FINAL PROJECT

Factors Affecting Employees

Performance: -
 Contents
1. Abstract.......................................................................................................................................................3

2. INTRODUCTION.......................................................................................................................................4

2.1. Background of the study..........................................................................................................................4

2.2. Previous Study.........................................................................................................................................5

2.3. Problem Statement...................................................................................................................................5

2.4. Measure to Tackle the Problem...............................................................................................................6

2.5. Significance of the study.........................................................................................................................6

2.6. Economic Model.....................................................................................................................................7

2.7. Study Hypothesis.....................................................................................................................................7

3. Literature Review........................................................................................................................................8

4. Research Limitations.................................................................................................................................13

5. Future Scope..............................................................................................................................................13
6. Conclusion.................................................................................................................................................13

7. References.................................................................................................................................................15

1. Abstract
The main purpose of the study is to investigate the factors of the employees’ performance. This
study has been conducted on companies in the banking sectors which is the sub sector of services
sector in Pakistan. This study includes four independent variables which are recruitment &
selection and training & development whereas employees’ performance is the dependent variable
of the research. This research article has investigated the association between the dependent and
independent variables. A number of researches have been examined in the part of literature
review that put light on the different variables that affect the employees’ performance. The study
concluded that recruitment & selection and training & development have significant and positive
impact on employees’ performance

Key words: Employees’ Performance, Recruitment & Selection and Training & Development.
2. INTRODUCTION

2.1. Background of the study

HR planning plays a vital role in the employee’s performance. In this concern the most
important things in the HR planning that can highly affect the employees performance are the
recruitment & selection activities and training & development. The employees performance
is highly depend upon the employee’s skills that are concerned while recruitment & selection
and in the same way these skills are polished in the process of training & development.
Training means to train and educate the employees to perform particular single task whereas
development is the process of educating employees in such a way that he become capable to
handle variety of tasks. On the other hand recruitment is the process of getting a pool of
people for the particular job by using different media e.g. social media and others whereas
selection is the process of selecting an appropriate person from the pool of application
received during the process of recruitment(Mustafa, 1992). The administration of the
company must know about the behaviors of the employees within the organization.
Employee’s performances can be enhanced with the help of training & development.
Training & development play a vital role in increasing employee’s performances. They
become able to perform more effectively and efficiently. With the help of development they
become able to handle variety of tasks than they have handled ever before. Many researchers
in the past had made their research on the topic of employees’ performance but no researcher
had made his/her research on employees’ performance with these variables e.g. recruitment
& selection activities and training & development and employee performance on the same
 platform (Ahsan, H. 2011). The management should take step forward for training and
development of their employees to enhance their performances in the organization and to
increase the productivity of employees and organization. The main theme of this research
article is to investigate that how recruitment & selection activities and training &
development can increase the employees’ performances in the organization. And how the
management of the company can train their employees on their jobs(Kroth, 2007). The level
of HR planning is measured through its dimensions – recruitment & selection activities and
training & development. Recruitment and selection also plays a vital role in this concern. The
process of recruitment and selection shows the level of efficiency of the management of any
company. If the management select the appropriate person full of job related skills he would
be able to perform effectively on the job (Ramzan, Riaz, Ishaq, Akram, & Karim, 2012). In
this research article I am going to explain the relationship between the all independent and
dependent variables. This research is made on the banking sector of Pakistan which is sub
sector of services.

2.2. Previous Study

Mubeen J. (2011) examined the relationship growth opportunities and employees’ performance.
The intent of this research article was to investigate the impact growth opportunities on
employees’ performance. The dependent variable of this study was employees’ performance
and independent variables were growth opportunities. Data was collected from 2002 to 2007
of 120 chemical industries in Karachi Stock Exchange. OLS and regression method Ire used
in this study for analyzing the data. This research article has concluded that if the employees
will get growth opportunities they will be more encouraged and will get motivated and they
will give their best performance.

2.3. Problem Statement

Capital plays a role like blood in human body. This is the essential element for running
business. Banks are the institutions that provide capital for running of starting business. On
the other hand the services provided by the banks are so important for the businessmen as
well as the masses. As this banking sector has so much importance so this should have strong
basis. The strong base of the banking sector primarily depends upon the employees’
performance of the banks (Bedeian, A. G. 1994). For the better performance of the
employees, they require recruitment & selection activities and training & development.
Energetic staff can be obtained only by the effective recruitment and selection process. Lack
of training & development disturb the performance of employees. If the selection process is
not good then company will face problems. Here the problem is employees’ performance and
this problem can be resolved by recruitment & selection activities and training &
development. Employees’ performance is not so good in the banking sector of Pakistan that
is the main problem.

2.4. Measure to Tackle the Problem

For the tackling the problem there are the following measures which are going to be discussed here:

 The main solution of the problem is to investigate the influence of recruitment &
selection, and training & development on employee’s performance in the sectors of banks
Pakistan. This research article will investigate the relation between independent variables
(recruitment & selection and training & development) and dependent variable of
employee’s performance.
 Examine and evaluate the recruitment & selection in banking sector of Pakistan and
examine the relationship between recruitment & selection and employee’s performance.
 Examine and evaluate the training & development in baking sector of Pakistan and
examine the relationship between training & development and employee’s performance.
 Draw conclusion about relationship of independent and dependent variables jointly.
 Give solutions to implement effective of recruitment & selection and performance of
employees for the purpose of best employees’ performance.

2.5. Significance of the study

The overall profit of the company depends upon the employees’ performances in the
organization of banking sector in Pakistan. If in the particular company, employees are
performing well, that company will be in a good position and will perform well entirely.
On the other hand if the employees within the organization are not performing well on
their job, the company will be on the dangerous position and can face the failure in the
goal achievement. In order to verify the employees’ performances four factors have been
discussed in this research article. . Secondly this study will help to the researcher who
will come up with their new ideas in the future. This study will give them a way to walk
 on. They would be able to understand the factors affecting the employees’ performances
and how much these factors are affecting the employees’ performances. Thirdly, this
study would give new horizons to the economic development of Pakistan. This will play
a vital role in the development of the country’s economy (Garrison, M. 2004). Fourthly,
this study will be beneficial for the companies especially in the banking sector of
Pakistan. While examining the factors affecting the employees’ performance and the
proportionate of their affection will guide the company to take solid decisions to cope up
with the deficiencies in the HR planning. This research can be used by the enterprise's
management to evaluate its performance (Sharma, D. B. 2012). The management of the
companies in the banking sectors would be in position to use the employees more
productively.

2.6. Economic Model

2.7. Study Hypothesis

H1: There is significant relationship between recruitment & selection and employees’
performance.
 Ho: There is no significant relationship between recruitment & selection and employees’
performance.

H2: There is significant relationship between training & development and employees’
performance.

Ho: There is no significant relationship between training & development and employees’
performance.

3. Literature Review
Habib, Y. Kiani, A. Z. & Khan, A. M. (2012) examined the relationship between motivation and
employees’ performance. The main purpose of this study was to examine the relationship
between employees’ performance and motivation in the cement sector of pakistan. The
dependent variable of this study was employees’ performance and independent variables
motivation. Data was collected from 2002 to 2008 of companies 100 index in Karachi Stock
Exchange. Cross sectional regression method was used in this study for analyzing the data.
They gave the conclusion that the motivation is the factor that can increase the performance
of the employees from 0% to 100%. There are two types of motivations, monetary and non-
monetary. Both have a great effect on employees’ performance.

Ashraf, N. & Khan, W. (2014) examined the relationship between intrinsic compensation and
employees’ performance. The main theme of this research article was to discover the employees’
performance is how much being affected by the intrinsic compensation. The dependent variable
of this study was employees’ performance and independent variables intrinsic compensation.
Data was collected from financial statements of 26 companies listed on Karachi Stock Exchange.
Multiple regression method was used in this study for analyzing the data. This research article
has concluded that intrinsic compensation highly affect the employees’ performance within the
organization.
Rafique, M. (2012) examined the relationship between employees’ growth and employees’
performance. The intent of this study was to analyze changing behavior of employees’
performance in the light of different important characteristics of the organizational management.
The dependent variable of this study was employees’ performance and independent variables
employees’ growth. Data was collected from 2005 to 2010 of 53 companies representing the 11
sectors listed on Karachi Stock Exchange. Multiple regression method was used in this study for
analyzing the data. This research article showed that employees’ growth encourage the
employees within the organization to give their best to the firm.
Asif, A. Rasool, W. & Kamal, Y. (2011) examined the relationship between extrinsic
compensation and employees’ performance. The aim of this study was to analyze the effect
of extrinsic compensation on employees’ performance in the textile sector. The dependent
variable of this study was employees’ performance and independent variables extrinsic
compensation. Data was collected from 2002 to 2008 of 403 companies listed on Karachi
Stock Exchange. Ordinary Least Square (OLS) regression method was used in this study for
analyzing the data. This research article gave the results that extrinsic compensation is a
source of motivation and motivation is the psychological factor that urge the employees to
perform in a best way.

Ghafoor, A. Khan, A. M. Shah, A. S. & Khan, H. H. (2014) examined the relationship between
job satisfaction and employees’ performance. The intent of this study is to investigate the
employees’ performance behaviors in the automobile sector of the country. The dependent
variable of this study was employees’ performance and independent job satisfaction. Data
was collected from 2006 to 2012 of 50 companies listed on Karachi Stock Exchange.
Multiple regression method was used in this study for analyzing the data. This research
article concludes that if the employees are satisfied at their jobs they would be in position to
give their best performances. Satisfaction is very much important factor of the employees’
performance.

Ahmed, S. Murtaza, H. (2015) examined the relationship between HR planning and employees’
performance. The main theme of this research article was to highlight the determinants of
 employees’ performance. The dependent variable of this study was employees’ performance
and independent HR planning. Data was collected from 2003 to 2011 of 38 companies from
different sectors. Descriptive statistics and pooled least square method were used in this
study for analyzing the data this research article explained that the HR planning plays a vital
role in the employees’ performance. If the HR planning is good then the performance of
employees will definitely be good.

Akber, M. Baig, H. H. (2010) examined the relationship performance assessment and

employees’ performance. The main theme of this research article was to test the relationship
between the performance assessment and employees’ performance. The dependent variable
of this study was employees’ performance and independent variable was performance
assessment. Data was collected from 2004 to 2017 of 79 chemical industries in Karachi
Stock Exchange. T-test was used in this study for analyzing the data. This research article has
explained that if the performances of the employees are being properly measured, the
performance of the employees will definitely be improved.

Afza, T. Mirza, H. H. (2011) examined the relationship growth opportunities and employees’
performance. The intent of this research article was to investigate the impact growth
opportunities on employees’ performance. The dependent variable of this study was employees’
performance and independent variables were growth opportunities. Data was collected from
2002 to 2007 of 120 chemical industries in Karachi Stock Exchange. OLS and regression method
Ire used in this study for analyzing the data. This research article has concluded that if the
employees will get growth opportunities they will be more encouraged and will get motivated
and they will give their best performance.

Ehsan, S. Khalid, M. & Akhter, W. (2014) examined the relationship incentives and employees’
performance. The core aim of this study is to evaluate the effect of incentives on employees’
performance. The dependent variable of this study was employees’ performance and independent
variable was incentives. Data was collected from 2007 to 2011 of 100 chemical industries in
Karachi Stock Exchange. OLS (Ordinary Least Square) regression method was used in this study
for analyzing the data. This research paper gave the results that incentives attract the employees
in the organization and the encourage them to give their best.

Arif, A. & Akber, F. (2013) examined the relationship between job environment and employees’
performance. The objective of this study was to find the potential determinants of employees’
performance. The dependent variable of this study was employees’ performance and independent
job envoirnment. Data was collected from 2005 to 2010 of 174 non-financial chemical industries
in Karachi Stock Exchange. Regression method was used in this study for analyzing the data.
This research article has concluded that job environment causes the good or bad performance by
the employees of the company.

Hensawanf, S. (2007) examined the relationship between compensation management and

employees’ performance. The main intent of this study is to investigate the factors
significantly affecting employees’ performance. The dependent variable of this study was
employees’ performance and independent variable was compensation management. Data was
collected from 2001 to 2015 of 60 financial and non-financial chemical industries in Karachi
Stock Exchange. Multiple regression method was used in this study for analyzing the data.
This research article has concluded that compensation management plays a vital role in the
performance of employees. It has significant impact on employees’ performance.

Hasan, M. Ahmed, I. M. Rafiq, Y. M. & Rehman, U. R. (2015) examined the relationship

between competitors’ compensation and employees’ performance. The main objective of this
study is to investigate the relationship between employees’ performance and competitors’
compensation. The dependent variable of this study was employees’ performance and
independent variables was competitors’ compensation. Data was collected from 1996 to 2008
of two sectors energy and textile for the 100 chemical industries in Karachi Stock Exchange.
Ordinary Least Square (OLS) regression method was used in this study for analyzing the
data. This research article has concluded that there is a significant relationship between the
competitors’ compensation and employees’ performance.
Rehman, A. (2012) examined the relationship between recruitment and employees’ performance.
The intent of this study was examines the determinants of employees’ performance in the
major stock exchange of Pakistan i.e. Karachi Stock Exchange (KSE). The dependent
variable of this study was employees’ performance and independent variables were the
recruitment. Data for the 2009 was used of 50 chemical industries in Karachi Stock
Exchange who announced their dividend to their shareholders. Regression method was used
in this study for analyzing the data. This research paper explained the recruitment highly
affects the employees’ performance in any organization in the country.

Salim, M. D. Hameed, M. M. (2012) examined the relationship between firm type and
employees’ performance. The intent of this study was to investigate the effect of firm type on
employees’ performance. The dependent variable of this study was employees’ performance and
independent variables was firm type. Data was collected from 1995 to 2005 of 116 chemical
industries in Karachi Stock Exchange. Different regression methods Ire used in this study for
analyzing the data. The researcher came to know that performances of the employees are
different in the different types of companies in Pakistan.

Ali, A. E. Hameed, M. M. (2013) examined the relationship between gender and employees’
performance. The main intent of this study is to find out the results that how much gender has
effect on the employees’ performance. The dependent variable of this study was employees’
performance and independent was gender. Data was collected from 2005 to 2009 of 40
chemical industries in Karachi Stock Exchange. Regression methods Ire used in this study for
analyzing the data. The conclusion of the study was that there is no discrimination in the
gender. Both male and female perform equally at the work place.

Fakher, P. G. (2010) examined the relationship between selection process and employees’
performance. The theme of this study was to find out the impact of selection process on the
dependent variable that is employees’ performance. The dependent variable of this study was
employees’ performance and independent variables were selection process. Data was collected
from 2000 to 2007 of 65 chemical industries in Karachi Stock Exchange. Ordinary least square
method was used in this study for analyzing the data. This research has concluded that there is
significant relationship between selection process and employees’ performance

Moradi, M. (2009) examined the relationship between employee’s trainings and employees’
performance. Theme of this study is to find out the effect of employees training on
employees’ performance. The dependent variable of this study was employees’ performance
and independent variables were employees’ training. Data was collected from 2000 to 2008
of 65 chemical industries in Karachi Stock Exchange. Multiple regression method was used
in this study for testing the data. This research paper has concluded that employees trainings
are very much important for the best performance of the employees.

4. Research Limitations
There are the following limitations of this research article:
 This research is conducted in Pakistan so it is applicable only in Pakistan.
 There are so many sectors of companies but this research is only for banking sector as it
is conducted on banking sector.
 This is a quantitative research that uses the positivism paradigm.
 The entire results are based upon only four discussed factors which are recruitment &
selection and training & development.
 This study is particularly based on past data of the companies in banking sector.
 In future there may be difference due to involvement of any other factor.

5. Future Scope
This study would give new horizons to the economic development of Pakistan. This will play a
important role in the growth of the country’s economy. This study will be beneficial for the
companies especially in the banking sector in Pakistan. While examining the factors affecting the
employees performance and the proportionate of their affection will guide the company to take
solid decisions to cope up with the deficiencies. On the other hand the employees’ performance
analysis can be used for multi purposes within the organizations. A company may use
employees’ performance analysis for the purpose of increment announcements. Employees’
performance analysis can be used by the enterprise's management to evaluate its employees for
promotions. This study will guide the HR department while making decisions that which
employees should be promoted and which employees should be given incentives on the basis of
their performances.

6. Conclusion
The study is conducted on the factors affecting employee’s’ performance of the companies listed
on the banking sectors of Pakistan shows that there is instability and deviation in the employee’s’
performance from companies to companies. The employee’s’ performance is significantly
affected by the independent variables which recruitment & selection and training & development
(Grant, D. L. 1979). The conclusion of this research article shows that recruitment & selection
and training & development have significant and positive relationship with the employees’
performance in the banking sector of Pakistan that is the sub sector of service sector in Pakistan.

The selected variables directly affect the employee performances which are recruitment &
selection and training & development. As these selected variables have significant relationship
with the dependent variable that is employees’ performance, so there should be paid a proper
attention to them by the HR department (Russell, J. E. 1993). It should be a focused point to HR
planning. Planning should be made by keeping in view these factors. More research can be
conducted on the topic of employees’ performance in the future as this research is limited up to
only four important variables.
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