Faculty of Economics & Management

Commercial Sciences & Management Field of Study

Master of Science in International Business Economics
and Management Programme

Analytic Hierarchy Process and Its Application in

Human Resource Management

Master thesis by
Armaghan Omrani
Submitted for the Degree of
Master of Science in International Business Economics
and Management

Supervisor: Professor Dr. Edward Omey

Academic Year: 2011 – 2012

Defended in: September 2012

Hogeschool-Universiteit Brussel, Warmoesberg 26, 1000 Brussel

Tel: 02-210 12 11, Fax: 02-217 64 64, www.hubrussel.be
Hogeschool - Universiteit Brussel
Faculteit Economie & Management

Master Thesis - Summary

Analytic Hierarchy Process and Its Application in Human Resource

Management
Armaghan Omrani
Master of International Business Economics and Management
Report

Summary
In the world of rapid change- when it is hard if not impossible to make measurement and
evaluation in an absolute way - two kinds of knowledge are crucially important for the success of
organization. One is the knowledge of future changes of industry and the second one is decision
making knowledge. Decision making is the process of human mind, and it is affected by human
perception of the events and his analytical power in different situation, it means that it is an
objective process. If the criteria are intangible then to make the decision it is essential to make the
priority of them and quantify them. To quantify them we assign numbers to each using weighting
process. This process helps decision makers to reduce the risk of the effect of human minds’
limitation (Keeney, 1992). Mintzberg (1973) describes that manager’s activities can be divided into
three categories: informational, interpersonal and decisional category. Organizations bring together
information, technology, people and raw material in order to achieve the goal and to perform the
tasks. Human Resource Management is the area of making some of the most important decisions
of the organization. The success of an organization mainly depends on making proper decisions in
the human resource department. Human resource decisions basically involve the multi criteria
evaluation of qualitative data. The Analytic Hierarchy Process (AHP) was developed by Thomas L.
Saaty in the 1970’s, later the approach of Saaty has been accepted in international science as a
strong and flexible tool for providing a solution to complex decision making methods. AHP it is a
multi-criteria decision making method and it is comprehensive, logical and it rationalizes the
human thinking. (Saaty, 1994; Satty 2008).

1. Problem definition and research question

In decision making, HR managers have to take into account a large amount of information. Part of
this information is quantitative and part of the information is qualitative. To measure quantitative
variables it is possible to use units and axis. In order to measure qualitative variables it is
necessary to rank the alternatives and create priorities and weight the variables. Subjective criteria
are unavoidable in decision making process in human resource department. The challenge is how
to measure them and how to quantify qualitative criteria. Since human mind is limited and
individual preferences are involved in decision making process, it is essential to weight and
quantify these preferences.

Main research question:

How to improve decision making in human resource department applying analytic hierarchy
process?

2. Research method

a. Justification of the research method

1
Hogeschool - Universiteit Brussel
Faculteit Economie & Management

Master Thesis - Summary

Based on the main research question, the thesis is categorised as an exploratory strategy. this
strategy in this master thesis is based on conducting survey and studying the case study. Three
phases designed to portray the research approach. The first phase with the aim to find out the
potential use of AHP in general and then specification of its feature in decision making process, In
phase two of this master thesis, the researcher started to collect data related to Human Resource
Management and decision making process. The huge amounts of articles available about this
subject, however finding the related and scientific literature were not easy task; the third phase of
this master thesis is based on case study. To find the answer of the last sub question, what is the
impact of AHP in decision making process and how it improves decision making process; the case
study was decided to be studied. One Iranian herbal Pharmaceutical company selected to be
analyzed. This company- Goldaru- had announced vacancy to recruit new pharmacist. The
management formulated a list of several criteria and sub criteria. The main focus in this master
thesis is the application of AHP in human resource management. In this thesis we use AHP as a
method to decide on multi criteria evaluation issues. A deductive approach is used to find out how
AHP can help to solve the problem of HRM in decision making in case study of the company
Goldaru, This thesis is exploratory in the sense that it explores the necessity of using analytic
hierarchy process in order to facilitate the process of decision making in HRM.

b. Collection and processing of the data

The data collected from HUB library and online databases were the main sources of collection of
data, conferences on “Proceedings of International Symposium on the AHP” were included. Related
articles are summarized logically; the data collected from articles and data gathering was done
through secondary data analysis. We used a number of online databases such as EBSCO, ELSEVIER
Science Direct, Springer Link and Google Scholar. Case studies of recruitment process and job
evaluation were studied; data gathering about the company was done by studying its journal.
Request of interview sent to company and the objectives and reasons of the interview clarified. In
December the request for an interview sent to the human resource manager by email, the first
interview conducted by telephonic conversation, later one face to face interview conducted and
company visit arranged.

3. Findings and conclusions

The Analytic hierarchy process facilitates the process of decision making by quantifying qualitative
data. Human resource department mainly faces with difficulty to make the proper decisions and to
keep the workplace a fair and happy place. Analytic Hierarchy Process reduces human mind
involvement in the process of making decisions by converting subjective issues into objective
variables and finding out the best alternative(s) to solve the problem.

4. Refrences

Keeney. R.L. (1992).Value-Focused Thinking: A Path to Creative Decision Making. Cambridge:

Harvard University Press

Mintzberg. H. (1973). The Nature of Managerial Work. New York: Harper & Row.

Saaty, T. L. (1980). The analytic hierarchy process: planning, priority setting, resource allocation.
New York: McGraw Hill International Book C.
Saaty, T. L. (1994). How to make a decision: the analytic hierarchy process. Interfaces, 24 (6), 19-
43.
Saaty, T. L. (2008). Decision making with the analytic hierarchy process. International Journal
Services Sciences, 1 (1), 83-98.

2
Preface

The report which is lying in front of you is my master thesis and is the result of one year of working
and research at the faculty of Economic and Management of Hogoschool Universiteit Brussel (HUB).

I would firstly like to thank my supervisor at HUB, Prof. Dr Edward Omey. He gave me a lot of
support whenever I faced difficulties during the academic year and his trust in my skills gave me a
lot of confidence. He helped me a lot to develop this research. He spent lots of time to improve my
skills in writing and developing methods which are used in this thesis. Without his support I could
not have completed my thesis and meet the deadlines.

My second word of thanks goes to the administration staff of HUB who showed flexibility, whenever
I faced problems during the academic year and they are really appreciated for their assistance. In
particular I would like to mention name of Ms Inge Bergers. She helped me a lot during my
education in HUB.

Finally I would like to thank the staff of Goldaru because of their help to collect the data for me.
They gave me the chance to interview them and gave me permission to visit their company. They
also provided me with convenient and valuable information.

Today I finished my thesis. I will continue to pursue challenges for me in the future and want to
apply what I have learned at HUB. For me it is not the end but the start.
Table of content

1 Introduction -------------------------------------------------------------------------------------------1

2 Research question and Research approach-----------------------------------------------------------3

2.1 Problem Definition and Research question----------------------------------------------------3

2.2 Research Approach-----------------------------------------------------------------------------4

3 The Analytic Hierarchy Process------------------------------------------------------------------------5

3.1 Analytic Hierarchy Process in General---------------------------------------------------------5

3.1.1 Introduction--------------------------------------------------------------------------5

3.1.2 Literature Review--------------------------------------------------------------------6

3.2 Analytic Hierarchy Process Steps-------------------------------------------------------------8

3.2.1 Introduction ------------------------------------------------------------------------8

3.2.2 Hierarchy Construction--------------------------------------------------------------9

3.2.3 Priority Analysis--------------------------------------------------------------------10

3.2.4 Finding Weights---------------------------------------------------------------------11

3.2.5 Example and Weighted Criteria----------------------------------------------------14

3.2.6 Consistency Index and Consistency Ratio-----------------------------------------16

3.2.7 More Examples of finding weights methods---------------------------------------17

3.3 Conclusion--------------------------------------------------------------------------------------17

4 Human Resource Management-----------------------------------------------------------------------19

4.1 Introduction-----------------------------------------------------------------------------------19

4.2 Literature Review-----------------------------------------------------------------------------20

4.3 Decision Making in Human Resource Management-----------------------------------------22

4.4 Recruitment-----------------------------------------------------------------------------------23

4.4.1 Assessing the Personnel need-----------------------------------------------------24

4.4.2 Job Analysis-------------------------------------------------------------------------24

4.5 Job Evaluation---------------------------------------------------------------------------------32

4.5.1 Introduction------------------------------------------------------------------------32

4.5.2 Different method of job evaluation------------------------------------------------32

 4.5.3 Job evaluation in Human Resource Management---------------------------------33

4.6 Conclusion--------------------------------------------------------------------------------------36

5 Case Study, Recruitment Process in Goldaru by Application of AHP--------------------------------37

5.1 Introduction----------------------------------------------------------------------------------37

5.2 Background----------------------------------------------------------------------------------38

5.2.1 Goldaru’s Job Analysis------------------------------------------------------------39

5.2.2 Profiles of Vacancy Applicants---------------------------------------------------41

5.2.3 Application of AHP in decision making in Goldaru------------------------------49

5.3 Conclusion-------------------------------------------------------------------------------------54

6 Conclusion---------------------------------------------------------------------------------------------55

7 References--------------------------------------------------------------------------------------------57
List of Tables: Page Number

Table 1: Criteria of secretary recruitment-----------------------------------------------------------------9

Table 2: Saaty’s Fundamental Scales--------------------------------------------------------------------10

Table 3: The weight of pair-wise comparison matrix of candidate--------------------------------------15

Table 4: Random consistency index------------------------------------------------------------------------6

Table 5: Literature review, definition of human resource management--------------------------------21

Table 6: Examples of quantitative decision making methods--------------------------------------------28

Table 7: Illustration of criteria and sub criteria of recruitment process of Goldaru-------------------40

Table 8: Summary of applicant’s profiles of Goldaru-----------------------------------------------------42

Table 9: Scale of importance measuring of criteria and sub criteria used in Goldaru----------------47

Table 10: Performance of the candidates with respect to all sub criteria------------------------------52

Table 11: Weights for the candidates----------------------------------------------------------------------53

Table 12: Overall result------------------------------------------------------------------------------------54

List of Figures Page Number

Figure 1: The Hierarchical tree-----------------------------------------------------------------------------6

Figure 2: The hierarchy of criteria of secretary recruitment----------------------------------------------10

Figure 3: The hierarchy tree of secretary recruitment including weights-------------------------------14

Figure 4: The hierarchy tree of criteria and sub criteria of recruitment of new staff------------------31

Figure 5: The hierarchy tree of criteria and sub criteria of job evaluation-------------------------------35

Figure 6: Hierarchy tree of criteria and sub criteria of recruitment new Pharmacist in Goldaru-----46

Figure 7:The weights for the criteria and sub criteria-----------------------------------------------------50

List of appendix
Appendix 1: Example and weighted criteria

Appendix 2: List of interview questions in Goldaru  

1 Introduction
In our daily life we constantly make small and big decisions, consciously or unconsciously. Every day
we encounter situations which require measuring things. What we do in measuring things is using a
scale of understanding our judgment (Saaty, 2008a, Page 83).There exist different types of scales. In
nominal scales for example, we decide about colors (black dress or pink dress?) or TV shows (film or
documentary). On the other hand, in ratio scales we decide about quantities in a rational way.

In complex cases, we have to decide about a problem in which there are many issues involved. We
can think about the issues involved in buying a property, in selecting a school, in choosing a job, and
so on. Usually the problem is not only formulated in terms of quantitative elements, but also of
qualitative elements. In buying a property, the price plays an important role, but also the looks of the
house and the neighborhood of the house.

Thomas L. Saaty (1980) developed a method which he called “the Analytic Hierarchy Process”.
According to Saaty, in order to make a proper decision about a specific issue, decision makers need to
know the précis, specific problem and have to be able to describe it into details. In many cases,
decision makers then divide the big problem into several sub problems and define criteria and sub
criteria in each level of the problem decomposition (Saaty, 2008a).

The Analytic Hierarchy Process (AHP) helps to structure the problem in a rational way, in particular
when the decision should be made taking into account multi criteria. AHP provides the possibility of
making an objective decision about subjective matters by means of transferring the intangible factors
into tangible factors (Saaty,1994). It helps decision makers to make a quantitative evaluation of
qualitative elements. AHP is a method which does not give the correct answer to the problem but the
result of the method yields the best choice and the best decision (Saaty,1994). The validity of this
method is based on thousands of accepted results in its actual application, cf. section 3.1.3 below.

In the thesis we proceed as follows. In Chapter 2 we describe the research questions and the research
approach. In Chapter 3 we outline the assumptions of the Analytic Hierarchy Process (AHP) and show
how to obtain weights in quantitative and qualitative decision situations. The aim is to apply AHP in
the context of Human Resources Management (HRM).

In Chapter 4 we discuss some of the important duties of the management in an organization. The
management has to run an organization and this requires making decisions all the time. A typical
example of making decisions appears in the recruitment, training, and job evaluation of people. To
choose the right people for the right place at the right time, decision makers need to emphasize the
number of people they need in the organization in order to execute the goals efficiently and effectively
(Hill & McShane, 2006, pp. 286-479).In this approach they should assess the future demand of
employment and estimate the number of current laborers who are in the stock of employees. They
should assess internal and external labor movement and the number of people who will retire or quit
or join the labor force. Therefore recruitment requires constant decision making and it is based on
multi-criteria evaluation. Managers gather information, screen, process it and then formulate their
own interpretation. Apart from the fact that perceiving and interpretation play a significant role in
making decision (Robbins & Judge, 2008), an attempt has been made to overcome the high degree of
personal preferences and opinions in the overall process.

1 
 
In Chapter 5 we apply AHP in a case study. An Iranian company Goldaru had a vacancy and the
management formulated a list of several criteria and sub criteria. Finally there were four valuable
candidates left. Using AHP, we selected the best candidate.

2 
 
2 Research Questions and Research Approach

2.1 Problem Definition and research question

Because of the nature of the job, human resource managers are involved in many questions related to
recruitment, training and job evaluation of people. In decision making, HR managers have to take into
account a large amount of information. Part of this information is quantitative and part of the
information is qualitative. Examples of quantitative elements are: age, years of experience, number of
children, and so on. Examples of qualitative elements are: ability to work in a team, communication
skills, level of the university degree, leadership, and so on.

One important thing in job analysis is to avoid any discrimination. The HR department evaluates
different posts in the organization to ensure that the evaluation has been done fairly.

In addition to recruitment, HR managers are also responsible to invest on training based on the
performance evaluation. If the performance curve is downward, the human resource department
investigates the reason. The reason can be either the lack of motivation or the need of training. These
are some examples of decision making in the human resource department and it is based on multi
criteria evaluation.

In job recruitment, it is important to formulate the right needs and criteria. After receiving application
forms, the HR manager makes a rough selection and only continues, working with applications that
meet the criteria. After this step it is time to choose the best candidate.

One method of finding the right person on the right place is the method of Saaty. He called his
method the Analytic Hierarchy Process. AHP was introduced around 1980, Saaty (1980), and has
been used in many different applications since that time. AHP has been used in education, engineering
and government decisions because of its simplicity and its flexibility (Vaidya & Kumar, 2006). Because
of the nature of the job, human recourse managers’ decisions have to take into account the evaluation
of qualitative elements. To avoid any discrimination it is essential to leave out personal feelings and
any individual preference. AHP has been introduced as a new method of job evaluation by Adamus
(2009). We will explain how AHP can help in general to solve the main problems of HR Management
department related to the decision making process and why it is important to use AHP in this
approach.

As an application, in this thesis we tried to develop a tool in which we use AHP as a way to choose the
best candidate out of a number of potential candidates. We study a case study in the company
Goldaru.

The main research question of this research can be formulated as follows:

How to improve decision making in human resource department applying analytic hierarchy process?

In order to respond to this question there are three sub questions to be replied

- How analytic hierarchy process helps to make the right decision?

- What are the areas of decision making in human recourse department?
- Why some of the decisions made by human resource managers are not proper?
- What are the consequences of wrong decision making process?

3 
 
 - What is the impact of AHP method in HR making decision in real case study of one Iranian
company?

2.2 Research Approach

In order to find out the answer of above questions and the potential use of AHP in HRM, we
performed a search through database and the library of HUB. The data collected from articles and
data gathering was done through secondary data analysis. We used a number of online databases
such as EBSCO, ELSEVIER Science Direct, Springer Link and Google Scholar.

In chapter 3 we discuss the AHP method in general and we give a literature review of AHP and some
of its applications. We study the analytic hierarchy process in order to use it as an approach to make
the process of decision making more rational. This mathematical method contains a quantitative
analysis of qualitative data. From the mathematical point of view, the AHP approach is well known by
now. We used an Excel applet to make all the necessary calculations and respond to the first sub
question.

In Chapter 4 we discuss human resource management in general and in particularly we focus on

problems that human resource manager encounters in multi criteria level evaluation. In this step we
want to answer the second three questions about what the problems of human resource department
are with regard to decision making process. To find out the answer, we found related articles and
books and we decided to include a case study of one of the health care companies in Iran which has
been discussed in chapter 5 and provided us with answer to the last sub question. So in December
2011 the request for an interview sent to the human resource manager by email and in January 2012
the first interview conducted, later one in July 2012 face to face interview conducted and company
visit arranged. Before the interview the author explained the reasons and the objectives of the
interview and made the purpose of the data gathering clear.

The main focus in this master thesis is the application of AHP in human resource management. In this
thesis we use AHP as a method to decide on multi criteria evaluation issues. The importance of
applying AHP in human recourse management is due to the fact that managers are responsible for
making crucial decisions involving evaluation on many different criteria. Consider the case of
recruitment, there are so many applications which are sent to the organizations by applicants and
then the human recourse manager has to evaluate the applications based on the different criteria
which are important for the job. So the first step is to describe the problem, clarify the need and
objectives of the problem. Then there is an analysis of the objectives and we can make a hierarchal
structure of the criteria and sub- criteria. This is one of the applications of AHP in human resource
management and there are some more parts of decision making which are appropriate to use AHP as
a method. Job performance is another example of making decision based on multi criteria evaluation
(Hill & McShane, 2006).

A deductive approach will be used to find out how AHP can help to solve the problem of HRM in
decision making. In our case study we consider the company Goldaru which is one of the most
famous herbal Pharmaceutical companies. This thesis is exploratory in the sense that it explores the
necessity of using analytic hierarchy process in order to facilitate the process of decision making in
HRM. Literature review is the main method of collecting data, but an interview with the HRM
department of Goldura was used to obtain insight in the company. To find a clear picture of the
problem of HR management department sub questions developed for example why it is necessary to
reduce the level of individual mind involving in the process of decision making.

4 
 
3 The Analytic Hierarchy Process

3.1 Analytic Hierarchy Process in General

3.1.1 Introduction
In everything we do during our daily life we make decisions. To make a proper decision we need to
know the problem and the objective of making decision. The Analytic Hierarchy Process (AHP) was
developed by Thomas L. Saaty in the 1970’s while he was involved in e military project. Later the
approach of Saaty has been accepted in international science as a strong and flexible tool for providing
a solution to complex decision making methods.

The AHP methodology compares criteria, compares sub criteria and compares alternatives with respect
to these criteria or sub criteria. To this end it is compulsory understand the criteria, the sub criteria
and the alternatives (Saaty, 2008a). Decision makers need to gather information and recently
decision making has become a mathematical science. AHP it is a multi-criteria decision making
method and it is comprehensive, logical and it rationalizes the human thinking. It provides a possibility
of making objective decision of subjective matters by developing a method of measuring qualitative
data and thus making a quantitative evaluation of qualitative problems (Saaty, 1994).

To measure quantitative variables it is possible to use units and axis. In order to measure qualitative
variables it is necessary to rank the alternatives and create priorities and weight the variables. AHP
helps quantify and weight individual preferences. The weighted result can be ranked and the result on
the first rank is the best choice. As an example consider an organization that faces a decision making
process. Each department may have a solution for the particular problem. Each may have a solution
for the particular problem according to their responsibility. Applying AHP, the best alternative will be
chosen.

AHP users decompose the problem into sub problems hierarchically. And this hierarchy refers to any
aspect of the problem, which can be tangible or intangible. Then a comparison is made. All criteria are
compared and all sub criteria are compared and finally all alternatives are compared with respect to
the upper elements in the hierarchy (Saaty, 2008a). To make the comparison, decision makers use
their judgment about the importance of each element. After evaluating, numerical values or weights
can be found in the entire level of problem.

In this part, we introduce Analytic Hierarchy Process as a scientific way to making decisions.
According to Forman and Selly (2001), the name AHP it explains its logic:

 Analysis: define the problem and decompose the problem into a list of related
elements and sub problems (Structure the complexity);
 Hierarchy: make a hierarchical chart of the elements and organise the levels of
criteria and sub criteria in relation with the goal. Later we obtain a judgemental matrix
of pair-wise comparisons at each level. At the lowest level in the hierarchy we have the
different alternatives. These alternatives are compared with respect to each of the sub
criteria at the lowest level.
 Process: in this part of the method, we use a mathematical method to obtain weights
at each level of the hierarchy. Starting from a judgement matrix we obtain a weight
(priority) for each of the alternatives and each of the criteria and sub criteria.
Moreover, we use a consistency ratio to check the consistency of the judgement. The

5 
 
 resultt of this method is not a true or fa
alse answer to our prob
blem but it iis the best
answe er can be fou
und.

First of a
all the decision makers should
s divide
e the problem m into its components an nd all attribu
utes should
be arrannged into mu ultiple hierarc
chy levels. TThen they ha ave to compa are the elements of each h level with
respect to the upper level and tthe same sh hould be don ne for the su ub elements.. For example decision
makers c compare the e criteria loca
ated at the second
s level with respectt to each oth
her and with respect to
the goal. When all the comparisons are don ne at all leve
els, and the consistencyy is approved d, then the
alternatives are compared and d by the us se of the weights,
w thee best alterrnative can be found.
Usually the
t hierarchy with the c criteria, sub ccriteria and alternatives can be reprresented in a graphical
way. As an example consider the e following ggraph:

Figure 1: Hierarchica
al tree  

Go
oal

C1 C2 C3

C11 C12 C13 C2

21 C22 a

a a a a a b

b b b b b c

c c c c c d

d d d d d

At the h
highest level we have the goal. On tthe first leve el we put the e major crite
eria. For eac
ch criterion
we can present
p two or more sub criteria or no sub crite eria at all. At
A the lowestt level of the
e hierarchy
we put tthe alternatives. In this example we e have 3 major criteria C C1, C2 and C3.
C In C1 there are 3
sub crite
eria and in C
C2 there are e 2 sub criteeria. In C3 th
here are no sub criteria. At the botttom of the
hierarchy we place inn our examp ple the 4 alte
ernatives a, b
b, c and d.

Later we e will discuss

s how to obttain pair-wisse compariso on matrices and weights
s for each off the (sub)
criteria a
and each alteernative at e
each of the le
evels in the hierarchy.
h

3.1..2 Literatture Rev

view

AHP hass been used widely in mmany differennt fields suc

ch as politics
s and resourrce allocation
ns. So far,
there are
e not so man
ny researche
es about its a
application in
n human res source managgement.

6
 
Forman and Gass (2001) give a comprehensive overview of AHP Applications. In their list they
mention choice decisions and choice problems such as: product selection, vendor selection, policy
decisions. A second group of applications is related to prioritization and evaluation of projects. AHP
can be used in problems of budget allocation (how to divide the budget for research of a university
over the faculties?) and resource allocation. Forman and Gass (2001) also mention applications in
quality management and in health care.
In Vaidya & Kumar (2006), the authors present a review of applications of AHP. Their paper contains a
discussion of around 150 papers. They group the papers thematically and consider the following
groups of applications:

- Selection (software selection; contractor selection; site selection; etc.)

- Evaluation (supplier evaluation; competitive bidding; product evaluation; etc.)
- Cost-Benefit analysis (introduce ISO environment or not?; investment decisions; etc.)
- Allocation (distribution center selection; resource allocation; etc.)
- Planning and development (combat ship planning; health care systems; etc.)
- Forecasting (technological forecasting; exchange rate forecasting; etc.)

The paper contains many references! None of these references includes applications of AHP in Human
resource management!

Ho (2008) gives an overview of Integrated AHP processes and their applications. In this paper the
author discusses AHP in combination with other OR-techniques such as for example linear
programming and goal programming. In their impressive list of references, there are some
applications related to HRM. As applications they mention among others, papers in education
requirement selection, in teaching method selection and in performance evaluation. In (Saaty,
Peniwati & Shang, 2007), the authors use AHP and LP in the context of human resource allocation.
Chang and Yang (2011) use what they call fuzzy AHP to determine product attributors toward
customer value. Saaty, Vargas and Dellman (2003) used AHP-LP in order to study the resource
allocation problem of two companies. Bertolini and Bevilacqua (2006) used AHP and Goal
programming in a manufacturing area with the purpose of maintenance strategy selection.

Adamus (2009) claims to be the first author to introduce AHP in job evaluation, Job evaluation is a
chapter in about every book on HRM. But the approach of Adamus seems to be the first in this field.
In his paper Adamus evaluates jobs taking into account 7 criteria and many sub criteria. Most of the
elements in his hierarchy are qualitative elements. He uses the AHP methodology to obtain weights for
each of the (sub) criteria.

In Peiris, Rehan and Jayakody (2009), the authors discuss a way to improve the quality of candidate
selection and to minimize personal preferences in making shortlists. In their paper they discuss
several methods and techniques. It turned out that evaluators using AHP “will be able to come to a
more accurate unbiased result”. At the same time “the identification of … comparative values for each
criterion is a cumbersome process”.

Another application of AHP appears when HRM policies affect the ability of employees to execute the
job. It affects the motivation of the employees in an organization and it directs the strategy of the
organization to achieve the goal (Purcell, Kinnie, Swart, Rayton, & Hutchinson, 2009). Since the most
important assets of an organization are the people who are working in this organization

7 
 
(Vermeyle,2010), the human resource management is considerably important with regard to make the
proper decisions. Moreover, these decisions should not involve any subjective attitude of the person
decision makers.

In their paper, Taylor III, Ketcham & Hoffman, (1998) use AHP for rating personnel. In universities,
business and authorities it is difficult to recover from serious personnel evaluation mistakes. On the
one hand it is possible that the organization recruits the wrong person and the institution has to live
with the consequences for ages. On the other hand, it is possible that a “good” person receives a bad
evaluation because of personal conflicts between the person and the evaluators. Again AHP may be
helpful to tackle these problems.

We briefly mention some other papers. Sun (2005) gives an overview of applications of AHP in China.
Among others AHP has been useful in planning the economy and systematic evaluation of equipment.
One nice case study is about the design of new bridges.

AHP has been applied in manufacturing system. Investing in a manufacturing section is long term and
expensive. This makes it important to make proper decisions. AHP is one of the methods that is
popular in this context (Ic & Yurdakul, 2009). Weapon selection is another example of an important
decision making process. Because of its nature it involves multiple criteria evaluation and so AHP has
been used in this area (Dagdeviren, Yavuz, & KilInç, 2009). The applications of AHP in medicine are
related to (drug) production planning. A planning process, that can minimize the cost of production
while satisfying patients, was studied in 2010 in the pharmacy department of a French Hospital
(Sahin, Martelli, Berhoune, & Bonan, 2010). A review of AHP methodology was done by Ishizaka and
Labib (2011). In this paper the authors also discusses problems related to the modeling, pair-wise
comparisons and consistency index.

AHP is used in analyzing the structure of project selection problems (Amiri, Zandieh, Soltani &
Vahdani, 2009). In assessing alternatives by a group of assessors, a new method was invented which
is called the Group Analytic Hierarchy Process Ordering method. It is based on AHP and it is separated
into two hierarchies: one for a cost and a one for a benefit analysis (Ishizaka & Labib, 2011). AHP was
used in engineering and industry and banking sectors. Vaidya & Kumar (2006) illustrate the feedback
from bankers in Nepal for using AHP as a decision support tool. Areas of AHP application include
medicine, engineering, social, manufacturing, social and individual (Steuer & Na, 2003). AHP is
characterized by its capacity to make the judgment on both qualitative and quantitative data. Basically
the application of AHP is classified into three categories which are based on: Theme, Specific
application and application combined with some other methodology (Vaidya & Kumar, 2006). Al Harbi
(2001) applied AHP in order to select the best contractor of project management. The evaluations
were based on criteria of experience, financial stability, quality performance, manpower resources,
equipment resources and current workload. To find the overall best choice the ranking was done and
the best contractor was selected.

3.2 Analytic Hierarchy Process Steps

3.2.1 Introduction
First of all the decision makers should decompose the problem and divide it into its component parts,
and arrange hierarchy levels. It is advised to organize a table and describe the criteria and sub criteria

8 
 
and explain each term to help to clarify the hierarchy. Hierarchy is the method which is used in human
organizations, but it can be used in mathematical structures as well. Problems are structured into
their constituted parts and each constitution is divided to its sub constitution. Then each element is
preceded down to the hierarchy considering its importance which we care. It helps decision makers to
focus on understanding each element according to its importance and its effect on the overall process
(Islam & Rasad, 2005).

In an AHP hierarchy structure, the overall goal is put at the top. There are some criteria that can be
used to achieve that overall goal. There are groups of factors which relate the alternatives to the goal
and some of the criteria can contain some sub criteria. Actually, the hierarchy structuring has to be
the result of a significant discussion and negotiation among the decision makers (Forman and Gass
2001). Then the comparison will be done by the group of relevant experts to develop the construction
of judgment matrix.

3.2.2 Hierarchy construction

To better illustrate the AHP Hierarchy construction, consider the simple example of a company when
the HRM department decides to recruit a new secretary. The steps they follow are:

Definition of objective: selection of new secretary

Definition of criteria: language- commitment- computer skills

Alternatives: Person A, Person B, Person C, Person D

Now it is time to construct a table and illustrate the criteria:

Table 1: criteria of secretary recruitment

Criteria Meaning
Language It is concerned about how much the employee is
able to communicate with customers based on the
need of company in international relationship.

Commitment skill The ability of employee to perform the task with

minimum supervision in order to achieve the goal of
the company

Computer skill It demonstrates the ability to perform the tasks

related to computer science such as word
processing , internet application and database
application

The HRM department has selected 4 persons among all applicants and they are alternatives which
should be considered for the job. Now it is the turn to set the hierarchy tree: (Islam & Rasad, 2005)

9 
 
Figure 2:  The hierarchy of criteria of secretary recruitment  

Select a new secretary

Language Commitment Computer skill

A A A

B B B

C C C

D D D

The goal is called Parent of the other criteria. Each criterion is called the parent of its sub criteria and
in each level the comparison will be with respect to the parent level. Finally the pair wise comparison
will be done for the alternatives elements with respect to the last sub criterion.

3.2.3 Priority Analysis

The priority of alternatives is always depending on the higher level elements. To determine the
importance of the criteria, judgment is used to rank the criteria. Sometimes in ranking, a scale is used
to rank the criteria. The following scale was developed by Saaty and it quantifies the degree of
importance of one element to another element (Saaty 2008a, b).

Table 2: Saaty’s Fundamental Scales (Saaty 2008 a, b)

Intensity of Importance Definition

1 equal importance
2 weak or slightly more important
3 somewhat more important
4 more important
5 strongly more important
6 very much more important
7 very strongly more important
8 absolutely more important
9 extremely more important

10 
 
Of course it is allowed to use other scales! In some case authors use a scale going from 1 to 5. It is
also possible and allowed to use a continuous scale from 1 to 9 (or some other number). In practice,
most researchers use the scale 1-9. At first it is hard to separate 8 types of importance. Usually
authors start with giving a rate 1 – 3 – 5 – 7 – 9 and later on refine by using the numbers in between.
This scale has proved to be a suitable scale that helps decision makers to approximate the unknown
weights for comparing criteria or alternatives. In Saaty (2008b), the author gives a lot of historical
comments about decision making and about ways to measure things.

The question which is asked by decision makers is “if element X is more important than element Y, by
how much”. The answer of this question should be translated into quantitative information. This gives
the decision makers the opportunity to find the best solution to the problem (Bodin & Gass, 2003).
Using the ratio scale of Table 2, decision makers assign a digit number to their priorities. Here we use
the example to clarify this part of the method.

Using pair-wise comparison the relative importance of one criterion over the other one will be
expressed. In the company of the example, language is more important that commitment because the
company is multinational and so they have lot of customers inside and outside of the country. The
degree of importance will be decided by human recourse managers is 3. This means that language is 3
times more important than commitment. Because of the need to communicate with customers in
different locations it is essential to have computer skills and so computer skill is 5 times more
important than commitment. Due to the fact that the company has invested heavily to attract the
customers online, so computer skills are more important than language. The degree of importance is 2
which means that computer skill is considered 2 times more important than language. Now the
decision makers construct the following judgment matrix:

 
  Language  Commitment Comp. Skills 
L  1  3 1/2
C  1/3  1 1/5
CS  2  5 1

3.2.4 Finding weights

There are some kinds of software that can help decision makers to calculate weights directly by
entering the scale ratio numbers or the judgment matrix. Basically there are two main methods to
calculate the weights for such kind of multiple criteria evaluation: the column method and the right
Eigen Vector method (Bodin & Gass, 2003; Saaty 1980, 1994, 1996).

In this part of the research we illustrate these two methods on the example of selecting a new
secretary.

11 
 
  Column method
Consider the judgment matrix of the example structured in previous part of priority analysis:

 
  Language  Commitment   Comp. Skills 
L  1  3  1/2
C  1/3  1  1/5
CS  2  5  1

To find weights, we perform the following steps.

Step 1

We calculate the sum of each column, and then divide each element of each column by the sum of the
corresponded column. The result is:

Language  Commitment  Comp. Skills 

L  1  3  1/2
C  1/3  1  1/5
CS  2  5  1
SUM  10/3  9  17/10

New matrix:

Language  Commitment  Comp. Skills 

L  3/10  3/9  5/17
C  1/10  1/9  2/17
CS  6/10  5/9  10/17

Step 2

In the next step we calculate the average of each row:

We find the following result:

Language  Commitment  Comp. Skills  average

L  0,3  0,3333  0,2941 0,3092
C  0,1  0,1111  0,1176 0,1096
CS  0,6  0,5556  0,5882 0,5813

12 
 
As a result we find that computer skill gets a weight of 58%. It is the most important criterion for the
company. Language gets a weight of 31% and is the second important criterion. The last and least
importance weight is given to commitment (11%).

 Right Eigen Vector method

According to Thomas Saaty (1990) the Right Eigenvector solution is the best approach to get the
ranking of priorities. We illustrate this method on the example of selecting a new secretary.

The principle of this method is based on the following mathematical problem.

For a given judgment matrix A, we solve the following optimization problem

Max λ

Such that AW=λW

Where the vector W is a weight vector, i.e. W consists of positive numbers that sum up to 1.

From the mathematical point of view, Saaty has shown that this optimization problem always has a
unique solution λ* and W*. From the practical point of view, I used the software that has been
provided by the supervisor.

In this example, we start from the judgment matrix

 
  Language  Commitment  Comp. Skills 
L  1  3  1/2
C  1/3  1  1/5
CS  2  5  1

We found the following solution:

λ* = 3.00369

0,3089 
W* =   0,1095 
0,5816 

The weights are almost the same as the weights that we found using the column method.

   

13 
 
 3.2.5 Example and weighted criteria
Up to here we have calculated the weights of the criteria. Decision makers should evaluate the
alternatives as well. In this approach again consider the hierarchy tree:

Figure 3: The hierarchy tree of secretary recruitment including weights

Select a new
secretary

Language Commitment Computer skill

0.309 0.10945 0.58155

A A A

B B B

C C C

D D D

For each criterion already the weight has been calculated (eigenvector method):

0,3089  Language
W* =   0,1095  Commitment
0,5816  Comp. Skills

First we compare the different candidates with respect to language. We can for example take into
account how many languages each of the candidates speaks and the extent to which these languages
can help to fulfill the goal of the company.

Computer skill can be measured by the number of software that alternatives are able to use and it can
be evaluated by information indicated in their application forms, or by reviewing the certificates of
them. Commitment is the criterion which can be determined by taking into account the work history of
each alternative, and we can consider for example how many times each alternative has quit the job
and the reason.

The result is of the pair-wise comparison of each of the candidates is given in the following table:

14 
 
Table 3: the weight of pair-wise comparison matrix of candidate

Language A B C D
A 1 1/4 4 1/6
B 4 1 4 1/4
C 1/4 4 1 1/5
D 6 4 5 1

Computer skill A B C D
A 1 2 5 1
B 1/2 1 3 2
C 1/5 1/3 1 1/4
D 1 1/2 4 1

Commitment A B C D
A 1 4 2 3
B 1/4 1 5 1/2
C 1/2 1/5 1 1/4
D 1/3 2 4 1

Applying the eigenvector method we obtain the weighted matrix for alternatives in term of each
criterion. The results are as following:

Language Computer skill Commitment

A 0,131 0,378 0,458
B 0,244 0,287 0,195
C 0,066 0,074 0,102
D 0,559 0,261 0,245

Now we calculate the overall weight for each of the candidates. For candidate A, we find

Weight A = weight of A with respect to Language * weight of language

+ weight of A with respect to Computer skill * weight of Computer skill
+ weight of A with respect to Commitment * weight of Commitment

= 0.131 * 0.3089 + 0.378 * 0.1095 + 0.458 * 0.5816 = 0.310

In a similar we find

Weight B = 0.264

Weight C = 0.075

Weight D = 0.351

15 
 
Eventually the result shows that alternative D is the winner and is the highest ranking. Person D will
be a new secretary.

The reason of the conflicts in many cases is due to the lack of consensus to solve a problem, and AHP
is one of the most useful methods which practically help the different parts of an organization to get
the right direction to achieve the goal of the organization which is maximizing profit.

3.2.6 Consistency index and consistency ratio

After calculating the weights of judgment matrix decision makers expect some degree of inconsistency
but not too high inconsistency. Saaty has developed a measure of consistency and it is called
consistency index (CI). To evaluate the consistency index, we compare it with theoretical consistency
indices and we calculate the consistency ratio (CR). Inconsistency can be calculated in two ways
depending on the method which we use to calculate the weight (Saaty, 1980). We show the methods
by using the example.

 Column method inconsistency ratio

From the previous part weighted matrix concluded and here to check the consistency there are
following steps:

We calculate a column c by multiplying the pair-wise judgment matrix and the weights. We find:

L C CS Weighs
L 1 3 0,5 0,309 0,9295
C 0,333333 1 0,2 0,110 0,3281
CS 2 5 1 0,581 1,749

Now we divide these numbers by the weights. We find

0.9295/0.309 = 3.008
0.3281/0.110 = 2.983
1.749/0.581 = 3.0103

The mean value of these numbers is given by

µ = (3.008 + 2.983 +3.0103)/3 = 3.00059

The Consistency Index is defined as: CI = (µ - n)/(n-1), where n is size of the judgment matrix. In our
example we find CI= 0.00024.

Saaty randomly selected 500 matrixes and calculated the corresponding consistency index and the
average of these random consistency indices is shown in the following table:

16 
 
Table 4: random consistency index

n 1 2 3 4 5 6 7 8 9 10
RI - - 0.58 0.9 1.12 1.24 1.32 1.41 1.45 1.49

According to size of the judgment matrix random index will be chosen for n=3 , RI=0.58

CR= Consistency Ratio = CI/ RI = 0.00041.

The judgment matrix is considered to be consistent it the consistency ratio VR is less than 10%. In our
example this is the case.

 Eigenvector method consistency ratio

To calculate the consistency ratio by this method decision calculates the consistency index as follows:
makers have to pass these steps:

CI = (λ* -n)/(n-1)

For the example we find CI = 0.00185. Now we refer again to the table of Random index. Since n = 3,
we find CR= CI/RI=0.00318 which is less than 10%. It means that the values of the judgment matrix
are acceptable. (Saaty et al, 2003)

3.2.7 More Examples of finding weights methods

In appendix1, reader can find more examples about the origin of the methods of finding weights in the
case of pair-wise comparison matrices.

3.3 Conclusion
Analytic Hierarchy process is one of the mathematical methods which can be used to accommodate
subjective variables. AHP is a systematic method which is easy to apply. According to this method,
complicated problems of making decisions turn into hierarchy levels and hierarchical levels represent
the problem in an organized approach. Then decision makers compare different criteria and they can
focus much better to the problem decompositions and accurately consider the importance of the
criteria by applying weighting methods. AHP measures the consistency of decision by considering a
consistency index. Therefore it gives a more reliable result. The result of applying AHP for making
decision always gives the best choice and not the right choice. Comparing different criteria and
alternatives in a rational manner helps to measure the quantified qualitative variables.

17 
 
 18 
 
4 Human Resource Management

4.1 Introduction
Management functions such as staffing, communicating and decision making: as a manager you can’t
do it all by yourself. Your job is to create the environment that provides people a situation in which
they engage to achieve the goal.

There are four major tasks for managers to function: planning, organizing, leading and controlling.
The organization as a whole can be described as a processor. Resources are its input and performance
is the output. Management functions are the process. Resources include: human, financial, raw
material, technological and information, while performance includes service, product, attain goal,
efficiency and effectiveness (Brannigan & De Lisser, 1996). Organizations bring together information,
technology, people and raw material in order to achieve the goal and to perform the tasks. An
organization is made up of people, who are working toward a goal, which means that it is designed to
achieve some outcomes. Usually the work is done in a deliberated structure where tasks are divided
and the responsibilities are clear for each member of the organization. As a consequence, managers
are responsible to coordinate the resources in order to achieve the organization’s goal which is
ultimately high performance, effectively and efficiently (Uchitelle, 2002).

One of the most important skills of managers is the ability to work with people and doing tasks
through people. It is called human skill. Human skill contains the ability to motivate people, to solve
conflicts, to inspire respect, loyalty and affection. Managers are responsible in different departments
to develop different tasks and execute different plans, so not all managers do the same jobs. There
are two types of hierarchy: vertical hierarchy and horizontal hierarchy. According to the vertical
hierarchy there are three types of management: top managers, middle managers and first line
managers. In a horizontal hierarchy, there are two types of horizontal hierarchy: functional managers
and general managers, Human resource managers are working in first line management and they are
functional managers. (Huy, 2001).

Human resource managers are responsible to perform four functions of management at this level. One
of the major activities of managers is to delegate the responsibilities among people working in the
organization and help them to develop their abilities to meet the organizational goal (Mintzberg,
1994). Due to arising concepts of globalization, workforce diversity and social turbulence, nowadays
human skills become more important. Companies’ enlargement leads to organize more meetings and
with more people. It implies that human skills are more crucial, particularly for those managers whose
works are done through people (Mathis & Jackson, 2010).

Human resource managers often get overwhelmed by the everyday jobs of hiring, supervising and
disciplining others and the fact is that managing people is not an easy task. "What's the big deal
[about managing people]? The big deal is that people are human. . . . To be a good manager, you
have to mentor them, listen to their problems, counsel them, and at the end of the day you still have
your own work on your plate” (White, 2005).

Mintzberg (1973) describes that manager’s activities can be divided into three categories:
informational, interpersonal and decisional category. In informational activities, managers play the
role as monitor, disseminator and spokesperson. In the interpersonal category, managers play a role
as figurehead, leader and liaison. Finally, one of the most significant categories of manager’s activities
consists of decisional activities. This forces managers to play the role as entrepreneur, disturbance
handler, resource allocator and negotiator (Kurke & Aldrich, 1983). Managers have to make the choice

19 
 
and take actions facing different situation and managers constantly think about the future. They
recognize the problem and try to take innovative actions to solve the problem. Managers make
decision about how to allocate resources. Resources are people, time, and budget to achieve the
outcomes. These activities are related to decisional role of managers and decision making is one of the
most significant responsibilities of managers. During past decades - due to rapid changes in workplace
- works are more flexible. Employees in lower level of organizations can make decision and the work
place is organized more around the network environment rather than being in hierarchy levels (Ellis,
2003). This explains why recruitment of the right people for the right jobs is more crucial. Works are
done by teams and not by individuals anymore. People are the most important properties of the
organizations.

4.2 Literature Review

In this part of the paper we evaluate the different understandings and definitions of human resource
management and the process of decision making. Organizations have access to a lot of information
and can benefit of all of this knowledge and information. However making the decision is one of the
most important issues which affect the sustainability of the organization. Managers are paid not only
to make the decisions but also to make the best and the most effective and efficient decisions.
(Longest & Darr, 2000). There are some streams of researches which illustrate the decision making
process and strategy setting of human resource management department in different organizations.

20 
 
Table 5: literature review, definition of human resource management

Author Human Resource management

Graham (1978) Human resource management makes sure that employees’ abilities
are used in the most beneficial way and employers provide them with
the satisfactory psychological and material rewards.

Barney (1991) Rare and valuable resources of the firm especially when they are
difficult to be substituted are a source of successful position in a
competitive advantage environment. Human capital is identified as a
very significant source of creating competitive advantage.

Docherty, Forslin, and “Human resources to be fostered include skills, knowledge, co-
Shani (2002) operation and trust, motivation, employability, contractive industrial
relations, and also broader institutional/ societal prerequisites, such
as training system.”

Thom and Zaugg, Sustainable human resource management is identified as long term
(2004) activities which are aimed to establish appropriate approach of
recruitment, development, deployment and release of employees.

Wright and McMahan, Human resource management is defined as a pattern of planned

(1992) activities in order to achieve the goal of organization.

Craft (1995) He speaks about human resource management as a process of

motivating the company to the goal of the company selecting the
right people for the right job and providing the environment of value
creating and help employees to be effective in the organization

Bratton and Gold ”Human resource management is a strategic approach to manage

(2007) employment relations which emphasizes the leveraging people’s
capabilities is critical to achieve competitive advantage, this being
achieved through a distinctive set of integrated employment policies,
programs and practices.”

21 
 
 22 
 
4.3 Decision making in human resource manager
 

In the world of rapid change- when it is hard if not impossible to make measurement and evaluation in
an absolute way - two kinds of knowledge are crucially important for the success of organization. One
is the knowledge of future changes of industry and the second one is decision making knowledge.
Decision making is the process of human mind, and it is affected by human perception of the events
and his analytical power in different situation, it means that it is an objective process. In order to
make the decision as it is listed above, one step is to evaluate the alternatives based on the criteria
and ranking the alternatives. If the criteria are intangible then to make the decision it is essential to
make the priority of them and quantify them. To quantify them we assign numbers to each using
weighting process. This process helps decision makers to reduce the risk of the effect of human minds’
limitation (Keeney, 1992). Every day we take decisions, we choose among different alternatives and
make the priority of them in our mind by considering different criteria. Making decisions and choices is
one of the most crucial activities of human life. The significant preference of the criteria is based on
pairwise comparison. We evaluate the alternatives and we choose the alternative with the highest
weight and then we try to make the decision in an optimal way. It is why decision making processes
have been always one of the main topics for researchers and scientists. There are lots of papers about
this issue with regard to human resource management. Significant points in making decisions are
decision criteria. Strategic management theory, Organization learning theory and behavioral economic
theory help decision making to categorize and identify decision criteria. In an organization there are
different types of decision making at different levels, according to Pownall (2012) these types of
decisions can be explained hierarchically as following:

- Strategic Decisions: this type of decisions are structured and concerned with how to use
organizational resources more appropriately.
- Tactical Decisions: when strategic decisions are concerned to what should be the purpose of
the organization, tactical decisions determine what needs to be done to achieve this goal.
- Operational Decisions: these decisions determine which action should be taken by the
organization.
The decision making process begins whenever a real problem is recognized. All managers attempt to
make the best decisions. Managers need some resources- information, time, personnel, equipment
and supplies- in order to make the best decisions. Because the ideal environment is not provided for
managers, they have to make the satisfactory decisions. Usually time is a factor which causes
managers to make the quick decision considering only some obvious solutions (Nelson & Quick, 2008).

“Absolute judgment is the identification of magnitude of some simple stimulus …whereas

comparative judgment is the identification of some relation(s) between two stimuli both present to the
observer.” (Blumenthal, 1977)

4.4 Recruitment
In order to improve the work performance it is essential to hire competent personnel. The selection
criteria are designed by human resource managers traditionally. If the human resource department
manages effective recruitment of employees it can improve the performance of the organization. The
skills and competences which are necessary to perform the task change and successful organizations
are those that can adapt themselves with those changes (Pilbeam & Corbridge, 2006). Whenever
employees retire, move and leave a post or the organization grows and needs new personnel,

23 
 
managers determine whether there is a need of recruitment and if yes how they are going to fill it.
(Garner, 2012). Since decision making process is made by people who are working in HRM
department it is important to avoid any personal preferences. The effective recruitment affects the
level of performance of the organization so one of the most significant roles of human recourse
managers is recruitment. It is essential for the success of an organization to make a proper plan to
employ talented people. It is the decision that continuously affects goal achievement of the
organization. In the world of competition, the need to employ high qualified people is felt more
because it reduces the cost of training. Also it reduces the number of turnover. (Richardson, 2012).
Recruitment is a time consuming and a costly process for organizations, so before taking any decision,
managers attempt to evaluate some other options. For example, is it the right time to select someone
for the vacancy? Is the vacancy necessary to fulfill the future plan of the organization? And does the
organization get profit out of someone doing this job? (Russell, 2012a) 

To make the proper recruitment there are some primary steps before making the decision. Here is an
attempt to illustrate these steps.

First of all, the future and current need of human resource should be assessed. The potential human
resource pool and the competition for knowledge and skills should be considered as well. The next
step is job analysis and job evaluation. It is necessary for the organization to determine the salary
that they can afford during the period of recruitment. When the information is clarified preciously,
then it is time to make the suitable policy (Richardson, 2012).

4.4.1 Assessing the personnel need

It is advised to consider the following principles in order to have a successful recruitment process
(Russell, 2012a):

 Make sure that all of the vacancies are filled with people who are willing and able to do the job
 Make sure that all skills and competencies that are required to perform the job are clear and
specific so the worker will be more likely to be matched with the job
 Write the job description and make clear what you expect from people to perform
 The performance appraisal should be based on the expectations which have been specified and
are clear, and the training plans should be decided based on measurable learning objective

Each new employment has some costs for organization such as additional space for the person hired,
cost of supports and adding service and supplier so it is important to make the right decision to start
the process of hiring new people. Make sure that the revenue that you have to pay for the new
employees is worth to meet your company‘s income goal for future. Therefore it is crucial to clarify the
reason of recruitment. Usually the reason of investing on recruitment can be that some helps are
needed in the sales department, or some administrative support is needed in the company, the
company plans to start a new market or maybe the company grows and the work increases and the
need to reorganize the company is felt. The process of selection of new people in workplace requires
identifying and well defining the knowledge, experience, competencies and skills which are necessary
for executing the job. So it is essential to analyze the job, to write the job description and finally to
write the job specification. (Russell , 2012b)

4.4.2 Job analysis

Job analysis provides information about the skills and education and knowledge which are necessary
to perform the job. By job analysis the following information will be understandable:

24 
 
  Qualifications which are necessary
 Education
 Types of equipment used
 Materials used
 Types of service which are necessary to execute the task
 Physical requirement
On the other hand it helps to determine the responsibilities and duties which are required for doing
the job. So there will not be any overlapping for responsibilities and it helps the managers to
undertake performance evaluation effectively in concern. It is necessary to identify the job
requirements which are important for the position and also to identify the knowledge and abilities and
the qualities level which are necessary for this responsibility. (Roberts & Seldon, 2001).

There are two outcomes of job analysis:

1- Job description
2- Person specification

 Job description

Writing the job description tells about duties of the task and the nature of the job, things like job
hazard and physical work condition. On the whole, job description tells about why, how, what and
where the job should be executed. Also it spells out how many hours one employee should spend
doing the task to achieve the purpose of job. It helps to design the job requirement and makes a
better selection procedure. (Russell, 2012b)

 person specification

Person specification provides information about the qualifications, skills and knowledge needed to
perform the job; it gives the standards which have to be measured in the process of selection of a
candidate. In this stage, things like education, general intelligence, personality and physical attributes
are described and depending on the case will be taken into account. . (Russell, 2012a, b)

After the job is described precisely and the duties and responsibilities are defined well and the job
specification clarifies the human qualifications necessary to do the job, it is turn to make the decision
to select the right person for the position available (Roberts & Seldon, 2001). Job description and
person specification help managers to list the criteria; the list of criteria should be fair, relevant and
contain those qualifications which are necessary to perform the task. Obviously all criteria will not
have the same weight, so it is necessary to prioritize them. There are two types of criteria generally,
essential criteria and desired criteria (Garner, 2012).

In order to make the successful recruitment and to avoid wasting time and money to make interview
or training with the people who are not at all in the right category for doing the job, the right
candidates should be attracted. In this approach the organization can contact with private and public
agencies to find the proper candidate. One of the most popular approaches is to advertise the vacancy
in schools or newspapers or other local media. Another way is to announce the vacancy inside the
organization. Evidence suggests that current employees are one of the most trustworthy sources
because they actually don’t offer low quality candidates (Roberts & Seldon, 2001). At this step the
organization will receive application forms and resumes of applicants. Application forms should provide

25 
 
you all information that you need to make a shortlisting. To find out candidates from the list of
applicants, we eliminate those who are not qualified and those who don’t meet all essential criteria,
and we rank those who meet essential criteria according to the desired criteria that they meet and
give priority to the list. (Garner, 2012).

What has been discussed up to this point indicates the process of collecting information and problem
description. Managers will decide how they want the candidate to support their information, they may
decide to use tests or to conduct interview (Russell, 2012a). Collecting information is done in order to
make the decision considering the criteria list. It is unavoidable to have subjective criteria, but the
challenge is to measure them objectively (Pownall 2012).

4.4.3 Recruitment Methods

Recruitment methods are the methods that managers use to assess their candidates. Recruitment can
be done internally or externally. If the decision is to conduct the recruitment internally, managers use
internal sources. They assess applicants from those who are working already inside the organization.
(Richardson,2012).

There are some advantages to recruit employees from inside the company:  
1- Assessment of the insider is more reliable due to the fact that they are potentially sources of
evaluation comparing with sources (like interview of screening application forms) which are
used to recruit the outsider applicant.
2- Insiders know the strengths and weaknesses of the company; they are familiar with the
organization culture. They are people of the company.
3- Insiders are more loyal to the organization and they have commitment to the company. So
skilled people inside the company are more likely to develop the activity if they know that this
activity leads to promotion.
4- Moreover insiders’ recruitment is less costly and time consuming. (Richardson, 2012)
 

There are some disadvantages as well about insider’s recruitment:

1- It is not always easy to find the right person for the job within the organization
2- It is possible that there is not a sufficient supply of qualified people inside company and so this
change in the position of an insider may prevent the company to get the skill they need to
perform the job.
3- Maybe there will be the resistance to change by people who are interested in maintenance of
their position in the company
4- When the company is facing rapid growth and they need to adjust the positions, sometimes
managerial positions are undertaken by under-qualified people within the organization and it
may lead to damages for the company which is difficult or even impossible to undo. To prohibit
such damage the organization maybe ends up with a high cost of training. (Richardson, 2012)

If the company is not able to find anyone proper for the vacancy inside, the company and managers
decide to fill the vacancy externally. External recruitment deals with attracting and evaluating external
sources of applicants. The Company may use employment agencies, job centers, advertising in
educational institutes and labor market or personnel recommendation (Richardson, 2012). One other
source to find the right people for the position is college recruitment which means that among new

26 
 
graduated people the vacancies will be announced. Based on career workshops the proper people will
be chosen to be candidate. Finally the human resource department will end up with the best
candidates for the job among all applicants (Fisher, Schoenfeldt & Shaw, 1993). Up to this point the
process of collecting analyzing data about candidates has been assessed, but successful organizations
are not those who can gather information, they are among those companies which can make the good
decisions. For gaining competitive advantage in the world of rapid change and growth, making sound
decisions in good time is one of the main success factors. In many companies there is so much effort
for collecting information and analyzing them instead of evaluation alternatives. Many decision makers
think that thinking hard can help them to make the best decision but Irving Janis (1989) provided
evidence that “A poor-quality decision-making process (which characterizes simplistic strategies) is
more likely than a high-quality process to lead to undesirable outcomes (including disastrous
fiascoes)” (Irving,1989). He asserted “When all vital decisions are made on the basis of a simplistic
strategy, the gross misperceptions and miscalculations that remain uncorrected are likely to lead to
disaster sooner or later — usually sooner rather than later.” One of the troubles of problem solving
approaches is that they are dealing with qualitative data (Irving, 1989). Once the human resource
department collects all the information and choose the best candidates then to make the decision they
start making trade-off among all objectives related to the decision purpose. When there are many
objectives and criteria to evaluate then process of making decision is more complex.

One of the methods of group making decision is brainstorming. Brainstorming is when a group of
experts work together to generate ideas (Osborn, 1963). Nominal Group Technique is another
example of decision making. According to this method a well-structured meeting will be hold by
managers, the problem will be identified and explained and each member writes his or her idea. There
is no communication and discussion between members; after collecting the idea, if clarification is
needed, the person will explain his or her idea. To each idea a letter will be assigned and members
assign the number to each idea and rank them. Finally the idea which is ranked higher will be applied
(Sample, 1984). The Delphi method is one another example of a group decision making process. In
this method the group does not meet each other face to face, a series of questionnaires and surveys is
sent to them and members respond to them. They are usually asked to provide some explanation for
their answers, the answers are gathered and based on the new information the decision will be made,
but the process will continue till the group reaches a consensus (Custer, Scarcella, Stewart, 1999).
Some of the disadvantages of group decision making process are the following:

 The process is time consuming.

 The solution is more compromised rather than being optimal.
 Group may have difficulties and confusion to implement and evaluate the decision.
 Individuals maybe have the tendency to be aligned with the group decision.

Proper decision making in human resource department depend on many factors such as correct time
and ability to set the priorities. Manager’ attributes or his own approach to make the decision is
recognized as the most significant factor. There are some methods of decision making by managers
individually:

The Rational/normative decision making process is based on reasoning and rational thinking. It is
structured decision making. It follows a series of logical steps directed to the clear aim. (Lee &
Cummins, 2004)

Intuitive decision model of decision making is used by “gut” managers. They rely on their feelings to
make the decision and they avoid logical steps. Instead they use their intuition and years of

27 
 
managerial experience and practices. There is not any systematic analysis in this model and managers
try to find the similarity between current situation and previous ones. (Khatari & Alving, 2000).

In Predisposed decision models, managers make decision and then they collect information to support
their decisions. They don’t search all possible alternatives, they try to find and evaluate alternatives as
long as they can find an acceptable decision (Hitt & Tyler, 1991).

Decision making in all of the above methods depends on individual analysis and human preferences.
They are subjective rather than being objective.

It is clear that when intangible variables turn into tangible variable to be measured, all numbers
should be interpreted according to their priorities. It is crucial to learn how to give value to the
priorities after identification of criteria and sub-criteria (Saaty, 2008a). In the case that decision
makers face with multi criteria evaluation for some alternatives, there are some methods to improve
the quality of decision by reducing the degree of personal preferences and selection of the most
deserving candidate for the job. The attempt is to make the decision making process using
quantitative methods. There are some examples of quantitative methods the following table explains
them and emphasizes the advantages and disadvantages of these models:

Table 6: examples of quantitative decision making methods:

Quantitative decision making Advantages Disadvantage

model
Linear programming model - It helps to find the best - It is applicable only
(Gass,1985) possible solution of the when the problem can
problem be translated into linear
- It highlights the bottle equations. It is not
necks. useful for real life
problems.
- Uncertainty of situation
is not taken into account
Simulation Model - It is easy to perform - It is expensive to
(Banks, Carson & Nelson, 1996) - It helps to find implement
unexpected events - It is often difficult to
- The result is accurate interpret the result

Integer programming - It gives accurate result - It does not take into

(Wolsey, 1998) rather than ad hoc account the uncertainty
approach of the situation.
- It helps to consider how - Input information should
sensitive is the model if be merely quantitative
we change some
variables

This is why human resource managers have to use the ranking process. Ranking is based on
comparing different criteria and sub criteria what is illustrated here is analytic hierarchy process which
is widely used in order to make proper decision and helps to avoid personal preferences to affect the
process of decision making.

28 
 
There are some common mistakes during making decisions: (Forman & Selly, 2001)

1- One of the common mistakes during making decision for recruitment is plunging in. This
means that human resource department receives many applications and they collect
information and they make the conclusion without thinking about how such decisions should
be made
2- Frame blindness means that you put efforts to solve the wrong problem, it is possible that
human resource department loses the main objective of the selection
3- It is possible that human resource department relies on their past experience to select the
person and this kind of mistake is known as being overconfident in judgment.
4- Relying on the information that is easily available about the candidate and ignore that
information which is necessary to be considered to perform the task.
5- Shooting from the hip is another mistake which is common in making decision is keeping all
information about the candidate in head rather than systematically analysis it.
6- It is possible that human resource department gives the responsibility of selection to a board
of experts and assumes that this group of smart people will make the good decisions without
going through the decision process; however there are some evidences that smart people
cannot make good decisions sometimes.
7- Sometimes, decision makers rely on their past experiences and so they don’t keep track of the
process.
8- Another common mistake is failure to create organized approach to understand own process of
decision making
There are some reasons to fail in making good decisions in different circumstances. The cognitive
limitations of human mind, insufficient time for thought and consideration and lack of enough
resources for information gathering are among those reasons which lead to fail in making good
decision. One of the common approaches in selection is to list the pros and cons of each candidate and
then compare them to each other ( Forman & Selly, 2001). The human resource department maybe
makes the list as following:

Issue: (stating the job position)

Responsibilities:

Required skills:

Candidate 1:

Pros:

Cons:

Candidate 2:

Pros:

Cons:

Candidate 3:

Pros:

Cons:

29 
 
Considering that a board of experts and smart people of the organization sit around the table and
make the discussion about the candidates’ pros and cons, there are some points which may affect the
process of selection and then failing to find the right person for the vacancy (Forman &Selly, 2001).
Here is the list of these factors:

1- Some of the relevant issues which should be considered to select the person will be discussed
several times;
2- Some of the relevant issues will not be considered at all and maybe they will be overlooked;
3- Some members of the board may get frustrated of the discussion and thus dominate the
discussion
4- Some shy members of the board maybe do not participate actively in the discussion
5- The selection will be done when there is no more forthcoming or it is time to conclude the
meeting

At this point we want to illustrate the process of recruitment by applying Analysis hierarchy process.
In Chapter 2 we discussed AHP as the process of making decision while the situation involves multi
criteria evaluation for some alternatives. It helps to reduce time of making decision and personal
preferences. Once the organization’s human resource department recognizes the need to recruit new
employees, they announce the vacancy inside and outside the company (Dessler, 2000) While
assessing the candidates’ quality for the job there are some factors which are measurable and we can
mathematically measure and compare and make the ranking of them. For example it is possible to
say that candidate A is two times more experienced than candidate B because he/she has two times
more years of working in the relevant industry. It is also reasonable to say that candidate B is two
times more educated than candidate A according to the years of education. But there are some more
important factors which are necessary to be considered and to be compared and we don’t know how
to measure them, like personality, reaction to critical situation, communication skills and so on. To be
able to make the judgment far from all of the personal preferences and mind limitation, decision
makers need to assign each criterion and sub criterion some numbers; it is called weighting the
criteria and the sub criteria. It is done through the process of weighting. In Chapter 2 of this thesis the
example of recruitment has been discussed. As mentioned earlier, there are two types of criteria
considered for candidate to be evaluated: essential criteria and desired criteria. Essential criteria are
what an applicant should have when applying for the job. Desired criteria are those which can be
learned and developed after recruitment.

One example of recruitment criteria is illustrated here. This is a typical example of recruitment of new
staff for the IT department of the company. While the hierarchy tree is designed and different levels
are identified, the HRM department starts the process of weighting according to Saaty’s ranking table.
It is also possible to use the software of “Expert Choice” to make the process of weighting and
choosing the best alternative. By using this method HR Department reduces the time, also they
reduce the cost of employing expert people to make the decision, and declines the human minds’
common mistakes. Analytic hierarchy process is a flexible, rational and synergic method, which
enables decision making to take into account subjective criteria, comparative criteria and absolute
criteria and weight them to reach to the acceptable rational result. 

The following figure shows the hierarchy tree of this example:

30 
 
 Figure 4: The hierarchy tree of criteria and sub criteria of recruitment of new staff

 
Recruitment of
  new staff

Technology
  Business Interpersonal and Technical
management skills functionalskills management specialties skills
kill
 

 
Ability to learn Knowledge of Ability to help System
 
new technology businessfunctions others if
d d
 

 
Skills of being
Ability to learn initiative
Ability
  to focus on  
about business
techno as means skills System
not as an end integrated
 

  Skills of being
organized
Ability to recognize
  to understand
Ability the problem and find
technological trend the solution

 
Candidate A
 

  Candidate C

Candidate B

31 
 
4.5 Job evaluation

4.5.1 Introduction
Another important aim of human resource managers is to evaluate the job quality and to provide the
association between employees and their job results. HR department makes the remuneration
systems and makes decisions about how to allocate the payment for different jobs by evaluating job
quality. There are many different methods to evaluate the job. According to Armstrong, Cummins,
Hastings and Wood, (Armstrong, Cummins, Hastings & Wood, 2008): “job evaluation is the systematic
process of determining the relative value of different job posts within the organization”.

4.5.2 Different method of job evaluation

There are different ways for job evaluation. Here is a brief discussion of the main approaches ( Adamus, 
2009) 

1- Ranking job posts: this method is based on the ranking of jobs from the hardest to the
easiest ones.
Advantages of this method is that it is easy to be understood by employees
Disadvantage of this method is that it is not easy to explain the method for employees and it
does not measure the difficulty of the job.

2- Classifying job posts: this method categorizes the job posts into homogeneous classes of jobs
and then the job will be compared with this model.
Advantage: it is easy to be used and easy to be understood by employees
Disadvantage: this method is subjective, does not consider the difficulty of the job and it is
difficult to define the job description

3- Comparing factors: it is an analytic method which determines the right hierarchy of job but
without considering the level of job difficulty.
Advantage: it is the method which can be applied to all organizations
Disadvantage: it is subjective and difficult to select suitably the job posts

4- Analytic point ranking: this method evaluates the job difficulty, it is based on comparing the
level of the difficulty of the job with a scale, and the scale is defined according to experienced
criteria.
Advantage: this method provides decision maker by the identified criteria basis and it is easier
to evaluate and describe the job position and level.
Disadvantage: it is difficult to adjust the job position based on the defined criteria, it is
complicated to apply, and it needs some skill and knowledge on tasks in organization.

5- National Joint Council: it is the method to evaluate the job of administrative staff based on 13
synthetic criteria
Advantage: on a given post only one evaluation criterion is used to assess the knowledge
needed to execute the task.
Disadvantage: it is not based on analytic criteria

6- Market based job evaluation: this method is based on evaluation of pay rate comparison with
the market pay rate in the market in the section of industry

32 
 
 Advantage: this method provides a situation where job is paid according to the amount which
is paid by the market.
Disadvantage: in this method it is not considered that maybe the value of one post is different
in different companies. Also it is difficult to collect the information about the amount which is
paid for the post in the market.

7- Bedaux’s method: this method considers evaluation of requirements which are essential to
perform the job.
Advantage: in this method difficulty of the post is considered more preciously because it takes
into account the factor which affects the job difficulty
Disadvantage: in this method it is necessary to have so much knowledge about the job to
create the remuneration system

The methods which are used for job evaluation are introduced in almost all human resource
management books. So at this point of the research, an attempt is to illustrate why applying some
methods of job evaluation fail to make the good remuneration system.

4.5.3 Job evaluation in Human resource management

Some organizations ask and pay some experts to come to make the process of job evaluation but still
they can’t make the suitable remuneration system and proper decision to allocate the financial budget
of the company. Poor job evaluation leads to unsatisfied employees and unhappy environment and
consequently a lower performance level for the entire company. The limitation in human comparison
abilities particularly facing with multi criteria decision making process may make some inconsistencies
and omit some important aspects of job evaluation models. Evidence shows that it is more
complicated for people to deal with quantitative assessment and make comparison objects than
making mental efforts and using qualitative manners like verbal words to express their preferences.
Though it is important to know that it is more rational to make decisions based on quantitative data,
so recently an attempt is to make the process of decision making mathematical method. In this part of
the research the method to measure qualitative date for job evaluation is illustrated.

The following steps for job evaluation can be used to measure qualitative variables:

1- Defining the problem – indicating the job qualitative features

2- Clarifying the main goal of problem solving , which is here the assessment of different posts
inside the company
3- Clarifying the factors which affect the job evaluation
4- Stating the problem structure in the form of a hierarchy tree by criteria and sub criteria
5- Determining the preferences of criteria based on comparison and according to Saaty
preferences table.
6- In this step the comparison in pairs should be determined to make the hierarchy preferences
and in this approach the fundamental preferences scale of Saaty will be used.
7- The verbal discussion about the strength of each criteria is done to help human resource
department make the preferences evaluation
8- In this step the objective point of view should be measured, therefore specialist of evaluation
allocate the numbers based on Saaty’s table to each pair comparison and these numbers are
relatively determined
9- Depending on the job position and the organization’s position in industry, factors which affect
the job will be determined.

33 
 
 10- Each criterion priority (analytical or synthetic) is normalized based on the AHP method
11- The degree of consistency is determined
12- Finally the matrix of the job posts in the organization will be designed and the priority of each
task is defined, so it is time to establish the fundamental pay scale. (Adamus, 2009)

According to the Equal Pay Act (1963) there are four compensable factors to take into account while
human resource department decide to establish remuneration, these factors are as following:

 Skills
 Efforts
 Responsibilities
 Working condition

These are synthetic factors at the first level of the hierarchy tree. To find out the analytical factors
which are located on the bottom of hierarchy tree, internal value of the organization is discussed and
potential factors which affect the internal value of organization will be identified. Then experts who are
responsible to establish remuneration system classify highest and lowest level of each factor and
categorize each factor in proper level to create job worth hierarchy.

There are some examples of abilities which affect job evaluation: (“NHS Job Evaluation Handbook”,
2004)

Knowledge: human resource department identifies the educational level for the job, if it is
required to have a formal or professional diploma to perform the task. Since the job is in IT
department: which kinds of computer skills are necessary. What kind of mathematical skills
are required?

Experience: period of time related on job in terms of months or years

Initiative, judgment and choice of action: the ability which is necessary in the case of problem
arising by referring to books, guidelines or industry codes.

Mental efforts: it identifies the period of time which employees need to use visual
concentration or listening ability, reading or using his/her five senses.

Physical efforts: what kinds of physical efforts employees have to put, like driving car, lifting
heavy materials or lifting patients

Dexterity: identifying if the job requires the hand or eye accurate use. Like arc welding

Safety of work: does the employee have to work alone? Is there any risk of injury for the
employee in workplace?

Supervision of others: identifying if the job includes coordinating with others or assigning
works to others.

After describing the criteria and sub criteria, the evaluator has to reply the list of some questions.
Determining that which criteria are more important to value the job and how much each criterion is

34 
 
 more important comparing with the other ones. As it has been discussed in chapter 2, the pair wise
comparison will be conducted.

Here the tree of hierarchy of job evaluation is shown:

Figure 5: The hierarchy tree of criteria and sub criteria of job evaluation

Job Evaluation

Know-how Experience Wisdom Physical Intellectual Responsibilities

 
skills &mentaleffor efforts
ts
 

 
No Responsible to Energy Creative Decision
Education
  experience use making
information
 
Interpersonal General Precision Innovation
Responsible to People
skills experience
use of
experience
 
Managerial Complicated Work Emotionally Property
skills job environme
  Respect to
dignity
 
Aim Finances
High Initiative
Leadership attainability
  technology Responsible to
skills
use of how
  know

 
Job position 1  Job position n
Job position 2 
 

35 
 
4.6 Conclusion
Human resource department is one of the most significant parts of any organizations. The
responsibility of human resource manager is to manage one of the most crucial resources of
organizations which are its people. In the competitive market, while different kinds of technologies are
available for most of the organizations, hiring and training talents is recognized as an effective way to
win the competitive advantage in the market. Because of the nature of the task, the human resource
manager has to make important decisions and these decisions mostly confront with evaluation of multi
criteria situations. To avoid any kinds of discrimination and to make an accurate decision, the methods
of making decisions based on rational manner have been considered and AHP is one of those methods
which turn qualitative data into measurable variables and helps HRM to make the proper decisions.
There are some processes of evaluation in each human resource department where decision making
involves multi criteria evaluation. Recruitment is one of these areas where the HR department has to
make decision on pool of applications received and make the best choice for the job. Another example
is job evaluation and organizing the remuneration system. A proper remuneration system helps the
organization to devote financial properties in a fair way, and it is based on evaluating many criteria
and sub criteria which are different in their importance for the job. This part of the research indicates
that decision making in human resource department is a complicated task with evaluation of many
criteria and the mathematical method of AHP facilitate this process.

36 
 
5 Case Study, Recruitment process in Goldaru by
application of AHP

5.1. Introduction
This part of the master thesis contains a case study of Goldaru recruitment and selection process. This
case study evaluates the function of human resource department of the company in implementation of
recruitment and selection process. The purpose of this case study is to compare the current method of
recruitment in the company with applying analytic hierarchy process in decision making. We try to find
out the best method to implement recruitment process more effectively and more efficiently. The
company is one of the Iranian herbal Pharmaceutical companies and it is part of the health sector. The
Company has announced a vacancy to recruit a new pharmacist. In the introduction we give insight of
how important is the sector and what are the general difficulties of the selection process then the
author starts the case study. First we discuss the background of Goldaru. this part explains the
historical perspective of the company with regard to its staff. Then we explain the role of the human
resource department in selection process and, then the method and practices used by the human
resource department in the recruitment process. Finally we explain how to use AHP in the selection
process of the company.

Activities done by herbal Pharmaceutical companies are increasing worldwide. Due to the fact that
people are getting more aware of the potential risk of using synthetic drugs, there is an increasing
interest to use natural products. Evidence shows that more than 80% of people still depend on the
traditional medicine which is classified in the group of medicines constructed by animal or plants
(Verma & Singh, 2008). Since herbal medicines are demanded highly and day by day, this industry
has attracted much attention recently. Herbal Pharmaceutical companies are classified in the health
sector and evidence shows the crucial role of the human resource in this field. One of the problems of
the health related companies is the shortage of qualified personnel in order to meet the intended
objectives of the health policies. According to the International Pharmaceutical Federation,
pharmacists and bioengineers are the third largest world professional group. There are however some
difficulties for the human resource management department to recruit and retain people in the health
sector.

Here is a list of some of the possible crisis that human resource department has to deal with in this
sector:

 On the whole there is a shortage of health workers particularly in developing countries

 Present workforces are not able to respond to the local health need, great numbers of qualified
professionals are interested to leave the country and immigrate
 Qualified health workers are more interested in working in urban area than working in rural
areas and more in private sectors than in public. The reason is that in rural area people have
more financial problems.
 Manufactures and laboratories of pharmaceutical usually are not located in the center of the
city and so employees have to travel distances to reach the work place.
 It is not easy to motivate high qualified personnel, because they are expected to earn more
and to work in a better work environment.

Considering all above mentioned it is important to select the person for the vacancy in this sector in
order to keep the future turnover low and make the workplace a happier place in order to have higher

37 
 
performance (Tata, Wuliji, & Cinnella 2011). Training and hiring qualified people for different
departments of the healthcare sector are significant in maintenance of a healthy population.
Improving the performance of the Herbal Pharmaceutical companies is one of the most important
challenges that a company in this sector has to deal with because of presence of substitutes of
chemical medicines. In a competitive environment the higher qualified personnel is the crucial
resource for organizations to win the advantage.

In this chapter the main focus is to illustrate the challenges of companies in Pharmaceutical sector and
as an example the case of Goldaru will be illustrated. We apply AHP in order to make the proper
decision. The author relied heavily on personal observation and in-depth interview for gathering
information.

5.2. Background:
Goldaru is a Herbal Pharmaceutical Company which was established in 1983. In 1998 the company
equipped itself by new and existing units and facilities with infrastructure of 11000 M.Sq. From 2001
onward the company started to deploy the production of herbal drugs to the pharmaceutical form of
syrups, tablets, capsules and gels. The company already uses the latest technology and supply
pharmaceutical products in both Iran and several Asian and some European countries. Goldaru is in
collaboration with over 20 specialists of different scientific disciplines, including Pharmacognosy,
Pharmacology, Pharmaceutical chemistry and biotechnology in processing technology. The company
benefits the staff of over 200 people, who are working in research, formulation and production of
herbal medicines. The company also benefits the knowledge of university professors and scholars
inside and outside the country, and benefits the most updated technologies and advanced scientific
tools. The company is in compliance with the standard protocol of Pharmacy and the World Health
Organization (WHO) and received the certifications of ISO, in 2008. Goldaru has different fields of
flowers in various parts of the province for planting and harvesting. (Goldaru, 2012)

In Goldaru the rate of turnover is not high. In the company the division of tasks is based on skills and
they use skill inventory in each case. Employees receive feedback from their direct supervisors, their
team leaders and from the department manager. Good performance is encouraged by rewards and
bonus; the names of good performers are published. Bad performance is getting punished by verbal
remarks and written remarks. Job satisfaction is measured by the productivity of the employees, and
the performance curve, although in some departments the friendly environment helps the managers
to get the feedback about the work condition from employees directly. The work condition is checked
according to GMP standards and WHO standards. (Goldaru, 2012)

Goldaru has announced two vacancies six months ago. One position is to recruit a new pharmacist and
the next one is to recruit a new guard. The company faced with some difficulties for hiring the new
pharmacist. In Appendix 2, the list of questions during an interview with top managers of the company
is available.

Here are the probable reasons which the Human resource manager mentioned in response to the
question “why people are not interested to work at your company in this position?”

 The location of the company is far away from the centre of the city
 The salary which has been allocated for the position does not meet the expectation of the
candidates
 In general, pharmacists are more interested in having their own business of pharmacy

38 
 
  The cost and the risk of introducing a new Herbal drug to the market can make fluctuation in
the budget of the company

The Human resource department mentioned two main reasons for recruitment:

 More scientific support is needed in order to maintain competitive advantage;

 The amount of work has increased and the number of people working in this position is not
enough.
Goldaru announced the vacancy in local newspapers and also to the public agencies which are
responsible to introduce candidates to companies. The first thing to do in the company is that when
they need new staff they announce the vacancy inside the company. But because of the specific
knowledge which is essential for this position and because managers did not find the proper person
inside the company, they announced the vacancy outside the company. The traditional recruitment
process in Goldaru consists of: advertising, receiving applications and screening. The company
received four application forms and CVs for the vacancy of pharmacist. HRM investigates applicants’
profiles and here they are used as an illustration.

After receiving the application forms the human resource department starts the selection process. It
consists of testing and evaluating of candidates. It includes psychological tests, interview, checking
background and medical examination. There are three steps of interview. The primary interview is
done by the administrative manager; In this step basic information is gathered and basic tests are
conducted. It is one of the most important parts of the selection. EQ tests, self-evaluation test,
evaluation of locus of control were conducted by the administrative department. After that the
candidate is asked to be interviewed by the manager of concern department. And then the final
interview is done by the human resource manager. The Selection process in Goldaru is based on
decision making by top managers and individual preferences in decision making affect the decisions.
In each step of the interview, interviewer makes a shortlist and sends it to the next interviewer and at
the end HR manager makes the final decision based on all the information. In Goldaru, when the
candidate succeeds in the first interview and receives the first approval, he/she has to give criminal
records checking, all candidates are precisely vetted. Candidates are asked to introduce three referees
and Goldaru is going to contact them and get their opinion . They contact with previous employers to
collect some more information. The applicant who is confirmed by all interviewers, will sign the
contract for one month. This one month contract helps managers to evaluate the candidates, and at
the end of the month they get the report form the direct supervisor of candidate. During the
temporary contract the applicant receives a salary and insurance. Since the company provides two
types of national insurance for its employees, the candidates have to bring the health certificate. In
addition, because of the nature of job, it is essential for the company to know about the health
condition of the candidate. Company tries to provide equal opportunity for candidates with some
degrees of disability.

Since Goldaru is in the process of the recruitment of a new pharmacist, in this part the profiles of four
eligible candidates are designed. The purpose is to apply AHP to make the decision. As illustrated, the
recruitment process in the company involves interviews, tests, from referees, providing the certificates
of previous background if applicable ( e.g. diploma) and approval of health condition and police
record. But structured recruitment methods, such as AHP were not applied in the company. I offered
the managers to apply AHP in the process and I sent the results to them.

39 
 
 5.2.1 Goldaru’s Job analysis
Here are the criteria which are listed. The list of criteria is offered by the director of the department,
the administrative manager and HR manager.

There are two types of criteria identified by the company: essential criteria and desired criteria

Essential Criteria:

 Education
 Experience
 Skills
 ICT
Desirable Criteria:

 Knowledge of Herbal science

 Ability to use Pharmacological software
These are the main criteria being considered for the evaluation of candidates but there are some sub-
criteria for each criterion, in the following table we explain the criteria and sub criteria.

Table 7: illustration of criteria and sub criteria of recruitment process of Goldaru

Criteria Explanation Sub-Criteria

Know-How Completed Pharmacology education
skills, and PhD diploma and the registration
(essential) code which allows them to have
patent. The ranking of the university
where the candidate graduated
indicates the qualification. Additionally
herbal knowledge is important;
however Goldaru follows the policy of
training the candidate to achieve this
criterion.
Experience Relevant work experience is important
(essential) for the company, As one of the
objectives of Goldaru is to supply
products to other countries it is
important for the company that the
candidate has enough experience to
work in an international environment.
Number of years of education and level of
university (essential)
Ability to develop research in a scientific
manner (essential)
Herbal knowledge (desirable)
Number of years of related job
experience(essential)
International experience (essential)
Local work experience (essential)
Number of times that applicant has changed
his job place

Synergy There are different skills necessary to Communication skills (essential)

develop the job. Ability to work under pressure (essential)
Flexibility (essential)
Problem solving ability(essential)
Ability to work in a team (essential)
Supervisory skills (essential)

40 
 
ICT The company has to develop some
Information technology in order to
keep updated and speed up the
communication to the world. It is why
Information and communication
technology is one of the criteria of
recruitment process.
Ability to work with Pharmacological
software (desirable)
Skills of presentation using new methods
(essential)
Skills of working with office software
(essential)

After the description of selection criteria and sub-criteria the panel evaluates the application forms and
CVs of applicants. Panel consists of staff who have the skills and ability to judge and they represent
appropriate specialists. After deep study of the application forms and CVs , the panel decides to
conduct an interview in order to achieve the better insight in the applicants. The interview will be done
only for those applicants who are qualified and eligible after primary evaluation of their application
forms and CVs. The proper time and date for the interview will be announced to the applicant and the
right person will be in charge of conducting interview. This person has to respect some rules during
the interview. There are many different templates for doing the interview. The Interview should be
structured; the company believes the interviewee gets an impression from the interviewer as much as
the interviewer gets an impression from interviewee. By this they mean that interviewer can see the
company through the eyes of candidate, so a well-structured interview can help the company to
improve performance, so in the eyes of Goldaru interview helps both parties to get benefit. In the first
step, the interviewer is a person who is more the observer and questioner. He tries to gather
information from the candidate rather than giving him/her information and he sees the interview as a
chance to know if the person is safe. Once he feels that the candidate is safe he becomes the greatest
support. The type of the second interview depends on what is the vacancy In general in the second
interview the candidate is getting closer to be a “future colleague” so the common type of interviewer
is to be performer and prober, they like to attract their candidate but they get the chance to know the
person as much as possible. The last interview is done by the HR manager. It is friendlier and the
attempt is to attract the candidate who has already passed different steps of recruitment successfully.

5.2.2 Profiles of Vacancy Applicants

Human resource department of the company has had some priorities which are announced in the
advertisement and so in this study these priorities are not considered as criteria, due to the fact that
the applicants who apply are supposed to meet these primary priorities The sample profiles received
from 4 candidates that have been categorised by Human Resource department as eligible candidates
are portrayed in the following table. The candidates’ personal information was not revealed by the
HRM department. Therefore in this research they are addressed as Candidate A, Candidate B,
Candidate C and Candidate D. Here the profile of each candidate has been summarised in the
following table:

41 
 
Table 8: summary of applicant’s profiles of Goldaru 

Criteria Level Candidate A Candidate B Candidate C Candidate D

Education
B ranking local A ranking International A ranking
 What is the level of the university. national European national
graduated university? university university university

 What is the discipline of Pharmaceutics Toxicology Pharmacology Pharmacognosy

diploma?

Ability to develop research

(scientific background)
 Does the candidate has No 6-year work at His previous Member of
university professional university position was R&D
experience? level member of department of
research group a company
of university

 Does the candidate have

any scientific article
published? No There are He has articles No
some articles published in
published by journals
him

Herbal knowledge

 Does the candidate offer Yes No No No

any certificate?

 Does his study discipline No Yes No Yes

consist of herbal courses?

No No Yes No
 Does he need to be trained?

Know- how skills

42 
 
Numbers of year of relevant
experience

 How many years of work 7 years 4 years 5 years 7 years

experience?
 Does the candidate have
working experience in Local chemical No- working in No- 2 years Yes - working
industrial area? medicines laboratory of laboratory and in R&D
manufacture university 3 years department
pharmacy

International experience
 Does the candidate have
any international work No No Yes Yes- 1 year
experience? work
experience in
 Does the candidate have to Germany to
make international launch her
communication in his ex- company.
position?
No Yes- contact Working in the Yes – she has
with laboratory of been member
universities one of Int of Int
and attending Universities in negotiation
some EU committee
workshops in
order to
master new
techniques
Local work experience

 Does the candidate got Yes, 7 years No, local Yes, 2 years Yes, she
used to work in local? experience. has worked
Worked in in both
capital. local and
capital
branches

Number of times candidate

changed his/her
position(Loyalty)

 Does the candidate change 2 times No 1 time No

his job frequently? How
many times?

Experience

43 
 
Communication skills

 What is the result of EQ

test? 13 16 15 14

 What is the type of

Conventional Conventional Enterprising Social
personality? ( J. L. Holland
test, 1976)
Ability to work under Stress

 Result of stress test:

(Yerkes & Dodson ,1908; 102 72 98 54
Goldaru, 2012)

(64-32: high level of stress

tolerating)
(65-95: acceptable level of
stress tolerating)
(96-128: poor level of stress
tolerating)

Flexibility

 Result of EQ test: (flexibility 16 21 14 24

and consistency part)

Conventional Conventional Enterprising Social

 Result of J. L. Holland
(1976) personality test:

Problem solving ability

 Result of Thomas - Kilmann

(1977) Conflict test Accommodating Competing: Compromising Collaborating:
: unassertive- assertive- :intermediate in assertive-
cooperative uncooperative both cooperative
assertiveness
and
cooperativeness

Ability to work in a team

 Result of J. L. Holland Conventional Conventional Enterprising Social

(1976) personality test:

Yes, working in Yes, he has Yes, he has No. Despite

44 
 
 Previous work experience in 5 persons team been in team been in a team her social
team: as large as 15 work when it personality,
and as small was necessary. she is not
as 3, his team interested to
had crucial work in a
role and team, she
succeed believes that
she suffers
social loafing

Supervisory skills
 Result of J. L. Holland
(1976) personality test: conventional Conventional Enterprising Social
 Result of EQ test: ( self-
management and empathy) 21 35 28 19
 Does the candidate have
previous supervisory No Yes, he was Yes, he was No
experience? supervisor of supervisor of
his successful the team for
team temporary
period
Synergy
Ability to work with Yes, he is Yes, she is
Pharmacological software expert to use familiar to use
the specific some
 Has the candidate been Yes Yes he is software used technical
trained to work with expert in Goldaru to software
scientific software? develop its
Research
profile.

Skills of presentation using Yes, he has Yes, she has

new methods organised the ability to
meetings make
 Does the applicant applied No, he has not frequently and Yes, he has the presentation
skill of presentation in his been in position done skill to make and using the
previous position? which applies presentations presentation in methods of
presentation in different presentation
departmental meetings.
seminars
Skills of working with office He has trained He has trained He knows how She is able to
software and he has and he offers to manage manage
 Has the applicant been certificate certificate working with working with
trained to use the software? office, word and office, world
excel excel, but not
access.
ICT

45 
 
 5.2.3 Application of AHP in decision making in Goldaru
After summarizing the profiles of the candidates, the time to evaluate the candidates arrives. Goldaru
was confronted with a large number of criteria for evaluation. All applicants are evaluated based on
these criteria and the priority will be set for each applicant, but in the first step the hierarchy tree will
be figured out.

Figure 6: Hierarchy tree of criteria and sub criteria of recruitment new Pharmacist in Goldaru

Goal: Recruitment of
Pharmacists

Know How Skills Experience Synergy ICT Skills

C1 C2 C3 C4

Education C11 # years Communication Pharmaceutics

relevant work C31 software C41
C21
 
 
Ability to Ability to work
  International Presentation
develop under stress
  researches C12 experience C22 Method C42
C32
 
 
Herbal Local Flexibility C33 Office skills
knowledge C13 experience C23 C43

Problem
  # time changing solving C34
the position of
  job C24

Ability to work
  in a team C35

 
Supervisory
Skill C36

46 
 
To implement measurement of AHP, company uses 1-9 scales for measuring the important degree of

criteria and sub criteria.

Table 9: scale of importance measuring of criteria and sub criteria used in Goldaru

Degree of 1 3 5 7 9
importance

Definition The same a little more much more Absolutely

Importance more important important important
important

According to Job description done by HRM department the degree of importance for the different
selection criteria is as following:

The objective of Goldaru to recruit Pharmacists is

 To increase contribution in health care market

 To achieve the better quality product
 To be innovated and launch new products
 To save customer value
 To supervise employees of research group

Considering the objectives of Goldaru recruitment process, criteria and sub criteria are compared by a
team of experts, and weighted based on the requirement of job position. In the following matrix the
main four criteria are compared:

C1 C2 C3 C4 Weights

Know how skills experience synergy ICT

C1 1 3 5 7 0,5558
C2 1 3 5 0,2589
C3 1 5 0,1364
C4 1 0,0489

According to expert evaluation knowhow skills is more important than experience by 3 degree and
more important than skills by 5 degree and it is much more important than ICT skills for the position.
The reason which is mentioned is that the position of pharmacist requires scientific efforts and
knowledge more than experiment or synergy and ICT. Experience is a little more important than
synergy because HR experts considering the work environment believe that the fitness required to
execute the task can be achieved and learnt during the work, experience is more important than ICT
skills by 5 degree and the reason is that HR expert team develops some training for employees to
achieve these skills. And synergy in order to fit to the job is more important than ICT skills by degree
of 5.

47 
 
Weighting of sub criteria of knowhow skills are illustrated in the following weights

C1 C11 C12 C13 Weights

C11 1 3 9 0,6553
C12 1 7 0,2897
C13 1 0,0549

Education is more important than ability to develop research because the research team of Goldaru is
already rich and able to meet the need of company to improve the new employee potential to research
Herbal knowledge is a desirable skill so absolutely it has less importance compared to education and
ability to develop research.

C2 C21 C22 C23 C24 Weights

C21 1 7 5 7 0,6685
C22 1 3 1 0,1318
C23 1 1/3 0,0678
C24 1 0,1318
 

The number of years of relevant experience is significantly more important than International and
local experience, because working in the industry requires some specific abilities such as rigid work
schedule, while a pharmacist in his own pharmacy can enjoy some degree of flexibility of work time It
is even more important than loyalty of the person to the job. But international experience is more
important than local experience due to the fact that new employee will be responsible to communicate
with international health care societies and one of the objectives of Goldaru is globalization. Local
experience is important to some extent because the employee has to use local plants mainly to
develop his/her research to find out the new medicines, additionally the company is not willing to
invest more in its transport service. But loyalty is more important for the organization since HR
department as experience knows that fluctuation of job can be tolerated and improved by those
employees who are loyal.

According to evaluation of sub criteria of Synergy criterion, communication is more important than
ability to work under stress, because new staff is responsible of one production line.it is more
important than being flexible because Goldaru attempts to provide consistency in work place and up to
now it has been successful. But problem solving is more important than communication according to
the position because employee has to analyses the situation and make decisions and evidence shows
that conflicts are unavoidable on the production line level, but communication is as important as
ability to work in a team, due to the responsibility allocated to the position. The new employee should
be able to supervise a team of research in production manufacture of Goldaru. Ability to work in
stressful environment is as important as being flexible to deal with changes however according to
Yerkes ad Dodson (1908) some level of stress in work place has a positive effect on performance.
Because of the nature of the job, employees sometimes have to deal with fluctuation in market. The
problem solving ability has a higher importance compared with the ability to work under stress. The
belief is that if person can help to solve problems, this can help to reduce the stress. The ability to
work in team is more important than being able to deal with stress and the ability to be supervisor the
company values more. It is worth to mention here that the job is in the category of stressful jobs, but
it is team work. Flexibility and coping with changes is less important than problem solving ability, and

48 
 
less important than working in team but it is the same important as being supervisor . Problem solving
is less important than ability to work in team by 3 degree and is as important as being supervisor, the
ability to work in team is more important than skill of being supervisor due to the fact that the nature
of position of job indicates that the task is rather done as a group and team than being done under
the supervision.

C3 C31 C32 C33 C34 C35 C36 Weights

C31 1 5 5 1/3 1 1/5 0,1597
C32 1 1 1/5 1/7 1 0,04352
C33 1 1/3 1/7 1 0,0582
C34 1 1/3 1 0,208
C35 1 7 0,2481
C36 1 0,2823

After comparing the criteria of synergy, then it is turn to weighting ICT skills criteria:

C4 C41 C42 C43 Weight

C41 1 1/5 1/7 0,0719
C42 1 1/3 0,2789
C43 1 0,6491

ICT skills consist of the ability to use software related to Pharmaceutics issues, and ability to use
presentation methods and ability to work with Office 2010. Since the ability to work with
pharmaceutics software can be trained it takes less attention for selection from HR department, it is
less important than knowing presentation methods by 5 degree and is less important than office skill
by 7 degree, but office skill is more important than presentation skill by 3 degree. The job position
requires working with office more frequently.

We summarize the weights for the criteria and sub criteria in the following graph.

49 
 
Figure 7: the weights for the criteria and sub criteria

Goal: Recruitment of
Pharmacists

Know How Skills Experience Synergy ICT Skills

C1: 0.5558 C2: 0.2589 C3: 0.1364 C4: 0.0489

C11: 0.6553 C21: 0.6685 C31:0.1597 C41:0.0719

 
 
C12: 0.2897 C32: 0.04352
  C22:0.1318 C42: 0.2789
 
 
 
C13: 0.0549 C23: 0.0678 C33: 0.0582 C43:0.6491

C34: 0.208
  C24: 0.1318

 
C35:0.2481
 

 
C36:0.2823
 

   

50 
 
The HRM department selects a committee of experts and they make the evaluation of candidates
abilities based on the requirements of job. In each of the sub criteria, they decide to classify each of
the candidates in one of three categories Low, Medium and High. For example, if a candidate has a
work experience of less than 3 years, it is measured as Low, if the candidate has a work experience
between 3 and 6 years it is measured as Medium and if more than 6 years of work experience it is
measured as High. The pairwise comparison of Low, Medium and High is as follows:

- L – M: we prefer M to L with rate 3

- L – H: we prefer H to L with rate 5
- M – H: we prefer H to M with rate 3

As an example, suppose that with respect of one of the sub criteria CRIT, we find that A performs
Low, B and C perform High, and D performs Medium.

This leads to the following pairwise comparison matrix with respect to CRIT:

CRIT  A  B  C D Weights
A  1  1/5  1/5 1/3 0,068
B  1  1 3 0,39
C  1 3 0,39
D          1 0,152
 

The eigenvector method leads to the weights in the last column. When looking at criterion CRIT, B and
C have the same weight, followed by D and A. Using these weights, we have quantified the rank.

For each of the sub criteria, the performances of A, B, C and D were as follows:

   

51 
 
Table 10: performance of the candidates with respect to all sub criteria

C1 C11 C12 C13

A L L H
B M H M
C H H L
D M M M

C2 C21 C22 C23 C24

A H L L L
B M M H H
C M H M M
D H H M H

C3 C31 C32 C33 C34 C35 C36

A M L L M L L
B H M M L H H
C H L L M M M
D H H H H L L

C4 C41 C42 C43

A M L H
B M H H
C H M M
D M M L
 

   

52 
 
For each of the sub criteria we calculated the weights in the way as explained above. We find:

Table 10: weights for the candidates

C1  0,66  0,29  0,05

   C11  C12  C13 Total  Rank 
A  0,078  0,068  0,522 0,0973 4 
B  0,2  0,39  0,2 0,2551 2 
C  0,522  0,39  0,078 0,46152 1 
D  0,2  0,152  0,2 0,18608 3 
  
C2  0,668  0,132  0,068 0,132
   C21  C22  C23 C24 Total  Rank 
A  0,375  0,068  0,078 0,068 0,273756 2 
B  0,125  0,152  0,522 0,39 0,19054 3 
C  0,125  0,39  0,2 0,152 0,168644 4 
D  0,375  0,39  0,2 0,39 0,36706 1 
  
C3  0,16  0,044  0,058 0,208 0,248 0,282
   C31  C32  C33 C34 C35 C36 Total  Rank 
A  0,1  0,095  0,095 0,152 0,095 0,095 0,107656  4 
B  0,3  0,25  0,25 0,068 0,56 0,56 0,384444  1 
C  0,3  0,095  0,095 0,39 0,25 0,25 0,27131  2 
D  0,3  0,56  0,56 0,39 0,095 0,095 0,23659  3 

C4  0,07  0,28  0,65

   C41  C42  C43 Total  Rank 
A  0,167  0,078  0,39 0,28703 2 
B  0,167  0,522  0,39 0,41135 1 
C  0,499  0,2  0,152 0,18973 3 
D  0,167  0,2  0,068 0,11189 4 
 

With respect to C11, the candidates obtain weights (0.078, 0.2, 0.522, 0.2). In cluster C1, the sub
criteria have weighs (0.66, 0.29, 0.05). In the last column of C1, we calculated the overall result of
candidate A with respect to C1.
In a similar way we calculated the tables for C2, C3 and C4.

   

53 
 
 

The overall result is given in the following table: 

Table 12:  Overall result 

0,5558  0,2589  0,1364 0,0489

C1  C2  C3 C4 Total Rank 
A  0,0973  0,273756  0,107656 0,28703 0,153675 4 
B  0,2551  0,19054  0,384444 0,41135 0,263669 2 
C  0,46152  0,168644  0,27131 0,18973 0,346459 1 
D  0,18608  0,36706  0,23659 0,11189 0,236197 3 
 

Candidate A has a weight of 0.097 in C1, a weight of 0.2551 in C2 and so on. The weights of C1, C2,
are given by 0.5558, 0.2589, ….

The final overall weight for the candidates is given by (0.153, 0.263, 0.346,0.236)

The HRM of Goldaru can conclude that candidate C is the best choice. By considering all his potential
skills and abilities and by adapting some training, he will be the best choice. This result has been
offered to the company to make the best choice based on rational method. The company would like to
inform other applicants the reason of the rejection and a good summary of the method is believed to
convince other applicants and therefore maintains the popularity of the company.

5.3. Conclusion
Goldaru is a Herbal Pharmaceutical Company. It is part of healthcare society and has to cope with
some difficulties to find the right person who can execute the task for the vacancy they announced.
Their attempts to find the right person put human resource department in the condition which
involved evaluating several application forms and choose the best one for the job. After a detailed job
analysis the responsibilities and duties of the position were well-defined. The traditional method of
recruitment of the company is based on in-depth interview in three steps, participation in some tests
such as personality test, work stress test and Thomas-Kilmann conflict mode test and finally police
record and health certificate. In this case study the HR department was asked the permission to
develop the Analytic hierarchy process to facilitate the evaluation of the criteria. Using the AHP
approach, according to all criteria and sub criteria, the best choice is candidate C. It is worth to
consider that in this systematic evaluation the company also considered the training process but the
objective was to reduce the cost of the training process as much as possible. Candidate C starts
working in the company with a one-month contract and more evaluation will be done through
monitoring his performance.

54 
 
6 Conclusion
This research has divided into three parts. Human resource department is generally considered as an
important department of each organization, because they are responsible to make the major decisions
of the company. Human resource department effectively and efficiently manage the people of the
organization in order to achieve the overall goal. Since HR managers are working through people so in
the most cased they have to evaluate qualitative data. To evaluate qualitative data managers have to
use their minds, any kind of decision which is done by human is the subject of some limitations of his
mind. The need to apply a scientific method to measure intangible variables feels in this area of
decision making, particularly when the problem solving requires multi criteria evaluations. The first
step to solve any problem is to define and analysis it, then decompose it to sub problems. In order to
have a good insight to the problem it is essential to have human resource management knowledge,
since the main goal of most of the organizations is to achieve maximum profit in effective and efficient
way, human resource department will be successful if they can reduce the cost and time of making
proper decision. To define the problem decision makers must have creative and critical thinking minds,
which help them to indicate the goal of the problem. By decomposing the problem, they will reflect on
some criteria and sub criteria which are important to take action and make the proper decision. The
HR department defines the criteria and according to the degree of their importance they make the
hierarchical tree, it is what happened about the case study of Goldaru company. In the case study it
mentioned that human resource department defined the criteria and sub criteria based on job
analysis. it is done in all successful recruitment process. Considering the situation of job analysis again
the goal is clarified and the important factors are discovered and defined. To minimize the
involvement of human minds in making decision, AHP as an effective method of decision making
developed by Saaty. And applying this method helps HR department to change subjective issues into
measurable variables. After construction of hierarchy tree according to the importance of each factor,
the evaluation will be done through pair wise comparison and Saaty scale of 9 degrees will be applied.
Weighting the factors and alternatives are done through any of two methods of column or right
eigenvector. And finally the ranking will give the best solution to the problem. In the case study of
Goldaru where the recruitment of pharmacist investigated, human resource department considered
know-How skills, Synergy, Experiment and ICT as the main criteria and then divided each of them to
the list of related sub criteria. Job analysis was the key step to find out and define the criteria and in
order to have a better insight to the problem; human resource department organized the team of
experts. By considering the hierarchy order the process of weighting applied and the result gave the
best choice. In this process Goldaru allocated the financial budget for training the desirable criteria
and to arrange judgment matrix they considered this potential of training.

55 
 
 56 
 
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 64 
 
Appendix 1:
Here there are some examples of ideal case:

After all matrices are developed and all pair-wise comparisons are completed, we have to calculate
weights for each of the (sub-) criteria and alternatives.

Suppose that we start from a 3 x 3 reciprocal matrix A:

A=

1 a1,2 a1,3
a2,1 1 a2,3
a3,1 a3,2 1

Where ai,j = 1/aj,i

Starting from A, we want to construct weights W = (w1 , w2, w3).

 Example 1:
These are positive numbers and Suppose that we want to hire a secretary and that the following
elements are important

- Know how to use Word (W)

- Know how to use Excel (E)
- Know how to use Database (D)
- Know how to use Internet (I)
In the ideal case, we have the weights. Suppose that in the example the weights are given by

W = (0.4, 0.3, 0.2, 0.1)

We give a higher weight to knowledge about Word than about the other elements.

From the weighs we can construct a pairwise comparison matrix as follows.

If we compare W and I, we give 4 times more weight to W, this is aW,I = 4. If we compare W and E,
we get that aW,E = 4/3. In a similar way, we find aW,D = 2.

In a similar way, we can compare all criteria and we find the following comparison matrix:

1 1,333333 2 4

A= 0,75 1 1,5 3

0,5 0,666667 1 2

0,25 0,333333 0,5 1

1 
 
Let us see how we can find back these weights using the methods or AHP.

Remark

In this ideal quantitative situation we find that the matrix A is an ideal matrix. A pairwise comparison
matrix A is called ideal if we have ai,j = ai,k * aj,k for all cases.

Now we consider 3 methods to find the weights: such that the sum w1 + w2 + w3 = 1.

Method 1: Column method

In this method we have to follow 3 steps as follows.

Step 1: Calculate the sum in each of the columns

The result is

1 1,333333 2 4

Step 1 0,75 1 1,5 3

0,5 0,666667 1 2

0,25 0,333333 0,5 1

2,5 3,333333 5 10

Step 2: Divide all the elements of a column by the sum of this column

The result is

0,4 0,4 0,4 0,4

Step 2 0,3 0,3 0,3 0,3

0,2 0,2 0,2 0,2

0,1 0,1 0,5 0,1

Step 3: Calculate the mean value in each row

The result is

mean

0,4 0,4 0,4 0,4 0,4

Step 3 0,3 0,3 0,3 0,3 0,3

0,2 0,2 0,2 0,2 0,2

0,1 0,1 0,5 0,1 0,1

2 
 
These 3 steps lead to the weight vector

W = (0.4, 0.3, 0.2, 0.1)

The advantage of using the column method is that we can apply it also in situations where we have to
evaluate general qualitative or quantitative properties.

 Example 2 :
Method 1: Column method

Suppose that we want to find weights for the qualitative property of a secretary:

(R = reading, L = listening, S = speaking, W =writing)

As an example, we consider the pair-wise comparison matrix given by B:

R L S W

R 1 2 3 0,25

B= L 0,5 1 1 0,2

S 0,333333 1 1 0,5

W 4 5 2 1

We find that reading is more important than listening and with an intensity of 2. On the other hand we
find that writing is much more important than reading. This importance is represented by the number
4.

Following the 3 steps, we find:

R L S W

R 1 2 3 0,25

Step 1 L 0,5 1 1 0,2

S 0,333333 1 1 0,5

W 4 5 2 1

5,833333 9 7 1,95

R L S W

Step 2 R 0,171429 0,222222 0,428571 0,128205

L 0,085714 0,111111 0,142857 0,102564

S 0,057143 0,111111 0,142857 0,25641

W 0,685714 0,555556 0,285714 0,512821

3 
 
And

R L S W mean

Step 3 R 0,171429 0,222222 0,428571 0,128205 0,237607

L 0,085714 0,111111 0,142857 0,102564 0,110562

S 0,057143 0,111111 0,142857 0,25641 0,14188

W 0,685714 0,555556 0,285714 0,512821 0,509951

The comparison matrix B leads to a the weight vector given by W = (0.24, 0.11, 0.14, 0.51)

We give the highest weight to writing (weight 51%) and the second highest weight is for Reading
(weight 24%).

 Example 1:
Method 2: Row method

In this method we have to follow 4 steps as follows. We use the same ideal example

Step 1: calculate the sum in each of the rows

1 1,333333 2 4 8,333333

Step 1 0,75 1 1,5 3 6,25

0,5 0,666667 1 2 4,166667

0,25 0,333333 0,5 1 2,083333

Step 2: Divide all elements in a row by its row sum

0,12 0,16 0,24 0,48

Step 2 0,12 0,16 0,24 0,48

0,12 0,16 0,24 0,48

0,12 0,16 0,24 0,48

4 
 
Step 3: Calculate the mean value in each of the columns

0,12 0,16 0,24 0,48

Strep 3 0,12 0,16 0,24 0,48

0,12 0,16 0,24 0,48

0,12 0,16 0,24 0,48

0,12 0,16 0,24 0,48

Step 4: Take reciprocal and normalize the resulting vector

The vector (0.12, 0.16, 0.24, 0.48) is not the desired weight vector yet. To find the weight vector in
this method, we have to calculate the reciprocal of these numbers, and then renormalize the result.
We find: Reciprocal vector = (1/0.12, 1/0.16, 1/0.24, 1/0.48) = (8.33, 6.25, 4.17, 2.08)

To renormalize, we divide each of these numbers by the sum:

Sum = 20.83 Division = W = (0.4, 0.3, 0.2, 0.1) We find back the weights as before.

 Example 2:
Method 2: Row method

We apply the row method for the second example. We find

R L S W

R 1 2 3 0,25 6,25

Step 1 L 0,5 1 1 0,2 2,7

S 0,333333 1 1 0,5 2,833333

W 4 5 2 1 12

R L S W

R 0,16 0,32 0,48 0,04

Step 2 L 0,185185 0,37037 0,37037 0,074074

S 0,117647 0,352941 0,352941 0,176471

W 0,333333 0,416667 0,166667 0,083333

5 
 
 R L S W

R 0,16 0,32 0,48 0,04

Step 3 L 0,185185 0,37037 0,37037 0,074074

S 0,117647 0,352941 0,352941 0,176471

W 0,333333 0,416667 0,166667 0,083333

0,199041 0,364995 0,342495 0,093469

Step 4 We calculate the reciprocal and normalize the result. We find

sum

reciprocal 5,024081 2,739767 2,919754 10,69868 21,38228

renormalize 0,234965 0,128133 0,13655 0,500353

As weight vector, we find

W = (0.23, 0.13, 0.14, 0.50)

We don’t find the same weights as by using the Column method. Usually both methods lead to very
similar results.

 Example 1:
Method 3 Right Eigenvector

The method that is used by Saaty and by many scientists is the right eigenvector method. This is
mathematically the most difficult method. But the use of applets and software makes the method easy
and very attractive. In this method we have to solve the following mathematical problem:

Find maximum of λ

Conditions: AWT = λWT

Where W is a weight vector

The column WT is called a right eigenvector of the matrix A. The optimal value of λ is denoted by λmax
and it is called the largest eigenvalue of the matrix A.

It is possible to prove that this problem always has a unique solution when A is a pairwise comparison
matrix. Let us have a look at the ideal example as before. Earlier we have found

6 
 
 1 1,333333 2 4

A= 0,75 1 1,5 3

0,5 0,666667 1 2

0,25 0,333333 0,5 1

and W = (0.4, 0.3, 0.2, 0.1)

Now we calculate AWT and we find:

1 1,333333 2 4 0,4 1,6

AW^t = 0,75 1 1,5 3 0,3 = 1,2

0,5 0,666667 1 2 0,2 0,8

0,25 0,333333 0,5 1 0,1 0,4

Now notice that the resulting vector has the following property: we see that

1.6/0.4 = 1.2/0.3 = 0.8/0.2 = 0.4/0.1 =4

We conclude that for this example we have AWT = 4WT and we have the solution to our mathematical
problem.

In this case we have λmax= 4 and W = (0.4, 0.3, 0.2, 0.1)

Remark

In general we always find that λmax ≥ n, where n is the size of the comparison matrix.

 Example 2:
Method 3 Right Eigenvector method

For the second example we have

R L S W

R 1 2 3 0,25

L 0,5 1 1 0,2

S 0,333333 1 1 0,5

W 4 5 2 1

Using the excel program written by E. Omey, we get the following result:

7 
 
 W = (0.23, 0.11, 0.135, 0.525) and λmax = 4.29

Consistency

For ideal matrices, the three methods always lead to the same result and in this case we always find
that λmax = n.In the real situations, users of AHP use subjective judgments to obtain the pairwise
comparison matrix. In most cases the resulting matrix will not be an ideal matrix.To compare the real
situation to the ideal situation, Saaty introduced a consistency index (CI) and a consistency rate (CR)

CI and CR for the right eigenvector method

In the eigenvector method the consistency index is defined as

CI = (λmax – n)/(n – 1)

where n is the dimension of the problem. In the ideal case, we have CI = 0.

For the real case, Saaty (2000) calculated a reference index. He obtained this by simulating thousands
of pairwise comparison matrices and making tables for CI.

The reference index is given in the table 4. We only take values up to n = 10 because we want to
compare only a limited number of criteria or alternatives at one moment.

To find the consistency ratio we compare the value of CI to the value of RI:

CR = CI/RI We say that the consistency is acceptable if the constancy ratio is below 10%.

Example

If we take the following matrix

1 0,5 5

C= 2 1 1

0,2 1 1

We find:
W= 1,533819 1,423872 0,660903

λmax = 3.619 CI = 0.309 CR = 0.53

Since CR > 50%, we conclude that the user has been not consistent in filling in the values in the
pairwise comparison matrix.

8 
 
For the example

1 1 5

C= 1 1 1

0,2 1 1

We find

W= 0,518996 0,30351 0,177494

λmax = 3.295 CI = 0.147 CR = 0.25 Since CR < 50%, the matrix is considered to be consistent.

In our example of the previous section, we had λmax = 4.29.

It follows that CI = 0.097 CR = 0.11 Since CR > 10%, we should reconsider the comparison matrix
for consistency in the pairwise comparisons

CI and CR for the column and row method

For the column method we calculate a consistency index as follows

Step 1 Using the matrix A and the weights W, we calculate DT = AWT

Step 2 We divide each value of D by the corresponding value of W. This gives a vector d.

Step 3 We calculate the mean value µ of the entries of b

Example

We take

1 3 2 5

0,333333 1 2 0,5

C= 0,5 0,5 1 0,333333

0,2 2 3 1

Using the column method we find the weights

W= 0,48376 0,16024 0,12415 0,23185

Now we calculate D:

1 3 2 5 0,48376 2,37203

D= 0,333333 1 2 0,5 0,16024 = 0,685718

0,5 0,5 1 0,333333 0,12415 0,523433

0,2 2 3 1 0,23185 1,021532

9 
 
Now we can find d

d= 4,90332 4,279321 4,216136 4,406004

Taking the mean value here, we get the value µ = 4.4512 The consistency index is defined as
CI = (µ – n)/(n – 1)

Now we use the RI and define the CR as before. In our example we have CI = (4.4512 – 4)/ 3 =
0.1504 and CR = 0.1504/0.89 = 0.167. For the weights found by using the row method, we proceed
in a similar way. (Omey, 2000)

10 
 
 11 
 
Appendix 2:
Proposal Questions applying during the interview:

1. How many employees are there in your company?

2. How does this relate with 5 years ago? What triggered this change?
3. How you try to provide good work condition for them?
4. Do you think that it is essential to make sure about their job satisfaction? If yes how you do it.
5. Does the work condition in Goldaru make the most of employees’ potential?
6. Does the division of tasks in your company based on skills? Please give me some information how you
do that
7. What is your recruitment method?
8. Do you conduct interview? If yes who are responsible to do that?
9. Do you use any kind of tests for your candidates?
10. Do you take into account the appearance of your candidates?
11. How do you assess the correctness of the information that candidates give you?

12. What is your plan to train your personnel to achieve enough information of new methods? Suppose
that there are new techniques, new software, how do you train your personnel to use these new
tools?

13. Does working in Goldaru need skill variety in different levels of staff? If yes in which department you
need it more?
14. How do you communicate vacancies to your staff? If you have an internal recruitment plan?
15. Is the selection procedure done entirely by this organization or is it through the help of job hunting
companies and selection agencies?
16. Do you use a skills inventory to take training decisions?
17. How much feedback do employees get from their managers for their work? Is there a general system
for that? Provide more information please.
18. What range of benefits do employees enjoy? Does it depend on the number of years, outstanding
performance, etc.? Does the company give bonus for outstanding performance?

19. What technical skills are needed in the organization? Where do these skills get developed?
20. Is the number of people appropriate for the amount of work?
21. How do you monitor/assess your employees’ skills and capabilities?
22. How do you monitor/assess your candidate’s skills and capabilities?
23. Do you measure job satisfaction? How are you going to do it? ( box of complaint )
24. Why did you decided for new recruitment?
25. Why people are not interested to work in your company in the new position as pharmacist?
26. How many people are already working as pharmacist in your company?