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Recruitment and Selection: Hiring the Right Person

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1 Recruitment and Selection: Hiring the Right Person
Staffing Management • Myrna L. Gusdorf, MBA, SPHR • 2008

2 Learning Objectives At the end of this module, students will understand the: Methods used by organizations to recruit and select employees. Legal issues that affect recruitment and selection. HR’s role in the recruitment and selection process. Role of supervisors and peers in the recruitment and selection of team members. ©SHRM 2008

3 Hiring the Right Person: Recruitment
The process of attracting individuals in sufficient numbers with the right skills and at appropriate times to apply for open positions within the organization. ©SHRM 2008

4 Recruitment Issues Alternatives to recruitment:
Outsourcing. Contingent labor. Part-time employees. Overtime. Costs of recruitment and selection: Replacing supervisory, technical and management personnel can cost from 50 percent of salary to several hundred percent of salary. When HR planning indicates the need for additional labor, organizations have a number of choices to make. This may be the first step in a full-scale recruitment and selection process but sometimes hiring additional employees is not the best method to obtain additional labor. It may be practical for an organization to consider alternatives to recruiting such as outsourcing or contingent labor. If this is a temporary fluctuation in work volume, the simplest solution may be part-time labor or overtime by existing employees. Since the costs of recruitment and selection can be staggering, hiring new employees should occur only after careful consideration and only when the organization anticipates a long-term need for additional labor. Estimates of the cost to replace supervisory, technical and management employees run from 50 percent to several hundred percent of their salaries (SHRM White paper, Employee Turnover Hurts Small and Large Company Profitability, Richard Galbreath, SPHR, 2000). ©SHRM 2008

5 Internal Environment Promotion from within: Advantages:
Promotion as a reward for good work. Motivational tool for other employees. Promoted employee gets up to speed must faster in his or her new job. Disadvantages: Must fill the position vacated by the promoted employee. Lack of new ideas and creativity that may come from a new person. Jealousy from those not promoted. Advantages: Many organizations use promotion from within as a motivation tool and reward for good work or longevity with the employer. When employees see their co-workers being promoted, they become more aware of their own career opportunities and they are likely to plan accordingly. Disadvantages: The promoted person will leave a staffing gap in their former position, so there is still a position to be filled. The organization loses out on the chance for new ideas and the creativity that can come from a new person entering the organization for the first time. You may have individuals that believe they should have gotten the promotion instead of the individual promoted.

6 Internal Environment Nepotism: Hiring relatives.
Does your organization have a policy on nepotism? May be discriminatory. Must ensure individuals are not in supervisory positions managing their own relatives. May create issues of favoritism. Be careful of civil rights violations. In many states, it is illegal to discriminate in hiring practices based on a person’s marital status. Many organizations have nepotism policies, so find out where your employer stands on the issue. When hiring relatives, most employers require family members to work in different areas to prevent issues of favoritism and possible morale problems among other employees. It is never appropriate for family members to be in supervisory positions where they are required to manage their own relatives. ©SHRM 2008

7 External Environment Labor market conditions:
Strong economy = difficulty hiring. Weak economy = too many applicants. The strength of the economy and labor market conditions will significantly affect your organization’s ability to attract and retain top-level employees. When the economy is strong with little unemployment, you may have to compete with other employers for a limited number of skilled employees. This may require increased compensation or benefit incentives to attract quality applicants. The reverse may be true in a soft economy with high levels of unemployment. The problem then is not a shortage of qualified applicants; instead, the problem is managing a huge number of applications that must be pared down to find a few potential good hires. ©SHRM 2008

8 Discrimination Issues in Recruiting
Civil Rights Act of 1964. Age Discrimination in Employment Act of 1967. Pregnancy Discrimination Act of 1975 Americans with Disabilities Act of 1990. Local regulations can add further protections against discrimination. There are a number of laws that will affect your hiring process, particularly in the area of discrimination. The Civil Rights Act of 1964 prohibits discrimination in employment practices when the discrimination is based on a person’s race, color, sex, religion or national origin. The federal law applies to organizations with 15 or more employees. The Age Discrimination in Employment Act of 1967 extends discrimination protection to persons aged 40 years old and older for organizations of 20 or more employees. Passed as an amendment to Title VII of the Civil Rights Act, the Pregnancy Discrimination Act of 1975 makes it illegal to refuse to employ a woman because of pregnancy, childbirth or a related medical condition. The basic principle of the act is that a woman affected by pregnancy or other related medical condition must be treated the same as any other applicant in the recruitment and selection process. The Americans with Disabilities Act of 1990 prohibits discrimination against qualified individuals with disabilities in organizations of 15 or more employees. The ADA also requires that the employer offer reasonable accommodations to disabled individuals so that they have equal opportunity to apply for job openings and if hired, to be successful in their job functions. Many states and local communities have passed legislation that extends discrimination protection beyond the scope of federal laws. If you are not sure of the regulations in your state, contact your state department of labor for information on appropriate laws in your area and remember that it is important for you to remain current on employment law, as regulations are frequently updated. Additional information on legal compliance can be found at the EEOC website at and at the website for the Department of Labor at ©SHRM 2008

9 Internal Recruitment Job Posting: The process of announcing job openings to employees. Job information must be made available to all employees. Ensure minority workers and disadvantaged individuals are aware of job opportunities. Employee cynicism occurs when there is not “equal” opportunity for open positions. Employee Referrals: Some believe this is the route to the best employees. Can perpetuate discriminatory hiring practices. Job posting is the process of announcing job openings to all employees. Some organizations have developed computerized versions of job announcements that are sent out as s to all employees and some publish employment newsletters or flyers. The announcement should contain information about the position, the required qualifications and instructions for applying. The important issue in job posting is that the job announcement is made available to all employees. Adequate job posting can ensure that minority workers and other disadvantaged groups are aware of opportunities within the organization. HR must ensure that all employees have an equitable opportunity to apply for the jobs that are available. Employee cynicism can occur when jobs are posted but the organization has already selected a strong internal candidate for the position. Such practices create resentment and mistrust among employees when they believe the job posting is just a formality with little real opportunity for advancement. Employee Referrals: Current employees can play an important role in recruiting new employees and some organizations pay a bonus to employees for successful referrals. There is a downside to extensive use of employee referrals. The EEOC compliance manual issued in 2006 updated guidance on the prohibition of discrimination under Title VII of the Civil Rights Act of The manual clearly warns that relying on word-of-mouth recruiting may generate applicant pools that do not reflect the diversity of the labor market. Therefore, it would seem prudent to use employee referral sparingly. ©SHRM 2008

10 External Recruitment Employment agencies. Executive search firms.
In-house recruiters. Local advertising: Newspaper. Multimedia. Internships. Job fairs. College recruiting. Walk-in candidates. Private agencies and executive search firms are most commonly used to recruit white-collar employees, however they can be used for virtually any type of position. Using job criteria provided by your organization, an agency will generate the applicant pool and do the preliminary interviews, thereby screening out unqualified candidates and sending to you only those who are actually qualified for the position. Large organizations often have in-house recruiters whose sole focus is to generate qualified candidates for open positions. Recruiters are generally used in high-tech industries and they focus their efforts on technical schools, community colleges and universities. You may choose to advertise the open position in local newspapers, trade journals, radio and television. Advertising can range from a simple help wanted ad in the classifieds to an extensive multimedia campaign. Traditionally, local newspaper advertising has been the common method of recruitment, particularly for entry-level positions, as it is low cost and can generate a good number of applicants. An internship is a special form of recruitment where a student is placed temporarily in a position with no obligation by either the student or the organization to make this a permanent position. The internship may be a summer or part-time job while the student is in school, enabling the student to learn the organization and try out the job before settling into a career. It also enables the organization to try out a possible future employee before making a job offer. Depending on the nature of the job you are hiring for, you may also get some unsolicited, walk-in applicants. ©SHRM 2008

11 Internet Recruiting Advantages: Inexpensive.
Quick and easy to post announcement. Responses arrive faster and in greater quantity. Will generate a wider range of applicants. Applicants can be screened by computer. Some selection tests can be administered by computer. Automated applicant tracking. Disadvantages: Ease of submission will result in a lot of applicants, many whom are not qualified. May take more HR time to sort through the greater quantity of applicants. ©SHRM 2008

12 Recruitment for Diversity
An ethnically diverse workforce enhances creativity and may facilitate expansion into global markets. Recruiting must generate applicants from a wide variety of individuals. Train recruiters to use objective standards. Include pictures of minority and disabled employees on recruitment flyers. Make sure ads and interviews are bi-lingual. Many organizations recognize the inherent advantage of a diverse workforce. Diverse employees bring increased creativity to the organization and the ability to help the firm expand into global markets. Employers who wish to develop a diverse workforce must ensure the use of recruiting methods that generate applications from a variety of individuals. It is important that recruiters receive training in the use of objective standards, as these individuals occupy a unique position in terms of encouraging or discouraging diverse individuals to apply for positions with the organization. Recruitment flyers can include pictures of minority and disabled employees, advertisements can be bi-lingual and interviews can be conducted using translators if appropriate. ©SHRM 2008

13 HR Dilemma: Employee Referrals
An organization starts an employee referral program to find employees for its assembly plant. The program is very effective, but no candidates from protected groups are referred or hired. Could the organization be guilty of discrimination? Should the organization abandon its referral program? Instructor’s note: This is a good place to get the class talking. Ask for discussion about this dilemma. What would students suggest? If the use of employee referrals does not generate a diverse applicant pool, the organization may be guilty of adverse impact discrimination. “A potential disadvantage of referrals is that employees tend to refer others who are similar in age, gender, ethnicity, and religion. If relied on too heavily, this recruiting method may be detrimental to equal employment opportunity goals. Minority employees may refer only minority candidates and non-minorities may refer only other non-minorities.” Jackson, Susan E., Schuler, Randall S. and Werner, Steve. (2009). Managing Human Resources, 10e. (p. 204) South-Western CENGAGE Learning. See also EEOC vs. Carl Buddig. ©SHRM 2008

14 The Employment Application
Applications must include: Applicant information. Applicant signature certifying validity of information. Statement of employment at will, if permitted. Permission from the applicant for reference check. Avoid the following: Discriminatory information. Citizenship and Social Security data. Information on past use of FMLA, ADA or Workers’ Compensation. Disability information. Past salary levels. Birth date or education dates. Driver’s license information, unless driving is a job requirement. The employment application form should include sections for the applicant’s name, address, telephone number, education, military background, work experience and reference information. There should be a place for the applicant to sign and a preprinted statement that the applicant’s signature indicates their verification that everything on the form is true; if found otherwise, the candidate can be released. When it is not prohibited by state law, many organizations include a statement of employment at will, reminding employees that either the employer or the employee can terminate the employment relationship at any time. And finally, the form should contain a statement from the applicant giving permission to have references checked. Avoid requesting information on gender, race, national origin, education dates and disabilities. The most commonly found inappropriate questions involve past salary levels, age and driver’s license information. Questions about past salary are considered inadvisable since they can perpetuate the existence of lower salaries for women and minorities as compared to white males. If employers base a starting salary on an applicant’s prior earnings, minorities and women will likely be offered less pay. Although the majority of applications do not explicitly ask about age, many contain inquires about an applicant’s education dates (year of high school graduation) which can be used to infer an applicant’s age. Driver’s license information can be used to obtain demographic (and possibly discriminatory) information about an applicant. ©SHRM 2008

15 Screening Interview Usually conducted by telephone.
Not done in all organizations. A few straight-forward questions. Can eliminate those less qualified early in the selection process. Screening interviews are usually conducted by telephone. The interviewer asks a few straight-forward questions to further determine the candidate’s job qualifications and appropriateness for the open position. If it is determined that the applicant is not appropriate for the position in question, the interviewer can steer them to another open position within the organization if there is something available that matches the applicant’s skills. If there is nothing else available and the candidate is obviously unqualified for the position, the process ends there, thereby saving both the candidate and the organization the time and expense of going further into the selection process. ©SHRM 2008

16 Selection Tests SELECTION TEST: Any instrument that is used to make a decision about a potential employee.(1) STANDARDIZATION: Uniformity of procedures and conditions related to administering tests.(2) RELIABILITY: The extent to which a selection test provides consistent results.(2) VALIDITY: The extent to which a test measures what it claims to measure.(2) Do higher test scores relate to higher success on the job? (1) Myrna L. Gusdorf (2) R. Wayne Mondy Selection Test: Selection tests are used to identify applicant skills that cannot be determined in an interview process. Using a variety of testing methods, applicants are rated on aptitude, personality, abilities, honesty and motivation. Tests are generally administered and evaluated before interviewing candidates. Testing applicants has two major advantages: test results are objective and free from personal bias and test results are usually expressed numerically so they can be validated by statistical analysis. Employers often use tests to determine the applicant’s knowledge level or proficiency in required job skills. Standardization : The processes used to test applicants must be as identical as possible. The content of a test, the instructions and the time allowed must be the same for all candidates. Reliability: A test’s reliability should be questioned if it does not generate consistent results each time it is administered. For example, if a person scores 125 on an intelligence test one week and only 80 on the same test the following week, we should assume that the testing instrument was not reliable. Validity: The skills tested in a selection instrument should be the same skills used on the job. Therefore, we can assume that higher test scores would correlate to higher success in job performance. ©SHRM 2008

17 Kinds of Selection Tests
Cognitive aptitude tests measure reasoning, vocabulary, verbal and numeric skills. Job knowledge tests measure knowledge regarding a particular job. Work sample tests allow candidates to demonstrate how they would work on the job. Psychomotor abilities tests assess the skill level of tasks required on the job. Personality tests assess traits and personal characteristics. They are used to determine if the applicant is the right fit for the organization. Vocational interests tests identify occupations in which the candidate is most interested. Honesty and integrity tests try to measure a candidate’s truthfulness . ©SHRM 2008

18 Interviewing Candidates
Team or individual interviewer? Structured or patterned interview: Pre-set questions asked of all candidates. Nondirective interview: Minimum of questions, not planned in advance. Open-ended questions; interviewer follows the candidate’s lead. Situational and problem-solving interview: Candidate describes how he or she would solve a problem. Behavioral interview: Candidate describes how he or she responded to a specific situation. In the past, the supervisor may have been the only person interviewing a candidate but now most organizations use an interview team consisting of representatives from the various areas of the organization. Multiple interviewers represent broader areas of interest and when interviewing is completed, there is more than one person to make the selection decision. The downside to team interviews is that the larger the team, the more difficult it will be to find a time and a place in everyone’s schedule to make the interview happen. In addition, candidates are likely to find a panel interview more stressful than an interview by a single person. In a structured or patterned interview, the interviewer follows a pre-set list of questions that are asked of all candidates. This allows for consistency in the process, ensures that important questions are not left out and helps guarantee that all candidates are assessed by the same standards. The nondirective interview is conducted with a minimum of questions asked by the interviewer and questions are not always planned in advance. This technique involves open-ended questions such as “tell me about the work you do in your field,” allowing the candidate to express his or her thoughts and feelings that might be relevant to the job and allowing the interviewer to follow the direction set by the candidate. Situational interviewing is characterized by questions like, “what would you do in this situation?” allowing the candidate to speculate on how they would handle a particular job problem. Behavioral interviewing asks the candidate to “describe what you did in a particular situation?” It requires the candidate to give real examples of past actions and results and it is based on the theory that past behavior is a good predictor of future behavior. Generally, behavioral questions are more likely to give real-world information that may be relevant in making a good selection decision. ©SHRM 2008

19 Background Verification and Reference Checks
The importance of checking: 40 percent of applicants lie about work histories and educational backgrounds. 20 percent of applicants falsify credentials and licenses. 30 percent of applicants make misrepresentations on their resumes. According to ADP Screening and Selection Services, 40 percent of applicants lie about their work histories and educational backgrounds and about 20 percent present false credentials and licenses. Nationwide, an estimated 30 percent of job applicants make material misrepresentations on their resumes (P. Babcock, “Spotting Lies,” HRMagazine; October 2003). Another survey found that 95 percent of college students said they would lie to get a job and 41 percent said that they had already done so. One survey of top executives found that 15 percent admitted falsifying resume information. (“Avoiding Truth or Dare in Reference Checks.” HR Focus; May 2000). ©SHRM 2008

20 Legal Liability DEFAMATION: The act of harming the reputation of another by making a false statement to a third party.(1) NEGLIGENCE: The failure to exercise the standard of care that a reasonably prudent person would have exercised in the same situation.(1) [1] Garner, B. A. (Ed.). (1999). A handbook of basic law terms. St. Paul, MN: West Group. Difficult as it may be to check references, you must get accurate information on your prospective new hire. Unfortunately, past employers are becoming increasingly reluctant to give references, mostly because they fear defamation lawsuits from disgruntled former employees. Consequently many employers strictly limit the information they provide about former employees. It’s a no-win situation for employers because they can be sued either way. Withholding negative information regarding former employees may protect the previous employer from a defamation lawsuit but it increases their exposure to a lawsuit based on negligence if they withhold information regarding the volatility of a former employee. ©SHRM 2008

21 Legal Liability - Negligence
NEGLIGENT REFERRAL: The legal risk incurred when a past employer fails to warn a potential employer of the inherent danger presented by a former employee.(1) NEGLIGENT HIRING: The liability incurred when failing to conduct a reasonable investigation of an applicant’s background and then assigns a potentially dangerous person to a position where he or she can inflict harm. .(1) (1) Mondy, R. W. (2008). Human resource management (10th ed.). Prentice Hall, NJ: Pearson A past employer who fails to warn about an employee’s known propensity to violence may be guilty of negligent referral and a potential employer who fails to do proper reference checks whereby they may have uncovered the potential risk of a new employee, may be guilty of negligent hiring if the new employee causes injury to another in the workplace. It is a reminder to HR that we must diligently ferret out information on new hires and at the same time, we must keep accurate employment records on current employees so that, when asked, we can provide verifiable and reliable reference information. ©SHRM 2008

22 The Job Offer Making the job offer:
May be done by phone, letter or in person. Make arrangements for further conditions: Physical exam and drug screen. Discuss salary and benefits: Avoid quoting an annual salary. Realistic job preview, Verify employment eligibility: I-9 form. The job offer may be extended by phone, letter or in person; whatever is customary in your organization. Most commonly, the job offer is handled by the HR department. At this time. salary and benefits are discussed and the prospective employee is told of any further conditions that must be met. If your organization requires a physical examination or a drug screen, arrangements should be made for completing the process. If the candidate needs time to think over the job offer, a time should be established for notification. At this point you need to ensure that your potential new hire receives a realistic job preview. Tell him or her everything they need to know about the job; the bad as well as the good. Avoid quoting an annual salary. Quote compensation by the hour or the month, whichever is appropriate. Annual salary quotes have sometimes been interpreted by the courts as a contract for employment for a minimum of one year. If the employee is let go before the completion of that first year, you are looking at a potential lawsuit. The Immigration Reform and Control Act requires employers to hire only American citizens and aliens who are legally authorized to work in the United States. Eligibility for employment must be verified for all new hires within three days after he or she starts work. Both the employee and the employer must complete and sign the I-9 form with the employee presenting the necessary documents to verify identity and legal right to work in the United States. The form indicates which documents have been presented and the employer’s signature verifies that the documents appear to be genuine. The I-9 form must be retained by the employer for at least three years. ©SHRM 2008

23 HR Dilemma: I-9 Verification
A landscaping company requires all legal aliens to provide a permanent resident card at the point of hire. The company hires a worker and verifies that his permanent resident card is legal. Two weeks after starting the job, the company and the employee fill out the I-9 form for the employer’s files. Is the company in violation of the Immigration Reform and Control Act? What changes in procedures would you suggest to the company? Instructor’s Note: This is another good place to get the class talking. Ask for discussion regarding the HR Dilemma. What would class members suggest? Is the company in violation of the Immigration Reform and Control Act? Yes. The I-9 form is required of ALL new hires. It must be filled out and verified within three days of hiring. Two weeks is TOO LONG! ©SHRM 2008

24 Evaluating the Recruitment and Selection Process
Cost: Did you stay within your recruitment budget? Time: How long did it take you to fill the position? Quality: Were your applicants well qualified for the job? Longevity: What about turnover? Do your new hires stay for the long term? Most organizations keep at least minimum statistical information on their recruitment and hiring process. You will want to evaluate the process to ensure that it was cost effective and timely. Information gathered may be invaluable for further recruiting as your organization grows. ©SHRM 2008

25 CONGRATULATIONS! You have a new employee! ©SHRM 2008

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