Human resource management deals with the management of key issues in an organization to ensure high performance, reduced costs, and manage people effectively. The main issues in human resource management revolve around people management, which mainly focuses on leadership and motivation, performance management, recruitment, and selection, as well as compensation and rewards.
This report is a case study of the Toyco Company’s human resource practices. Notably, the company suffers from poor human resource management, leading to problems like unclear selection and recruitment policies, poor compensation, and reward systems, and low motivation among employees, leading to high staff turnover, as well as poor people performance management (Toyco case study 2012, p. 4). The report will document the necessary theories suitable for solving these issues. The paper will analyze how well the company aligns with theories and offer action plans and recommendations to help solve the problems.
Recruitment and Selection Process
Recruitment and selection are core aspects of human resource management. They involve tasks like the acquisition, development, and reward of the company’s employees. One factor that ensures this human resource function is successful is a high level of cooperation between the general human resource manager and the line managers (Gusdorf 2008).
Recruitment and selection are commonly referred to as the resourcing cycle because it occurs through a cycle. The process begins with noticing a vacancy and ends with the selected candidate executes their roles successfully (Cania 2014).
When a vacancy arises, the company must evaluate whether the vacancy can be filled through an alternative way or solely requires the recruitment of a new employee (Price 2007). The human resource manager is obligated to draft the specifications for the vacant position if it is established that a new employee is required to fill the position. Ideally, specifications should state the requirements and duties that the successful candidate is expected to carry out (Storey 2007). These are inclusive of the experience, skills, knowledge, aptitude, and personal qualities required of the potential job holder (Hendry 2012).
The next stage involves the attraction of the necessary candidates. It is a core goal of recruitment to produce a suitable number of candidates that can take up the job (Pilbeam & Corbridge 2010). While there is not a suitable way to attract candidates, the attraction method applied must draw a suitable number of qualified persons for the position applied.
Ideally, there are two ways through which a company can choose to attract candidates to the vacant position. These are internal recruitment and external recruitment (Bratton& Gold 2012). Internal recruitment involves the identification of staff from within the company with the ability to fill a new vacancy. This is dependent on their level of competencies, their skills for the position, and previous performance. Among the ways that internal recruitment is done is through promotions.
The second means of recruitment that companies can apply for is external recruitment. External recruitment involves an analysis of a wider talent range other than the existing internal staff (Doornenbal, Stitselaar & Jansen 2012). Determining whether a candidate is suitable for a position involves the application of the above-analyzed recruitment and selection procedure. While internal recruitment is cheaper for the organization, it limits the organization’s capacity to get a wide range of applicants.
Rees and French (2013) espouse that interviews are a key process through which a candidate’s suitability for a position can be assessed. Direct interactions with the candidates enable the human resource to establish to what level the candidate fits in with the strategy of the organization. However, owing to the golden hallo effect, which refers to an interviewer’s subconscious preference of a candidate considered a good cultural fit, the interview process must be conducted transparently.
Thus, it is necessary to apply a wide range of selection criteria before a candidate can be selected for a post. These are through psychometric and aptitude testing. Owing to potential bias in the interview process, coupling this selection procedure with other methods help to obtain fairness. Notably, aptitude testing is an assessment of the candidates’ capability to analyze numerical information and carry out logical reasoning, as well as their verbal competency. In psychometric testing, the candidates’ traits are tested so that the company can be able to determine how well they can fit in the organizational culture.
The last stage is the selection process. Selection refers to a chosen means through which an employer seeks to reduce the qualified candidates by compiling a shortlisted group. Ideally, one of the critical considerations in selecting candidates is conducting interviews, after which the human resources department can determine a candidate’s degree of suitability for a chosen position. It is also necessary that organizations couple interviews with other psychometric tests to ensure that they can get the best possible candidates for the job. Overall, the selection methods chosen should be reliable and valid to ensure consistent results with the goals and objectives of the organizations.
One major factor that should apply in the selection process is that of fairness. According to the competence and traditional model, an organization should select the person that can result in the highest gain to the organization’s performance. Thus, selection decisions should be admissible and fair to all the candidates that applied for the position. In this regard, fairness applies to the actual selection method about factors that lead to the candidate’s success during the interview, their resume details, and their work samples.
Recruitment and Selection Theories
Three theories support the recruitment and selection process. These are the resource-based view, the human capital view, and the grounded theory.
Ideally, the resource-based view theory explains that firms should have a human pool of workers and staff who are not able to be imitated and substituted by their competitors. In effect, the theory explains that there is a need that the candidate to fill in a desired position in the company is one that is exceptional and better in delivery compared to the pool of talent that was finally invited to the interview (Priem & Butler 2001). Notably, firms must hire individuals that can generate a human advantage for the firm. About this theory, the candidate to be hired for a given position should have the requisite human skills and knowledge to exercise given tasks of the job position they are selected for. This theory is a framework that guides on recruitment goals of an organization. It is imperative that when a vacancy arises, the human resources carry out a job description and specifications for the position to guide the person fit to take up the position. This way, they can get the best person for the job, with desirable competencies to accelerate the company’s competitive advantage. In effect, this theory guides the organization to determine the organizational goals a company seeks to fulfill by hiring new staff and the skills and competencies that the new staffs have that help in the fulfillment of the goals.
The second theory is the human capital resource theory. Ideally, the need to attract and hire the right person for the organization is guided by the human capital theory. According to the human capital theory, human beings, that is, staffs and employees are fixed capitals to the business because they have the necessary skills and useful abilities that could be employed by the company to gain a competitive advantage over its competitors (Marimuthu, Arokiasamy & Ismail 2009). Owing to the potential gains that companies accrue while hiring staff and workers, they ought to choose and select those people with the ability to fit into the organizational strategy and help them in gaining mileage over their competitors. Notably, this theory guides on the need to carry out effective selection processes.
The third is grounded theory. The theory is a qualitative methodology that has been developed to understand and interpret the collected data. This theory, allows the researcher to understand and create new points of view of the context of working. Besides, the grounded theory is relevant for recruitment as it permits the candidate to respond directly to interview questions, after which an employer can gain qualitative data on the candidate (Corbin & Strauss 2008).
Toyco’s Compliance with the Selected Theories
Notably, Toyco has a poor selection and recruitment policy, which are critical concerns as the company faces high staff turnover. Consequently, many positions are vacant most times. However, the management does not seem to understand why people vacate these positions (Toyco case study 2012, p. 4). According to the resource cycle, the first step is determining the vacant position and assessing whether there are alternatives to carrying out the job other than recruitment. Notably, the management is not even aware of the departments that are experiencing high turnovers or the positions that have been left vacant.
Toyco does not comply with the resource-based view theory. Notably, the resource-based view theory explains that the selection and recruitment of a candidate should align with the strategic goals and objectives of an organization to attain a competitive advantage. Further, drafting job specifications and candidate skills set are guiding principles and policies that guide the organization in arriving at the successful candidate. Some of these issues include experience, skillset, and professional qualifications. These factors determine how well the successful candidate can fit into the specified position. For instance, the Human Resource Director, Geraldine Swagg, is experienced but not professionally qualified for the job (Toyco case study 2012, p. 6). This limits her effectiveness in performance when it comes to human resource deliverables. For instance, Swagg does not exercise the professional mandate of a human resource director. She practices preferential loyalty, with her favorite being Perle (Toyco case study 2012, p. 5). She has also altered the organization’s rules for people she likes, leading to favorable treatment in promotions and rewards. She also recruits people that she likes because the company lacks a formal recruitment and succession plan. This also goes to show that the company does not align with the selection and recruitment theory, as it hardly practices fairness in the selection and the process is not valid and reliable.
Secondly, the company does not consider the need to draft specifications like job descriptions, among others. Ensuring that every employee is knowledgeable about their line of duty reduces instances of conflict in the workplace. Thus, the managing directors and the chief designer are normally disagreeing on whose creative design should be implemented.
Thirdly, there is little consideration for the grounded theory. One way that the grounded theory is applicable is in gathering a candidate’s qualitative data in interviews. In effect, companies and human resource managers must analyze the competencies of potential employees to ensure the highest human advantage for the company. This is not the case with Toyco. Notably, there is no instance when the human resource, Geraldine, interviews potential staff, or checks their potential contribution to the company before giving them jobs (Toyco case study 2012, p. 6).
Action Plans/ Recommendations
Overall, the functionality of the human resource department needs to be reviewed to ensure effective practices. First, the organization should align its recruitment and selection procedures. The organization must come up with a list of specifications, job descriptions for various positions, and employ qualified human resource personnel in the recruitment process (Ghanbarpour & Najmolhoda 2013).
First, human resources should determine the strategic goals of the organization versus the aim of hiring certain staff. The goals will be a platform through which the human resource can base decision making when it comes to recruitment and selection plans.
Secondly, the company needs to recruit competent professionals to take up the capacity of human resources managers and directors. The present director and managers are failing the organization as they do not apply human resource theory and principles to their practice.
Toyco Company is facing a collapse of its human resource function. Poor human resource management is causing the company serious problems of high staff turnover, high recruitment and operational costs, and poor employee motivation, among others. Thus, the management must align all their human resources processes to ensure better recruitment and selection policies.
Bratton, J, & Gold, J 2012, Human resource management: theory and practice, Palgrave Macmillan, London.
Cania, L 2014, ‘The impact of strategic human resource management on organizational performance’, Economia Seria Management, vol. 17, no. 2, pp. 373-383.
Corbin, J. & Strauss, 2008, Basics of qualitative research: Techniques and procedures for developing grounded theory, 3rd ed, California, Sage Publications, Thousand Oak.
Doornenbal, E, Stitselaar, W, & Jansen, L 2012, Recruitment & selection, Christian University of Applied Sciences, Windesheim.
Ghanbarpour, Z, & Najmolhoda, FS 2013, ‘Contemporary theories of motivation in organizational leadership and behavior’, International Research Journal of Applied and Basic Sciences, vol. 6, no. 1, pp. 1-7.
Gusdorf, ML 2008, Recruitment, and selection: Hiring the right person, CIPD Publications, London.
Hendry, C 2012, Human resource management, Routledge, New York, NY.
Martin, D & Joomis, K 2007, Maslow’s hierarchy of needs in building teachers: A constructivist approach to introducing education, Wadsworth, Belmont.
Marimuthu, M, Arokiasamy, L, & Ismail, M 2009, ‘Human capital development and its impact on firm performance: Evidence from developmental economics’, The Journal of International Social Research, vol. 2, no. 8, pp. 265-272.
Nankervis, AR, & Compton, RL 2006, ‘Performance management: theory in practice?’, Asia Pacific Journal of Human Resources, vol. 4, no. 1, pp. 83-101.
Pilbeam, S & Cambridge, M 2010, People resourcing and talent planning, 4th ed, Pearson Education Limited, Edinburgh Gate.
Priem, RL & Butler, JE 2001, ‘Is the resource-based “view” a useful perspective for strategic management research?’, Academy of Management Review, vol. 26, no. 1,pp. 22-40.
Price, A 2007, Human resource management in a business context, Cengage Learning EMEA, New Jersey.
Rees, G, & French, R 2013, Leading, managing and developing people, CIPD Publications, London.
Storey, J 2007, Human resource management: A critical text, Cengage Learning EMEA, New Jersey
Toyco case study: action toys for a lifetime 2012, Brookes University, Class reading material.