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Recruitment and selection process in an organization is important in order to attract an effective workforce. This is important because it would determine the business success and would affect the whole organization operation. One of the most valuable assets in an organization is the employees.
Recruitment is defined as the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, and encouraging them to apply for jobs with an organization (Mondy & Noe, 2008). There are two main stages of recruitment. Firstly, strategic planning is needed to define the objectives and goals of the organization. Next, human resource planning is needed to identify the whether there are surplus or shortage of workers or just enough workers to achieve the organizational goals. The objective of recruitment is to attain the number and quality of employees that can be chosen to help the organisation achieve its objectives and goals. It also helps to create a pool of potential employees for the organisation in order for the management to select the right applicant for the right job.
Selection is the process of choosing from a group of applicants the individual best suited for a particular position and organization (Mondy & Noe, 2008). The vital goal of selection is to hire the candidate who is most suitable for the job duties and the culture of the organization. Using the right selection methods and delivering them effectively is important. Human resource managers can determine effective selection tools with the job when job analysis is carefully done.( Neil Kokemuller) Proper selection of candidates can reduce the cost of training because qualified candidate can perform well and achieve organizational goals. Selection can also reduce employee problems in the organization such as labour turnover and absenteeism.
Since recruitment and selection cost are significant, there are some alternatives to solve shortage of employees. The alternatives to recruitment are outsourcing, contingent workers, professional employer organization and overtime.
Outsourcing is when the organization uses an external company to perform task and function of the organisation. Contingent workers are also known as temporary workers, part-time workers and just-in-time workers. When there is not enough full-time employees to complete some task, using contingent workers is a good choice. Professional employer organisation is companies that lease out their employees to organisations for a certain period. Overtime is when employees work for extra hours to deal with a large workload that is temporary. This way organisations save money on recruiting, selecting and training new employees.
2.1 Recruiting methods
Recruitment source is the place where qualified individuals are found (Mondy & Noe, 2008). Recruitment method is defined as the ways in which potential employees are attracted to an organisation (Kleynhans, 2006).
Internal recruiting methods are employee database, employee referrals, job posting and job bidding. Employee database is able to show the organisation whether current employees have the required qualifications for filling the vacancies. Furthermore, an employee referral is when employees mention someone who is capable and suitable for the job opening to the recruiter. Job posting is a procedure of letting employees know there is a job vacancy whereas job bidding is a procedure that employees who believe that they possess the required qualifications to apply for the vacant position.
There are several external recruiting methods. The methods commonly used are media advertising, job fairs, internships and employee agencies.
Media advertising is a popular method. The organisation can put up its employment needs through various advertising means such as newspaper, internet, radio and television. Other than that, job fair is a recruiting method used by employers to attract large number of applicants to one location for interviews. Internship is where students are hired by an employer for a period of time into professional or technical position that relates to their area of study and prepare them for the workforce (Internship Definition, 2008). Employee agencies are organisation that aids to recruit employees and also help individuals to find for jobs.
2.2 Selection process
The first step of selection process is preliminary interview. This step is to eliminate obviously unqualified candidates. The HR manager can conduct this step via telephone, video or virtual job interview. Telephone interview is commonly used as it saves time.
The next step in selection process is review of applications and r ésumé. Evaluation of the applications of employment is done by the employer to determine whether the applicant is suitable for the position.
Subsequently, the organization will administer some test such as work sample, job knowledge, psychomotor abilities test, vocational interest, and personality. Work sample test is used to test the ability of an individual to perform task that represent the job itself. Job knowledge test are used to test the applicant's knowledge on duties of the job applied. Psychomotor abilities test assess the strength, coordination and agility of the applicant. Vocational interest test are used to test one's satisfaction or interest on the occupation. Personality test measures trait, temperaments and characters of the applicants.
Employment interview is the oral examination of candidates for employment. The employer will exchange conversation with the applicants to evaluate them. There are two types of interview; structured and unstructured. Structured interview ask about questions related to the job whereas unstructured interview ask open-ended question. There are also four methods of interviewing which are one-on-one, group, broad and multiple interviews.
Following the employment interview, investigation of the applicants' background and reference are done to determine the truth of information stated. Previous employment, education verification, criminal history and personal reference check are some elements to verify.
Next, selection decision is conducted. This is the most crucial step in the process. Candidate with the best qualification would be recruited by the organization.
Lastly, medical examination is administered to see whether the candidate is physically capable to execute the job functions.
If the applicants pass the whole process successfully, they will be notified to commence work as soon as possible.
2.3 Significance of Recruitment and Selection
Recruitment and selection process is important for an organization to achieve its goals. When the right people are selected, the employee will produce productive results and stay with the organisation longer hence having a low employee turnover. If selection is not carefully done, the employee may make mistake which leads to a financial loss. It also wastes the time of human resource managers to go through the recruitment and selection process again.
3. Case development
3.1 Company description
The company that we have chosen for our assignment is Public Bank Bhd. This company was start up in August 1966 by its Founder and Chairman, Tan Sri Dato' Sri Dr. Teh Hong Piow. Public Bank is a top-tier bank in Malaysia. Public Bank Berhad is engaged in investment holding, stock-broking, provision of related financial services, management of unit trust funds and sale of trust units, underwriting of insurance. Furthermore, Public Bank also emphasises on a wide range of banking services such as commercial banking, investment banking, financing Islamic banking business and card businesses. In the market of banking services, Public Bank is the market leader in consumers banking and retail commercial lending to SMEs in Malaysia.
Besides, Public Bank has about 250 branches throughout Malaysia .The company employs 90% in Malaysia which mean more than 14,000 people are employed by the company and the services that provides in each of the branches include deposit accounts, insurance plans, loans, insurance plan and as well as credit cards. In addition, it has more than 100 overseas branches in countries including Cambodia, China, Hong Kong, Laos, Sri Lanka, and Vietnam. The Public Bank Group has demonstrated powerful capacity of transporting exceptionally high rates of organic growth in its core businesses.
In other hand, this company perform six segments. Retail operations which concerning on transferring the products and services to all small and medium-size businesses. Second, hire purchase operations, the provision of passenger vehicle financing to all levels of customers are being concerned by hire purchase operations. Furthermore, corporate lending operations provide the financing needs of corporate customers. In addition, trading treasury related products and services is engaged in the treasury and capital market operations. Investment banking operations which provide the business needs of business customers. Last but not least, fund management operations which consist of sale of trust units and the management of unit trust funds.
Besides, Public Bank`s banking and management excellence has continued to be accorded prestigious domestic and international recognition. Furthermore, its excellence performance has received several awards granted by highly reliable institution and magazines. These awards included the Best Domestic Commercial Bank in Malaysia by Asiamoney and The Asset, Best Local bank in Malaysia by FinanceAsia and Euromoney, Best Bank in Malaysia by Global Finance and the Most outstanding Annual Report Award. In other hand, Between the 40 mainly well regarded Malaysian companies, Public Bank was ranked at 2 in year 2003. The bank also won the KLSE Corporate Excellence Award for the fourth consecutive year and the inaugural Malaysian Business Corporate Governance Award in year 2003, becoming the standard bearer of good corporate governance practices in Malaysia.
Human capital is the most valuable assets for Public Bank Group. The Public Bank Group is committed in generating its human capital and determine the need for a powerful performance reward system to encourage their employees to perform better by rewarding their employees. Previously, Public Bank Group still stands out as one of the strongest and successful financial services group during the global recessionary economic conditions. Besides, Public Bank Group reward the staff with higher bonus as a result of their excellent performance. The compensation make up of a basic salary of RM 2,800 per month for entry level, other benefits and caring environment for the right applicants.
With increasing online purchasing, Public Bank is now providing internet banking services, PBeBank.com .The security of the internet banking was improved with an alert mechanism that is well-qualified to identifying and diminishing doubtful account activities and preventing unauthorised access. Besides, this internet banking system allows customers to make payment for regular bills. In branches, every customer service delivery is improved with special care counters for senior citizens, expectant mothers and the disabled. Moreover, in each of the branches it provide convenient one-stop assistance for customer enquiries on loans.
3.2 Company recruitment practices and implementation
There are two recruitment methods; internal and external. Public Bank uses both methods but mainly on external.
Internal recruitment method
Promotion from within
The internal recruitment source that used by Public Bank is promotion from within. In general it is a procedure that the manager has stated a promise to consider promoting current employees for an opportunity before employing applicants from outside the organization. One of the employees, Tan Sri Datuk Seri Utama Thong Yaw Hong who was the Director in June 1986 and made Chairman in October 1986, now serves as Independent Non-Executive Co-Chairman of the Board at Public Bank Bhd (Reuters).
External recruitment method
Online Recruiting Method
Public Bank is using external recruitment sources to find qualified individuals. One of the external recruitment source that usually used by Public Bank is online recruiting. Public Bank post their job vacancy on their company website and job search engine such as jobstreet.com.
Besides, external recruitment method that used by Public Bank to attract potential employees is media advertising. The most common media advertising that used by Public Bank to convey their employment needs is through newspaper namely in The Star Jobs section.
Moreover, Public Bank also used Job fair as one of the external recruitment method. Job fair is a exposition or fair that organized by an organization for the purpose of matching job seekers and people who seek for a job. One of the job fair that Public Bank has involved is the "MCTF 12"( Malaysia Career and Training Fair 2012). Before the Job fair Public Bank may posted their vacancy job detail on their website. The detail included minimum qualification, previous employment, communication skill and so on.
Public Bank usually will transfer their employees from one department to another department. And this could bring the benefit of providing a excellent candidates for Public Bank to fill a vacancy.
3.3 Advantages and Disadvantages of Recruiting Methods
Promotion from within
. Because the current employees had gone through the training that provide by company and it take the current employee much less time to become efficiency and effective to the new job because current employee is already familiar with their job, so the current employees is someone who is capable for the empty job in the company. Besides, it is economical. By using the internal recruitment source, Public Bank has eliminated the cost of advertising, interviewing, training and development since the current employee has familiar with their works.
In other hand, current employees have worked for the company for a period of time. So they are able to fit in with the company culture. It is very important because it could help to achieve organization efficiency. For example, employees who can work well with their colleague improve the efficiency in productivity of the organization because a person work in a warm and good culture environment could improve the productivity of the organization. Besides, this internal recruitment practices could motivate the employees. It encourages the employees to work hard and get promoted.
One of the disadvantages of promotion from within is limited choice for the company. The selection of applicants is forced to be done from a limited pool. Due to this, the quality of applicant may need to be sacrificed and resolved in applicants that have less qualification. Other than that, candidates from within do not have a new ideas. Employees from within could not bring in outside talents and skills to maintain new ideas and plans to come in. And this will not make the company grow and improve. Moreover, promotion also can be resulted in inefficiency as it only focus on the service's length rather than value, and it may be a good thing for inefficient candidates as they will not need to work hard in order to prove that they are worth to stay in the organisation.
The advantage of e-recruiting is that it saves cost on promoting company vacancy because it is free for Public Bank since it is placed on their website. Secondly, it is also easy to place an online advertisement. HR Managers don't need an in-depth knowledge on IT since most job sites and CV database are user-friendly.
By using the external recruitment source of online recruiting, it is also time-consuming because it will generate many unqualified candidates. The human resource managers will waste time trying to filter and sift out all of the unqualified candidates. When they are choosing candidates, they will become confused because there are too many candidates.
The reason that Public Bank using this method is newspaper advertising can appeal to a wider audience. Those audiences have different backgrounds, specialized knowledge and experience. Public Bank can refer to their viewpoint and try to apply in their business. It can also help to fill the vacancies fast.
However, there are many disadvantages for advertising too. Advertising will waste a lot of money. It will not be cost-effective. It is also time-consuming because it will generate many unqualified candidates. The human resource managers will waste time trying to filter and sift out all of the candidates. When they are choosing candidates, they will become confused because there are too many candidates.
Through this career fair Public Bank had the chance to meet up large number of applicant in a short time. Besides, this fair allow the employers to meet their potential employee face to face, exchange information and impress them. However there are some cons on job fair too.
One of the cons is during the job fair the environment may be very noisy and overcrowded. This could affect the recruiting process. Besides, it is time consuming, the employers may meet a lot of unqualified employees and it may take some time to filter the unqualified employees.
3.4 Selection Process
After the recruitment process, Public Bank will undergo selection process. Selection means choosing the best individual best suited the particular position in Public Bank from a group of qualified applicants. Public Bank want to make sure that the applicants is properly matched with jobs and organization by selection process. The selection process in Public Bank is done step by step after Public bank recruited qualified people throughout the selection methods.
The first process is preliminary interview. The main objective Public bank do this process is to eliminate the obviously unqualified individuals. Public bank will phone the candidates recruited to have a telephone conversation. In the conversation, the applicants will be eliminate once they are found not fulfill the qualification.
Second process is review application and resumes. Qualified applicants will send their resume according to the jobs they apply. Summary of experience, education, training development must include in the resume for the process of selection. Public Bank will check for the validity and reliability of the resume in different ways such as make a phone call to the university he or she graduated, make a phone call to his or her last company to check for his or her experience and personality.
The third process is having a selection test. In Public Bank, they basically will have cognitive test, job knowledge test and work sample test. Public Bank will give the applicants an IQ test form to fill up, to make sure the ability of applicants and how well he or she can perform a job. After that, Public Bank will give them job knowledge tests to measure how deep their knowledge about the position. After that, Public Bank will create a situation and require applicant to solve it based on their experience. This is the best way to test the ability of the applicant, to find out how applicants deal with the uncertainty and solve the problem with best solution.
Fourth process is employment interview. Public Bank will ask the applicants come to branch to have a face-to-face interview. Basically, the interviewer will ask about occupational experience, academic achievement, interpersonal skills and how well applicants try to fit into the organization. Public Bank will uses both structured and unstructured interview. First ask applicants to introduce themselves, lists out their strength and weaknesses. After that, the interviewer will ask about the job related question. Public bank usually uses one-on-one interview method.
Fifth process is pre-employment screening. Public Bank wants to determine the accuracy of information submitted by applicants. Public bank will checks applicants' previous employment, education, criminal history, compensation history and credit history. The validity of information is very important; this is to make sure they hire the best workers among the applicants.
Sixth process is selection decision, the most important and critical step. Interviewer will discuss with their head of department and head of human resource management to choose the person most closely conform to the open position and organization. Final process is to notify the applicant who being chosen. Public Bank will inform them as soon as possible by email and formal letter.
3.5 Advantages of the practice of Selection methods in H.R management
Save time and cost
When Public Bank does the preliminary interview, it helps to reduce time and effort. This method can eliminates weak candidates and send the high quality applicants for the second interview. Phone call will not cost Public Bank as much as compare to face-to-face interview and effort of interviewer. It is also a way to test for the verbal skills by having tele-conversation. If the applicants cannot perform well in tele-conversation, for sure they will also not perfom well during face-to-face interview which require higher verbal skills include body language, eye contact and movement.
Applicants will be given a selection tests. All the results obtain from the selection test will be standardize and uniform. Hence, it will be faster during make comparison between applicants, directly increase the efficiency of selection process. Other that, structure interview also will increase the efficiency of selection process because the question is similar for the entire applicant such as introduce yourself. By this, interviewer will have a best formal answer and determine which applicant will give the answer most close to the formal answer.
Increase reliability and accuracy
Public Bank will have a background and references checks after face-to-face interview with the applicants. They want to make sure that information given by applicants is not fraud and certificates and documents submitted are recognized by the issuing units. Once the issuing units confirmed the certificates and documents thus prove the applicants have the qualification with proper education background. If records are not found when refer to the issuing units, thus can eliminate the applicant to prevent organization hire the unqualified worker.
Disadvantages of the practice of Selection methods in H.R management
Interviewer may have bias to certain group of people
Public Bank is using one-on-one interview method. This method is quite inappropriate when the interviewer is biased to certain group of people. The performance of applicants is very subjective due to the perspective of the interviewer. For example, when the interviewer believe that man will perform better in banking industry compare to woman, no matter how well the women performance during the interview or having higher education of that area, having more experience, she will still not been selected because of the point of view of the interviewer. This may cause Public Bank lose a better worker thus directly reduce competitive advantage.
Public Bank want to increase reliability and accuracy but in another hand waste time. To check for the validity of certificates and documents, the issuing units need time to proceed. While waiting for the feedback from issuing unit, applicants may search for other jobs. Once they found the information given by selected applicant is fraud, they need to select another applicant and go through this process again. Besides that, by having one-one-one interview method, it takes times to review all the applicants. As we know time is crucial because when the applicants wait for a long time and do not receive any feedback, they may search for other job opportunity.