the stereotype of what the assessors consider to be

a good manager (Robertson and Makin, 1993). Nevertheless, assessment centres remain a

useful tool for selection and development.

21

2.5.4 Background Checks Workers are not similar across the labor market. There are good workers and bad workers, but

information is asymmetrically distributed between employers and employees. Pre-employment

check is a good way of diminishing problems arising from asymmetric function. It is a way of

preventing risks, liabilities and disasters to the company when hiring new staff. Thus, the

number of ‘bad hires’ that may have a direct impact on an organization’s performance and

reputation can be reduced at a minimal level (NZB, 2005).

Background checks are used to verify information provided by candidates and to determine

whether any disqualifying factors exist (David, 2012). These checks may entail contacting

references; verifying past employment; confirming that necessary degrees, licenses, or other

credentials are possessed; checking driving records; checking for criminal convictions;

examining credit reports and even inspecting candidates’ online persons on social networking

and other sites. A basic motive for conducting background checks is the potential liability of

employers for the harmful acts of the people they hire (David, 2012).

2.6 Influence of Corporate Strategy on Recruitment and Selection Practices In numerous corporations, their greatest differentiator is their people. Whereas it is important

for organizations to have great strategies, those strategies mean nothing without the right

people to execute and drive them. The minute one thinks of their biggest challenges at work,

they typically involve average to poor performers or individuals in the wrong positions. It is

believed that top performers allow organizations to be more productive and in the highly

competitive world that we live in today, it is imperative to hire the best and brightest.

22

Evidently, when it comes to attracting top performers various companies struggle to align their

recruitment strategies with their business strategies (John, 2011).

Human resource management (HRM) strategic integration needs to be examined both in

strategy formulation and strategy implementation phases of a business (Budhwar, 2000; Lam

and White, 1998; Shen, 2005). In strategy formulation one is concerned with making decisions

with regard to an organization’s mission, vision, short and long term objectives and plans,

while strategy implementation is concerned with aligning the organization structure, systems

and processes to achieve the business strategy (Johnson & Scholes, 1999). Recruitment and

selection methods flow ultimately from the organization’s mission and strategic objectives that

is the strategies and processes of recruitment and selection must be compatible with business

strategies (Nankervis, Compton & Baird, 2002).

Social scientists argue that through the incorporation with business strategies, recruitment and

selection help achieve goals and enhance organizational performance. The extent of

recruitment and selection strategic integration can be gauged through four distinctive

indicators: the timely supply of an adequately qualified workforce, effective job analysis and

descriptions, effective selection, and the involvement of line managers in the recruitment and

selection practices.A strategic approach that is aligned with Human Resource (HR) ensures that

an organization’s employees, skills and abilities contribute to the achievement of its business

goals (Huselid, Jackson, and Schuler, 1997). The value of human capitals is dependent upon

their potential to contribute to the competitive advantage or core competence of the

organization. Therefore, strategic value of human resource is a relative value. On the one hand,

23

it is determined by the extent in how employees’ skills enable a firm to enact strategies that

improve efficiency and effectiveness, exploit market opportunities, and neutralize potential

threats (Barney, 1991; Porter, 1985).

24

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction This chapter deals with the methodology adopted in conducting the study. It discusses the

research design, target population, data collection procedures and data analysis techniques.

3.2 Research Design The study involved a cross-sectional survey design. A cross-sectional survey collects data to

make inferences about a population of interest at one point in time and this is why this design

was chosen. They are snapshots of the populations about which they gather data. Tanur (1982)

asserts that a survey is a means of collecting information about a large group of elements

referred to as a population. A survey has three characteristics: to produce quantitative

descriptions of some aspects of the study population in which case it is concerned either with

relationships between variables, or with projecting findings descriptively to a predefined

population; data collection is done by asking people structured and predefined questions and

data is collected from a fraction of the target population (Pinsonneault and Kraemer, 1992).

3.3 Population of the Study According to Bums and Grove (1993), a population is defined as all elements (individuals,

objects and events) that meet the sample criteria for inclusion in a study. The population of the

study included all commercial banking institutions operating in Kenya. Central bank of Kenya

(2013) indicated that there were 43 licensed commercial banks as at 13th December 2012. The

43 licensed commercial banks therefore formed the target population for this study. Since the

population was small, the study was a census.

25

3.4 Data Collection This study relied on primary data sources. The researcher collected the primary data from

heads of human resource departments or other persons carrying the same responsibility in all

the 43 commercial banks in Kenya. The data was collected by use of questionnaires that were

administered by drop and pick later method. The questionnaire contained 3 sections: Section A

sought personal data of respondents; section B sought data on corporate strategy in use in

commercial banks in Kenya while section C sought data on recruitment and selection practices

among commercial banks in Kenya.

3.5 Data Analysis The data collected was sorted and coded to ensure it was complete for analysis. Statistical

Packages for Social Sciences (SPSS) was used to analyze the data. Descriptive statistics such

as mean, standard deviation, frequencies and percentages were used to summarize research

findings. Correlation analysis was used to establish the influence of corporate strategy on

recruitment and selection practices. The findings were presented in tables.

26

CHAPTER FOUR

DATA ANALYSIS, RESULTS AND DISCUSSION

4.1 Introduction

This chapter presents the output of data analysis as per the research objectives. The objective

of the study was to establish the influence of corporate strategy on recruitment and selection

practices among commercial banks in Kenya. The study targeted 43 commercial banks in

Kenya and one respondent from each bank was selected. Out of the 43 questionnaires

distributed, 38 were returned. These questionnaires represented a response rate of 88% which

the study considered adequate for analysis.The findings were presented in three sections;

demographic characteristics of the respondents, corporate strategies implemented by the bank

and recruitment and selection practices. The findings of the study were presented in form of

tables.

4.2 Demographic Characteristics of Respondents This section contains the responses got pertaining to the respondents demographic features.

This was meant to establish the suitability of the respondents for the study. The section

captures; position in the organization, academic level of respondents and period employees

worked in the bank.

4.2.1 Position in the Organization The study sought to obtain details about the position held by respondents in their banks.

Majority of the respondents (94.7%) interviewed were Human Resource Managers who were

found to have a wide understanding of corporate strategies in relation to recruitment and

selection practices used by Commercial Banks in Kenya.

27

4.2.2 Academic Level of Respondents The study sought and obtained details about the academic level of the respondents for purposes

of understanding their level of understanding of the concept of recruitment and selection

practices. Details of therespondents on their academic level are shown in Table 4.1

Table 4.1 Academic Level of Respondents

Academic Level of Respondents No. of Respondents Percentage (%)

Masters Degree 10

26.3

BachelorDegree 19 50

College 9

23.6

High School 0

0

Primary School

0 0

Valid N (list wise) 38

100

Source: Research data (2013) As shown in Table 4.1majority (50%) of the respondents were bachelor degree holders

working in the banks. 26.3% were post-graduate holders, 23.6% were college graduates, 0%

were high school leavers and 0% were primary school leavers. From the analysis it can be

concluded that most of the respondents are degree holders and therefore could comprehend and

respond to the research.

4.2.3 Period Employees Worked in the Bank The study sought to establish the number of years the respondents had worked in the bank. The

longer the years of work in the bank, the more acquainted the employee would be in regard to

the recruitment and selection practices. The findings are summarized in Table 4.2

28

Table 4.2 Period Employees Worked in the Bank

Duration No. of Respondents Percentage (%)

1-5 years 1 2.6

6-10 years 3 7.8

11-15 years 19

50

16-20 years 11 29

21 and above years 4 10.5

Valid N (List wise) 38 100

Source: Research data (2013) As shown in Table 4.250% of the respondents had worked in their banks for a period of 11-15

years, 29% had worked for 16-20 years. 10.5% had worked for a period of 21 years and above,

7.8% had worked between 6-10 years and 2.6% had worked for a period of 1-5 years. From the

analysis, it can be concluded that most of the human resource managers have been in their

respective banks long enough to respond to the recruitment and selection practices of the

banks.

4.3 Corporate Strategies Adopted by the Bank In order to establish the influence of corporate strategy on recruitment and selection practices,

it was important for the respondents to first indicate theextent to which they adopted corporate

strategies in their banks. A scale of 1-5 was used; (1: Not at all, 2: small extent, 3: moderate

extent, 4: large extent and 5: very large extent). Mean ratings were determined for each

response in order to provide a generalized perception of all the respondents. Mean ratings <1.5

implied that the strategy was not used at all, means >1.5 but <2.5 implied that the strategy was

used to a small extent, means >2.5 but <3.5 meant that the strategy was used at a moderate

extent, means >3.5 but <4.5 meant that the strategy was used at a large extent and means >4.5

29

implied that the strategy was used at a very large extent.The findings are shown in Table 4.3;

Table 4.3 Corporate Strategies Implemented by the Bank

Corporate Strategies Mean Std Deviation

Cost leadership strategy 4.34 .669

Cost focus strategy 4.42 .722

E-business strategy 4.26 .685

Growth strategy 4.26 1.155

Global strategy 3.42 .919

Diversification strategy 4.11 .798

Differentiation strategy 4.08 .941

Differentiation focus strategy 3.87 .844

Stability strategy 3.47 1.202

Renewal strategy 3.47 .979

Cooperative strategy 2.53 .506

Consolidation strategy 2.34 .878

Source: Research data (2013)

From Table 4.3 it is clear that respondents adopted cost focus strategy, cost leadership strategy,

E-business strategy and growth strategy at a large extent with scores of 4.42, 4.34,4.26 and

4.26 respectively. Diversification and differentiation strategy were rated with means of 4.11

and 4.08 correspondingly thus meaning that they were also applied at a large extent.

Differentiation focus strategy was applied at a large extent with a mean of 3.87. Respondents

stated that stability and renewal strategies were used at a moderate extent with means of 3.47

each. Cooperative strategy was also used at a moderate extent with a mean of 2.53.

Consolidation strategy was applied at a small extent with a mean of 2.34.

In conclusion the analysis shows that strategies like cost leadership, E-business, growth,

30

diversification and differentiation are highly adopted by commercial banks in Kenya while

consolidation strategy is lowly adopted.

4.4 Recruitment and Selection Practices Respondents were asked to indicate therecruitment and selection practicesof the bank.From

this response one would be able to identify the recruitment and selection practices carried out

in the commercial banks.

Table 4.4: Recruitment and Selection Practices Recruitment and Selection Practices Mean Std Deviation

Using employment agencies to obtain resumes 2.6579 .78072

Use of online recruitment 3.8947 .68928

Interviewing applicants for vacant positions 4.6316 .48885

Using career or job fairs to recruit 1.9211 .88169

Utilizing referrals for recruitment and selection 4.2895 .69391

Advertising vacant positions 4.3158 .70155

Using psychological tests for recruitment and selection 4.1316 .81111

Use of assessment centers to pick qualified candidates 3.5526 1.0053

Sourcing employees from educational institutions 3.1316 1.06976

Conducting background checks 4.6053 .49536

Recruiting from walk-ins pool 1.8947 .83146

Source: Research data (2013) From Table 4.4 above, respondents indicated that interviewing applicants for vacant positions

has the highest mean of 4.63 thus implying it is a recruitment practice used by commercial

banks at a very large extent. Background checks is a selection practice that is used at very large

extent with a mean of 4.60. They also indicated that advertising for vacant positions, utilizing

31

of referrals and conducting psychological tests are used at alarge extent with means of 4.31,

4.28 and 4.13 respectively. Additionally, online recruitment and use of assessment centers to

pick qualified candidates are used at a large extent with each having a mean of 3.89 and 3.55

correspondingly. Sourcing employees from educational institutions and use of employment

agencies to obtain resumes are practices used at a moderate extent with means of 3.13 and 2.65

respectively. Walk-ins and use of career/job fairs are practices used at a small extent and

havemeans of 1.89 and 1.92 respectively.

From this analysis we can say that commercial banks mainly apply recruitment and selection

practices such as; interviewing, employee background checks, advertising vacant positions, use

of referrals and conducting psychological tests. However, practices such as recruiting from

walk-ins and career/job fairs are used minimally.

4.5 Influence of Corporate Strategy on Recruitment and Selection Practices

The correlation analysis results illustrated in Table 4.5 below indicate that there is a strong

direct relationship of 0.789 between growth strategy and promoting of employees. It was also

evident that cost focus strategy and promotion of employees have a strong inverse relationship.

This implies that commercial banks focusing on cost strategy have few employee promotions.

E-business strategy has a strong direct relationship of 0.986 with use of online recruitment.

This means that commercial banks that utilize e-business strategy tend to make use of online

recruitment more than other recruitment practices. It was further established from the study

that the growth strategy and interviewing of applicants for vacant positions have a strong direct

relationship of 0.689 which confirms that a growth strategy accelerates the interviewing of

applicants to fill vacant positions created in the banks. In general, the study established that

32

most of the corporate strategies have a positive relationship with recruitment and selection

practices although some of the correlations were too insignificant. This is an indication that the

corporate strategy used directly influences the recruitment and selection practice adopted by

commercial banks in Kenya.

Table 4.5: Influence of Corporate Strategy on Recruitment & Selection Practices

Growth strategy

Stability strategy

Renewal strategy

Diversification strategy

E-business strategy

Cooperative strategy

Global strategy

Consolidation strategy

Cost leadership strategy

Differentiation strategy

Cost focus strategy

Differentiation focus strategy

Promoting employees

.789 .562 .487 .856 .321 .422 .426 -.587 -.621 .214 -.637 .236

Transferring employees to fill vacant positions

.694 .412 .578 .879 -.568 .281 .654 -.625 -.325 .232 -.456 .145

Advertising vacant positions

.894 .443 .358 .688 .156 .286 .564 -.883 .221 .119 -.224 .287

Sourcing employees from educational institutions

.474 .332 .589 .324 .427 .227 .448 .117 .098 .124 .213 .221

Using employment agencies to obtain resumes

.529 .452 .566 .682 .245 .352 .662 -.256 -.325 .325 -.263 .228

Recruiting from walk-ins pool

.593 .278 .326 .456 -.596 .229 -.698 .259 .257 .235 .689 .259

Using career or job fairs to recruit

.356 .246 .387 .229 .458 .369 .487 .174 .326 .425 .396 .246

Use of online recruitment

.569 .256 .458 .583 .986 .369 .256 .339 .796 .356 .456 .356

Utilizing referrals for recruitment and selection

.486 .652 .165 .397 .006 .325 .218 .248 .748 .234 .523 .313

Interviewing applicants for vacant positions

.689 .425 .269 .863 .468 .521 .484 .232 .397 .427 .564 .273

Using psychological tests for recruitment and selection

.594 .517 .482 .607 .764 .439 .673 .217

.537 .393 .491 .375

Use of assessment centers to pick qualified candidates

.678 .572 .514 .639 .174 .277 .524 .225 .431 .384 .519 .396

Conducting background checks

.697 .618 .431 .428 .597 .375 .639 .372 .458 .473 .494 .412

Source: Research data (2013)

33

4.6 Discussion

Mintzberg (1979) argues that strategy is a mediating force between the organization and its

environment: consistent patterns in streams of organizational decisions to deal with the

environment. In the globalized business, companies require strategic thinking and only by

evolving good corporate strategies can they become strategically competitive. Findings of the

analysis show that commercial banks in Kenya adopt various corporate strategies such as cost

leadership, E-business, growth, diversification and global strategy. These strategies give the

banks a competitive advantage and also ensure that resources are allocated in the most

effective way.

From the analysis, it was evident that commercial banks mainly applied recruitment and

selection practices such as; interviewing, employee background checks, advertising vacant

positions, use of referrals and conducting psychological tests. However, practices such as

recruiting from walk-ins and career/job fairs were used minimally. Anderson and Shakleton

(1993) have pointed out that interviewing is an effective selection tool. This is because the

interview serves not only as a predictor of suitability, but as an effector of both parties’

outcome decisions and further behavior. Pre-employment check is a good way of diminishing

problems arising from asymmetric function. It is a way of preventing risks, liabilities and

disasters to the company when hiring new staff (NZB, 2005). From the literature, recruiting

from walk-ins is said to be inexpensive but it is questionable because applicants often are

unemployed at the time of applying and apply in response to their own financial needs rather

than the requirements of the job. It could also result in complaints of unfair labour practices

(Melanie, 1996). This therefore could be part of the reason why walk-ins are used minimally

34

by banks in recruiting and selecting of employees.

In numerous organizations, their greatest differentiator is the people. Whereas it is important

for organizations to have great strategies, those strategies mean nothing without the right

people to execute and drive them. A strategic approach that is therefore aligned with Human

Resource ensures that an organization’s employees, skills and abilities contribute to the

achievement of its business goals (Huselid, Jackson and Schuler, 1997). Findings of the

analysis show that there is a relationship between corporate strategies and recruitment and

selection practices adopted by the commercial banks.

35

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction This chapter entails the summary of the study, conclusion and recommendations based on the

objective of the study. The study sought to find out the influence of corporate strategy on

recruitment and selection practices among commercial banks in Kenya. In addition, this

chapter provides a direction for further studies.

5.2 Summary The purpose of this study was to establish the influence of corporate strategy on recruitment

and selection practices among commercial banks in Kenya. Primary data was collected using

questionnaires which were administered to human resource managers of commercial banks in

Kenya. From the study, majority of the respondents were degree holders and had worked in the

banks for more than ten years thus, this meant that they had a good understanding of the

concept of recruitment and selection practices. The study further revealed the main corporate

strategies used by the banks which were cost leadership strategy, cost focus strategy, E-

business strategy, growth strategy and diversification strategy. However, cooperative and

consolidation strategies were used at minimal extent.

It was also found in the study that recruitment and selection practices used at a very large

extent include; interviewing applicants, advertising vacant positions, use of psychological tests

and use of referrals. Nonetheless, practices such as recruiting from walk-ins and use of career

or job fairs were used at a small extent by the same banks. The study used the chi-square test of

36

association to establish the influence of corporate strategy on recruitment and selection

practices. The findings indicated that there is an association between most of the corporate

strategies and recruitment and selection practices. It was noted that the cooperative strategy

does not relate well with almost all recruitment and selection practices except for recruiting

from walk-ins pool. Cost focus strategy, growth strategy, E-business strategy, differentiation

strategy among other strategies on the other hand relate well with the recruitment and selection

practices.

5.3 Conclusion To gain competitive edge in the dynamic business environment, large and small firms should

adopt effective corporate strategies for survival. To achieve objectives like profit

maximization, offsetting costs of operations, business survival and gaining competitive

advantage in the market, organizations should formulate, implement and measure corporate

strategies with regard to the recruitment and selection practices of the organization. Human

capital is the key input in any successful organization in the turbulent business environment.

It is concluded that if a proper mechanism is put in place with regard to investment in corporate

strategies focusing on recruitment and selection practicesby commercial banks operating in

Kenya, then the banks stand to gain a competitive advantage in the market thus contributing to

social economic developments in Kenya. Training of commercial bank staff, capital

advancement and in reasonable terms, good business operating environment and good business

practices by the banking industry will contribute to the same.

37

5.4 Recommendations The study established that corporate strategies do have an effect on recruitment and selection

practices. It realized that most banks use interviews, referrals, advertising of vacant positions

and psychological tests when recruiting and selecting. The realization of corporate strategies

largely applied by the banks was also evident. Therefore, this study recommends that banks

acknowledge the important role of corporate strategies with special regard to the recruitment

and selection practices and thus enhance efficient and effective selection of strategies by

various stakeholders in the banking industry for human resource attraction and retention.

Policy makers need to regulate and provide policies that will facilitate easy adoption of

recruitment and selection practices in the banking sector. The policy makers should implement

policies that protect and attract more banks to employ competent and knowledgeable staff to

perform. The study confined itself to commercial banks in Kenya; this research should

therefore be replicated in all other financial institutions and the results be compared so as to

establish whether there is consistency in how the different strategies applied influence

recruitment and selection practices.

5.5 Limitations of the Study Getting accurate information from the respondents was one of the major challenges since some

of the workers were threatened that the information may be used against them by the

management in terms of performance hence insecurity of their jobs. The challenge was

minimized by assuring the respondents of confidentiality of the information they gave.

38

The staffs of commercial banks were usually very busy and therefore they required a lot of

time in order to fill in the questionnaires. The challenge was overcome by giving the

respondents the questionnaires and agreeing to their time frame request to fill the

questionnaires.Not all questionnaires were returned leading to a response rate of 88%.

Although this was considered adequate for the study, 100% response would have been more

preferable. This study was based on a sample limited to commercial banks in Kenya.

5.6 Suggestions for Further Research Future studies should explore the reasons behind the influence of corporate strategy on

recruitment and selection practices among commercial banks in Kenya. Researchers should go

ahead and establish the reasons behind poor performance ofcommercial banksin relation to

employees’ competence and skills. Future studies will minimize the challenges experienced by

the commercial banks during recruitment and selection. The findings will help the banking

industry to understand the value of corporate strategy on performance of commercial banks.

39

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i

APPENDICES

Appendix I: Introduction Letter The Human Resource Manager

………………………………..

Dear Sir/Madam,

RE: REQUEST TO COLLECT DATA FOR MBA RESEARCH PROJECT

I Josephine Kudoyi, is undertaking a research project on the Influence of corporate strategy on

recruitment and selection practices among commercial banks in Kenya. To this end, I kindly

request that you respond to the attached questionnaire.

Your response will be treated with great confidentiality. Thank you for accepting to be part of

this study.

Yours faithfully,

…………………

Josephine Kudoyi.

ii

Appendix II: Research Questionnaire Introduction

This questionnaire is designed to assist in collecting data on the influence of corporate

strategy on recruitment and selection practices among commercial banks in Kenya. The

data collected will be used for academic purposes only and will be treated with a high

degree of confidentiality.

Section A: Personal Information 1. What is your position in the organization:

________________________________________________

2. Highest academic qualifications attained:

a. Masters Degree [ ]

b. Bachelor Degree [ ]

c. College [ ]

d. High school [ ]

e. Primary school [ ]

3. Number of years you have worked in this organization:

a. 1 – 5 yrs [ ]

b. 6 – 10 yrs [ ]

c. 11 – 15 yrs [ ]

d. 16 – 20 yrs [ ]

e. 21 yrs and above [ ]

Section B: Corporate Strategies

Please state the extent to which you implement the following corporate strategies in

your bank.

Use the following scale: 5= Very large extent 4= Large extent 3= Moderate extent 2=

Small extent 1= Not at all

Corporate Strategies 1 2 3 4 5 1 Growth strategy 2 Stability strategy 3 Renewal strategy 4 Diversification strategy 5 E-business strategy

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6 Cooperative strategy 7 Global strategy 8 Consolidation strategy 9 Cost leadership strategy 10 Differentiation strategy 11 Cost focus strategy 12 Differentiation focus strategy

13. Kindly mention any other corporate strategies applied in your bank and state to

which extent you implement them.

………………………………………………………………………………………………………………………………………………………………………………………… Section C: Recruitment and Selection Practices Kindly indicate the extent to which you employ the following recruitment and selection

practices in your bank.

Use the following scale: 5= Very large extent 4= Large extent 3= moderate extent 2=

Small extent 1= Not at all

Recruitment and Selection practices 1 2 3 4 5 1 Promoting employees 2 Transferring employees to fill vacant positions 3 Advertising vacant positions 4 Sourcing employees from educational institutions 5 Using employment agencies to obtain resumes 6 Recruiting from walk-ins pool 7 Using career or job fairs to recruit 8 Use of online recruitment 9 Utilizing referrals for recruitment and selection 10 Interviewing applicants for vacant positions 11 Using psychological tests for recruitment and selection 12 Use of assessment centers to pick qualified candidates 13 Conducting background checks

14. Please indicate any other recruitment and selection practices that are used in your

bank.

……………………………………………………………………………………………

……………………………………………………………………………………………

Thank you for participating

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Appendix III: List of Commercial Banks in Kenya

1. African Banking Corporation 2. Bank of Africa 3. Bank of Baroda 4. Bank of India 5. Barclays Bank 6. CFC Stanbic Bank 7. Chase Bank 8. Citibank 9. Commercial Bank of Africa 10. Consolidated Bank of Kenya 11. Cooperative Bank of Kenya 12. Credit Bank 13. Development Bank of Kenya 14. Diamond Trust Bank 15. Dubai Bank Kenya 16. Eco Bank 17. Equatorial Commercial Bank 18. Equity Bank 19. Family Bank 20. Fidelity Commercial Bank Limited 21. Fina Bank 22. First Community Bank 23. Giro Commercial Bank 24. Guardian Bank 25. Gulf African Bank 26. Habib Bank 27. Habib Bank AG Zurich 28. Housing Finance 29. I&M Bank 30. Imperial Bank Kenya 31. Jamii Bora Bank 32. Kenya Commercial Bank 33. K-Rep Bank 34. Middle East Bank Kenya 35. National Bank of Kenya 36. NIC Bank 37. Oriental Commercial Bank 38. Paramount Universal Bank 39. Prime Bank Kenya 40. Standard Chartered Kenya 41. Trans National Bank Kenya 42. United Bank for Africa 43. Victoria Commercial Bank