Sunday, December 27, 2009
Wednesday, December 9, 2009
Mutual Fund
Mutual fund
Mutual funds can give investors access to emerging markets
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. As of early 2008, the worldwide value of all mutual funds totals more than $26 trillion.
Since 1940, there have been three basic types of investment companies in the United States: open-end funds, also known in the US as mutual funds; unit investment trusts (UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a generic term for various types of collective investment vehicles, such as unit trusts, open-ended investment companies (OEICs), unitized insurance funds, and undertakings for collective investments in transferable securities (UCITS).
History
Massachusetts Investors Trust (now MFS Investment Management) was founded on March 21, 1924, and, after one year, it had 200 shareholders and $392,000 in assets. The entire industry, which included a few closed-end funds represented less than $10 million in 1924.
The stock market crash of 1929 hindered the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that a fund be registered with the Securities and Exchange Commission (SEC) and provide prospective investors with a prospectus that contains required disclosures about the fund, the securities themselves, and fund manager. The SEC helped draft the Investment Company Act of 1940, which sets forth the guidelines with which all SEC-registered funds today must comply.
With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s, there were approximately 270 funds with $48 billion in assets. The first retail index fund, First Index Investment Trust, was formed in 1976 and headed by John Bogle, who conceptualized many of the key tenets of the industry in his 1951 senior thesis at Princeton University. It is now called the Vanguard 500 Index Fund and is one of the world's largest mutual funds, with more than $100 billion in assets.
A key factor in mutual-fund growth was the 1975 change in the Internal Revenue Code allowing individuals to open individual retirement accounts (IRAs). Even people already enrolled in corporate pension plans could contribute a limited amount (at the time, up to $2,000 a year). Mutual funds are now popular in employer-sponsored "defined-contribution" retirement plans such as (401(k)s) and 403(b)s as well as IRAs including Roth IRAs.
As of October 2007, there are 8,015 mutual funds that belong to the Investment Company Institute (ICI), a national trade association of investment companies in the United States, with combined assets of $12.356 trillion.
Usage
Since the Investment Company Act of 1940, a mutual fund is one of three basic types of investment companies available in the United States.
Mutual funds can invest in many kinds of securities. The most common are cash instruments, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for instance, can invest primarily in the shares of a particular industry, such as technology or utilities. These are known as sector funds. Bond funds can vary according to risk (e.g., high-yield junk bonds or investment-grade corporate bonds), type of issuers (e.g., government agencies, corporations, or municipalities), or maturity of the bonds (short- or long-term). Both stock and bond funds can invest in primarily U.S. securities (domestic funds), both U.S. and foreign securities (global funds), or primarily foreign securities (international funds).
Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager, who forecasts cash flows into and out of the fund by investors, as well as the future performance of investments appropriate for the fund and chooses those which he or she believes will most closely match the fund's stated investment objective. A mutual fund is administered under an advisory contract with a management company, which may hire or fire fund managers.
Mutual funds are subject to a special set of regulatory, accounting, and tax rules. In the U.S., unlike most other types of business entities, they are not taxed on their income as long as they distribute 90% of it to their shareholders and the funds meet certain diversification requirements in the Internal Revenue Code. Also, the type of income they earn is often unchanged as it passes through to the shareholders. Mutual fund distributions of tax-free municipal bond income are tax-free to the shareholder. Taxable distributions can be either ordinary income or capital gains, depending on how the fund earned those distributions. Net losses are not distributed or passed through to fund investors.
Net asset value
The net asset value, or NAV, is the current market value of a fund's holdings, less the fund's liabilities, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. The public offering price, or POP, is the NAV plus a sales charge. Open-end funds sell shares at the POP and redeem shares at the NAV, and so process orders only after the NAV is determined. Closed-end funds (the shares of which are traded by investors) may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.
Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments (such as stock in a non-public company). In the absence of a public market for these securities, it is the responsibility of the fund manager to form an estimate of their value when computing the NAV. How much of a fund's assets may be invested in such securities is stated in the fund's prospectus.
Average Annual Return
US mutual funds use SEC form N-1A to report the average annual compounded rates of return for 1-year, 5-year and 10-year periods as the "average annual total return" for each fund. The following formula is used:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10-year periods (or fractional portion).
Turnover
Turnover is a measure of the fund's securities transactions, usually calculated over a year's time, and usually expressed as a percentage of net asset value.
This value is usually calculated as the value of all transactions (buying, selling) divided by 2 divided by the fund's total holdings; i.e., the fund counts one security sold and another one bought as one "turnover". Thus turnover measures the replacement of holdings.
In Canada, under NI 81-106 (required disclosure for investment funds) turnover ratio is calculated based on the lesser of purchases or sales divided by the average size of the portfolio (including cash).
Expenses and TER's
Mutual funds bear expenses similar to other companies. The fee structure of a mutual fund can be divided into two or three main components: management fee, nonmanagement expense, and 12b-1/non-12b-1 fees. All expenses are expressed as a percentage of the average daily net assets of the fund.
Management fees
The management fee for the fund is usually synonymous with the contractual investment advisory fee charged for the management of a fund's investments. However, as many fund companies include administrative fees in the advisory fee component, when attempting to compare the total management expenses of different funds, it is helpful to define management fee as equal to the contractual advisory fee + the contractual administrator fee. This "levels the playing field" when comparing management fee components across multiple funds.
Contractual advisory fees may be structured as "flat-rate" fees, i.e., a single fee charged to the fund, regardless of the asset size of the fund. However, many funds have contractual fees which include breakpoints, so that as the value of a fund's assets increases, the advisory fee paid decreases. Another way in which the advisory fees remain competitive is by structuring the fee so that it is based on the value of all of the assets of a group or a complex of funds rather than those of a single fund.
Non-management expenses
Apart from the management fee, there are certain non-management expenses which most funds must pay. Some of the more significant (in terms of amount) non-management expenses are: transfer agent expenses (this is usually the person you get on the other end of the phone line when you want to purchase/sell shares of a fund), custodian expense (the fund's assets are kept in custody by a bank which charges a custody fee), legal/audit expense, fund accounting expense, registration expense (the SEC charges a registration fee when funds file registration statements with it), board of directors/trustees expense (the disinterested members of the board who oversee the fund are usually paid a fee for their time spent at meetings), and printing and postage expense (incurred when printing and delivering shareholder reports).
12b-1/Non-12b-1 service fees
12b-1 service fees/shareholder servicing fees are contractual fees which a fund may charge to cover the marketing expenses of the fund. Non-12b-1 service fees are marketing/shareholder servicing fees which do not fall under SEC rule 12b-1. While funds do not have to charge the full contractual 12b-1 fee, they often do. When investing in a front-end load or no-load fund, the 12b-1 fees for the fund are usually .250% (or 25 basis points). The 12b-1 fees for back-end and level-load share classes are usually between 50 and 75 basis points but may be as much as 100 basis points. While funds are often marketed as "no-load" funds, this does not mean they do not charge a distribution expense through a different mechanism. It is expected that a fund listed on an online brokerage site will be paying for the "shelf-space" in a different manner even if not directly through a 12b-1 fee.
Investor fees and expenses
Fees and expenses borne by the investor vary based on the arrangement made with the investor's broker. Sales loads (or contingent deferred sales loads (CDSL)) are not included in the fund's total expense ratio (TER) because they do not pass through the statement of operations for the fund. Additionally, funds may charge early redemption fees to discourage investors from swapping money into and out of the fund quickly, which may force the fund to make bad trades to obtain the necessary liquidity. For example, Fidelity Diversified International Fund (FDIVX) charges a 1 percent fee on money removed from the fund in less than 30 days.
Brokerage commissions
An additional expense which does not pass through the statement of operations and cannot be controlled by the investor is brokerage commissions. Brokerage commissions are incorporated into the price of the fund and are reported usually 3 months after the fund's annual report in the statement of additional information. Brokerage commissions are directly related to portfolio turnover (portfolio turnover refers to the number of times the fund's assets are bought and sold over the course of a year). Usually the higher the rate of the portfolio turnover, the higher the brokerage commissions. The advisors of mutual fund companies are required to achieve "best execution" through brokerage arrangements so that the commissions charged to the fund will not be excessive.
Types of mutual funds
Open-end fund
The term mutual fund is the common name for what is classified as an open-end investment company by the SEC. Being open-ended means that, at the end of every day, the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.
Mutual funds must be structured as corporations or trusts, such as business trusts, and any corporation or trust will be classified by the SEC as an investment company if it issues securities and primarily invests in non-government securities. An investment company will be classified by the SEC as an open-end investment company if they do not issue undivided interests in specified securities (the defining characteristic of unit investment trusts or UITs) and if they issue redeemable securities. Registered investment companies that are not UITs or open-end investment companies are closed-end funds. Neither UITs nor closed-end funds are mutual funds (as that term is used in the US).
Exchange-traded funds
A relatively recent innovation, the exchange-traded fund or ETF, is often structured as an open-end investment company. ETFs combine characteristics of both mutual funds and closed-end funds. ETFs are traded throughout the day on a stock exchange, just like closed-end funds, but at prices generally approximating the ETF's net asset value. Most ETFs are index funds and track stock market indexes. Shares are issued or redeemed by institutional investors in large blocks (typically of 50,000). Most investors purchase and sell shares through brokers in market transactions. Because the institutional investors normally purchase and redeem in in kind transactions, ETFs are more efficient than traditional mutual funds (which are continuously issuing and redeeming securities and, to effect such transactions, continually buying and selling securities and maintaining liquidity positions) and therefore tend to have lower expenses.
Exchange-traded funds are also valuable for foreign investors who are often able to buy and sell securities traded on a stock market, but who, for regulatory reasons, are limited in their ability to participate in traditional U.S. mutual funds.
Equity funds
Equity funds, which consist mainly of stock investments, are the most common type of mutual fund. Equity funds hold 50 percent of all amounts invested in mutual funds in the United States. Often equity funds focus investments on particular strategies and certain types of issuers.
Capitalization
Fund managers and other investment professionals have varying definitions of mid-cap, and large-cap ranges. The following ranges are used by Russell Indexes:
Russell Microcap Index - micro-cap ($54.8 - 539.5 million)
Russell 2000 Index - small-cap ($182.6 million - 1.8 billion)
Russell Midcap Index - mid-cap ($1.8 - 13.7 billion)
Russell 1000 Index - large-cap ($1.8 - 386.9 billion)
Growth vs. value
Another distinction is made between growth funds, which invest in stocks of companies that have the potential for large capital gains, and value funds, which concentrate on stocks that are undervalued. Value stocks have historically produced higher returns; however, financial theory states this is compensation for their greater risk. Growth funds tend not to pay regular dividends. Income funds tend to be more conservative investments, with a focus on stocks that pay dividends. A balanced fund may use a combination of strategies, typically including some level of investment in bonds, to stay more conservative when it comes to risk, yet aim for some growth.
Index funds versus active management
Main articles: Index fund and active management
An index fund maintains investments in companies that are part of major stock (or bond) indices, such as the S&P 500, while an actively managed fund attempts to outperform a relevant index through superior stock-picking techniques. The assets of an index fund are managed to closely approximate the performance of a particular published index. Since the composition of an index changes infrequently, an index fund manager makes fewer trades, on average, than does an active fund manager. For this reason, index funds generally have lower trading expenses than actively managed funds, and typically incur fewer short-term capital gains which must be passed on to shareholders. Additionally, index funds do not incur expenses to pay for selection of individual stocks (proprietary selection techniques, research, etc.) and deciding when to buy, hold or sell individual holdings. Instead, a fairly simple computer model can identify whatever changes are needed to bring the fund back into agreement with its target index.
Certain empirical evidence seems to illustrate that mutual funds do not beat the market and actively managed mutual funds under-perform other broad-based portfolios with similar characteristics. One study found that nearly 1,500 U.S. mutual funds under-performed the market in approximately half of the years between 1962 and 1992. Moreover, funds that performed well in the past are not able to beat the market again in the future (shown by Jensen, 1968; Grimblatt and Sheridan Titman, 1989).
Bond funds
Bond funds account for 18% of mutual fund assets. Types of bond funds include term funds, which have a fixed set of time (short-, medium-, or long-term) before they mature. Municipal bond funds generally have lower returns, but have tax advantages and lower risk. High-yield bond funds invest in corporate bonds, including high-yield or junk bonds. With the potential for high yield, these bonds also come with greater risk.
Money market funds
Money market funds hold 26% of mutual fund assets in the United States. Money market funds entail the least risk, as well as lower rates of return. Unlike certificates of deposit (CDs), money market shares are liquid and redeemable at any time.
Funds of funds
Funds of funds (FoF) are mutual funds which invest in other underlying mutual funds (i.e., they are funds comprised of other funds). The funds at the underlying level are typically funds which an investor can invest in individually. A fund of funds will typically charge a management fee which is smaller than that of a normal fund because it is considered a fee charged for asset allocation services. The fees charged at the underlying fund level do not pass through the statement of operations, but are usually disclosed in the fund's annual report, prospectus, or statement of additional information. The fund should be evaluated on the combination of the fund-level expenses and underlying fund expenses, as these both reduce the return to the investor.
Most FoFs invest in affiliated funds (i.e., mutual funds managed by the same advisor), although some invest in funds managed by other (unaffiliated) advisors. The cost associated with investing in an unaffiliated underlying fund is most often higher than investing in an affiliated underlying because of the investment management research involved in investing in fund advised by a different advisor. Recently, FoFs have been classified into those that are actively managed (in which the investment advisor reallocates frequently among the underlying funds in order to adjust to changing market conditions) and those that are passively managed (the investment advisor allocates assets on the basis of on an allocation model which is rebalanced on a regular basis).
The design of FoFs is structured in such a way as to provide a ready mix of mutual funds for investors who are unable to or unwilling to determine their own asset allocation model. Fund companies such as TIAA-CREF, American Century Investments, Vanguard, and Fidelity have also entered this market to provide investors with these options and take the "guess work" out of selecting funds. The allocation mixes usually vary by the time the investor would like to retire: 2020, 2030, 2050, etc. The more distant the target retirement date, the more aggressive the asset mix.
Hedge funds
Hedge funds in the United States are pooled investment funds with loose SEC regulation and should not be confused with mutual funds. Some hedge fund managers are required to register with SEC as investment advisers under the Investment Advisers Act. The Act does not require an adviser to follow or avoid any particular investment strategies, nor does it require or prohibit specific investments. Hedge funds typically charge a management fee of 1% or more, plus a "performance fee" of 20% of the hedge fund's profits. There may be a "lock-up" period, during which an investor cannot cash in shares. A variation of the hedge strategy is the 130-30 fund for individual investors.
Mutual funds vs. other investments
Mutual funds offer several advantages over investing in individual stocks. For example, the transaction costs are divided among all the mutual fund shareholders, which allows for cost-effective diversification. Investors may also benefit by having a third party (professional fund managers) apply expertise and dedicate time to manage and research investment options, although there is dispute over whether professional fund managers can, on average, outperform simple index funds that mimic public indexes. Yet, the Wall Street Journal reported that separately managed accounts (SMA or SMAs) performed better than mutual funds in 22 of 25 categories from 2006 to 2008. This included beating mutual funds performance in 2008, a tough year in which the global stock market lost US$21 trillion in value. In the story, Morningstar, Inc said SMAs outperformed mutual funds in 25 of 36 stock and bond market categories. Whether actively managed or passively indexed, mutual funds are not immune to risks. They share the same risks associated with the investments made. If the fund invests primarily in stocks, it is usually subject to the same ups and downs and risks as the stock market.
Share classes
Many mutual funds offer more than one class of shares. For example, you may have seen a fund that offers "Class A" and "Class B" shares. Each class will invest in the same pool (or investment portfolio) of securities and will have the same investment objectives and policies. But each class will have different shareholder services and/or distribution arrangements with different fees and expenses. These differences are supposed to reflect different costs involved in servicing investors in various classes; for example, one class may be sold through brokers with a front-end load, and another class may be sold direct to the public with no load but a "12b-1 fee" included in the class's expenses (sometimes referred to as "Class C" shares). Still a third class might have a minimum investment of $10,000,000 and be available only to financial institutions (a so-called "institutional" share class). In some cases, by aggregating regular investments made by many individuals, a retirement plan (such as a 401(k) plan) may qualify to purchase "institutional" shares (and gain the benefit of their typically lower expense ratios) even though no members of the plan would qualify individually. As a result, each class will likely have different performance results.
A multi-class structure offers investors the ability to select a fee and expense structure that is most appropriate for their investment goals (including the length of time that they expect to remain invested in the fund).
Load and expenses
A front-end load or sales charge is a commission paid to a broker by a mutual fund when shares are purchased, taken as a percentage of funds invested. The value of the investment is reduced by the amount of the load. Some funds have a deferred sales charge or back-end load. In this type of fund an investor pays no sales charge when purchasing shares, but will pay a commission out of the proceeds when shares are redeemed depending on how long they are held. Another derivative structure is a level-load fund, in which no sales charge is paid when buying the fund, but a back-end load may be charged if the shares purchased are sold within a year.
Load funds are sold through financial intermediaries such as brokers, financial planners, and other types of registered representatives who charge a commission for their services. Shares of front-end load funds are frequently eligible for breakpoints (i.e., a reduction in the commission paid) based on a number of variables. These include other accounts in the same fund family held by the investor or various family members, or committing to buy more of the fund within a set period of time in return for a lower commission "today".
It is possible to buy many mutual funds without paying a sales charge. These are called no-load funds. In addition to being available from the fund company itself, no-load funds may be sold by some discount brokers for a flat transaction fee or even no fee at all. (This does not necessarily mean that the broker is not compensated for the transaction; in such cases, the fund may pay brokers' commissions out of "distribution and marketing" expenses rather than a specific sales charge. The purchaser is therefore paying the fee indirectly through the fund's expenses deducted from profits.)
No-load funds include both index funds and actively managed funds. The largest mutual fund families selling no-load index funds are Vanguard and Fidelity, though there are a number of smaller mutual fund families with no-load funds as well. Expense ratios in some no-load index funds are less than 0.2% per year versus the typical actively managed fund's expense ratio of about 1.5% per year. Load funds usually have even higher expense ratios when the load is considered. The expense ratio is the anticipated annual cost to the investor of holding shares of the fund. For example, on a $100,000 investment, an expense ratio of 0.2% means $200 of annual expense, while a 1.5% expense ratio would result in $1,500 of annual expense. These expenses are before any sales commissions paid to purchase the mutual fund.
Many fee-only financial advisors strongly suggest no-load funds such as index funds. If the advisor is not of the fee-only type but is instead compensated by commissions, the advisor may have a conflict of interest in selling high-commission load funds.
HRM RECRUITMENT PROJECT
A STUDY ON RECRUITMENT AND SELECTION FOR TEMP STAFFING
A CASE STUDY
AT
ADDECCO FLEXIONE WORKFORCE SOLUTIONS LTD
A Major project report submitted to Osmania University, in partial fulfillment of the requirements for the award of degree
Of
MASTER OF BUSINESS ADMINISTRATION
HRM
By
FARZANA
(18-05-146)
Department of Business Management
Aurora’s Post-graduate College
[Affiliated to Osmania University]
RAMANTHAPUR, Hyderabad
DECLARATION
I FARZANA declare that the project report entitled “A study on recruitment and selection for temp staffing” A Case Study at ADECCO Flexione workforce Solutions is an original and bonafide work done by me during the academic year 2005-2007. This is being submitted in the partial fulfillment of the requirement for the award of degree of the Master of Business Administration (Osmania University). The matter embodied in this report has not been submitted for the award of any other degree or diploma.
FARZANA
ACKNOWLEDGEMENT
I deem it a great privilege to thank all those people who helped me to complete this project work. I express my sincere thanks to the management of the AURORA POST GRADUATE COLLEGE and our respected Head of the department Dr. E.VIKRAM ADITYA for giving me this opportunity to under take the project work.
I am deeply obliged to my project guide Mrs. MANJULA, with out whose guidance and encouragement at all levels , the study wouldn’t have been completed.
I express my profound thanks to, Mr. BHARTH KUMAR Group Accounting Manager, ADECCO Flexione Workforce Solutions Ltd, Hyderabad, for giving me valuable advice and guidance and sparing valuable time in clarifying various points raised by me.
FARZANA
Table of Contents
Chapter- 1 Page No
1. Introduction 1
2. Objectives and scope of the study 3
3. Methodology of the study 4
Chapter- 2
1. Review of Literature 5
2. Theoretical Framework 8
Chapter- 3
1. Company profile 35
Chapter- 4
1. Data analysis and interpretation 45
Chapter- 5
1. Findings 60
2. Suggestions 63
Bibliography 64
Annexure I
Questionnaire 65
Chapter- 1
1. Introduction
2. Objectives and scope of the study
3. Methodology of the study
INTRODUCTION
A “temp” is a temporary worker with an organization who is on a third-party (staffing company) payroll. A well-accepted norm in global companies, many large Indian organizations are now hiring a part of their workforce from employee leasing firms.
Temping in India has never been a lifestyle choice unlike the markets in the US. Since temping is used more as a stepping stone to permanent jobs in India, conversion from a temp to perm is in the higher range. In the US, it is anywhere between 4% and 5%. In Adecco Peopleone, the conversion is anywhere between 25% and 33% with the company providing liquidity support. “I would encourage this conversion to go up to 40% as it will generate greater demand,”
says Ajit Isaac, MD, Adecco Peopleone.
Recently, Bharti announced its intent to absorb 14,000 temps and make them permanent employees. While the high number with Bharti is an anomaly, most companies in India maintain a temp-perm mix and convert some good temporary staffers into permanent employees. On one hand, companies can gauge employees before absorbing them and first-timers in the employment market can gain a richer repertoire of experience having worked with a few MNCs.Meanwhile in the US, where temping is more established with 10m temps in the market, certain specialized jobs have also seen temps earn 17% more than permanent employees. For temping companies in India, it is about addressing frictional unemployment and providing jobs to first-timers in the employment market. “Of course, temping companies manage both service fees and absorption fees when this conversion happens,” Over a period of time, the temping industry will see penetration into Tier II towns due to higher levels of absorption. Temping companies will look at value additions in competency testing and certification of temps. “It cannot be about simply payrolling; we have to look at value addition along the entire chain,” says Soumen Basu, executive chairman, Manpower India. “The high rate of absorption is a good sign for our industry, it just shows that the market is maturing,” says Achal Khanna, country-head, Kelly Services. According to ASSOCHAM (Associated Chambers of Commerce and Industry) the size of the retail market would go up from Rs 5, 88,000 crore to 1,479,000 crore in 2008. Currently, of the Rs 5, 88, 000 crore market, the organized sector is only Rs 5,000 crore, but is expected to shoot up
to 1,60,000 crore by 2008.
Many companies because of the growing competition want to focus their core business. That‘s the reason why most of the companies in telecom sector in particular wants to increase their market share by increasing sales without increasing the headcount. To do so they are going for RPO’s which employs people on the rolls of not the client but on its own company rolls.
Temporary staffing firms recruit people for their clients by using various sources of recruiting available. These firms source the candidates and conduct initial screening by using different methods so that they select and place the right kind of people for the right kind of job.
OBJECITIVES
To understand the process of recruitment and selection in various telecom companies.
To know the effective method of recruitment and selection in selected telecom companies
To know the process of recruitment in Adecco Flexione Staffing Solutions.
To know the yield ratio
To know the sources used for recruiting at various levels and various jobs
SCOPE
The study’s emphasis is on recruitment and selection process of only three telecom companies TATA, IDEA and AIRTEL.
The study aims at understanding various issues involved in managerial recruitment process.
The study does not look into financial aspects of recruitment cost analysis
The study was done only to know the various sources of recruitment
METHODOLOGY OF STUDY
This study is conducted by collecting and analyzing the data from primary and secondary sources.
Primary Data:
Primary data was collected by administering the questionnaire to the recruiters working at ADECCO Flexione staffing solutions
Secondary Data:
Secondary data was collected from the books, journals, and websites and through the interaction with the individuals in the organization.
Data Analysis:
The data, which is collected, is analyzed and is represented through pie graphs and bar diagrams using percentages for analyzing and interpreting.
Sample Size:
The sample size of the recruiters were 8 recruitment consultants, and 1 Group Accounting managers (GAM’)
Chapter- 2
1. Review of Literature
2. Theoretical Framework
LITERATURE REVIEW
India is a growing market. While the advanced world is seeing decline in growth, India, china and other emerging countries will continue to experience boom time for almost the next 20-30 years. These possess a unique challenge for the corporates who are interested in quality recruitment. Understanding requirements is the first most important step towards effective recruitment. Despite knowing it well both organizations and Recruitment Service Providers (RSPs) do not spend time either in defining requirements or in understanding them. Organizations must “recruit” recruiters carefully, insist on good measures of value – add, define and communicate requirements, build and enlist high performing RSPs to work for them as brand promoters. Similarly, RSPs must provide services appropriate to the need of the organization , learn to say no when they cannot, improve their match making abilities and not merely push CVs.outsourcing recruitment to external RSPs should not be purely on cost considerations. Cost saving is only an initial excitement. RSPs those who provide guaranteed service levels will be more effective and would be sort after as partners for companies finding right-fit will be the key focus. Cost of wrong hires will be measured while refining the act of recruitment says S. Chandra Sekhar who works with CAP GEMINI CONSULTING INDIA at Mumbai in his article published in HRD newsletter.
In one of the studies conducted by the HR consulting firm HEWITT it was found that 45% of 129 companies surveyed did not see cost saving as their main consideration. Top three reasons for recruitment outsourcing in corporate are reported to be:
Gaining outside expertise
Improving service quality
Focusing on core business.
So the companies must not go for RSPs simply to reduce the cost of recruitment but they should focus more on improved structure, standardization, efficiency, technology, compliance and other value adds.
Behind every Attrition there is recruitment! Whenever an employee leaves an organization without informing and without giving notice or leaves the organization in the middle of the project it should be known that he or she is joining some other organization. Many times the employees of the recruitment consultants are hired by their own clients and are asked to join at a very short notice period. They are been told that “relieving letter” is not required and some even offer incentives for early joining. There must be some guidelines and ethics for recruitment so that there can be fair recruitment policies. There must be some ethical guidelines such as
a) Notice period must be served and nobody must be hired without relieving letter or providing proof of serving the notice period.
b) Corporate should not hire anyone who has spent less than one year in his current organization. The logic is obvious. Employees six months to begin their contribution and at least one year is required to recover recruitment process. More importantly if some body is hired who has worked less than a year with the current organization, that individual will ditch in even shorter period.
c) Corporates should not head hunting from competition. They should advertise and encourage employees seeking change to voluntarily respond to this advertisement.
d) Corporate should not bail out the prospective employee commitments such as employment bond etc. the corporate should realize that employee signed the bond and if he wants to break it, he should do at his own cost and the corporate should not reimburse or compensate him for violating the employment contracts says Mr. T. MURALIDHARAN who is the chairman of TMI NETWORK one of the India’s leading recruitment consultancy.
In one of the study conducted on recruitment and selection process at BIOLOGICAL-E LTD conducted by Manik Rao in the year 2005. It was found that company has used internal search for recruiting the employees into more higher or the positions in different departments who can fit into the job. It was found that the company has done it by considering it as the most cost effective way of filling the vacancies. It has also been found that the company opted for external sources such as advertisement agencies to fill vacancies. Employee referrals were also one of the internal sources of recruitment.
In another study on recruitment and selection in DW PRACTICE LLC which is a HR consultancy, it was found that most of the employees felt that the telephonic interview is not effective and instead direct interviews are more feasible.
These are some of the studies conducted earlier on the recruitment and selections.
THEORETICAL FRAMEWORK
Recruitment has been regarded as the most important function of personnel administration, because unless the right type of people are hired the organization cannot achieve its objectives. This is the second step in the process of procurement of the employee the first being the manpower planning. Recruiting makes it possible to acquire the number and types of people necessary to ensure the contained operation of the organization. This is a linking activity bringing together those with jobs and those seeking jobs.
RECRUITMENT AND SELECTION
Recruitment refers to the process of finding possible candidates for a job or function, usually undertaken by recruiters. It also may be undertaken by an employment agency or a member of staff at the business or organization looking for recruits. Advertising is commonly part of the recruiting process, and can occur through several means: through online, newspapers, using newspaper dedicated to job advertisement, through professional publication, using advertisements placed in windows, through a job center, through campus interviews, etc.Suitability for a job is typically assessed by looking for skills, e.g. communication skills, typing skills, computer skills. Evidence for skills required for a job may be provided in the form of qualifications (educational or professional), experience in a job requiring the relevant skills or the testimony of references. Employment agencies may also give computerized tests to assess an individual's "off-hand" knowledge of software packages or typing skills. At a more basic level written tests may be given to assess numeracy and literacy. A candidate may also be assessed on the basis of an interview. Sometimes candidates will be requested to provide a résumé (also known as a CV) or to complete an application form to provide this evidence. The follow-up process may be referred to as part of the recruitment process: inveigling the selected candidate or candidates to take up the target job or function.
RECRUITING INTERNALLY OR EXTERNALLY
Internal Recruiting
Recruiting from among the existing workforce offers many advantages. Seeing your employees at work on a day-to-day basis will enable you to evaluate their particular strengths and weakness accurately and choose the most suitable person for the position. When the company recruits from within the organization the employees will feel important and highly valued since it appears that the organization immediately turns to them whenever a vacancy occurs. Their work rate and performance should improve as well as they will realize that increasing job opportunities are available to them if they are industrious and successful at their jobs. However any method has its own merits and demerits.
Merits
It improves the morale of the employees
The employee is in better position to evaluate those presently employed than outside conditions
It promotes loyalty among the employees, for it gives them a sense of job security and opportunities of advancement.
These people are tried and can be relied upon
Demerits
It often leads to inbreeding and discourages new blood from entering into an organization.
There are possibilities that internal sources may “dry up” and it may be difficult to find the requisite personnel from within an organization.
No innovation are made no new thinking so on new inputs which is very much essential for the growth of the organization
Usually promotions are based on seniority so the danger is that really capable hands may not be chosen.
External Recruiting
When a company is involved in large expansions and is more oriented towards achieving high growth and high market share, with more focus on quality of the product and high customer satisfaction then it is inevitable for any organization to go for external recruiting. External recruiting is nothing but recruiting the people in your organization from outside the company. It will help the company to make best use of other sources that are lying outside the organization like for example campus recruits is an effective and efficient way of recruiting when a company wants new minds that are more creative and go-getters for any task. If a company wants to concentrate only on its core activities and wants to relieve the burden of the task of recruitment then the more feasible option would be third party recruiting or recruitment process outsourcing RPO. The experienced persons but unemployed can be recruited into the company which may reduce the training cost if they are from same industry. Retired and experienced people can yield more by enhancing their prior experience in new business situations.
Merits
New entrant to the labor force i.e., young mostly inexperienced potential employee’s fresh graduates or postgraduates can be taken and mould in accordance with company’s culture.
External recruiting results in best selection from the large sources
In the long run this source proves economical because potential employees do not extra training.
Many different ways of recruiting is available.
The excess applications generated for current requirement may be utilized for future vacancies.
Demerits
Extra time is required by the people to adjust them selves to the present working situations.
If the recruiting is done from large source then it will be more time taking as the applications generated are more and short listing becomes critical.
Cost of recruiting will be comparatively more than internal recruiting.
Sometimes it creates employee dissatisfaction as there may be mismatch between the employee expectation with the company and the company’s expectation with the employee.
Before making a choice and making decisions as to which source should be adopted for recruiting both the sources should be thoroughly assessed and must be studied carefully the wide variety of individual sources of recruitment that are available whether Internal or External. Before choosing any sources make sure that it gives answer as YES to these following questions:
Will it reach the right people?
The main criterion which can be used to judge each source must be whether it will put you in touch with potentially suitable applicants. No matter how competent we may at drawing up the applications, conducting interviews and running tests, it is all largely irrelevant if there are not good field of applicants to choose from. The source to be opted can be decided on the basis of job description and employee specification. Based on that choose the appropriate source that can give higher yield ratio.
Will it reach the right numbers?
It’s not enough just to get potentially ideal applicants to apply for the post. They must also do so in the right numbers. Its found that at the time interview is arranged one will already have obtained a job, another wont turn up and three of them are unsuitable and the only remaining candidate will turn down the job offer. Thus it result in again beginning the whole process which will incur the extra time and expense involved with reading and responding to all the applications. Although opinion varies considerably as to the number of applicants required, therefore the number of invites is increased around half a dozen for an interview and tests. But additional applicants will therefore simply increase the recruitment process. Unfortunately the recruiter doesn’t know the number of suitable candidates who are of equal importance.
Will it be at the right price?
It should always be taken into account the cost in terms of time and money of a specific source of recruitment. It should be in the proportion to the job concerned and its value to the company. There must be the balance between the expense against the type and number of people that it will reach. The information regarding all sources available for recruitment must be available prior to proceeding. Generate information from the past record to see that it was value for money.
INTERNAL SOURCES
The most common internal sources of internal recruitment are
1. personal recommendations
2. notice boards
3. newsletters
4. memoranda
1) Personal References
The existing employees will probably know their friends or relatives or colleagues who could successfully fill the vacancy. Approaching them may be highly efficient method of recruitment but will almost certainly offend other workers who would have wished to have been considered for the job. To keep employees satisfied make sure that potentially suitable employees are informed of the vacancy so that they can apply. Also any one else who is likely to be interested is told about it as well so that they can apply for the job.
2) Notice Boards
This is the convenient and simple method of passing on important messages to the existing staff. A job advertisement pinned to a notice board will probably be seen and read by a sufficient number of appropriate employees at little or no cost. However many of the staff will probably not learn of the vacancy in this way either because the notice board poorly located or is full of out dated notices that they don’t bother to look at it, as they assume there is nothing new to find out. A notice board must be ensured that it is well sited. Wherever it is been placed it should be certain that it is seen by every one. It means there must be equal opportunity to see to it and this happens when they know that just important topical notices are on display. Attention must be paid to the design and contents of the notice if it is to catch the eye and make the employee read on and then want to apply for the job.
3) Newsletters
Many companies regularly produce in-house newsletters, magazines or journals for their staff to read. It is hoped that latest company news sheet is read avidly by all staff thus ensuring that every one is aware of the job opportunity advertised in it. Unfortunately this is not always so, because it is sometimes not circulated widely enough and employees may find it boring and choose not to read it. Newsletter can be utilized as the source of recruitment if it is convinced that everybody will see a copy.
4) Memoranda
Possibly the best way of circulating news of the job vacancy is to send memoranda to department managers to read out to the teams or to write all employees perhaps enclosing memoranda in wage packets if appropriate. However it can be a time consuming process to contact staff individually, especially if there is a large work force. It should also be kept in mind as to in which way the memorandum is phrased out so that the job appeals to likely applicants.
EXTERNAL SOURCES
There are many sources to choose from if you are seeking to recruit from outside the company.
1. word of mouth
2. notices
3. job centers
4. private agencies and consultants
5. education institutions
6. the press
7. radio
8. television
1) Word of Mouth
Existing employees may have friends and relatives who would like to apply for he job. Recruiting in this way appears to be simple, inexpensive and convenient. Never use word of mouth as a sole or initial source of recruitment if the work force is wholly or predominantly of one sex or racial group. Also employing friends and relatives of present employees may be imprudent because it is not certain that they are as competent as the current staff.
2) Notices
Displaying notices in and around business premises is a simple and often overlooked method of advertising a job vacancy. They should be seen by a large number of passerby, some actively looking for work. It can also be inexpensive with a notice varying from a carefully hand written post card up to a professionally produced poster. Pay attention to the appearance and contents of the notice if it is intended that it is applied by the right people.
3) Job Centers
Most large towns have a job center which offers employers a free recruitment service, trying to match their vacancies to job seekers. Staff will note information about a post and the types of person sought and then advertise the vacancy o notice boards within their premises. Job center employees can further help if requested to do so by issuing and assessing application forms and thus weeding out those applicants who are obviously unsuitable for the position. Short listed candidates are then sent out for the employer to interview on his business premises.
4) Private Agencies and Consultants
There are various types of private organization that can help to find the right person for a particular job. Employment agencies exist in many town and cities. Some handle all general vacancies from junior unto supervisory level while others specialize in various occupations such as accountancy, clerical or computer personnel and marketing or sales. Since they maintain a register of job seekers, they initially attempt to find applicants from this list. A short list will be drawn up by reading through applications and conducting interviews on client organization’s behalf. Although fees vary, it is expected to pay around 10 to 15% of the annual salary offered if a suitable person is found for the job. This will be partly refundable if he leaves within a certain period of time. For temporary staff, it is normally charged on hourly, daily or weekly rate by the agency. They will then pay the employee. Recruitment agencies are similar to employment agencies in the services that they offer. The main difference is that recruitment agencies tend to operate at a higher level, concentrating on technical, managerial and executive appointment. Accordingly, increased time, effort and expertise are needed to compile a quality short list. This will be reflected in the fees charged, often between 18 and 22% of the annual salary of the staff recruited. Again a proportion of this may be refundable if the employees proves to be unsatisfactory and subsequently departs.
Search consultants, also known as Headhunters, specialize in finding candidates for senior positions. They normally head hunt people currently at work in similar posts, possibly at rival companies. Discrete approaches, by telephone, are made direct to the persons involved. Such a process is time consuming and requires considerable tact and diplomacy if it is to be successful. Charges may be in excess of 30% of the annual salary. Before opting for this source attention must be paid about those agencies who brashly promise to give a lengthy list of candidates very quickly. It may sound impressive but suggests that they are simply pulling names from a register perhaps of dubious quality and are not actively searching for and screening applicants properly. A good shortlist will take time to compile. It must be ensured that the agency with which the organizations contracting must follow a good refund system in case the new recruit resigns or needs to be dismissed shortly after joining. Also a free replacement warranty up to six months must be provided by the recruiting agency. When employing an agency or consultant, make sure that they know exactly what they are expected to do. A clear job description and employee specification, must be provided so that they could screen by referring to the employee specification and so on. Full up to date information about the job and person required. Supply all details and all instructions in writing to avoid subsequent misunderstandings and disagreements.
The recruiting agency or consultant must be in touch with the client company through out the recruitment process to ensure that the agency is following the instructions and doing its job well. Also it must be ensured that they are maintaining equality of opportunity and avoiding unlawful discrimination against applicants of a particular sex, marital status or any racial group. All applicants should be judged solely on their ability to do the job.
5) Educational Institutions Or Campus Recruitment
Those companies which require a steady intake of young persons for new Youth Training to trainee management positions ought establish and maintain close contact with colleges and universities. The advantage of campus recruitment is, it is known that who the audience to be addressed are. Promotional literature in the form of posters, broachers, catalogues; press releases and so on can be issued to the audience so that the company’s name remains prominent in their and their student’s minds all the time.
6) The Press
Advertising for the new staff through the press has proved successful for many companies. Choose between local newspapers, national newspapers and the magazines. All will put in touch with different audience. Local newspapers, read by a large cross-section of the immediate population, may be most suitable if there is sufficient talent in the area.
National newspapers, with their mass circulations and differing attitudes to news coverage appealing to various tastes, could be better when looking out to fill the senior position.
Trade Magazines often under estimated as useful source of recruitment might be worth considering if looking out to recruit someone for a specialized job which possibly requires previous experience of the particular industry.
Naturally there are some drawbacks to newspaper advertising. It is expensive in relation to other, often equally good source such as job and careers centers, which advertise free. Other drawbacks of newspaper advertising include a high level of wastage (the vast majority of readers will not be job hunting) and a short life span. The daily or evening newspaper is invariably discarded at the end of the day. A short series of advertisement incurring extra expenses may sometimes be required and multiplying one advert by three or four starts to make this source prohibitively costly. Trade magazines could be a better way of recruiting staff depending upon the circumstances. Most will include employment advertisements within a classified section which will be read by a small but select and interested number of people. There some disadvantages, however the financial outlay is still considerable. If the magazine is published bi-monthly or quarterly, may have to wait sometime before the advertisement is seen. It may be intended to fill the vacancy as soon as possible.
7) Radio
Many radio stations broadcast special job finders advertisements throughout the day for companies looking for new recruits. Advertising through the radio has got many advantages as it will be transmitted to over a wide geographical area to potentially large audience. Variety of age groups listens thus making it a suitable medium for different types and levels of jobs. Advertisements can be broadcast very quickly sometimes within hours. Nevertheless there are some disadvantages that must be considered carefully. As few have tune in to hear advertisements and their thoughts invariably wander when they are on, or they may start station hopping to find more music. The radio is also transient medium. An advertisement lasts for perhaps 30 seconds, which is a very short period in which to put across all the important points, and is then finished. It is usually difficult to remember (What was the company’s name? what was its phone number?) most listeners will not have a pen and pad handy to make notes.
8) Television
You can advertise on a regional or national basis. Recruiting staff through the Television is still widely regarded as a new and innovative approach. Companies which use this medium may therefore be seen as go-ahead and dynamic. Thus, this medium may not be an immediate choice if there is only just one vacancy to be filled, although shorter and expensive one month contracts could be negotiable and worth considering.
SELECTION
The selection procedure is concerned with securing relevant information about the applicant. This information is secured in number of steps. The objective of selection process is to determine whether an applicant meets the qualifications for a specific job and to choose the applicant who is most likely to perform well in that job
The hiring procedure is not a single act but it is essentially a series of methods by which additional information is secured about the applicant. At each stage facts, which came to light, make the acceptance or rejections of the candidate clear. Some selection processes are quite easy and some with many hurdles this increases with the level and responsibility of the positions to be filled.
Essentials of Selection Procedure
The selection process can be successful if the following requirements are satisfied:
1. Someone should have the authority to select. This authority comes from the employment requisition as developed by an analysis of the work-load and work force.
2. There must be some standard of personnel with which a prospective employee may be compared i.e., a comprehensive job description and job specification should be available beforehand.
3. There must be sufficient number of applicants from whom the required number of employees may be selected.
PROCESS OF SELECTION
Selection
Preliminary screening interview
Completion of application or form if not done previously
Employment tests
Comprehensive interview
Back ground investigation
Final employment decision
Preliminary Interview or Screening
The initial screening is usually conducted by a special interviewer a high caliber receptionist in the employment office. These interviews are short and are known as stand-up interviews. The main objective of such interviews is to screen out undesirable/unqualified candidates at very outset. Such interviews conducted by someone who inspires confidence, who genuinely interested in people, and whose judgment in the “sizing up” of the applicant is fairly reliable.
Basic criteria that must be met for an application to be eligible for consideration. If these criteria are not met, there is no obligation on the employer to consider such applications. The screening process therefore seeks to identify those applications that meet the basic entry-level requirements applications that are therefore incomplete or do not meet the basic appointment criteria are considered unsuccessful applications. In order to be fair and objective in the screening of candidates, it is essential that a fixed set of valid criteria be applied in terms of each and every candidate that applies for a position.
Certain conditions should be met in relation to the format and content of -
a)Application forms b)Curricula Vitae (CV’s) and c)All other relevant documentation.
What is the purpose of short-listing?
After having completed the screening process and eliminated those applicants that do not meet the basic requirements, the next objective should be to identify a manageable size (pool) of applicants (a short-list) who are best suited to fill the position successfully and from whose ranks the most suitable candidate(s) is/are to be selected. It is about identifying a manageable pool of best suited candidates for a specific position, in the interest of the State, taking into account Affirmative Action and Employment Equity objectives.
May short-listing be used to reduce a vast number of applications to a manageable size?
As stated, the primary objective of the short-listing process is to reduce the
Number of qualifying applicants to a manageable size for purposes of selecting
the most suitable candidate. A further objective with short-listing is to rank candidates, and to determine a cut-off point below which candidates will not be interviewed. The criteria utilized for short-listing purposes should therefore be in sufficient detail to allow for this and should be applied consistently.
Application Form
Application form is also known as application blank. The technique of application blank is traditional and widely accepted for securing information from the prospective candidates. It can also be used as a device to screen the candidate at the preliminary level. Many companies formulate their own style of application forms depending upon the requirement of information based on the size of the company, nature of business activities, type and level of job etc. they also formulate different application forms for different jobs, at different levels, so as to solicit the required information for each job. But few companies in our companies in our country do not have prescribed application forms.
Psychological Testing
Test is defied as a systematic procedure for sampling human behavior
TESTS ARE USED IN BUSINESS FOR THREE PRIMARY PURPOSES.
1) for the selection and placement of new employees
2) for appraising employees for promotion potentials and
3) For counseling employees if properly used psychological tests can be of paramount importance for each of these purposes.
Classification of Tests on the Basis Of Human Behavior
A. Aptitude or potential ability test
Such tests are widely used to measure the latent ability of a candidate to learn new jobs or skills. They will enable us to know whether a candidate if selected, would be suitable for a job, which may be clerical or mechanical. These tests may take one of the following forms.
a) Mental or Intelligence Test - measures and enables to know whether he or she has mental capacity to deal with new problems.
b) Mechanical Aptitude Test - measures the capacity of a person to learn a particular type of mechanical wok. This could help in knowing a person’s capability for spatial visualization, perceptual speed manual dexterity, visual motor coordination or integration, visual insights etc.
c) Psychometric tests – these tests measures a persons ability to do a specific job
B. Achievement test
Also known as proficiency tests they measure the skill, knowledge which is acquired as a result of a training program and on the job experience they determine the admission feasibility of a candidate and measure what he/she is capable of doing.
a) Tests for measuring job knowledge – this type of test may be oral or written. These tests are administered to determine proficiency in shorthand and in operating calculators adding machines dictating and transcribing machines and simple mechanical equipment.
b) Work sample tests – demand the administration of the actual job as a test. A typing test provides the material to be typed and notes the time taken and mistakes committed.
C. Personality tests
These tests aim at measuring those basic make up or characteristics of an individual which are non-intellectual in their nature. In other words they probe deeply to discover clues to an individual’s value system, his emotional reactions and maturity and motivation interest his ability to adjust himself to the illness of the everyday life and his capacity for interpersonal relations and self image.
a) Objective tests – it measures neurotic tendencies self-sufficiency dominance submission and self-confidence. These are scored objectively. They are paper and pencil tests or personality inventors.
b) Projective tests – it is a test in which a candidate is asked to project his own interpretation into certain standard stimulus situation. The way in which he/she responds to these stimuli depends on his own values, motives and personality.
c) Situation tests – these tests measures an applicant’s reaction when he is placed in a peculiar situation his ability to undergo stress and his demonstration of ingenuinity under pressure. Such tests usually relate to leaderless group situations, in which some problem is posed to a group and its members are asked to reach some conclusion without the help of a leader.
d) Interest tests – these tests aim at finding out the types of work in which a candidate is interested. They are inventories of the likes and dislikes of the people of some occupation hobbies and recreational activities. They are useful in vocational guidance and are assessed in the form of answers to a well prepared questionnaire.
Interviews
Interviews are a crucial part of the recruitment process for most organizations. Their purpose is to give the selector a chance to assess the candidate and to demonstrate their abilities and personality. It’s also an opportunity for an employer to assess them and to make sure the organization and position are right for the candidate. An interview is an attempt to secure maximum amount of information from candidate concerning his suitability for the job under consideration.
The recruitment process for most organizations follows a common theme: Applications/CVs are received, either online or by post; and candidates are short-listed and invited for interview. The interview format can vary considerably and may include an assessment centre and/or tests. The number of interviews also varies. Some companies are satisfied after one interview, whereas others will want to recall a further shortlist of candidates for more. If successful at the final interview stage, an official job offer is sent to the candidate. Interview format is determined by the nature of the organization, but there are various standard formats.
Chronological Interviews -These work chronologically through the candidate’s life to date and are usually based on the CV or a completed application form.
Competency-Based Interviews -These are structured to reflect the competencies that an employer is seeking for a particular job (often detailed in the recruitment information). This is the most common type of interview for graduate positions today.
Technical Interviews - If a candidate has applied for a job or course that requires technical knowledge (e.g. positions in engineering or IT) it is likely, at some stage in the selection process, that the candidate will be asked technical questions or have a separate technical interview to test his/her knowledge. Questions may focus on the final year project and his/her choice of approach to it or on real/hypothetical technical problems. It seen that the candidate proves himself/herself but also they admit to what they don’t know.
Kinds of Interviews:
One to one interview: in this type of interview one selector interviews one candidate alone.
Informal interview: in this type there are discussions between the candidate and two or more interviewers.
Panel of interviews: in these pre planned standard questions ranging overall aspects of the job are asked. They focus directly on elements of person specification.
Direct planned interview: this interview is straight forward, face to face, question and answer situation intended to measure the candidate’s knowledge and background.
Indirect and direct interview: in this type of interview the interviewer refrains from asking direct and specific questions but creates an atmosphere in which the interviewee feels free to talk and go into any subject he considers important. The object of the interview is to determine what individual himself considers of immediate concern, what he thinks about these problems, and how he conceives of his job and his organization.
Patterned interview: in this interview a series of questions which illuminates validated against the record of employees who have succeeded or failed on the job.
Stress interview: in this interview the interviewer deliberately creates stress to see how an applicant operates in stress situation. To induce stress, the interviewer responds to the applicant’s answers with anger, silence and criticism. This interview aims attesting the candidate’s job behavior and level of withstanding during the period of stress and strain.
8. Depth interview: in this type of interview, the candidate would be examined extensively in core areas of knowledge and skills of the job.
Background Checks and Enquiries
Offers of appointment are subject to references and security checks. The references given in the candidate’s application will be taken up and a security check will be conducted. Security checks can take a while if the candidate has lived abroad for any period of time.
Final Selection Decision
Those individuals who perform successfully on the employment tests and the interviews, and are not eliminated by development of negative information on either the background investigation or physical examination are now considered to be eligible to receive an offer of employment. Who makes that employment offer? For administrative purposes the personnel department should make the offer. But their role should be only administrative. The actual hiring decision should be made by the manager in the department that had the position open.
YIELD RATIO
A yield ratio for many recruiting step reflects the number of candidates avail at a step and the step. For example, a series of newspaper ads may result in thousand applications for employment of these thousand applicants 100 are judged to meet some minimum qualifications, thus the yield ratio at this initial stages is 10% of a group of 100 candidates 50 accepted invitations to be interviewed (yield ratio is 50% at this stage) of the 50, 10 were given job offers 20% yield ratio.
Assuming the labor market has not changed dramatically from when the yield ratio was derived and similar methods of the recruiting are to be used (eg. Advertising in the same papers, employment screening resource.com, using a website or head hunters). This ratio then can be used as the basis for planning future recruitment efforts by going backwards from the yield ratio; the recruiter can estimate how many applicants will be necessary In order to fill a certain number of position. The recruiter then can adjust the recruiting efforts according with more / less advertising more or fewer trips to college campuses and so forth.
The use of yield ratio is another area where there is a wide gap between what academic texts are scholarly research recommends and the extent to which such data are collected in organization to drive future recruitment planning, while almost every scholar on the subject recommends a recruitment evaluation process to assist decision makers in efficient recruitment planning very few companies actually collect these data as a part of recruitment evaluation.
Mutual funds can give investors access to emerging markets
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. As of early 2008, the worldwide value of all mutual funds totals more than $26 trillion.
Since 1940, there have been three basic types of investment companies in the United States: open-end funds, also known in the US as mutual funds; unit investment trusts (UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a generic term for various types of collective investment vehicles, such as unit trusts, open-ended investment companies (OEICs), unitized insurance funds, and undertakings for collective investments in transferable securities (UCITS).
History
Massachusetts Investors Trust (now MFS Investment Management) was founded on March 21, 1924, and, after one year, it had 200 shareholders and $392,000 in assets. The entire industry, which included a few closed-end funds represented less than $10 million in 1924.
The stock market crash of 1929 hindered the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that a fund be registered with the Securities and Exchange Commission (SEC) and provide prospective investors with a prospectus that contains required disclosures about the fund, the securities themselves, and fund manager. The SEC helped draft the Investment Company Act of 1940, which sets forth the guidelines with which all SEC-registered funds today must comply.
With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s, there were approximately 270 funds with $48 billion in assets. The first retail index fund, First Index Investment Trust, was formed in 1976 and headed by John Bogle, who conceptualized many of the key tenets of the industry in his 1951 senior thesis at Princeton University. It is now called the Vanguard 500 Index Fund and is one of the world's largest mutual funds, with more than $100 billion in assets.
A key factor in mutual-fund growth was the 1975 change in the Internal Revenue Code allowing individuals to open individual retirement accounts (IRAs). Even people already enrolled in corporate pension plans could contribute a limited amount (at the time, up to $2,000 a year). Mutual funds are now popular in employer-sponsored "defined-contribution" retirement plans such as (401(k)s) and 403(b)s as well as IRAs including Roth IRAs.
As of October 2007, there are 8,015 mutual funds that belong to the Investment Company Institute (ICI), a national trade association of investment companies in the United States, with combined assets of $12.356 trillion.
Usage
Since the Investment Company Act of 1940, a mutual fund is one of three basic types of investment companies available in the United States.
Mutual funds can invest in many kinds of securities. The most common are cash instruments, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for instance, can invest primarily in the shares of a particular industry, such as technology or utilities. These are known as sector funds. Bond funds can vary according to risk (e.g., high-yield junk bonds or investment-grade corporate bonds), type of issuers (e.g., government agencies, corporations, or municipalities), or maturity of the bonds (short- or long-term). Both stock and bond funds can invest in primarily U.S. securities (domestic funds), both U.S. and foreign securities (global funds), or primarily foreign securities (international funds).
Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager, who forecasts cash flows into and out of the fund by investors, as well as the future performance of investments appropriate for the fund and chooses those which he or she believes will most closely match the fund's stated investment objective. A mutual fund is administered under an advisory contract with a management company, which may hire or fire fund managers.
Mutual funds are subject to a special set of regulatory, accounting, and tax rules. In the U.S., unlike most other types of business entities, they are not taxed on their income as long as they distribute 90% of it to their shareholders and the funds meet certain diversification requirements in the Internal Revenue Code. Also, the type of income they earn is often unchanged as it passes through to the shareholders. Mutual fund distributions of tax-free municipal bond income are tax-free to the shareholder. Taxable distributions can be either ordinary income or capital gains, depending on how the fund earned those distributions. Net losses are not distributed or passed through to fund investors.
Net asset value
The net asset value, or NAV, is the current market value of a fund's holdings, less the fund's liabilities, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. The public offering price, or POP, is the NAV plus a sales charge. Open-end funds sell shares at the POP and redeem shares at the NAV, and so process orders only after the NAV is determined. Closed-end funds (the shares of which are traded by investors) may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.
Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments (such as stock in a non-public company). In the absence of a public market for these securities, it is the responsibility of the fund manager to form an estimate of their value when computing the NAV. How much of a fund's assets may be invested in such securities is stated in the fund's prospectus.
Average Annual Return
US mutual funds use SEC form N-1A to report the average annual compounded rates of return for 1-year, 5-year and 10-year periods as the "average annual total return" for each fund. The following formula is used:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10-year periods (or fractional portion).
Turnover
Turnover is a measure of the fund's securities transactions, usually calculated over a year's time, and usually expressed as a percentage of net asset value.
This value is usually calculated as the value of all transactions (buying, selling) divided by 2 divided by the fund's total holdings; i.e., the fund counts one security sold and another one bought as one "turnover". Thus turnover measures the replacement of holdings.
In Canada, under NI 81-106 (required disclosure for investment funds) turnover ratio is calculated based on the lesser of purchases or sales divided by the average size of the portfolio (including cash).
Expenses and TER's
Mutual funds bear expenses similar to other companies. The fee structure of a mutual fund can be divided into two or three main components: management fee, nonmanagement expense, and 12b-1/non-12b-1 fees. All expenses are expressed as a percentage of the average daily net assets of the fund.
Management fees
The management fee for the fund is usually synonymous with the contractual investment advisory fee charged for the management of a fund's investments. However, as many fund companies include administrative fees in the advisory fee component, when attempting to compare the total management expenses of different funds, it is helpful to define management fee as equal to the contractual advisory fee + the contractual administrator fee. This "levels the playing field" when comparing management fee components across multiple funds.
Contractual advisory fees may be structured as "flat-rate" fees, i.e., a single fee charged to the fund, regardless of the asset size of the fund. However, many funds have contractual fees which include breakpoints, so that as the value of a fund's assets increases, the advisory fee paid decreases. Another way in which the advisory fees remain competitive is by structuring the fee so that it is based on the value of all of the assets of a group or a complex of funds rather than those of a single fund.
Non-management expenses
Apart from the management fee, there are certain non-management expenses which most funds must pay. Some of the more significant (in terms of amount) non-management expenses are: transfer agent expenses (this is usually the person you get on the other end of the phone line when you want to purchase/sell shares of a fund), custodian expense (the fund's assets are kept in custody by a bank which charges a custody fee), legal/audit expense, fund accounting expense, registration expense (the SEC charges a registration fee when funds file registration statements with it), board of directors/trustees expense (the disinterested members of the board who oversee the fund are usually paid a fee for their time spent at meetings), and printing and postage expense (incurred when printing and delivering shareholder reports).
12b-1/Non-12b-1 service fees
12b-1 service fees/shareholder servicing fees are contractual fees which a fund may charge to cover the marketing expenses of the fund. Non-12b-1 service fees are marketing/shareholder servicing fees which do not fall under SEC rule 12b-1. While funds do not have to charge the full contractual 12b-1 fee, they often do. When investing in a front-end load or no-load fund, the 12b-1 fees for the fund are usually .250% (or 25 basis points). The 12b-1 fees for back-end and level-load share classes are usually between 50 and 75 basis points but may be as much as 100 basis points. While funds are often marketed as "no-load" funds, this does not mean they do not charge a distribution expense through a different mechanism. It is expected that a fund listed on an online brokerage site will be paying for the "shelf-space" in a different manner even if not directly through a 12b-1 fee.
Investor fees and expenses
Fees and expenses borne by the investor vary based on the arrangement made with the investor's broker. Sales loads (or contingent deferred sales loads (CDSL)) are not included in the fund's total expense ratio (TER) because they do not pass through the statement of operations for the fund. Additionally, funds may charge early redemption fees to discourage investors from swapping money into and out of the fund quickly, which may force the fund to make bad trades to obtain the necessary liquidity. For example, Fidelity Diversified International Fund (FDIVX) charges a 1 percent fee on money removed from the fund in less than 30 days.
Brokerage commissions
An additional expense which does not pass through the statement of operations and cannot be controlled by the investor is brokerage commissions. Brokerage commissions are incorporated into the price of the fund and are reported usually 3 months after the fund's annual report in the statement of additional information. Brokerage commissions are directly related to portfolio turnover (portfolio turnover refers to the number of times the fund's assets are bought and sold over the course of a year). Usually the higher the rate of the portfolio turnover, the higher the brokerage commissions. The advisors of mutual fund companies are required to achieve "best execution" through brokerage arrangements so that the commissions charged to the fund will not be excessive.
Types of mutual funds
Open-end fund
The term mutual fund is the common name for what is classified as an open-end investment company by the SEC. Being open-ended means that, at the end of every day, the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.
Mutual funds must be structured as corporations or trusts, such as business trusts, and any corporation or trust will be classified by the SEC as an investment company if it issues securities and primarily invests in non-government securities. An investment company will be classified by the SEC as an open-end investment company if they do not issue undivided interests in specified securities (the defining characteristic of unit investment trusts or UITs) and if they issue redeemable securities. Registered investment companies that are not UITs or open-end investment companies are closed-end funds. Neither UITs nor closed-end funds are mutual funds (as that term is used in the US).
Exchange-traded funds
A relatively recent innovation, the exchange-traded fund or ETF, is often structured as an open-end investment company. ETFs combine characteristics of both mutual funds and closed-end funds. ETFs are traded throughout the day on a stock exchange, just like closed-end funds, but at prices generally approximating the ETF's net asset value. Most ETFs are index funds and track stock market indexes. Shares are issued or redeemed by institutional investors in large blocks (typically of 50,000). Most investors purchase and sell shares through brokers in market transactions. Because the institutional investors normally purchase and redeem in in kind transactions, ETFs are more efficient than traditional mutual funds (which are continuously issuing and redeeming securities and, to effect such transactions, continually buying and selling securities and maintaining liquidity positions) and therefore tend to have lower expenses.
Exchange-traded funds are also valuable for foreign investors who are often able to buy and sell securities traded on a stock market, but who, for regulatory reasons, are limited in their ability to participate in traditional U.S. mutual funds.
Equity funds
Equity funds, which consist mainly of stock investments, are the most common type of mutual fund. Equity funds hold 50 percent of all amounts invested in mutual funds in the United States. Often equity funds focus investments on particular strategies and certain types of issuers.
Capitalization
Fund managers and other investment professionals have varying definitions of mid-cap, and large-cap ranges. The following ranges are used by Russell Indexes:
Russell Microcap Index - micro-cap ($54.8 - 539.5 million)
Russell 2000 Index - small-cap ($182.6 million - 1.8 billion)
Russell Midcap Index - mid-cap ($1.8 - 13.7 billion)
Russell 1000 Index - large-cap ($1.8 - 386.9 billion)
Growth vs. value
Another distinction is made between growth funds, which invest in stocks of companies that have the potential for large capital gains, and value funds, which concentrate on stocks that are undervalued. Value stocks have historically produced higher returns; however, financial theory states this is compensation for their greater risk. Growth funds tend not to pay regular dividends. Income funds tend to be more conservative investments, with a focus on stocks that pay dividends. A balanced fund may use a combination of strategies, typically including some level of investment in bonds, to stay more conservative when it comes to risk, yet aim for some growth.
Index funds versus active management
Main articles: Index fund and active management
An index fund maintains investments in companies that are part of major stock (or bond) indices, such as the S&P 500, while an actively managed fund attempts to outperform a relevant index through superior stock-picking techniques. The assets of an index fund are managed to closely approximate the performance of a particular published index. Since the composition of an index changes infrequently, an index fund manager makes fewer trades, on average, than does an active fund manager. For this reason, index funds generally have lower trading expenses than actively managed funds, and typically incur fewer short-term capital gains which must be passed on to shareholders. Additionally, index funds do not incur expenses to pay for selection of individual stocks (proprietary selection techniques, research, etc.) and deciding when to buy, hold or sell individual holdings. Instead, a fairly simple computer model can identify whatever changes are needed to bring the fund back into agreement with its target index.
Certain empirical evidence seems to illustrate that mutual funds do not beat the market and actively managed mutual funds under-perform other broad-based portfolios with similar characteristics. One study found that nearly 1,500 U.S. mutual funds under-performed the market in approximately half of the years between 1962 and 1992. Moreover, funds that performed well in the past are not able to beat the market again in the future (shown by Jensen, 1968; Grimblatt and Sheridan Titman, 1989).
Bond funds
Bond funds account for 18% of mutual fund assets. Types of bond funds include term funds, which have a fixed set of time (short-, medium-, or long-term) before they mature. Municipal bond funds generally have lower returns, but have tax advantages and lower risk. High-yield bond funds invest in corporate bonds, including high-yield or junk bonds. With the potential for high yield, these bonds also come with greater risk.
Money market funds
Money market funds hold 26% of mutual fund assets in the United States. Money market funds entail the least risk, as well as lower rates of return. Unlike certificates of deposit (CDs), money market shares are liquid and redeemable at any time.
Funds of funds
Funds of funds (FoF) are mutual funds which invest in other underlying mutual funds (i.e., they are funds comprised of other funds). The funds at the underlying level are typically funds which an investor can invest in individually. A fund of funds will typically charge a management fee which is smaller than that of a normal fund because it is considered a fee charged for asset allocation services. The fees charged at the underlying fund level do not pass through the statement of operations, but are usually disclosed in the fund's annual report, prospectus, or statement of additional information. The fund should be evaluated on the combination of the fund-level expenses and underlying fund expenses, as these both reduce the return to the investor.
Most FoFs invest in affiliated funds (i.e., mutual funds managed by the same advisor), although some invest in funds managed by other (unaffiliated) advisors. The cost associated with investing in an unaffiliated underlying fund is most often higher than investing in an affiliated underlying because of the investment management research involved in investing in fund advised by a different advisor. Recently, FoFs have been classified into those that are actively managed (in which the investment advisor reallocates frequently among the underlying funds in order to adjust to changing market conditions) and those that are passively managed (the investment advisor allocates assets on the basis of on an allocation model which is rebalanced on a regular basis).
The design of FoFs is structured in such a way as to provide a ready mix of mutual funds for investors who are unable to or unwilling to determine their own asset allocation model. Fund companies such as TIAA-CREF, American Century Investments, Vanguard, and Fidelity have also entered this market to provide investors with these options and take the "guess work" out of selecting funds. The allocation mixes usually vary by the time the investor would like to retire: 2020, 2030, 2050, etc. The more distant the target retirement date, the more aggressive the asset mix.
Hedge funds
Hedge funds in the United States are pooled investment funds with loose SEC regulation and should not be confused with mutual funds. Some hedge fund managers are required to register with SEC as investment advisers under the Investment Advisers Act. The Act does not require an adviser to follow or avoid any particular investment strategies, nor does it require or prohibit specific investments. Hedge funds typically charge a management fee of 1% or more, plus a "performance fee" of 20% of the hedge fund's profits. There may be a "lock-up" period, during which an investor cannot cash in shares. A variation of the hedge strategy is the 130-30 fund for individual investors.
Mutual funds vs. other investments
Mutual funds offer several advantages over investing in individual stocks. For example, the transaction costs are divided among all the mutual fund shareholders, which allows for cost-effective diversification. Investors may also benefit by having a third party (professional fund managers) apply expertise and dedicate time to manage and research investment options, although there is dispute over whether professional fund managers can, on average, outperform simple index funds that mimic public indexes. Yet, the Wall Street Journal reported that separately managed accounts (SMA or SMAs) performed better than mutual funds in 22 of 25 categories from 2006 to 2008. This included beating mutual funds performance in 2008, a tough year in which the global stock market lost US$21 trillion in value. In the story, Morningstar, Inc said SMAs outperformed mutual funds in 25 of 36 stock and bond market categories. Whether actively managed or passively indexed, mutual funds are not immune to risks. They share the same risks associated with the investments made. If the fund invests primarily in stocks, it is usually subject to the same ups and downs and risks as the stock market.
Share classes
Many mutual funds offer more than one class of shares. For example, you may have seen a fund that offers "Class A" and "Class B" shares. Each class will invest in the same pool (or investment portfolio) of securities and will have the same investment objectives and policies. But each class will have different shareholder services and/or distribution arrangements with different fees and expenses. These differences are supposed to reflect different costs involved in servicing investors in various classes; for example, one class may be sold through brokers with a front-end load, and another class may be sold direct to the public with no load but a "12b-1 fee" included in the class's expenses (sometimes referred to as "Class C" shares). Still a third class might have a minimum investment of $10,000,000 and be available only to financial institutions (a so-called "institutional" share class). In some cases, by aggregating regular investments made by many individuals, a retirement plan (such as a 401(k) plan) may qualify to purchase "institutional" shares (and gain the benefit of their typically lower expense ratios) even though no members of the plan would qualify individually. As a result, each class will likely have different performance results.
A multi-class structure offers investors the ability to select a fee and expense structure that is most appropriate for their investment goals (including the length of time that they expect to remain invested in the fund).
Load and expenses
A front-end load or sales charge is a commission paid to a broker by a mutual fund when shares are purchased, taken as a percentage of funds invested. The value of the investment is reduced by the amount of the load. Some funds have a deferred sales charge or back-end load. In this type of fund an investor pays no sales charge when purchasing shares, but will pay a commission out of the proceeds when shares are redeemed depending on how long they are held. Another derivative structure is a level-load fund, in which no sales charge is paid when buying the fund, but a back-end load may be charged if the shares purchased are sold within a year.
Load funds are sold through financial intermediaries such as brokers, financial planners, and other types of registered representatives who charge a commission for their services. Shares of front-end load funds are frequently eligible for breakpoints (i.e., a reduction in the commission paid) based on a number of variables. These include other accounts in the same fund family held by the investor or various family members, or committing to buy more of the fund within a set period of time in return for a lower commission "today".
It is possible to buy many mutual funds without paying a sales charge. These are called no-load funds. In addition to being available from the fund company itself, no-load funds may be sold by some discount brokers for a flat transaction fee or even no fee at all. (This does not necessarily mean that the broker is not compensated for the transaction; in such cases, the fund may pay brokers' commissions out of "distribution and marketing" expenses rather than a specific sales charge. The purchaser is therefore paying the fee indirectly through the fund's expenses deducted from profits.)
No-load funds include both index funds and actively managed funds. The largest mutual fund families selling no-load index funds are Vanguard and Fidelity, though there are a number of smaller mutual fund families with no-load funds as well. Expense ratios in some no-load index funds are less than 0.2% per year versus the typical actively managed fund's expense ratio of about 1.5% per year. Load funds usually have even higher expense ratios when the load is considered. The expense ratio is the anticipated annual cost to the investor of holding shares of the fund. For example, on a $100,000 investment, an expense ratio of 0.2% means $200 of annual expense, while a 1.5% expense ratio would result in $1,500 of annual expense. These expenses are before any sales commissions paid to purchase the mutual fund.
Many fee-only financial advisors strongly suggest no-load funds such as index funds. If the advisor is not of the fee-only type but is instead compensated by commissions, the advisor may have a conflict of interest in selling high-commission load funds.
HRM RECRUITMENT PROJECT
A STUDY ON RECRUITMENT AND SELECTION FOR TEMP STAFFING
A CASE STUDY
AT
ADDECCO FLEXIONE WORKFORCE SOLUTIONS LTD
A Major project report submitted to Osmania University, in partial fulfillment of the requirements for the award of degree
Of
MASTER OF BUSINESS ADMINISTRATION
HRM
By
FARZANA
(18-05-146)
Department of Business Management
Aurora’s Post-graduate College
[Affiliated to Osmania University]
RAMANTHAPUR, Hyderabad
DECLARATION
I FARZANA declare that the project report entitled “A study on recruitment and selection for temp staffing” A Case Study at ADECCO Flexione workforce Solutions is an original and bonafide work done by me during the academic year 2005-2007. This is being submitted in the partial fulfillment of the requirement for the award of degree of the Master of Business Administration (Osmania University). The matter embodied in this report has not been submitted for the award of any other degree or diploma.
FARZANA
ACKNOWLEDGEMENT
I deem it a great privilege to thank all those people who helped me to complete this project work. I express my sincere thanks to the management of the AURORA POST GRADUATE COLLEGE and our respected Head of the department Dr. E.VIKRAM ADITYA for giving me this opportunity to under take the project work.
I am deeply obliged to my project guide Mrs. MANJULA, with out whose guidance and encouragement at all levels , the study wouldn’t have been completed.
I express my profound thanks to, Mr. BHARTH KUMAR Group Accounting Manager, ADECCO Flexione Workforce Solutions Ltd, Hyderabad, for giving me valuable advice and guidance and sparing valuable time in clarifying various points raised by me.
FARZANA
Table of Contents
Chapter- 1 Page No
1. Introduction 1
2. Objectives and scope of the study 3
3. Methodology of the study 4
Chapter- 2
1. Review of Literature 5
2. Theoretical Framework 8
Chapter- 3
1. Company profile 35
Chapter- 4
1. Data analysis and interpretation 45
Chapter- 5
1. Findings 60
2. Suggestions 63
Bibliography 64
Annexure I
Questionnaire 65
Chapter- 1
1. Introduction
2. Objectives and scope of the study
3. Methodology of the study
INTRODUCTION
A “temp” is a temporary worker with an organization who is on a third-party (staffing company) payroll. A well-accepted norm in global companies, many large Indian organizations are now hiring a part of their workforce from employee leasing firms.
Temping in India has never been a lifestyle choice unlike the markets in the US. Since temping is used more as a stepping stone to permanent jobs in India, conversion from a temp to perm is in the higher range. In the US, it is anywhere between 4% and 5%. In Adecco Peopleone, the conversion is anywhere between 25% and 33% with the company providing liquidity support. “I would encourage this conversion to go up to 40% as it will generate greater demand,”
says Ajit Isaac, MD, Adecco Peopleone.
Recently, Bharti announced its intent to absorb 14,000 temps and make them permanent employees. While the high number with Bharti is an anomaly, most companies in India maintain a temp-perm mix and convert some good temporary staffers into permanent employees. On one hand, companies can gauge employees before absorbing them and first-timers in the employment market can gain a richer repertoire of experience having worked with a few MNCs.Meanwhile in the US, where temping is more established with 10m temps in the market, certain specialized jobs have also seen temps earn 17% more than permanent employees. For temping companies in India, it is about addressing frictional unemployment and providing jobs to first-timers in the employment market. “Of course, temping companies manage both service fees and absorption fees when this conversion happens,” Over a period of time, the temping industry will see penetration into Tier II towns due to higher levels of absorption. Temping companies will look at value additions in competency testing and certification of temps. “It cannot be about simply payrolling; we have to look at value addition along the entire chain,” says Soumen Basu, executive chairman, Manpower India. “The high rate of absorption is a good sign for our industry, it just shows that the market is maturing,” says Achal Khanna, country-head, Kelly Services. According to ASSOCHAM (Associated Chambers of Commerce and Industry) the size of the retail market would go up from Rs 5, 88,000 crore to 1,479,000 crore in 2008. Currently, of the Rs 5, 88, 000 crore market, the organized sector is only Rs 5,000 crore, but is expected to shoot up
to 1,60,000 crore by 2008.
Many companies because of the growing competition want to focus their core business. That‘s the reason why most of the companies in telecom sector in particular wants to increase their market share by increasing sales without increasing the headcount. To do so they are going for RPO’s which employs people on the rolls of not the client but on its own company rolls.
Temporary staffing firms recruit people for their clients by using various sources of recruiting available. These firms source the candidates and conduct initial screening by using different methods so that they select and place the right kind of people for the right kind of job.
OBJECITIVES
To understand the process of recruitment and selection in various telecom companies.
To know the effective method of recruitment and selection in selected telecom companies
To know the process of recruitment in Adecco Flexione Staffing Solutions.
To know the yield ratio
To know the sources used for recruiting at various levels and various jobs
SCOPE
The study’s emphasis is on recruitment and selection process of only three telecom companies TATA, IDEA and AIRTEL.
The study aims at understanding various issues involved in managerial recruitment process.
The study does not look into financial aspects of recruitment cost analysis
The study was done only to know the various sources of recruitment
METHODOLOGY OF STUDY
This study is conducted by collecting and analyzing the data from primary and secondary sources.
Primary Data:
Primary data was collected by administering the questionnaire to the recruiters working at ADECCO Flexione staffing solutions
Secondary Data:
Secondary data was collected from the books, journals, and websites and through the interaction with the individuals in the organization.
Data Analysis:
The data, which is collected, is analyzed and is represented through pie graphs and bar diagrams using percentages for analyzing and interpreting.
Sample Size:
The sample size of the recruiters were 8 recruitment consultants, and 1 Group Accounting managers (GAM’)
Chapter- 2
1. Review of Literature
2. Theoretical Framework
LITERATURE REVIEW
India is a growing market. While the advanced world is seeing decline in growth, India, china and other emerging countries will continue to experience boom time for almost the next 20-30 years. These possess a unique challenge for the corporates who are interested in quality recruitment. Understanding requirements is the first most important step towards effective recruitment. Despite knowing it well both organizations and Recruitment Service Providers (RSPs) do not spend time either in defining requirements or in understanding them. Organizations must “recruit” recruiters carefully, insist on good measures of value – add, define and communicate requirements, build and enlist high performing RSPs to work for them as brand promoters. Similarly, RSPs must provide services appropriate to the need of the organization , learn to say no when they cannot, improve their match making abilities and not merely push CVs.outsourcing recruitment to external RSPs should not be purely on cost considerations. Cost saving is only an initial excitement. RSPs those who provide guaranteed service levels will be more effective and would be sort after as partners for companies finding right-fit will be the key focus. Cost of wrong hires will be measured while refining the act of recruitment says S. Chandra Sekhar who works with CAP GEMINI CONSULTING INDIA at Mumbai in his article published in HRD newsletter.
In one of the studies conducted by the HR consulting firm HEWITT it was found that 45% of 129 companies surveyed did not see cost saving as their main consideration. Top three reasons for recruitment outsourcing in corporate are reported to be:
Gaining outside expertise
Improving service quality
Focusing on core business.
So the companies must not go for RSPs simply to reduce the cost of recruitment but they should focus more on improved structure, standardization, efficiency, technology, compliance and other value adds.
Behind every Attrition there is recruitment! Whenever an employee leaves an organization without informing and without giving notice or leaves the organization in the middle of the project it should be known that he or she is joining some other organization. Many times the employees of the recruitment consultants are hired by their own clients and are asked to join at a very short notice period. They are been told that “relieving letter” is not required and some even offer incentives for early joining. There must be some guidelines and ethics for recruitment so that there can be fair recruitment policies. There must be some ethical guidelines such as
a) Notice period must be served and nobody must be hired without relieving letter or providing proof of serving the notice period.
b) Corporate should not hire anyone who has spent less than one year in his current organization. The logic is obvious. Employees six months to begin their contribution and at least one year is required to recover recruitment process. More importantly if some body is hired who has worked less than a year with the current organization, that individual will ditch in even shorter period.
c) Corporates should not head hunting from competition. They should advertise and encourage employees seeking change to voluntarily respond to this advertisement.
d) Corporate should not bail out the prospective employee commitments such as employment bond etc. the corporate should realize that employee signed the bond and if he wants to break it, he should do at his own cost and the corporate should not reimburse or compensate him for violating the employment contracts says Mr. T. MURALIDHARAN who is the chairman of TMI NETWORK one of the India’s leading recruitment consultancy.
In one of the study conducted on recruitment and selection process at BIOLOGICAL-E LTD conducted by Manik Rao in the year 2005. It was found that company has used internal search for recruiting the employees into more higher or the positions in different departments who can fit into the job. It was found that the company has done it by considering it as the most cost effective way of filling the vacancies. It has also been found that the company opted for external sources such as advertisement agencies to fill vacancies. Employee referrals were also one of the internal sources of recruitment.
In another study on recruitment and selection in DW PRACTICE LLC which is a HR consultancy, it was found that most of the employees felt that the telephonic interview is not effective and instead direct interviews are more feasible.
These are some of the studies conducted earlier on the recruitment and selections.
THEORETICAL FRAMEWORK
Recruitment has been regarded as the most important function of personnel administration, because unless the right type of people are hired the organization cannot achieve its objectives. This is the second step in the process of procurement of the employee the first being the manpower planning. Recruiting makes it possible to acquire the number and types of people necessary to ensure the contained operation of the organization. This is a linking activity bringing together those with jobs and those seeking jobs.
RECRUITMENT AND SELECTION
Recruitment refers to the process of finding possible candidates for a job or function, usually undertaken by recruiters. It also may be undertaken by an employment agency or a member of staff at the business or organization looking for recruits. Advertising is commonly part of the recruiting process, and can occur through several means: through online, newspapers, using newspaper dedicated to job advertisement, through professional publication, using advertisements placed in windows, through a job center, through campus interviews, etc.Suitability for a job is typically assessed by looking for skills, e.g. communication skills, typing skills, computer skills. Evidence for skills required for a job may be provided in the form of qualifications (educational or professional), experience in a job requiring the relevant skills or the testimony of references. Employment agencies may also give computerized tests to assess an individual's "off-hand" knowledge of software packages or typing skills. At a more basic level written tests may be given to assess numeracy and literacy. A candidate may also be assessed on the basis of an interview. Sometimes candidates will be requested to provide a résumé (also known as a CV) or to complete an application form to provide this evidence. The follow-up process may be referred to as part of the recruitment process: inveigling the selected candidate or candidates to take up the target job or function.
RECRUITING INTERNALLY OR EXTERNALLY
Internal Recruiting
Recruiting from among the existing workforce offers many advantages. Seeing your employees at work on a day-to-day basis will enable you to evaluate their particular strengths and weakness accurately and choose the most suitable person for the position. When the company recruits from within the organization the employees will feel important and highly valued since it appears that the organization immediately turns to them whenever a vacancy occurs. Their work rate and performance should improve as well as they will realize that increasing job opportunities are available to them if they are industrious and successful at their jobs. However any method has its own merits and demerits.
Merits
It improves the morale of the employees
The employee is in better position to evaluate those presently employed than outside conditions
It promotes loyalty among the employees, for it gives them a sense of job security and opportunities of advancement.
These people are tried and can be relied upon
Demerits
It often leads to inbreeding and discourages new blood from entering into an organization.
There are possibilities that internal sources may “dry up” and it may be difficult to find the requisite personnel from within an organization.
No innovation are made no new thinking so on new inputs which is very much essential for the growth of the organization
Usually promotions are based on seniority so the danger is that really capable hands may not be chosen.
External Recruiting
When a company is involved in large expansions and is more oriented towards achieving high growth and high market share, with more focus on quality of the product and high customer satisfaction then it is inevitable for any organization to go for external recruiting. External recruiting is nothing but recruiting the people in your organization from outside the company. It will help the company to make best use of other sources that are lying outside the organization like for example campus recruits is an effective and efficient way of recruiting when a company wants new minds that are more creative and go-getters for any task. If a company wants to concentrate only on its core activities and wants to relieve the burden of the task of recruitment then the more feasible option would be third party recruiting or recruitment process outsourcing RPO. The experienced persons but unemployed can be recruited into the company which may reduce the training cost if they are from same industry. Retired and experienced people can yield more by enhancing their prior experience in new business situations.
Merits
New entrant to the labor force i.e., young mostly inexperienced potential employee’s fresh graduates or postgraduates can be taken and mould in accordance with company’s culture.
External recruiting results in best selection from the large sources
In the long run this source proves economical because potential employees do not extra training.
Many different ways of recruiting is available.
The excess applications generated for current requirement may be utilized for future vacancies.
Demerits
Extra time is required by the people to adjust them selves to the present working situations.
If the recruiting is done from large source then it will be more time taking as the applications generated are more and short listing becomes critical.
Cost of recruiting will be comparatively more than internal recruiting.
Sometimes it creates employee dissatisfaction as there may be mismatch between the employee expectation with the company and the company’s expectation with the employee.
Before making a choice and making decisions as to which source should be adopted for recruiting both the sources should be thoroughly assessed and must be studied carefully the wide variety of individual sources of recruitment that are available whether Internal or External. Before choosing any sources make sure that it gives answer as YES to these following questions:
Will it reach the right people?
The main criterion which can be used to judge each source must be whether it will put you in touch with potentially suitable applicants. No matter how competent we may at drawing up the applications, conducting interviews and running tests, it is all largely irrelevant if there are not good field of applicants to choose from. The source to be opted can be decided on the basis of job description and employee specification. Based on that choose the appropriate source that can give higher yield ratio.
Will it reach the right numbers?
It’s not enough just to get potentially ideal applicants to apply for the post. They must also do so in the right numbers. Its found that at the time interview is arranged one will already have obtained a job, another wont turn up and three of them are unsuitable and the only remaining candidate will turn down the job offer. Thus it result in again beginning the whole process which will incur the extra time and expense involved with reading and responding to all the applications. Although opinion varies considerably as to the number of applicants required, therefore the number of invites is increased around half a dozen for an interview and tests. But additional applicants will therefore simply increase the recruitment process. Unfortunately the recruiter doesn’t know the number of suitable candidates who are of equal importance.
Will it be at the right price?
It should always be taken into account the cost in terms of time and money of a specific source of recruitment. It should be in the proportion to the job concerned and its value to the company. There must be the balance between the expense against the type and number of people that it will reach. The information regarding all sources available for recruitment must be available prior to proceeding. Generate information from the past record to see that it was value for money.
INTERNAL SOURCES
The most common internal sources of internal recruitment are
1. personal recommendations
2. notice boards
3. newsletters
4. memoranda
1) Personal References
The existing employees will probably know their friends or relatives or colleagues who could successfully fill the vacancy. Approaching them may be highly efficient method of recruitment but will almost certainly offend other workers who would have wished to have been considered for the job. To keep employees satisfied make sure that potentially suitable employees are informed of the vacancy so that they can apply. Also any one else who is likely to be interested is told about it as well so that they can apply for the job.
2) Notice Boards
This is the convenient and simple method of passing on important messages to the existing staff. A job advertisement pinned to a notice board will probably be seen and read by a sufficient number of appropriate employees at little or no cost. However many of the staff will probably not learn of the vacancy in this way either because the notice board poorly located or is full of out dated notices that they don’t bother to look at it, as they assume there is nothing new to find out. A notice board must be ensured that it is well sited. Wherever it is been placed it should be certain that it is seen by every one. It means there must be equal opportunity to see to it and this happens when they know that just important topical notices are on display. Attention must be paid to the design and contents of the notice if it is to catch the eye and make the employee read on and then want to apply for the job.
3) Newsletters
Many companies regularly produce in-house newsletters, magazines or journals for their staff to read. It is hoped that latest company news sheet is read avidly by all staff thus ensuring that every one is aware of the job opportunity advertised in it. Unfortunately this is not always so, because it is sometimes not circulated widely enough and employees may find it boring and choose not to read it. Newsletter can be utilized as the source of recruitment if it is convinced that everybody will see a copy.
4) Memoranda
Possibly the best way of circulating news of the job vacancy is to send memoranda to department managers to read out to the teams or to write all employees perhaps enclosing memoranda in wage packets if appropriate. However it can be a time consuming process to contact staff individually, especially if there is a large work force. It should also be kept in mind as to in which way the memorandum is phrased out so that the job appeals to likely applicants.
EXTERNAL SOURCES
There are many sources to choose from if you are seeking to recruit from outside the company.
1. word of mouth
2. notices
3. job centers
4. private agencies and consultants
5. education institutions
6. the press
7. radio
8. television
1) Word of Mouth
Existing employees may have friends and relatives who would like to apply for he job. Recruiting in this way appears to be simple, inexpensive and convenient. Never use word of mouth as a sole or initial source of recruitment if the work force is wholly or predominantly of one sex or racial group. Also employing friends and relatives of present employees may be imprudent because it is not certain that they are as competent as the current staff.
2) Notices
Displaying notices in and around business premises is a simple and often overlooked method of advertising a job vacancy. They should be seen by a large number of passerby, some actively looking for work. It can also be inexpensive with a notice varying from a carefully hand written post card up to a professionally produced poster. Pay attention to the appearance and contents of the notice if it is intended that it is applied by the right people.
3) Job Centers
Most large towns have a job center which offers employers a free recruitment service, trying to match their vacancies to job seekers. Staff will note information about a post and the types of person sought and then advertise the vacancy o notice boards within their premises. Job center employees can further help if requested to do so by issuing and assessing application forms and thus weeding out those applicants who are obviously unsuitable for the position. Short listed candidates are then sent out for the employer to interview on his business premises.
4) Private Agencies and Consultants
There are various types of private organization that can help to find the right person for a particular job. Employment agencies exist in many town and cities. Some handle all general vacancies from junior unto supervisory level while others specialize in various occupations such as accountancy, clerical or computer personnel and marketing or sales. Since they maintain a register of job seekers, they initially attempt to find applicants from this list. A short list will be drawn up by reading through applications and conducting interviews on client organization’s behalf. Although fees vary, it is expected to pay around 10 to 15% of the annual salary offered if a suitable person is found for the job. This will be partly refundable if he leaves within a certain period of time. For temporary staff, it is normally charged on hourly, daily or weekly rate by the agency. They will then pay the employee. Recruitment agencies are similar to employment agencies in the services that they offer. The main difference is that recruitment agencies tend to operate at a higher level, concentrating on technical, managerial and executive appointment. Accordingly, increased time, effort and expertise are needed to compile a quality short list. This will be reflected in the fees charged, often between 18 and 22% of the annual salary of the staff recruited. Again a proportion of this may be refundable if the employees proves to be unsatisfactory and subsequently departs.
Search consultants, also known as Headhunters, specialize in finding candidates for senior positions. They normally head hunt people currently at work in similar posts, possibly at rival companies. Discrete approaches, by telephone, are made direct to the persons involved. Such a process is time consuming and requires considerable tact and diplomacy if it is to be successful. Charges may be in excess of 30% of the annual salary. Before opting for this source attention must be paid about those agencies who brashly promise to give a lengthy list of candidates very quickly. It may sound impressive but suggests that they are simply pulling names from a register perhaps of dubious quality and are not actively searching for and screening applicants properly. A good shortlist will take time to compile. It must be ensured that the agency with which the organizations contracting must follow a good refund system in case the new recruit resigns or needs to be dismissed shortly after joining. Also a free replacement warranty up to six months must be provided by the recruiting agency. When employing an agency or consultant, make sure that they know exactly what they are expected to do. A clear job description and employee specification, must be provided so that they could screen by referring to the employee specification and so on. Full up to date information about the job and person required. Supply all details and all instructions in writing to avoid subsequent misunderstandings and disagreements.
The recruiting agency or consultant must be in touch with the client company through out the recruitment process to ensure that the agency is following the instructions and doing its job well. Also it must be ensured that they are maintaining equality of opportunity and avoiding unlawful discrimination against applicants of a particular sex, marital status or any racial group. All applicants should be judged solely on their ability to do the job.
5) Educational Institutions Or Campus Recruitment
Those companies which require a steady intake of young persons for new Youth Training to trainee management positions ought establish and maintain close contact with colleges and universities. The advantage of campus recruitment is, it is known that who the audience to be addressed are. Promotional literature in the form of posters, broachers, catalogues; press releases and so on can be issued to the audience so that the company’s name remains prominent in their and their student’s minds all the time.
6) The Press
Advertising for the new staff through the press has proved successful for many companies. Choose between local newspapers, national newspapers and the magazines. All will put in touch with different audience. Local newspapers, read by a large cross-section of the immediate population, may be most suitable if there is sufficient talent in the area.
National newspapers, with their mass circulations and differing attitudes to news coverage appealing to various tastes, could be better when looking out to fill the senior position.
Trade Magazines often under estimated as useful source of recruitment might be worth considering if looking out to recruit someone for a specialized job which possibly requires previous experience of the particular industry.
Naturally there are some drawbacks to newspaper advertising. It is expensive in relation to other, often equally good source such as job and careers centers, which advertise free. Other drawbacks of newspaper advertising include a high level of wastage (the vast majority of readers will not be job hunting) and a short life span. The daily or evening newspaper is invariably discarded at the end of the day. A short series of advertisement incurring extra expenses may sometimes be required and multiplying one advert by three or four starts to make this source prohibitively costly. Trade magazines could be a better way of recruiting staff depending upon the circumstances. Most will include employment advertisements within a classified section which will be read by a small but select and interested number of people. There some disadvantages, however the financial outlay is still considerable. If the magazine is published bi-monthly or quarterly, may have to wait sometime before the advertisement is seen. It may be intended to fill the vacancy as soon as possible.
7) Radio
Many radio stations broadcast special job finders advertisements throughout the day for companies looking for new recruits. Advertising through the radio has got many advantages as it will be transmitted to over a wide geographical area to potentially large audience. Variety of age groups listens thus making it a suitable medium for different types and levels of jobs. Advertisements can be broadcast very quickly sometimes within hours. Nevertheless there are some disadvantages that must be considered carefully. As few have tune in to hear advertisements and their thoughts invariably wander when they are on, or they may start station hopping to find more music. The radio is also transient medium. An advertisement lasts for perhaps 30 seconds, which is a very short period in which to put across all the important points, and is then finished. It is usually difficult to remember (What was the company’s name? what was its phone number?) most listeners will not have a pen and pad handy to make notes.
8) Television
You can advertise on a regional or national basis. Recruiting staff through the Television is still widely regarded as a new and innovative approach. Companies which use this medium may therefore be seen as go-ahead and dynamic. Thus, this medium may not be an immediate choice if there is only just one vacancy to be filled, although shorter and expensive one month contracts could be negotiable and worth considering.
SELECTION
The selection procedure is concerned with securing relevant information about the applicant. This information is secured in number of steps. The objective of selection process is to determine whether an applicant meets the qualifications for a specific job and to choose the applicant who is most likely to perform well in that job
The hiring procedure is not a single act but it is essentially a series of methods by which additional information is secured about the applicant. At each stage facts, which came to light, make the acceptance or rejections of the candidate clear. Some selection processes are quite easy and some with many hurdles this increases with the level and responsibility of the positions to be filled.
Essentials of Selection Procedure
The selection process can be successful if the following requirements are satisfied:
1. Someone should have the authority to select. This authority comes from the employment requisition as developed by an analysis of the work-load and work force.
2. There must be some standard of personnel with which a prospective employee may be compared i.e., a comprehensive job description and job specification should be available beforehand.
3. There must be sufficient number of applicants from whom the required number of employees may be selected.
PROCESS OF SELECTION
Selection
Preliminary screening interview
Completion of application or form if not done previously
Employment tests
Comprehensive interview
Back ground investigation
Final employment decision
Preliminary Interview or Screening
The initial screening is usually conducted by a special interviewer a high caliber receptionist in the employment office. These interviews are short and are known as stand-up interviews. The main objective of such interviews is to screen out undesirable/unqualified candidates at very outset. Such interviews conducted by someone who inspires confidence, who genuinely interested in people, and whose judgment in the “sizing up” of the applicant is fairly reliable.
Basic criteria that must be met for an application to be eligible for consideration. If these criteria are not met, there is no obligation on the employer to consider such applications. The screening process therefore seeks to identify those applications that meet the basic entry-level requirements applications that are therefore incomplete or do not meet the basic appointment criteria are considered unsuccessful applications. In order to be fair and objective in the screening of candidates, it is essential that a fixed set of valid criteria be applied in terms of each and every candidate that applies for a position.
Certain conditions should be met in relation to the format and content of -
a)Application forms b)Curricula Vitae (CV’s) and c)All other relevant documentation.
What is the purpose of short-listing?
After having completed the screening process and eliminated those applicants that do not meet the basic requirements, the next objective should be to identify a manageable size (pool) of applicants (a short-list) who are best suited to fill the position successfully and from whose ranks the most suitable candidate(s) is/are to be selected. It is about identifying a manageable pool of best suited candidates for a specific position, in the interest of the State, taking into account Affirmative Action and Employment Equity objectives.
May short-listing be used to reduce a vast number of applications to a manageable size?
As stated, the primary objective of the short-listing process is to reduce the
Number of qualifying applicants to a manageable size for purposes of selecting
the most suitable candidate. A further objective with short-listing is to rank candidates, and to determine a cut-off point below which candidates will not be interviewed. The criteria utilized for short-listing purposes should therefore be in sufficient detail to allow for this and should be applied consistently.
Application Form
Application form is also known as application blank. The technique of application blank is traditional and widely accepted for securing information from the prospective candidates. It can also be used as a device to screen the candidate at the preliminary level. Many companies formulate their own style of application forms depending upon the requirement of information based on the size of the company, nature of business activities, type and level of job etc. they also formulate different application forms for different jobs, at different levels, so as to solicit the required information for each job. But few companies in our companies in our country do not have prescribed application forms.
Psychological Testing
Test is defied as a systematic procedure for sampling human behavior
TESTS ARE USED IN BUSINESS FOR THREE PRIMARY PURPOSES.
1) for the selection and placement of new employees
2) for appraising employees for promotion potentials and
3) For counseling employees if properly used psychological tests can be of paramount importance for each of these purposes.
Classification of Tests on the Basis Of Human Behavior
A. Aptitude or potential ability test
Such tests are widely used to measure the latent ability of a candidate to learn new jobs or skills. They will enable us to know whether a candidate if selected, would be suitable for a job, which may be clerical or mechanical. These tests may take one of the following forms.
a) Mental or Intelligence Test - measures and enables to know whether he or she has mental capacity to deal with new problems.
b) Mechanical Aptitude Test - measures the capacity of a person to learn a particular type of mechanical wok. This could help in knowing a person’s capability for spatial visualization, perceptual speed manual dexterity, visual motor coordination or integration, visual insights etc.
c) Psychometric tests – these tests measures a persons ability to do a specific job
B. Achievement test
Also known as proficiency tests they measure the skill, knowledge which is acquired as a result of a training program and on the job experience they determine the admission feasibility of a candidate and measure what he/she is capable of doing.
a) Tests for measuring job knowledge – this type of test may be oral or written. These tests are administered to determine proficiency in shorthand and in operating calculators adding machines dictating and transcribing machines and simple mechanical equipment.
b) Work sample tests – demand the administration of the actual job as a test. A typing test provides the material to be typed and notes the time taken and mistakes committed.
C. Personality tests
These tests aim at measuring those basic make up or characteristics of an individual which are non-intellectual in their nature. In other words they probe deeply to discover clues to an individual’s value system, his emotional reactions and maturity and motivation interest his ability to adjust himself to the illness of the everyday life and his capacity for interpersonal relations and self image.
a) Objective tests – it measures neurotic tendencies self-sufficiency dominance submission and self-confidence. These are scored objectively. They are paper and pencil tests or personality inventors.
b) Projective tests – it is a test in which a candidate is asked to project his own interpretation into certain standard stimulus situation. The way in which he/she responds to these stimuli depends on his own values, motives and personality.
c) Situation tests – these tests measures an applicant’s reaction when he is placed in a peculiar situation his ability to undergo stress and his demonstration of ingenuinity under pressure. Such tests usually relate to leaderless group situations, in which some problem is posed to a group and its members are asked to reach some conclusion without the help of a leader.
d) Interest tests – these tests aim at finding out the types of work in which a candidate is interested. They are inventories of the likes and dislikes of the people of some occupation hobbies and recreational activities. They are useful in vocational guidance and are assessed in the form of answers to a well prepared questionnaire.
Interviews
Interviews are a crucial part of the recruitment process for most organizations. Their purpose is to give the selector a chance to assess the candidate and to demonstrate their abilities and personality. It’s also an opportunity for an employer to assess them and to make sure the organization and position are right for the candidate. An interview is an attempt to secure maximum amount of information from candidate concerning his suitability for the job under consideration.
The recruitment process for most organizations follows a common theme: Applications/CVs are received, either online or by post; and candidates are short-listed and invited for interview. The interview format can vary considerably and may include an assessment centre and/or tests. The number of interviews also varies. Some companies are satisfied after one interview, whereas others will want to recall a further shortlist of candidates for more. If successful at the final interview stage, an official job offer is sent to the candidate. Interview format is determined by the nature of the organization, but there are various standard formats.
Chronological Interviews -These work chronologically through the candidate’s life to date and are usually based on the CV or a completed application form.
Competency-Based Interviews -These are structured to reflect the competencies that an employer is seeking for a particular job (often detailed in the recruitment information). This is the most common type of interview for graduate positions today.
Technical Interviews - If a candidate has applied for a job or course that requires technical knowledge (e.g. positions in engineering or IT) it is likely, at some stage in the selection process, that the candidate will be asked technical questions or have a separate technical interview to test his/her knowledge. Questions may focus on the final year project and his/her choice of approach to it or on real/hypothetical technical problems. It seen that the candidate proves himself/herself but also they admit to what they don’t know.
Kinds of Interviews:
One to one interview: in this type of interview one selector interviews one candidate alone.
Informal interview: in this type there are discussions between the candidate and two or more interviewers.
Panel of interviews: in these pre planned standard questions ranging overall aspects of the job are asked. They focus directly on elements of person specification.
Direct planned interview: this interview is straight forward, face to face, question and answer situation intended to measure the candidate’s knowledge and background.
Indirect and direct interview: in this type of interview the interviewer refrains from asking direct and specific questions but creates an atmosphere in which the interviewee feels free to talk and go into any subject he considers important. The object of the interview is to determine what individual himself considers of immediate concern, what he thinks about these problems, and how he conceives of his job and his organization.
Patterned interview: in this interview a series of questions which illuminates validated against the record of employees who have succeeded or failed on the job.
Stress interview: in this interview the interviewer deliberately creates stress to see how an applicant operates in stress situation. To induce stress, the interviewer responds to the applicant’s answers with anger, silence and criticism. This interview aims attesting the candidate’s job behavior and level of withstanding during the period of stress and strain.
8. Depth interview: in this type of interview, the candidate would be examined extensively in core areas of knowledge and skills of the job.
Background Checks and Enquiries
Offers of appointment are subject to references and security checks. The references given in the candidate’s application will be taken up and a security check will be conducted. Security checks can take a while if the candidate has lived abroad for any period of time.
Final Selection Decision
Those individuals who perform successfully on the employment tests and the interviews, and are not eliminated by development of negative information on either the background investigation or physical examination are now considered to be eligible to receive an offer of employment. Who makes that employment offer? For administrative purposes the personnel department should make the offer. But their role should be only administrative. The actual hiring decision should be made by the manager in the department that had the position open.
YIELD RATIO
A yield ratio for many recruiting step reflects the number of candidates avail at a step and the step. For example, a series of newspaper ads may result in thousand applications for employment of these thousand applicants 100 are judged to meet some minimum qualifications, thus the yield ratio at this initial stages is 10% of a group of 100 candidates 50 accepted invitations to be interviewed (yield ratio is 50% at this stage) of the 50, 10 were given job offers 20% yield ratio.
Assuming the labor market has not changed dramatically from when the yield ratio was derived and similar methods of the recruiting are to be used (eg. Advertising in the same papers, employment screening resource.com, using a website or head hunters). This ratio then can be used as the basis for planning future recruitment efforts by going backwards from the yield ratio; the recruiter can estimate how many applicants will be necessary In order to fill a certain number of position. The recruiter then can adjust the recruiting efforts according with more / less advertising more or fewer trips to college campuses and so forth.
The use of yield ratio is another area where there is a wide gap between what academic texts are scholarly research recommends and the extent to which such data are collected in organization to drive future recruitment planning, while almost every scholar on the subject recommends a recruitment evaluation process to assist decision makers in efficient recruitment planning very few companies actually collect these data as a part of recruitment evaluation.
Subscribe to:
Posts (Atom)