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LECTURE 4 (CHAPTER 5 & Pages 543-550)

HR Planning, Recruitment, & Selection

Lecture Objective: To understand the processes involved in planning for and attracting
adequate human resources and then deciding whom to hire.

I. Human Resource Planning - Definition: 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 service in the future.

A. Labor Supply - Definition: the availability of workers with the required skills
to meet the firms labor demand.
1. Comes from: internal labor market (existing employees) and external labor
market (those available & wanting to be hired).

B. Labor Demand - Definition: how many workers the organization needs in the
1. Increases & decreases as a function of demand for firms products and
changes in labor productivity.

C. Conditions & Appropriate Responses

1. When labor demand exceeds labor supply, firm can train, promote from
within, recruit from outside, subcontract, assign overtime etc.

2. When labor supply exceeds labor demand, firm can cut pay, layoff, reduce
hours, offer early retirement incentives, severance pay, etc.

3. When labor demand equals labor supply, firm replaces quits from inside or
outside, and does internal transfers and deployment.

D. Forecasting Techniques: ways of estimating future supply & demand. This is

the first step in HRP.
1. Quantitative methods include those that use past data to calculate estimates
such as regression, linear programming, and Markov models.
a. Two limitations: past relationships between sales and labor may not
apply to the future and rapid changes in conditions make skills needed in
future different from the past.

2. Qualitative methods include those that rely on human judgment such as

Delphi and nominal group techniques.
a. A limitation is that these methods may lead to imprecise forecasts.
II. Challenges in the Hiring Process
A. Determining the Characteristics Most Important to Performance - Reasons
They Are Not Obvious:
1. Nature of a given job may be constantly changing.

2. The firms culture must be taken into account.

3. Those in different jobs within the firm want different abilities from the
same new hire.

B. Measuring the Characteristics that Determine Performance - Selecting What?

This refers to what means are used to figure out how qualified applicants are for a
job such as interviews and tests.

C. Evaluating Applicants Future Performance Levels - What Affects It?

1. Ability - natural qualities of a person

2. Motivation - effort expended.

3. System factors (see page 227 in chapter 7); the context around the new

D. Determining Who Should Make the Decision

1. Reasons for HR to decide: insures legal requirements are met &
requires less coordination among managers.

2. Reasons for line managers to decide: they are more familiar with the
jobs to be filled, must work with the new hires, and are responsible for
their performance.

III. Recruitment - Definition: the process of generating a pool of qualified candidates for
a particular job in order to fill a job opening.

A. Recruiting Sources - Their Advantages & Disadvantages

1. Current employees: motivates current employees but creates domino

2. Employee referrals: good source for finding future loyal, satisfied

employees but may create EEO problems.

3. Rehires: have experience with organization and their past performance

is known.

4. Print ads: expensive and slow.

5. Internet: cheaper and faster than print ads but still some cost.

6. Employment agencies: can help find applicants with specialized skills

and who are currently employed. Very expensive.

7. Temporary help agencies: allow the firm to observe the temps work and
can help to control benefit costs.

8. College recruiting: good source for inexperienced applicants who can

be more easily trained the firms way. Focus is on entry level jobs only.

9. Customers: as users of firms products they have insight into its

products from a different perspective.

10. Nontraditional labor pools include prisons, welfare recipients, and

foreigners. These tend to be high risk hires. Senior citizens work well in
many cases but have less energy.

B. External Vs. Internal Candidates

1. Advantages of externals are fresh perspectives, & skills based on
previous experience for job opening.

2. Disadvantages of externals are time needed to orient to new employer,

viewed as outsider by old employees, and styles (ways of doing similar
things) may clash.

3. Advantages of internals are less cost for recruiting & compensation, and
good for employee morale.

4. Disadvantages of internals are old perspectives, training costs for new

job skills, and difficulty supervising former peers.

C. Determining How Many Applicants To Attract

1. Yield ratios refer to relationships between numbers of applicants
involved in each step of the recruitment and selection procedure of a firm
and the numbers making it to the next step. Examples include a job offer
to acceptance ratio, or percent of respondents to an ad who are qualified
for the job.

IV. Selection - Definition: the process of making the decision to fill a job opening.
(Selection is the hiring decision.)

A. Reliability - Definition: consistency of measurement across time and judges.

1. Deficiency error: occurs when not all critical aspects of the job
qualifications are included in the measure(s).

2. Contamination error: irrelevant influences become part of the

measure(s). Example is interviewer bias.

B. Validity - Definition: extent to which a technique measures the intended

knowledge, skill or ability. In the selection context it is the extent to which scores
on a test or interview correspond to actual job performance.

1. Content validity assesses the extent to which the content of the selection
method is representative of the job content.

2. Empirical validity demonstrates the relationship between the selection

method and job performance. The score on the selection tool is compared
with a measure of job performance.

a. Concurrent validity uses current employees as subjects.

b. Predictive validity uses applicants as subjects and requires that

selection not include the tool that is being validated.

C. Selection Tools as Predictors of Job Performance

Does each predict performance?

1. Letters of recommendation are poor predictors.

a. Can improve use by taking a content approach to analyzing
letters in terms of traits mentioned, not on how positive letters are.

2. Application forms are used as screening devices to check on whether

minimal job qualifications are met.
a. Biodata forms are lists of questions that relate to the job such as
interests in and experience with aspects of the job that have been

3. Cognitive and physical ability tests are valid to the extent they measure
job related abilities.
a. Work sample tests involve actual tasks of the job. These tests are
generally the best selection tool as they predict job performance better
than any other selection tool.

4. Personality tests assess traits that are not easily defensible if

discrimination charges arise.
a. Factor most related to job performance is conscientiousness
b. Two warnings: must take into consideration the results of job
analysis and analysis of the work environment.
5. Psychological tests are used to measure honesty or motivation.
a. These must be carefully validated. Honesty tests are paper and
pencil tests since polygraph tests have been prohibited through
state laws. While these tests have validity, 40% fail them.

6. Interviews: structured versus unstructured. (Most commonly used

selection tool.)
a. Improved validity comes from asking job related questions
which can be situational, knowledge-based, or job requirement-
based to all applicants, and answers are scored using criteria
determined in advance of the interviews.

b. Unstructured questions are used because they are more

convenient for the interviewer.

7. Assessment center is a set of simulated tasks or exercises that

candidates for supervisory positions are asked to perform. Very
expensive, but effective tool if done correctly.

8. Drug tests involve urinalysis and do relate to future job performance.

9. Reference (or background) checks should be done because it keeps the

firm from being subject to negligent hiring lawsuits.

D. Reactions to Selection Tools: May Affect Number of Lawsuits Filed

1. Applicants tend to favor work sample tests, assessment centers and
interviews. They dislike personality tests, cognitive ability tests and
biodata sheets.

2. Manager want selection tools that are quick and easy to do.

V. International Recruitment & Selection

When firms have wholly owned foreign subsidiaries or joint ventures, recruitment and
selection issues, as with all HR policies, become more complicated.
A Determining the Mix of Host-Country and Expatriate Employees
1. Ethnocentric approach employs home country nationals.

2. Polycentric approach employs host country nationals.

3. Geocentric approach ignores nationality.

B. Locals Vs. Expatriates

1. Advantages of locals include: lower costs and greater understanding of
local culture and conditions.
2. Advantages of expatriates include: greater understanding of ways of
parent company and closer coordination between companys operations.

C. Challenges of Expatriate Assignments

Failure is a problem among American managers.
1. Career blockage: May distract from career within firm.

2. Culture shock: adjustment process to another set of behaviors.

3. Family problems: adjustment of spouses.

D. Re-entry Problems
1. Lack of appreciation for acquired skills.

2. Reverse culture shock.

E. Appropriate Selection Criteria for International Assignments

1. Cultural sensitivity

2. Screen applicants family members, especially spouse or partner.