Reading: Lesson 2 - The Employment Process

12.2.A - The Employment Process

1. SELECTING PERSONNEL

1. Hiring employees is an important activity for every business. Effective selection means hiring people with the right skills for the right job. The process can be expensive and time consuming, but hiring people who do not meet specific job qualifications results in high training costs, poor performance, and dissatisfied employees and customers. Some businesses occasionally need to hire employees, but for many companies, recruiting and hiring new employees is an ongoing process. This section discusses procedures for selecting personnel in a company with a human resources department.
   
2. As a first step in the process of hiring an employee, managers must establish the actual need for a new employee. Businesses often need to replace an employee who has left the company, been promoted, or retired. If the company or department is growing, new employees are needed to handle the additional work. Changes in the operations of a department or the use of new procedures or equipment may require that employees be hired to perform those duties. After identifying a need, the department manager works with human resources specialists to complete the hiring process. The human resources department must have detailed and accurate information about the position in order to screen applicants and choose only the most qualified people to consider. A job description is a list of the duties and responsibilities that make up a job. It defines the job, where it fits within the organization, and what the jobholder is expected to do. A job specification is a list of the qualifications and skills a worker needs to do the job. With a job description and job specification, people responsible for filling the job will know what to look for in an applicant. At the same time, applicants will understand what the job entails and whether they have the necessary qualifications.
   
3. Human resources employees work with managers and other employees who are currently doing each job to prepare job descriptions and specifications. This information is maintained in the human resources department and is updated regularly as job requirements and activities change. The data are used in a variety of ways, but in the selection process, the information is used to recruit a pool of qualified applicants and to help determine the best candidate for the job. 
   
4. After the human resources department has received a request to fill a position and has reviewed the job description and specifications, it begins to recruit applicants. An effective recruitment process results in a number of appropriately qualified applicants. If the pool of applicants is too small, the chances of finding someone who is well qualified decreases. If the pool is too large, the process of selecting the most qualified applicant takes longer and adds to the company’s costs. Internal recruitment is the process of looking within the organization for employees to fill open positions. Companies should make information about all job vacancies available to everyone in the company and give current employees the first opportunity to apply. External recruitment seeks new employees from outside of the organization. Human resources personnel should consider all possible external recruitment resources and select those most likely to reach qualified people who have an interest in working for the company. Some common resources include current employees, on site applications, the Internet, private and public employment agencies, and advertising.
   
5. When current employees are happy with their work, they can become an effective recruiting resource. Companies need to inform employees about open positions and ask for their help in recruiting candidates. Many companies offer incentives to employees who are a part of successfully recruiting an external candidate.
   
6. Although some companies accept applications on site, many large companies ask applicants to submit their job application and resume electronically. The employment database can search for key words in the application to find matches to job requirements. Companies may restrict the applications to jobs that are currently open. However, some companies accept applications even when there are no openings. After applications are screened, they are kept for six months to a year to be reviewed when openings occur.
   
7. The Internet has become a popular resource for recruiting personnel. Employment websites (sometimes called job boards) such as Monster and CareerBuilder provide thousands of job listings that job seekers can search by job category, location, company, or salary expectations. Most major Internet employment sites make it possible for applicants to submit their resumes to prospective employers online. They also allow job seekers to post their resumes so that recruiters can find them. In addition to posting job openings on these sites, some businesses pay for special services such as resume screening and applicant testing. Companies that regularly hire employees place a link to employment opportunities on their home page. Recruiters may use professional networking sites such as LinkedIn to evaluate applicants or find potential new employees. LinkedIn provides a virtual resume to post career information. It also provides an endorsement feature where others can endorse skills outlined in the virtual resume. High-quality candidates are likely to have endorsements from many other professionals.
   
8. Employment agencies are organizations that actively recruit, evaluate, and help people prepare for and locate jobs. Private agencies provide a broad range of services and receive a fee from the applicant or from the employer for the services used. Services for job seekers include job matching, resume preparation, skills analysis, and interview coaching. Services for employers include resume screening, active recruiting, initial interviewing, and testing. Clients choose the service they need. All states maintain a public employment service supported by state and federal taxes. The goal of public employment agencies is to help employers find qualified applicants and to help job seekers find employment. In addition, many agencies are involved in workforce development to help people qualify for available jobs.
   
9. Advertising is a commonly used method of attracting job applicants. Companies frequently advertise in local media, including newspapers, television, and radio, when they need a large number of employees or they must fill an opening quickly. For longer-term needs or specialized jobs, companies may place advertising in industry magazines or other specialized publications.
   
10. Colleges and universities, career and technical schools, and some high schools have placement offices to assist graduates looking for jobs. Businesses can use the placement offices to obtain lists of potential employees and, in some cases, to obtain resumes and other information about graduates. The offices may provide assistance in scheduling interviews with a number of applicants to help the recruiting business. Job fairs are becoming an increasingly popular way to reach a large number of potential applicants at one time. The goal is to attract hundreds of job seekers at one time to learn about job opportunities with one or more prospective employers. Job fairs are commonly organized by communities, educational institutions, professional associations, and employers. Some employers use job fairs as forums for exchanging information, while others accept applications and conduct preliminary interviews.
    
11. Most job seekers fill out an application. The form asks for the information necessary to identify applicants who meet the employment criteria established by the business and who are qualified for a specific job. It must be carefully developed to solicit needed information but not ask for inappropriate, illegal, or discriminatory information. Once the application is received, human resources and the hiring department complete additional procedures to process the applications and choose the best candidate for the job. The specific process varies, but most companies complete a series of similar activities.
    
12. Each application is reviewed to eliminate applicants who do not meet minimum qualifications. Those qualifications are determined from the job description and job specification and typically include level of education, previous employment experience, specific training, certifications, or licenses.
    
13. Critical applicant information such as education and employment history is checked for accuracy. This may be done by contacting schools attended, previous employers, and agencies and organizations that issue licenses and certifications. In some cases, an initial interview may be conducted to gather additional information and to determine oral communications skills. That interview is often conducted via telephone.
    
14. For some jobs, employees need an appropriate level of knowledge or specific skills. If so, the top applicants may be tested as a part of the application process. To be legal, the tests must measure only characteristics that can be linked directly to successful job performance. 
    
15. A face-to-face interview presents an excellent opportunity to learn more about an applicant than can be determined by looking at a resume or application. Human relations and oral communications skills, as well as the decision-making ability of the applicant, will become evident during the interview. The manager of the hiring department usually conducts the interview. The manager asks specific questions related to the applicant’s qualifications and potential. The interview also provides an opportunity for the manager to share details about the job and answer questions from the applicant.
    
16. The final hiring decision is made by comparing information gathered through the selection process with the job requirements. Once the best candidate is identified, the business may choose to complete a background check before making an offer. Some companies require a drug screening before finalizing an offer. When an offer is made, the prospective employee will have the opportunity to accept or decline the offer or possibly negotiate different employment terms.
    
17. Once a person is hired, members of the HR department help the new employee understand and complete the necessary paperwork, such as tax forms and insurance enrollment forms, and review all employment requirements and benefits. Many businesses help new employees get off to a good start with an orientation program and initial training. After the new employee has been on the job for some time, human resources should follow up with the hiring manager and the employee to see whether the right person was selected and to continue to improve the company’s employment procedures.
    

2. PROMOTING, TRANSFERRING, AND RELEASING EMPLOYEES

1. The amount of time and money invested in recruiting, hiring, and training a new employee is very high. Because of the expense, once the company finds a good employee, it should attempt to keep that person as long as possible. Offering opportunities for promotion and transfer can help retain good employees. The company also needs a procedure for dealing with employees who are not performing satisfactorily and for reducing the number of employees if changing economic conditions require downsizing.
   
2. A promotion is the advancement of an employee within a company to a position with more authority and responsibility. Usually, a promotion includes an increase in pay and may include greater prestige and additional benefits. Promotion opportunities occur when another person vacates a job (through promotion or retirement, for example) or when the company creates a new position. Whenever possible, a business should fill vacancies by promotion. If the company has an effective selection procedure, it should have well-qualified employees who, with training and experience, could be promoted. All employees should have an equal opportunity to receive promotions for which they are qualified. Employees should be informed about jobs to which they can advance and the factors considered in promotion. Many companies now provide career counseling services for employees. Through career counseling, employees can plan career paths, determine the education and training required for the jobs in the career path, and develop plans to prepare for the jobs they want.
   
3. A transfer is the assignment of an employee to another job in the company that, in general, involves the same level of responsibility and authority as the person’s current work. A transfer is sometimes called a lateral move. There are many reasons for transfers. Examples appear in the Figure below. 
   

   
   

4. Some situations require employees to leave the company. Some employee separations are permanent, and others are temporary. They may result from a downturn in the economy or from a change in the company’s plans or profitability. Employees may also be released because they have violated company policies or have not met job performance standards. A discharge is the release of an employee from the company due to inappropriate work behavior. In ordinary language, this means that the employee is fired. Careful procedures must be followed to make sure the reasons for the discharge are a clear violation of company rules and policies and have been communicated to the employee. A layoff is a temporary or permanent reduction in the number of employees because of a change in business conditions. After a layoff, employees may be called back to work when jobs become available again. When a company plans a large number of layoffs, the human resources department should help employees plan for them. HR may help locate other jobs, offer personal and career counseling, or provide retraining for other jobs within the company.
   
5. Employee turnover is the rate at which people enter and leave employment in a business during a year. The rate of turnover is important to a business because the loss of experienced employees means that new employees have to be hired and trained. New employees will not be as productive as experienced ones for some time. Between the time an experienced employee leaves and a new employee is hired, the remaining employees are often called on to get the work done. Most companies watch their employee turnover rate carefully and make every effort to keep it low. Two common formulas for computing the rate of employee turnover are shown in the Figure below. An example will illustrate the difference between the two methods. Suppose that over the last year, 150 employees left their jobs in a company. The company hired 120 new employees to replace those who had left. The average number of employees during the year was 1,000. According to the termination method, the employee turnover was 15 percent (150/1,000). According to the replacement method, it was 12 percent (120/1,000). The termination method reflects only the employees who have left during the year. Consequently, it does not reflect major changes in the growth or reduction of the company’s labor force. The replacement method calculates employee turnover based on the current size of the company’s labor force. A company in which the size of the workforce is stable from year to year may prefer the termination method, while one in which the size of the workforce is changing dramatically may believe the replacement method more accurately reflects the turnover of existing employees. To make it easier to study employee turnover trends, the company should use the same formula from year to year. 
   

   
   

6. Whenever an employee leaves a company, managers should be interested in the reasons. An exit interview is a formal interview with an employee who is leaving the company to determine the employee’s attitudes about the company and seek suggestions for improvement. The exit interview provides insight into the causes of employee turnover and feedback about the company’s policies and procedures, management, and operations. The interview procedure should be carefully planned to get important information in a way that is comfortable for the person being interviewed and to accurately record the information so it can be used to improve operations and employment procedures.