Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine December 2015 edition.
Case Study - The Cause of Concern in Internal Recruitment
In fact, this company has a large variety of worsted suitings to cater to the needs of the assorted customers. The company has a workforce comprising 7,500 employees. The HR department is headed by Mr Uday Shankar, the General Manager (HR). The company has HR policies and practices for almost all its staffing activities.
Hirthick's promotion policy stipulated that the company adopt internal recruitment for non-managerial and entry-level managerial cadres as a first choice, whereas, for all other ranks above the entry-level managerial position, external recruitment should be the only option. The company had a smooth sailing on the manufacturing front till a few weeks ago when Mr Suresh Kulkarni, the production chief at the level of general manager, submitted his letter of resignation. He cited personal reasons for his decision to leave the company and all the efforts of the management to persuade him to take back his resignation failed. Left with no other option, the management instructed the HR department to begin the separation process for Mr Suresh Kulkarni and the recruitment process to fill the consequent vacancy.
As regards the recruitment of a new incumbent for the vacant position, the management was in favour of external sources of recruitment as per the policy and they wanted the General Manager (HR) to search widely to choose the best candidate for the job. However, Mr Uday Shankar had different ideas for the post as he wanted to fill the vacancy by providing promotion to one of the three production managers in charge of the three production units of the company. These senior production managers had been with the company for quite a long time and had nearly unblemished service records. He believed strongly that the promotional opportunities can motivate these managers and improve their morale greatly. Therefore, he made a request to the top management for exempting this job position from the general promotion policy on a trial basis. The top management agreed to the proposal reluctantly and permitted the GM (HR) to proceed with his plan to fill the post by promoting one of the production managers as GM (Production).
As per its general promotion policy, the company adopted merit as the sole criterion for choosing the best candidate for the post. The HR department, after a series of promotional selection processes and due consideration of the past performance records of the three production managers, chose one of the managers as GM (Production). However, the promoted manager happened to be the youngest of all the three managers and had the least number of years of service in the company. The top management approved the selection done by the HR department and issued the job-offer letter to the selected manager accordingly. Soon, the news of the selection spread and the unsuccessful man-agers expressed shock and disbelief as their first reaction. They could not believe that they were less efficient than the promoted manager. They expressed their displeasure to the top management and faulted the HR department for not selecting them.
The efforts of the management to convince them bore no fruits. Their performance began to decline and they showed all symptoms of leaving the organization early. In contrast, promoted manager in his capacity of GM performed brilliantly and justified his selection. Thus, the decision of Mr. Uday Shankar produced mixed results for the company.
Questions for discussions & solutions
1. Do you agree with the decision of Mr Uday Shankar in resorting to internal recruitment for the GM (Production) post?
Yes, I agree with Mr. Uday Shankar – GM HR’s decision in resorting to internal recruitment for GM (Production) post even though the company policy stated that for all ranks above entry-level managerial position, external recruitment should be the only option.
The objective of this decision by GM HR was to promote leadership from within the organization with proven capability and track record rather than bringing in an outsider. Also internal recruitment helps to fill in the void position faster as compared to external sourcing which is a time consuming and costly activity. This would also motivate the employees as they too seek career growth opportunities at some point of time and are glad to see opportunities within the organization. Internal promotion also acts as a retention tool.
Managers have a responsibility to help employees attain their job and career progression development objectives. These provide evidence to workers that they are valued by the organization and its leaders. This, in turn, enhances employee engagement, which enhances productivity.
An internally promoted employee would know the systems and processes of the organization far better and be in a position to deliver quicker, better and faster results as compared to an outsider who would obviously need time to settle down in the new profile and understand how things work in the organization before getting to the task in hand for which recruited.
2. Had you been the GM (HR), how would you have filled up the post of GM (Production)?
Had I been the GM (HR), I would have first determined the knowledge, skillsets, attributes, nos. of years of experience required for filling up the post of GM (Production) left void by Mr. Suresh Kulkarni. Setting clear communication rules for the internal hiring process is vital.
This was missing in case of Hirthick & Co’s context.
An internal recruiting policy needs to be made that will specify who can apply for internal vacancies and provide full details of open position i.e. salary, benefits, time frame an employee needs to be in his or her current position before applying for new one, etc…Although the HR Department followed a promotion selection process and gave due consideration to past performance records of the three production managers whom it had shortlisted for GM (Production) vacancy, some of the questions such as these need to be considered when establishing the company’s internal recruiting policy.
Offer feedback. Always tell candidates if they weren’t selected and why. It is to be noted that this was missing in the internal hiring process for GM (Production) at Hirthick & Co. Out of the
3 candidates shortlisted, the unsuccessful 2 were not offered feedback as to why they were not chosen. Hence when the news broke out, shock & disbelief was the first natural reaction. If there had been some form of communication, then things would have been better managed.
From the outset, make it very clear that the organization follows meritocracy. If clear expectations are set, then these type of issues have minimal negative consequences.
3. According to you, what is the solution to the problem arising out of the internal recruitment?
When a higher post is given to a deserving employee, it motivates all other employees of the organization to work hard. However in case of Hirthick & Co, it led to resentment amongst the other 2 unsuccessful candidates. They could not believe that they were less efficient than the promoted manager and vehemently expressed their displeasure to management & HR dept. Although management tried to convince them, the efforts bore no fruits and there were indications that they would leave the organization.
Outline the promoted employee’s successes within the organization so that the other two know the things they don’t have to focus on. Then, as tactfully as possible, outline the areas where they need improvement so they can position themselves for that promotion in the future. That way, they clearly understand what they need to work on.
Honesty is crucial when delivering news in regard to a promotion. Inform the two employee's who were not promoted about the decision, and then tactfully explain the reasoning behind it.
Another solution is to get them a new internal position based on merits on an immediate basis. Delay in doing so will breed further resentment amongst them and ultimately leave Hirthick & Co with the problem it’s trying to avoid anyway.
It is easier to break challenging news when there is an alternative career plan available for an employee to go. Employees who see a future in the company, an opportunity to move up in title, a more challenging role and higher compensation tend to stick around, even if there is a setback. If they know what their target is, and there is transparency, the conversation is much easier to have!
