SUBMITTED TO: MISS.

JUWAYRIAH NADEEM

CLASS: B.COM

DATE: 30. JUNE . 2020

SEMESTER: 01

SESSION : MORNING

ROLL NO: -

SUBJECT: INTRO TO BUSINESS

ASSIGNMENT: 04

GROUP NAME :
SAQLAIN ZAFAR
1.What are the advantages and disadvantages of internal and external recruiting? Under what
circumstances is each more appropriate?

Answer:
ADVANTAGES OF INTERNAL RECRUITMENT
Hiring internal candidates can be more efficient than recruiting externally, because it can:

1.Reduce time to hire:

When recruiting externally, hiring teams find candidates (either through sourcing or job posting),
evaluate them and, if all goes well, persuade them to join their company. All of which takes time.
Conversely, internal candidates are already part of your workplace, so the time you need to find
and engage those candidates is much less. It’s also easier to assess internal candidates because:
They’re prescreened for culture fit.
Their track record is easily accessible.
They may not always need full interviews with managers (for example, if they are moving within
their department, the department head already knows the candidate.)
All these reduce the time spent on each hiring stage and your overall time to hire.
2.Shorten on boarding times:
Everyone needs some time to adjust to a new role, but internal hires are quicker to onboard than
external hires. This is because they:
Know how your company operates and most of your policies and practices.
May be familiar with people in their new team, especially in smaller businesses.
May already know the content and context of their new roles if they move within the same team
or to a similar one (for example, a sales associate becoming a category manager).
3.Cost less:
Research has shown that external hiring may cost 1.7 times more than internal hiring. This is
because when hiring from within, you usually don’t need to:Post ads on job boards. It’s easy to
inform internal candidates about job openings through email or your company’s internal
newsletter. You could also place printed job ads on a bulletin board, if all your employees work in
one place.Subscribe to resume databases. Instead of sourcing passive candidates on resume
databases, ask managers about their team members or look into your HRIS to find coworkers
who might fit in your open roles.Pay for backgrounds checks. You may already have conducted
background checks on internal candidates when you first hired them. And, you know if they’re in
good standing based on their manager’s input or employee records.
4.Strengthen employee engagement:
Promoting from within sends a message that you value your employees and want to invest in
them. Giving employees more opportunities to advance their careers, or even letting them move to
other same-level positions that may interest them, is good for morale: employees who change roles
develop professionally and others know they may have similar opportunities in the future. This
helps to build a culture of trust that enhances employee engagement and retention.
DISADVANTAGES OF INTERNAL RECRUITMENT
Despite all the merits of internal recruitment, there are some things to keep in mind. Hiring from
within can:

Create resentment among employees and managers

Employees who were considered for a role could feel resentful if a colleague or external candidate
is eventually hired. Also, managers are often uncomfortable losing good team members and may
even go so far as to hinder the transfer or promotion process.

Leave a gap in your existing workforce

When you promote someone to fill an open position, their old position becomes vacant. This
means that a series of moves and promotions may ensue that could disrupt your business’
operations. Ultimately you may need to turn to external recruitment in addition to your internal
hire.
Limit your pool of applicants
While your company may have a lot of qualified candidates for specific positions, this isn’t
necessarily true for every open role. For example, if a role is fairly new to your business, your
employees will have other specialties and may not be able to fill this skills gap. Relying solely on
internal hiring means you could miss the chance to hire people with new skills and ideas.

Result in inflexible culture

Doing most of your hiring from inside your business may result in a stagnant culture. This is
because employees can get too comfortable with the ‘way things are done’ and struggle to spot
inefficiencies and experiment with new ways of working. An inflexible culture will be more
problematic in leadership positions where employees may need to advocate for change and
improvements instead of relying on established, inefficient practices. External hires are essential
in shaking up culture and offering a fresh perspective on existing problems.

2.Why is the formal training of workers so important to most employers? Why don’t employers
simply let people learn about their jobs as they perform them?

Answer:
Formal training insures the employee is properly trained in all aspects of the job they are to
perform including the safety procedures and procedures to follow to do the job. It is important to
employers due to many reasons. For example , if you get hurt while doing the job the employer
can determine if this was caused by a known error or will this be another JHA(Job Hazard
Analysis) that needs to be recorded. Also, if quality issues play a factor it could determine if job
wasn't performed according to job specifications.
Some people are faster learners that others. The employer needs someone who can be
immediately productive. In some jobs there is also expensive equipment involved that the
employer won't want an inexperienced person using and possible breaking it. There are jobs that
can be learned "on the job" with the right person and some that can't. It can also depend on the
experience the employer has had with "trainees".

3.What different forms of compensation do firms typically use to attract and keep productive
Workers?

Compensation strategy:
Defining a pay plan is a crucial practice for many companies , particularly startups. The payout plan has
to be cost-effective, organized and fairly efficient.You ought to develop your payout plan to better
match your particular market circumstances. As a startup, you would not be able to match on wages
with major businesses. Therefore a variety of strategies will be seen to hire and retain main workers.Do
not underestimate the value of the benefits or perquisites your company has to offer, which may not be
readily available in larger companies — opportunities for interesting work , lack of hierarchy, flexible
environment, and so on. Some people are motivated by the desire to be at the forefront of scientific or
technological advances.If they trust in the potential and the job it has to give, they will take less pay to
job with a company.
Salary and wages:
If they trust in the potential and the job it has to give, they will take less pay to job with a company.A
compensation (or wage) is a set sum paid in return for the services given to an employee. Law on
Ontario Employment Standards entitles most employees to receive a "minimum salary" in exchange for
the work they do for a company. For full-time employees, salary is generally described in annual,
monthly, bi-weekly or weekly amounts. It is generally defined as an hourly for part-time workers
hourly.
You will decide the correct salary and/or wage scale your employer is prepared to pay for a job.
1. Establish the value of the position based on your organizational requirements.
2. Understand what the market is paying for a similar position
Incentives: Drivers in attracting the best employees:
Compensation can be divided into wages , bonuses and incentives. While salary and benefits have to be
competitive, incentives are the most likely drivers to attract and retain the best start up employees.
There are three key types of incentives: bonuses, profit sharing and stock options.
Bonuses:
1.Individuals are rewarded based on attainment of performance-based goals (individual, team and/or
company).
2.Goals must be realistic and closely matched to the business and people involved.
3.Payout potential should be large enough to be significant to the individual.
4.Bonuses can be set up to directly drive and support the company’s needs (for example, profitability,
annual results, successful completion of projects and/or significant project milestones).
Profit sharing:
1.Payment is tied to company profits.
2.A pre-determined percentage of profit is shared among all employees.
3.Profit-sharing bonuses are generally paid out once a year in the form of cash or on a deferred basis.
Stock options:
1.An individual receives the option to buy company shares for a set price during a specified time frame.
2..Option can be exercised by the individual at any time during the agreed-upon term and subject to any
vesting schedule.
3..Stock options are often part of management’s executive compensation but may be offered to key
employees in lieu of a higher salary—especially where the business is not yet profitable and/or cash
flow is constrained.
4.If the business does well and the company’s stock rises, the holders of the options share in the
financial benefits.
5.In general, if the company permits a long period from the date of issue to the last date for exercising
the option, it will encourage the employee to stay with the company and be fully committed to its
success.
Commissions:
Commissions are a common method of remunerating workers (salespeople) to protect a good or service
from being delivered. The goal is to create a clear motivation for the employee to bring as much energy
into their job as possible. Commissions are usually measured as a percentage of the good or service
revenue (for example, 5 percent of the retail purchase price of a computer component).Payment may
either be pure payment (no base salary) or a combination of base salary and fee. The committee system
is usually focused on the attainment of defined goals or thresholds mutually decided upon by
management and the employee. Usually, these thresholds or quotas are related to net revenue, unit sales
or some other metric dependent on demand.