1. Recruiting and Selecting Employees
Chapter 5
Recruiting and Selecting Employees
Recruiting and selecting the right employees is crucial for higher performance and to avoid the costs of hiring the “wrong” employee. Chapter 5 provides the foundation for knowing the processes used in recruiting and selecting the right employees.
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2. Chapter Challenges Understand human resource supply and demand
Have familiarity with the hiring process
Recognize challenges in the hiring process
In Chapter 5, we’ll look at understanding human resource supply and demand and gaining familiarity with the hiring process. We’ll also recognize the challenges in the hiring process.
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3. Chapter Challenges
Learn practices for meeting the challenge of effective staffing
Know the tools of selection
Develop awareness of legal issues in staffing
Additionally in Chapter 5, we’ll learn about the practices for meeting the challenge of effective staffing, the tools of selection, and developing an awareness of legal issues in staffing. The focus of this chapter is on understanding and conducting effective recruitment and selection.
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4. Human Resources Planning
Human resource planning (HRP) is the process an organization uses to ensure that it has the right amount and the right kind of people to deliver a particular level of output or services in the future. Firms that do not conduct HRP may not be able to meet their future labor needs or may have to resort to layoffs, which leads to significant costs. HRP uses both qualitative and quantitative forecasting techniques.
The first HRP activity entails forecasting labor demand. Labor demand is likely to increase as demand for the firm’s product or services increases and is likely to decrease as labor productivity increases. The second part of HRP entails estimating labor supply. The labor supply may come from existing employees or from outside the organization. After estimating labor demand and supply for a future period, a firm faces one of the three conditions, each of which requires a different set of responses.
The first condition is when the labor demand exceeds labor supply. The second condition is when labor supply exceeds labor demand. The third condition is when labor demand equals labor supply.
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5. Hotel Chain Labor Prediction
This figure represents an example of predicting labor demand for a hotel chain with 25 hotels. Column A indicates the number of employees who currently hold each of the jobs. Column B calculates the present ratio of employees to hotels. The hotel chain expects to add additional hotels by the next year for a total of 32. In column C, the expected number of employees for each job in the next year is calculated by multiplying the current ratio of employees to hotels (column B) by 32. This is an example of a quantitative forecasting technique, using sophisticated mathematical means to calculate estimates of labor supply and demand. Qualitative forecasting techniques rely on experts’ judgment or subjective estimates.
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6. The Hiring Process
The hiring process includes: 1. Recruitment—The process of generating a pool of qualified candidates for a particular job; the first step in the hiring process.
2. Selection—The process of making a “hire” or “no-hire” decision regarding each applicant for a job; the second step in the hiring process.
3. Socialization—The process of orienting new employees to the organization and the unit in which they will be working; the third step in the hiring process. The socialization process is discussed in detail in Chapter 8.
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7. Costs of Turnover
Good employees are worth 40% more than average employees
Turnover costs about 25% of salary and benefits
Major turnover costs include:
Separation
Recruitment
Selection
Hiring
Productivity
Good employees are worth 40% more than average employees. Furthermore, turnover costs about 25% of salary and benefits. The following are
major turnover costs:
Separation—time spent for exit interviews and paperwork processing
Recruitment—advertising and recruiter fees
Selection—pre-employment testing and interviewing
Hiring—orientation and training
Productivity—vacancy costs and disruption
Getting and keeping the best not only makes sense in terms of treatment of employees as customers and the management process, but also makes good economic sense.
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8. Challenges of the Hiring Process
Determining Characteristics Important to Performance
Measuring Characteristics That Determine Performance
The Motivation Factor
Performance = Ability x Motivation
Who Should Make the Decision?
The hiring process has its challenges. The most important of these are:
1. Determining which personal characteristics are most important to performance: The characteristics a person needs to perform a job effectively are not always obvious. The knowledge, skills, and abilities needed for jobs change as technological and other changes happen. Additionally, people have differing opinions of desired characteristics for a particular job.
2. Measuring characteristics that determine performance: Tests must be administered in some cases (assessing math skills, for example), for specific abilities. Many tests yield different outcomes, some are better at predicting performance, and tests vary in administrative costs.
3. The motivation factor: Although many tests measure abilities, motivation is also a key principle in performance. The equation is Performance = Ability x Motivation. Someone’s ability alone is not enough for performance. Likewise, much motivation and little ability is also not enough for higher performance. However, motivation is very difficult to measure. Many employers assess motivation in the interview.
4. Who should make the hiring decision? There are two good reasons for letting HR run the staffing process. (1) The organization must ensure that the employment practices comply with legal standards and (2) letting HR run it is convenient. However, managers should be in on the process, especially if the individual will be working under him or her. Additionally, many organizations are also including peers and subordinates in the hiring process.
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9. An Approach to Recruitment
Go to where the customers are
What do they want and what do you have to offer?
Treat applicants like customers
Recruitment can be effective when it is viewed from the applicant’s perspective. Because applicants are customers of the organization, the organization hopes that applicants make a buy decision about the job opening. Thus recruitment is the opportunity to sell the job, the organization, and the community to the job applicant. Here’s the approach to take when recruiting:
Go to where the customers are: Go to social media like Facebook, Twitter, and LinkedIn.
What do they want and what do you have to offer? People join organizations for a variety of reasons, some of which include working atmosphere, career opportunities, work–life value, job characteristics, and pay.
Treat applicants like customers: Do your job applicants feel like they were treated as customers? Applicants who have a positive experience are more likely to pursue employment with an organization.
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10. Sources of Recruitment
Current employees
Referrals
Former employees
The most prominent sources of recruitment for organizations are:
Current employees: Many companies have policies about job openings before recruitment to the outside sources. Internal job postings give current employees the opportunity to move into the firm’s more desirable jobs. However, the internal promotion also creates another job to fill.
Referrals from current employees: Studies have shown that employees who were hired through referrals from current employees tended to stay with the organization longer and displayed greater loyalty and job satisfaction. However, one issue with this type of recruitment is that it causes those to seek referrals that are similar to themselves, and thus fosters the lack of the diversity that an organization needs, so this needs to be monitored closely.
Former employees: A firm may decide to recruit employees who previously worked for the organization. Typically, these people were laid off. Also, forming an online alumni network could be a simple and cost-effective way to maintain a hiring pool of candidates.
Former military: Since 2001, there has been a pool of former military personnel to hire. Some organizations believe that hiring a former military person means hiring a more consistent job performer.
Former military
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11. Sources of Recruitment
Customers
Print and radio advertising
Internet advertising
Customers: Customers can be a convenient and cost-effective source of employees. Because customers are already familiar with the organization’s products and services, recruiting can capitalize on this familiarity.
Print and radio advertising: Advertising can be used both for local recruitment efforts and for targeted regional, national, or international searches.
Internet advertising: Employers are increasingly turning to the Web as a recruitment tool because online ads are relatively cheap, more dynamic, and can produce faster results than newspapers. The Web is also a convenient place for employee candidates.
Career sites and social media: Thousands of career sites are available for recruitment and employment information. The Web makes it easy for job candidates to seek jobs by industry, geographic location, and job description. Social media sites such as Facebook, Twitter, and LinkedIn are also heavily used by job seekers.
Career sites and social media
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12. Sources of Recruitment
Employment Agencies
Temporary Workers
College Recruiting
Employment agencies: Many organizations use external contractors to recruit and screen applicants. Typically, the employment agency is paid a fee based on salary offered to the new employee. Agencies can be especially effective when the firm is looking for an employee with a specialized skill.
Temporary workers: Provide employers the flexibility to quickly meet fluctuating demands. Bringing in temporary workers enables employers to bypass the time-consuming hiring process of job interviews and background checks.
College recruiting: Most schools have a job placement service office that helps students make contacts with employers. Many companies seek college placement services to find job candidates. Furthermore, employers visit campuses and job fairs, and create relationships through internships.
Nontraditional recruiting: Includes labor pools such as prisoners, welfare recipients, senior citizens, and workers from foreign countries. These can be an excellent source of untapped labor for certain jobs. Greystone Bakery in New York is a great example of a company that embraces a nontraditional labor pool for its hiring.
Nontraditional Recruiting
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13. Recruitment External vs. Internal Candidates Protected Class
Planning the Recruitment Effort
Planning the Job Search
External vs. internal candidates: Hiring externally gives the firm the advantage of fresh perspectives and different approaches. Sometimes it also makes sense to hire externally, as it would be more expensive to train or educate some skills and knowledge that is easier to obtain rather than recruit. However, sometime new hires are perceived as “rookies” and not readily accepted by current employees. Internal candidates offer less expensive (at times) means of recruitment and they are already familiar with the company, product, and industry, which alone saves in “training/orientation” cost. However, one of the biggest disadvantages of internal recruiting is not taking advantage of new and innovative ways of thinking that may be needed to move the organization forward.
Protected class: An important recruitment initiative is to actively attract and recruit women, minorities, and persons with disabilities. A good rule of thumb is to target potential recruits through media or recruitment methods aimed at the protected class. Going to the places where these people are most likely found (professional organizations, colleges, etc.) is a good way to seek these candidates.
Planning the recruitment effort: For an organization to recruit effectively, recruitment must be tied to sound HRP. Calculating yield ratios and investigation into anticipated market conditions is prudent. Additionally, revisiting the HRP numbers will ensure an organization stays on track with recruitment planning.
Planning the job search: In addition to the other means of finding a job, a good source to look is through the Dictionary of Occupational Titles, the Occupational Outlook Handbook on the Bureau of Labor Statistics website, and the O*Net Web site, to name a few.
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14. Selection Reliability Validity Deficiency error Contamination error
Content
Empirical (concurrent and predictive)
Selection determines the overall quality of an organization’s human resources. The economic value of good selection procedures is higher than most people realize. A variety of tools can be used in the selection process. We’ll look at too important concepts for selection tools:
Reliability: The consistency of measurement, usually across time but also across judges. If a measure produces perfectly consistent results, the measure is perfectly reliable. However, perfect reliability is rarely achieved. Measurement almost always involves some form of error or “noise” or unreliability.
Deficiency error occurs when a component of the domain being measured is not included in the measure.
Contamination error occurs when a measure includes unwanted influences.
Validity: The extent to which the technique measures the intended knowledge, skills, or ability. In the selection context, it is the extent to which scores on a test or interview correspond to actual job performance.
Content validity assesses the degree to which the content of the selection method is representative of job content.
Empirical validity (criterion-related: two types, either concurrent or predictive) is a strategy that demonstrates the relationship between the selection method and job performance.
Concurrent validity indicates the extent to which scores on a selection measure are related to job performance levels.
Predictive validity indicates the extent to which scores on a selection measure correlate with future job performance.
Selection methods can be reliable, but not valid; however, selection methods that are not reliable cannot be valid.
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15. Selection Tools Letters of Recommendation Application Forms
Ability Tests (Cognitive and Physical)
Personality Tests
Honesty Tests
Interviews
Additional common methods of selection are the following:
Letters of recommendation—A content approach to considering letters of recommendation can increase the validity of this selection tool. Assessment is done in terms of the traits the letter writer attributes to the job candidate.
Application forms—Organizations often use application forms as a screening device to determine whether a candidate satisfies minimum job specifications, particularly for entry-level jobs. The forms typically ask for information regarding past jobs and present employment status.
Ability tests—Various tests measure a wide range of abilities, from verbal and qualitative skills to perceptual speed. Cognitive ability tests measure a candidate’s capability in certain area, such as math, and are valid predictors of job performance when the abilities tested are based on a job analysis. Physical ability tests are used by police and fire departments and measure strength and endurance.
Personality tests—Assess traits of individual workers’ characteristics that tend to be consistent and enduring. Personality tests have been widely used since the 1940s. The “Big Five” factors, now widely accepted in the field of personality psychology, are:
Extroversion—the degree to which someone is talkative, sociable, active, aggressive, and excitable.
Agreeableness—the degree to which someone is trusting, amiable, generous, tolerant, honest, cooperative, and flexible.
Conscientiousness—the degree to which someone is dependable and organized and conforms and perseveres on tasks.
Emotional stability—the degree to which someone is secure, calm, independent, and autonomous.
Openness to experience—the degree to which someone is intellectual, philosophical, insightful, creative, artistic, and curious.
Honesty tests—Because employee theft is a serious and costly problem, honesty tests have become important. Honesty tests are designed to identify job applicants who are likely to engage in theft and other undesirable behavior.
Interviews—Even though studies have shown that interviewers do not agree (biases and human judgment) with one another on candidate assessments, interviews are still widely used today. We’ll now look at the structured interview.
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16. Structured Interviews
Structured interviews—Job interviews based on a thorough job analysis, applying job-related questions with predetermined answers consistently across all interviews for a job.
The three types of questions commonly used in structure interviews are as follows:
Situational—these questions try to elicit from candidates how they would respond to particular work situations.
Job knowledge—the questions assess whether candidates have the basic knowledge needed to perform the job.
Worker requirements—these questions assess candidate’s willingness to perform under prevailing job conditions.
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17. Interviewer Don’ts Don’t ask applicants if they have children
Don’t ask applicant’s age
Don’t ask applicants whether they have a physical or mental disability
Don’t ask for height or weight on an application
Don’t ask a female candidate for her maiden name
Don’t ask about citizenship
Don’t ask applicants about their arrest records
Don’t ask applicants if they smoke
Don’t ask applicants if they are HIV positive or have AIDS
Whether employers choose structured or unstructured interviews, they need to make sure their interview questions are not illegal. Following are illegal questions that should NOT be asked in an interview:
Don’t ask applicants if they have children
Don’t ask applicant’s age
Don’t ask applicants whether they have a physical or mental disability
Don’t ask for height or weight on an application
Don’t ask a female candidate for her maiden name
Don’t ask about citizenship
Don’t ask applicants about their arrest records
Don’t ask applicants if they smoke
Don’t ask applicants if they are HIV positive or have AIDS
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18. Selection Tools Assessment Centers Drug Tests Reference Checks
Background Checks
Assessment centers—A set of simulated tasks or exercises that candidates are asked to perform. This is usually done with manager candidates. These can be simulation types of assessments, work-related types of activities, and scenario-based assessments (problem-solving).
Drug tests—Pre-employment drug testing typically requires job applicants to undergo urinalysis as a part of routine selection procedures. These tests are generally more common in jobs that require special equipment handling, but now these tests have extended to other types of jobs.
Reference checks—One of the best methods of predicting the future success of prospective employees regarding their past employment record. However, note that there are some legal issues regarding giving out information about an job candidate.
Background checks—Can be distinguished from reference checks and can include criminal background checks, verification of academic achievement, driving histories, immigration status checks, and social security checks. The primary reason for this type of check is to avoid negligent hiring charges.
Handwriting analysis—Graphology, the study of handwriting for the purpose of measuring personality or other individual traits, is routinely used to screen job applicants in Europe, the birthplace of the technique. Graphology is not yet considered a valid measure of performance.
Note that organizations use multiple methods to collect information on candidates and it’s now easier with the Internet.
Handwriting Analysis
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19. Legal Issues in Staffing
Discrimination Laws
Develop clear hiring policies
Affirmative Action
Making job-related decisions without discrimination
Negligent Hiring
Learn as much as possible about past work-related behavior
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20. Summary and Conclusions
Human Resource Supply and Demand
The Hiring Process
Challenges in the Hiring Process
Meeting the Challenge of Effective Staffing
Recruitment
Selection
Legal Issues in Staffing
To summarize, hiring is a critical component of human resource function and there are many steps to recruit and select effectively. The challenges to finding the right employee are many, but it’s very important to utilize all effective and innovative tools in recruiting the most talented and desirable performers for the organization.
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21. Pearson Education, Inc. Copyright
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