INTRODUCTION:

Nowadays, employers and human resource managers do not exist in a vacuum. They have to do a lot of things in the global movements, political pressures, cultural preferences, and product market developments. One of them is recruitment and selection activities. Human resource recruitment is defined as any practice or activity carried on by the organization with the primary purpose of identifying and attracting potential employees. Meanwhile, the selection is the use of tools to find the best candidate for the organizations. So, this process is very important for any organization. One of the newer approaches referstomeasuring the efficiency of recruitment and selection activities via KPI.

Key Performance Indicators, also known as KPI or Key Success Indicators, help managers and employees gauge the effectiveness of various functions and processes important to achieving organizational goals. Due to that fact in the first part of this paper will be explained what are KPI, recruitment, and selection practices; the characteristics of KPI, and the importance of organizational performance measurement. The second part of this paper will show the research methodology for this paper. The third part of the paper will propose a set of KPIs used for assessing the effectiveness of recruitment and selection and indicated the notes in using this set of KPIs in any organization.

LITERATURE REVIEW:

KPI

KPI stands for Key Performance Indicator (Carol Talor, 1990), a measure of productivity that helps organizations shape and track growth relative to their goals. KPI was introduced in the United States from the 80s of the 20th century and is now widely used in the world including Vietnam. The application of KPI is seen as a solution to help organizations evaluate their success in the management of business operations. Once the business has formed a mission, identifying the factors that influence and set goals, the business needs to measure growth against the set goals. KPI is a measure of this growth.

However, the first thing we need to consider is the difference between a performance metric and a result metric. Performance indicators (Dean, 2007) represent the results of previous actions, while the result indicator is a measure of the direction of the results achieved in the performance indicators. Simply, Nguyen et. al. (2001) indicated that performance indicators are quantifiable measures. These measures have been agreed upon by all members and they reflect the critical success factors of the business. Therefore, the KPI requires reflecting on the goals and mission of the business.

However, in practice, there are many measurable indicators. This does not mean they are the keys to the success of the business. Therefore, when selecting the KPIs, it is important to carefully select the indicators that are needed and can help the business achieves its objectives. KPIs, on the other hand, give the staff an overall picture of the key factors and what they need to prioritize in their jobs. Thus, it is important to ensure that all employees are focused on achieving the goals in the KPIs for performance measurement.

David Parmenter (2010) deﬁne seven characteristics of KPIs:

· Are non-ﬁnancial measures (e.g., not expressed in dollars, yen, pounds, euros, etc.)

· Are measured frequently (e.g., 24/7, daily, orweekly)

· Are acted on by the CEO and senior management team (e.g., the CEO calls relevant staff to enquire what is going on)

· Indicate what action is required by staff (e.g., staff can understand the measures and know what to ﬁx)

· Are measures that tie responsibility down to a team (e.g., CEO can call a team leader who can take the necessary action)

· Have a signiﬁcant impact (e.g., affect one or more of the critical success factors [CSFs] and more than one BSC perspective)

· They encourage appropriate action (e.g., have been tested to ensure they have a positive impact on performance, whereas poorly thought-through measures can lead to days-functionalbehavior)

The system of standardized activities such as KPI allows good measurement of the activities of the business. The magnitude of the measurement is enormous. Continuous measurement is the basis for continuous improvement of organizational activities and is one of the most important management principles (Besic & Djordjevic, 2007).

If the organization does not have enough information about the process, product, or service, they can not control them. There are a lot of values measured during the operation of a business. Lidija (2013) showed "When you can measure what you are doing, you understand it".

Measuring performance means qualitative or quantitative results by selected indicators. Choosing suitable indicators is important in measuring the organization’s performance. The performance indicators have two functions:

· Developing and guiding function - because they are the basis for developing and implementing organizational strategy.

· Motivating function - promotes to completion of goals and motivates all employees to achieve that goal (Pesalj, 2006).

All employees know that there are important activities for the managers. Accordingly, the manager must identify a set of indicators that represent the main activities in a business. Key Performance Indicators (KPIs) are the financial and non-financial indicators that the organization uses to demonstrate how successful in the long-term.

KPIs are static and stable indicators. They help to remove emotions from business goals and focus on practical things that generate profits for the business.

Recruitment and selection:

There are many definitions of recruitment and selection. However, all contain common elements: focus on attracting, identifying, and retaining employees. Recruitment are often considered as a term, but there are differences. For some, the focus is on identifying and selecting individuals from a group of applicants external to the organization, while the selection is focused on internal candidates (David et. al., 2009). For other recruitment is about the identification and attraction of the competent applicant and ends when an application is made. For this recruitment is taken to mean the attraction of the candidate likely for a vacancy, while the selection involves the assessment and determination of the suitability of the candidate from this pool.

Recruitment and selection provide the key opportunities for an organization to change the type of employee, but those changes may need to be considered in the context of attrition levels and accurate investigation of who is leaving and why (Dragana et. al., 2011). Therefore, an organization might determine the need for separate and distinct configurations in new hires, such as when technology has advanced and lack of skills, the organization also needs to be aware that the introduction and retention of their new employees also need attention.

Raymond A. Noe et al (2010) indicated that the source from which a company recruits potential employees is a critical aspect of its overall recruitment strategy. The total labor market is expansive; any single organization needs to draw from only a fraction of that total. The size and nature of the fraction that applies for an organization’s vacancies will be affected by how (and to whom) the organization communicates its vacancies. The type of person who is likely to respond to a job advertised on the Internet may be different from the type of person who responds to an ad in the classified section of a local newspaper. In this section, we examine the different sources from which recruits can be drawn, highlighting the advantages and disadvantages of each. We have some recruitment sources, including:

· Direct applicants and Referrals

· Advertisements in newspapers

· Electronic recruiting

· Public and private employment agencies

· Colleges and universities

Recruitment and selection might be just one stage in the human resources cycle for a company, but it can have a huge impact on productivity and survival in the future. While it is central to the beginning of employment it can also have wide implications for other HR processes, such as organizational development and change. Evaluating the effectiveness of recruitment and selection involves assessing not only the number of a recruit, but also their effective integration and retention, and their impact on existing employees and the organization’s performance.

During the recruitment and selection process, there are four possibilities for each candidate (Stefanović, et. al.,2010).

Table 1: Four possibilities for each candidate

Ability’ candidate to complete the job	Hiring decisions
Ability’ candidate to complete the job	Eliminating	Hiring
Good	Mistake (Due to underestimation) (2)	Accuracy (1)
Not good	Accuracy (3)	Mistake (Due to overestimation) (4)

In boxes 1 and 3: Candidates can complete a job well and get rid of unqualified applicants. In inbox 2, the recruiters evaluated the candidate as being less than practical, thus ignoring good candidates. In contrast, in inbox 4, recruiters evaluated the candidates too high, hiring of inappropriate employees, performed poorly on the job. And all of this directly affects the effectiveness of recruiting. When evaluating the effectiveness of recruitment and selection, managers also pay attention to some factors:

· Cost for recruitment and selection activities and costs for each recruitment. This cost includes recruitment service costs, advertising.

· The number and quality of applications.

· The coefficient between the new employees and the proposed employees.

· The number of applicants accepting and refusing jobs at a certain salary.

· The new employee’s performance.

· The number of new employees voluntary turnover.

METHODOLOGY:

To address the set of KPI used in evaluating the effectiveness of recruitment and selection practices, the qualitative research methodology was used. The research was conducted in two steps as outlined below:

· Designing a research questionnaire from selective information from many books and magazines

· Conducting interviews with 25 human resource managers of 14 companies in Danang. The interview questions focused on the following issues:

· Hiring’s strategy

· The criteria for evaluating the organization’s recruitment and selection practices

· How to evaluate the efficiency of recruitment and selection practices

DISCUSSION:

Propose a set of KPIs used for assessing the effectiveness of recruitment and selection.

Based on the literature reviewand the result of qualitative research, the author develops KPIs to evaluate the effectiveness of recruitment and selection activities.

KPIs use for evaluating the effectiveness of recruitment.

As you know, the recruiting performance can be seen through the activities, results, performance, and fairness, so we will rely on here to developing KPIs in the table below:

KPIs use for evaluating the effectiveness of selection.

As you know, hiring decisions to affect the productivity and professional qualification of the workforce. Table 3 is a list of criteria for assessing the effectiveness of selection activities.

Table 2: KPIs use for evaluating the effectiveness of recruitment

KPIs	Formulation	Notes
Number of applications submitted by each recruitment source
Direct applicants	The total number of candidates from each recruitment source/The total number of candidates.	The organization has data capture of the number of candidates from each recruitment source.
Internal sources
Newspaper advertising
Electronic Recruiting – Internet
Public & Private Employment Agencies
Job fairs
Colleges& Universities- campus placement services
Number of eligible candidates by recruitment source
Direct applicants	The number of eligible candidates by recruitment source/ The total number of candidates.	Used to evaluate the quality of candidates by each recruitment source. It is necessary to store the specific data the candidate comes from.
Internal sources
Newspaper advertising
Electronic Recruiting – Internet
Public & Private Employment Agencies
Job fairs
Colleges & Universities- campus placement services.
Cost per candidate by each recruitment source
Direct applicants	Total cost for each recruitment source/The number of candidates come that recruitment source	Used to calculate the cost-effectiveness for each recruitment source.
Internal sources
Newspaper advertising
Electronic Recruiting – Internet
Public & Private Employment Agencies
Job fairs
Colleges& Universities- campus placement services

Table 3: KPIs use for evaluating the effectiveness of selection

KPIs	Formulation	Notes
Cost per new employee.	The total cost of the hiring process/the number of candidates.	This indicator shows the cost of hiring per candidate so that the effectiveness of this hiring process might compare with one another.
The number of new employees.	The number of new employees/The number of candidates.	This indicator can show the candidates’ qualifications.
The number of employees who work for over five years.	The number of employees who work over five years/The number of new employees.	This indicator shows the willingness for jobs and the loyalty of new employees.
Average working time of new employees at the organization.	Total working time of new employees at the organization/The number of new employees.	This indicator shows the average working time for new employees.
New employees’ qualifications.	Base on the result of the performance appraisal.	This indicator shows the new employees’ qualification
The rate of good new employees	Base on the result of the performance appraisal.	This indicator shows the rate of good new employees in each hiring process.
New employees’ promotion.	Base on the result of the performance appraisal.	This indicator shows the new employee’s career path.
Candidates’ awareness: satisfaction with the hiring process, knowledge of the organization, satisfaction with the organization.	Base on the result of the recruitment interviews.	This indicator indicates whether the candidates are satisfied with the organization's hiring program, which can be considered as the information to improve hiring practices.

Table 4: Data system

Name of hiring’s programs
Date:
	Human Resource Recruitment Sources
	Direct applicants	Internal sources	Newspaper advertising	Electronic Recruiting Internet	Public & Private Employment Agencies	Job fairs	Colleges & Universities campus placement services.
The total number of candidates.	No.	No.	No.	No.	No.	No.	No.
The number of eligible candidates	No.	No.	No.	No.	No.	No.	No.
Total cost	No.	No.	No.	No.	No.	No.	No.
The number of new employees	No.	No.	No.	No.	No.	No.	No.
Cost per a new employee	No.	No.	No.	No.	No.	No.	No.
The number of employees who work for over five years.	No.	No.	No.	No.	No.	No.	No.
Average working time of new employees at an organization	No.	No.	No.	No.	No.	No.	No.
New employees’ qualification	No.	No.	No.	No.	No.	No.	No.
New employees’ promotion.	No.	No.	No.	No.	No.	No.	No.
The number of candidates who is satisfied with the hiring process	No.	No.	No.	No.	No.	No.	No.

All of the above data is easy to get, but the clerks need to note some of the following:

· The information about the candidate's recruitment sources should be added to the recruitment form.

· The hiring cost should be accumulated from all costs incurred during the hiring process, including recruitment advertising costs, travel, and accommodation costs, training for new employees’ costs.

Some notes in using the KPI results to evaluating an organization’s recruitment and selection:

After collecting and calculating KPIs, the executives use these data to evaluating the efficiency of the recruitment and selection activities in the organization, which depends on each indicator in the KPI set. However, whether these indicators reflect the effectiveness of these activities, depends on the organization’s strategy in a specific hiring program.

In the hiring strategy, organizations need to determine the number of candidates who are attracted to each vacancy. During the hiring process, some applicants do not qualify or do not accept jobs, the organization needs to attract more applicants than they need to hire. The selection rates help organizations determine this. The selection ratios show the relationship between the number of candidates who are chosen in each step and the number of people who will be accepted into the next step.

In the hiring plan, organizations must determine the appropriate selection rates. The selection rates affect the organization’s finance and candidate’s psychology and candidate's expectations. The selection rates are mostly determined by the job’s characteristics and the candidate’s psychology. Therefore, the determination of selection rates should be based on the following factors:

· The diversity of the labor market (labor supply and demand)

· The quality of the labor force

· The complexity of the work

· The candidate’s psychology

· The organization's experience in recruitment.

CONCLUSION:

Continuing to measure business performance via Key Performance Indicators is a new concept used by many organizations today. KPI is a financial or non-financial indicator that helps businesses test their business success. One of the prerequisites for using KPIs is the clarity of the goals and business process.

This paper explains the KPI, the recruitment and selection activities that are used in organizations. Then it proposes a set of KPIs used for assessing the effectiveness of recruitment and selection. Tables show the simplicity of measuring and explanation of a given result, which is one of the most important advantages of using such indicators.

REFERENCES:

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Received on 03.11.2020 Modified on 21.11.2020

Asian Journal of Management. 2021; 12(1):73-78.

DOI: 10.5958/2321-5763.2021.00011.1