CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

In practice it is not easy to define the terms SMEs or an SME sector. A review of the related literature on SMEs indicate that, SMEs face a definition problem and that many researchers have struggled to come up with universally acceptable definition of what a small business is and is not. According to some experts in the field, the definition problem has stemmed from two main factors. These are the Conflicting ideas upon which economic aggregates to base the analysis. Potobsky (1992), for example, a small firm in the petrochemical industry would probably have much higher levels of capitalization, sales and possible employment than a small firm in the car repair trades Tonge (2001). To overcome this definition problem, The Bolton Committee (1971) first attempted a definition when it formulated an “economic” and “statistical” definition of a small firm. The Bolton Committee applied different definition to different sectors. Several definitions have been given for SMEs and according to Kayanula and Quartey (2002) as cited in Abor and Quartey (2010), the most commonly used criterion is the number of employees of the enterprise. Recruitment strategy is one way small businesses can enhance performance.

Recruitment and selection (or staffing) is said to the best represented area of research in people management in smaller, growth, or entrepreneurial organizations with more scholarly work done conducted than other functional aspect of HRM Cordon & Stevens (2004) as cited in Taylor (2006). The recruitment and selection process thus forms the first stage of the psychological contract between applicants and organizations, where information is mutually exchanged and role expectations are clarified and negotiated Herriot (1993); Anderson (2004). Recruitment ‘includes those practices and activities carried out by the organization with the primary purpose of identifying and attracting potential employees’ Breaugh and Starke (2000: 405) and has long been regarded as an important part of HRM as it ‘performs the essential function of drawing an important resource human capital into the organization’ Barber (1998). The recruitment and selection of an effective workforce consequently can be viewed as central to the success of an enterprise and a key function in HRM. The strategic importance of recruitment is often reported in academic literature Boxall& Purcell (2003).

Recruitment is primarily concerned with “the process of generating a pool of capable people to apply for employment to an organization” Bratton and Gold (2003). It is closely connected with the selection process which “is the process by which managers and others use specific instruments to choose from a pool of applicants a person or persons most likely to succeed in the job (s), given management goals and legal requirements” Bratton and Gold (2003). This is supported by Foot and Hook (2010) seems to be clearer in their minds when they identified the key stages of a systematic approach to recruitment as job analysis, job description, person specification and attracting applicants through the various methods of recruitment. Denisi and Griffin in their book “Human Resource Management” second edition were almost in agreement with Foot and Hook (2010), when they described the recruitment process as consisting of three. The three key stages according to them are job analysis, job description and person specification. Effective selection processes allow both the candidate and the organization to properly assess the degree to which the candidate fits the job specification and are keeping with all applicable legislation. Selection is an opportunity for companies to choose candidates that they believe are most suitable for the job. From the Foregoing therefore, the study seeks to add to knowledge by examining the relationship between recruitment strategy and small business performance in some selected small businesses in Khana, 

1.2 Statement of Problems

It is a well known fact that small businesses are facing various of challenges which have effect its growth and performance. These problems include poor recruitment process which are improper selection, improper placement of workers, not giving the workers orientation about the job. Lack of all these strategies will lead to low productivity, job dissatisfaction and role conflict. 

In addition, small businesses continue to lack the skills and adequate capital to recruit competent and experienced staff to enhance its operations hence the reliance of low grade staff that lack the strategic knowledge and requisite education to promote the business leading to lack of performance, low productivity and role conflict. From the foregoing therefore the study is determined to examine recruitment strategy and small business performance of some selected small businesses in Khana Local Government Area.

1.3 Objectives of the Study

The main objective of the study is to examine the relationship between recruitment strategy and small business performance in some selected small businesses in Khana. The specific objectives are as follows:

1. To examine the relationship between selection and small business performance in some selected small businesses in Khana.

2. To examine the relationship between orientation and small business performance in some selected small businesses in Khana.

3. To examine the relationship between placement and small business performance in some selected small businesses in Khana.

1.4 Research Questions

The following research questions were proposed to guide the study.

 1. To what extent does selection associated with small business performance in some selected small businesses in Khana?

2. To what extent does orientation associate with small business performance in some selected small businesses in Khana?

3. To what extent does placement associate with small business performance in some selected small businesses in Khana?

1.5 Research Hypotheses

The following hypotheses were formulated to guide the study:

HO1: There is no positive and significant selection relationship between small business performance in some selected small businesses in Khana.

HO2: There is no positive significant orientation small business performance in some selected small business in Khana.        

HO3: There is no positive and significant relationship between placement and small business performance.

1.6 Significance of the Study

The outcome of the study would guide decision makers especially owners and potential owners of small businesses in their recruitment and selection processes.

The study would also come out with recommendations to guide employee

recruitment and selection that can be taken to improve the activities of the small businesses sector.

Finally, it would serve as reference document to academics and researchers and to all those interested in the study of small businesses recruitment and selection practices in Nigeria.

1.7 Scope/limitation of the Study

The study is delimited under the following headings; content scope, geographical scope and unit of analysis.

Content Scope: The content of this study involves an investigation to ascertain the relationship between recruitment strategy and small business performance. The independent variable being recruitment strategy includes selection, orientation and placement, while the dependent variables performance includes job satisfaction and production.

Geographical Scope: This study is limited to some small business in Bori.

Unit of Analysis: The unit of analysis involved the owners of the small business in Bori. Therefore, it is organizational level of analysis in carrying out an investigation of this nature the researcher must be faced with some constraints.

The limitations of the study include time constraint, financial and poor response.

Firstly, the time constraints, the time frame provided for this study was short.

Secondly, Financial constraints. Usually, a study of this nature involved some level of expenditure therefore; finance was also a limiting factor.

Thirdly, Poor response from the respondent and inability to access the entire population of the study. In the next segment significance of the study will be discussed. Lastly, poor measurement instrument.

1.8 Definition of Terms

JOB SATISFACTION: Job satisfaction is one criterion for establishing the health of an organization; rendering effective services largely depends on the human source.

ORIENTATION: This is the introduction of a new employee to his duty or job place in the organization.

PLACEMENT: Placement exam, determines which class a student should take; Favored placement, the practice of preferentially listing search engine results for given sites; Job placement, a short time spent in a company to get work experience.

PRODUCTIVITY: The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

RECRUITMENT: Recruitment and selection (or staffing) is said to the best represented area of research in people management in smaller, growth, or entrepreneurial organizations with more scholarly work done conducted than other functional aspect of HRM.

SELECTION: Selection refers to choosing the applicants who have the highest chance of meeting the organizations standard of performance (Moy & Lee, 2002).

SMALL BUSINESS PERFORMANCE: A review of the related literature on SMEs indicate that, SMEs face a definition problem and that many researchers have struggled to come up with universally acceptable definition of what a small business is and is not.