Discriminant Analysis as an Aid to Human Resource Selection and Human Resource Turnover Minimization Decisions

Abstract

A discriminant analysis is conducted in order to estimate a discriminant function to determine the expected status of the faculty post candidates in a private university in Bangladesh. The explanatory variables are age of the candidate, salary offered for the post, whether the candidate has foreign degree-dummy variable and result in masters’ examination of the candidate in Bangladesh. Statistically significant differences are observed in the group means of the variables of the two groups: not stayed faculty & stayed faculty. The log determinants are found approximately equal in size for the groups while the Box’s M value shows that the assumption of the equal co-variances is violated. However, the uni-variate normality tests are conducted and found the variables follow approximately normal distribution. Consequently, we proceeded to estimate the discriminant function. The estimated function is significant at 1 per cent level of significance and can explain 50 per cent of the variations in the group memberships. The structure matrix shows that the variables: result (0.526), f-degree (-0.489) and salary (0.408) are very important and the age (0.127) is the least important determinants of the expected status of the faculties. Finally, the prediction matrix of the holdout sample shows that 83 per cent of the cases are classified correctly.