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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-1
Human Resource Management
Chapter Five
Workforce Planning
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-2
Steps in Recruitment and Selection Process
The recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job.
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Importance of Workforce Planning
Having the right number of employees with the right skill sets will enable a firm to take advantage of business opportunities
Excess staffing is an inefficient use of financial resources
A company’s effectiveness is directly affected by the quality of workforce planning decisions
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Definition of Workforce Planning
Making sure individuals with the right skills sets are where they need to be at the right time to meet current and future needs
Labor demand— number and types of employees the company needs
Labor supply— current or potential employees to perform jobs
Labor shortage— when demand for labor exceeds available supply
Labor surplus—when supply of labor is greater than demand
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Workforce
Planning
Internal Considerations•Turnover•Employee Movement•Productivity•Company performance•Strategic direction
External Considera-tions•Turnover•Economic conditions•Industry trends
Labor SupplyLabor Demand
Labor supply exceeds
labor demand
Labor SupplyEquals
Labor Demand
Labor Demand Exceeds
Labor Supply
Labor Surplus Tactics•Layoffs•Attrition and HiringFreezes•Early Retirement•Promotions, Transfers, Demotions
Status Quo –Maintain the firm’s employment levels
Labor Shortage Tactics•Overtime•Contingent Labor•Employe retention•Promotions, Transfers, Demotions•New Hires
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Forecasting Labor Supply & Demand:Internal Factors
Turnover: voluntary and involuntary termination of employees
Creates stress on co-workers who must pick up the slack
Adds costs and time demands associated with filling open positions
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Internal Factors (cont’d)
Employee Movements: Promotions—moving to higher level positions Transfers—moving to jobs with similar
responsibility Demotions—moving to lower-level positions
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Tracking Employee Movements Replacement charts—identifying potential
replacement employees for positions that could open up within the organization
Succession planning—identifying employees who might be viable successors for top managerial positions
Transition matrix—model for tracking movement of employees throughout the organization to plan for the future
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Employee Productivity
Productivity is the level of a firm’s output (products or services) relative to inputs (employees, equipment, materials, etc.) O/I
Productivity ratio—the number of employees needed to achieve a certain output level
Managers can calculate the number of employees needed once they have productivity ratios
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Tactics for Labor Shortages
Overtime—quick solution for short duration but will be costly and may lead to stress, burnout, turnover
Outsourcing—sending work to other companies (payroll, cafeteria, maintenance)
Contingent labor—hiring employees on a temporary or contractual basis
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Tactics for Labor Shortages (cont’d)
Numerical flexibility—adjusting number of employees quickly to meet seasonal demands
Functional flexibility—modifying composition of workforce by using workers with different knowledge and skills
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Employee Retention
Lowering turnover lowers a firm’s costs of recruiting, selecting, and training new employees
Employee satisfaction is a key predictor of turnover
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Labor Surplus Tactics
Layoffs—quickly reducing the number of workers employed
Used to quickly adjust the size and composition of the workforce
Focused on short-term cost containment Can produce feelings of job insecurity and lead to
lower commitment and higher turnover
Attrition—decision not to fill vacant positions
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Labor Surplus Tactics (cont’d)
Hiring Freeze— ban on all hiring for a period of time
Early Retirement—financial incentive to have employees retire early (can result in mass exodus)
Promotions, transfers, demotions—can move people to other areas of the firm facing shortages
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Company Characteristics and Workforce Planning
Companies focused on cost will deal with labor surplus quickly (layoffs)
Companies focused on differentiation may have more ability to absorb costs of surplus and will be reluctant to outsource certain positions
Smaller companies will feel a greater impact of shortages or surpluses
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Who Conducts Workforce Planning
Larger companies use HR department and technology to track labor force
Smaller companies look to managers and supervisors
Companies in early development often require managers to “wear many hats”
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Stress and Work/Life Balance
Layoffs create stress on employees who lose jobs but also on families and communities where they live
Current employees have to work harder, put in more hours or work in new areas and feel insecure
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Perceptions of Justice It is important that employees understand the
rationale behind the decisions (distributive justice)
Even if employees agree with decision, they may disagree with how the practice is implemented (procedural justice)
Key is open lines of communication to maximize employee involvement and acceptance
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Labor Force Trends and Workforce Planning
Stay current on emerging labor force trends that affect company (occupational and demographic trends)
Many companies are increasingly competing with other companies for limited supply of workers
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Selecting Tactics to Use
Actively retain employees to prepare for labor shortages
Modify the nature of the job
Actively recruit older employees
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Determining Number of Employees Needed
Automation—machines performing tasks that could otherwise be performed by people
Technological improvements help companies redesign processes and improve productivity ratios
Technology also changes types of skills employees need to service customers
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Workforce Planning Forecasts
Companies can track skill sets of employees and identify potential matches for jobs
Succession planning increases ability to identify and track future replacements
Globalization has fueled trend toward offshoring and global opportunities (IT jobs, call centers)
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Globalization Benefits include access to a large labor
supply Wages are a fraction of what they are in the
United States Opportunities to operate a firm “24/7” without
any downtime Risks include maintaining product and
service quality
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Case Study: East Cost Bank Paula Mason’s position is created to provide administrative support for the
regional manager in charge of the southwest region. Each region has 8 to 12 bank branches Each branch consists of 4 primary positions
Branch managers Assisstant managers Loan officers Tellers/customer service agents
On average, each bank has 1 Branch manager 3 Assisstant managers 4 Loan officers 15 Tellers/customer service agents
Questions1. Based on the transition matrix for ECB which positions are experiencing
a labor surplus or a labor shortage?2. What tactics would you use to address the labor shortages? Why?3. What tactics would you use to address the labor surpluses? Why?4. Do you see any areas that are of particular concern?5. What plan would you recommend for the future to prevent excess
surpluses and shortages?
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Transition Matrix for Southwest Region
2009
2008Branch
ManagersAssistant
Managers
Loan Officers
Tellers/Cust Srv Agts Exit the Company
8 Branch Managers 6 (75 %) 2 (25 %)
24 Assistant Managers 2 (8 %) 16 (67 %) 1 (4 %) 1 (4 %) 4 (17 %)
36 Loan Officers 2 (6 %)26 (72
%) 8 (22 %)
120 Tellers/Customer Srv. Agents 14 (12 %) 2 (2 %) 64 (53 %) 40 (33 %)
Anticipated Labor Supply 8 32 29 6526 % (54 out
of 204)
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Human Resource Management
Chapter Six
Recruitment
6-1
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Purpose of Recruitment
Activities that will identify potential employees, communicate job and organizational attributes to them and convince them to apply
Key to success is finding qualified individuals who have knowledge, skills and abilities (competencies) to do the job
Effective recruiting will free managers to spend more time and effort on other management activities
6-2
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Recruitment Process
1. Decide on the objective for the recruiting process (quick hiring with few applicants or recruit a large number of applicants for best match)
2. Identify the best sources for recruitment
3. Craft the recruitment message
4. Familiarize oneself with the job duties and requirements of the position
In small business, managers are involved in all stages. In large businesses, recruiters take the lead
6-3
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Internal Recruitment Gives opportunities for promotion to
employees Word of mouth is simplest, but not always
most effective Job posting is most common formal method:
posting note on bulletin board, note in company newsletter, or on company intranet
Succession planning and replacement charts Rehiring
6-4
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Other Methods of Sourcing Internal Candidates
Performance appraisals or supervisor feedback on candidates
Special programs like Deloitte’s Career Connections provide Information about other job and career opportunities internally Intranet based one-on-one career coaching and development
information Career management tools, self assessments, a resume
builder, information on seeking jobs internally
Program provided savings about $ 14 millions in few years.
6-6
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Pros and Cons of Internal Recruitment
Pros: Most cost-effective Existing employees already familiar with
company and its culture Employees motivated by opportunities for
advancement Managers have access to applicants’ past
performance
Cons: Sometimes companies want new ideas Need for diversity 6-7
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External Recruitment
1
2
3
4
5
Advertising
Recruiting via the Internet
Employment Agencies
Temp Agencies and Alternative Staffing
6
7
8
Executive Recruiters
College Recruiting
Referrals and Walk-ins
Locating Outside Candidates
Sourcing
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External Recruitment
Source should be dictated by nature of the job, location, and skill level needed
Relevant labor market: location in which one can reasonably expect to find a sufficient supply of qualified applicants
6-8
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External Recruitment: Recruiting via the Internet
Kariyer net etc. Company Web sites may contain a “Careers” link
design and content of these sites are important because they convey information about the culture of the organization.
Detail job descriptions, information about career paths lead to favorable perceptions
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Outstanding Employer Web Site
State Farm® Career CenterFOUND: A great place to work!You have the skills. We have the opportunity, character, and strength you demand. Let's talk about your future with State Farm®
Meet Our PeopleShyam,Actuarial Analyst Learn More
DiversityAt State Farm, diversity isn't a program, it's a state of mind.Learn More
http://www.statefarm.com/about/careers/careers.asp
6-10
Provide information about•Career paths•Sample interview questions•List of recruiting events•Benefits, work/life balance, compensation•Recruiter link
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External Recruitment: Recruiting via the Internet
Advantages Cost-effective way to publicize job openings More applicants attracted over a longer period Immediate applicant responses Online prescreening of applicants Links to other job search sites Automation of applicant tracking and evaluation
Disadvantages Excessive number of unqualified applicants Personal information privacy concerns of applicants
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Advertising The Media Choice
Selection of the best medium depends on the positions for which the firm is recruiting. Should use multiple sources and keep them up-to-date Newspapers (most popular): local and specific labor
markets (Sunday vs. weekday) Downside is expense On-line job posting on bulletin boards at colleges, or
professional organizations Trade and professional journals: specialized employees
Internet job sites: global labor markets
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College Recruiting
Sending recruiters to college campuses to attract employees right out of college
Recruiters usually have multiple openings May speak to student organizations or alumni
groups Internships are sometimes offered to
evaluate performance and allow student to get to know organization
Business- College joint projects6-11
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Employment Agencies and Search Firms
May benefit small HR departments to make recruiting process more efficient
Public employment agency???? Private employment agencies provide job
search assistance for a fee Contingency recruiting agencies are paid a
fee or percentage of new hire’s salary (% 20 – 30)upon completion of search and placement. 90 days to one year guarantee is given
6-12
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Search Firms (cont’d)
Retained agencies paid a retainer by employer to conduct job search (also called executive search firms or headhunters). There is upfront payment and the rest is paid at different times
On-demand recruiting services charge based on time spent (weekly, monthly) recruiting rather than per hire for large number of recruitment needs
6-13
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Other Recruitment Sources (cont’d)
Temporary Employees may often become permanent employee (temp to hire)
Employee Referrals—employees can receive a bonus if their referral is hired and many referrals tend to have lower turnover and greater job satisfaction
6-15
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Pros and Cons of External Recruitment
More costly than internal recruitment May upset existing employees if internal
applicants don’t get the job Give firm the opportunity to bring in
employees with fresh perspective Allows company to target specific
competencies that current employees may not possess
6-17
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Preparing Recruitment Advertisements
Creating a value proposition will help applicants differentiate one company from another
Recruitment value proposition should include: Information about job’s duties, working environment, rewards Company’s corporate image and values Level of compensation and leadership development
opportunities Social responsibility
Helps an applicant understand what day-to-day life in the firm will be like
6-18
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Writing the Recruitment Message Starting point is to answer “why a highly talented
person would want to work at the company?” Individuals are attracted to jobs for which they have
more information Little information in the ads imply that company does not
value its employees highly enough Convey the value proposition and company-related
information Include brief description of job and its minimum
requirements Gear a high quality message to target audience Effective Ads
Create attention, interest, desire, and action (AIDA). Create a positive impression of the firm.
6-19
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Minimum Requirements for a Job AdContent Job title Brief description of duties Minimum education, experience and skill levels required Special criteria like extensive tavel or relocation Brief overview of the company Benefits providedWriting Start with an attention-getter (Looking for a great place to work?) Use proper grammer and punctuation Minimize the use of abbreviations Keep it focused Avoid discriminatory language (young and energetic employees sought)Applying How to apply Where to apply Deadline Privacy promise
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Ineffective and Effective Web Ads
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Help Wanted Ad that Draws Attention
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Recruiters
Includes professional recruiters and managers involved in identifying and attracting employees
Personality of recruiter (warmer) and knowledge about job and company are important
Need to be trained on value proposition, and issues about false representation
6-20
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Realistic Job Preview Balanced recruitment (both favorable and not
favorable) message will have the best long-term results
Realistic job preview (RJP) will enable applicants to screen themselves out of application process
RJP will help decrease turnover and increase satisfaction of new hires
Shadowing (observing someone doing the job) can be used as an effective RJP
6-21
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Recruitment Follow Up Maintaining communication with prospective
employees conveys your company’s interest in them
The way you communicate affects company image
Let each applicant know their status by sending a personalized letter
Measure effectiveness of recruitment effort with yield ratio (ratio of number selected to number applied)cost-per-hire, time to fill, and managers’ feedback
6-22
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Content of Recruitment Message
Advantages of working for the organization Competencies sought Positive “story” about why employees would
want to work for company Cost leadership strategy: message may
focus on efficiencies and cost reductions (BİM)
Differentiation strategy: message may focus on customer experience (Tiffany & Co.)
6-23
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Choice of Recruitment Methods
Word-of-mouth (employee referrals) is low-cost
Trade publications and Web sources target individuals with specific backgrounds or skills
More established firms have more formal recruitment processes
6-24
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Managing Recruitment
Smaller companies require managers take lead in recruitment process
Larger companies will have staffing departments
Companies should focus on specific job information, reputation of company, and compensation and benefits package
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Internal vs. External Recruiting Many companies attempt to fill position
internally before recruiting externally Too much focus on internal recruiting may
make the company too insular Too much focus on external recruiting will
make employees feel less valued and lead to turnover
6-26
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Appeal of the Recruitment Message
Not all applicants will focus on same things when seeking a new job:
Company’s culture Development of their careers Opportunities to create innovative products Values of work/life balance Tasks of the job itself Benefits and compensation level
6-27
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Value Proposition Offered
Fortune’s list of 100 best companies to work for include: those that stress work/life
balance and corporate social
responsibility
6-31
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Challenges to Truth-in-Hiring
Employers trying to aggressively attract employees in tight labor market may mislead
Employees who are terminated may seek recourse against former employers
Job candidates may be lured away from existing job with promises that fail to materialize
6-32
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Ethics and Regulatory Issues Code of ethics should be shared with applicants
during recruitment process Poaching (taking employees from competitors) may
backfire when new employees leave for the next best offer
Recruitment activities cannot discriminate, firms should use multiple sources for applicants
Recruiters should be trained on behavior and what questions to ask job applicants
Careful attention to recordkeeping of resumes and applications
6-34
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Classwork: Writing an Ad
Find or write a job description for a job of interest to you and prepare a recruitment message and recruitment plan:
Write the advertisement Where would you place the ad and why? What aspect of the ad do you think is most
important? Discuss your decision. What information other than the job description
would you use to decide what to include in the ad?
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Human Resource Management
Chapter Seven
Selection
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Selection and Performance
Hiring manager has ultimate responsibility for selection of employees, not HR manager
Performance of company is directly correlated to employees hired and the competencies they bring to the job
Employees who are not a good fit tend to make mistakes and/or leave often resulting in lost customers and money
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Why Careful Selection is Why Careful Selection is ImportantImportant
Organizational performance
Costs of recruiting and hiring
The Importance of Selecting the Right
Employees
Legal obligations and liability
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Selection Systematic process of deciding which applicants to hire, promote or move to other jobs Prediction—selecting an applicant that can do the job or learn to do it well Internal selection is moving current employees into vacant positions
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Person-Job Fit
A good match between applicant’s KSAs and interests with those of the job
Satisfied employees tend to be more productive
A strong fit maximizes the benefits for employees and the organizations for which they work
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Selection Methods Initial screening involves reviewing the information
provided by applicants to decide which applicants are worthy of consideration Review application form answers and resumes Conduct screening interviews
Final screening is taking a more in-depth look at applicants. Final screening narrows down number of candidates to enable final selection Use employment tests Conduct interviews Conduct reference and backgroud checks Use “assessment centers” Drug tests, medical examinations
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Guidelines for Application Questions
Applications and resumes are important to determine which applicants meet minimum job requirements (education, previous experience, etc.)
Guidelines for application questions: Keep questions job related Ask questions about relevant past work experience, skills, abilities, education, goals and interests Don’t ask personal questions. Even the following questions are regarded as personal in US
Are you married? What year did you graduate from high school?
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Tips for Screening Resumes
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Screening Interviews
Calling applicant and conducting a short telephone interview
Confirms person is still looking for a job
Provides clues about person’s oral communication skills
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Use of Tests in Selection Process
Use tests as supplements Check the reliability and validity of the test
in Turkish Culture Ask other firms who uses these tests for
referance before you start to use one Use a certified people or rather a
psychologist for personality inventories
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Basic Testing ConceptsBasic Testing Concepts
Reliability Describes the consistency of scores obtained by the
same person when retested with the identical or alternate forms of the same test.
Are test results stable over time?Validity
Indicates whether a test is measuring what it is supposed to be measuring.
Does the test actually measure what it is intended to measure?
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Types of TestsTypes of Tests
Aptitude TestsMotor and physical abilities
Personality and interests
What Different Tests Measure
Currentachievement
Basic talents & abilitis
Endurance, strength or general fitness
Personality traits &
characteristics
Current knowledge or skill level
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Types of TestsTypes of Tests
Cognitive abilities
Work sample test
Knowledge tests
What Different Tests Measure
Combined tests
Reasoning, memory,
comprehension
Sample of work
representative of the job
Mastery of subject matter
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Measuring PersonalityMost common method: self-reporting surveysProblems:
Easy to fake deliberately Social desirability bias
Two dominant frameworks used to describe personality(primary traits that govern behavior):
Myers-Briggs Type Indicator (MBTI®)
Big Five Model
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The Myers-Briggs Type Indicator Most widely used instrument in the world. Participants are classified on four axes to determine one of 16
possible personality types, such as ENTJ.
Flexible and Spontaneous
Sociable AssertiveOutgoing
Quiet and Shy
Unconscious ProcessesBig Picture
Uses Values & Emotions
PracticalOrderlyRoutine
Use Reasonand Logic
Want Order Structure&
Control
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The Big Five Model of Personality Dimensions
Five basic dimensions underlie all others
Research has shown Big Five to be a better framework.
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The Big Five Model of Personality Dimensions
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Graphology - use of handwriting analysis to determine the writer’s basic personality traits.
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When to Use Employment Tests
1. Current selection process does not result in quality of employees desired
2. Turnover or absenteeism is high
3. Current selection methods do not meet professional or legal standards
4. Productivity is low
5. Errors made by employees could have safety, health, or financial consequences
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Interviews Panel interview—several people interviewing applicant at
the same time Unstructured interviews—interviewer will ask job-related
questions but without defined format and uses different questions with different applicants
Structured interview—more accurate means of comparing responses across applicants, same questions asked to all applicants
Situational interview—interviewer poses hypothetical situations and asks how candidate would respond
Behavioral interview—interviewer asks how candidate has handled a situation in the past
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Examples of Questions
Situational Questions
1. Suppose a more experienced coworker was not following standard work procedures and claimed the new procedure was better. Would you use the new procedure?
2. Suppose you were giving a sales presentation and a difficult technical question arose that you could not answer. What would you do?
Past Behavior Questions
3. Based on your past work experience, what is the most significant action you have ever taken to help out a coworker?
4. Can you provide an example of a specific instance where you developed a sales presentation that was highly effective?
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Biases and Errors of Biases and Errors of InterviewInterviewersers
Impression management -self
promotion, ingratiation
Applicant’s personal
characteristics (gender,
attractiveness etc.)Interviewer’s inadvertent
behavior(demographic
similarity, playing the psychologist
etc.)
Factors Affecting An Interview’s
Usefulness
Halo effect- first impressions affect
the other attributes
Interviewer’smisunderstanding
of the job
Contrast Effect – Candidate order
affects the evaluation
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Assessment Centers
Put candidates through a series of simulations designed to assess their ability to perform aspects of job they are seeking (example: communication, decisiveness, delegation, planning, etc.)
In-basket—candidates sort through and respond to letters, memos, reports within a specified time frame
Leaderless group discussion—candidates are given a problem to solve
Role plays—candidates play out job-related situations
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Other Screening Techniques
Reference checks—potential employer can contact applicant’s references to verify information (applicants should sign release form granting permission)
Background checks—verifying information provided during the application process or to obtain additional information (education, criminal check, credit reports)
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Drug and Medical Tests Drug testing is used extensively in some
countries Medical exams can only be required after
an offer of employment has been made
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Choosing Among Selection Methods
Compensatory approach - a process for deriving a final score for each candidate in the selection process by weighting outcomes on multiple selection measures differentially so that some items are “weighted” more heavily than others and a high score on one part can offset a low score on another part
Multiple-hurdle—applicants have to successfully pass each step (hurdle) to continue on in the selection process
Multiple-cutoff—applicants have to reach a minimum score on each measure to remain in the running for a particular job
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Factors Affecting Selection Practices
Company’s strategy and core competencies required of all employees
Low-cost strategy might focus on efficiency and productivity using simple application, short interview
Differentiation might focus on customer service using role plays, situational interviews, etc.
Larger companies use more formal and extensive selection process, smaller companies very informal, simplified process
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Factors Affecting Selection Practices (cont’d)
Person-Organization fit—how well a person fits within the broader organizational culture (values)
Promotion-from-within policy—extent to which a company tends to promote current employees rather than look outside the organization
Efforts to reduce bias and treat applicants in fair and consistent manner
Labor market including skills of applicants and willingness of applicants to accept jobs
Globalization and need to modify selection process for language differences
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Technology and Selection
Applications are completed at a computer kiosk
Computer based personality or situational judgment questionnaire used for screening interview
Applicants call in to respond to questions Reference and background checking may
now be done by companies online
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Globalization and Selection
Hiring increasingly large numbers of international employees to work domestically
Selecting internal candidates to send to other countries
Hiring host-country nationals to work in host countries
Hiring international employees to work for company abroad
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Privacy Concerns
Selection methods like background checks, credit reports, drug tests should be used only when job related and less invasive alternatives are not available
Rationale should be explained to applicants Reliability and validity should be
established Think through what information is ethical
and responsible to divulge to applicants
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