Recruitment and Selection Essay Example

Recruitment and Selection Essay The Recruitment and Selection process promotes successful hiring decisions that can truly impact the success of a department or faculty. The selection of a candidate with the right combination of education, work experience, attitude, and creativity will not only increase the quality and stability of the workforce, it will also play a large role in bringing management strategies and planning to fruition. For every organization it is important to have a right person on a right job. Recruitment and Selection plays a vital role in this situation. Shortage of skills and the use of new technology are putting considerable pressure on how employers go about Recruiting and Selecting staff. It is recommended to carry out a strategic analysis of Recruitment and Selection procedure. The ideal recruitment programme is the one that attracts a relatively larger number of qualified applicants who will survive the screening process and accept positions with the organization, when offered. Recruitment programmes can miss the ideal in many ways i. e. by failing to attract an adequate applicant pool, by under/over selling the organization or by inadequate screening applicants before they enter the selection process. We will write a custom essay sample on Recruitment and Selection specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Recruitment and Selection specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Recruitment and Selection specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Thus, to approach the ideal, individuals responsible for the recruitment process must know how many and what types of employees are needed, where and how to look for the individuals with the appropriate qualifications and interests, what inducement to use for various types of applicants groups, how to distinguish applicants who are qualified from those who have a reasonable chance of success and how to evaluate their work. With reference to this context, this project is been prepared to put a light on Recruitment and Selection process. This project includes Meaning and Definition of Recruitment and Selection, Need and Purpose of Recruitment, Evaluation of Recruitment Process, Recruitment Tips. Sources of Recruitment through which an Organization gets suitable application. Scientific Recruitment and Selection, which an Organization should follow for, right manpower. Job Analysis, which gives an idea about the requirement of the job. Next is Selection process, which includes steps of Selection, Types of Test, Types of Interview, Common Interview Problems and their Solutions. Approaches to Selection, Scientific Selection Policy, Selection in India and problems. The objective of the study is to analyze the actual recruitment process in BHEL and to evaluate how far this process confirm to the purposes underlying the operational aspects of the industry. How far the process is accepted by it? The study on recruitment highlights the need of recruitment in BHEL. Human resource is a most valuable asset in the Organization. Profitability of the Organization depends on its utilization. If their utilization is done properly Organization will make profit otherwise it will make loss. If a good dancer appointed as a Chief Executive Officer of a Company, he may not run the business. So right man should be procured at right place in right time, otherwise their proper utilization may not be done. To procure right man at right place in right time, some information regarding job and job doer is highly essential. These information are obtained through Job analysis, job descriptions, Job Specifications. BHEL procure manpower in a very scientific manner . It gets information by use of these important documents like Job Analysis, Job Descriptions and Job Specifications. Without these recruitment may be unsuccessful. OBJECTIVE OF THE STUDY In BHEL the recruitment policy spells out the objective and provides a framework for implementation of the recruitment programme in the form of procedures. The company involves a commitment to broad principles such as filling vacancies with best qualified individuals. The recruitment policy in a company may embrace spell issue such as the extent of promotion from within, attitudes of enterprise in recruiting old, handicapped and minor individuals, minority group members, parttime employees and relatives of present employees. In a company BHEL, there usually a staff unit attached with personnel or an industrial relations department designated as employment or recruitment office. This specialization Of recruitment enables staff personnel to become highly skilled in recruitment techniques and their evaluation. However, recruitment remains the line responsibility as far as the personnel requisition forms are originated by the personnel, who has the final words in the acceptance or rejection of a particular applicant. Despite this the staff personnel have adequate freedom in respect of sources of manpower to be tapped and the procedure to be followed for this purpose. SCOPE AND IMPORTANCE OF THE STUDY SCOPE 1. To structure the Recruitment policy of BHEL for different categories of employees. . To analyse the recruitment policy of the organization. 3. To provide a systematic recruitment process. 4. It extends to the whole Organization. It covers corporate office, sites and works appointments all over India. 5. It covers workers, Clerical Staff, Officers, Jr. Management, Middle Management and Senior Management cadres. IMPORTANCE Without focusing the pattern of management, organization philosophy highlights on achieving a surely where all citizens (employees) can lead a richer and fuller life. Every organisation, therefore, strikes for greater productivity, elimination of wastes, lower costs and higher wages, so the industry needs a stable and energetic labours force that can boast of production by increased productivity. To achieve these objectives a good recruitment amp; selection process is essential. By which industry strikes right number of persons and right kind of persons at the right time and at right places through and the planning period without hampering productivity. Proposed Research Methodology The methodology used is to gain an insight into various dimensions and aspects of the study so as to determine the concept of Recruitment and Selection at BHEL. In initial stage data will be collected through extensive literature survey specific to the report. Second stage involves applying the knowledge gained and transforming it into real practice by having hands on experience. The last stage will consist of analyzing the whole process of Recruitment and Selection at BHEL. This project requires a detailed understanding of the concept – â€Å"Recruitment and Selection†. Therefore firstly we need to have a clear idea of what is Recruitment and Selection at BHEL Then I would application of Recruitment and Selection at BHEL * And in the end suggestions and recommendations have been given * The project will be prepared mainly using the secondary data which would consist of: * Books on Human resource management by various authors and internet websites. * The main reason for this reliance on secondary data is due to the fact that first hand information is not available due to its confidentiality. Limitations of the study Study is not very exhaustive and many concepts cannot be studies due to time and other constraints. * The lack of information sources for the analysis part. * Though I tried to collect some primary data but they were too inadequate for the purposes of the study. Recruitment and Selection (Overview) Recruitment and selection are two of the most important functions of personnel management. Recruitment precedes selection and helps in selecti ng a right candidate. Recruitment is an important part of a business human resource planning. In all businesses, people are a vital resource and they need to be managed as such. The overall aim of the recruitment and selection process is to obtain the number and quality of employees that are required in order for the business to achieve its objectives. The Recruitment and Selection process promotes successful hiring decisions that can truly impact the success of a department or faculty. The selection of a candidate with the right combination of education, work experience, attitude, and creativity will not only increase the quality and stability of the workforce, it will also play a large role in bringing management strategies and planning to fruition. There are three main stages in recruitment: 1) Identify and define the requirements. This involves the preparation of job descriptions, job specifications and person specifications (2) Attract potential employees there are various methods for doing this which are described in a separate revision note (3) Select and employ the appropriate people from the job applicants It is important to appreciate that recrui tment is a continuous process because of: * Staff departures (e. g. retirements, sackings, resignations) * Changes in business requirements (e. g. new products, markets, expanded operations) * Changes n business location (a relocation often triggers the need for substantial recruitment) * Promotions Recruitment is a process to discover the sources of manpower to meet the requirement of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of efficient personnel. Staffing is one basic function of management. All managers have responsibility of staffing function by selecting the chief executive and even the foremen and supervisors have a staffing responsibility when they select the rank and file workers. However, the personnel manager and his personnel department is mainly concerned with the staffing function. Every organization needs to look after recruitment and selection in the initial period and thereafter as and when additional manpower is required due to expansion and development of business activities. ‘Right person for the right job’ is the basic principle in recruitment and selection. Ever organization should give attention to the selection of its manpower, especially its managers. The operative manpower is equally important and essential for the orderly working of an enterprise. Every business organization/unit needs manpower for carrying different business activities smoothly and efficiently and for this recruitment and selection of suitable candidates are essential. Human resource management in an organization will not be possible if unsuitable persons are selected and employment in a business unit. MEANING: RECRUITMENT Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. Recruitment is understood as the process of searching for and obtaining applicants for the jobs, from among whom the right people can be selected. A formal definition states, â€Å"It is the process of finding and attracting capable applicants for the employment. The process begins when new recruits are sought and ends when their applicants are submitted. The result is a pool of applicants from which new employees are selected†. In this, the available vacancies are given wide publicity and suitable candidates are encouraged to submit applications so as to have a pool of eligible candidates for scientific selection. In recruitment, information is collected from interested candidates. For this different source such as newspaper advertisement, employment exchanges, internal promotion, etc. re used. In the recruitment, a pool of eligible and interested candidates is created for selection of most suitable candidates. Recruitment represents the first contact that a company makes with potential employees Definition: According to EDWIN FLIPPO,†Recruitment is the process of searching for prospective employees and stimulatin g them to apply for jobs in the organization. † Need for recruitment: The need for recruitment may be due to the following reasons / situation: a) Vacancies due to promotions, transfer, retirement, termination, permanent disability, death and labour turnover. ) Creation of new vacancies due to the growth, expansion and diversification of business activities of an enterprise. In addition, new vacancies are possible due to job specification. Purpose and importance of Recruitment: 1. Determine the present and future requirements of the organization on conjunction with its personnel-planning and job analysis activities. 2. Increase the pool of job candidates at minimum cost. 3. Help increase the success rate of the selection process by reducing the number of visibly under qualified or overqualified job applicants. . Help reduce the probability that job applicants, once recruited and selected, will leave the organization only after a short period of time. 5. Meet the organizationâ €™s legal and social obligations regarding the composition of its work force. 6. Begin identifying and preparing potential job applicants who will be appropriate candidates. 7. Increase organizational and individual effectiveness in the short term and long term. 8. Evaluate the effectiveness of various recruiting techniques and sources for all types of job applicants. Recruitment is a positive function in which publicity is given to the jobs available in the organization and interested candidates are encouraged to submit applications for the purpose of selection. Recruitment represents the first contact that a company makes with potential employees. It is through recruitment that many individuals will come to know a company, and eventually decided whether they wish to work for it. A well-planned and well-managed recruiting effort will result in high quality applicants, whereas, a haphazard and piecemeal efforts will result in mediocre ones. Unscientific Recruitment and Selection: Previously, the selection of candidates was influenced by superstitions, beliefs, personal prejudices of managers looking after the recruitment and selection of the staff. The net result of such unscientific recruitment and selection are: (a) Low productivity of labour (b) High turnover (c) Excessive wastage of raw materials (d) More accidents and corresponding loss to the organization (e) Inefficient working of the whole organization and finally (f) Ineffective executive of training and management development programs Scientific recruitment and selection The importance of selection recruitment and selection of staff is now accepted in the business world. Selection is important as it has its impact on work performance and employee cost. As result scientific methods of recruitment and selection are extensively for the selection of managers and the supervisory staff. The assistance of experts such as industrial psychologist and management consultants are also taken for the purpose of scientific selection. As a result, the objective of â€Å"right man for the right job† is achieved in many organizations. Moreover, â€Å"right job† is the basic rinciple in manpower procurement. RECRUITMENT PROCESS Recruitment refers to the process of identifying and attracting job seekers so as to build a pool of qualified job applicants. The process comprises five interrelated stages, viz, 1. Planning. 2. Strategy development. 3. Searching. 4. Screening. 5. Evaluation and control. The ideal recruitment programme is the one that attracts a r elatively larger number of qualified applicants who will survive the screening process and accept positions with the organization, when offered. Recruitment programmes can miss the ideal in many ways i. e. y failing to attract an adequate applicant pool, by under/over selling the organization or by inadequate screening applicants before they enter the selection process. Thus, to approach the ideal, individuals responsible for the recruitment process must know how many and what types of employees are needed, where and how to look for the individuals with the appropriate qualifications and interests, what inducement to use for various types of applicants groups, how to distinguish applicants who are qualified from those who have a reasonable chance of success and how to evaluate their work. STAGE 1: RECRUITMENT PLANNING: The first stage in the recruitment process is planning. Planning involves the translation of likely job vacancies and information about the nature of these jobs into set of objectives or targets that specify the (1) Numbers and (2) Types of applicants to be contacted. Numbers of contact: Organization, nearly always, plan to attract more applicants than they will hire. Some of those contacted will be uninterested, unqualified or both. Each time a recruitment Programme is contemplated, one task is to estimate the number of applicants necessary to fill all vacancies with the qualified people. Types of contacts: It is basically concerned with the types of people to be informed about job openings. The type of people depends on the tasks and responsibilities involved and the qualifications and experience expected. These details are available through job description and job specification. STAGE 2: STRATEGY DEVELOPMENT: When it is estimated that what types of recruitment and how many are required then one has concentrate in (1). Make or Buy employees. (2). Technological sophistication of recruitment and selection devices. 3). Geographical distribution of labour markets comprising job seekers. (4). Sources of recruitment. (5). Sequencing the activities in the recruitment process. ‘Make’ or ‘Buy’: Organization must decide whether to hire le skilled employees and invest on training and education programmes, or they can hire skilled labour and professional. Essentially, this is the ‘make’ or ‘buy’ decision. Organizations, which h ire skilled and professionals shall have to pay more for these employees. Technological Sophistication: The second decision in strategy development relates to the methods used in recruitment and selection. This decision is mainly influenced by the available technology. The advent of computers has made it possible for employers to scan national and international applicant qualification. Although impersonal, computers have given employers and ob seekers a wider scope of options in the initial screening stage. Where to look: In order to reduce the costs, organizations look in to labour markets most likely to offer the required job seekers. Generally, companies look in to the national market for managerial and professional employees, regional or local markets for technical employees and local markets for the clerical and blue-collar employees. When to look: An effective recruiting strategy must determine when to look-decide on the timings of events besides knowing where and how to look for job applicants. STAGE 3: SEARCHNG: Once a recruitment plan and strategy are worked out, the search process can begin. Search involves two steps A). Source activation and B). Selling. A). SOURCE ACTIVATION: Typically, sources and search methods are activated by the issuance of an employee requisition. This means that no actual recruiting takes place until lone managers have verified that vacancy does exist or will exist. If the organization has planned well and done a good job of developing its sources and search methods, activation soon results in a flood of applications and/or resumes. The application received must be screened. Those who pass have to be contacted and invited for interview. Unsuccessful applicants must be sent letter of regret. B). SELLING: A second issue to be addressed in the searching process concerns communications. Here, organization walks tightrope. On one hand, they want to do whatever they can to attract desirable applicants. On the other hand, they must resist the temptation of overselling their virtues. In selling the organization, both the message and the media deserve attention. Message refers to the employment advertisement. With regards to media, it may be stated that effectiveness of any recruiting message depends on the media. Media are several-some have low credibility, while others enjoy high credibility. Selection of medium or media needs to be done with a lot of care. STEP 4: SCREENING:Screening of applicants can be regarded as an integral part of the recruiting process, though many view it as the first step in the selection process. Even the definition on recruitment, we quoted in the beginning of this chapter, excludes screening from its scope. However, we have included screening in recruitment for valid reasons. The selection process will begin after the applications have been scrutinized and short-listed. Hiring of professors in a university is a typical situation. Application received in response to advertisements is screened and only eligible applicants are called for an interview. A selection committee comprising the Vice-chancellor, Registrar and subject experts conducts interview. Here, the recruitment process extends up to screening the applications. The selection process commences only later. Purpose of screening The purpose of screening is to remove from the recruitment process, at an early stage, those applicants who are visibly unqualified for the job. Effective screening can save a great deal of time and money. Care must be exercised, however, to assure that potentially good employees are not rejected without justification. In screening, clear job specifications are invaluable. It is both good practice and a legal necessity that applicant’s qualification is judged on the basis of their knowledge, skills, abilities and interest required to do the job. The techniques used to screen applicants vary depending on the candidate sources and recruiting methods used. Interview and application blanks may be used to screen walk-ins. Campus recruiters and agency representatives use interviews and resumes. Reference checks are also useful in screening. STAGE 5: EVALUATION AND CONTROL: Evaluation and control is necessary as considerable costs are incurred in the recruitment process. The costs generally incurred are: 1. Salaries for recruiters. 2. Management and professional time spent on preparing job description, job specifications, advertisements, agency liaison and so forth. 3. The cost of advertisements or other recruitment methods, that is, agency fees. 4. Recruitment overheads and administrative expenses. 5. Costs of overtime and outsourcing while the vacancies remain unfilled. . Cost of recruiting unsuitable candidates for the selection process. EVALUATION OF RECRUITMENT PROCESS The recruitment has the objective of searching for and obtaining applications for job seekers in sufficient number and quality. Keeping this objective in the mind, the evaluation might include: 1. Return rate of application sent out. 2. Number of suitable candidates for selection. 3. Retention and perfor mance of the candidates selected. 4. Cost of the recruitment process 5. Time lapsed data 6. Comments on image projected. Sources of Recruitment SOURCES OF MANAGERIAL RECRUITMENT INTERNAL SOURCES EXTERNAL SOURCES 1) Promotion 1) Campus recruitment 2) Transfers 2) Press advertisement 3) Internal notification 3) Management consultancy service (Advertisement) amp; private employment exchanges 4) Retirement 4) Deputation of personnel or transfer from one enterprise to another 5) Recall 5) Management training schemes 6) Former employees 6) Walk-ins, write-ins, talk-ins 7) Miscellaneous external sources The sources of recruitment can be broadly categorized into internal and external sources- (I) Internal Recruitment – Internal recruitment seeks applicants for positions from within the company. The various internal sources include * Promotions and Transfers – Promotion is an effective means using job posting and personnel records. Job posting requires notifying vacant positions by posting notices, circulating publications or announcing at staff meetings and inviting employees to apply. Personnel records help discover employees who are doing jobs below their educational qualifications or skill levels. Promotions has many advantages like it is good public relations, builds morale, encourages competent individuals who are ambitious, improves the probability of good selection since information on the individual’s performance is readily available, is cheaper than going outside to recruit, those chosen internally are familiar with the organization thus reducing the orientation time and energy and also acts as a training device for developing middle-level and top-level managers. However, promotions restrict the field of selection preventing fresh blood amp; ideas from entering the organization. It also leads to inbreeding in the organization. Transfers are also important in providing employees with a broad-based view of the organization, necessary for future promotions. * Employee referrals- Employees can develop good prospects for their families and friends by acquainting them with the advantages of a job with the company, furnishing them with introduction and encouraging them to apply. This is a very effective means as many qualified people can be reached at a very low cost to the company. The other advantages are that the employees would bring only those referrals that they feel would be able to fit in the organization based on their own experience. The organization can be assured of the reliability and the character of the referrals. In this way, the organization can also fulfill social obligations and create goodwill. * Former Employees- These include retired employees who are willing to work on a part-time basis, individuals who left work and are willing to come back for higher compensations. Even retrenched employees are taken up once again. The advantage here is that the people are already known to the organization and there is no need to find out their past performance and character. Also, there is no need of an orientation programme for them, since they are familiar with the organization. * Dependents of deceased employees- Usually, banks follow this policy. If an employee dies, his / her spouse or son or daughter is recruited in their place. This is usually an effective way to fulfill social obligation and create goodwill. * Recalls: When management faces a problem, which can be solved only by a manager who has proceeded on long leave, it may de decided to recall that persons after the problem is solved, his leave may be extended. * Retirements: At times, management may not find suitable candidates in place of the one who had retired, after meritorious service. Under the circumstances, management may decide to call retired managers with new extension. * Internal notification (advertisement): Sometimes, management issues an internal notification for the benefit of existing employees. Most employees know from their own experience about the requirement of the job and what sort of person the company is looking for. Often employees have friends or acquaintances who meet these requirements. Suitable persons are appointed at the vacant posts. II) External Recruitment – External recruitment seeks applicants for positions from sources outside the company. They have outnumbered the internal methods. The various ex ternal sources include * Professional or Trade Associations :- Many associations provide placement service to its members. It consists of compiling job seeker’s lists and providing access to members during regional or national conventions. Also, the publications of these associations carry classified advertisements from employers interested in recruiting their members. These are particularly useful for attracting highly educated, experienced or skilled personnel. Also, the recruiters can zero on in specific job seekers, especially for hard-to-fill technical posts. Advertisements :- It is a popular method of seeking recruits, as many recruiters prefer advertisements because of their wide reach. Want ads describe the job benefits, identify the employer and tell those interested how to apply. Newspaper is the most common medium but for highly specialized recruits, advertisements may be placed in professional or business journals. Advertisements must contain proper information li ke the job content, working conditions, location of job, compensation including fringe benefits, job specifications, growth aspects, etc. The advertisement has to sell the idea that the company and job are perfect for the candidate. Recruitment advertisements can also serve as corporate advertisements to build company’ image. It also cost effective. * Employment Exchanges:- Employment Exchanges have been set up all over the country in deference to the provision of the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959. The Act applies to all industrial establishments having 25 workers or more each. The Act requires all the industrial establishments to notify the vacancies before they are filled. The major functions of the exchanges are to increase the pool of possible applicants and to do the preliminary screening. Thus, employment exchanges act as a link between the employers and the prospective employees. These offices are particularly useful to in recruiting blue-collar, white collar and technical workers. * Campus Recruitments:- Colleges, universities, research laboratories, sports fields and institutes are fertile ground for recruiters, particularly the institutes. Campus Recruitment is going global with companies like HLL, Citibank, HCL-HP, ANZ Grindlays, Lamp;T, Motorola and Reliance looking for global markets. Some companies recruit a given number of candidates from these institutes every year. Campus recruitment is so much sought after that each college; university department or institute will have a placement officer to handle recruitment functions. However, it is often an expensive process, even if recruiting process produces job offers and acceptances eventually. A majority leave the organization within the first five years of their employment. Yet, it is a major source of recruitment for prestigious companies. * Walk-ins, Write-ins and Talk-ins- The most common and least expensive approach for candidates is direct applications, in which job seekers submit unsolicited application letters or resumes. Direct applications can also provide a pool of potential employees to meet future needs. From employees’ viewpoint, walk-ins are preferable as they are free from the hassles associated with other methods of recruitment. While direct applications are particularly effective in filling entry-level and unskilled vacancies, some organizations compile pools of potential employees from direct applications for skilled positions. Write-ins are those who send written enquiries. These jobseekers are asked to complete application forms for further processing. Talk-ins involves the job aspirants meeting the recruiter (on an appropriated date) for detailed talks. No application is required to be submitted to the recruiter. * Contractors:- They are used to recruit casual workers. The names of the workers are not entered in the company records and, to this extent; difficulties experienced in maintaining permanent workers are avoided. * Consultants:- They are in the profession for recruiting and selecting managerial and executive personnel. They are useful as they have nationwide contacts and lend professionalism to the hiring process. They also keep prospective employer and employee anonymous. However, the cost can be a deterrent factor. * Head Hunters:- They are useful in specialized and skilled candidate working in a particular company. An agent is sent to represent the recruiting company and offer is made to the candidate. This is a useful source when both the companies involved are in the same field, and the employee is reluctant to take the offer since he fears, that his company is testing his loyalty. * Radio, Television and Internet:- Radio and television are used to reach certain types of job applicants such as skilled workers. Radio and television are used but sparingly, and that too, by government departments only. Companies in the private sector are hesitant to use the media because of high costs and also because they fear that such advertising will make the companies look desperate and damage their conservative image. However, there is nothing inherently desperate about using radio and television. It depends upon what is said and how it is delivered. Internet is becoming a popular option for recruitment today. There are specialized sites like naukri. com. Also, websites of companies have a separate section wherein; aspirants can submit their resumes and applications. This provides a wider reach. * Competitors:- This method is popularly known as â€Å"poaching† or â€Å"raiding† which involves identifying the right people in rival companies, offering them better terms and lur

Compelling Topics for Research Papers

Compelling Topics for Research Papers Compelling Topics for Research Papers Finding a compelling topic for your research paper is a step by step process; dont rush and reap the rewards Call in Ontario for assistance. Challenge and Engage The best thing to do is choose a topic that interests and challenges you simultaneously. It shouldn’t be something that’s too difficult to handle; dont bite off more than you can chew. The topic should be thought provoking and grab the readers interest immediately. Next, consider the scope of the essay. If the topic you choose is too narrow, it may be difficult to find research material. If the topic is too broad, it runs the risk of seeming too boring for the reader. Research, Research Do plenty of investigation on the topic. At this stage you’ll discover how compelling the topic truly can be, and save time if you decide to scrap it for a better idea. If you have a general idea in mind, research anything that could be associated with it to learn more and create an interesting essay. For example, if you choose to write about farming, consider other topics such as free trade agreements, weather patterns, transportation, and fertilizers. What’s the Angle? Choosing a topic almost always involves choosing an â€Å"angle.† Ask yourself, â€Å"What am I trying to prove with this essay?† Take into account historical, geographical, and sociological factors. This will help clarify your topic and its focus. Your topic may require final approval from the professor or teacher. Make sure you meet all established guidelines before proceeding with more writing and research. If you need help can make sure you finish your project on time. Please give us a

Credit Risk Assessment of Bank Customers using DEMATEL and Fuzzy Research Paper - 1

Credit Risk Assessment of Bank Customers using DEMATEL and Fuzzy Expert System - Research Paper Example The research is carried out using data from the Middle East Region of the Asia. Banking has become a necessity to individuals who require safe storage of their financial assets(Bilal,7). Among commercial banking various benefits, some risks are associated with them especially credit risk which requires management for any bank institution to make profits for its stakeholder and investors. Assessment of credit risk is necessary for sustainability of banking institutions especially in the Islamic realm where moral laws such as shari’ah and social justice are adopted in order to preserve customer associations, reasonable dealing, protection and precautions of staff amongst others(Bilal,7). Management of credit involves mitigating the exploitation of the risk, which is applied by including credit scoring models that serve as structures for providing credit to customers. Research has been conducted on how to evaluate credit risk with success factors being evident in the use of GA-based SVM and Rough set theory that provided effectiveness in data mining therefore contributing a positive impact on risk restructuring(Jianguo and Bai, 3). Other studies included credit risk assessment with support vector machines and hybrid neutral systems that resulted in robustness in the use of fuzzy logic in real time applications to solve problems specifically in credit risk management(Shin, Lee and Kim, 130). This paper concentrates on credit risk assessment using Dematel and fuzzy expert systems applying credit scoring models. The objective of this paper is to study consumers’ credit risks that are obtained from previous research that includes financial ratios obtained from banking balance sheets. Rules are used to determine the correlation between consumers’ financial credit risk levels and resultant financial circumstances that is improved by expert decision making that is from filtered financial ratios(Amorim, Vasconcelos and Brasil,