Fundamentals of Human Resource Management 6th Edition Noe Solutions Manual 1

Chapter 05 - Planning for and Recruiting Human Resources
Fundamentals of Human Resource Management 6th Edition

Noe
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Chapter Five: Planning for and Recruiting Human

Resources
Welcome to your guide to teaching Chapter Five, Planning for and
Recruiting Human Resources!
This guide will provide you with a chapter summary, learning objectives, lecture
outlines, solutions to in-chapter case questions and end of chapter discussion questions
and possible responses.
Instructor’s Manual Highlights:

Chapter Five Roadmap
We hope you find each chapter of your Instructor Manual practical and useful, but also,
exciting! You can adapt the chapter text, the PowerPoints, and the video to work in an online
class environment, a guided independent study environment, or a face to face or on-ground
environment.
 When presenting Chapter Five, have the students first read the chapter and encourage
them to absorb the “big picture” of Human Resource Planning and Recruiting.
 Use the PowerPoint for Chapter Five to frame your lecture.
 Have students read and discuss the Cases and their respective Questions.
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
 Have students validate their knowledge of the chapter by working through the
Discussion Questions at the end of the Chapter.
 Lastly, have students review, journal, or discuss the Key Vocabulary Terms at the end of
the chapter.
ROADMAP: THE LECTURE
PLANNING FOR AND RECRUITING HUMAN RESOURCES
Chapter Summary
This chapter explores how organizations carry out human resource planning. At the beginning,
the chapter identifies the steps that go into developing and implementing a human resource
plan. Each subsequent section of the chapter has a focus on recent trends and practices, such
as downsizing and outsourcing, which are prevalent to human resource management.
Throughout the remaining sections, an exploration into the recruiting process will be
undertaken. At the end of the chapter, a discussion will be presented on the role of human
resource recruiters.
Learning Objectives
After studying this chapter, the student should be able to:
1. Discuss how to plan for human resources needed to carry out the organization’s strategy.
2. Determine the labor demand for workers in various job categories.
3. Summarize the advantages and disadvantages of ways to eliminate a labor surplus and
avoid a labor shortage.
4. Describe recruitment policies organizations use to make job vacancies more attractive.
5. List and compare sources of job applicants.
6. Describe the recruiter’s role in the recruitment process, including limits and opportunities.
I. Introduction
The way in which applicants search for a job, and get a first impression of a company,
has changed with the advances in technology. Applicants get a first impression when
they visit the company website, Facebook page, or interact with a recruiter through
LinkedIn or Twitter. Lars Schmidt, National Public Radio director of talent acquisition,
was not happy with the way the organization was portrayed on line to prospective
employees and went about updating their online message. He added links to social
media, video clips of employees telling about NPR’s creative culture, and updated the
webpage design. Schmidt found ways to use social media to speak with the prospective
applicants in real time which increased the number of qualified applicants.
Discussion Question and Suggested Response
1. This vignette provided some insight into issues of recruiting and planning human
resources with the use of social media. Do research on one company you would like
to work possibly work for some day and share your first impression of their “careers”
section on their website and the different ways you can contact the recruiter with
social media.
Answers will vary.
II. The Process of Human Resource Planning
1. Organizations should carry out human resource planning so as to meet business

objectives and gain an advantage over competitors.
2. Human resource planning compares the present state of the organization with its goals
for the future, then identifies what changes it must make in its human resources to meet
these goals. The changes may include downsizing, training existing employees in new
skills, or hiring new employees.
3. Figure 5.1, Overview of the Human Resource Planning Process, identifies the stages
of the human resource planning process.
A. Forecasting
1. The first step in human resource planning is forecasting. This is defined as the
attempts to determine the supply and demand for various types of human
resources to predict areas within the organization where there will be labor
shortages or surpluses.
2. Forecasting supply and demand can use statistical methods or judgment.

Statistical methods capture historical trends in a company’s demand for labor. In
situations where statistical methods are of little use, the organizations must rely on
the subjective judgments of experts.
3. Forecasting the Demand for Labor: An organization forecasts demand for
specific job categories or skill areas. There are several ways of making such
forecasts:
a. Trend analysis, which is constructing and applying statistical models that

predict labor demand for the next year, given relatively objective statistics from
the previous year. These statistics are called leading indicators, which are
objective measures that accurately predict future labor demand. They may
include measures of the economy, actions of competitors, changes in
technology, and trends in the composition of the workforce.
b. Statistical planning models are useful when there is a long, stable history that
can be used to reliably detect relationships among variables. These models
almost always have to be complemented with subjective judgments of experts.
4. Determining Labor Supply: Determining the internal labor supply calls for a
detailed analysis of how many people are currently in various job categories or
have specific skills within the organization.
a. One type of statistical procedure that can be used for this purpose is the
analysis of a transitional matrix. This is a chart that lists job categories held
in one period and shows the proportion of employees in each of those job
categories.
b. Table 5.1 provides an example of a transitional matrix. Matrices such as

the one indicated in Table 5.1 are extremely useful for charting historical trends
in the company’s supply of labor. More importantly, if conditions remain
somewhat constant, matrices can be used to plan for the future.
c. Historical data may not always reliably indicate future trends. Thus, planners
need to combine statistical forecasts of labor supply with expert judgments.
d. Besides looking at labor supply within the organization, planners should

examine trends in the external labor market.
5. Determining Labor Surplus or Shortage: Based on the forecasts for labor

demand and supply, the planner can compare the figures to determine whether
there will be a shortage or surplus of labor for each job category. Determining
expected shortages and surpluses allows the organization to plan how to address
these challenges.
B. Goal Setting and Strategic Planning
1. The second step in human resource planning is goal setting and strategic
planning.
2. The purpose of setting specific numerical goals is to focus attention on the

problems and provide a basis for measuring the organization’s success in
addressing labor shortages and surpluses. The goals should come directly from
the analysis of labor supply and demand.
3. For each goal, the organization must choose one or more human resource
strategies.
4. Table 5.2 shows major options for reducing an expected labor surplus and
avoiding an expected labor shortage. The options differ widely in their
expense, speed, and effectiveness.
5. Another consideration in choosing an HR strategy is whether the employees

needed will contribute directly to the organization’s success. Organizations are
most likely to benefit from hiring and retaining employees who provide a core
competency, which is a set of knowledge and skills that make the organization
superior to competitors and create value for customers.
6. Downsizing: This is the planned elimination of large numbers of personnel with

the goal of enhancing the organization’s competitiveness. The primary reason
organizations engage in downsizing is to promote future competitiveness.
According to surveys, organizations do this by meeting four objectives:
a. Reducing costs
b. Replacing labor with technology
c. Mergers and acquisitions
d. Moving to more economical locations
7. Some indications suggest that downsizing efforts have not lived up to

expectations. In one survey, 80 percent of the firms that had downsized later
replaced some of the very people that had laid off. In one Fortune 100 firm, a
bookkeeper making $9 an hour was let go. Later, the hired her back as a
consultant for $42 an hour.
8. There are several reasons why so many downsizing efforts fail to meet
expectations. These reasons include:
a. Negative results
b. Loss of talent
c. Disrupts the social networks
d. Need to rehire
e. Survivors become self-absorbed and afraid to take risks
f. Negative publicity
9. Many problems with downsizing can be reduced with better planning.
HR Oops!
Trimming More Than the Fat
Although getting lean improves an organization’s efficiency and makes it stronger for the long
haul, some organizations are so desperate to cut costs that they starve themselves of important
human resources. Walmart needed to cut costs after the 2008 recession. They opened 13%
more stores but with 1.4 percent less workforce. Some of the cuts were at headquarters but the
question remains if they became more efficient of cut costs too deeply. Many customers
complained of longer lines, lack of product on shelves, and unable to find employees to help
with questions. Some Walmart employees responded by stating they were overwhelmed and
needed more help. In a national customer service, Walmart ranked in last place again for the
6th year in a row. Walmart’s sales have been falling but profits have remained steady. So, the
question is, have they cut their employees too deeply to cut costs instead of concentrating on
increasing sales?
Discussion Questions with Possible Responses
1. What pros and cons of downsizing do you think apply to this example?
Answer will vary. A pro is that the company could get rid of redundancies and workers
could become more efficient. A con is that if they cut too deep then the employees
become overwhelmed and customer service suffers.
2. Besides reducing the workforce in its stores, how else could a retailer like Walmart
respond to a decline in demand?
There are several different responses. The company could offer employees, particularly
those who might prefer it anyway, to work part-time so that they could more effectively
juggle work, family, and other demands upon their time. The company could initiate a job
sharing program, ideally on a voluntary basis. The company could cross train
employees, so that employees could work in other departments that might have a more
steady flow of work, so that the workflow was evened out during times of declining
demand. Finally, the company could reduce hours, with a corresponding reduction in
pay.
10. Reducing Hours: One way to spread the burden more fairly is cutting work hours,
generally with a corresponding reduction in pay.
11. Early-Retirement Programs: These are another way to reduce a labor surplus.
Such programs are a way to encourage older workers to leave voluntarily by
offering early-retirement incentives.
12. The average age of the U.S. workforce is increasing. There are several forces
that fuel the drawing out of older workers’ careers such as:
a. Improved health
b. Decreased physical requirements of jobs
c. Fear of Social Security being cut
d. Insufficient employer-sponsored pensions
e. Age discrimination laws
f. Outlawing of mandatory retirement ages
13. Many organizations are moving from early-retirement programs to phased-

retirement programs. In these programs, the organization can continue to enjoy
the experience of older workers while reducing the number of hours that these
employees work as well as the cost of those employees.
14. Employing Temporary and Contract Workers: The most widespread methods
for eliminating a labor shortage are hiring temporary workers and outsourcing
work.
15. Temporary Workers: Temporary employment is popular with employers because

it gives them flexibility and lowers costs.
16. If an employer believes a higher level of demand will persist, it often can hire the
temps as permanent workers.
17. Agencies that provide temporary employees may handle some of the tasks
associated with hiring, such as testing and training,
18. Temporary workers may offer benefits not available from permanent workers such
as bringing an objective point of view to the organization’s problems and
procedures and providing a great deal of experience gained while working in other
organizations.
19. To benefit from using contract or temporary workers, organizations must

overcome the disadvantages associated with this type of labor force. One
drawback is that tension often exists between temporary and permanent
employees.
20. Employers can minimize resentment and ensure that all workers feel valued not
by bringing in temporary or contract workers immediately after downsizing and by
hiring temporary workers from agencies that provide benefits.
HR How To
Using Temporary Employees and Contractors
Contingent workers look like an ideal solution for when a company lands a big order, needs to
catch up on administrative work, or isn’t sure demand will continue at present levels. The
company can hire workers from a temp agency, or negotiate contracts for short-term projects.
When the project or demand falls, the company doesn’t have to figure out what to do with the
workers. Additionally, the company may be able to save money because it doesn’t have to
provide benefits or withhold taxes from contract workers’ pay. The Internal Revenue Service has
guidelines for what constitutes and employee and an independent contractor. This How To box
provides some tips as follows. Companies can specify what they want a contractor to
accomplish but if they tell the workers how to do the work, or control the workers’ activities, then
the workers are employees, not independent contractors. Providing the workers with supplies or
tools and reimbursing workers for expense associate with work tend to be signs that the workers
are employees. Providing workers with benefits is a sign that workers are employees.
If a company hires workers from a temp agency and directly controls what the workers do, or if
the workers are used to perform key roles, the company may be seen by the government an
employer, or a “joint employer” with the temp agency.
1. Suppose a small company does not want the headaches of administering benefits
programs, so it hires its workers from a temp agency and keeps them on for several
years. Would you expect the IRS to agree that these are not employees? Why or Why
not?
If the employees worked for the employment agency, then they could still be considered non
employees of the small company. If they were independent contractors, then the IRS might
have more of a concern. Many small companies are using Professional Employer
Associations (PEO’s) to help deal with the issues of benefits. The PEO pays for those
benefits and charges a fee for the “employees.” Go to http://www.napeo.org/ for more
information on PEO’s.
2. Suppose you work in the HR department of a company that wants to hire production
workers as independent contractors. What advice would you give management about
this idea?
If the production workers needed to use our equipment, be at work at specific hours, and
work under the supervision of our supervisors, I would tell management that workers are
employees, not independent contractors. In order to be considered independent contractors
the worker needs much more say in how they do their work.
21. Employee or Contractor?: A company can obtain workers for limited

assignments by entering into contracts with them. Independent contractors do not
receive company benefits such as health insurance and vacations. Using
contractors can result in savings, even if the contractor works at a higher rate of
pay. It is important to verify that the arrangement will meet the legal requirements
and the Internal Revenue Service website (http://www.irs-gov) is a good place to
start.
22. Outsourcing: Contracting with another organization to perform a broad set of

services is called outsourcing.
23. A major reason for outsourcing can save money is that the outside company
specializes in the services and can benefit from economies of scale.
24. Outsourcing is logical when an organization lacks certain kinds of expertise and
doesn’t want to invest in developing that expertise.
25. Technological advances in computer networks and transmission have speeded up

the outsourcing process and have helped it spread beyond manufacturing areas
and low-skilled jobs.
26. Outsourcing manufacturing may make good sense in the short term, but it may
ultimately hurt U.S. firms’ competitiveness due to a decreased lack of in-house
knowledge and expertise.
27. Organizations that are interested in outsourcing should plan how they will avoid
problems like giving up direct control of a particular operation. Other problems
include quality-control issues, security violations, and poor customer service.
28. Overtime and Expanded Hours: Organizations facing a labor shortage may be
reluctant to hire employees, even temporary ones, or to commit to an outsourcing
arrangement. They may choose to expand working hours and pay overtime to
current employees instead. However, overtime is most suited for short-term labor
shortages.
C. Implementing and Evaluating the HR Plan
1. The final stage of human resource planning involves implementing the strategies
and evaluating the outcomes.
2. When implementing the HR strategy, the organization must hold some individual
accountable for achieving the goals.
3. In evaluating the results, the most obvious step is checking whether the
organization has succeeded in avoiding labor shortages or surpluses. The
evaluation should identify which parts of the planning process contributed to
success or failure.
Did You Know?
The Biggest Hiring Challenges Involve Recruiting
Small business owners state that the biggest challenge in recruiting is finding the right
people. More than 4 out of 10 employers state that finding qualified workers is their
biggest challenge and one-fourth say their biggest challenge is finding employees who
fit their company culture.
Discussion Question with Possible Response
1. Suppose a new local restaurant has brought you in to advise on how it can gain a
competitive advantage over other restaurants in the community. Applying the
results of the survey, what would you suggest the restaurant’s management focus
on doing better?
2. Answers will vary. Managers should start with a job analysis to fully understand
the KSAO’s they are looking for in an applicant. They could survey current
employees and ask what they like about their job and the company. They could
develop an employee referral reward program to give incentive to current
employees to recommend prospective employees.
D. Applying HR Planning to Affirmative Action
1. Many organizations have an HR strategy that includes affirmative action to

manage diversity or meet government requirements.
2. Affirmative-action plans forecast and monitor the proportion of employees who
are members of various protected groups. The planner can compare the
proportion of employees who are in each group with the proportion each group
represents in the labor market. This type of comparison is called a workforce
utilization review. The organization can use this process to determine whether
there is any subgroup whose proportion in the relevant labor market differs
substantially from the proportion in the job category.
3. The steps in a workforce utilization review are identical to the steps in the HR
planning process shown in Figure 5.1.
III. Recruiting Human Resources
1. The role of human resource recruiting is to build a supply of potential new hires that the
organization can draw on if the need arises.
2. Recruiting consists of any practice or activity carried on by the organization with the
primary purpose of identifying and attracting potential employees.
3. Because of differences in companies’ strategies, they may assign different degrees of

importance to recruiting. In general, all companies have to make decisions in three
areas of recruiting: personnel policies, recruitment sources, and the characteristics
and behavior of the recruiter. Figure 5.2 shows how these aspects of recruiting can
have different effects on whom the organization ultimately hires. Personnel policies
influence characteristics of the positions to be filled. Recruitment sources influence the
kinds of job applicants an organization reaches. And the nature and behavior of the
recruiter affect the characteristics of both the vacancies and the applicants.
IV. Personnel Policies
1. An organization’s personnel policies are its decisions about how it will carry out human
resource management, including how it will fill job vacancies.
2. Several personnel policies are especially relevant to recruitment:
a. Recruiting existing employees to fill vacancies or hiring from outside the

organization
b. Meeting or exceeding the market rate of pay
c. Emphasizing job security or the right to terminate employees
d. Images of the organization conveyed in its advertising
A. Internal versus External Recruiting
1. Opportunities for advancement make a job more attractive to applicants and

employees.
2. As personnel policies, decisions about internal versus external recruiting affect the
nature of jobs. Promote-from-within policies signal to job applicants that the
company provides opportunities for advancement.
B. Lead-the-Market Pay Strategies
1. Pay is an important job characteristic for almost all applicants. Organizations have
a recruiting advantage if their policy is to pay more than the current market wage for
a job.
2. Increasingly, organizations that compete for applicants based on pay do so using

forms of pay other than wages or salary.
C. Employment-at-Will Policies
1. Within the laws of the state where they are operating, employers have latitude to set
policies about their rights in an employment relationship. A widespread policy
follows the principle of employment at will, which holds that if there is no specific
employment contract saying otherwise, the employer or employee may end an
employment relationship at any time, regardless of cause.
2. An alternative to employment at will is to establish due-process policies. These

policies formally lay out the steps an employee may take to appeal an employer’s
decision to terminate that employee.
3. In decisions about employment-at-will policies, organizations should consider not

only the legal advantages of employment at will but also the effect of such policies
on recruitment.
D. Image Advertising
1. Advertising designed to create a generally favorable impression of the organization

is called image advertising.
2. Image advertising is especially important for organizations in highly competitive

labor markets that perceive themselves as having a bad image.
4. Whether the goal is to influence the perception of the public in general or specific
segments of the labor market, job seekers form beliefs about the nature of the
organization well before they have any direct interviewing with these companies.
V. Recruitment Sources
1. Another critical element of an organization’s recruitment strategy is its decisions about

where to look for applicants.
2. The method and audiences the organization chooses for communicating its labor needs
will determine the size and nature of the labor market the organization taps to fill its
vacant positions.
3. Figure 5.3 summarizes major sources from which organizations draw recruits. Each
source has advantages and disadvantages.
Best Practices
Sources of Talent for Advanced Technology Services
Advanced Technology Services (ATS) helps solve the shortage of manufacturing employees by
providing its clients with employees with skilled workers. Many young people have been scared
off from going into manufacturing since so many job have gone to offshoring. Instead of each
individual manufacturer trying to find a few employees, ATS is source for many companies and
supplies employees as needed. In order to be a service to so many companies ATS has
developed relationships with the high school and community colleges and looks to the military
and factory closings for skilled workers.
1. How does ATS’s approach to recruitment make it valuable to its clients?

Their approach is valuable because they have built relationship which gives them a
pipeline of ongoing qualified employees. It saves the individual companies time and
money in the recruitment effort.
2. Why is it important for ATS to recruit and train young workers instead of only hiring
experienced employees from factories that are closing?
When manufacturers moved to offshoring, many young people were discouraged to go
into vocational training so there is now a shortage of skilled workers. Manufacturing
will need young people to get into the field to learn the skills to develop into the skilled
workers needed for the future.
A. Internal Sources
1. An organization may emphasize internal or external sources of job applicants.
2. Internal sources are employees who currently hold other positions in the
organization.
3. Organizations recruit existing employees through job postings – communicating

information about vacancies on bulletin boards, in employee publications, on
corporate intranets, and anywhere else the organization communicates with
employees.
4. For the employer, relying on internal sources offers several advantages such as:
a. Generates applicants well known to the organization
b. Applicants are relatively knowledgeable about the organization’s vacancies
c. Faster and less expensive than external recruiting
B. External Sources
1. Organizations often have good reasons to recruit externally such as:
a. No internal recruits available
b. Bring in new ideas or new ways of doing business
2. Organizations often recruit through direct applicants and referrals, advertisements,

employment agencies, schools, and Web sites. See Figure 5.3 External
Recruiting Sources.
3. Direct Applicants and Referrals: Direct applicants are people who apply for a
vacancy without prompting from the organization. Referrals are people who apply
because someone in the organization prompted them to do so.
4. One advantage is that many direct applicants are to some extent already “sold” on
the organization. This process is called self-selection. A form of aided self-
selection occurs with referrals.
5. Many job seekers use social networks to help find employment.
6. A benefit of such sources is that they cost less than formal recruiting efforts.
Considering these combined benefits, referrals and direct applicants are among the
best sources of new hires.
7. Some employers offer current employees financial incentives for referring applicants
who are hire and perform acceptably on the job. Other companies play off their
good reputations in the labor market to generate direct applicants.
8. A major downside of referrals is that they limit the likelihood of exposing the
organization to fresh viewpoints.
9. Sometimes referrals contribute to hiring practices that appear unfair such as

nepotism. This is the hiring of relatives.
10. Advertisements in Newspapers and Magazines: Although computer search tools

have made electronic job listings the most popular way to advertise a job opening,
some recruiters still follow the traditional rout and advertise open positions in
newspapers or magazines. When the goal is to find people who know the local
community, advertising in a local newspaper can reac that audience.
11. Electronic Recruiting: Few employers can fill all their vacant positions through
direct applications and referrals, so most need to advertise openings. Most often
today, that means posting information online.
11. Public Employment Agencies: Employers can register their job vacancies with
their local state employment office and the agency will try to find someone suitable,
using its computerized inventory of local unemployed individuals.
12. The government also provides funding to a variety of local employment agencies.
HRM Social
Social Networks Can Also Be Career Networks
Listing job openings online is an easy way to let potential employees know about positions.
However, the ease of searching and responding to ads means companies have been swamped
with hundreds or thousands of resumes, often from individuals without the necessary
qualifications. Many are turning to social media. Recruiters are more likely to use the career-
focused LinkedIn network. LinkedIn profiles emphasize work experience, skills, and interests.
Many recruiters purchase LinkedIn’s “talent solutions” services for HR managers and recruiters
which helps to manage the applicant pool. Recruiters are also using Twitter to have more
regular contact with prospective applicants.
1. Bases on this description, what are some advantages of finding a candidate with social
media rather than posting jobs on the company’s website?
All social media present opportunities for recruiters to find prospective candidates for
jobs. LinkedIn is more career-focused, and it highlights the type of information that
recruiters might value the most such as professional experiences, education, training,
certifications, skills, and interests. The recruiter is actively seeking a candidate instead of
waiting for the candidate to see the company website when the recruiter is using social
media. It helps to engage the applicant in a discussion and the recruiter can learn about
the applicant through the social media discussion.
2. Based on this description, would you want to post a profile for yourself on LinkedIn?
Why or why not?
Answers will vary. Be sure to emphasize to students the importance of building a
professional profile. All business students should have a LinkedIn account. You can
make this an assignment to develop their account.
13. Private Employment Agencies: Private employment agencies provide much the
same service as public employment agencies, but primarily serve the white-collar
labor market.
14. Another difference between the two types of agencies is that private agencies
charge employers for providing referrals.
15. For managers or professionals, an employer may use the services of a type of
private agency called an executive search firm (ESF). People often call these
agencies “headhunters”.
16. Colleges and Universities: On campus interviewing is the most important source
of recruits for entry-level professional and managerial vacancies. Participating in
university job fairs is another way of increasing the employer’s presence on
campus.
C. Evaluating the Quality of a Source
1. In general, there are few rules that say what recruitment source is best for a given
job vacancy. It is wise for employers to monitor the quality of all their recruitment
sources. One way to do this is to develop and compare yield ratios for each
source. This ratio expresses the percentage of applicants who successfully move
from one stage of the recruitment and selection process to the next.
2. Another measure of recruitment is the cost per hire.
3. Table 5.3 looks at examples of how HR professionals can use these measures.
VI. Recruiter Traits and Behaviors
The recruiter affects the nature of both the job vacancy and the applicants generated.
Many applicants approach the recruiter with some skepticism and sometimes discount
what the recruiter has to say. The recruiter’s characteristics and behaviors seem to
have limited impact on applicants’ job choices.
A. Characteristics of the Recruiter
In general, applicants respond more positively to recruiters whom they perceive as

warm and informative. The impact of other characteristics of recruiters including their
age, sex, and race, is complex and inconsistent.
B. Behavior of the Recruiter
1. Many studies have looked at how well realistic job previews – background
information about jobs’ positive and negative qualities – can help organizations
minimize turnover among new employees.
2. For affecting whether people choose to take a job, the recruiter seems less
important than an organization’s personnel policies that directly affect the job’s
features.
C. Enhancing the Recruiter’s Impact
1. Although recruiters may have little influence on job choice, this does not mean
recruiters cannot have an impact. Researchers have tried to find conditions in
which recruiters do make a difference. Based on this research, an organization can
take several steps to increase the impact that recruiters have on the people they
recruit such as:
a. Can provide timely feedback
b. Can avoid behaving in ways that convey the wrong impressions about the
organization
c. Can recruit with teams rather than individual recruiters
2. Figure 5.4 provides examples of behaviors for recruiters to avoid.
ROADMAP:
Thinking Ethically
Is Something Wrong with a Mutual Agreement Not to “Steal” Employees?
There is a talent war in the high-tech industry as tech companies compete for the best and
brightest talent. As with any competitive environment, there is a strategy for getting and
keeping top talent. Many high-tech companies started to offer huge sign on bonuses and also
bonuses and benefits to keep talented employees. The high-tech industry realized that the
competition was only costing the companies a lot of money so many made agreements not to
“steal” or “poach” employees. Google, Apple, Intel, and Adobe Systems are just a few of the
companies who have used these policies. The Justice Department filed a civil law suit stating
that these companies illegally colluded to restrict the free movement of labor and to fix wages.
There was an out of court settlement.
1. What has been the financial incentive for the high-tech companies to agree not to recruit from
one another? If the arrangement had not been challenges in court, would you consider them
ethical? Why or Why Not?
The financial incentive for the companies was to keep the recruitment and retention costs low.
Since it was such a competitive field, much more demand than supply, the costs were
escalating very quickly. The companies were driving the costs up for each other with the
employees being the winners and companies being the losers, from an arbitrary cost
perspective. The answers will vary on the ethics of these types of policies.
2. Given that the Justice Department has seen these arrangements as possibly violating
antitrust laws, what would be the most ethical way to decide whether to recruit employees from
other companies?
Student responses will vary but the need to consider the ethics from the employer and the
employee viewpoints.
ROADMAP: Chapter Vocabulary

Forecasting
Trend Analysis
Leading Indicators
Transitional Matrix
Core Competency
Downsizing
Outsourcing
Workforce Utilization Review
Recruiting
Employment At Will
Due-Process Policies
Job Posting
Direct Applicants
Referrals
Nepotism
Yield Ratio
Realistic Job Previews
ROADMAP: Review and Discussion Questions
1. Suppose an organization expects a labor shortage to develop in key job areas over the
next few years. Recommend general responses the organization could make in each of
the following areas:
a. Recruitment
b. Training
c. Compensation (pay and employee benefits)
When an organization anticipates an upcoming labor shortage, new human resource

strategies must come into play at the organization. The following responses could be
undertaken to alleviate the problem in these specific areas: Recruitment – select new
employees carefully while availability remains high and indoctrinate them into the
organization, recruit more widely and through a variety of methods such as Internet
recruiting, and utilize other nontraditional recruiting sources to fill organizational needs;
Training - develop a training program that will produce “home grown” employees from
within the company who can be taught a variety of job skills in order to fill the gap when
supply is diminished; Compensation – maintain a competitive compensation/benefit
system in order to attract the best of the available candidates and modify the existing
system in order to diminish the affect of perceived inequity within the organization.
2. Review the sample transitional matrix shown in Table 5.1. What jobs experience the
greatest turnover (employees leaving the organization)? How might an organization with
this combination of jobs reduce the turnover?
A matrix such as the sample presented in Table 5.1 is a chart that lists job categories
held in one period and shows the proportion of employees in each of those job
categories in a future period. It answers the following questions: “Where did people
who were in each category go” and “Where did people now in each job category come
from?”
Based on the information provided by Table 5.1, sales representatives are the jobs with
the most indicated turnover within the organization. An organization with this
combination of jobs may reduce turnover by providing training and preparation to
individuals in order to offer promotion availability.
3. In the same transitional matrix, which jobs seem to rely the most on internal recruitment?
Which seem to rely most on external recruitment? Why?
The jobs that seem to rely the most on internal recruitment are the sales manager
positions. The matrix data indicates that sales manager positions are primarily filled
through internal promotions. The information provided by the matrix also indicates the
sales apprentice positions rely on external recruitment. There is no internal talent
available to fill the apprentice positions, so the organization must recruit from outside
sources.
4. Why do organizations combine statistical and judgmental forecasts of labor demand,

rather than relying on statistics or judgment alone? Give an example of a situation in
which each type of forecast would be inaccurate.
Statistical methods capture historic trends in a company’s demand for labor while
judgment methods rely on the expert’s subjective reasoning. Organizations combine
these two methods in order to generate the most accurate predictions of labor demand
that is possible.
An example of when the statistical method would not be accurate is a company that is
just beginning operations. There would be no historical information to utilize in order to
make future predictions. Utilizing judgment may not be accurate when the environment
is so unstable that neither past experience nor expert judgment would provide a reliable
base of information.
5. Some organizations have derailed affirmative-action plans, complete with goals and
timetables, for women and minorities, yet have no formal human resource plan for the
organization as a whole. Why might this be the case? What does this practice suggest
about the role of human resource management in these organizations?
Organizations may have derailed affirmative action plans because they must. For
instance, they may be government contractors or be under a court-ordered decree that
forces them to have such a plan. There are no legal requirements for human resource
planning, therefore many organizations may not possess the expertise to recognize the
need for one or the know-how to plan for one. This practice indicates the need for
deeper involvement of the human resource department within the operations of the
organization as a whole.
6. Give an example of a personnel policy that would help attract a larger pool of job
candidates. Give an example of a personnel policy that would likely reduce the pool of
candidates. Would you expect these policies to influence the quality as well as the
number of applicants? Why or why not?
The responses provided will vary. However, all responses should indicate
understanding of the concepts. A suggested example for a personnel policy that would
attract a larger pool of candidates would be to offer a method for career progression and
advancement. An example of a policy that would likely decrease the candidate pool
would be to offer a pay-rate that is below the market rate.
Personnel policies do indeed influence the quality as well as the number of applicants for
the organization. Candidates have certain expectations and needs when they apply to
an organization. Policies that do not meet these needs or expectations can negatively
impact the number and type of candidates responding.
7. Discuss the relative merits of internal versus external recruitment. Give an example of a
situation in which each of these approaches might be particularly effective.
Merits of internal recruitment are that the organization will be more familiar with the
motivation and work habits of the candidate and it provides motivation to employees
since internal promotions do occur. Merits of external recruitment include bringing fresh
ideas and expertise into the organization. An example of when internal recruitment
might be particularly effective is when the labor supply is very low and there is a high
level of competition. An example of when external recruitment might be particularly
effective includes when the organization needs innovative and modern ideas in order to
remain competitive within the market.
8. List the jobs you have held. How were you recruited for each of these? From the
organization’s perspective, what were some pros and cons of recruiting you through
these methods?
The individual responses will vary, but each response should demonstrate
understanding of the chapter concepts.
9. Recruiting people for jobs that require international assignments is increasingly

important for many organizations. Where might an organization go to recruit people
interested in such assignments?
Some colleges and universities have majors in international trade or business. Students
often have a double major in a foreign language and business. These individuals are
more likely to be interested in going abroad. Thus, recruitment at colleges and
universities could provide candidates. People who have language skills other than
English may also be a possibility, particularly if they have lived in other countries.
Placement of job advertisements in special-interest magazines may prove helpful.
10. A large share of HR professionals have rated e-cruiting as their best source of new
talent. What qualities of electronic recruiting do you think contribute to this opinion?
The student responses given for this question will vary. However, all answers provided
should demonstrate the individual student’s understanding of the chapter concepts on
electronic recruiting. Students should mention in particular, the fact that electronic
recruiting expands the labor market from which the organization can draw candidates.
11. How can organizations improve the effectiveness of their recruiters?
The impact that recruiters have on the people they recruit include: (1) the organization
can have recruiters provide timely feedback. Applicants dislike delays in feedback and
can draw negative opinions about the organization without timely feedback being
provided to them, (2) organizations can have recruiters who avoid behaving in ways that
might convey the wrong impression about the organization, and (3) the organization can
recruit with teams rather than individuals.
Taking Responsibility
SAP’s Inclusive Approach to Recruiting
SAP is a software company with 65,000 employees in 130 countries. SAP believes that human
resources are a source of their competitive advantage. They want to hire “young and brilliant
minds” and train them to be “sustainable.” One initiative they have is hiring employees who are
autistic. They realize that many people on the autism spectrum bring great skills such as being
highly structured or paying careful attention to details. SAP has started a pilot program to hire
autistic individual and have training and set them up with mentors. Their goal is to have up to 1
% of their workforce be employees with autism because they will help the company to think
differently and spark innovation.
1. What recruiting methods described here support SAP’s need for talented workers who help
the company innovate?
In order to have employees who innovate, SAP needs to be innovate in their recruitment and
look outside standard recruitment boundaries. By recruiting employees on the autism spectrum
they are looking for unique strengths and setting up a support system and training to make
those employees successful.
2. Suggest a few other recruiting methods that would help SAP remain a strong, innovative
company.
Answers will vary. SAP could work with local colleges and universities to develop curriculum
that will help educate employees to be more creative and innovative. They can become an
employer of choice by having a corporate culture where applications will want to apply.
Managing Talent
Boeing’s high-Flying Approach to HR Planning and Recruitment
Boeing is a well-known name in the aerospace industry but they still struggle with identifying,
attracting, and retaining skilled workers. Many talented people are going to Internet companies
instead of aerospace because of the challenges in the aerospace industry. To deal proactively
with the potential employee shortage, Boeing has dedicated many years to developing a
systematic approach to talent management. They divided work groups into segments and use
predictive models to forecast business trends and workforce demographics. The HR
department uses the data to determine where they can promote, transfer, or recruit to fill
needed positions. College recruitment has become more intense and they offer jobs earlier and
have an interview process where the applicant can better understand the company culture.
Boeing has also started some partnerships with schools to better prepare future employees.
1. To meet labor shortages within the company, Boeing starts with promotions and transfers.
What advantages might it experience from filling positions with current employees?
Answers will vary. One major advantage is the loyalty from the current employees who feel
valued and challenged because of the promotion. The promoted or transferred employee
already knows the company well so time is saved on training and the company already knows
the employee is good fit with the corporate culture.
2. Besides the external recruitment sources described here, what other sources would you
recommend for Boeing? Why?
Answers will vary. Boeing could develop relationships with local employment agencies. This
would help to get some temp to perm employees. The employment agency takes the initial risk
and this give the temp employee a chance to see the culture of the organization. The
employment agency would know the culture of Boeing as well and do a solid job of screening
potential applicants. Another idea would be to work with the military to recruit engineers and
technical people as they leave the military and are looking for a second career. This would be
helpful because the ex-military person would understand how a large organization operates and
the person should come with some top-notch skills.
HR in Small Business
For Personal Financial Advisors, a Small Staffing Plan with a Big Impact
This case describes the decision of Robert J. Reed, a financial planner in Covington, Louisiana,
to recruit a planner to work with him so that he could grow his business, and focus on managing
the investments.
Questions
1. Is a company ever too small to need to engage in human resource planning? Why or
why not? Discuss whether you think Robert Reed planning his hiring strategy at an
appropriate time in the firm’s growth.
Since Reed’s firm was only a two-person office, his decision to hire another planner
demonstrated the fact that a firm is never too small to need to engage in human
resource planning. Reed assessed what his goals and objectives were, and that he
wanted someone to complement his strengths (of managing investments), so he
carefully selected Lauren Gadkowski. Reed’s hiring strategy was done at the perfect
time, because he wanted to be able to focus on managing the investments and he
wanted to grow the company in a way that would free more time for him to spend with
his family.
2. In Table 5.2, review the options for avoiding a labor shortage, and discuss how well the
options besides new hires could have worked as ways for Reed to reach his goals for
growth. As you do so, consider qualities of a financial-planning business that might be
relevant (for example, direct client contact and the need for confidentiality).
It is unlikely that other options besides new hires could have worked for Reed. Overtime
would not make sense as a strategy because he wanted more free time. Temporary
employees would not make sense because of the relationship-orientation of this
business. Outsourcing would not make sense for similar reasons. Turnover reductions
would not make sense, since there were only two people in the office and he needed
and wanted to grow.
3. Suppose that when Reed was seeking to hire a certified financial planner, he asked you
for advice on where to recruit this person. Which sources would you suggest, and why?
Direct sourcing, just as what Reed did, is perhaps the most appropriate way to recruit for
this position. Reed knew precisely what he was looking for. He wanted a Certified
Financial Planner who had experience plus an interest in all of the planning and advising
tasks except investment management. Reed could also have posted an ad on a job
board and provided the detailed description of the position. Referrals and word of mouth
would also be appropriate suggestions because of the relationships that likely evolve
among colleagues in the same industry.
HRM DVD Vol 3 Suggested Video with Discussion Questions and Possible Responses
Video Part 2: Recession Job Growth(6:22)
Video Summary
The country is at a crossroads regarding job growth. One in six Americans is underemployed.
The recession wiped out 15 percent of the manufacturing workforce. A decade’s worth of job
growth was lost in the recession. Experts expect elevated unemployment to last at least the next
five years. While the United States is still the world’s strongest economy, our competitive edge
is eroding.
Innovation must be the first in a three prong strategy to replace lost American jobs. In the
1960s, launching the space program created millions of jobs and led to innovations. The
defense department began working on a computer network that became the internet, and
millions of jobs were created around this innovation alone.
History shows us you don’t save your way out of a recession, you invest your way out of it.
Research and development is the second prong of the strategy to replace lost jobs. Intel has
recently invested 7 billion dollars to create factories in Arizona, Oregon and New Mexico to
make the next generation of semiconductors, but they say high tech jobs have become hard to
fill. We are not graduating nearly the number of engineers that are coming out of China, India,
and elsewhere. Therefore the third prong of the strategy is education. We need to have
qualified, capable people to fill the positions.
Discussion Questions
1. What strategies will companies likely use to try to fill the high tech job demands?
Large companies may be able to use their strong reputation and prestige to give them the edge.
For smaller employers, offering the chance for someone to have a large, immediate impact may
have appeal. Other incentives include high pay, benefits, and perks.
Some employers may try strategies like the University of Maryland Baltimore County, where
they sponsor programs with elementary students to get them interested in high tech career
fields early on. Employers will likely use other strategies like employee retention, tuition
reimbursement, delayed retirement, etc. to try to compensate for the talent gap.
2. What are some of the ways companies can continue to motivate their employees in a time of
a recession and extended higher unemployment.
Employers can employ several strategies during times of uncertainly and turmoil. They can
constantly reassure their employees they are important and that they are valued. Employees
during these times are questioning whether they should they be looking elsewhere. Second,
companies need to continue the focus on career development. Focusing on the future gives
employees encouragement that they will be there long term and forces them to keep growing
and enhancing their skills. One of the worst outcomes is that employees freeze in place, afraid
to advance themselves. Also, employees need to be busy. Being busy keeps employees
producing and driving feelings of adding value. Last, companies can ensure a risk-averse
environment does not form by rewarding risk taking and innovation.

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Chapter 05 - Planning for and Recruiting Human Resources

Fundamentals of Human Resource Management 6th Edition

Chapter Five: Planning for and Recruiting Human

Instructor’s Manual Highlights:

 Use the PowerPoint for Chapter Five to frame your lecture.

PLANNING FOR AND RECRUITING HUMAN RESOURCES

After studying this chapter, the student should be able to:

2. Determine the labor demand for workers in various job categories.

5. List and compare sources of job applicants.

Discussion Question and Suggested Response

II. The Process of Human Resource Planning

1. Organizations should carry out human resource planning so as to meet business

2. Forecasting supply and demand can use statistical methods or judgment.

a. Trend analysis, which is constructing and applying statistical models that

b. Table 5.1 provides an example of a transitional matrix. Matrices such as

d. Besides looking at labor supply within the organization, planners should

5. Determining Labor Surplus or Shortage: Based on the forecasts for labor

B. Goal Setting and Strategic Planning

2. The purpose of setting specific numerical goals is to focus attention on the

5. Another consideration in choosing an HR strategy is whether the employees

6. Downsizing: This is the planned elimination of large numbers of personnel with

b. Replacing labor with technology

c. Mergers and acquisitions

d. Moving to more economical locations

7. Some indications suggest that downsizing efforts have not lived up to

c. Disrupts the social networks

e. Survivors become self-absorbed and afraid to take risks

9. Many problems with downsizing can be reduced with better planning.

Trimming More Than the Fat

Discussion Questions with Possible Responses

b. Decreased physical requirements of jobs

c. Fear of Social Security being cut

d. Insufficient employer-sponsored pensions

e. Age discrimination laws

f. Outlawing of mandatory retirement ages

13. Many organizations are moving from early-retirement programs to phased-

15. Temporary Workers: Temporary employment is popular with employers because

19. To benefit from using contract or temporary workers, organizations must

Using Temporary Employees and Contractors

Discussion Questions with Possible Responses

21. Employee or Contractor?: A company can obtain workers for limited

22. Outsourcing: Contracting with another organization to perform a broad set of

25. Technological advances in computer networks and transmission have speeded up

C. Implementing and Evaluating the HR Plan

Did You Know?

The Biggest Hiring Challenges Involve Recruiting

Discussion Question with Possible Response

D. Applying HR Planning to Affirmative Action

1. Many organizations have an HR strategy that includes affirmative action to

III. Recruiting Human Resources

3. Because of differences in companies’ strategies, they may assign different degrees of

IV. Personnel Policies

2. Several personnel policies are especially relevant to recruitment:

a. Recruiting existing employees to fill vacancies or hiring from outside the

b. Meeting or exceeding the market rate of pay

c. Emphasizing job security or the right to terminate employees

d. Images of the organization conveyed in its advertising

A. Internal versus External Recruiting

1. Opportunities for advancement make a job more attractive to applicants and

B. Lead-the-Market Pay Strategies

2. Increasingly, organizations that compete for applicants based on pay do so using

2. An alternative to employment at will is to establish due-process policies. These

3. In decisions about employment-at-will policies, organizations should consider not

1. Advertising designed to create a generally favorable impression of the organization