Chapter 2: HRM Planning, Recruitment, and Selection
Human Resource Planning (Page 37 Chart)
Strategic planning: HR policies, processes, and practices that help the company achieve the goals through its employees.
o Broad in scope and long in time frame (two to three years)
o Provide an overall direction to the entire organization.
Human resource planning (Manpower planning, employment planning):
o Process that the people required to run the company are being used as effectively as possible, where and when
they are needed to accomplish the organization’s goals.
o While strategic planning allocates resource to objectives, HR planning ensures that objectives are met
o It is the line manager’s job to make plans for business objectives but plan for necessary staffing resources, so
that the organization has the people capability to adjust to changes in the environment
o Succession planning: Developing leaders for the future and focusing efforts on developing programs so that
the leaders have the competencies necessary that can keep pace with the direction of the organization
o Considering the dramatic shifts in the labour force today, managers must become more involved in planning
staff needs, such as methods of employee selection, training, compensation, and motivation.
o Without HR planning, there may be intangible costs incurred or vacancies to remain unfilled.
o In the best companies, there are no distinction between strategic planning and HR planning.
o Forecasting the demand for employees:
Trend analysis: Quantitative approach to forecasting labour demand on an organization index
Management forecast: Opinions and judgements of supervisors or management and others that are
knowledgeable about the organization’s future employment needs.
o Analyzing the supply of employees:
Staffing tables: Graphic representation of organizational jobs along with the numbers of employees
currently occupying those jobs and future employment needs.
Markov analysis: Methods for tracking the pattern of employee movement through various jobs
Skills inventory: Information about the education, experiences, skills, etc. of staff
Results: The ideal HR planning outcome is a useable balance between the demand for and supply of employees.
o However, it is not a guarantee that there will never be a time when there are too many or too few employees.
o If there is oversupply:
Analyze attrition (Natural departure of employees through people quitting, retiring, or dying)
Leave of absence without pay
Job sharing & reduced hours
Hire full time / part time
Lease employees & overtime
Retention strategies Recruitment
Recruitment: Process of locating and encouraging potential applicants to apply for existing or anticipated job openings
1. Determine its needs of human resources.
2. The line manager (with HR professionals) identify where a company might look for candidates, with the
purpose to have a large pool of potentially qualified applicants.
3. Inform the applicants of the qualifications required to perform the job and the career opportunities the
organization can offer its employees.
4. Determine recruitment method (internal or external)
5. Create a pool of potential qualified applicants.
One of the largest challenges for organizations is to continue the recruitment during difficult economic times. However,
there is always a shortage of certain skills, and managers must focus on accessing new talent.
Many organizations ‘brand’ their employment framework, to have a uniform image come into prospective and existing
employees upon mention of the company’s name.
Most public, and some private organizations try to fill above entry-level job vacancies through promotions and transfers.
o Human resource information systems (HRIS): IT has made it possible for organizations to create databases
that contain complete records and qualifications of each employee within the organization.
Allows easy identification of potential candidates to available jobs.
Can also be used to predict career paths of employees and when promotion opportunities may arise.
o Succession planning: Process of identifying, developing, and tracking key employees for promotions.
Rely upon the organization identifying its long-term goals making sure the employee is developed to
assume other roles and responsibilities.
o Internal job postings: Method of communicating information about job openings
Benefits may not be realized unless employees believe the process is being administered fairly
Most effective when job posting is part of a career development program in which employees are
made aware of opportunities available to them within the organization.
o Promotions rewards employees for performance
Encourages promoted employees to continue their efforts
Gives employees reason to anticipate that similar efforts will lead to promotion and increases morale
Especially for employees who have faced difficulty in employment and promotion
o Transfers protect employees from layoffs or broaden job experiences
Becomes more noticeable as it has fewer levels between executives and front-line employees
Transferred employee’s familiarity with the organization eliminates orientation and training costs
Transferred employee’s performance record is likely to be more accurate predictor of success Limitations:
o Employees hired from outside may be source of new ideas and the knowledge from their previous employer
(particularly technical and managerial positions)
o Excessive reliance on internal sources can create ‘employee cloning’
Usually organized and coordinated by a line manager (with HR professionals giving suggestions about where to recruit.)
Advantages: Individuals bring certain unique skills, experiences and perspectives that the company requires.
o Lack of solid information about the person’s past performance.
o Applicants may not know the industry or the organization well, requiring orientation and training.
o Expansive costs may hinder organization from getting a good pool of applicants.
Labour market: The area from which applicants are recruited, varying according to the type of position to be filled and
the amount of compensation to be paid.
o Higher and more important positions may be international in scope, while smaller recruitment will only
encompass a small geographic area, due to many peoples’ reluctance to relocate.
o Condition of the labour market may help which recruitment source to use, but at any given time, an employer
will find it necessary to utilize several recruitment sources.
Sources of Recruitment:
Use of the mass media, including websites, newspapers, trade journals, radio, television, billboards,
posters, and e-mails with the goal of reaching a large audience of possible applicants.
Some degree of selection can be achieved.
Highlight the major assets of the position, while showing the responsiveness of the organization to
the job and career needs of the applicants.
Public employment agencies can easily connect employers and the unemployed.
Both companies and applicants find this method cheap, fast, and potentially very effective.
Checking postings on the internet is the most common method of job searching for seekers, and 90%
of employers make use of the Internet to post new positions.
Companies have integrated websites with their databases to screen information.
o Employment agencies:
Attempt to match applicants with the specific needs of the company for a fee to the employer.
Private agencies focus on clerical, technical, and junior-middle management.
Executive search firms (head hunter) focus on executive-level managerial positions.
Expansive; 30% of the employee’s annual salary once someone is found.
Some agencies provide temporary employees, for vacation fill-in, peak work periods, parental or sick
leaves, or other events when a full-time employment cannot be justified.
Can be fired quickly and with less costs, but their commitment to the company is lower. o Educational institutions:
Sources of young applicants with formal training but little full-time work experience.
Employers must be aware of what attracts students to organizations, which include:
Opportunities for advancement
Good people to work with
o Employee referrals of current employees:
Quality of employee-referred applicants is high, since employees are hesitant to recommend
individuals who may not fare well.
Effectiveness can be increased by commissioning employees when they make a ‘recruitment sale’
o Unsolicited applications and resumes:
Percentage of acceptable applicants are not high, but should not be ignored, as many individuals use
this method to introduce themselves to organizations they are interested in.
Any person contacting an organization for a job be treated with courtesy and respect even for those
without possibility of recruitment.
o Recruitment for diversity:
Employers often focus on attracting potential staff in different ethnic and cultural backgrounds.
S&P 500 companies that aggressively sought diversity outperformed others.
Globalizing companies found having staff in various backgrounds supported recruitment and sales.
o Professional organizations: Established at national meetings for mutual benefit of employers and applicants