The XYZ limited is a retail business enterprise whose aim is to increase market share as well as its revenues. For this objective to be achieved in the current competitive corporate world, there is a need for organizations to come up with working and a practical strategy that will help them to cut down costs, and give them competitive advantages in the industry. One of the areas XYZ is concerned with in ensuring that it remains competitive in the market is the area of recruitment and selection. An efficient recruitment and selection process result to the employment of highly qualified workers who will ensure there are high productivity and customer satisfaction. To make sure that the people employed will fit into the organization well and also succeed in their job positions XYZ relies on internal recruitment method. This recruitment method is quick, cost-effective, boost workers morale and enhances productivity as the people employed are known, and they have the necessary skills and experience for the job position. Although this approach has many advantages, it does not allow new talent and ideas into the organization. Also, the method may lead to the emergence of issues like discriminatory promotion hence leading to employee resentment. Similarly, XYZ uses a ranking method for employee appraisal. The paper will look into the analysis of XYZ’s employee recruitment and performance assessment methods.
Introduction
The processes of recruiting, selecting, and performance appraisal of employee are essential to any organization, and every manager has a responsibility of ensuring the operation is carried out in the best way possible. These processes when done improperly might lead to creating managerial problems in a company. At the XYZ Company, the human resource management employs the approaches of recruiting, selecting as well as retaining for the optimization of its human resource capacity. The XYZ’s HRM deals with the employment needs by using various methods and sources of recruiting to fill multiple positions in the company. The organization uses a compensation program, career development, and management of employee relations strategies as a motivation to the workers and also to improve their morale. The combination of these strategies and approaches are useful for the XYZ in addressing its needs in the process of recruiting, selecting and retaining its human resource; this, in turn, helps the company in maintaining its workers who are vital to the success of the organization’s operations as well as the realization of its mission for global expansion.
XYZ Selection Practices
The company mostly relies on the internal recruitment process; however, in some positions where the company’s employees lack the necessary expertise, external recruitment sources are used. Due to this combination, the organization can satisfy its human resource needs. The types of sources of internal recruitment commonly used here involve current employees, trainees, and transfers. The current employees act as the most significant source of recruitment for managerial and supervisory positions. The XYZ uses the strategy for promoting its sales staff to top management. The management also recruits the trainees working for the XYZ to fill in the position related to their training and transfers are used to fill in gaps that may arise in other locations.
XYZ Internal Recruitment Process
The process usually starts with the management writing an internal job advertisement that includes application requirements, duties associated with the position, description of the department and an explanation for the process of application. The XYZ human resource management focuses on having the most qualified internal workers to apply for the positions available. The HRM helps the employees understand the benefits of moving from their current posts to the next, and this act as an encouragement. Similarly, the communication of the job advert is done in the most effective ways possible that include posting of the job advert on the intranet, putting it in the company’s newsletter, posting on the company notice boards and sending all employees a company-wide email. This strategy of job advertisement ensures that all employees see the new job opportunities.
The company employs two approaches: coming up with a transfer policy that is flexible and the creation of a culture that will promote the development of employees. These two factors are essential in supporting the process of internal hiring. XYZ human resource management discourages strict restrictions on internal transfers to avoid cases where individuals who are most suitable candidates for various positions from being unable to apply for such jobs. The organization also uses the Applicant tracking system, and this system has made it easier for the establishment of the program of the employee referral. Likewise, the XYZ Company has developed succession plans that help in keeping track of employees and identifies which one is appropriate to fill a specific position when it becomes vacant. The succession plans rely on the employee’s potential and skills and go hand in hand with training programs which help equip these individuals with the necessary skills, and ensure that they are developing professionally (Thompson, 2018). These plans that encourage professional development serve as a way of preparing the employees for the upward mobility towards the top managerial positions within the organization.
The use of internal recruitment by the XYZ Company is the main reason behind the growth of the corporate culture in the organization where the loyalty is valued, and workers know that there is an opportunity for them to advance. By establishing recruitment policies known to all employees by the human resource management, all workers are motivated to seek new skills in preparation for internal recruitment that in most cases serve as a promotion to them.
Reasons why XYZ find Internal Recruitment Suitable
In the current corporate world, the economy has become weak, and this has limited the resources at the companies’ disposal forcing the management to work with a strained recruiting budget. This challenge is the reason behind the rise in the number of the organizations adopting internal recruitment method, and the XYZ Limited is not an exception.
The practice of internal recruitment is cheaper as compared to external sourcing because it saves a lot of money that could be used on training the new employees, recruiting, advertisements, traveling, relocation of new employees, and the opportunity cost of leaving the position vacant. According to the research by Andrew Thompson, the price of external hiring is 1.7 times higher than internal recruitment and between 40-60% of those hired from outside do not succeed, and may end up leaving the company because of lack of the necessary skills as compared to only 25% of those employed from within the organization (Thompson, 2018). The XYZ limited saves approximately one million dollars annually as a result of using internal recruitment.
The company prefers this method of hiring because it saves time as compared to external recruitment that is very bureaucratic and might take months. Internal hires are already in HR databases, “their performance reviews are already accounted for, and managers have a good sense of the strength of the candidate within the corporate environment” (Thompson, 2018). Unlike in external sourcing, this method does not have many uncertainties.
The Human resource management at the XYZ limited believes that their staff knows about the procedures, policies and how work is done in the company and they already have connections, so they are bound to excel when promoted to a new position within the organization. XYZ has tremendously benefited from this approach as productivity has been enhanced as a result of the strategy motivating the staff to work hard so that they can as well receive a promotion. According to the research conducted by the Gusdorf, it was evident that “external hires were paid 18% more than internal hires, but the outsiders brought in had worse performance reviews during their first two years on the job” (Gusdorf, 2008). For the managers to improve the employee's productivity, the company will need to spend extra money on training them.
The Selection Process at XYZ limited
Criteria for Selection
At the XYZ the criteria used in selecting of a suitable candidate depends on the type of the job vacancy, and they include training, education background, and criminal records. In cases where the positions available are for salespersons, the company uses interpersonal skills and knowledge retention regarding the company’s products as selection criteria. For the sales position, interpersonal skills are essential because the job involves dealing directly with the customers. For managerial and supervisory job positions the HRM employs the abilities of problem-solving, analytical skills and skills for conflict management (Testofy, 2016). This criteria used for selecting managers and supervisors help ensure that those selected will be able to effectively use their skills in analyzing and solving problems as well as resolving conflicts in their places of work.
Methods and techniques used in the selection
The XYZ’s human resource management during the selection process uses the evaluation of job knowledge and structured interviews. The interview helps to find necessary information such as the candidate’s expectations and perspective about XYZ. This information is vital because it determines the candidate fitness for the job and organization. Similarly, the organization applies situational judgment and personality tests for top management positions like operations, finance, marketing, sales and human resource. The situational judgment test helps in finding out whether the candidate possesses the necessary abilities needed for the analyzing and solving problems. Personality test, on the other hand, helps in determining the candidate's ability to fit and function in the culture of the organization as well as the nature of the business.
The internal recruitment is advantageous to the XYZ regarding cost-effectiveness, time-saving, building morale and enhancing retention; however, it also has its shortcomings. By using this approach, XYZ is unable to be exposed to a large pool of candidates with diverse experiences and skills in the labor market, and therefore the method does not bring into the company new ideas, talent, and energy. This approach of hiring may also encourage discrimination as those responsible for recruitment may favor their friends, and this will lead to resentment among team members who will feel that the process was unfair (Testofy, 2016). For this reason, the organization should not over-rely on internal hiring but also should consider exploring the external labor market by using external recruitment as well to avoid these problems.
The Performance Appraisal at XYZ
The process of performance assessment at XYZ is done systematically by the supervisors, and the focus is on the individual performance basing on factors like quality of output, knowledge of the job, leadership skills, dependability, and initiative. The company relies on performance appraisal program for various reasons that include; for aiding in administrative decision making such as promotions, salary increment, retention, and layoffs, for development use like in identification of individual’s needs and the maintenance of the organization. The management at XYZ uses the Ranking method in its employee appraisal program. The system is valid because it leads to the development of a work culture of high performance. In a study by Sprenkel, it was found out that organizations using individual performance criteria in their performance assessment perform well as compared to those using overall performance in the appraisal (Sprenkel, 2011). The method is reliable and valid in cases where there is a significant interaction between the individual employee and the supervisor otherwise its validity will be compromised.
This method is prone to bias and therefore may not work well for XYZ when it expands because in such an environment the supervisors and managers will not be able to interact with each worker every day. Similarly, since the approach only focuses on the individual employee, it is detrimental to teamwork in the organization.
The supervisors responsible with employee assessment need to be trained so that they can be able to follow the evaluation guidelines clearly and use similar criteria in the ranking of the workers; this will lead to a fair ranking process and at the same time will prevent the occurrence of errors (Hrwale.com, 2018). The XYZ should keep the result of the performance assessment confidential because by making the result public the employee’s morale is negatively affected when one is in the low performing category. This method of performance appraisal can lead to legal issues more so where there are no specific assessment criteria as it means the organization base it's ranking on favoritism instead of performance data that is quantifiable.
Conclusion and Recommendation
In the current world where the economy is no longer stable, business organizations must adopt strategies that will enable them to use the limited resources available to accomplish much. The process of recruitment and selection is costly and very vital for the success of any organization, and therefore must be handled with great care. Companies like XYZ are using internal recruitment to cut cost and reduce the uncertainties that come along with external outsourcing because hiring from within improves productivity as the employees already understand the procedure and rules of the company. This approach of recruitment is advantageous; however, organizations need to use both internal and external hiring methods to avoid issues of resentment and also allow new blood, talent, and ideas into the organization. XYZ uses the Ranking method in the process of employee assessment, although the technique encourages high-quality performance, it also has its disadvantages. To deal with the issues that might arise as a result of this method like discrimination in ranking, lawsuits, and lowering employee morale, the companies using ranking method should train the managers responsible with ranking and also develop standard assessment criteria. I would also recommend that the XYZ Company shift its focus from individual performance to team performance in its assessment as this will help in building strong teamwork in the organization and turn this will enhance the general performance of the company.
Reference
Gusdorf M.(2008) Recruitment and Selection: Hiring the Right Person.SHRM. https://www.shrm.org/academicinitiatives/universities/TeachingResources/Documents/Recruitment%20and%20Selection%20IM.pdf. Accessed July 13, 2018
Hrwale.com (2018). Human Resource Management: Performance Appraisal Methods. https://corehr.wordpress.com/performance-management/performance-appraisal-methods/. Accessed July 13, 2018
Testofy. (2016). 5 Most Effective Employee Performance Evaluation Methods. https://testofy.com/blog/2016/05/19/5-most-effective-employee-performance-evaluation-methods/. Accessed July 13, 2018
Sprenkel, L. (2011). “Forced Ranking: A Good Thing for Business?” Workforce Management, n.d. http://homepages.uwp.edu/crooker/790-iep-pm/Articles/meth-fd-workforce.pdf. Accessed July 13, 2018
Thompson A. (2018). Walmart: Human Resource Management. Business, Management. Panmore Institute. http://panmore.com/walmart-human-resource-management-hr-management. Accessed July 13, 2018
