The Methods Used For Deciding Employees Commerce Essay

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An organisation's decision to choose the methods to obtain the best needed employees and to place them in the right job to meet the company's short and long term business objectives should be effective and this makes selection a critical function of effective Human Resource Management. Unless appropriate employees are not selected, the organisation will not succeed in achieving its strategic objectives and this will lead to personnel problems like high turnover, low productivity, and high rates of absenteeism and employee stress (Storey, 2007).

Organisations use selection methods to collect more information about applicants and these can be gathered from self reports like resumés and applications, tests and work samples. Evers et al (2005) talks about the 3 phases in decision making such as who makes the decision, what factors affects their decisions and what challenges they face when they make these decisions. Usually the decision makers vary from personnel specialists, line managers, supervisors and team members to external agencies, consultants and even customers.

Traditionally personnel specialists held a key role in the selection process, but as HR issues like short listing interviewing and administrative procedures are progressively more delegated to line managers the focus has been shifted to providing specialist advice, training and evaluation of selection effectiveness (Torrington and Hall, 1995). Consultants can also provide packages which can offer training support and improve selection process, retaining interview at centre stage. Beardwell and Holden (1997) says that with the changing circumstances, where there is growth in work contracts, employment agencies traditionally used in selection of both temporary and permanent workforce, would be relied more. Occasionally organisations offer opportunities to the customers to select the new workforce. For example, South West Airlines involves some of its best customers in the hiring process of the flight attendant crew (Pfeffer, 1995, Storey, 2007).

Once the significant decision makers are selected, it is important that the internal and external environmental factors that affect the selection processes have to be identified rather than sticking to personal notions about different candidates. Efficient decisions must be carried out to identify whom to hire and how, within the legal boundaries set forth in equal opportunity legislation. Typically all selection methods attempt to recognize the applicants who have the highest probability of meeting an organisation's standard of performance.

Ivancevich (2007) says that rather than just using effective selection methods on the basis of candidate quality, the methods should be an optimal match between the job and the amount of any particular characteristic that the applicants possess. Therefore the organisation should try to identify and decide which method is most important for each circumstance.

Generally the popularity of selection techniques is determined by the accuracy and validity level at predicting who is suitable and unsuitable for the job (1997). People who do well in any of the selection methods used by the company should be capable of doing the job well. Beardwell et al (1997) also say that the most popular methods, interviewing and references are sometimes less accurate and the assessment centres and testing which are increasingly used 'in addition to' rather than 'instead of' interviews, help to improve the accuracy of the selection process.

Although the combined use of these methods have a potential advantage of gathering more information about the candidate, and therefore increase the accuracy of the whole process, facts shows that this benefit is not always exploited. According to the IRS survey (1991b:2) the interview was considered most important method to make a selection decision. 85 % of the organisations depended on interviews as the key determinant of the best candidates, whereas only 6% accounted for assessment centres and merely 3% considered tests to be the best selection method (IRS, 1991b). Bio data was also not considered as the key selection method by most of the organisations. Nevertheless combining these selection methods to source information about candidates increases the validity of the decision criteria and this way the hiring decision process is fairer (Noe et al., 2004).

The strength of a decision is dependent on the validity of the selection method and one method of measuring this is by comparing the people's scores on any particular method with their job performance. Schimdt and Hunter (1998: 262) found that using hiring methods with increased predictive validity leads to considerable increase in employee performance. The consistency between a high score in a test and the successful performance of the relevant job can be used to figure the validity of a selection method (Noe et al., 2004). For instance, organisations can find out how an applicant will react to a probable problem from the scores of the relevant tests conducted. Noe et al (2004) also mentions that using a generalized method can be valid as this applies to most jobs and organisations especially complex jobs.

The more valid a method is the more practical it will be too (1998). The utility of a selection method is crucial to an organisation as it determines not just the future performance of an individual but also predict how an organisation will benefit from this. Since factors like costs and duration of the selection process also play a significant role in decision making, methods that provide an economic value greater than the cost of using them are said to have utility. (Noe et al, 2004; Schimdt et al, 1998)

The cost of a wrong selection is always high and the more important a job, the greater the cost of the selection error (Aswathappa, 2007). For instance, 'Barclays Bank usually spends an estimated £15,000 for its assessment centres' (1997). However for an organisation to decide on the most cost-efficient methods the up-front costs should be balanced against the costs of wrong decisions which include costs associated with labour turnover. Appelbaum et al (1989) suggest that to balance selection costs the organisation should also consider the learning curve for a replacement of the job holder, the 'down time' taken to change jobs internally or externally and relocation costs.

While cost is an important factor, reliability is equally imperative in choosing a selection method. A selection method is said to be highly reliable if that method has low random error and also generates consistent results (Noe et al, 2004). For instance, a reliable test of intelligence can generate consistent results if taken several times by the same person as his aptitude level remains reasonably stable. One of the highly reliable method according to Hinrichs and Haanperá (1976) is the assessment centre method in several organisations; they have found that this method appears adequate if not outstanding. In assessment centres the thrust is on the individual rather than on the method and the decisions that each applicant takes while participating in the program has a strong relation to the job performance.

Much as the validity, utility, and cost of a selection method is important in the decision making process of a selection method, an organisation has to understand its internal and external environment that affects these decisions. A number of internal characteristics like organisational size, complexity and technological volatility can influence an organisation's decision on the amount and type of selection methods. Organisational size is proportional to the complexity of a selection method as costly and complex selection methods are usually used only in large organisations (Schimdt et al, 1998).

However size alone does not contribute to deciding the best method. The sufficient number of jobs to be filled also has to be considered as large organisations may need only a few occupants. The level of vacancy within the company determines whether the company should use cheaper, straightforward methods or elaborate costly methods. The IRS survey (1991b) found that assessment centres were usually used for applicants in the managerial roles than graduate vacancies. Beardwell et al (1997) stresses the fact that organisations usually invest heavily in the selection of workforce in the top management than middle and low, because of the managerial posts warranting higher salaries and therefore the repercussions of an incorrect judgment can be severe. This is also the organisation's means to attract the best applicants in terms of quality.

Organisations also have to be wary of the external environment that can affect the selection decisions to select the most suitable employees both internally and externally. Decisions as to who will be hired could be done fairly only within the legal standards and according to the demand and supply in the external labour market. There are specific legal rules that determine how an organisation can or cannot do specific selection methods. The government requires that the selection processes avoid discrimination and provides access to employees with disabilities.

The selection specialists have to first do the work permit check of the candidates in the required countries. Secondly, they should make sure that the selection methods should be able to prevent discrimination on the grounds of sex, race and disability. The Sex Discrimination Act 1975, Race Relations Act 1976 and the Disability Act 1995 make it unlawful to discriminate against a person's sex, race or disability directly or indirectly. These can only be used as criteria for selection in jobs that specifically need candidates from a specific age or race group, like model agencies or front office employees (Ivancevich 2007). However, although there are rules to prevent discrimination, they do not require employers to promote equality. Equalising opportunities in employment therefore depends on the voluntary initiatives taken by the organisations (Dickens, 1994: 275).

The size, composition and availability of the relevant labour market are significant external environment factors. 'The level of the complexity to hire employees from the labour market depends on the demand and supply of the candidates' (Ivancevich, 2007: 216). Selection strategies differ according to the rise and fall in the employment rates.

Any effective selection is an identification of the characteristics that are needed for high performance and productivity. Determining certain personal characteristics can help the decision maker understand more about the candidates. The big five personality traits known as 'emotional stability, extroversion, openness to experience, agreeableness and conscientiousness' may describe up to 75% of an individual's personality (Heneman et al., 2000). Recent findings on personality tests have been more positive regarding the link between job performance and personality. One example would be the relation of the personality traits and the job performance of a sales executive. Heneman et al. (2000) report that extroverts are more likely to perform better in a sales role.

However many personality measures run a great risk of being legally challenged as there is an invasion of privacy than other kinds of selection tools. Thus organisations using personality as a criterion should be certain that they can distinguish between successful and unsuccessful employees. It is probably unwise to use personality as a general criterion for screening out 'undesirable' applicants since the same personality characteristic that leads to failure in one job might lead to success in another (Bourbeau (1996) as cited in Ivancevich (2007: 220)). There is still debate on whether general or more specific personality measures are the best to use in selection (Tett et al., 2003).

Organisations can face social, legal and economic consequences if the selection methods chosen are unfair and inaccurate. Candidates unjustly treated will form poorer or negative attitudes and this can lead to a loss in public good will and may discourage other individuals from applying to particular organisations. Several studies have demonstrated that selection procedures impact the reactions of job applicants(Crant and Bateman, 1993, Kluger and Rothstein, 1993). Organisations also stand the chance of losing the good candidates as the top applicants who doubt the validity of the selection practice can turn down offers (Murphy, 1986).

Companies choosing selection methods that do not comply with the social and legal system will face even greater difficulty among those hired as there will be poorer work attitudes and performances. (Folger and Cropanzano, 1998). Therefore, by adopting valid, reliable and cost-efficient methods, organisations can make the right selection decisions that will provide them with a competitive advantage of owning the best employees.

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