Financial Utility of Best Employee Selection Practices at Organizational Level of Performance

Abstract

In 1993, Terpstra and Rozell found that organizations using effective employee- selection procedures enjoyed greater organizational performance. This study, a replication of Terpstra and Rozell's study in the financial services industry, failed to yield similar results. Human resource executives at 122 credit unions in the United States were surveyed about their organizations' selection procedures. The authors found no significant relations between the organizations' selection practices and their objective measures of financial success. Because of the limited number of studies in this area, the present study adds an important empirical counterpoint to Terpstra and Rozell's earlier findings. The authors suggest that the best practices model to enhance organizational performance may not always be accurate and suggest alternative models for future research.