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Hiring is an essential and integral part of any organization. An organization can initiate hiring for expanding its business and future requirements or it can be because of vacancy created by termination of someone's employment in the organization. Whatever be the reason, selecting a right candidate for the job becomes a critical task. Selection of a wrong employee can be a costly affair for an organization as there is a direct cost associated with selection process and training of the new employee (Weinclaw, 2013). Apart from these direct costs there is indirect cost associated with a wrong selection. The selected employee may not be able to fulfill the customers demand in an appropriate manner and hence causes loss of business. The selected employee may not fit well in the organizational culture and may try to harm the organizational culture, adversely affect the team work and hence undermine the productivity of others in the organization. Hence, it becomes necessary for an organization to have a robust recruitment process which focuses on hiring a right candidate for a particular job.
Planning and Acquiring the Talent
Possibility of selecting a wrong candidate increases during good economic conditions when labor requirement is high and there is an urgency to fill the vacant posts. If the organization is not prepared for it, it will end up in wrong selection of a candidate. This is where preplanning of labor requirement becomes important. In that sense, recruiting should be considered as a more comprehensive management activity (Pamenter, 1999). When recruitment is considered as a management activity, it becomes less fragmented and chances of success increases. Under this approach the recruitment planning process includes analyzing, planning and developing a strategic compatibility. It will also impose greater accountability for recruiting decisions.
When an employment is terminated, it represents breakdown of employment relationship except employment termination because of death or retirement. On creation of a vacancy, there is an immediate hurry to fill the vacant post and little attention is paid to what caused the termination or is there a possible opportunity created by termination which can add value to the organization. For example, a detailed analysis of the situation may reveal redundancy of the post and hence organization can cut down the cost by eliminating the post or it can be a chance to realign responsibilities to make existing employees perform better. If nothing else, it will show the structural deficiencies of the organization. It will give the organization a chance to take corrective measures or else the situation will surface again and again and it will cost the organization.
How Successful Companies Pre-Plan for Human Resource
The trend towards human resource planning is increasing in most of the companies (Mills, 1985). The companies involved in human resource planning do so because their top management believes that it will give them a competitive advantage. They believe in human resource planning because they think it will make their organization more entrepreneurial and flexible. It eliminates the future surprises. Lack of planning of human resource can give surprises and create problems for a company. For example, General electric in early 1970s was directing its business plans and corporate resources towards new products and technologies which required a good strength of electronics engineers. But their major work force at that time was of 30, 000 electromechanical engineers. It created a huge problem for GE by mid-1970s as it was not prepared for this requirement. It had its focus only on business plan and neglected human resource planning. This experience of GE in late 1970s, made them to plan for human resource needs.
A human resource planning model given by D. Quinn Mills shown in figure 1 accurately captures the human resource planning practices of some highly successful companies.
The below model suggests that the most important part in human resource planning is the integration of various elements for decision making. There are three major activities in the model: 1) Selecting right number of people with necessary job skills 2) Motivating them for better performance 3) Interaction between business plan and human resource planning.
Figure 1: The Human Resource Planning Process
Source: (Mills, 1985)
For future plans, a business plan is established keeping in mind the organization structure and goals. Then the planning process divides into two important components of organizations skills and staffing forecasts and individual and business performance objectives. The organization staffing forecasts depends on both its business goals and organizational structure. To meet these forecast demands, an organization can either make new hires or retrain and reassign people from within the organization. Skills inventories, succession plans, performance appraisal form part of this decision. For reassigning and retraining from within the organization, employee training and executive development are focused on where as for external hire advance hiring , keeping stockpiling of talent and recruitment projections comes into play.
To meet the performance objectives, wages and benefits adjustments can be required. Other than this to meet organizational objectives and individual objectives adjustments in organizational culture may be required. This will include designing and analyzing corporate culture and implementing new employee development and morale programs.
Organizations that have organizational objectives aligned with individual objectives and have right kind of human resource planning to meet with business planning constitute a competitive advantage and are successful.
Once the human resource planning is made there comes a need to have a logical and step wise process to hire new employees for its business needs. This process should ensure that right kinds of people are hired for the jobs.
Before hiring an employee, job analysis should be done to determine the requirements of the job and required skills sets to perform it efficiently. Ambiguous job description and expectations from the employee may lead to faulty selection. For example, it is not enough to say that the sales person in a retail outlet should have a good personality to be a better sales person. Because this statement doesn't clearly states what actually the sales person is expected to do. A more detailed job analysis and expectations from a sales person can include that the sales person needs to be customer friendly and should be observant of the behavior of the customer right from the moment the customer enters and till she exists. The sales persons should be able to perform multitasking as and when required and should have patience to help the customer. When the Job expectations are clearly defined, it gives a good framework to look out for particular traits and skill sets in an applicant. The qualities desired in an employee should be both behavior centric and skill set centric to select an applicant who can be both culturally and job fit in the organization. The job analysis frame work can be broken further down to define the Knowledge, skills, abilities, or other capabilities (KSAOs) required in an applicant (Weinclaw, 2013).
As shown in Figure 2, a well-defined selection process will start with job analysis. Job analysis will include identifying the criteria for success at the job and the KSAOs expected from an applicant to meet these criteria. The next step will be the selection of appropriate selections tools like interviews, aptitude tests etc. to check if the applicant has required KSAOs. If the predictors have been defined, the next step will be to make a comparison between how well people do on the predicators and how well they actually perform on job. This comparison can be done in multiple ways. For example, organization can check how the current employees perform on predicators and how they actually perform on job. The purpose of making this comparison is to determine how well the tests adopted predict the job fitness of an applicant. If there is a strong correlation between adopted predictors and job performance, the predictor is valid and effectively measures the applicant on the required criteria and can be accepted. If the predictor is not valid, it will not effectively capture what is required to measure and hence a different instrument should be tried. Even if the instrument is valid, there needs to be a periodic review of it because characteristics of job changes from time to time.
Figure 2: Selection Instrument Validation Model
Source: (Weinclaw, 2013)
Meeting the Legal Requirements:
Â Every organization wants to hire the right talent to meet its business needs but the organization needs to make sure that it is meeting all the legal requirements of hiring. Every country has some hiring laws which are to ensure that there are no unfair means adopted to make the selection and there is no indiscrimination against any particular group or race. For example in the U.S.A, Â Equal Employment Opportunity Commission has made a draft known as Strategic Enforcement Plan( SEP) which gives guidelines to eliminate barriers in the process of equal and fair hiring. (Dwoskin, Squire, & Patullo, 2013). The law is to make sure that there is no indiscrimination against racial and ethnic groups, women, people with disabilities, older workers. The law requires that the prescreening tests, background checks, date of birth requirements, photo requirements made before actual employment are not aimed and used in making a discriminatory decision for selection.
While it is a common practice by organizations to perform background checks on an individual before giving employment but if this task is not perform carefully , there is a chance that these checks can invade applicant's privacy and the organization can find its self in legal trouble. The background checks are needed for educational qualification validation, criminal history check. These are perfectly legitimate checks for an organization to make sure that the applicant is not a threat to the organization and she possesses required valid educational qualification to be suitable for the job but if not done systematically they can invade privacy of an individual or may have adverse effect on minority group applicants.
To make sure that the organization doesn't strangle in the legal issues, it can adopt the following practices for background checks-
Provide written notice to the applicant about the requirement of background check for employment purposes in a well-defined document and also take a written consent from the applicant for the same.
If denying employment on the basis of background check, give a detailed background report of the applicant to the applicant along with the reason for denying of employment. Also, the applicant should be given a fair time to respond back to the organization for any disparities in the report.
Because of these legal requirements, the role of a Human Resource manager becomes more important. Ideally, the manager to whom the applicant would report should be involved in hiring but she may not have all the knowledge required for legal requirements of hiring.
Once the organization has planned it hiring requirements which meets its business needs and has well defined the job specifications, KSAOs required for the job and selection tools to be used, the process of hiring the candidate starts. There are many modes of hiring depending on the cost and convenience of organization. These modes can range from traditional referral hiring to new age internet hiring.
Methods of Hiring
The different methods via which hiring can take place are as follows -
Hiring Through Referrals - Recruitment is seen as a process where the interplay of social relationships between employers, job seekers and other elements in an organization, has an important role. The referral system essentially seeks to obtain value from this interplay, by leveraging the existing social networks of the individuals working in the organization. It is a win-win for both the employers and the existing employees, as the former save on substantial hiring costs and some part of the savings are passed on to the latter in the form of referral bonuses.
Candidates who come in through the referral system have higher chances of being recruited than candidates who come through the open market. A hiring process driven by employee referrals ensures a stronger and more cohesive culture in the organization. The reasons for the same are -
Appropriate resumes - Since the referrals have a prior relationship with an employee in the organization, they have a better understanding of how to best present their resumes to impress the employers.
Cultural Fit - The process of hiring can test the technical skills of a candidate exhaustively but there is always a marginal doubt regarding the cultural fit of a candidate. In case of referrals the extent of this doubt is reduced as employees automatically do not refer job-seekers who won't be a good cultural fit.
Job Description - The referral candidates usually fit the job requirements better than candidates from the open market. This is because before referring, employees informally assess the suitability of their referral with respect to the job description.
To ensure the success of the referral system, apart from appropriate incentives, employees need to be involved in the complete process. After an employee refers a job-seeker, the employee should be intimated about contact initiation, screening, interview etc., so that an employee better understands the responsibility conferred on this through the referral system.
Hiring Through the Internet - The internet is a treasure trove of passive job seekers, who make up approximately 90% of the talent pool (Joos, 2008) .Apart from job sites like Naukri.com, there are professional social networking sites like Linkedin.com also. Job portals like Naukri.com essentially work like an online job board, using complex algorithms for mapping the information provided by the job seekers with the job description and other requirements posted by the company. Here, determining the authenticity of information provided by job seekers at an early stage can be a problem for recruiting companies. Professional social networking sites like Linkedin work on a different principle - the strength of connections in our social network, making it a combination of a conventional referral system and online job portals.
Job seekers who come in through professional networking sites find it more difficult to overstate their achievements than those who come in through job portals. This is because a profile on a professional social network can be viewed by present as well as former colleagues and has a system where your professional contacts can endorse your various skills. Studies prove that job-seekers have lesser tendency to fake information on their Linkedin profiles, as the deception can be easily verified through their social networks (Guillory & Hancock, 2012)
Internet based recruitment allows employers to proactively recruit throughout the year instead of limiting themselves to need based recruitment. Furthermore, there are significant savings in terms of costs, as pre-screening of candidates can be automated. In case of technical jobs, technical skills can be tested online through specialized tests, thus reducing time taken to process each application.
Apart from Linkedin and other professional social networking sites, HR professionals also go through other social media profiles of candidates like Facebook, Twitter etc. Through the legality of screening candidates through this medium is debatable, posts by candidates on Twitter and Facebook are used by HRs to preliminarily test the cultural fit of the candidate.
Lateral Hiring versus Internal Mobility
In recent years most firms have moved away from employment models where fresh graduates are hired with the view of life-time employment and lateral hiring is negligible. This shift in the way hiring takes place for senior positions has far-reaching consequences for an organization.
The company has incomplete information about external hires, with only certain sure-shot signs of ability like education and experience whereas they have complete information about the abilities of their existing employees. This incomplete information comprising of certain highly positive indicators leads to companies paying external hires more than internal standard salaries. Furthermore, when lateral hires enter a company with years of experience in a different organization, it becomes difficult for them to fit into the organizational culture. This eventually leads to dilution of culture in an organization, as the percentage of lateral hires increases.
Lateral hires perform lower than internal hires in the first few years of their job, even though they are paid high. This is because in a majority of cases, external hires are poorer fits for a job role than internal hires. Internal hires are already compatible with the organization, its culture and its processes; whereas external hires take time to adjust to the same, leading to an impediment in their performance.
Overall experiences hires have more job specific knowledge as they usually come with relevant experience, whereas internal hires have more organization specific skills. In case of internal hires, there is a cost associated with training them in the relevant job-specific skill set. This cost is both in the form of time and money and HR should continuously plan training of internal resources in case they desire internal mobility. On the other hand, in an organization whose main objective is innovation, external hires bring in the desired knowledge of the external environment and competitors.
In case of organizational knowledge sharing, tacit knowledge is not shared easily with external hires, as they are seen as outsiders and a threat by existing employees. In case of internal mobility, there is a higher chance of tacit knowledge transfer through existing informal networks.
Recruitment outsourcing can happen in various scenarios:
Recruiting for a difficult role
Recruiting for a sudden increase in volume
The advantage of hiring recruitment agencies is that these agencies have existing databases of job seekers in the requisite field, so the amount of sifting required for the right candidate is lesser.
On the lower end of the spectrum, recruitment agencies do not understand the exact job requirements in case of a difficult role and send across resumes which are poor fits. This leads to wastage of both time and money for the company. Another issue which arises due to recruitment outsourcing is bad cultural fit. Since contractual recruiters do not understand the existing culture of an organization, they are not able to screen out these candidates during the preliminary interview processes.
The sources of competitive advantage are increasingly dependent on the human capital of an organization. The ability of an organization to retain and develop its employees depends on the satisfaction, performance, stress, commitment, turnover, and intent to leave of an en employee. These factors are related to the support and information an organization provides to its new employees.
As the increase in the cost of hiring, turnover and the need to retain employees gain importance, new hire orientation (NHO) become important. NHO is a vital strategic human resource management tool based on a firm's human resource conceptualization in its overall strategic plan. Orientation programs impact corporate performance and deserves to be the core strength of a firm.
To align the NHO with the objectives of the organization, the elements of an NHO process have been identified in studies as below:
Perceived Value of Employees
Perceived Role of New Hire Orientation (NHO)
Responsibility for NHO
Commitment of company resources to the NHO Process
These elements are connected to the concepts of human resources in the management of the organization. The concept development levels are different in NHO for an organization depending upon the human resources conceptualization as below:
Table 1: Concept Development Levels in New Hire Orientation
Perceived Value of Employees
Perceived Role of New Hire Orientation (NHO)
Responsibility for NHO
Commitment of company resources to the NHO Process
Element of production
To get the new hire on job as quickly as possible
HRD and/or immediate supervisor
Brief programs, if any, with immediate supervisor's involvement
Element of a highly productive team
Facilitate integration into work teams
Management assumes limited role ensuring limited formalized program
Development of new formalized programs with longer orientation periods
Stakeholder in the success of the company
Integrate new hire into designed organizational culture
Diffused to immediate stakeholders in the success of the new hire
Expands with the addition of mentors and peer support for the new hire
Critical factor in the success of the company
First stage of ongoing relationship with new hire
Top management involvement including full range of stakeholders
Ongoing company investment in education and professional development programs
Source: (Dunn, 2009)
Induction is a process of combining the peoples, processes and technology within the organization so as to achieve best productivity with optimized use of resources
The induction program is the first stage of post hiring; the new recruits in company are made aware about company's culture, ethics, business lines, competitors, key markets, working standards, various departments etc. In the first week, new employees go through the activities related to induction program such as introduction to the existing employees, tour of the company's buildings and workplace
Sometimes, mentors are allocated to the groups of new hiring so as to guide and coach them about their responsibilities, job role, key challenges etc. There are some icebreaking sessions with managers and colleagues so that new recruits feel more comfortable to indulge in the organization's environment so that they understand the company's processes, their respective job profiles and responsibilities at the earliest stages which could make them productive from the beginning.
During induction program, through informal meetings the new recruits socialize within the company through activities such as outing, picnic, group activities so that new recruits starts interacting with each other which will help them to work more collaboratively and efficiently in groups as well as individually
Follow up in induction program is a critical stage where it is being checked that respective new hires are able to connect themselves with the company or not, the problems and issues of new recruits are being discussed and resolved, this transmits message that organization do care for its employees concerns.
Induction program needs to deliver positive feelings in the new recruits so that they could feel attached to the organization and further it helps in creating a base for retention of those employees for long term. In the initial weeks, the employees also set their goals and targets in accordance with the company's objective. (Hendricks, 2012)
The performance of an employee in an organization is very much dependent on the kind of attachment to organization, strong psychological bonding will extract good performance out of the employees. This bonding initiated at the induction program but it gets affected at various stages and instances, the induction program creates a base for psychological contract and later on either this bonding gets strong or deteriorates.
When an employee and organization gets things according to their desires and expectations then the bonding gets stronger (initiation of psychological contract) for example if employee does not gets job profile, projects and assignments according to his capabilities then he will feel less attached to his work, where as if he gets challenging roles and responsibilities as expected then it helps in feeling more attached to work and psychological contract get started
The key role is played by the supervisor of new recruit as the very first assignment or project he gets, he should be guided positively so that it could transmit a positive feeling and excitement into the new recruit about his role; in case of any doubt or issues supervisor or immediate manager is responsible for resolving his issues regarding the training.
Work groups are critical for an employee because the other members of group sometimes drive this bonding in a positive way and sometimes negatively, if an employee does not get gelled with other members then it may affect the productivity of the whole group rewards also plays an important role in building psychological contract as if employees are rewarded for performing well then it will motivate him to work more passionately but if employee is improving on a continuous basis but he does not get rewarded then it will demotivates him and this hits on his bonding with organization.
Psychological bonding helps employees to explore new ideas and innovations, increasing organization productivity and also long term retention of employees depends on the intensity of bonding they have with the organization. (Kotter, 1973)