Recruitment and selection

 


Assignment



























1.       Critically evaluates the impact of the current global economic situation on recruitment and selection, drawing on examples from different companies and countries.

The Economic meltdown which was faced by whole world started from year 2008 with the subprime crisis. Subprime crisis was mainly occurred due to the sudden increase in the cost of short term credit in USA due to which major companies and Banks got bankrupt and very harmful consequences came out of that all around the globe. This crisis not only impacted the economies around the world but also changes the practices which were followed earlier in the areas of management in the companies. Lot of employees have to leave their jobs while other has to lose their business even which they have started in their whole life. Figure below shows the unemployment figures which arises very rapidly in USA.

 

Unemployment figures do not arise not only in USA but it impacted the economy around the world. The main factor responsible for this phenomenon was globalisation due to which big giants of USA are distributed in many a countries and have their lot of business and their employee around the world so whenever they got impacted there strategy overall got impacted and the consequences can be seen in around the world. Mainly OECD countries i.e. Organisation for economic co-operation and development got impacted. The figure showing huge impact on the employement of the OECD countries is as follows:





Percentage of labour force
Millions
Percentage of labour force
Projections
Projections
Seasonally adjusted
Projections


2007
2008
2009
2010
2007
2008
2009
2010
Q4-2007
Q4-2008
Q4-2009
Q4-2010
North America












Canada
6.0
6.1
7.0
7.5
1.1
1.1
1.3
1.4
5.9
6.4
7.3
7.4

Mexico
3.4
4.1
4.6
4.4
1.5
1.9
2.1
2.0
3.5
4.5
4.6
4.2
United States
4.6
5.7
7.3
7.5
7.1
8.8
11.4
11.8
4.8
6.5
7.5
7.4
Asia













Japan
3.9
4.1
4.4
4.4
2.6
2.7
2.9
2.9
3.8
4.3
4.4
4.4

Korea
3.2
3.2
3.6
3.6
0.8
0.8
0.9
0.9
3.1
3.4
3.7
3.5
Europe






Austria
5.1
4.9
5.7
6.0
0.2
0.2
0.3
0.3
5.0
5.1
6.0
6.0
Belgium
7.4
6.8
7.4
7.8
0.4
0.3
0.4
0.4
7.0
6.8
7.7
7.9

Czech Republic
5.3
4.5
5.2
5.5
0.3
0.2
0.3
0.3
4.8
4.6
5.5
5.5
Denmark
3.7
3.1
4.0
4.5
0.1
0.1
0.1
0.1
3.3
3.2
4.3
4.6

Finland
6.9
6.2
6.5
6.8
0.2
0.2
0.2
0.2
6.9
6.3
6.6
6.9
France
8.0
7.3
8.2
8.7
2.2
2.1
2.3
2.5
7.5
7.6
8.6
8.6

Germany
8.3
7.4
8.1
8.6
3.6
3.2
3.5
3.7
7.9
7.4
8.4
8.6
Greece
8.1
7.6
8.0
8.2
0.4
0.4
0.4
0.4
7.9
7.6
8.2
8.2

Hungary
7.4
7.9
8.9
9.2
0.3
0.3
0.4
0.4
7.8
8.0
9.3
9.0
Iceland
2.3
2.8
7.4
8.6
0.0
0.0
0.0
0.0
1.9
3.5
9.0
8.1

Ireland
4.6
5.9
7.7
7.8
0.1
0.1
0.2
0.2
4.7
7.3
7.8
7.6
Italy
6.2
6.9
7.8
8.0
1.5
1.7
2.0
2.0
6.3
7.2
8.2
7.8

Luxembourg
4.4
4.5
6.5
7.0
0.0
0.0
0.0
0.0
..
..
..
..
Netherlands
3.3
3.1
3.7
4.1
0.3
0.3
0.3
0.4
3.0
3.2
3.9
4.2

Norway
2.5
2.6
3.0
3.3
0.1
0.1
0.1
0.1
2.4
2.6
3.2
3.3
Poland
9.6
7.2
7.1
7.6
1.6
1.2
1.2
1.3
8.5
6.8
7.3
7.8

Portugal
8.0
7.6
8.5
8.8
0.4
0.4
0.5
0.5
7.9
7.8
8.8
8.7
Slovak Republic
11.0
9.7
9.4
9.0
0.3
0.3
0.3
0.2
10.3
9.0
9.5
8.8

Spain
8.3
10.9
14.2
14.8
1.8
2.5
3.3
3.4
8.6
12.4
14.8
14.7
Sweden
6.1
6.1
7.0
7.7
0.3
0.3
0.3
0.4
6.0
6.4
7.4
7.7

Switzerland
3.6
3.5
3.9
4.2
0.2
0.2
0.2
0.2
3.5
3.6
4.1
4.2
Turkey
9.6
9.7
10.5
10.6
2.3
2.4
2.6
2.7
..
..
..
..

United Kingdom
5.4
5.5
6.8
8.2
1.7
1.7
2.1
2.5
5.2
6.0
7.3
8.3
Oceania






Australia
4.4
4.3
5.3
6.0
0.5
0.5
0.6
0.7
4.4
4.5
5.8
6.0
New Zealand
3.6
4.0
5.4
6.0
0.1
0.1
0.1
0.1
3.4
4.3
6.0
6.1
OECD Europea
7.1
6.9
8.0
8.5
16.0
15.8
18.3
19.6
7.1
7.4
8.5
8.7
EU-15a
7.0
7.0
8.2
8.8
13.3
13.5
15.9
17.0
6.8
7.4
8.6
8.8
EU-19a

7.2
7.0
8.1
8.6
15.8
15.6
18.0
19.3
6.9
7.3
8.5
8.6
Total OECDa
5.6
5.9
6.9
7.2
31.9
34.0
40.1
42.1
5.5
6.3
7.2
7.2
a) Unemployment rates aggregates are computed using labour force weights. EU-15 refers to Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom. EU-19 refers to EU-15 and Czech Republic, Hungary, Poland and Slovak Republic. OECD Europe includes EU-19 countries and Iceland, Norway, Switzerland and Turkey.
Source: OECD (2008), OECD Economic Outlook, No. 84, November.
Some of the major changes in the recruitment and selection procedures can be summed up as:
1.      While before the melt down there were not enough human resource available to sustain for some industries like construction in countries like Estonia while after the meltdown the unemployment rate has gone up by 20%.
2.      Salaries paid to the employees are much lesser than those paid in the previous year since companies are cutting down their cost in crisis time.
3.      The work environment also get affected for the employees as employees are less and have to work more than previous time which increased stress at work for the employees.
4.      Due to more number of layoffs during economic meltdown so people available for the work are now more productive and more motivated towards their work.
5.      HRM role now has been changed from merely support role to strategic HRM.
6.      More pool of human resource is available now.
7.      Outside recruitment agencies are hired less for hiring the human resource in the companies now.
8.      HRM job get tougher as due to cost cutting it become really difficult to motivate the employees.







Resources:



2.     E-Learning and its role in Human Resource Development.
E-Learning is the process through which information and knowledge is transferred through computer and network enabled devices. It involves electronic devices such as TV, CD ROM and Video tape, Internet media or web based media. So depending upon this it can be categorised mainly into two parts:
a)      CBT (Computer based training)
b)      IBT (Internet based training) or WBT (Web based training)
By e-Learning process several companies provides online study materials, tutorials, assessment test as well as certification test for their employees. There are several pros and cons of e-Learning process which can be given as:
Pros:
1.      Cost saving as labour for training
2.      Cost saving as e-Learning provides economies of scale
3.       No time constraints
Cons:
1.      Higher drop-out rates for e-Learning than normal learning
2.      Retention rate for the e-Learner is also not so high
3.      Better performance in normal classes than e-Learning classes  
The figure below shows the e-Learning cycle for any organisation:

Role of e-Learning for Human resource development:
1.      Specific Target group: e-Learning programme are developed for a specific target group so as to provide the specific information and knowledge and information which may or may not be having with other members of the group.
2.      Time flexibility: Though e-Learning do not assure the quality measurement for the employees but still it provides the time flexibility for the employees as they can complete their whenever they desire to do so which is very crucial for them.
3.      Roles involved: The roles of different programme manager, instructor and administrator if clearly defined can make the process very successful.
The figure showing e-Learning environment in a company can be given as under:




Resources:

3. Bonuses in Financial Service Sector when the banks are being bailed out.
Bonuses form the major part of the salary for the employees in almost every organisation and proved as the major factor for retaining the talented customer pool for the companies around the world. Bonuses are paid out to the employees for their performance in the given year and by recognising their contribution into the company provides them satisfaction for the work they have done for the company. In year 2008 these bonus come on attack after the financial meltdown in the country when the major bank of the country was bailed out 18 billion dollar and was still paying huge sum of money to their employees as the bonus income. At Wall Street which is mainly about money bonuses are paid in huge amount to the employees. At the time when companies are making profits and overall economy is booming it is worthwhile to payout to employees for maintaining their satisfaction but in case of the economic crisis which happened just earlier when the economic conditions of the companies are not so good and government is bailing out the companies with huge sum of money and companies are going for cost cutting to minimize their losses in such situations it becomes very difficult to maintain the employee satisfaction as they are not paid for what they are worth off. But the shareholders of the companies are not allowing the company to pay the bonuses in such conditions. According to the RBS chief the financial sector has become the marathon game not the sprint i.e. they will return on the path of profit after taking a lot of time may be after year 2011 so it has become the marathon it’s not like the sprint. In February 2009 Senator Christopher J. Dodd made the rule about the bonuses paid out to the employees of the financial sector by saying that the bonuses paid would not be in the form of cash but would be in form of stocks and can be up to one third of the total compensation paid to the employee.
Figure below shows the chart which emphasis on the salary and bonus increase among the employees:
Some of the facts about the financial sector showing their change in bonuses policy are as follows:
In year 2008:

1.      The total amount of bonus paid to the employees by financial companies reduced by 37% to approx $112000 in year 2008.
2.      The reduction in bonuses at Wall Street will cost $1billion to the new York in Income tax revenue lost.

In year 2009:

1.      Bonuses paid at Goldman Sachs, Morgan Stanley, and JPMorgan Investment Bank, increased by 31% in year 2009 after the sharp fall which was seen in year 2008. 
2.      In year 2009 most of the financial sector companies have decided that their top executives will not receive the cash incentives as the bonus part but they would be receiving the stocks in place of the cash.
3.      The compensation paid which were more than 50% of the net revenue in the year 2008 has fallen down to less than 40% in the year 2009.
4.      Total taxable bonus rise on the Wall Street was $130850 in the year 2009 in comparison to the year 2008.


Web Resources:







4. Relevance of trade unions.
Trade unions are the associations of the workers, financed and run by them in order to fulfil their common goals. Trade unions work for the welfare of the employees; their main motives are to protect the employee’s right and to provide them their rights against the company for which they are working. In today’s business context trade unions are getting more relevance as more and more conflicts are arising between management and the employees. So in a way now a day’s trade unions are working as a bridge between employees and the management to give a better communication between the two. There are several characteristics of the trade unions which are as under:
1.      Association: Trade unions is association of employees
2.      Similar Goal: trade union is the association of people having the common goals
3.      Collective action: The action taken by the trade unions are the collective action and has high impact on the management
4.      Instable: trade unions cannot be categorised as the stable association as they keep on changing their members and rules and regulations
5.      Volunteer: Trade unions are volunteer as the members are not forced to join the trade unions

Some of the major objectives of the trade unions can be summed as under:
1.      To provide workers fair wages by comparing with cost of living
2.      To provide secure employement to employees
3.      To make the system democratic and allow workers to say in the processing’s of the company
4.      To provide share of profit to workers
5.      To provide better working conditions to the workers

Some of the important functions of the trade unions are as under:
1.      Trade unions protects the right of the workers through collective bargaining with the management for employee welfare
2.      Trade unions provide financial and non financial support to the trade union members during lock out and strike situations
3.      Trade unions also help the members by eradicating social evils like corruption, nepotism and black marketing
4.      Trade unions also do the political functions by affiliating their unions through political parties so as to increase their power
5.      Trade unions also do the ancillary functions like providing education, establishing communication and human resource development.

There are certain reasons for which workers assemble into the trade unions which can be given as under:
1.      Trade unions assure steady employement to the workers
2.      Trade unions provides the economic benefits to the workers
3.      Trade unions stops the management to take arbitrary actions against the workers
4.      Trade unions also protects the union members from economic hazards like illness and others
5.      Trade unions provides sense of belongingness to their members
6.      Trade unions provide recognitions to its members

  Some of the examples of trade unions in Indian context can be given as under:
1.      Bhartiya Mazdoor Sangh (BJP)
2.      Centre of Indian Trade Union (CITU)
3.      National trade union federation (NTUF)
4.      Indian national trade union congress (INTUC)

Though trade unions provides benefits to its member as well as to management by providing an easy communication channel to pass on their message to the workers but it also has certain limitations too. These limitations have different forms and some time causes adverse impacts on the employees as well as on the company. Some of the major limitations of the trade unions are as follows:
1.      Low income of the workers does not allow them to join the trade unions so they get deprive of the benefits they would have got as a member of the trade unions.
2.      Employer’s tries a lot to break up the trade unions and do not allow the workers to form any kind of trade unions in their companies.
3.      Illiteracy and lack of knowledge among the lower level workers do not allow them to know about their rights and hence their rights are provided to them by employers.
4.       Inter unions rivalry also get significant when power of the trade unions get increase due to which management get chance to break up the trade unions.
5.      Lack of interest among many of the employees which look trade unions as the wastage of their time hinder to provide strength to the trade unions.
6.      Trade unions have a very narrow portfolio of services as they do not much look after the social services of the employees.

Structure of trade unions:
The structure of the trade unions is modelled as under:


1.      Union members: Are the people who subscribe to the union and become as a part of them and work for common goals
2.      Union representatives: These are the elected members of the unions which are elected by the union members to lead the union
3.      Branches: These are the local unions which support the unions in other local organisations to make them powerful. Every branch has a head leading to that branch.
4.       Regional offices: These offices have staffs which are the members of the unions.
5.      National offices: National offices are the offices which are operated at a national level and act as a collective negotiator for the unions.


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References:
1)      Global Employment Trends – International Labour Office: http://www.ilo.org/public/libdoc/ilo/P/09332/09332(2010-January).pdf, last accessed on 28-Nov-10.
2)      The Role of Distance Education in the Human Resource Development of India by Dr. Ashok Kumar Gaba, Senior Research Officer Staff Training and Research Institute of Distance Education , Indira Gandhi National Open University, 2002.
3)      The US Financial and Economic Crisis: Where Does It Stand and Where Do We Go From Here? by Martin Neil Baily and Douglas J. Elliott, 2009. http://www.brookings.edu/~/media/Files/rc/papers/2009/0615_economic_crisis_baily_elliott/0615_economic_crisis_baily_elliott.pdf, last accessed on 28-Nov-10.
4)      Did Increases in the Minimum Wage Change Consumption Patterns? Research Report for the Low Pay Commission by J. Wadsworth, 2007.



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