The adjusted R square statistic (Adj. R2 = .408) indicates that recruitment and selection accounts for 40.8% of the variance in the performance of the SMEs leaving about 59.2% to other factors including errors in the measurements. Since recruitment and selection are significant predictors of the performance of SMEs, it was possible to build prediction model of performance using the constant and value such that PI = -95.96-14.01h; where PI is the predicted performance, H the status of recruitment and selection if it can be accurately measured. Hence it is possible to increase the performance of SMEs in Kisumu city by about 40.8% through putting in place effective measures and criteria for recruitment and selection. The performance of SMEs can also be lowered by the same magnitude if poor recruitment and selection process are allowed to prevail.