Personnel Selection in Small Business Enterprises

Two decades ago, Roper Organization poll underpinned the issue of selecting right personnel as a crucial factor in small business sector besides the issue of motivating them to perform well, since it found incompetence and lack of motivation are the major negative drivers in small business enterprises (The Wall street, 1980). However, another survey showed that the personnel selection practices in this sector contribute to the difficulty in developing effective personnel selection programs, where owners or managers screen and hire the employees on their own, instead of employing a personnel specialist to do the job (Little, 1986).

Thus unimaginative recruitment and selection strategies are to blame for the debacle in small business sector, opine the researchers after observing that interview and application blank accounted for 90 percent of the most frequently used selection techniques (McEvoy, 1984). Such state of affairs is really uncalled for in a sector where organizations cannot afford to do without dedicated, skilled and quality performers, since each employee here represents a large percentage of the work force (Solomon, 1984, p.

22). And now amid the post-downturn business environment, when the market is asking to provide more at less cost, the significance of personnel selection has reached a new high in small business sector, as it is almost a “perform-or-perish” situation for them. Such state of affairs clearly shows that all what the small business enterprises need is a systematic process of personnel selection that would help them to find the right employee for any position.

This study thus explores the nuances of a three-step selection strategy that is based on the principle of incorporating behavioral consistency into selection instruments used to make decisions among job applicants. Background Basically any company would like to recruit persons who possess a desired level of cognitive, emotional, leadership, and management ability coupled with matching skills and cultural competency.

But it is not easier to underpin the levels of such elements in individuals and to weigh them against the organizational benchmark. Further, a selection decision has far-fetched implication on the organization in terms of money, time, effort and organizational environment. For example, an inaccurate selection decision can bring unproductive expenditure under the heads like recruitment process, training, and compensation.

Worse still, it could be repetitive until an employee of desired caliber is found (Solomon, 1984, p. 23). Thus the most significant point lies in the fact that personnel selection involves performance prediction of the prospective candidates and for that matter it needs to apply “the measurement of individual differences to the hiring of people in to jobs where they are likely to succeed” (Bobrow, 2003, p.

14). To cater to the above need, Industrial and Organizational Psychology came into being during the early 20th century, by virtue of the confluence of ideas of the psychologists like Musterberg and management philosophers like Taylor, which culminated into a process of using information about the job and the candidates to help the organizations to find fitting candidate for a particular job.

This area of research gained momentum during World War II, with the advent of large-scale aptitude batteries (Army General Classification Test) and leadership assessment technique (Office of Strategic Services assessment centers), which popularized the adoption of structured techniques in personnel selection, where IO psychology shifted from clinical judgment to prediction-based, reliable, and valid selection techniques (Bobrow, 2003).

Over the period, IO psychology too has gone through several refinement processes with the help of the thinkers and laws of the land. For example, Griggs vs. Duke Power (401 U. S. 424, 1971) court case strengthened the issue of fairness in selection procedures by establishing standards for the validation and use of pre-employment tests. In the process, The Uniform Guidelines on Employee Selection Procedures were adopted in 1978, with its case law and guideline instruments eventually making their way to codification under the Civil Rights Act of 1991 (Equal, 1978).

Thus, the endeavor to find a systematic, fair, and reliable personnel selection process finally provided a general framework for the development and use of psychological tests for employee selection, comprising of sections like job analysis, selection system development, validation of the assessment, ensuring fairness and applying ethics code.

Small business enterprises with a handful of employees are usually free to surpass legal directions on personnel selection. However, responding to such temptation backfires more often than not, as observed by the researchers. Still, small business sector too needs a customized process of personnel selection, as it differs in nature and operation from big, commercial houses.