Influence of Recruitment on the Organizational Performance of Microfinance Institutions in Nairobi County, Kenya

Abstract

This study examined the influence of recruitment on the organizational performance of Microfinance Institutions (MFIs) in Nairobi County. The key objective was to determine how recruitment practices impact performance outcomes. A correlational research design was adopted, targeting 247 Human Resource Managers and their assistants across 10 MFIs. Using Taro Yamane’s formula at a 5% error margin, a sample size of 153 respondents was selected through stratified random sampling. Data was collected using structured questionnaires and analyzed using both descriptive and inferential statistics. Regression analysis revealed that recruitment significantly influences organizational performance, with an R-squared value of 0.583, F-statistic of 206.631, and a p-value of 0.000, indicating that recruitment explains 58.3% of the variation in performance. The B= 0.763 (p = 0.000), confirming a strong and positive influence. The study concluded that effective recruitment characterized by clear screening criteria, fair shortlisting, comprehensive reference checks, and structured interviews significantly enhances MFI performance. It is recommended that MFIs adopt standardized and inclusive recruitment policies, ensure all panel feedback is considered, and strengthen reference checks. Policy frameworks should be developed to enforce transparent and merit-based hiring to sustain institutional growth and competitiveness in the financial sector.