Human resource management relates to the policies, practices, and systems that influence employees' behavior, attitude, and performance (Noe et al., 2008). Managing human capital has emerged as a burning topic in this modern dynamic business environment. Company must deal successfully with the environmental challenges such as sustainability, globalization and technology to create and maintain value. Over the last two decade, researches have explored how companies handle their scare resources in order to mitigate the future uncertainty and threats of ever-changing environment. Among the several views to analysis the organizational performance, the resource based view of the firm has played a crucial role in providing solid theoretical agreements to explain how a firm's human capital, as an idiosyncratic resource that is difficult to analyze and imitate , can be a source of competitive advantage (Martin-Alcazar et al. 2008). HRM is a broad phenomenon including many HR dimensions such as staffing, recruitment and selection, compensation, performance assessment and socialization policies.
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This assignment tries to underpin within an important dimension on the recruitment and selection methods, procedures and systems that directly impact on organization in order to achieve overall objectives and goals. Recent globalised business scenario reveals firms need to familiarize with the way to minimize the errors in employee selection and placement.
(Example 1) the biggest corporate scandals such as Enron, WorldCom have shown to the new ventures to scan the potential candidates before recruitment (Lynch, R., 2005). Needless to say, employers have a challenging task to select the appropriate staffs in appropriate place. However, company could be evaluated many employment policies, practices and decision that desperate impact of their group of employee before they are implemented.
In the early corporate culture, selecting employee was not a big deal. Despite the current economic downturn, the "talent crunch" continues. Manpower Inc.'s 2009, Talent Shortage Survey reported that 30% of employers worldwide had difficulty finding qualified candidates for open positions, citing a "lack of suitable talent" (http://www.manpower.com). However, companies use verities of strategy for hiring, retaining and maintaining to their work forces. Managers should know some generic standards of selection methods and its rationale to motivate and maintain employee turnover ratio. New dynamic business culture exemplifies that the key success throughout the organization is to integrate the both suitable talents and stakeholders expectations' by Employee- Business Partnership (EBP).
(Example 2), John Lewis Partnership, an English trust-worthy and unique largest employee co-operative company with over 72,000 partners, has one of the UK's top ten retail businesses with 27 John Lewis department stores, 201 Waitrose supermarkets and John Lewis direct (e-shopping site). The John Lewis Partnership aims to ensure that everyone who works for it enjoys the experience of ownership by sharing profits, having access to information and by sharing in decision making. (http://www.johnlewispartnership.co.uk).
2. Theoretical Framework of Recruitment and Selection.
This section is intended as a brief review of the varieties of human resource management literature focusing especially on acquisition and preparation of human resources.
Human resource management consists of a process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety and fairness concerns. Recent trends have shaping for acquiring employees and thus these are perhaps more subtle. These trends include globalization, technology, indebtedness or "leverage" and deregulation, economic challenges, and the nature of works and its demographic changes. (Dessler, G., 2011).
Managing employees without dispute has remained as challenge for a modern manager unlike machine, finance and many more intangible resources. According to Sir Richard Branson, Virgin: "Customers don't come first employees come first. If employees are treated right, then service will follow.
Everyone knows that the ever-changing technology directly impacts organizational HR strategies. (Example 3) Amazon.com works its worldwide distribution its products/goods via e-shopping. In such a situation, selecting intellectual personnel may be a crucial job who explores their innovative activities throughout the company. Thus, Steven M. Venokur (2009) addressed that skill management which is a process of manage and leverage organizational talent. Most importantly, demographic trends make complicated for finding, hiring, and supervising workforces more challenging. A study of 35 large global companies' senior HR managers recently said talent management put top concern in particular the acquisition, development and retention to fill the companies' employment needs (Dessler, G., 2011).
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Former CEO of General Electric Jack Walch defined the best people not as the best performers, but as the best fit for a globalised, cross cultural environment. According to the Autal Vashistha in his recent published book 'Globalization Wisdom: The seven secrets of Great Globalizes illustrates that recruiting the best people to help roll out globalization initiatives throughout the company with the best people at the helm, the globalization initiatives can find strong support at all levels of the organization. (http://www.neogroup.com).
The importance of human resources in an organization has shown that manager needs to take several precautions to select the right people in right place. After the appropriate alignment of strategic human resource planning, companies develop specific recruitment and selection methods, procedures, tools and techniques which are based on the categories of jobs like skilled, semi skilled and non-skilled.
The primary purpose of recruitment includes identifying and attracting potential employees as the sources can be internal or external, direct or referral. However it does not mean that simply generate large number of unqualified applicants which incur huge expenses in personnel selection. Influencing appropriate candidates and selecting them using several generic standards of selection process especially focus on five: (1) reliability, (2) validity, (3) generalizability, (4) utility, and (5) legality (Noe et al., 2008).
Once reviewing applications, companies interview likely candidates and decide whom to choose. Therefore, it is an important task because of the performance, and legal obligation which pinpoints organizational sustainability and corporate governances. Make friendly working environment for new employee and minimizing errors of hiring new employee, company uses several selection devices such as application firms, interviews, cognitive and interest test, or physical abilities and so on. (Example 4) Generally restaurants hire employees via interview only whereas firefighter's job applicants must pass the physical endurance tests as well as cognitive test as needed which must demonstrate the validity of selection device (Robbins et al., 2011).
The new venture often applies the solid methods of selection process because of the rapid change business environment. Therefore, we need to know that the traditional method of selection like interview along with the emergent devices such as psychometric test, computer simulation and so on. Personally speaking, most deep rooted problem is validity either the interview or paper and pencil selection method. Most measurement of employee selection deals with their characteristics like skills, knowledge, attitude, personality, leadership, and intelligence ability. Selecting employee via interview only can often be too reliable and valid tools for measuring performance whom has done clerical jobs whereas the managerial jobs need to judge overall through variety of measures like written, performance-simulation tests, as well as behavioral interviews. However, a high scorer of written test is not necessarily good indicators who will perform well as a web developer. Undoubtedly, well constructed simulation tests should be a better predictor which provides identical job contents (Robbins et al., 2011). Any selection tools that vary from company to company typically based on selecting time and cost factors, acceptability and appropriateness of the methods, and ability of the staff involved in selection process and administrative ease along with the organizational size and sector (Torrington et al, 2007).
3.0 Methods of Selection and Its Implications.
The bottom-line of HRM proposed the specific direction of the people. In order to achieve mutual goal between the employers and employees, manager needs to select to the prospective staffs. Company have formulated own policies and practices to manage the personnel in accordance with the environment of situated countries. Although, some generally accepted methods are briefly described as follows.
Methods in recruitment and selection
Paper & Pencil /Test
Steps in recruitment and selection process
Source: Dessler, D., (2011). Human Resource Management, 12th Edition, Pearson: England p178.
3.1.1 Application forms: In spite of the boarder importance of HRM some conservative companies have not used any the appropriate methods of selection due to fear of high costs and managing tensions. They have developed own application forms and fill for contact the person if any circumstance occur in future. Later on, in addition this forms, some other assessment and cognitive tests have began for finding to right people. (Example 5) A telephonic conversation with the director of a trekking company owner in Nepal, named Mr. Pandey, has described that for hiring new unskilled staffs such as foremen, messengers, trekking porters, cooks only submit application from for personal history purpose while selecting the tour guides need special speaking skills along with knowledge about history of the places. Lastly he added, "I am a small entrepreneur and can't afford the recruitment and selection cost". (http://www.mountainleaders.com). In order to minimize cost, most of the small to medium enterprises have also practiced to hire part time staffs using referral method in UK.
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3.1.2 Internal/referral: Internal recruitment refers recruiting the working candidate either own or different departments/branches within the same group of companies whereas the referral involves the people come via reference by current or existing staffs. (Example 6) UNESCO is an organization of approximately 2000 employees, including 831 International Professionals (P Staff) as of 1st May 2008. In the evaluation of the UNESCO's recruitment policy and practice has found that the turnover of staff is quite low however when turnover occurs in around 70% of the cases, an internal person takes the posts with half of those internal placements (Perrin, B., et al, 2009).
3.1.3 Interview: Interview tries to find out the persons behavior, attitude and problem solving skills with oral responses either structured or unstructured interviews. More often, a structured interview tends to be more validate and reliable than unstructured. Because of the structured guidelines and pre-planned questions on job related subject areas in advance, managers may use some set of criteria to predict the candidate's performance to enhance job relatedness and reduce the potential bias (Dessler, G., 2011). In our real life, there are several examples of structured interviews from SMCs to governmental organizations. (Example 7) the US department of homeland security, has been used the structured officer programs applicant interview form. It includes three areas like overall impression, performance of duties, and communication skills with seven different rating systems (http://www.gocoastguard.com). There are some contradictions for the types of the interview questions. Generally, situational, behavioral, and job- related interviews are most important to measure consistency of selection (Dessler, G., 2011). Due to technological advancement, most of the companies practices to panel and phone interviews. However, some researchers have blamed that only interview occur more error because of snap and non-verbal judgments than paper and pencil measures.
3.1.4 Paper and pencil /Testing:
Some HR management text books are illustrated the important issues of test validity on employee selection as criterion-related validity, content validity, and construct validity. Basically tests include psychometric test, cognitive abilities and so forth.
Psychometric tests are becoming popular due to more validate and reliable for predicting the persons behavior with the related jobs. Recruiting above the first line manager candidates may require fulfilling target score form the test. However, some critic of computer based human made software may be resulted errors.
(Example 8) Capital One financial used three paper and pencil test like cognitive, job history and math test which resulted to hire more validate employee (Dessler, G., 2011).
Besides these, Computer online hiring methods are recently emerged. Companies have advertised vacancies on web sites (Example 9) Fedex has using the online and offline computerized test (Dessler, G., 2011). For some cases, they use social networking sites (SNSs) like Facebook, Myspace have become extremely popular to influence employees (Kluemper, et al, 2009). After collecting information about the person, companies are improving employment decisions. By submitting their resume as well as online questionnaires, computer software may take psychometric or interest test and provide the likelihood outcomes. It may help to human resource managers to select enthusiastic, motivate and honesty employees.
Interview, internal hiring, referral or even combination of aforementioned methods, an employers, agencies or public hiring commission must demonstrate the validity of selection method. Mostly, the validation process consists of some steps such as analyze the job, choose and administer the tests, relate the test score and criteria and then cross validate the test periodically (Dessler, G., 2011 pp 219-223). In a nutshell, candidates may like test but the company make sure these tests should fair with follows good practices like reliable, privacy, and so on.
In developed countries like USA, and Canada, Human Right Acts prohibits the discrimination on the basis of race, gender, region, age, marital status, sex, physical and mental disability, or national origin (Robbins et al., 2011). However, some countries still have seen the gap between the laws and its practical implications. (Example 10), Public Service Commission (PSC) in Nepal recruits only permanent basis government officials. It advertises and organizes the written test and for the final selections it processes the interviews. Recently PSC has announced the new polices for the reservation seats to different sectors like the ethnic minorities, geographical representation, and gender reservation (http://www.psc.gov.np). Therefore, we can say that the HRM practices are not same globally.
4. Critical Analysis of selection validity and alternative measures
The universal device of selecting employee is interview along with the application form. The irony of this is that the value of an interview as a selection device has been the subject of considerable debate (Posthuma et al, 2002).
Some barriers of selection methods and its validity include:
4.1 Group difference of testing
Socio-cultural issues have greatly impacts on the ability of firm to hire. The different groups of people have different opinion upon the same type of test. Company wants to fill critical skill gaps by selecting the capable, self-motivated, flexible, multi-skilled concerned with the matching characteristics of the person to the values and culture (Robbins et al., 2011).
4.2 Selection fairness and testing
The fairness of the selection methods are the more academic interest. Most of the companies Interviewer behavior affects the interviewee's performance and rating (Dessler, G., 2011). Some interviewers are unable to formulate the related question of subject matters whiles other are smart to drawing out the attention of the prospective employees. Some news of unfair practices of selection procedure has frequently seen in the developing countries. Some commission has been losing the public verdict due to lack of transparency of selection and the testing criteria. (Example) Nepal bank limited
4.3 Types of workforce
The type of work forces have affected the work performance in terms of age groups such as Baby boomers (born between in 1646-1964) , Generation X (born in 1965 - 1977), Generation Y (born in 1978 to 1994). Researchers have shown some facts and figures that majority of baby boomer i.e. 41.5 % has hold the job market whereas the Generation Y has only 24% whom are savvy , flexible , productive, and quick decision maker (Robbins et al., 2011). The changing behavior of the employee's and their working patterns provide the wide range of options for validating the selection process.
4.4 Work force diversity
Racial, religious, and ethnic minorities have spent centuries battling discrimination while attempting to convince others of the negative effects it can have on their lives (Thiederman, 1991). Such ideas has formulated some laws and regulations in USA like Equal Pay Act (1963), Age Discrimination in Employment Act (1973), Civil Right Act (1991) and so forth for combating the discrimination (Robbins et al., 2011). As a result, toady's companies must ensure that selection and recruitment process must be made without discrimination to age, sex, race, color, disability, and national origin. (Example 11) UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence (http://jobs.undp.org). In addition to this, US projected annual labour force growth rates has shown as per below graphs which are the affirmative action programs in the diversity to change.
Importantly, we have seen that the Asian and other labor force are projected to increase most rapidly. By 2010, the Hispanic labor force is projected to be larger than the black labor force, primarily because of faster population growth (http://www.bls.gov) and special reservation for minorities.
Internationalisation of work force brings cultural compositions and increases work force diversity which directly affects such as recruitment, selection and orientation (Robbins et al., 2011). Thus, modern managers need to highlight the key issues for managing diversity. (Example 12) London Evening Standard, a national daily newspaper has published that more than 90% of high executive level jobs relying on current workers referral as a source of candidates in September 2010 while 60% of officer level jobs by recruitment agencies. The most popular practices to hire employees are turning non-traditional recruitment to modern procedures like women's job networks, urban job banks, over-50 club, and gay organisations to increase diversity.
5.0 Factors affecting the selection validity
5.1.1 Time and cost factors: Selection validity directly depends upon the time and cost factors. Company needs to appoint personnel at right time with capable person. Selecting the different tools may consume time as well as waste money. If the company uses interview as well as paper and pencil measure, it may increase the costs. Thus, before using the selection methods, human resource panning may help to reduce the cost with efficient use of resources. It also will be administrative ease.
5.1.2 Acceptability and appropriateness of the methods.
Selection of appropriate methods may affect to validation of the testing of the employees. The method and its acceptability by trade unions and employees could be critical issues. To mitigate the future uncertainty, companies have used a number of strategies to deal with disproportionate outcomes from selection testing (Scroggins, et al, 2008).
5.1.3 Ability of the staff involved in recruitment and selection process.
Selection processes involve several stages as shown above diagram. Involving the staff's perception will be in each steps will be procedures The abilities of the committee member will be a crucial factor for listing appropriate candidates which may occur to lower outcomes of employee performance.
5.1.4 Organizational size and sector.
Another problematic issue has shown organizational size and sector. Obviously, organizational size greatly affects the selection methods. There are some reasons that might vary staff selection criteria from large corporations with the small to medium enterprises (SMEs). Large corporations may have greater brand recognition with more vacancies which might attract number of candidates. They also may use formalized selection process with adequate budget whereas small or medium organizations squeeze in terms of budget, administrative ease, and other procedures.
Whether the organization large or small, the sectors may drastically affect the selection processes. Research has shown that interview were used more financial sectors than industrial sectors and that service sectors made more use of formalize selection methods than industrial sectors (Zibarras, L.D., & Woods, S.A, 2010 Pp 4).
4.1.5 Legal obligation.
The last but not the least important factor is legal obligation. (Example 13) The UK Boarder Agency has stopped accepting Tier 1 (general) application made from overseas. It shows that government wants limited number of professionals (http://www.ukba.homeoffice.gov.uk). So, we can conclude the legal procedures of the nation will be affected to the company hiring policies and procedures.
Despite of above obstacles, companies have been used to number of strategies to deal with the selection validity. Due to global work force diversity, they either hire from abroad and/or out-sourcing their activities to maximize the value of the firm and build shareholders confidence.
It is very difficult for reliability and validity of selection by separating the tests and interviews. Minimizing the turnover ratio and retain the intellectual properties, company should prepare own hybrid method of selection considering both paper and pencil measures along with interviews. However, the time and cost may be high for using both tools to hire.
Formulate and apply the HR practices that managers should know about the legal context to manage work force ethically. In order to retain intellectual properties, company needs to create high performance work culture by focusing critical issues.
Integrated these methods into practices is the important part of validation of selection within the organization and the positive benefits that may be derived by implementing training and development that enables the company to maintain sustainable competitive advantage through people, process and technology.