Competency-based recruitment and managerial succession

Abstract

This article identifies and ranks the components of competency-based recruitment and the vital role it plays in managerial succession, at Bank Saderat, Isfahan province, Iran. The case study entailed a synthesis of qualitative and quantitative methods, with both interviews and a questionnaire used for data collection. The statistical sample contained 400 personnel experts and senior managers, while the qualitative sample included 17 interviewees. The questionnaire data were analyzed through descriptive and inferential statistics, including exploratory factor analysis, confirmatory factor analysis and structural equation modeling. The results show 22 components of competency-based recruitment, along five dimensions: competency, prospection, flexibility, justice and integrity. Competency has the highest factor loading and justice the lowest one. Indeed, competency-based recruitment seems to have a significantly positive effect on managerial succession. The article concludes with the study’s limitations, while also discussed are policymaking implications and future research directions.

Keywords

Competency-based recruitment competency succession management

Abdoullah Karimi is a PhD student at the Department of Management, University of Isfahan, Isfahan, Iran. He graduated with MSc in Public Administration at the Department of Management, Islamic Azad University. His research interests include resources for human development and organizational behaviour. Mr. Karimi is actively participating in a number of research projects in the Management Research Institute of the University of Isfahan.

Hadi Teimouri is an Assistant Professor of the Department of Management, University of Isfahan, Isfahan, Iran. He graduated as honours in all of the three levels of bachelor, master and PhD degrees from University of Isfahan. His fields of interest are resources for human development, organizational behaviour and strategic management. He has published several books and research articles in national and international journals.

Arash Shahin is a Full Professor at the Department of Management and the Director of Quality Management Research Group at the University of Isfahan, Isfahan, Iran. He received his PhD in Quality Engineering from the Newcastle University, UK. His research interests include quality engineering and management, supply chain management, maintenance management and innovation management. He has been the author of 11 books, five book chapters and 450 published papers in national and international journals and conferences since 1994.

Ali Shaemi Barzoki is an Associate Professor of the Department of Management, University of Isfahan, Isfahan, Iran. His fields of interest are resources for human development, organizational behaviour and entrepreneurship. He has published several research articles in national and international journals.

1 Introduction

Undoubtedly, the present age is the era of organizations and authorities of these organizations are human beings. Organizations are well aware that they need the best talents in order to succeed in a complex global economy and to survive in a competitive business environment. Employees play an important role in providing significant value and competitive advantage to organizations; it is evident that employees are the main factor in the survival of organizations in competition. With complexity of environment and diversity of cultures and occupations in organizations, the role of employees has also gradually changed. Current organizations need creative, flexible and responsive workers, who can bring great wealth to the organization by giving a plan and idea. On the other hand, it is more difficult than before to identify, attract and retain these talents in the organization. Personnel management is defined as identification, selection, recruitment, training and development of personnel in order to achieve organizational goals [1]. Personnel management can be described as the specific set of practices through which the personnel management strategy is implemented. In fact, personnel management can contribute to sustained competitive advantage through facilitating the development of competencies and employee motivations that are firm specific, produce complex social relationships, are embedded in a firm’s history and culture and generate tacit organizational knowledge. When viewing organizations as systems, we must consider the workers as inputs, processes (practices), and outputs that can lead to sustained competitive advantage. Taking this system’s perspective, personnel management can be defined as a set of distinct, yet interrelated activities, functions, and processes that are directed at attracting, developing, and maintaining a firm’s personnel. The organization’s personnel management activity is therefore a dynamic process (e.g. recruitment and selection, performance appraisals, training, and compensation) that enables the firm to acquire develop and deploy its resources to achieve superior performance and ultimately a competitive advantage. Currently, organizations consider their employees as the major players in achieving their purposes; thus, investment in activities which empower employees, improve their skills and motivate them will increase the ability of organization to deal with these challenges [2]. According to Martin et al. (2006), it is essential to identify and develop managerial competencies under these circumstances, because various industries, particularly service industries such as banks, are strikingly faced with problems such as labour shortages, high quit rates, inadequate skills, and competency gap, particularly at managerial levels [3]. Moreover, strong relations and overlaps between different personnel management sub-activities require reciprocal reinforcement of each of these sub-activities for systematic and dynamic structure of personnel management. One of the best approaches for achieving this is to apply a competency approach in personnel management and planning. This means that each personnel management sub-activity can be designed on the basis of competency, and in fact competency is the core of all personnel management activities of the organization. This study tends to identify and rank criteria of competency-based recruitment which can lead to design and reinforcement of each personnel management sub-activity in the Saderat Bank of Iran and create competitive advantage for the organization. The purpose of this study is to identify and rank the components of competency-based recruitment and then the role of components in establishment of succession management. It can help organizations eliminate the talent crisis from inside, adopt succession strategies, and create competitive advantage for the organization besides designing and strengthening each sub-activity of personnel management in Bank Saderat.

Currently, the proposition “employee is the most important competitive advantage” has become a definite, universally accepted and universally accepted proposition; for this reason, valuable role of people is emphasized in the organization [4]. In current competitive environment of organizations and in an environment which is characterized by successive changes and the need for continuous innovations, only organizations will succeed that grasp the strategic role of their personnel and have capable, skilled and knowledge-based people [5].

One of the challenges of current organizations is the demand for qualified and talented employees as it puts the labor market environment and increasing competition in the bottleneck to be more flexible to rapid environmental changes, because new products are quickly copied and profit market is threatened [6]. Therefore, highly skilled and high-quality worker is the only thing that is almost impossible to copy and repeat. Thus, organizations focus on treasury of talents to provide a source of competitive advantage over other competitors. In fact, the ability to recruit, hire, retain, train, develop and utilize capabilities of people at all levels of the organization can be considered as one of the sustainable competitive advantages of an organization. Because demand for qualified personnel is more than its supply, organizations have suffered losses due to the loss of experienced and skilled people for various reasons [7].

It is noteworthy that skilled and competent worker cannot be solved only by hiring; for solving the crisis of succession, organizations should also focus on themselves to focus on empowerment and development of their existing talents.

Literature lacks studies which identify and rank criteria of competency-based recruitment in Iran and there is a research gap in this field. Thus, this study tends to identify and rank criteria of competency-based recruitment. Theoretical framework of the study is presented as follows.

The research background shows that criterions of competency-based recruitment and their role in establishment of succession management especially in Iran have not been identified and ranked in any survey. Hence, there is lack of research in this field. The main problem of this study is to identify and rank the components of competency-based recruitment and its role in establishment of succession management. Theoretical principles of the research variables are reviewed in the following.

2 Recruitment

Due to strong competition and lack of highly skilled employees, organizations currently need to find and recruit talented employees [8]. Traditionally, recruitment was thought to be the same as purchase, that is, an organization tended to separate the best people of various options. In this case, the organization was considered as an active agent and people were considered as passive workers. However, new ideas of workers and talent management believe that recruitment is similar to marketing for which managers are responsible. In this case, it is not the organization that chooses, but people choose the organization. Therefore, organizations must strive to persuade people to cooperate with the organization by presenting advantages and opportunities [9, 10].

Attracting talents requires the development and implementation of appropriate attraction strategies which compensate for shortage of talented people to fill essential and strategic positions [11]. It is recommended that organizations abandon traditional attraction techniques and employ creative strategies in order to attract the best people. Traditional attraction techniques such as advertisements and recalls about superior talents are not very effective because these people should be hunted. Typically, the superior workers have various job opportunities due to their high abilities and skills; thus, their identification is very important. The recommended strategies include websites and networks active in this area and referral plans. Referral is important because current members of the organization are better able to identify the right workers for vacancies and tend to always introduce the best people, so that their credibility is not compromised [12, 13].

One of the main subjects in attracting talents is the attention to employer brand (brand and reputation of the organization). In order to attract talents, the need to create an employer brand and introduction of unique features to external talents are very important [14, 15]. Reputation of an organization is one of the important factors in attracting top people. An organization that has a high reputation and social identity will have no problem in attracting quality employees. On the contrary, an organization which does not have a good image will find it difficult to attract quality employees. For this reason, introducing the capabilities of progress within the organization to talented individuals and showing this to new employees that managers are assigned to positions based on competency and ranking can be very effective in attracting external talents to the organization. Differentiation of employer brand from other competitors must be done by managers through surveys to receive views and opinions of employees in relation to the brand and organize attraction plans and programs for each occupation group [14]. Attractiveness of job is also effective in attracting top people. When attractiveness of a job is low, it is difficult to find the right people. Tedious, risky and troublesome jobs are low-paid jobs and jobs which lack opportunities for progression do not attract many volunteers [1]. Studies show that existence of independence and freedom of action in job, exciting challenges in job, opportunities of growth and development, and adaptation with manager is very effective in attracting talents. Moreover, culture and values, strong leadership, strong performance, industrial advancement, diversity of existing talents, attractiveness of colleagues and job security are also important in tendency of talents to co-operate [14, 16].

Talent attraction requires adopting an ultra-active approach and formulating formal attraction processes. For this reason, development of more structured and targeted attraction programs is one of the essential requirements. The need for more comprehending and further discussion of common problems and potential solutions to attraction of talents can be effective in this regard. This creates widespread and extensive communication channels for attracting talents and develops appropriate strategies to encourage current employees to introduce talented people [17].

Introduction of various material and immaterial advantages and explanation of opportunities for growth and development of people in the organization are also very effective in attracting talents [18]. Employees should also play an active and effective role by providing feedback to managers about accuracy and reality of unique features of the organization (in brand of the organization) and their adaptation to facts of working life. Moreover, people can meet with attraction team members of the organization to provide their expectations of the organization. This will enable the attraction team to attract talents with more relevant information successfully. In addition, employees can act as an interface between the organization and talented outsiders and play their main role in attracting talents [17].

3 Competency-based orientation

Currently, various industries, particularly service industries, are significantly struggling with problems such as lack of worker, high quit rates, inadequate skills, and competency gaps. Competency gap means that employees do not have the desirable level of competencies required by the job; in other words, there is a gap between competencies of the employee and competencies required by the job. Competencies are related to success in the job and are considered as predictors of performance. Competencies lead to high or low performance in a job [19]. Service industries experience higher competency gaps than other industries, particularly in terms of managerial competencies [3, 20]. This means that competencies are less important in service industries such as hospitality, universities and capital market compared to manufacturing industries such as automotive, defence, computer and electronic equipment. The concept of competency is very close to the concept of talent; that is, if people achieve a high degree of competencies required for their jobs, they can certainly be considered as the best talent [21].

Siu (1998) argues that organizations must define and determine competencies required for particularly important occupations before hiring and recruiting for them [22]. For this reason, several companies are applying and implementing competency framework [23]. In this regard, organizations design and develop certain criteria for adapting job applicants [24]. This suggests that competency framework is an important source of success in personnel management.

Prior to addressing the concept of competency, it is essential to know its difference with knowledge and skill. Generally, knowledge is defined as what one needs to know to be able to fulfill competencies of his role and skill is defined as what one must be capable of in practice in order to fulfill competencies of this role. Competency is defined as a set of behaviours which support achievement of organizational purposes; competency is application of knowledge and skills for job performance [25]. Bailey et al. (2001) also defined competencies as critical and important behaviours which are essential for successful occupation or organizational role [26]. According to them, competencies can be used as an important and valuable criterion for measuring job performance.

Professional competencies include personal characteristics and behaviours such as skills, knowledge and attitudes. Since these factors always interact with each other, it is difficult to distinguish them [27]. It is not easy to say that a factor is a component of knowledge or skill or attitude. Some other experts have also identified other components of professional competence; factors such as motivation, self-esteem, individual factors, values and beliefs which play a major role in job success [28].

Professional competencies are formed on the basis of work experience. Studies have shown that characteristics of job competencies should be discussed in the context of work experience [29]. The conducted studies have divided professional competencies into technical competencies and generic competencies [30, 31]. Technical competency includes professional, work-related knowledge [32], while generic competency refers to people-related competency which can be effective in performing job tasks and includes individual characteristics such as motivation, attitude and personal characteristics. Technical qualifications are specific to the job and vary from job to job. For example, technical and professional competencies of an expert are different from technical competencies of an accountant. Generic competencies are beyond jobs and job boundaries and are common among various groups of jobs. Competencies such as decision making and problem solving, communication, achievement, time management, and so on are often common among different jobs; moreover, these competencies are often related to managerial positions and jobs.

Due to important concept of competency in recent years, the field of job analysis in personnel management has also shifted towards adopting a competency-based approach. Currently, the traditional job analysis (TJA) approach which is based on knowledge, skills, abilities and responsibilities required to perform a job has been replaced by competency modelling (CM) which is based on design and formulation of core competencies required for a job.

4 Succession management

Since the end of 20th century until now, organizations have been exposed to sever changes arising from ambiguity, complexity, and environmental instabilities. The only source that cannot be traded ideally is workers so that it can be stated that the most important competitive capital of a country is efficient and standard workers. According to a study done by a group of researchers, the biggest concern of organizations in the recent decade has been how to attract and maintain the talents despite their survival and profitability. Indeed, the problem of modern organizations is how to enjoy the existing sources to satisfy numerous needs and criticisms of shareholders and beneficiaries in the best manner. Modern organizations are faced with several challenges with regard to their personnel such as employees’ turnover. This is interpreted as wave pounding, the tsunami due to employees’ leaving the organization [33]. In fact, experts believe that talent and succession management is the critical factor for survival and sustainability in any organization [34]. Many organizations employ some plans to supply competent labor for various jobs in order to prevent any trouble in their progress. Succession planning is one of the plans for supplying competent labor for important jobs in times of necessity. Succession is a process in which suitable employees are selected for high-rank and important managerial posts among the qualified and talented staff in an organization. One of the main topics in the scope of organizational behavior is talent management. It acts as an incoming channel for succession and is a process which has been considered by organizations, scholars and researchers in different languages since the far past. Because of its role in individual and group effectiveness and creating competitive advantage, it is highly considered.

All organizations have some methods for succession when there is an empty place. Three stages of development and progress of an organization are equipping a job with an employee, replacement planning, and sequence planning. The succession process is different in various organizations and the corporate climate is effective on its efficient implementation. Thus, given various definitions, succession can be defined as a plan that an organization creates to be able to fill its most important executive posts. Previous studies reveal that succession management has not been considered by domestic scholars in Iran in spite of high fortune of the academic community in other countries.

5 Research questions

Considering the above-mentioned issues in the introduction and theoretical literature, employing qualitative methods based on experts’ opinions seems necessary in order to identify the components of competency-based recruitment and its role in establishment of succession management in banking industry. The present study attempts to provide a fair way for identification of talents, appointment, and promotion of managers at various bank levels via identifying the components of competency-based recruitment and realize duration of corporate management and leadership through succession management. The research questions are as below:

What are the components of competency-based recruitment in establishment of succession management?

What is the priority of each component?

Which model can be presented to determine the role of a competency-based recruitment in establishment of succession management?

How is the model’s goodness of fit?

6 Research methodology

Exploratory mixed methods design has been used in the current study via combining the qualitative and quantitative methods. First, the researcher explored the research topic qualitatively with limited participants and then made the intended tool based on quantitative findings. The statistical population in qualitative survey (interview) included 17 bank experts who had executive experiences at macro decision-making levels and were referred to as knowledgeable experts. A questionnaire was prepared based on the components and the extracted codes from the interviews. Validity of the questionnaire was approved based on content validity and construct validity. For content validity, two bank managers explored the items and the required revision was done according to their opinions after receiving the ideas of the supervisor and the research counselors. For construct validity, confirmatory factor analysis was used which was one aspect of construct validity of a scale that estimated model parameters given the number of fundamental factors and relations among the indicators. Reliability of the questionnaire was calculated equal to 0.87 via Cronbach’s alpha coefficient with the help of SPSS software. The obtained figure shows the required reliability. Thematic coding was employed to analyze qualitative data via content analysis. In the quantitative section, descriptive and inferential statistics methods were used. Relations among the variables were determined using exploratory factor analysis and the components were ranked by means of confirmatory factor analysis. Data analysis in this section was carried out via Amos software.

7 Research findings

Judgmental sampling was employed to determine the research samples. If the purpose of interviewing is to discover and describe the ideas and attitudes of interviewees, 10–25 samples can be used for the interview given the time and accessible resources. In this study, 17 samples were selected. Demographic statistics of the samples under study is displayed in Table 1. The interviews were carried out during the time period winter 2016-summer 2017.

Table 1
Demographic statistics of interviewees

Interviewees’ area of expertise and executive scope Organizational unit Number of interviewees

University professors University of Isfahan 5

Senior managers of Bank Saderat Iran Bank Saderat Iran 4

Personnel managers of Bank Saderat Iran Bank Saderat Iran 5

Heads of Bank Saderat Iran Bank Saderat Iran 3

Sum 17

Interviewees’ area of expertise and executive scope	Organizational unit	Number of interviewees
University professors	University of Isfahan	5
Senior managers of Bank Saderat Iran	Bank Saderat Iran	4
Personnel managers of Bank Saderat Iran	Bank Saderat Iran	5
Heads of Bank Saderat Iran	Bank Saderat Iran	3
Sum		17

7.1 Qualitative findings

7.1.1 Experts’ Delphi

Having analyzed the qualitative data in the coding stage, 150 primary conceptual codes were obtained. In the validation phase, criterions of competency-based recruitment were shown to some interviewees and their opinions about the codes were received. In the second stage of Delphi with five experts, semi-structured interview was conducted and their opinions about the criterions were received. They were asked to evaluate each criterion in a range between 1–10.

Content validity ratio (CVR) was calculated for quantitative evaluation of content validity and ensuring that the most important and accurate content (necessity of the main criterion) is essential. To determine the content validity, questionnaires were sent to 30 management experts and professors. The experts and professors included 5 university professors and 12 bank experts who had academic experiences and work in personnel management field such as books, research projects and academic-research articles. The experts were asked to respond to 24 criterions of competency-based recruitment which were identified during deep interviews in the form of “it is necessary”, “it is not necessary but is helpful” and “it is not necessary”. For the quantification of votes of the members of the evaluator panel (experts), first, the responses were extracted through calculation of frequency of members who had selected option E (essential) in SPSS software. Then, CVR was calculated via relation (1) and was adapted to Lawshe Table. Given the values of the evaluation panel (experts), values higher than 0.33 were accepted. $CVR = \frac{ne - \frac{N}{2}}{\frac{N}{2}}$

Ne = the number of members of the evaluation panel who chose the item “necessary” in that sub-criterion.

N = total number of members of the evaluation panel

According to Table 2, CVR was calculated and evaluated for all 24 criterions of competency-based recruitment. Two sub-criterions with CVR < 0 and numerical mean of standard judgments less than 1.5 were omitted from the list of main criterions of competency-based recruitment.

Table 2
Results of CVR test

Criteria Sub-criteria CVR Numerical mean Result

Competence Intention to recruiting 0.40 1.7 Accepted

Ability to identify capabilities and talents of applicants 0.53 1.66 Accepted

Ability to predict performance of the applicant in the job (estimated progress) 0.47 1.7 Accepted

Transparent and well-documented job analysis 0.67 1.8 Accepted

Proper classification of competencies required for jobs 0.47 1.7 Accepted

Priority of organizational interests over individual interests 0.40 1.7 Accepted

Prospection Clear career path 0.33 1.6 Accepted

Quantity and quality of employees required by the organization (prospection) 0.40 1.63 Accepted

Formation of talent treasury and optimization of talent expansion 0.33 1.66 Accepted

Stability in bank services –0.04 1.32 Rejected

An exploratory approach to a possible future 0.47 1.73 Accepted

Long-term employee planning 0.53 1.76 Accepted

Integrity Coordination between recruitment strategies and other personnel management and organization strategies 0.80 1.9 Accepted

Attention to alignment of organizational and individual values 0.60 1.8 Accepted

Demand and gap analysis of the required resources –0.12 1.35 Rejected

Integrity of recruitment criteria (physical-psychological) 0.53 1.7 Accepted

Opportunity for growth and promotion of employees 0.47 1.66 Accepted

Justice Competency-based orientation based on Islamic morality 0.27 1.63 Accepted

Centrality of justice and avoiding non-professional narrow-mindedness and attitudes 0.67 1.83 Accepted

Similar internal and external market orientation 0.33 1.6 Accepted

Procedural justice (similar application of recruitment criteria for employment applicants in order to create a healthy competitive environment) 0.87 1.86 Accepted

Flexibility Adaptation to environmental conditions (legal, political, social) 0.47 1.73 Accepted

Use of different updated recruitment methods based on needs of the organization 0.73 1.76 Accepted

Periodic review and revision of recruitment criteria and procedures 0.40 1.56 Accepted

Criteria	Sub-criteria	CVR	Numerical mean	Result
Competence	Intention to recruiting	0.40	1.7	Accepted
	Ability to identify capabilities and talents of applicants	0.53	1.66	Accepted
	Ability to predict performance of the applicant in the job (estimated progress)	0.47	1.7	Accepted
	Transparent and well-documented job analysis	0.67	1.8	Accepted
	Proper classification of competencies required for jobs	0.47	1.7	Accepted
	Priority of organizational interests over individual interests	0.40	1.7	Accepted
Prospection	Clear career path	0.33	1.6	Accepted
	Quantity and quality of employees required by the organization (prospection)	0.40	1.63	Accepted
	Formation of talent treasury and optimization of talent expansion	0.33	1.66	Accepted
	Stability in bank services	–0.04	1.32	Rejected
	An exploratory approach to a possible future	0.47	1.73	Accepted
	Long-term employee planning	0.53	1.76	Accepted
Integrity	Coordination between recruitment strategies and other personnel management and organization strategies	0.80	1.9	Accepted
	Attention to alignment of organizational and individual values	0.60	1.8	Accepted
	Demand and gap analysis of the required resources	–0.12	1.35	Rejected
	Integrity of recruitment criteria (physical-psychological)	0.53	1.7	Accepted
	Opportunity for growth and promotion of employees	0.47	1.66	Accepted
Justice	Competency-based orientation based on Islamic morality	0.27	1.63	Accepted
	Centrality of justice and avoiding non-professional narrow-mindedness and attitudes	0.67	1.83	Accepted
	Similar internal and external market orientation	0.33	1.6	Accepted
	Procedural justice (similar application of recruitment criteria for employment applicants in order to create a healthy competitive environment)	0.87	1.86	Accepted
Flexibility	Adaptation to environmental conditions (legal, political, social)	0.47	1.73	Accepted
	Use of different updated recruitment methods based on needs of the organization	0.73	1.76	Accepted
	Periodic review and revision of recruitment criteria and procedures	0.40	1.56	Accepted

Having calculated CVR, content validity index (CVI) was employed to ensure that sub-criterions of the tool have been well designed to measure the content. CVI shows integrity of judgments related to validity or model implementation, final test or tool. To this end, questionnaires containing 22 criterions of competency-based recruitment were again given to members of the evaluation panel to evaluate content validity for sub-criterions. Thus, the questionnaires were again sent to 30 experts to calculate CVI. They were asked to express their opinion about each sub-criterion of competency-based recruitment based on the three following indexes: “associatedness”, “simplicity” and “obviousness”. Therefore, CVI score was calculated via sum of agreeable scores for each item that had the rank 3 and 4 (the highest score) over the total number of the statistical population. CVI value of the remaining sub-criterions for competency-based recruitment (CVI-0.51) was calculated. Final codes for the quantitative section are shown in Table 2.

Question 1: what are the components of competency-based recruitment and their role in establishment of succession management?

According to qualitative data analysis in deep and exploratory interviews, coding, content analysis of the text of interviews, and matching them with theoretical principles based on the participants’ opinion, 22 components in 5 dimensions were identified for competency-based recruitment which are effective on establishment of succession management. This is shown in Table 2. Figure 1 displays the coding model and a paradigm for establishment of succession management based on qualitative findings. This conceptual model shows relations among main dimensions and obtained secondary components (recruitment evaluation) from the qualitative process. The presumption is that dimensions of competency-based recruitment and the related components are directly effective on establishment of succession management.

Fig.1

Coding and paradigm model based on qualitative findings.

7.2 Findings in the quantitative section

In order to determine whether or not amount of data is suitable for factor analysis, KMO index and Bartlets Test of Sphericity were employed. As it is observed in Table 3, value of KMO test statistic is greater than 0.85 in main dimensions of competence, prospection, integrity, justice and flexibility. This shows that factor analysis is highly suitable for such data. According to exploratory factor analysis in theoretical principles and qualitative section of the research, six components in competence dimension, five components in prospection dimension, four components in integrity dimension, four components in justice dimension, and three components in flexibility dimension were used for statistical analysis. Results of exploratory factor analysis are represented in Table 3.

Table 3
Exploratory factor analysis of theoretical principles

(Main) dimension Statistics of KMO and Bartlets test* Components (secondary factors) Variance of total dimensions

Competence Barttlett = 2442/466, KMO = 0.915 6 74.46

Prospection Barttlett = 2238/458, KMO = 0.959 5 76.07

Integrity Barttlett = 2145/466, KMO = 0.899 4 77.33

Justice Barttlett = 1116/107, KMO = 0.829 4 69.105

Flexibility Barttlett = 1494/169, KMO = 0.915 3 58.179

(Main) dimension	Statistics of KMO and Bartlets test*	Components (secondary factors)	Variance of total dimensions
Competence	Barttlett = 2442/466, KMO = 0.915	6	74.46
Prospection	Barttlett = 2238/458, KMO = 0.959	5	76.07
Integrity	Barttlett = 2145/466, KMO = 0.899	4	77.33
Justice	Barttlett = 1116/107, KMO = 0.829	4	69.105
Flexibility	Barttlett = 1494/169, KMO = 0.915	3	58.179

*Sig = 0/000.

As it is observed in Table 4, competence dimension and its components (with factor loading equal to 0.94) has the highest effectiveness factor and flexibility dimension and its components (with factor loading equal to 0.81) has the lowest effect on explanation of competency-based recruitment from respondents’ viewpoint.

Table 4

Results of exploratory factor analysis and determining factor loading of (main) dimensions

(Main) dimension	Standard factor loading	Coefficient of determination (R²)	T statistic
Competence	0.94	0.55	13.05
Prospection	0.84	0.53	12.74
Integrity	0.90	0.46	11.77
Justice	0.80	0.34	8.27
Flexibility	0.81	0.34	10.05

Question 2: what is the priority of each component?

Following the results of exploratory factor analysis, the results of factor analysis and ranking of the dimensions of competency-based recruitment that have a role in establishment of succession management are addressed to prioritize the components. Likewise, communication path of each component in dimensions of competency-based recruitment and their role in establishment of succession management (related to obvious (tangible) and hidden (intangible) variables) as well as standard coefficients and t-value of the measurement equation are shown in Table 5.

Table 5

Results of factor analysis and determining the priority and communication path of each dimension

(Main) dimension	Standard factor loading	Coefficient of determination (R²)	T statistic	Rank
Competence	0.94	0.55	13.05	1
Prospection	0.84	0.53	12.74	3
Integrity	0.90	0.46	11.77	2
Justice	0.80	0.34	8.27	5
Flexibility	0.81	0.34	10.05	4

Table 5 shows priority and ranks of the main dimensions which are effective on competency-based recruitment. Five dimensions of competency-based recruitment have been confirmed in establishment of succession management and according to standard coefficients of the model, the highest effectiveness is related to competence with factor loading equal to 0.94 and other dimensions are in subsequent order of importance. According to the addressed results in Table 5 and also with respect to the importance of the organizational justice variable, it is surprising that this variable is ranked as the fifth. This might be due to the working experience of the first author in environments where in, perceptions of other organizational justice variables such as distributive, procedural and interactive justice are considerably effective and therefore, organizational justice perception is relatively higher than the average value in the studied population. This explains the low rank of this variable regarding its important and influence on competency based recruitment, while it has a higher rank regarding other variables.

Question 3: which model can be presented to determine the role of competency-based recruitment in establishment of succession management?

Results of confirmatory factor analysis with direct standard coefficients and t-value coefficients determine relations among the components of competency-based recruitment. Results of standard coefficients in determining the role of existing components in competence, prospection, integrity, justice and flexibility dimensions reveal that competence has the highest effect on competency-based recruitment with standard coefficient equal to 0.94. Besides, t-value coefficients show significance of coefficients and parameters of the role of competency-based recruitment in establishment of succession management in Bank Saderat Iran. Hence, it can be stated that 22 secondary components in five main dimensions are effective on competency-based recruitment and explain its role in establishment of succession management. Figure 2 shows the final model of identified components and dimensions of competency-based recruitment and their role in establishment of succession management with each effective factor.

Question 4: How is the model’s goodness of fit?

Fig.2

Final model based on research findings.

Having presented the final model, its goodness was addressed. Table 6 shows goodness indexes of the final research model. Goodness indexes like non-normed fit index, normed fit index, adjusted goodness of fit index, goodness of fit index, comparative fit index, and incremental fit index are at an acceptable and appropriate level. On the other hand, RMSEA is equal to 0.072 that is less than 0.1 and RMR is equal to 0.07 that is small and shows that the obtained model has very well conformity indexes and it is appropriate. Moreover, relations among the variables based on the theoretical framework and qualitative section are rational and have the required goodness and their totality is approved.

Table 6

Goodness indexes of the final research model

Indexes	Acceptable value	Value of research finding	Utility
(χ²/df)*	–	198.50	Confirmation of the model
P-Value	–	0.000	Confirmation of the model
DF	Df > = 0	104	Confirmation of the model
χ²/df	χ²/df < 3	1.90	Confirmation of the model
RMSEA	RMSEA < 0.1	0.072	Confirmation of the model
NNFI	NNFI > 0.9	0.93	Confirmation of the model
NFI	NFI > 0.9	0.91	Confirmation of the model
AGFI	AGFI > 0.9	0.79	Confirmation of the model
GFI	GFI > 0.9	0.82	Confirmation of the model
CFI	CFI > 0.9	0.91	Confirmation of the model
IFI	IFI > 0.9	0.94	Confirmation of the model
RMR	RMR > 0.9	0.07	Confirmation of the model

*Ratio of chi-square to degree of freedom.

8 Discussion and conclusions

Supply of workers is one of the main tasks of management and other tasks (planning, organizing, etc.) are realized practically when there is appropriate and skillful labor for its execution. Proper selection of employees is highly important, because non-proportional selection means selecting those who do not have the ability and competency for doing work or those who leave the organization after some time and impose huge expenses on the organization.

Recruitment is the process of determining employees’ needs in an organization and ensuring the adequate number of competent people for realization of those needs. For proper doing of tasks, organizational members who are responsible to do so should be familiar adequately with legal, psychological and environmental grounds. For this reason, different tasks and various fields in which recruitment should be done have converted it into a difficult and challenging activity. The purpose of recruitment process is to ensure that an organization has adequate number of competent employees at an appropriate time and place permanently.

The purpose of this study was to identify and rank the components of competency-based recruitment and its role in establishment of succession management. Having collected the required information, criterions of competency-based recruitment were identified. Then, a questionnaire was designed based on these criterions and distributed among 400 employees at Bank Saderat Iran. The results of coding and content analysis showed that there are 22 effective factors in five dimensions of competence, prospection, integrity, justice and flexibility which are important in establishment of succession management.

The obtained results disclosed that paying attention to competency is the most important criterion in competency-based recruitment. Competencies in banking include various factors such as intention to recruitment, the ability to recognize capabilities and talents of applicants, predictability of applicant’s performance in a job, existence of transparent job analysis and so on. This finding illustrates that recruitment of competent employees and entering an organization is mostly affected by existence of competencies. At the same time, this factor is more important for the banking and monetary sector that their main activity is service. Thus, if the banks are going to compete in Iran gradually, they should attract the best workers and try to improve their personnel management activities in the first place. It is suggested to define accurate criteria proportional to each job and every person shall be evaluated based on those criteria. The important point in recruitment is paying attention to competencies. Since competencies are the axis of organization’s activities including personnel management activities, inattention to them in recruitment will be led to difficulties for the organization in realization of its purposes such as succession management. The main attempt of this study was to develop a framework to perform employees’ recruitment based on competency and evaluate its role in establishment of succession management.

Another important criterion for employees’ recruitment is paying attention to integrity. Components such as coordination among the recruitment strategies with other personnel strategies, paying attention to alignment between individual and organizational values, integrity of recruitment criterions, providing the ground for growth and promotion of employees, and so on are the important factors in this criterion. The results revealed that integrity is the second important criterion.

According to the results, observing organizational justice is highly important for employees especially the talents. If recruitment criterions are suitable and can eliminate employees’ concerns particularly the talented ones, they can be very effective on their satisfaction. For this reason, it is suggested to the banks to create motivation in their employees via observing justice and establishment of meritocracy. As a result, they feel they are being considered and job motivation will be enhanced in them.

Given the results, it is claimed that Bank Saderat Iran needs appropriate policies for the realization of factors related to competency-based recruitment. Especially, this bank has to pay more attention to competence, prospection, integrity, justice and flexibility. Finally, it is pointed out that the issue of competency-based recruitment in the field of personnel management has been addressed less in Iran and most previous studies are about recruitment methods.

However, although interesting results were obtained, this study could not be concluded without mentioning its limitations. Since personnel management activities influence each other and such activities in turn are influenced by organizational factors such as structure, strategies, culture and management style and also environmental factors such as political, economic, legal, social and cultural issues, it was not possible to investigate the influence of all of the other mentioned factors on the recruitment activities. Due to the fact that every organization is dominated by its own organizational/environmental conditions, therefore, whether the same conditions are true for organizations is questionable. In the qualitative part of study, semi-structured interview was merely applied and with respect to the scope of research and data collection limitations, it was not possible to apply other approaches such as observation.

Competency-based recruitment is an extensive scope and can be extended in other studies. Regarding the fact that not all the factors influencing on the relations among studied variables were investigated in this article, interpretation of the findings should be performed with more care. Therefore, it is suggested to researchers to consider the influence of other variables and also the inter-relations among personnel management sub-activities and to compare the results with the findings of this article in their future investigations.

8.1 Practical suggestions

Given the competency index, it is suggested to create intention to recruiting, identify the capabilities and talents of employment applicants, predict applicants’ performance in the job, perform transparent and regular job analysis for applicants, classify the required competencies for jobs, and prioritize organizational interests over individual interests.

Given the prospection index, it is suggested that the career path should be clear, quantity and quality of workers required by the organization should be determined, talent treasuries should be formed and talent expansion must be optimized, and there must be long-term planning for employees.

Considering the integrity index, it is suggested to create coordination between recruitment strategies and other personnel and organizational strategies, consider alignment between individual and organizational values, and provide the ground for employees’ growth and promotion. In addition, recruitment criterions should have integrity.

Considering the justice index, it is suggested to observe meritocracy based on Islamic morality and avoid non-professional and narrow-mindedness attitudes. There must be justice orientation and procedural justice (similar application of recruitment criterions for employment applicants in order to create a healthy competitive environment) should be the basis for recruitment in the organization.

Considering the flexibility index, it is suggested that recruitment criterions be compatible with environmental conditions (legal, political, social). Different and modern methods proportional to organizational needs must be used and recruitment criteria and procedures should be reviewed periodically.

One sample of banking experts was just explored in this study. Thus, generalization of findings is faced with limitation.

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