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In your assessment you should draw upon your reading of the HRM literature, including relevant research. You may also give examples from organizations with which you are familiar. The purpose of this assignment is to identify and discuss the view that recruitment and selection can be used to enhance the strategic priorities and competitiveness of an organization. The report will start by introducing human resources management, define "strategy", and "recruitment and selection" and will then proceed to discuss how these elements can influence each other by illustrating how human resources management (HRM), particularly selection and recruitment, is practiced at Microsoft Corporation and how this is used as a tool to create a competitive edge over rival firms.
Companies throughout the world, make every possible effort to reach a form of predefined targets, being financial or philanthropic. In order to achieve their missions, organizations perform strategic plans which require a deployment of vast amount of resources to be implemented. All these resources need to be properly managed in order to reach the final outcomes targeted by the organization. Resources can be classified as human, material and financial. Out of these three, human resource management is vital and notoriously the most complicated to administer, because of the uniqueness of every human being bounded to have dissimilar traits. Furthermore, HRM is considered vital, as it is these same human beings that will ultimately control and coordinate the other organizational processes. Having an effective working group is thus indispensable for the success of implementation of the organization's strategy.
Strategy can be defined as the direction an organisation takes over the long-term in order to achieve competitive advantage through its configuration of resources within a challenging environment. The strategy an organization takes must take care of matching the needs of the industry with the capabilities of the organization. (Johnson and Scholes, 2006)
The strategy content of an organization is developed at three levels, the corporate level, the business level and the functional level.
Corporate level strategy is "concerned with the overall purpose of an organisation and the way value will be added to the different parts of the organisation" (Johnson and Scoles, 2006). Corporate level strategy will make decisions as to which markets to compete in, or whether the organization wants to go global, or the way the latter may be achieved, e.g. by evaluating between merger or acquisition of new businesses, or additions or disinvestments of business units and joint ventures.
The second level of strategy is concerned with the business development, that is, how a company should compete within its market for customers. Business strategy deals with marketing activity, that is, it enters in which products should be marketed for which segment and how to achieve advantage over rival firms. Strategic decisions at this level concern the amount of marketing, extent of research and development, new product development, expansion or contraction of product lines etc. (Johnson and Scoles, 2006).
The third level of strategic decision-making is at operational level. This is indispensable as it ties the internal and external strategy at each level of aggregation within the firm. This functional level strategy is concerned with how the component parts of an organisation should support and manage the business level strategy. That is, how a company should actually operate, implement and control its activities within the organization to meet the goals and objectives set. In spite of the vast experience of many large organizations, it is always a hard task to implement strategies and plans into individual actions essential in achieving superior business performance. Most organizations may have the correct strategy however they may fail in truly motivating their people to work with enthusiasm towards a common corporate goal. This is where human resources management comes into action. HRM refers to the design and application of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. (Jackson and Mathis, 2001) Its primary activities are to attract an effective workforce to the organization, develop this workforce to its maximum potential and maintain the workforce over the long term. (Fisher, 1989). The basis of human resources management is that the individuals are treated as key resources rather than an expense. The human resource principle has thus parted away from the long-established hire and fire role to focus on employees as strategic partners. The task of HR is to ensure that the company gets the most out of its investment in its people. HRM can be described as a tool used by organizations towards motivating employees to reach corporate aims. This leads to the definition that workers are assets within a company, and are potentially a source of sustainable competitive advantage rather than an expense on the balance sheet. Thus, central to the HRM employment movement are motivation rather than compliance, communication rather than imposition, training and development rather than repetitive work, and leadership of employees used to create a circle of commitment, flexibility and quality of workforce within the organization. This creates an involvement of satisfied and loyal employees which nurture a sense of commitment and identification with the corporation's goals. Successful HRM can only be initiated by having the right people with the right skills and abilities deployed in the company; this is where recruitment and selection comes in action. Once the corporate strategy is set, a gap analysis of where the company is compared to where it intends to arrive will specify the amount of work needed for the company to achieve the prescribed tasks. Concurrently, by setting up a knowledge map, an organization may assess the knowledge and capabilities lacking to execute the strategy. (Zack, 1998) If the organization's human resources is short of competences in the form of capabilities or knowledge, the gap can be narrowed by either training your workforce or by hiring. Through organization reviews, an assessment is undertaken to determine whether the incumbent employees can be trained to achieve the level of capabilities required or whether it is more reasonable to recruit employees to align the capabilities with those needed to perform the strategy. If the company decides that the latter is the best solution, it is the primary goal of HRM to attract individuals that are most suitable for the post in hand and who ultimately show progressive signs of becoming valued, productive and satisfied employees that can help the organization meet its targets. As a consequence, recruitment should not be considered as just a simple selection process, but requires extensive planning to employ the appropriate candidates capable of fit in the organization and improve the company's performance. The process of recruitment does not end once the selection is complete but involves maintaining and retaining the employees chosen.
Selection and recruitment
Recruitment and selection policies thus stem from strategic human resources management and act primarily within the operational level strategy. The recruitment and selection of staff is paramount for creating the foundation of an HRM policy and subsequently to effectively implement the organization's strategy.
Once the strategic gap analysis between 'where the company intends to arrive' and 'where it is now', confirms that new workforce has to be brought in the company, the human resources has an arduous task of recruiting and selecting the best employees that will bring in fresh verve to accomplish the company's goals. The first thing to do when a vacancy is confirmed, is to have the post's job description established and the requirements a person should have to fill the vacated post. If an organization does not select and maintain the right type of employees, its days are numbered. The recruitment and selection programme deals with looking for new employees that are ready to achieve the corporate aims. It is the whole process from identifying a vacancy, to notifying the successful candidate. Dowling and Schuler, (1990) define recruitment as "searching for and obtaining potential job candidates in sufficient numbers and quality so that the organization can select the most appropriate people to fill its job needs." The main objective of selection and recruitment is to hire the correct employees for the organization. This is essential as people drive organizations into success. Recruiting process requires also looking for those individuals whose needs fit in the organization and in the job and have the ability to go along with co-workers. Survey research shows that careful selection is the best method to retain front line employees and subsequently diminish labour turnover. (Charles R-Green, 2000) It is widely accepted that turnover should be avoided as it increases costs on the organization while inducing a lowering of spirits in the existing workers. Discontented employees are unlikely to give of their outmost, and end up either leaving or offer less flexibility and commitment to the organisation. This is a deterrent to the organization, which will then have to restart the process again and spend further effort on other recruitment exercises, when what was required in the first place would have been a methodical process to review the role to be filled, and the type of knowledge, skills and abilities needed to fill it.
Selection and recruitment may also be required to overcome the changes occurring in the labour market. If recruiters are not synchronized with changes happening in the labour market, shifts of labour may occur between organizations causing unpredictable skill shortages. These shortages may be a blow to the organization's competiveness as it may affect its core competence, one of the most precious intangible assets that organizations are founded upon. Thus, organisations apart from constantly monitoring the future recruitment needs necessitate a formulation of the labour market trend and constantly update training programmes to reflect this trend in order to develop a flexible workforce capable to meet the changing market requirements. Skills' audits and training will eventually aid the company to have more internal recruiting options, thus avoiding expensive outside call for applications and giving away its core competence to rival firms which may generate an adverse effect on the company's profitability. Still, external calls may not always be avoided, especially if the company undergoes a diversification strategy or a gap between strategy and strategy implementation has resulted as mentioned before.
Implementing strategies may require culture changes. The process of selection and recruitment can also be considered as a very powerful tool in shaping an organization's culture, or in planning a culture change in order to implement the organization's strategy. Organizational culture refers to the views and behavioural patterns shared by members of the same organization. (Shein, 1985) As people within a group interact and share experiences with one another over an extended period of time, they construct a joint understanding of the world around them. This narrows their defined patterns of behaviours. As such, organization culture can strongly influence organizational performance. Historically, the notion that organisational culture and performance can be linked together, traces back to the Hawthorne Studies (Roethlisberger & Dickson 1939). Contemporary writings and empirical literature investigations sustain the contention that organisational culture is a significant key to the success of an organisation. The first explicit investigation of the effect of organisational culture on performance was undertaken by Silverzweig and Allen (1976). Since then, large scale quantitative studies have been undertaken, with a wide variety of studies indicating that culture and performance were highly correlated and that the performance of organisations can be in part attributable to a constructive organisational culture (Wilderom, Glunk & Maslowski, 2000). Thus, effective management of organisational culture is a significant tool that can be used to enhance performance. However managers cannot easily manipulate culture as the latter is largely determined and controlled by the members of the organization, rather than the other way round. A careful selection of recruits may be a source of managing the organization's culture. By an introduction of recruits that reflect the organization's cultural aims, organizations can facilitate management to do things in a different manner than what have been done previously and even in a different way from competitors facing the same environmental constraints. If the latter can be attained, a source of competitive advantage may result. Contrariwise, a company may already have an internal culture that is proving fruitful and it may just need to reinforce it. In this latter case, the process of selection and recruitment needs to filter those individuals who are set to destabilize the present culture.
In summary, vacancies may therefore take place as a consequence of a resignation, to cancel the strategic gap, due to market turnover or the formation of a new post or department. The latter may result after the organization may notice that in order to reach its strategic priorities some departments still lack the necessary human resources. Thus, recruitment and selection is the foundation of the initialization of strategic change, essential to the implementation of strategy. This is notoriously one of the main aspects of selection and recruitment, as it is used as a device to implement change. That is, if the organization is looking to become a leader in customer service, it needs to select recruits that are predisposed to become high performers in this aspect. Recruitment must therefore take into consideration the traits of the various individuals and only those individuals who are prone to deliver this type of service should be selected. Moreover, the program of recruitment and selection is an effective way to reinforce the culture within an organization as it can preserve and underpin the core culture and values the organization requires. It can also be used as a tool to initiate and sustaining corporate culture change. This is what is done at Microsoft.
Selection and Recruitment at Microsoft
Microsoft is globally renewed for its software packages installed in almost every personal computer around the world. Its global economic success was reviewed by every financial newspaper in the world. Yet few have looked at Microsoft from a human resources perspective. While other organizations base their leadership on cost cuttings, on improved technology, on focus strategy or on differentiating the final product, Microsoft, from its very initial stages, based its success on the effectiveness of its human capital. Microsoft employs human resources as a source of competitive advantage. They base their success on recruiting the elite people in industry and work hard in stimulating them to excel. Several times was Bill Gates quoted to express this principle, "it is the effectiveness of our developers that determines our success..." Thus, central to the Microsoft's management principle is that employees are their greatest value added to customers. Subsequently, how employees should be managed is one of the main themes at Microsoft. This clearly includes how they recruit, select and retain their human assets. In fact Microsoft has some elaborate recruitment and selection processes focused to employ the best talents that reflect the original ideals of the founders.
Bill Gates, the founder of Microsoft, and co founder Paul Allen, believed that by hiring the most innovative and intelligent people in the IT sector would prove more beneficial to their overall scope rather than by hiring on just experience or skills.
As a matter of fact, the first recruits at Microsoft were the brightest students they knew at school who were still inexperienced in the occupation sector. As Microsoft expanded, its recruitment strategy always reflected such a viewpoint and selection preference was always awarded to the sharpest students from the new IT graduates. Initially, the recruitment included initial selection of graduates from the leading universities such as Harvard, Yale, Carnegie Melon and Stanford. Once chosen, these alumni would experience a methodical selection through a series of interviews by Microsoft employees. The tough interviewing process would test the problem solving abilities with graduates faced a number of problematic scenarios and tested on their ability to come up with creative solutions. These interviews were pushed to the limit such as to test the amount of stress interviewees were capable to withstand. If interviewees succeeded this amount and type of pressure during the interviews they would succeed in the Microsoft's competitive and stressful environment. If this interview was successful, the interviewee would meet his prospective manager so that the latter can have a one to one interview and decide whether the interviewee can be given employment. A third and last interview sealed whether the interviewee would be given employment with Microsoft would be taken by a third independent person. This interview was necessary to cross-check whether the chosen individual represents Microsoft model employee rather than being chosen because of other causes, like desperate need of new recruits to fill long vacant posts. During this selection process Microsoft ensures that the manager responsible for the interview is of the same section where the element will be deployed and makes sure that the interviewee is not deceived by the interviewer as they believe that this can form negative impressions that will affect the recruiter's performance within the company. This mutual respect and trust is considered important as Microsoft basis its motivation criteria on the prospective that the section and environment provided will give sharp individuals the opportunity and facility to develop their skills beyond their current level, thus enabling them to excel in completing challenging assignments and fulfil their ambitions.
As the company expanded, and the number of new entrants could not be found from just universities, Microsoft continued on the same principles. They continued to devote resources in recruiting the right type of person rather than looking for the amount of experience or skill. Once an individual was recognized as highly talented and apt to fit in the Microsoft structure, discretely the organization would keep regular contact with the individual, being at conventions, invitation to formal dinners or telephone calls. This was intended to keep a form of contact with them most talented individuals in the sector. Microsoft would then be prepared to offer contracts to the most talented employees when companies would be laying off workers due to downsizing or closing down. This exercise was influential in Microsoft's strategy and lead to an advantage over competitors, as the latter where giving away their most talented without knowing that in fact they were strengthening their opponents! A case in point is when AOL downsized its operations. Once this downsizing was enunciated, Microsoft gathered a team to identify AOL best talents and these were offered a recruitment opportunity. If AOL's HR database was actually as up to date as Microsoft's, they would have not been reinforcing Microsoft by giving away their best talent. This occurred at Microsoft because they knew where they wanted to be in the future. Their corporate strategy was clear and they were using selection and recruitment to achieve this strategy. This aggressive head hunting technique from the HR department was synchronized with Microsoft's focused approach in reaching the corporation's ultimate goal - that of adding value to the company rather than searching for short term balance sheet profits.
Microsoft selection and recruitment does not end once an employee is offered a contract. The company aims in retaining its best employees by adopting HR practices aimed at motivating their workforce via self actualization and empowerment. Microsoft assures that all employees understand the corporation's objectives through its strong culture, and then through human management programs it ties their assigned tasks to the overall corporation strategy. This is given great priority as Microsoft's management believe that employees are more effective and motivated when they are aware of how their effort is aligned to the overall objectives of the company. This is in line with Maslow's theory of self fulfilment needs. The continuous development of the self in the organization provides stability and pride to the employees who in turn provide the possibility for the organization to attract, develop and maintain top quality employees.
We have seen how organizations formulate strategies to aim at competitive advantage. Once an organization identifies a gap between its strategic goals and its implementation process, this has to be minimised or better still nullified through restructuring, changing operational processes, altering work practices, or culture change. Managers have the responsibility for a smooth running of their strategy formation. However, no matter the plans, analyses and long meetings organizations can make to implement a formulated strategy, if there is a lack of human resources this strategy implementation cannot be initiated and sustained. Once a numerical constraint in employees is established or fresh elements are considered important to initiate change, a process of selection and recruitment needs to be immediately set off. Consequently, recruitment and selection can be considered as the preliminary stage of strategy implementation
The importance of ensuring the correct selection and recruitment of candidates to join the serving workforce has become increasingly apparent as the emphasis on people as a prime source of competitive advantage has grown. Environments faced by firms are becoming similar, hence to be distinctive and gain competitive advantage organizations seek to add value through being different internally. This means that the way internal resources are selected, configured and nurtured is becoming increasingly significant. Strategic Human Resources initiatives base their quest for competitive advantage by building on the strengths of their organization's 'greatest asset', - its workers. This is precisely why organizations work hard to attract and retain the best and brightest employees to achieve their objectives. Strategic Human Resources interventions focus on the fact that the uniqueness of the organization's workforce enhances competitive advantage as their outcome is difficult to imitate. Competitors can copy your technology, market penetration or product but cannot reproduce your staff. Successful organizations do not define return on investment on just profit and loss, but consider also the development of their human and intellectual capital. We have seen how this concept is clearly expressed at Microsoft, where employees are given a central role, being considered as the artefacts of the company's successes. It structured its organization in a way that rather than erect barriers to knowledge, it supported its recruits with a culture of learning, commitment and collaboration. This investment in recruits supported by learning and empowerment are the ingredients used by Microsoft to implement its strategy. It also helped Microsoft to achieve a greater stability in its workforce, which minimized labour turn over costs, which sequentially increased productivity and morale. All this contributed in strengthening the organizational culture and made Microsoft one of the workplaces where the best programmers aim to work with. This operational strategy at Microsoft, geared by HR practices proved a winning solution towards achieving the goal the corporation had predefined.
We saw also how selection and recruitment can be used to get the right people together from outside to match the attitudes and skills that are required by the corporation, maybe to narrow the organizational knowledge gap, or to initiate change. Organizations that do not have the ability to execute their strategy must either line up their strategy to their organization's competence and capabilities or obtain such capabilities from recruitment.
Recruitment can also help in promoting diversity and getting the benefits of independent thinkers coming from different segments of society, who by having different perspectives in the thinking approach and lifestyles can be functional in solving complex organizational tasks.