BUS 401Section

Title: Recruitment of employee based on recommendation rather than qualification.Company: Juvenile service ltd.

Prepared for:Dilara Afroz Khan (Senior Lecturer)

Prepared by:

Faisal Khaled Ahmed0930667530Farhana Kashfi Zahir0930746030Sawgat Mahmud0930837030Anika Ishrat1010098030Zahid- Ul- Hasan1010204030Sha Foysal Bin Amin1010229030Ashraful Adib1020090530

DUE DATE: 24/04/2014Table of Content:

Topic:Page no.Introduction3Research Objective4Hypothesis4Literature Review5Research Limitation7Research Methodology7Data Analysis8Conclusion17Bibliography 18Appendix19

Introduction:

It is a wide spread phenomenon all around the world that recruitment process is biased towards various individuals with high links and high contacts. Considering Bangladesh there are lots of different private as well as public companies where this kind of biasness approach is taken place during recruitment. This is an unethical act that takes place as fresh graduates or more deserving candidates are pushed away from opportunity that they rightly deserve. A lot of undeserving candidate is placed in position in the corporate world where they are not capable of without the backing of high links or political links. This causes a demonization to the capable candidates who would have done a much better job is the opportunity was offered. This research paper will focus on a local Bangladeshi company Juvenile Service ltd which is a buying house in situated in Bangladesh and its recruitment process which is usually biased on granting jobs to candidates with recommendation rather than candidates with merits or much deserving candidates. Thus in this research will focus whether it is an unethical act that is taking place in this company or not. Due to this practice taking place in the organization employees existing in the company who is not hired by recommendation feels less motivated toward work and sense less scope of achievement. This kind of practice reduces job satisfaction in the work place and hence distorts the job objective. This research will help to understand more about the elements that revolves around this current issue going on in the job sector of Bangladesh and specially in Juvenile Service Ltd.

Research Objective:

Our objective is to look in to the core reason why this kind of unethical act is encouraged or not resisted in Juvenile Service ltd. This paper will also focus on whether this kind of approach benefits the company in any way or does it have impact on the work environment. To understand if there is any other external factor that the company face other than pressure from top management or people with high political background that acts as catalyst to this unethical act. This research will bring out policies that will help the company to move away from such unethical act. This research will answer questions like:-1. Is it beneficial to the company to hire employees on recommendation rather than merit?2. Does this unethical act have any impact on the work environment?3. Do employees with recommendation contribute more to the company than employees selected on merit basis?

Hypothesis:

H0: Recruitment of employees based on recommendation is unethical.H1: Recruitment of employees based on recommendation is ethical.

H0: Unethical recommendation does not have any impact on work environment.H1: Unethical recommendation has any impact on work environment.

Literature Review:

The connection between fraud and the tone at the top of an organization has received international attention over the last few years. Tone at the top refers to the ethical atmosphere that is created in the workplace by the organization's leadership. Whatever tone management sets will have a trickle-down effect on employees of the company. If the tone set by managers upholds ethics and integrity, employees will be more inclined to uphold those same values. However, if upper management appears unconcerned with ethics and focuses solely on the bottom line, employees will be more prone to commit fraud because they feel that ethical conduct is not a focus or priority within the organization. Employees pay close attention to the behavior and actions of their bosses, and they follow their lead. In short, employees will do what they witness their bosses doing. It is crucial to a companys success for executives and management to set an ethical example (or tone) of how their employees should behave in the workplace. When those in top positions set the wrong, unethical example by committing fraud, their employees will take heed and follow in their bosses fraudulent footsteps, creating an entire culture of workplace fraud. When executives put pressure on their employees to meet unrealistic goals to yield profits for the company, they are essentially forcing employees to do whatever it takes to achieve those goals, whether they achieve those goals improperly or not. In their minds, the end justifies the means.Thus when talking about all the unethical practice in the workplace and how the employees will learn from the top management about the unethical behavior. Recruitment in most cases tend to be recommendation based rather that qualification, thus when employees know that unethical practice is going on at the first step i.e. recruitment then the employee will have less motivation on work and have high possibility of conducting unethical behavior at work place. This leads to negative workplace environment.People opted not to report about the unethical act of recruitment by recommendation as he/she may have followed the same route or thinks that it is done by the top level officers and going against them will have his/her job at stake. Obviously, there are many different forms of misconduct that go on in the workplace and are observed by employees every year. Yet, many employees do not report this unethical conduct. According to the National Business Ethics Survey, only 55 percent of employees in 2005 said that they reported misconduct that they observed in the workplace. This was a 10 percent decrease from the previous survey in 2003. In the past, employees under age 30 with little tenure (less than three years) were the least likely of any group to report ethical misconduct. This was due to their fear of retaliation from management and coworkers. They also felt that managers would consider them trouble makers if they reported unethical conduct. Middle managers and senior managers were most likely to report misconduct. However, in 2005, there was no significant statistical relationship between age/tenure and reporting. The top reasons for not reporting unethical conduct, according to the 45 percent of employees who did not report misconduct.To eliminate such activities the HR department has to play a vital role in this issue they have to carefully screen job applicants According to the ACFEs Fraud Examiners Manual, one of the easiest ways to establish a strong moral tone for an organization is to hire morally-sound employees. Too often, the hiring process is hastily conducted. Organizations should conduct thorough background checks on all new employees, especially managers and those who will be handling cash. These background checks should include a thorough examination of the candidates educational credentials, criminal record, history of employment, and references. Speaking with former employers or supervisors can provide valuable information about a persons reputation for trustworthiness, moral conduct, and loyalty. Implement a confidential hotline Hotlines have proved to be a very effective reporting mechanism. According to the ACFEs 2006 Report to the Nation on Occupational Fraud and Abuse, occupational frauds were more likely to be detected by a tip than by any other means such as internal audits, external audits, or internal controls. Additionally, organizations with hotlines had a median loss of $100,000 per scheme and detected their frauds within 15 months of inception. By contrast, organizations without hotlines suffered twice the median loss ($200,000) and took 24 months to detect their frauds. The mere mention of an anti-fraud, confidential hotline can deter fraud. When employees are aware of workplace ethics, their likelihood of engaging in misconduct decreases, according to the NBES survey. An organization can place an advertisement in the staff break room with a hotline number that employees can call to confidentially report suspicious fraudulent activity in the workplace. Promoting anti-fraud hotline numbers will send the message that the company is encouraging an ethical environment by allowing employees to fearlessly report misconduct.

Research Limitation:

Time constraints is a major limitation is this research as the research paper will have to be finished in two months time which can lead to various forms of error. The sample size which will be used for the survey is very less to actually understand the depth and various variables involved in this research. Budget limitation will limit the paper from other methods to conduct this research which could have been more accurate and effective. The survey carried out might have a biasness trend which can limit us from understanding the factors preciously for this research and hence lead us to conclusion to a different direction.

Research Methodology:

For primary research, we have conduct survey of the representative sampling of employees working in Juvenile service ltd (Management trainee officer, Executive, Clerks etc). Our sample size for this research is n=50. An interview was also taken place on few of the employees to better understand the depth of the scenario of our topic. Therefore, questioner was developed to inquire the target sample about their personal values, their expectation from their job, their social recognition, their work satisfaction, their ethical values etc to determine how they feel about the unethical recruitment process that is carried out in their company. For the papers secondary research, we have used the resources from our university library where we can access the j-store for journals and will also consult few books. This research paper has information from different websites and related articles on the relevant topic about various recruitment acts that is unethical to law. Google Scholar will also be used for scholarly journals.Data Analysis:

This section presents the findings of our primary research on ethical recruitment practices of Juvenile service ltd and its relevant impact upon the organization. These findings are set in accordance to our set of initial hypotheses and attempts to shed concluding evidence for or against them. Thus, these findings are analyzed according to the relevant theories and concepts of business ethics, aided by our secondary research of various ethical practices concerning recruitment in similar situations throughout the world.

Set of Findings from Questionnaire:Figure 1: Segments of the Sample surveyed

Figure 1 shows us that amongst the 50 people surveyed, 40 of them were employees, 5 were employers, and 5 labors. Such a dynamic was created in order to ensure that a diverse array of opinions was collected from the survey where biasness from different parties, the employer or the employee, would get minimized. This was one essential requirement for accurate collection of information regarding the issues under discussion. By ensuring that the majority of the respondents of the survey were employees, we ensured that in-depth knowledge of the effects of various forms of recruitment could be acquired.

Figure 2 illustrates the firms strategies concerning its source of recruitment 80% of the respondents claimed that the company preferred internal recruitment. Internal recruitment is a cheaper alternative to external recruitment and helps ensure that the firm has a greater control and better relation with its employees. It is a form of retention of employees by providing them with career growth, and generally is highly appreciated by employees. But it also gives the top management adequate scope to play favorites and hire or promote the people with whom they have good relations into the vacant positions.Figure 2: Internal Recruitment vs. External RecruitmentFigure 3: Importance of Educational Qualification

Figure 3 illustrates the importance that an educational degree plays in the recruitment process, according to the respondents. While 50% of them stated that the required level of educational qualification is a must, 50% declared that though it is of importance, it is not a mandatory. None of the respondents perceived it as having zero influence on the recruitment process. If we focus on the statement of the respondents who declared education as important but not a strict, mandatory guiding tool, we can realize that there lies some scope for informal hiring where managers do have the capability to hire people who do not meet the educational requirements set by the company itself. Figure 4: Importance of Technical Skills

While Figure 3 discussed the perceived role of educational qualifications of a given applicant for recruitment, Figure 4 discusses about his/her technical expertise and level of competence. While 60% of the respondents viewed candidates possessing the specific technical skills required to do their work is a mandatory, 20% stated that it was just slightly important, while the rest 20% viewed is as not important at all. Here, we must try and ascertain that most of the respondents of the latter group could have mainly formed of labor. Nevertheless, here still lies even more scope for unethical recruitment where the managers can simply recruit a person they want, regardless of whether anyone else possesses a better repertoire of skills than him. Yet, we must also acknowledge that firms do take in less competent people and train them later if they cannot find a supply of competent people in the applicant pool.

Figure 5 illustrates the frequency of hiring under-qualified candidates for a position. Here the views of the respondents were highly varied as two groups 30% stated that it is only done for emergencies, and it is only done rarely, respectively. 20% of the respondents felt that the company never hired under-qualified people, while the rest 20% admitted that they actually did it very, very regularly. Such variation in answers to the same question deduces the fact that either the respondents do not share the same knowledge about their organizations recruitment process, or they were not sharing real information. But both these cases can deliver wrong sets of information. Therefore, further discussion into the matter would be futile. Figure 5: Hiring without adequate Qualification

Figure 6 shows how equally the respondents feel that they are treated by their managers. While 60% stated that they are treated slightly fairly, the rest were divided in their opinions, where half of them felt that they were treated very fairly and the other half felt they were treated unfairly. On inspection, we would find that the people who felt that they were inferiorly treated were in the latter section, and the people who were given additional privileges thought that treatment was very fair. In short, discrepancy concerning treatment of employees from their seniors exists quite significantly. This can be a clue which leads to favoritism and biasness concerning promotions and rewarding systems for the employees.Figure 6: Equal Treatment by Managers

Figure 7 illustrates the importance of good recommendations for a fresh recruit for the company. While 60% of the respondents felt that good recommendations were important but not mandatory, 20% insisted on it having an even greater importance, and the rest 20% believed that new recruits need not have such recommendations to face the recruitment process. If our findings had indicated that recommendations for recruitment played a very important role for this organization it would have led us to deduce strongly that the management always picked up their recruits through unethical means of recommendations all the time. But the fact that the majority of the respondents viewed it as slightly important shows that even though there are enough evidence to suggest unethical, recommendation-based recruitment present in the organization, it is not the primary method for hiring new employees. Figure 7: Significance of Recommendations for Recruitment.

Figure 8 illustrates the performance of the new recruits who are hired based primarily on recommendation as compared with the other employees of the firm, typically the ones who hold positions primarily based upon their competence and work efficiency. While 3 groups of respondents, 20% each, stated that these new recruits performed slightly better, significantly better, and slightly worse than the typical employee, respectively, the majority, 40%, stated that the competence and efficiency of the recruits who came through good recommendation is initially quite poor, as compared to their regular standards. This begs to question the plan behind recommending for recruiting new employees who do not perform according to the organizations standards. And the answer might be that the primary intention of managers of recruiting these employees was not to maximize the effect on organizational efficiency the intentions of such managers must have been focused on an external or personal issue. This is a severe form of unethical practices of recruitment for the organization. Figure 8: Performance of Recruits hired primarily on good Recommendations

Figure 9: Unqualified Employees' Impact on Organizational Efficiency

Figure 9 focuses on the impact that under-qualified candidates have on organizational efficiency, according to the respondents of the survey. As with the previous discussion regarding the efficiency of such employees, the majority of the respondents, 40%, felt that these employees brought significantly negative impacts upon the organizational efficiency, while 3 groups of respondents, 20% each, felt that the impact is highly positive, slightly positive, and slightly negative, individually. It must be noted that, like the previous discussion, none of the respondents felt that such recruitment brings no change to organizational efficiency. Thus, we can deduce that recruiting under-qualified employees does not bring coherence within the work environment or organizational efficiency, once again leading to the question of employing such candidates to being with.Figure 10: Unqualified Employees' Impact on Work Environment

Figure 10 focuses on the impact that under-qualified candidates have on the work environment, according to the respondents of the survey. The majority of the respondents, 60%, felt that these employees brought significantly negative impacts upon the work environment. It must be noted that, like the previous discussion, none of the respondents felt that such recruitment brings no change to organizational efficiency. Thus, we can once again deduce that recruiting under-qualified employees does not bring coherence within the work environment, leading to the question of employing such candidates in the first place.

Figure 11 focuses on the respondents views concerning the most efficient means of recruitment, provided that it is either through recommendations or through educational qualification. 60% of the employees seemed to state that recommendation should be the primary criterion for recruitment, while only 40% preferred educational qualifications more. This goes against most of our initial findings from the outset. But on further explanation of their choice it was deduced that they did not feel that educational degrees and experience were adequate enough to judge a potential employees prospects, and proper recommendations from a neutral source could provide a better guidance. Yet they might have felt that some management might at times exploit such an opportunity and recruit employees who did not have adequate potential to work in the given positions. Set of Findings from Regression:Figure 11: Recommendation vs. Education and Experience

Two sets of regression were run in an attempt to prove the two following hypotheses:1. The company recruits more employees based on recommendation than on qualifications.2. The impact of hiring employees based on recommendations on organizational efficiency is negative.The major aim of this research was to prove that these two initial hypotheses were correct. In case the regressions run resulted in a negative set of answers we could discard these initial hypotheses and deduce that the company in fact recruits most of tis employees primarily based upon their educational and technical qualifications rather than good recommendations, and that any recommended employee, irrespective of his/her qualification impacts the organization in a positive manner. Hypothesis 1:The company recruits more employees based on recommendation than on qualifications.Regression Analysis:

Validity:The model used to generate these values have a strong validity behind it as is explained by an adjusted R Square value of 0.79, which means that this model can explain 79% of real world practices of the company. Generally, most statisticians take an R Square value of .60 or more as a reliable figure for the regression model.

Hypotheses Testing Result:The FCALC is lower than the FCRIT, which means that the initial hypothesis is true. Thus we can deduce that this company does in fact hire employees based more on recommendations than on qualifications.

Scatter Plot of the Model:

Hypothesis 2:The impact of hiring employees based on recommendations on organizational efficiency is negative.

Regression Analysis:

Validity:The model used to generate these values have a strong validity behind it as is explained by an adjusted R Square value of 0.59, which means that this model can explain 59% of real world practices of the company. Generally, most statisticians take an R Square value of .60 or more as a reliable figure for the regression model, and the R Square for this model is roughly .61

Hypotheses Testing Result:The FCALC is lower than the FCRIT, which means that the initial hypothesis is true. Thus we can deduce that when the company hires employees primarily based upon their recommendations it results in negative impacts upon the organizational efficiency and productivity.

Scatter Plot of the Model:

Conclusion:

From the data analysis we can conclude that our null hypothesis is accepted as recruitment of employees based on recommendation is an unethical act that is taking place in Juvenile service ltd. Due to this unethical act the employee loose motivation and faces uncertainty in their work. Unethical act of this type tend to have negative impact on the work environment in the company. Thus the HR department should look into this issue and establish or restructure their recruitment policy so that such unethical act can be minimized and eventually eliminated, which will later increase the work environment of the company and hence translate to profitability. As productivity of employees will increase with high moral and ethical work environment, as productivity increases the company can expect higher profitability and wealth maximization which it the ultimate goal.

BibliographyAnon., n.d. TONE AT THE TOP:, s.l.: ASSOCIATION OF CERTIFIED FRAUD EXAMINERS .Bagehot, 2011. The depressing tale of Johann Hari. The Economist.MelissaMelander, S. M. &., n.d. Historical Cases ofUnethical Research, s.l.: University of North Dakota.Roth, W.-M., 2004. Political ethics, Unethical politics. Qualitative Social Research, Volume 5, p. 3.

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