Examining a moderating effect of employee turnover between ...

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Co-Editors

Dr. Cihan Cobanoglu, University of South Florida, USA Dr. Valentina Della Corte, University of Naples Federico II, Italy

ADVANCES IN GLOBAL SERVICES AND RETAIL MANAGEMENT: VOLUME 2

ISBN 978-1-955833-03-5

*Authors are fully responsible for corrections of any typographical, copyrighted materials, technical and content errors.

University of South Florida M3 Center Publishing

https://digitalcommons.usf.edu/m3publishing/vol5/iss2021/69DOI: https://www.doi.org/10.5038/9781955833035

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Co-Editors

Dr. Cihan Cobanoglu, University of South Florida, USA Dr. Valentina Della Corte, University of Naples Federico II, Italy

ISBN 978-1-955833-03-5

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Muna et al.: Examining a moderating effect of employee turnover between recruitment and selection practice

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Associate Editor

Dr. Seden Dogan, Ondokuz Mayis University, Turkey Dr. Muhittin Cavusoglu, Northern Arizona University, USA

Assistant Editor

Dr. Faizan Ali, University of South Florida, USA Dr. Resat Arica, Adiyaman University, Turkey Dr. Alaattin Basoda, Aksaray University, Turkey Dr. Lisa Cain, Florida International University, USA Dr. Giovanna Del Gaudio, University of Naples Federico II, Italy Dr. Rab-Nawaz Lodhi, University of Central Punjab, Pakistan Dr. Bendegul Okumus, University of Central Florida, USA Dr. Antonella Miletti, University of Naples Federico II, Italy Dr. Gozde Turktarhan, University of South Florida, USA

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*Authors are fully responsible for corrections of any typographical, copyrighted materials, technical and content errors.



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Examining a Moderating Effect of Employee Turnover Between Recruitment and Selection Practice and Organizational Performance in Maldives Civil

Service Sector

Fathmath Muna1, Azam S. M. Ferdous2, and Ahmad Albattat1

1Post Graduate Center

Management & Sciencee University, Malaysia

2Faculty of Business Management and Professional Studies

University Drive, United States

Abstract

This study aimed to examine a moderating effect of employee turnover between recruitment and selection practice and organizational performance in the Maldives Civil Service Sector.An adopted self-administered questionnaire distributed to Maldives Civil Servants. Google Doc questionnaire distributed through an online platform; Email, WhatsApp, Viber, and Facebook. The study tested the hypothesis through Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) procedure. Moderating factor evaluated through Regression Path Analysis Method using bootstrapping multi-group comparison indirect effects. Regression analysis revealed the moderating factor Employee Turnover (ET) has a significantly positive effect between Recruitment and Selection Practice (RSP) and Organizational Performance (OP) as it's beta significantly different from the zero at 0.001 level p-values. The study asserted that the majority of the respondents were not satisfied with their current job. Also, respondents believed that fair and effective recruitment and selection lead to employee satisfaction and less turnover. This study would beneficial to policymakers, HR leaders, HR Practitioners of government organizations. The study would help to make the right decisions and to select the best candidates when hiring. Similarly, Recruitment and Selection Practice would improve organizational performance.

Keywords: employee turnover, recruitment and selection practice, organizational performance

Recommended Citation: Muna, F., Ferdous, A. S. M., & Albattat, A. (2021). Examining a moderating effect of employee turnover between recruitment and selection practice and organizational performance in Maldives civil service sector. In C. Cobanoglu, & V. Della Corte (Eds.), Advances in global services and retail management (pp. 1–10). USF M3 Publishing. https://www.doi.org/10.5038/9781955833035

Introduction

In this modern-day Human Resource Management is developing rapidly, recruitment and selection practice becomes challenging. Therefore, employee involvement is essential to success factors for HRM performance. Human Resource Management (HRM) is a tool that could influence an employee's commitment and engagement of HRM strategy. Conversely, retention and turnover are other aspects that are considered theoretical expansion. No doubted that the organization, HRM must be equipped to deal with the effects of work (Sutanto & Kurniawan, 2016). Understanding the implications of globalization, technology changes, workforce diversity Changing skill requirements, continuous improvement, enterprises liable workforce, decentralized work sites, and


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employee involvement are the issue that confronts. The biggest challenge to HRM is shortlisting suitable candidates for a particular position in the given time frame. Most importantly, the selection panel fails to recognize the qualified and right person for the right job. The Huge number of job leavers increased in Maldives Civil Service Sector still the employer put efforts to persuade the employees by giving them proper training during the induction period. However, employers claim that their work is effortless, and on the other hand, employees have different arguments. Employees find it difficult to do their job once the recruitment and selection stage is done due to higher responsibility, lower-level pay, dissatisfaction in the workplace, perception on the fairness of management decision making that has the allegation of fair recruitment and selection practice. The secondary research stated that most human resource managers do have sufficient data concerning HRM requirement ability. However, HRM is an expert skill that is highly required for personal with the relevant knowledge and ability (Albattat & Som, 2013).

Since the 1980s, employee turnover became the focal point of job performance and employee turnover has proven to be indefinable. Though several studies support the negative relationship between individual job performance and turnover. In this modern globalization increasing knowledge work, accelerating technology advancement raises the competition of attracting qualitative employees. However, most of the evidence shows that retention of talented employees becomes a huge concern to managers increasing the high rate of employee turnover (Hotel et al., 2008). To sustain fair recruitment and selection system it is important to have the correct HRM structure and to have a skilled, motivated, well-trained, and enthusiastic workforce in an organization. Besides, if the organization has a good HR system then it would eliminate unfairness, reduce employee absenteeism, turnover rate, and increase the overall efficiency of organizational performance. According to Hay Group, the global employee turnover rate will experience the severest escalation in 2014 and by 2018, more than 49 million employees leave their present jobs to compare to 2012 making it a total number of 192 million employees worldwide (HayGroup, 2013). This study aims to find the moderating effects between recruitment and selection practice and organizational performance and how its empirical evidence to ascertain from the respondents of civil servants. Also, this study rigorously adds knowledge to academia and would strengthen the results for further study to the broader perspective.

Literature Review

Bratto & Gold (2007) differentiate the two terms while establishing a clear link between recruitment and selection; Recruitment is to appointing to any post should be based on the applicant’s ability to successfully carry out the duties of the post as stated in the job description. The person specification details the attainments, knowledge, experience, skills, and other qualities needed to meet the requirements described in the job description. Selection will be based on fair and open competition and involve a selection panel in shortlisting and interviewing candidates by using specific instruments. All those involved in the process should have undertaken the Effective Recruitment and Selection Training Course (Afsana Akhtar, 2010). Some literature shows that recruitment effectiveness depends on performance and the best suitable most effectiveness could assess through investigating turnover rate, survival rate, and employee’s performance. Human resource management and its profession play key roles to help an organization of achieving its goals. However, effective HR activities such as; recruitment and selection practice can minimize the employee turnover rate and organization successfully by keeping skilled employees in the organization that would lead to better performance (Pahos & Galanaki, 2019). Several studies have



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found that promotions are negatively correlated with turnover (Carson, Griffitch, & Steal, 1994; Johnston, Grifftch, Burton, & Carson, 1993). McCormack (2008) has argued that the characteristics of immigrants, the recruitment practices of employers, and government policies drive labor market segmentation. Several studies have highlighted barriers to employment on both the supply and demand side as well as blockages to labor market mobility arising from policy constraints.

Challenges to Recruitment, Selection Practice and Employee Retention

The recruitment and selection process is not completed when the job appointment is done. After this process, it is important to motivate and retain potential candidates in an organization. To retain them in the organization top management or policymakers have to use HRM strategies, the theoretical tools and give them proper training during the induction to motivate retain them. According to the literature, employee supervision faces major issues in retention. Most of the time effective role of the supervisor’s guidance, support, and relationship with coworkers are lacking (Martin et al., 2003; Rycraft, 1994). Yang et al., (2011) found that a proactive personality is positively associated with interpersonal skills and negatively associated with turnover intention, those employees are less likely to leave as they are socially embedded within the organization. When staffing decisions are made based on unethical, favoritism, discrimination it results to the selection of incompetent employee who does not have the right knowledge, skill, and abilities that would not add value to the organization (Luballo & Simon, 2017). This will highly influence individual performance as well as the entire organization. High rates of voluntary turnover of such employees are often harmful or disruptive to the organization’s performance (Fahim, 2018). However, this disclosure negative characteristic leads to undue frustration and eventual turnover (Sarah et.al., 2018).

Generally, HRM recruitment and selection practices predict the voluntary turnover rate and employees' critical challenge of the organizational performance (Noe et al., 2007). HR practice leads to employee turnover and the effectiveness of organizational performance. Therefore, it is vital not to undermine the importance of recruitment and selection practice. However, an organization that is less selective or hires lower-skilled employees is likely to experience significant effects on service efficiency, while hiring mismatched employees can result in poor performance and high turnover rates (Darkoh, 2014). On the top improper working condition could lead to employee dissatisfaction and employee might start and where voluntary turnover starts. Grievance and other internal conflicts play a vital role to become more stressed and job dissatisfied. With a 3-year longitudinal study, Wong, Chun, & Law (1995) found that organizational commitment was an effective predictor of turnover intention. Other studies (Farrell, 2001; Khatri et al., 2001) have similar results and comments. So, soon they will leave the organization and the employee turnover rate will be high.

Effective recruitment and selection are possible when there is a dedicated and competent HR Team (Kaplan & Norton, 2004). A rigorous HR plan would help to recruit the right number of people with the right skills, experience, and competencies to the right job at right time. Robust recruitment and selection policies such as; recruitment and selection procedures, assessing criteria, talents auditing, and processing the information about the labor market are important epacts in recruitment when positioning suitable candidates. Past research shows that the competency level of HR managers has a major influence on recruitment and selection. Experienced HR practitioners and


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HR professionals would not only shorten vacancy duration but also improve the quality of the applicants. Performance evaluation another reason that contributed to employee retention as it gives them the confidence to employees that the organization is committed to accomplishing the needs and development of employees that enhances performance (Bogatova, 2017). On the other hand, some authors argue that the employer-provided training, may increase the turnover by making employees attractive to other organizations (Haines, Jalette, & Larose, 2010), The same point is given more credits in a recent study in Trevor (2001) when job satisfaction, unemployment rates, and pay were held constant, employees with higher education were more likely to quit. Here are some of the challenges that are faced in recruitment and selection practice.

When recruiting the wrong candidate to that specific job, they seek to leave the job for better opportunities (voluntary Turnover), and if the new recruiters fail to meet performance requirements could lead to an involuntary turnover rate (Noe et al., 2007). Generally, HR practice in recruitment and selection predicts the voluntary turnover rate and critical challenge to organizational performance.

In a recruitment and selection process, the HR team and HR professionals face difficulties in identifying qualified candidates from the bundle of applicants (Ni Mhurchu, 2007), and it is a failure of some recruitment practices to conform to the labor market standards.HR professions or Interview panel discrimination, stereotype judgement and unethical principal in making decisions also leads to high turnover rate. A recent study found that employee participation in training and development programs would reduce turnover rate, but also when they earn their graduate degree would increases turnover (Finegold, Benson, & Mohrman, 2004).

Figure 1: Theoretical Framework of Recruitment and Selection Practice Effects to Employee Turnover

Source. Noe et al., 2007: Luballo & Simon, 2017

If the organization has the right skilled, qualified, and experienced staff, certainly the organization would perform better to deliver the service. This linked to minimizing organizational turnover rate,

Recruitment & Selection Practice

Employee Turnover rate will be high

Weak Organizational

Culture

Demotivated Staff

Less Skilled Staff

Poor Relationship / Coordination



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poor performance and dissatisfied customers mutually would benefit both employee relation and high commitments (Akuamoah & Amedagbui, 2016).

The Effectiveness of Recruitment and Selection Techniques

Beardwell et al., (2004) suggest that any recruitment and selection system should be based on three fundamental principles, which are effectiveness, efficiency, and fairness. Effectiveness worried with individual accurately between suitable and unsuitable candidates. Mayo (1995) suggested several ways that could be measured to imply the effectiveness of recruitment & selection like; retention rates, promotion rates, a satisfactory level at work, and organizational performance as well. However, these factors are not standing alone for such measurement as they can be influenced by working conditions and the stress on employee development within the organization. Therefore, the effective selection technique is important to have high commitment and to build a strong relationship within the organization (Albattat & Som, 2013; Upchurch, DiPietro, Curtis, & Hahm, 2010). If the employees are highly committed, they tend to spend long hours in the organization. However, if employees are less committed towards the organizational goal they tend to have high turnover. Bloom & Michel (2002) argued that only highly committed employees would remain in the organization, even though they were offered better pay by other competitors. In Hartman & Yrle (1996) study, they proposed that employees are likely to become hobos and leave when they perceived limited promotional opportunities. Educational background may affect the perception too. If the employees are dissatisfied with their job they quit the job. High job dissatisfaction means a high turnover of employees. Job dissatisfaction eventually leads progressively to the employee leaving the company (Hom & Kinicki, 2001). Mor Barak, Nissly, & Levin (2001) investigated that workforce with higher educational backgrounds perceived more employment opportunities. A higher educated workforce may consider their qualification as a competitive advantage over a less educated workforce by having more choices of alternative positions. Effective Recruitment and selection creates a talent pool of potential candidates and helps to increase the success rate of the selection process by decreasing the no of visits qualified or overqualified job applicants. However, effective HR activities such as recruitment and selection practice can minimize the employee turnover rate and the organization to successfully keep skilled employees in the organization would lead to better performance.

Figure 2: Conceptual Framework of Hypothesis

This modified theoretical framework consists of three variables; Recruitment & Selection practice factors are independent variables (IV), Organizational Performance Dependent Variable (DV), and

Independent Variable (Exogenous)

Dependent Variable (Endogenous)


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Moderating Variable (MV) Employee Turnover Moderates on organizational performance. Based on the framework has these combined factors have positive relationships on recruitment and selection practice on performance. However, moderating variables affect the relationship between the independent and dependent variables by modifying the effects of the intervening variables. Based on previous research this conceptual framework there is one hypothesis moderator, which is Employee Turnover.Employee turnover moderate relationship between recruitment & selection practice and organizational performance

Research Methods

Sampling Technique

This study was a quantitative research methods survey. Stratified Random Sampling method used for this study. An adopted research questionnaire was used to collect the primary data. For the research 418 online (Google Doc) questionnaire was distributed to current employees who worked in the Government of Maldives Civil Service Organizations. Data was gathered from the employees who work in Ministries, Departments, Atoll councils, and Island Councils. The respondents were from various departments, sections such as; Human Resource Management, Administration, IT, Finance, Service quality, etc. The questionnaire items were measured by using the Likert Scale technique. The measurement tool of scaling ranges was between 1-5, Strongly Disagree to Strongly Agree.

Statistical Technique of Data Analysis

The study used a comparable statistical technique to investigate the collected data of its correlation, coefficient, and regression analysis. The reliability and consistency were validated by using Cronbach’s alpha. Statistical Package for Social Science (SPSS) Version 25.0 & AMOS version 24.0 software used to analyze the data collected from the survey questionnaire. The study has indicated that 51.2 percent of the respondents were Female and 48.8 Percent were Male. The highest respondents age group was between 25 – 34 years. 51.2 percent of the respondents were age between 25 – 34 years. Moderating effect on employee turnover between recruitment and selection practice and organizational performance was measured through 14 items. These 14 adopted instrumental items were drawn from past literature. Items include in the measure of moderating effect between recruitment and selection practice on performance

1. Recruitment and Selection Practice OP1: HR team has sufficient knowledge of HR practice and organizational service (5 point Likert-type scale) OP2: Selection process do initial screening and then conduct interview (5 point Likert-type scale) OP3: Organization conducts appropriate interview to select the suitable candidate (5 point Likert-type scale) OP4: Human Resource Management team decisions are fair in recruitment and selection practice (5 point Likert-type scale) OP5: This Organization evaluates all job vacancies to ensure it is still required to meet organizational needs (5 point Likert-type scale)

2. Organizational Performance OP1: The speed of project operations and service delivery is efficient (5 point Likert-type scale) OP2: The overall quality of service provide by employee are excellent (5 point Likert-type scale) OP3: This Organization achieve its goals & objectives on expect time (5 point Likert-type scale) OP4: This Organization deal with customer complaints faster than our expectation (5 point Likert-type scale)



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OP5: This Organization employee have skill, experience of the job to deliver superior quality service (5 point Likert-type scale)

3. Employee Turnover ET1: This Organization employee trust into leadership is high (5 point Likert-type scale) ET2: The Organizational trust among employee themselves is high (5 point Likert-type scale) ET3: This Organization provides formal training program to enhance employee's capability to retain the staff (5 point Likert-type scale) ET4: I received helpful orientation history and service information at orientation to do my job well (5 point Likert-type scale)

Research Findings

• H1: Employee Turnover Moderates the Recruitment and Selection Practice on Organizational Performance

Moderating Relationship Between the Variables

The Moderating factor evaluated through Regression Path Analysis Method using bootstrapping multi-group comparison indirect effects. In the model, it contains three variables called; Dependent variable (DV) hypothesized moderator variable Employee Turnover (ET), and Independent Variable Recruitment and Selection Practice (RSP). To estimate that three Unstandardized Regression Weight values of Independent, Moderate and Dependent variable coefficient values were used (Aydin, Özer, & Arasil, 2005). The results of this study model indicate that Moderating factor supported and significant beta from Independent Variable (IV) and Interaction.

Figure 3: Moderating Relationship Between the Variable

Moderating Effects

Table 1: Moderating Effect Hypothesis Test Result Hypothesis Significant Relationship Findings

H1 RSP è ETèOP Significant Relationship

Strong and Positive P-Value less than < 0.001 (Supported)

This hypothesis was tested in regression of moderating variable Employee turnover. In the study, the small difference the moderate was significant as its beta was significantly different from the zero at 0.001 level of p-values (two-tailed). In other words, the covariance between ET_RSP and ET_OP is significantly different from zero at the 0.001 level. The multiple regression analysis


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revealed that ET has a positively significant moderating effect between RSP and OP. This hypothesis supported and ET strengthens the positive relationship between RSP and OP. A large number of empirical studies verify a positive relationship between human resource management practices on organizational performance mainly in relation to employee retention (Tangthong, Trimetsoontorn, & Rojniruntikul, 2014).

According to the findings when Employee Turnover (ET) Moderates Low Recruitment and Selection Practice (RSP) on Organizational Performance (OP) the Model (y=0.612x+1.782) that the standard deviation was less than the mean. Employee Turnover (ET) Moderates High Recruitment and Selection Practice (RSP) on Organizational Performance (OP) the Model

Figure 4: Two-Way Interaction of Moderating Effect

(y=0.972x+1.842) as standard deviation was greater than mean. Hence, it was observed that ET has a moderating effect on the link between RSP on OP (Aydin et al., 2005). Therefore, this hypothesis Employee Turnover supports the significantly positive moderating effects to Recruitment and Selection Practice on Organizational Performance and this hypothesis was acceable.

The study indicated that 54.6% of the study population agree that employees were not satisfied with the current working environment. 71.3% responded that Fair and effective recruitment and selection can lead to employee satisfaction and less turnover. The study asserted that 89.7% of respondents believed Right employees should be placed in the right position to retain the staff for better organizational performance. Another obvious finding was 56.9% respondents were optimistic about future career and considering to change the work in next three years. However, 48.3 % of respondents agreed that absenteeism is very high in their organization.

y = 0.612x + 1.782

y = 0.972x + 1.842

1

1.5

2

2.5

3

3.5

4

4.5

5

Low RSP High RSP

OP

ModeratorLow ETHigh ETLinear (Low ET)Linear (High ET)



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Figure 5: Employee Turnover Moderates the Recruitment and Selection Practice on Organizational Performance

Conclusion

This study resulted in employee turnover moderates the relationship between recruitment and selection practice and organizational performance. Statistically, this objective hypothesis supported significantly positive moderating effects of Recruitment and Selection Practice on Organizational Performance. This results supported previous research (Amin, Khairuzzaman Wan Ismail, Zaleha Abdul Rasid, & Daverson Andrew Selemani, 2014; Fahim, 2018). These studies indicated that Human Resource practice has significant impacts to retain potential candidates where they could lead to have better organizational performance in public sector in Malaysia and Egypt. In this research study highlighted following indications;

• Despite the evidence from Civil Service respondents study asserted the organizational goals and objectives achieved, but their service delivery wasn’t an efficient.

• The study indicated that majority of the respondents were not satisfied with their current job and majority of the respondents have low organizational trust to themselves.

• Employees believed fair and effective recruitment and selection could lead to employee satisfaction and decrease the turnover rate.

Recommendation

This also will mitigate wrong selection decisions and ensure a more reliable and valid to collect and analyze data. However, the study recommends Civil Service organizations make fair and right decisions in recruitment and selection practice, which would lead to less employee turnover and better organizational performance. Then the employees will be more satisfied to deliver sufficient service. Since HR practice leads to employee turnover and the effectiveness of organizational performance it is vital not to undermine the importance of recruitment and selection practice. Most importantly, the Policy Makers need to ensure the HR team must have sufficient knowledge to practice recruitment and selection practices with other HR functions. In future the study recommended to conduct longitudinal research on employee turnover in recruitment and selection practice and it impacts on organizational performance.


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Afsana Akhtar, U. K. (2010). Recruitment and selection process. Retrieved from https://core.ac.uk/download/pdf/61800969.pdf

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Aydin, S., Özer, G., & Arasil, Ö. (2005). Customer loyalty and the effect of switching costs as a moderator variable. A case in the Turkish mobile phone market. Marketing Intelligence & Planning, 23(1), 89-103. doi.org/10.1108/02634500510577492

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