CHAPTER-I

INTRODUCTION

1.1. Introduction
Banking is known as the backbone of the national economy. Banks play an important

role in the business sector & promoting industrialization & economic development of

the country. Banks provide necessary funds for the executing various program

underway in the process of economic development. All sorts of economy & financial

activities revolve around the bank. As the industry produces goods & commodities,

bank creates & controls money market & promotes formation of capital.

Bank is a powerful medium to bring socio-economic changes in a developing country

like Nepal. The three important sectors in Nepal are Agriculture, Industry and Tourism

Sector provide the bulk of the country’s wealth. So the nourishment of these sectors is

only possible through satisfactory banking facility. Development of banking system

can provide the necessary boost for the rapid economy growth of a country. Bank

collects deposit from the customers at a lower rate of interest & lends it to the

borrowers at a higher rate of interest considering the cost of fund. The difference

amount indicates the operating profit for a bank.

Banks provide different services, credits to the customers. The customer comes from

all occupations, from a small business to a multi-national corporation having its

business activities all around the worlds. The bank has to satisfy the requirements of

different customers belonging to various social groups. The banking business has

therefore become complex & requires specialized skills. It functions as an agent for

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bringing about economic, industrial growth, & prosperity of the country. As a result,

different types of bank with various services have come in to existence to suit specific

requirements.

As an organization needs to succeed and survive, or compete effectively in the global

economy in this era of globalization, employers must be in the position to propound

and practice recruitment and selection of employees in the best way. The success of a

business or an organization is directly linked to the performance of those who work

for that organization. Underachievement can be a result of workplace failures. Every

organization has its own requirements in acquiring employees. It is vital that

organizations select people with the quality essential for continued success in this

competitive global village. The only means of achieving this success is through

proper recruitment and selection practices.

Recruitment and selection can play a pivotally important role in shaping an

organization’s effectiveness and performance, if work organizations are able to

acquire employees who already possess relevant knowledge, skills and aptitudes and

are able to make an accurate prediction regarding their future abilities. Recruitment

and selection also has an important role to play in ensuring employee performance

and positive organizational outcomes. It is often claimed that selection of employees

occurs not just to replace departing employees or add to a workforce but rather aims

to put in place employees who can perform at a high level and demonstrate

commitment (Ballantyne, 2009).

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By using the right selection methods one can ensure that the candidate does not only

has the right skills for the job, but also possesses the right personality to fit into the

existing organizational culture. Once that “right” person has been employed, the bank

has to ensure that the right incentives are put in place. However, recruitment and

selection is characterized by potential difficulties and it is necessary to keep abreast of

developments in research in the field of banking. Research from the Chartered

Institute of Personnel and Development concluded that organizations should

increasingly be inclusive in their employment offering, as younger generations have

grown up with the notion of flexible working, while older people have an interest in

flexible working as an alternative to retirement.

1.1.1. Selection process of Everest Bank Limited and Kumari Bank Limited

Selection is the part, which carries an extra weight for any organization because the

organizational performance, cost issues regarding recruitment and selection, and legal

obligations depends on it. Realizing the importance of careful selection Everest Bank

Limited and Kumari Bank Limited practices well organization selection process of all

types of employee. The elaborate selection of the organization is explained below:

(a) Reception of Application

Once the vacancy is announced, Everest Bank Limited and Kumari Bank Limited

move towards the selection process, which starts with the reception of application

forms, filled up through internet online form. After examining the filled up

information, they decide on which applications will sit for the written test, but

before that they evaluate the dependability of the information provided in the

application.

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 (b) Informing Candidates

After shortlisting of the C.V. and choosing the suitable candidates, HR division

inform the candidate over the phone about the written test. For written test, the

bank issues admit card through courier services ten to fifteen days prior to the

exam.

(c) Assessing candidates through written test

EBL and KBL is always concerned to retain the best candidates. After screening

out the applications from the previous phases, the choosen candidates sit for the

written exam known as the aptitude test. The abilities the written test measures

are:

1. Analytical ability

2. Logical reasoning ability

3. Numerical ability

The test questions contains math based and analysis questions where processing

information from data and forming relationship ability among the clues of given

problems are required to answer them. The exam committee checks the answer

scripts. According to the top marks candidates are invited for interviews.

(d) Document Checks

The candidates must submit photo copies of their education certificates of school,

college and university. In case where the original certificates have not been

provided by the institution, probationer certificate, academic transcript or mark

sheet will also be accepted by the bank.

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 (e) Interview

Candidates who qualify in the written test are called for an interview. The

candidates are informed about the interview time, date and venue at least prior to

the interview. All communications with the candidate like setting interview time

and date, position and salary negotiation etc are done by HR recruitment team

only. The interview board is formed with at least three members, one from top

management and other from HR and functional departments.

(f) Reference Check

When a candidate is selected for the job, his or her given reference has been

checked by HR. The candidate must give at least two reference. If the candidate is

fresh, then he or she has to have one reference from his educational institute. But

if the candidate was previously employed must have one reference from last

organization, preferably the supervisor. Subject to satisfactory response will get

job offer.

(g) Job offer

An approval needs to be taken from the MD for all permanent position and

temporary position and the approval is given by Head of HR. If a candidate

successfully reaches the final stage then candidates are given a job offer after

salary negotiation and upon acceptance of the job offer the candidate will be sent

for medical test at bank selected diagnostics. There is no salary negotiation for

temporary employee. Individuals joining as MTO have a probation period of

twelve months.

1.2. Statement of Problem

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The success of organization in this modern business environment depends on the

caliber of the manpower that steer the day to day affairs of the organization. The

process of recruiting and selecting all categories of employees into both private and

public companies has been a matter of concern to many and needs attention. Even

though it is the wish of every organization to attract the best human resource in order

to channel their collective efforts into excellent performance, unconventional

selection practices can make any business plan.

Managing people is a definite challenge bot at strategies or even organizational levels.

Thus, human resources are well managed and developed in alignment with the

organizational goals and strategies. It has been observed that for any organization to

achieve its stated objectives and goals there is the need for management to put in

place or strategies that will help attract the best of employees to strive towards the

achievement of organizational objectives.

It has also been observe that the performance output of employees of Everest Bank

Limited is of prime concern to management of Everest Bank Limited and Kumari

Bank Limited as it affect productivity and the development of the bank. Importantly,

some of the employees who are not able to improve and adjust to their new working

environment resign leading to employee’s turnover and this affect the organization in

terms of cost and productivity. The statement of problem of this study are as under:

a. How recruitment and selection practices are done in Everest Bank Limited and

Kumari Bank Limited?

b. What are the challenges associated with recruitment and selection practices to

Everest Bank Limited and Kumari Bank Limited?

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 c. What are the ways to improve staff recruitment and selection process in the

Everest Bank Limited and Kumari Bank Limited?

1.3. Objectives of the study

The general objective of this thesis is to investigate into employee recruitment

and selection practice by Everest Bank Limited and Kumari Bank Limited.

The specific objectives are as under:

a. To identify the existing selection and recruitment process adopted by

Everest Bank Limited and Kumari Bank Limited

b. To determine which of the recruitment and selection practices influence

the performance of employee.

c. To identify the challenges bank faces in the recruitment and selection

process of employee.

1.4. Significance of the study

Significance of this study will help Everest Bank Limited and Kumari Bank Limited

to adopt measures in the context of human resource in relation to recruitment and

selection and the performance. For other researchers it will also serve as reference and

be beneficial to the academic community and decision makers who deal directly with

the banking sector and to make meaningful proposes and suggestions to improve the

banking sector. Also the study is important because it reveals the importance of the

banking sector to the socio-economic development. This include offering employment

to many people. Finally, this will give for knowledge to management of Everest Bank

Limited before embarking and Human Resource Management and development.

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1.5. Limitation of the study

Every research has its own challenges. Notwithstanding, this research had its own

limitations. During data collection, most of the employees were busy on work so it

was quite difficult getting in touch with them. Some senior members were reluctant in

releasing vital information about recruitment and selection. Due to the combination of

studies and work I also did had limited time, but these limitations did not affect the

validity of the study.

1.6. Methodology

The study requires a systematic procedure from selection of the topic to preparation of

the final report. To perform the study, the data sources were to be identified and

collected, to be classified, analyzed, interpreted and presented in a systematic manner

and key points were to be found out. The overall process of methodology has been

given as below:

Primary: The primary information collected through questionnaire from employee and

Human resource manager.

Secondary: The secondary information collected from websites, magazines, annual

reports, books, journals and some other relevant sources.

1.7. Organization of the study

Chapter one, which is the general introduction of study, statement of problem,

objectives of the study , significance of the study, limitation and organization of the

study.

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Chapter two deals with a critical literature review of recruitment and selection

processes, defining requirements, selection methods, types of interviews, advantages

and disadvantages of interviews, “dos and don’ts” of selection interviewing, choice of

selection methods, improving the effectiveness of recruitment and selection of

employee.

Chapter three gives the overall view of research methodology including the

knowledge acquisition phases, research design, population, method of data collection

(i.e.) questionnaires, survey and semi- structured interviews.

Chapter four presents data collection and the results obtained from the questionnaires

survey, semi-structured interviews and analysis.

Chapter five provides conclusion of key findings of the research and makes
recommendation for future works.

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 CHAPTER-II

REVIEW OF LITERATURE

This chapter reviews critically employee recruitment and selection in organizations

and from the perspective of human resource management. The development of a

conceptual framework is also included.

2.1. Concept of recruitment and selection

Recruitment and selection is characterized finally by potential difficulties and it is

necessary to keep abreast of developments in research in this field. One of the assets

of every organization is its employees. To engage and employee’s services the

employer needs to undertake recruitment by creating a pool of applicants, which

mainly leads to the selection of qualified people to work in the organization.

Recruitment and selection also has an important role to play in ensuring employee

performance and positive organizational outcomes. Two main sources of recruitment

was identified - internal and external source of recruitment. The components of

internal source of recruitment consists of transfers, promotions, job positing and job

bidding (Shrestha, 2015).

Whilst the external source of recruitment are advertisement, e-recruitment, employee

referrals, employment agencies, labor office and educational and training

establishment. Selection process followed recruitment which entails, initial screening,

interview, reference check, selection test, job offer that mostly leads to organizational

performance. The conceptual framework explaining recruitment and selection

practices in organization.

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Recruitment is the process of finding and attempting to attract job candidates who are

suitably qualified and therefore capable of filling vacancies in job positions

effectively. The purpose is to encourage them to apply for the vacant position.

(Costello, 2006), affirm that recruitment is a set of activities and processes used to

legally obtain adequate number of qualified applicant at the right place and time to

enable applicant and the organization to select each other for their own optimum

interest.

Definition of recruitment as given by professional and scholars, it is apparent that

recruitment borders or deals with the plan advertisement of exiting vacant position in

an organization in order to wool or attract suitable and qualify applicant to apply for

the vacant position or offices for employment in the said organization. Based on the

above recruitment is a very specialized field in Human Resources practices as it

involves techniques that will adequately identify the pool of skilled and quality

applicants.

Selection refers to the process of choosing from a group of applicants those

individuals best suited for a particular position in an organization.‟ Whereas the

recruitment process is aligned to encourage individuals to seek employment with the

organization, the selection process is to identify and employ the best-qualified and

suitable individuals for specific positions. Traditionally, it was assumed that

organizations could choose amongst applicants and that they would accept all job

offers. However, attracting a large number of applicants was not the problem, but

recruiting the right applicants became the main concern amongst employers (Branine,

2008). With the oversupply of unskilled applicants (Nzukuma & Bussin, 2011), it can

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be assumed that employers would be very careful before selecting any applicants.

Employer decisions about the selection of employees.

Employer decisions about the selection of employees are central to the operation of

organizations and to a series of outcomes that matter to individuals, organizations, and

society. Perhaps the most basic question in this area is why employers engage in

selection efforts at all. Managers who are involved in hiring employees need to

understand the skills and abilities that are required in a particular job and determine

which candidates have those capabilities. Interviews, reference checks, tests,

applications and résumés can all help identify differences among candidates.

Managers can make their selection decisions with a fuller awareness of the

applicants‟ strengths and weaknesses.

2.2. Process of Recruitment

Full-cycle recruiting is a term used by human resources specialists who manage the

recruitment process from start to finish. Full-cycle recruiting begins with sourcing

candidates, which means looking for prospective applicants whose qualifications

might be suitable for the job openings. Everest Bank Limited sourcing has evolved in

the past several years with the proliferation of job and career sites. Every organization

has the option of choosing the candidates for its recruitment processes from two kinds

of sources: internal and external sources. The sources within the organization itself

(like transfer of employees from one department to other, promotions) to fill a

position are known as the internal sources of recruitment. Recruiting candidates from

all the other sources (such as outsourcing agencies etc.) are known as the external

sources of recruitment.

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2.2.1. Internal Sources of Recruitment

Internal sources refer to recruiting employees from within the organization. In

deciding requirement of employees, initial consideration should be given to a bank

current employees, which is concerned with internal recruitment. They include those

who are already available on the pay roll of the bank. This is important source of

recruitment as it provides opportunities for better development and utilization of

existing human resources in the organization. Armstrong (2006), proposed that first

consideration should be given to internal candidates, although some organizations

with powerful equal opportunity policies (often local authorities) insist that all

internal candidates should apply for vacancies on the same footing as external

candidates. Aspects of recruitment under internal sources are as follows:

(a) Promotion

It refers to promoting or upgrading an employee who is already existed in the pay roll

and contributed to the organizational performance. It is shifting an employee to a

higher position with high responsibilities, facilities, status and pay. Usually, many

banks fill higher job vacancies by promoting employees who are considered fit for

such positions. This is due to fact that it has a great psychological impact over other

employees for their motivation towards better performance. Internal recruitment

efforts very often result in promotions. Promotion signifies reward for past

performance and encourages employees in their efforts.

(b) Transfer

Transfer is a lateral shift causing movement of individuals from one position to

another. Mathis & Jackson (2006), consider transfers as being effected when the need

for people in one job or department is reduced or increased, if the work load reduced

employees would want to relocate to other areas where they can have enough tasks to

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perform. Under it, employees are recruited internally through transfer from one work

place to another. It refers to the process of interchanging the job duties and

responsibilities of employees from one place to another or from one department to

another without any promotion in their position or grade. It is a good source of

generating qualified employees from over-staffed departments (Keshav, 2013).

(c) Job Posting

Job posting is an open invitation to all employees in an organization to apply for the

vacant position. It provides an equal opportunity to all employees currently working

in the organization. Today it has become a very common practice in many

organizations across the world. Under this, vacancy announcement is made through

bulletin boards or in lists available to all employees. Interested employees, then apply

for the post being advertised. In this way, it has become one of the cost saving

techniques of recruitment (Keshav, 2013).

(d) Job bidding

Job bidding is more effective when it is part of a career development program in

which employees are made aware of opportunities available to them within the

organization. For example, HR departments may provide new employees with

literature on job progression that describes the lines of job advancement, training

requirements for each job, and skills and abilities needed as they move up the job-

progression ladder.

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Advantages of Internal Recruitment

(a) Labor Turnover:

The turnover of valuable employees is reduced through internal placement.

Employees within the banks can be reassigned to an area within the organization

where the need is greater. Restricting the vacancy to internal candidate can also help

to retain employees who might otherwise have left the organization (Sunderland &

Canwell, 2008).

(b) Performance

Internal recruitment might offer cost saving in the human resource management

process because of the record of performance available to recruiters. An internal

candidate has developed a record of accomplishment of performance during

employment that provides the most accurate assessment of her on the job professional

skills and experience. If the bank conducts formal performance reviews, the employee

performance and goal-setting information will give valuable insight to recruiters when

assessing internal candidates (Keshav, 2013).

(c) Corporate Culture

Corporate culture might formally relate to the goals and objectives of the banks as

articulated in its vision and mission statement. It informally includes the business

attitude, customs and etiquette. An external candidate that fulfills the experience and

skills needed for a position might not fit into the organizational culture. Internal

candidates are already familiar with the bank culture, policies and procedures. For

example, this might manifest itself in how meetings are conducted, projects are

organized or the use of consensus building in the decision-making process

(Keshav,2013).

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The Disadvantage of Internal Recruitment are:

(a) Limited Choice

Internal recruitment provides limited choice of talent available in the organization as

it avoids the arrival of fresh candidates. Internal recruitment does not tap any

candidate from outside the organization; hence, the number of potential candidates for

the post is limited to those from within the organization. There may be far better

external candidates who have more experience and better qualifications (Sunderland

& Canwell, 2008).

(b) Implementation of Traditional system

Internal recruitment requires the implementation of traditional form, system, process

and procedures. In addition, this limits the scope of fresh talent in the organization

(Keshav, 2013).

(c) Position

In using internal recruitment, existing employees, whether competent or not, will feel

that they have an automatic right to be given a more senior post (Sunderland &

Canwell, 2008).

(d) Costly

Taking into consideration that when an employee is promoted, instantly vacancy

instantly arises. In this regard, another employee is to be recruited to fill that position,

which may be costly affair (Sunderland & Canwell, 2008).

(e) Limited Internal Sources

The source of supply of manpower is limited in internal recruitment method. When an

employee is promoted, his/her previous position will be vacant and another personnel

is to be recruited to fill that vacant position (Keshav, 2013).

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(f) Time Value

When qualified candidates exist internally, recruiting candidates internally can

decrease the time it takes to fill a position. This is particularly useful in a tight job

market, when the number of external candidates applying for a given job opening can

become astronomical. In such cases, selecting among qualified internal candidates

may be efficient because it offers costs savings, such as those associated with

advertising and from using staffing resources to interview numerous external

candidates (Keshav, 2013).

2.2.2. External Sources of Recruitment

External sources of recruitment refer to attracting applicants from outside a particular

organization to fill vacant positions. Like internal sources, they are useful to attracting

competent applicants to apply for advertised positions in various organizations. Broad

varieties of methods are available for external recruiting. Organizations should fully

assess the kinds of positions they want to fill and select the recruiting methods that are

likely to reduce the best results. External source of recruitment include advertisement,

e-recruitment, employment agencies, employee office, education and training

establishment (Beardwell, 2007; Cober & Brown, 2006). Details of these sources are

discussed in this section.

(a) Advertisement

It is the most common form of external sources of recruitment. Organizations

advertise vacant position on both electronic print and media to access a larger pool of

applicants. An advertisement has communication as its basic underlying principle and

it should be worded in a manner that triggers responses from job seekers. Recruiters

should formulate the wording of advertisements in a manner that is not

discriminatory. Advertisements are expensive but attract a larger pool of applicants

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than internal recruitment processes. It is, however, more difficult to evaluate external

applicant than those that are already employed within the organizations.

(b) E-Recruitment

E-Recruitment or online recruitment uses web-based tools such as a firm’s public

internet site or its own intranet to recruit staff. The processes of e-recruitment consist

of attracting, screening and tracking applicants, selecting, and offering jobs or

rejecting candidates. Cappelli (2001) has estimated it that it costs only about one-

twentieth, as much to hire someone online. The internet has become a way for

employers to display bank image and advantages over competitors (Rotella, 2000).

Many internet users know the difficulty, frustration and inefficiencies of sorting

through information to find applicable and useful material. However, many bank’s

find it difficult to integrate the Internet with their existing systems.

(c) Employee Referral

An employee referral program is a system where existing employees recommend

prospective candidates for the job offered, and in some organizations if the suggested

candidate is hired, the employee receives a cash bonus.

Under this method, a candidate is appointed on the recommendation of some currently

working employees. Hence, the HR managers of various banks depend on the present

employees for reference of the candidates for various jobs. This source reduces the

cost and time required for recruitment. Further, this source enhances the effectiveness

of recruitment. HR managers offer various incentives/rewards including cash

incentives to the current employees for referring the best candidates.

(d) Employment Agencies

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Employment agencies, sometimes referred to as labour brokers, even though they can

face criticism from labour unions in Nepal, tend to be fast and efficient in recruiting

applicants for specialized positions. For a fee collected from either the employee or

the employer, usually the employer, these agencies do some preliminary screening for

the organization and put that organization in touch with applicants. Private

employment agencies differ considerably in the level of service, costs, policies, and

types of applicants they provide. Employers can reduce the range of possible

problems from these sources by giving a precise definition of the position to be filled

(Sims, 2002).

(e) Employee offices

Labor offices are sources of certain types of banks employee. A labor pool is generally

available through a union, and employees can be dispatched to particular jobs to meet

the needs of the employers. In some instances, the union can control or influence

recruiting and staffing needs. An organization with a strong union may have less

flexibility than a nonunion bank in deciding who will be hired and where that person

will be placed. Unions also can work to an employer’s advantage through cooperative

staffing programs.

(f) Educational and Training Establishment

Managers of organizations may visit educational institutions such as universities and

colleges to attract top students, especially during their final years of study to apply for

vacant positions. This method of recruitment is also referred to as campus recruiting

and is one of the cheapest methods of recruitment. It introduces final year students to

the institution. The recruiter normally makes a presentation to final year students and

invites desirable students to visit public institutions exposing them to different areas

within the organization.

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As with any recruiting method, hiring from outside an organization instead of
promoting from within the bank carries both advantages and disadvantages. Some of
the advantages are:

 When an organization recruits externally, it opens the organization up to a

larger pool of applicants, which increases its chance to find the right person
for the job.

 Looking outside the organization also allows a bank to target the key players
that may make its competition successful. Hiring a candidate with a proven
record of accomplishment for the competition allows the banks to get an
insider's view as to what the competition is doing to be successful. This gives
the organization a chance to stay a step ahead of the competition.

 External recruitment provides an opportunity for a fresh outlook on the bank

that a bank may need to stay competitive.

 Bringing in fresh talent from the outside can help motivate the current
employees to produce and achieve more in hopes of obtaining the next
promotional opportunity.

 Hiring an external candidate also opens up many opportunities to find

experienced and highly qualified and skilled candidates who will help a bank
meet its diversity requirements.

 The biggest advantage of external recruitment is that the bank has no limited
supply of candidates and can choose employees all over the world.

The challenges of external recruitment are

 External recruitment requires an employee to adapt to the new environment and

if the new recruit is in management, the employees may tend to resist change
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 that he or she tries to implement because these changes may work against the

organizational culture

 This method of recruitment can indicate that the management of the

organization fails to train or motivate their staff through promotion

opportunities and career advancement.

 In addition, external recruitment can lead to a high rate of labor turn over when

employees realize that there is no room for career advancement in the

organization.

2.3. Selection Process

Employer decisions about the selection of employees are central to the operation of

organizations and to a series of outcomes that matter to individuals, organizations, and

society. Perhaps the most basic question in this area is why employers engage in

selection efforts at all. Managers who are involved in hiring employees need to

understand the skills and abilities that are required in a particular job and determine

which candidates have those capabilities. Interviews, reference checks, tests,

applications and résumés can all help identify differences among candidates.

Managers can make their selection decisions with a fuller awareness of the

applicants‟ strengths and weaknesses (Chan, 1996)

2.3.1. Screening

Screening, popularly known as short listing, is the first step after the recruitment

process is completed and applications received. In this step, all the applications

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received by the due date are screened and those that do not correspond to the

requirements stipulated in the advertisement are immediately eliminated in this step.

Selection panels have to be careful not to discriminate against applicants with

potential. Their decisions should be guided by short-listing criteria that is developed

against the job requirements stipulated in the advertisements. Furthermore, they need

to ensure that enough time is set aside for short-listing.

2.3.2. Selection Test

It is essential to evaluate all tests by comparing the results at the interview stage with

later achievements. To be statistically significant, these evaluations should be carried

out over a reasonable period and cover a large number of candidates as possible. In

some situations a battery of tests may be used, including various types of intelligence,

aptitude and personality tests. These may be a standard battery supplied by a test

agency, or a custom-built battery may be developed. The biggest pitfall to avoid is

adding extra tests just for the sake of it, without ensuring that they make a proper

contribution to the success of the predictions for which the battery is being used.

2.3.3. Reference and Background check

Usually advertisements require that applicants provide the names and contact details

of people who can serve as referees to them in case their applications are considered.

Reference checks are used to verify the information that is supplied by applicant and

are usually done telephonically. Although most referees are reluctant to respond to

certain questions, reference checks can be used to gather as much information that

will be used in deciding whether to appoint or decline to appoint the applicants.

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References provide the organization with other people’s perceptions of the candidate’s

professional ability. The bank should contact the candidate’s previous employers and

colleagues. Questions to ask references might address the candidate's creativity and

initiative. This is mostly the reason why conditional job offers are given in other to

check the authenticity of what the candidate provided on the application form.

References are one of the more popular and „traditional‟ tools in the selection

process. However, the validity and reliability of references has been questioned,

particularly with respect to their unstructured and often ambivalent nature.

2.3.4. Interview

Interviews are virtually used by all organizations for selection purposes. Interviews

are the most widely used personnel selection procedure. With the use of interviews,

managers of organizations get an opportunity to meet the applicants directly. The

interview also provides the applicants with an opportunity to learn more about the

public institution. The purpose of the selection interview is to gather as much

information and to use such information to arrive at a selection decision. During the

interview, panel members (interviewers) normally pose questions to which the

interviewee is expected to respond. Responses to the questions are often captured by

means of scores as determined the interviewers. The applicant that obtains the highest

score is recommended for appointment. Because of interview ambiguity, efforts must

be made to ensure that all interviewees are being asked the same question.

2.3.5. Physical Examination

Applications are often expressed to undergo test(s) to determine if they are fit to

perform the job, should they be appointed. The most common example of the

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employment tests that applicants often undergo is a medical examination. Medical

examination, also referred to as pre-placement medical testing, is conducted only

where the applicants are required to use physical strength to successfully perform

their duties.

2.3.6. Job Offer

The next step in selection process is job offer to those applicants who have crossed all

the previous hurdles. In other words, it is the last step in the selection process.

Development of an offer via e-mail or letter is sometimes a more formal part of this

process.

2.4. Challenges of Recruitment and Selection

Recruitment and selection of employees is the most important job of a Human

Resource person. CIPD (2009), suggest that effective recruitment is central and

crucial to the success of day-to-day functioning of any organization. The success of

recruitment depends upon finding the people with the right skills, qualification and

expertise to deliver organization objectives and the ability to make a positive

contribution to the values and aims of the organization (CIPD, 2009).

Conducting a thorough job analysis and identifying the right caliber of candidates

bring about a good blend between applicants and the job. Argument has been given

that under qualified employees may not able to effectively perform their job positions

due to lack of knowledge and competencies, while on the other hand over qualified

employees tend to experience less job satisfaction due to their higher qualification

than a desired level for a given job. For every job in the organization as Armstrong

(2006), identified, there are stages by which a thorough job analysis must aim to

achieve -defining requirement, preparing job descriptions and specifications; deciding

24
terms and conditions of employment, attracting candidates, and reviewing and

evaluating alternative sources of applicants inside and outside the organization. Job

analysis process generates information which is converted into tangible outputs of a

job description and a person specification, that is what has to be done and who does it

before recruiting for a new or existing position. It is important to invest time in

gathering information about the nature of the job since it prescribes relevant personal

qualities and attitudes as well as skills and knowledge required for the job (Pilbeam &

Corbridge, 2006).

Organizations in the selection process use methods such as application forms,

interviews, formal tests, references, assessment centers and official transcripts. An

organization needs to choose a method that is most appropriate to the job positions.

HR experts generally drive the staffing process and the purpose of the staffing is to

fulfill the requirements of bank, and the skill levels presented by each new recruit is

likely to be judged better if the line managers are involved in the recruitment and

selection process. In bank strategy implementation, the involvement of line managers

in the entire staffing process (that is, drafting of job descriptions, setting selection

criteria and being on the panel of recruitment) is vital for ensuring recruitment and

selection to meet business needs. In other words, the line managers are the owner of

the recruitment and selection process along with HR playing a facilitator role.

Organization that are less selective or hire lower-skilled employees are likely to

experience significant effects on productivity, while hiring a mismatched employee

can result in poor performance and higher turnover rates (Batt, 2002). Scholars have

argued that other key issues and controversies run through analyses of human

resource management and recruitment and selection: efficiency, control, and the
25
difficulty of orienting practice towards social justice are often cited. The first two

problematic have been central to the management of people for as long as managers

have been present in organizations. The latter is also common across all organizations,

but is a particular academic and policy concern for smaller or growing organizations.

In recruitment and selection practice, the construction of formalized selection

frameworks and norms of acceptable discrimination maybe seen as an attempt to

enable managers to navigate between efficiency, control and social justice. In their

advice on how to achieve the perfect fit of person, organization and job, they argue

that selecting on the basis of managerial opinion is „utterly unscientific and unreliable

and that managers are liable to be turned this way and that by the most

inconsequential of considerations‟. In place of this unsatisfactory state of affairs,

these scholars propose that the physical self-provide the key to unlocking the inner

secrets‟ of the individual seeking employment, and therefore should inform the

selection process. The underlying philosophy of this process is that everything about

man indicates his character and as much information as possible should be collected

to inform a decision- making.

2.5. Impact of Recruitment and Selection Practices on Performance

Performance is an increasingly important issue for all banks in developed and

developing economies in both public and private enterprises. Organizations are

however not exempted from the necessity of performance as they are continually

threatened by increase competition resulting from the increasing liberalization of the

global economy. Individual performance is topical issue in today’s business

26
environment, to the extent that organizations go to the length to appraise and manage

it (Armstrong& Barron, 1998)

Performance is the level of an individual’s work achievement after having exerted

effort. Hayward (2005), stated that individual performance is a product of ability

multiply by motivation. With environmental factors influencing performance

primarily through the effect of individual determinants of performance ability and

motivation. HR practices are positively correlated with the profitability and suggest

that management of organization must focus on these HR practices (recruitment and

selection) resulting in improved organizational profit. In order to get maximum output

from employees, it is important to consider a fit between successful candidates and

the organization. This is made possible by the use of selection criteria as basis on the

questions asked by the selection panel and in interview. By selecting the required

candidates for positions in respective departments, line managers could help achieve a

better fit between job and candidate.

Poor recruitment practices and recruiting poor performing employees can have several

negative effects on the organization some of which are stated below:

 Employees with limited role specific capabilities take time to become

productive and need more training to build their skills, good employees hit the

ground running and are interested in learning

 Underperforming staff also affect the performance of many by a multiplier

effect.
27
  People who are not a good fit to the role require more time and attention from

their manager. The time that managers spend on developing their best people

is reduced higher human resources cost may arise as a result of time spent in

recruiting poor performing employees.

 Customer satisfaction is impacted through a increase in errors, poor decision

making and less effective customer services.

2.6. Review of Literature

Gupta (2005) defines Employee recruitment as “practices and activities carried on by

an organization for the purpose of identifying and attracting potential employees”.

Many large corporations have employee recruitment plans that are designed to attract

potential employees that are not only capable of filling vacant positions but also add

to the organization’s culture.

Armstrong, (2006) found in his study that the Recruitment and selection forms a core

part of the central activities underlying human resource management: namely, the

acquisition, development and reward of the employees. It frequently forms an

important part of the work of human resource managers – or designated specialists

within work organizations. However, and importantly, recruitment and selection

decisions are often for good reason taken by non-specialists, by the line managers.

Recruitment and selection also have an important role to play in ensuring employee

performance and positive organizational outcomes. Recruitment and selection had the

capacity to form a key part of the process of managing and leading people as a routine

part of organizational life, it is suggested here that recruitment and selection has

become ever more important as organizations increasingly regard their workforce as a

source of competitive advantage. Of course, not all employers engage with this
28
proposition even at the rhetorical level. However, there is evidence of increased

interest in the utilization of employee selection methods which are valid, reliable and

fair. Listing the essence of these in the following; build a pool of candidates for the

job, have the applicants fill out application forms, utilize various selection techniques

to identify viable job candidates, send one or more viable job candidates to their

supervisor, have the candidate(s) go through selection interviews, and determine to

which candidate(s)an offer should be made.

Sims (2002) in his study of recruitment and selection practices in the USA, found that

approximately 25 percent of respondent organizations conducted validation studies on

their selection methods. Furthermore, in a rating of various selection methods, those

perceived to be above average in their ability to predict employees' job performance

included work samples, references/recommendations, unstructured interviews,

structured interviews and assessment centers.

Storey (1995). a common problem in recruitment and selection is poor HR planning.

Rigorous HR planning translates business strategies into specific HRM policies and

practices. This is particularly so with recruitment and selection policies and practices.

The key goal of HR planning is to get the right number of people with the right skills,

experience and competencies in the right jobs at the right time at the right cost. Past

research shows that the competency level of HR managers has a major influence on

recruitment and selection and experienced HR experts with in the HR department will

not only shorten vacancy duration, but also improve the quality of the applicants.

Moreover, effective recruitment and selection is possible only if there is a dedicated

and competent HR team.

29
 CHAPTER-III
RESEARCH METHODOLOGY

Research methodology can be described as the framework associated with a particular

set of assumptions that can be used to conduct research. Research methodology also

involves considering the methods of data collection and the theories and concepts

underpinning the research topic.

3.1. Research Design

The choice of research design depends on the objectives of the research in order to be

able to answer the research questions. The research design in this study is descriptive.

30
3.2. Sources of data

The researcher used both primary and secondary sources of data for the study.

3.2.1. Primary Sources of data

The primary data was obtained using the survey method. These include the

distribution of questionnaires and collection of data from key respondents and

professionals pertaining to the banking industry. In order to achieve the aim and

objectives of the study, well-designed questionnaire with both close-ended and open-

ended questions were formulated to gather information from appropriate respondents.

The wordings were without bias and the questions provided multiple-choice options,

which gave the respondents the opportunity to present their ideas by way of selecting

from the options, provided. Data obtained was analyzed using excel to get meaningful

conclusions and recommendations.

3.2.2. Secondary Sources of Data

Secondary data is data collected by someone other than the user. A clear benefit of

using secondary data is that much of the background work needed has already been

carried out or analyzed. The secondary source was to get a deeper understanding of

published information on employee recruitment and selection within Nepalese

banking industry. The information gathered from these sources helped guide the

second phase of the questionnaire structuring, distribution and collection of data from

the key respondents.

3.3. Population and sample of the study

31
There are 28 commercial operating in Nepal (NRB, 2019) are the population of our

study. Out of them Everest bank limited and Kumari Bank Limited is taken as

convenience sample for the study. There are 156 employees working in Everest bank

limited and 248 employee working in Kumari Bank Limited in Province 1. Out of

them 122 have been interviewed.

3.4. Data analysis

After the responses were gathered, every type of data relating to the questions were

separated and gathered to answer different research objectives. The information

received were classified into answer categories and expressed as percentage

frequencies. The research methodology that is used is quantitative.

CHAPTER-IV
PRESENTATION AND ANALYSIS OF DATA

4.1. Introduction
This chapter presents the results, analysis interpretation and discussion of the data

collected. The results are displayed with regards to the order of arrangement of the

questionnaires. The major findings are briefly presented and discussed consequently.

The different sections are: questionnaire responses rate, experience of respondents,

formal policy for recruitment and selection of employees, ranking of recruitment and

selection method used mostly, ranking of recruitment and selection method which

32
leads to performance, ranking of the significant challenges confronting employee

recruitment and selection.

4.2. Questionnaire respondent rates

The table given represent the response rate of questionnaire administered to bank

employee and Human Resource Manager.

Table 4.1

Response Rate of Questionnaire

Respondent Questionnaire Questionnaire Questionnaire Response rate

Administered Received analyzed
Employee 200 145 122 72.5%
Total 200 145 122 72.5%

The 72.5% score or success is because of the special measures taken prior to the

administration of the questionnaires. The researcher waited and took back the

completed questionnaire immediately, took contacts of respondents who were unable

to make time available for the immediate completion of the questionnaire and

subsequently call to check and possibly collect such questionnaires.

4.3. Experience of Respondents

From (Table 4.2) a good number of the respondents (18.3%) had more than 5years of
experience. It was also 14.75% had working experience less than a year. This implies
that the outcome represent the point of view of very experienced people.
Table 4.2
Experiences of Respondents
Years Frequency Percentage (%)
Less than 1 year 18 14.75%
From 1 to 5 years 60 49.18%
From 6 to 10 years 22 18.03%
From 11 to 15 years 14 11.48%
More than 15 years 8 6.56%
Total 122 100%

33
Figure 4.1. Experiences of Respondents

4.4. Professional Qualification of Respondents

Table 4.3
Professional Qualification of Respondents
Qualification Frequency Percentage (%)

Masters of Business Administration 22 18.03%

Master’s 72 59.02%

Bachelor 28 22.95%

Total 122 100%

34
Figure 4.2. Professional Qualification of Respondents

This was to find out the highest qualification of the various respondents in the study

area. From the chart, it was realized that 22 respondents constituting 18.03% had

Masters of Business Administration (MBA), 72 (59.06%) Master’s Level Degree, 28

(22.95%) respondents had Bachelor qualifications and other professional affiliations.

It is noticed that the respondents were of higher level of professionalism averagely

and therefore information provided would be of higher significance to the objectives

of the research.

4.5. Formal policy for the recruitment and selection of employees

Table 4.4

Formal policy for the recruitment and selection of employees

Formal Policy for the recruitment and selection of Frequency Percentage(%)

employees
Yes 75 61.48%
No 47 38.52%
Total 122 100%

35
Figure 4.3. Formal policy for the recruitment and selection of employees

Here, the intention was to know if banks have policy for recruiting employees. From

the chart, 75(61.48%) respondents confirmed that formal policy was used in the

recruitment and selection of employees in their respective establishments. The few

respondents, 47 (38.52%) in number said that there was no formal policy for

recruitment and selection of employee. This line of reasoning corresponds with Smith

et al. (1989) that when an organization makes the decision to fill an existing vacancy

through recruitment, the first stage in the process involves conducting a

comprehensive job analysis.

4.6. Highly ranked recruitment and selection method

Table 4.5

Highly ranked recruitment and selection method

Recruitment and Selection Method Frequency Percentage (%)
Internet Recruitment 62 50.82%
In-house recruitment 34 27.87%
Employee referral 8 6.56%
Newspaper Advertising 18 14.75%
Total 122 100%

36
Figure 4.4. Highly ranked recruitment and selection method

The results showed that the four most used recruitment and selection method in the

order of merit are as follow: Internet recruitment 50.82%, In-house (internal

recruitment with 27.87%, employee referral 6.56% and Newspaper advertising

14.75%. Internet recruitment is most preferred because of easy, convenient and cost

effective. These methods are discussed below:

(a) Newspaper advertisement

The literature revealed that newspaper advertisement is the best traditional

approach employers use to attract and recruit employees for most open jobs. It

was added that for many positions, an advertisement in the local paper was

enough to tap into the local employee market. In very small organizations, the

owner often places the newspaper ad first, based on the recruiting criteria because

it best satisfies the employer’s objective for recruiting.

(b) In house recruitment

37
The literature revealed that newspaper advertisement is the best traditional

approach employers use to attract and recruit employees for most open jobs. It

was added that for many positions, an advertisement in the local paper was

enough to tap into the local labour market. In very small organizations, the owner

often places the newspaper ad first, based on the recruiting criteria because it best

satisfies the employer’s objective for recruiting.

Among the ways in which internal recruiting sources have an advantage over

external sources is that they allow management to observe the candidate for

promotion (or transfer) over a period of time and to evaluate that person’s

potential and specific job performance; a recruitment performance survey

conducted by Institute of Personnel and Development revealed this. It added that

an organization that promotes its own employees to fill job openings may give

those employees added motivation to do a good job.

(c) Employee referral

Despite the weak advantage it has on the part of the employer, it is mostly used in

employee sourcing where existing employees inform their friends and relations of

existing job vacancies. Although it is a highly used method of recruitment, it has a

number of disadvantages to the employer. Referrals of job applicants by the

organization’s existing employees can be a low-cost but very effective method of

recruitment.

(d) Internet recruitment

38
 The Internet has become a way for employers to display bank image and

advantages over competitors (Rotella, 2000). Internet recruiting is becoming a

popular solution to the bank employee shortage. The increased turnaround,

minimal recruiting cost, and favorable candidate demographics make the Internet

a potential solution to the labour shortage.” Some of the benefits he points out are:

convenient accessibility for both the recruiting firm and the job seeker (jobs are

posted 24 hours a day, 7 days a week), and immediate feedback (via online

communications) which results in a faster hiring cycle and reduced cost per hire.

Many predict that the Internet will become more popular as a recruiting tool in the

future. Internet Recruitment does not only save cost but also enables organizations

to provide much more information to applicants, which can easily be updated.

Internet has been recognized as a low-cost advertising medium that facilitates

paperless, real time transactions.

4.7. Effect of employment and recruitment on performance

Table 4.6

Effect of employment and recruitment on performance

S/N. Response Frequency Percentage (%)

1 Yes 80 65.57%
2 No 42 34.43%
Total 122 100%

39
Figure 4.5. Effect of employment and recruitment on performance

The study asked respondents whether the recruitment and selection method adopted

has influence employees performance in their respective firms. Bowen et al. (1991),

examined that, integrated recruitment and selection processes help recruiters to

choose the candidates to fit the characteristics of an organization’s culture.

Recruitment and selection has an important role to play in ensuring employees

performance and positive organizational outcomes. Majority of the respondents 30

(62.5%) indicated that the practice had incredibly affect their performance while 18

(37.5%) of the view that there had not been any improvement in their performance.

4.8. Factors to improve Recruitment and Selection Practices

The researcher wanted to find out from respondents how recruitment and selection

practices or processes for recruiting employees could be improved.

Table 4.7

Factors to improve Recruitment and Selection Practices

S.N. Response Frequency Percentage(%)

1 Proper Job Analysis 60 49.18%

40
2 Advertising Job Vacancy Publicly 34 27.87%

3 Job Description 12 9.84%

4 Competency should be basis for selection 16 13.11%

Total 122 100%

Figure 4.6. Factors to improve Recruitment and Selection Practices

Most respondents (49.18%) were of the opinion that job should be analyzed properly

and should be given to those in-house employee who can do it properly whereas

27.87% are of opinion that all applicants should be given an equal opportunity of

being selected and treated fairly while all favoritism and biases are eliminated to

ensure that all get a fair chance of being selected and employed. Respondents further

suggested that the public should be aware through advertisement for all to apply while

at the same time given an equal opportunity. Another group of the respondent was of

the view that competency (13.11%) should be the utmost basis for employee

selection.

41
Proper job analysis (49.18%) and job description (9.84%) spells out the descriptions

of jobs to individual for them to know exactly what the job is. Tt is a written

statement that explains the duties, working conditions and other aspects of a specified

job to the potential employee. Usually most advertised jobs have no job description to

specify the actual duties of the job and the working conditions. The purpose of jobs,

duties and required skills and qualifications were not made available for candidates.

New recruits do not find their comfortable levels in carrying out those functions when

they are employed because they have no idea of their responsibilities. Hence, it was

suggested that this important aspect should not be ignored.

CHAPTER-V
SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1. Summary
This part of the study presents summary of result together with conclusions of the

analysis and recommendations made to address the main problems identified from the

study in line with the objectives. Summary of the main findings is devoted to the first

part with regard to the objectives assigned to remind the reader of the achievements of

the objectives. The succeeding parts deals with the conclusions of the analysis. A
42
suggested performance appraisal structure and other specific recommendations made

are also presented in this chapter.

The objectives of the study were to identify existing recruitment and selection

methods adopted by Everest Bank Limited in engaging employee, to determine which

the recruitment and selection procedures influence the performance of employee, to

identify challenges recruiter encounter in the recruitment and selection of employee.

Below are the findings obtained from the analysis of the data gathered from the

survey conducted.

 The study revealed that the banking industry did not have any formal policy

for recruitment and selection. Most respondents constituting 77.78%

confirmed that no formal policy was used. The few 22.22% who had the

policy for recruiting employee added that the policy only allows for internal

scrutinizing at all departments.

 From the study four methods were identified as recruitment and selection

media adopted by recruiter in recruiting employees. Out of these the most

frequently used method of recruiting and selecting of bank employees is

internet recruitment followed by internal recruitment, employee referral and

newspaper advertisement.

 The study established that majority of the respondents constituting 62.5% of

the population confirmed that the recruitment and selection practices in their

respective firms helped them improve their performances whereas 37.5% felt

that its does not have any impact on job performance. Odiorne (1984) stated

that the result of effective recruitment and selection are the reduction on

43
 employee turnover, good employee morale and improves organization

performance.

5.2. Conclusions

The overall aim of the recruitment and selection process should be to obtain at

minimum cost the number and quality of employees required to satisfy the human

resource needs of the company (Armstrong, 2006). Following the analysis and

findings, the subsequent conclusions drawn based on the objectives of the study

include:

 The methods for the recruitment and selection of employee by bank include

internet recruitment, newspaper advertisement, employee referrals, and in-

house (internal recruitment).

 Out of these identified recruitment and selection methods, the most frequently

used medium of selecting employee for reason of their respective merits are

listed in the descending order of highly recognized method: Newspaper

advertisement, employee referrals, in-house (internal recruitment) and lastly

internet recruitment.

 Hence, the management objective for recruiting employee despite the existing

recruitment and selection policy must be re-looked at to avoid critical failure

in-terms of recruitment purpose including undesirable levels of staff turnover

and claims of discrimination from unsuccessful job applicants.

5.3. Recommendations

In view of the above conclusions drawn from the findings, the following

recommendations were made to contribute to the practices of recruiting and selecting

of Everest Bank Limited. The integral benefits of the identified recruitment and

44
selection practices cannot be overlooked; nevertheless, the following

recommendations must be well noted.

 As Everest Bank Limited and Kumari Bank Limited is a reputed bank, a huge

number of people want to be employed as employee of it. For this reason,

when job vacancy is announced a large number of resumes are deposited in the

bank. However, at the time of short listing according to evaluation criteria,

there are more number of employee fulfilling the qualification requirements

but among the qualified candidates, a small of number of candidates are

selected for the written test. All the qualified candidates are eligible for the

written test but HR department does not give opportunity to give written test

to all the qualified candidates. Only randomly selected candidates from the

qualified candidates can participate in the written test. In this regard, every

candidates should be given chances for written examination.

 Those candidate applying in bank should be made aware the terms and polices

of the banks properly before final recruitment and selection process.

 Sometimes applicants who are referred by the top-level management gets

some more favor from the recruiting board. It is not fair because the

organization may overlook the qualified employees who are desirable for the

organization. Therefore, from this prospect, for the welfare of EBL, nepotism

has to be stopped and the management bodies have to give more emphasis on

conducting a fair recruitment and selection process.

 Before any recruitment and selection method will be adopted, employers

should conduct job analysis to determine job description, job specification,

and job evaluation. Through proper job analysis, firms will be able to fix up

45
 the specific duties and responsibilities of every employee. Job analysis will

help in determining skills and knowledge to be possessed by the employees to

hold various positions. It will also facilitate in providing effective

compensation packages to the employees.

 Kumari Bank Limited is recommended to open its new branches in Biratnagar

market area as it is located outside the market area. Beside it should also

increase its number of staff for efficient services to its customers.

 In situations of internal recruitment, ensure that the job vacancy is

communicated to all divisions of the workplace, intranet, notice boards,

newsletter, team meetings etc. and include communication to those on leave to

avoid any perception that the internal recruitment process is a formality – that

is a preferred candidate has already been identified.

 Age limit should be excluded from the recruitment and selection process so

that more educated and experienced people can apply in the bank.

46