The Methods Of Recruitment And Selection Commerce Essay

Organizations are made up of two key resources: people and money. People, who consist as its workforce, are the most valued asset (Plumbley 1976). The knowledge, skills and commitment the workforce brings has to be utilized to its maximum to enable the organisation thrive. Plumbley (1985) suggests that the profitability and even the survival of an organization normally relies upon the calibre of the workforce, and it has been debated that the costs of ineffectual commercial viability can most likely be linked to a long period of ineffective recruitment and selection methods (Lewis, 1984; Plumbley, 1985; Smith and Robertson, 1993; Terpstra, 1996). More so the processes involved with recruitment and selection of employees, their management and availability of skills and knowledge will give an enterprise a firm business strategy.

Recruitment and selection are crucial processes for a successful organization, as hiring the appropriate staff can “improve and sustain organisational performance” (Petts 1997). Recruitment is simply linking those with jobs and those seeking jobs; in effect discovering the potential of prospective applicants for actual or anticipated vacancies. According to Edwin B. Flippo, “recruitment is nothing but a process of searching for prospective candidates for employment, stimulating and encouraging them to apply for a job”. An adequate recruitment process would consist of such progressive steps: Job definition, Person specification, Creation of recruitment and selection techniques, review and shortlist and offer of employment based on agreed contract (Peel and Dale 2001:9).

Figure Recruitment and Selection Process (Ward 2007)

In reality, the entire recruitment process is more complicated than just encouraging people. It targets the purpose of attracting the most suitable people at that point in time (Dale 2003:50).

Invariably the problem of selection not only involves allocating the right individual for the right job, but it also entails the efficacy of the methods employed in order to achieve that purpose (Dempsey 1955). The entire process of selection starts from an initial screening interview and concludes with a final employment offer.

Figure The Selection Process (Montana, Charnov 2000:216)

While carrying out the selection process, management must have an answer to the question: ‘What is required by the job’? As such, any criterion taken into account in employee selection must be a Bona fide Occupational Qualification (BFOQ), or job related criteria to avoid any form of discrimination that is an illegality and punishable (Montana, Charnov 2000).

Case Study Review

Company Profile

Framley engineering is a relatively small sized organisation that designs, develops, manufactures and sells superior electronics. A large proportion (60%) of the company’s revenue is derived from export markets; hence the company has a strong market interested in the unique products offered. The organization’s existence is hinged on the vital recruitment of R&D engineers who are pioneers of in house technology and responsible for launching new products for the market.

The company consist of 520 employees, 57 being engineers. The company is expanding due to the periodical recruitment of qualified engineers that are essential to its existence. With the following SWOT analysis, the company’s current situation can clearly be presented:

Strengths

Framley engineering is a small sized company in comparison to its larger competitors but holds a ‘first mover advantage’ (FMA), where it has been able to gain time over its competitors; and time advantage generally and in the field the company operates is the surest way to gain market share (Lieberman, Montgomery 1988).

Weakness

Lack of an effective recruitment and selection strategy by the Human Resource department, as a result of the incompetence of the Head of Human Resources and departmental heads using inadequate interviewing and selection skills for recruiting new engineers. This could be detrimental as it could reduce the company’s competitiveness in the market as its success is dependent on quality engineers.

Opportunities

Steadily expanding through employing qualified engineers and across-the-board low labour turnover.

Threats

The recruitment of people with no relevant skills or knowledge, who are unfit for the organization as highlighted by the Director of Engineering at Framley engineering. This can lead to increased labour turnover, increased costs for the organization and eventually lower the morale of the workforce.

Examining the SWOT analysis of the case study, it can be gathered that a major setback for Framley engineering is its grossly incompetent Head of Human Resource and departmental heads. The heads of department clearly lacked interviewing and selection skills basing decisions on personal grounds and prejudices which could be interpreted as a form of discrimination, possibly stereotyping or assigning of traits to people based on their social background. Although stereotyping is a natural mental process that enables the mind filter and categorizes stimuli, it becomes a stumbling block when recruiters view the aged, obese, sex and ethnic minorities within intransigent boundaries, assuming them as less qualified for a post based on their affiliation to a social group (Levesque 2005). An example is the case of James Connor (Greenhouse 2003), who was offered a job as a cook by McDonalds. Connor was 6 ft. tall and weighed 420 pounds therefore the chain had to order a customized uniform for him in which during the time of its arrival, the chain had changed management and the new owners decided against employing Mr Connor on account of his obesity. Thus it can be assumed that the new owners commits the perceptual blunder of the halo effect (Klein 2004) in deeming that because of one insignificant negative characteristic, their total perception of him and his abilities is distorted negatively (McShane et al 2005:19).

Furthermore the effects of poor recruitment decisions as observed in the case study include: wastage of time and money spent on advertising, shortlisting, interviewing, saying ‘good bye’ and re-hiring; negative individual and team morale where existing staff have to compensate for the new persons’ lack of skill or productivity. A major pitfall is the direct costs with having to re-recruit, estimated by the CIPD as £3,500 per employee on the average (Management and Standards Centre n.d.).

Effective Recruitment and Selection Strategies

Recruitment

Recruiting is seen as a “positive process of generating a pool of candidates by reaching the ‘right’ audience, suitable for the vacancy” (Leopold 2002). The initial progression of recruitment is to create a job analysis which is vital for both the organization and applicants. If the post is needed in the organization, a job description is then collated. A typical job description comprises of the job title, location and what the job key functions are principal duties the job entails and the part it plays in the success of an organization. Thereafter, based on the job description a person specification can be composed. In definition, a person specification is a “process by which both the required qualities vital to undertake the post and the desirable qualities of the ideal candidate for the job are described” (Torrington et al 1992). In line with the case study, a job description should solely be created by the Human Resource department at Framley engineering. Though it is recommended that the HR Head confers with the Director of engineering (for required skills), whom the new recruits will be reporting to; as their relative input into the job role will be imperative and such relevant details which should be included in the specification.

The next level is choosing appropriate steps in recruiting the best applicant. In effect there are three channels by which an organizations can recruit suitable candidates, there are: Internal, External and On-line recruitment. Internal recruitment involves advertising job posts on staff notice boards in staff rooms or announcing in staff meetings. Acknowledged by Leopold (2002), internal recruitment enables staff to progress within the organization through promotion to a new area, thereby providing them with valuable experience elevating them to a higher level in a similar role. For example, Tesco adopts internal recruitment calling it an ‘Internal Talent Plan’ where it lists current employees looking for a move either on the same level or on promotion. The advantage of internal recruitment is that the manager is aware of the candidate’s capabilities thus avoiding the error of employing an external candidate who may not be motivated to commit to the development of the organization. In contrast, a significant obstacle of internal recruitment is that it may introduce a sense of indifference within the organization. Wherefore sometimes it is preferable to employ externally which could increase competition for promotions and improve appraisals, as employees will not feel as though they are in their ‘comfort zone’, knowing the organization employs internally.

External recruitment involves recruitment agencies, job centres, referrals and new paper adverts. External recruitment is when a candidate is recruited from outside the organization as the candidate may bring creative ideas or skills needed. In relation to Framley engineering, the company employs externally, which is appropriate for its size, structure and field they operate in being the recruitment of R&D engineers. The company needs outside experience which brings an injection of fresh and innovative ideas. Though this technique maybe costlier, it is essential to keep the company in operation as it is reliant on the quality of engineers and in house technology.

The last recruitment technique is online recruitment which is a cost effective method for organizations as it shares information between candidates and recruiters, and information gathered can easily be updated. Though its major drawback is that it attracts series of unsuitable candidates and recruiters spend a lot of time extracting suitable ones (Beardwell 2007). Framley engineering should adopt this cost effective method as part of their recruitment policy though to fully utilize the method, recruiters must be in regular contact with potential candidates so that they are not lost to competition. Another example is Hong Kong airline Dragon Air, a subsidiary of Cathway Pacific Group which employs 1400 cabin crew staff. The airline uses online recruitment for costs and time saving as candidates submit their resume in fixed format through the internet. They also employ third party agencies such as Monster.com where data is consolidated and analysed by the quality of the candidate. This has proved effective in employing the right workforce and can be emulated by Framley.

In correlation, the next step in hiring applicants is assessing the adequate candidate for the post through sifting applications (Armstrong 2007). The sifting process encompasses classifying abundant applicants into ‘probable, possible and unsuitable’ groups (Beardwell 2007). This is achievable through the comparison of different resumes and passing promising candidates to the selection process. Unsatisfactory should be notified in writing soonest according to CIPD directives (Beardwell 2007). Another technique that can be used in sifting applications is Bio data, which is the collation of data that consists of demographic information such as education, sex, age, educational qualifications, employment history, and hobbies etc. points are awarded according to their relevance to the post and data collected is scored by the bio data survey. The points accumulated determine applicants who can proceed to the next stage (Armstrong 2007).

Selection

Selection can be interpreted as “the process of picking the ‘appropriate’ candidates both inclined and capable to fill the post”. Several selection techniques can be used to recognize the most suitable candidate for the post by reducing the pool (Leopold 2002). The several techniques could be: psychometric tests, assessment centres, interviews, references amongst others (Beardwell 2007).

The most widely used technique is interviews as expressed by Torrington (2002), as a “controlled conversation with a purpose”. There are three types of interviews namely: individual interview, selection board and interviewing panels, the most common one being the individual interview which is more or less face to face. This allows close contact between the interviewer and interviewee, but may result in partial decisions based on personal grounds like depicted in the case study. It is glaring that the departmental heads did not comprehend the whole process of recruitment. They lacked the training required to enlighten them about the importance of the recruitment process and creating a strategy to effectively deal with hiring the right people, equal opportunities, minimizing costs from ‘wrong hiring’, and more importantly to identify marginal performers prior to hiring. Definitely, untrained and incompetent recruiters combined with inappropriate selection techniques will result in a workforce not being sufficiently qualified for the post they hold, which suffocates an organization as it gradually gets crushed under the pressure of rehiring adequate employees that forms the backbone of the company; as in this case Framley engineering.

A much fairer method which may eradicate preconceived judgements is a panel interview, likely involving two line managers and one personnel manager to interview a single candidate. This allows fair discussions with a view from different angles. The last method is selection board interviews which is usually larger and more formal, and might have someone on the board more influential than others whose decisions might influence others on the board. This kind of interview enables people involved to make decisions on candidates according to relevant points. Framley engineering should adopt the panel interview method as it is more dynamic and candidates are assessed in a fairer manner as set of questions asked will be based on individual experiences.

Other selection techniques is assessment centres, which entails candidates going through a series of exercises while being observed by assessors what skills were demonstrated, their capabilities and if they are suitable for the job to enhance the development of the organization (Fowler 1992). Tasks performed at assessment centres are psychometric tests, group, job and individual exercises (Porter 2001). However, although this method gives a look into how people would perform in groups which would be an advantage to organizations that require staffs to work in groups, it is among many techniques and the best way to understand and select a suitable candidate is through interview. Moreover the process can be very costly as it requires a lot of resources, hence mainly used by larger organizations therefore not suitable for Framley engineering.

However, another technique which might be useful to the case study is using references. References are personal and accurate information gathered about applicants. This would enable the company know who they are recruiting. The downside of this method is that candidates can get anyone to write up a personal reference as Armstrong (2007) rightly pointed out that “personal references are of course evidently useless as all they indicate is that the candidate has at least one or more friends”. Thus, references should only come from Human resources and not from a previous manager or former workmate as they will be biased and conjure up a brilliant reference which is not beneficial as the organization needs to know the calibre of applicants they are recruiting.

For an organization to adopt the best approach to recruitment and selection there are several external and internal factors to be taken into consideration before an ideal strategy can be formulated. Such factors shall be analysed furthermore.

Internal Factors

Foremost is the size of an organization as this determines what strategy to adopt. An organization with between 200 and 500 employees, as is the situation in the case study, would need to adopt a best use of techniques mentioned here. However much smaller firms with 50 plus employees do not require adopting all techniques mentioned as it is inadequate, time consuming and counterproductive due to relatively high costs. For example assessment centres are not needed by smaller firms as this would be expensive, and instead use of practical methods such as interviews and paper application. But assessment centres are invaluable to larger organizations recruiters will need to narrow down the large number of applicants as effectively used by corporations like British Gas that uses assessment centres where they use 90 statements in all and applicants are rated as amber, green or red. The colour grading shows the attitudes applicants have towards team building and people, therefore it goes to show which roles are best suited for an individual. Green and amber applicants are put forward unto the last stage while red ratings are not taken any further.

The financial position of an organization also plays a crucial role as it has a major impact on the recruitment and selection policies an organization chooses. If a body is financially buoyant it can apply all the techniques but if otherwise can prove a weakness for organizations as strict budgets means limitations to techniques that can be employed to attract potential applicants.

Consequently, it can be determined that when taking into consideration the internal factors, firms need to conform to their internal factors when choosing what recruitment and selection method to adopt. It can be seen that not all organizations can adopt the ‘best practices’ due to size and financial constraints, however it is clear that all businesses can adopt the basic of recruitment and selection being interviews and applications.

External Factors

Political factors (macro environmental factors) such as government policy and legislation on race, sex and discrimination represents an important function in recruiting and selection methods, as organizations have to abide by laws that have been passed by government. Hence in reference to the case study, departmental heads and subsequently the head of HR may have to employ methods such as Bio data to prevent any discrimination laws from being broken as this could lead to the business’ closure and legal proceedings.

Forces within the external labour market may play a role in firms’ recruitment and selection shortages. In the field where Framley engineering operates, there is competition for recruitment of R&D engineers, thus the business might have to look outside the shores of Britain for suitable engineers, which would be an advantage since 60% of its revenue is derived from exports. A mix of foreign expertise could be beneficial for creating innovative products to suit the export market. This as well could be a complicated process as cross-border legalities must be adhered and exhaustive background checks must be carried out.

It is apparent when analysing external factors, there are a series of conditions that influence organizations in choosing the most suitable technique. What is constant in external factors is that business climates and market forces are rapidly evolving, more so businesses need to adapt in order to remain competitive. For example companies such as Tesco who frequently uses labour from Eastern Europe countries will have a change in their recruitment and selection policies which results in the need to adapt to the changes in macro environmental factors (as mentioned above).

Conclusion

An organization that does not promote a ‘best practice’ procedure will not only recruit ineffectively but put the business at a risk of closure due to failings of the Human resources department. There must be a close rapport between Human resources department, departmental heads and the Director of engineering, to ensure the techniques used and the person specification fits the job role. Particularly, utmost care should be taken to when interviewing for the recruiter to adopt a neutral position in order to avoid such mistakes like the halo effect, stereotyping and preconceived judgements. It is lastly imperative that interviewers are properly trained and heads of HR are accountable to either successes or failures of recruitment and selection policies.