LECTURE – 1

HUMAN RESOURCE PLANNING & EMPLOYEE

SELECTION
Learning objectives

• To discuss the planning and recruitment of human resources in

services

We often come across following statements by the customers after getting service:

• “Oh! I did not expect such bad behavior of employee working for a highly
reputed company”

or

• “I was amazed by the personalized treatment extended to me by the

employee of company in spite of his / her busy schedule”

What is infers?

4.1 Role of human resource in services

4.1.1 Service Employee: Direct contact with customer

• The interaction with the employee may influence customer's perception

• The vision of the firm is reflected through the employee’s orientation
towards service delivery system
• It is not only the technology and process design, but it is the person who
directly contacts the customer, influences the most customers’ perception.

Human resources are the efforts, skills and capabilities that people contribute to an
employing organization (Leopold et al, 1999). Human resource is a very important
asset for any service organization which can help in achieving sustainable
competitive advantage. In many service organizations like financial and
technology based service companies, the brand value is measured according to the
level of intellectual capital, human capability and commitment derived from
human resources in the company.

4.1.2 Types of human resource in services

• The service organizations generally employ large number of people or

human resource which is a significant contributor to the variable cost of
organization. The human resource employed in any service industry can be
of following two types.
 Customer facing employees or front line employees such as human
servers at bank tellers. This can be further high-contact services and low
contact services.
 Supporting employees of back office, not facing the customers,
employees such as human resource professional providing recruitment
and training services to colleagues.
• We can see a large employee base in service industry like education,
consulting, telecommunications. For example, Infosys has nearly one lakh
employees working all across the world.
• The recent challenge in managing services is the global service network,
where offices of service organizations especially like ITeS are located in
different regions/countries. The main challenge is to search for the perfect
match between global client expectation with the knowledge, skill and
capacity of a team of employees located in different offices all across the
world.
 • Managing human resources and their selection is based on the roles and jobs
they perform. There can be many types of service personnel based on
various categories as mentioned in Table 4.1.

TABLE 4.1 TYPES OF SERVICE PERSONNEL

Basis of
Categories Description of categories
classification

Professional service Possess high level of education such as doctors

Background and employees and lawyers
the level of service
provided Consumer service Provide relatively standardized services such
employees as salesperson at retail outlet

Usually get fringe benefits and other

Full time
Full time versus allowances
contingent
Subcontractors Security and housekeeping

Blue collar Factory workers

Type of job or
work performed
White collar Office workers

Skilled Pilots, Doctors

Operating personnel or maintenance personnel

Skill Semi-skilled
in airline industry

Unskilled Personnel at Cash counters of any retail shops

Customer contact Bank tellers and air hostess

Customer contact
Non- contact
Managing databases of customer details
employees
4.1.3 Challenges that employee faces

Any employee may face different kind of challenges in service organization. For
example the stress level of a surgeon performing lifesaving surgery will be very
different from the stress level of employee handling the billing counter at any super
market. The challenges employee face can be organizational driven or customer
driven.

4.1.4 Organizational driven

• Lack of resources
• Conflicting performance targets
• Nature of job in terms of stress
• Rewards & appraisal system

Lack of resources

• Same person handling queries over phone and taking care of reception in
some hotel.

Conflicting performance targets

• Productive target of reducing average call handling time versus the quality
service to the customer by being courteous and spending more time.

Nature of Job

• Job performed by a lawyer with victim versus by a receptionist in some

office.

Rewards & Appraisal system

• How to define performance standards in service organization?

 • How much effort employees should put to perform?
• What is the amount of maximum ensured payments?

4.1.5 Customer driven

• Constant presence & direct contact

• Each customer wants special personal treatment
• Customer’s unrealistic expectations

Constant presence of customer may put employee under pressure because customer
is observing all the activities of employee. Unrealistic demand of customer is
another challenge for employees.

Example: A customer wants to use mobile phone in a flight while flying in air.
This expectation is against the regulation of Airport Authority of any nation.

4.2 Human Resource Management (HRM)

Human resource management deals in acquisition & utilization of human

resources. HRM is comprised of HR planning and selection and people
management as shown in figure 4.1.
 FIGURE 4.1: COMPONENTS OF HUMAN RESOURCE MANAGEMENT

4.2.1 Human Resource (HR) planning in services

Human resource planning deals in

• Having right number of people

• Representing right mix of people
• Located at right places & right time
• Aligned with organization’s objectives & customer’s expectations

Planning in advance to strike a balance between human required and human

acquired. It is the process of forecasting the future demand for employees and
supply of potential employees and bridges the gap between supply and demand to
address issue of shortages and surpluses of human personnel.

Human resource planning in services

• Small service firms or large service firms

 • Objectives of people joining service firms
• Type of skill required
• Long range planning versus short range planning
• Front line and back end employees

Examples of HR planning in services

• Small kiosks of Frankies need 2-3 persons per kiosk whereas a big hospital
needs doctors, nurses and administration.
• Long term goal to be in one company or just short term plan with part time
job.
• Specialist as in beauty saloon or a security guard.
• Fast food employees hiring can fall under short range HR planning versus
HR planning in Airlines with long range focus.

4.2.2 HR planning based on customer contact

In services the planning of human resources and hence recruitment and selection
procedure is highly dependent on

• High contact and low contact services

 Customer contact is the percentage of time a customer spends in service
system.
Example: Low contact services can be seen in banks whereas high
contact services can be seen in hotel industry and education.
 High contact services are difficult to control because of longer customer
contact hence requires greater interpersonal dynamics.
• Frontline and back office employees
 The front end part of services where customer comes into contact or the
service system accessible to the customer
  The part of service system hidden from access and view of customer is
back end services, which enables the front end services of service
organization.
 For a successful service, both front end and back end services have to be
performed with utmost care.
Example: In any restaurant employees working in the kitchen or
employees responsible of procuring raw food items are back end
employees. Any delay in food preparation or quality of food will
influence the quality of service regardless whether the back end
employees come in contact with customers or not.
 The type of skill that is interpersonal and technical skills for front end
and technical skill for back end employees are very important to consider
while recruiting a service employee.

4.2.3 Issues and challenges in HR planning in services

High attrition rates

• Depends on the employee satisfaction, motivation and leadership of the

organization

High degree of customer interface

• Skill and expertise required and the discretion given to the employee

Managing cultural diversity

• Global presence serving region specific client.

Forecast human resource requirements as shown in Figure4.2 considering

• Length of planning horizon

 • Constraints like overtime limitations, service capacity and cash flow in
service organizations.

FIGURE 4.2: FRAMEWORK OF FORECASTING HUMAN RESOURCE

NEEDS

4.2.4 Employee recruitment and selection

Recruitment

• Identifying and attracting people who could fill positions within the firm and
then securing them as applicants based on the required qualifications.

Selection
• Select based on the clearly established criteria for the performance of the
job.
• Recruitment and selection is very important for service organization as the
kind of people selected influences the culture of organization.
Example: Infosys have been collaborating with universities and building
development centers to hire the bright and best human resource.
• We can see the steps of recruitment and selection followed by service
organization in figure 4.3.

FIGURE 4.3: EMPLOYEE SELECTION PROCEDURE

4.2.5 Imperatives of selection & recruitment in services

Most of services need frontline employees, which directly interact with customers.
It is important to select based on

• Flexibility based on situations

• Tolerance for ambiguity
• Empathy
• Age
• Education
• Sales related knowledge

Check the applicant’s service orientation

• Abstract questioning
• Situational vignette
• Role playing

4.2.6 Methods of recruitment

Direct recruitment method

• Companies visit various Universities and campus to interview potential

employees face-to-face. The information regarding job profile and
expectations from the employer is shared.
• It is adopted mostly where technical and professional skills are prime
objective.

Indirect recruitment method

• In this method companies advertise vacancies through media such as

newspapers, magazines etc. to reach to a large pool of potential employees.
 • Companies cannot recruit and select specific professional or technical skill.
Less skilled jobs for which large supply of talent is available can be explored
using this method.

Third party recruitment method

• Recruitment done through third party agencies like employment exchange,

private professional and consultancy services.
• Examples: In India many companies assist in e-recruitments like naukri.com
and monster.com.

Most of the companies are going for online application forms and online
assessment methods like McKinseys and Accenture, which can be inexpensive
recruitment methods. The other way of recruitment can be through a good alumni
network.

The recruitment methods can be evaluated based on the cost of recruitment per
employee hired which generally includes advertising fee, agency fee, referral
bonuses, cost of conducting campus interviews and walk-ins. The other way of
evaluating recruitment method is by determining yield ratio. Yield ratio is defined
as percentage of applicants from a recruitment source or recruitment agency that
make it to the next stage of the selection process.

4.2.7 Methods of selection

1. Asking for Bio-data or biographical note

2. Personal interviews
3. Intelligence tests to test the quality of understanding or mental ability tests
4. Aptitude test to check the ability to acquire a particular skill
5. Achievement test to measure the proficiency of applicant’s acquired
knowledge
Example: Recruitment and selection stages of software companies

1. Phase 1: Aptitude test

2. Phase 2: Technical interview
3. Phase 3: HR interview
4. Phase 4: Final Interview

4.2.8 CASE EXAMPLE:

Workforce planning and recruitment at Tesco

As per Tesco, a UK based retail chain, manpower forecasting is required generally

when following changes may happen in the company.

1. When company expands and opens new stores anywhere in the world

2. Vacancies are created due to resignations, retirement and promotions of

the employee.

3. Changes in job processes and technology need new jobs to be created and
then require appropriate skill.

Planning Process

Tesco starts its recruitment process at the end of February every year with
quarterly reviews to adjust staffing levels and recruits. The strategic objectives of
expanding with new stores and meeting customer requirements are the main inputs
to recruitment planning.

Workforce planning and recruitment at Tesco

Recruitment and selection

Tesco provides a clear job description and person specifications as shown in Table
4.2 and illustration in Table 4.3. It helps applicant to know what is expected of
from him/her. At the same time it helps managers to ensure whether employees are
carrying out jobs with appropriate standards.

TABLE 4.2: JOB DESCRIPTION AND PERSON SPECIFICATIONS AT

TESCO

Job description Person specifications

The title of the job Specifications required in a person

needs to do a particular job.
• to whom the job holder is
responsible • Skills
• for whom the job holder is • Characteristics
responsible • Attributes
• a simple description of roles and
responsibilities
 TABLE 4.3: AN ILLUSTRATION OF JOB DESCRIPTION AND JOB
SPECIFICATIONS AT TESCO

Job Description Job Non-food manager

Reports to Store manager
Area of
Stores – all non-food areas
business

• To drive business improvements and

performance in non-food.
Job Purpose
• To coach and develop the non-food team
to give customers the best service.

• Leadership skills, such as influencing

others and decision making.
Person • Operating skills, such as managing staff
Skills
specification and stock management.
• General skills, such as communication,
planning and problem solving.

(Source: http://businesscasestudies.co.uk/tesco/recruitment-and-selection/
workforce-planning.html accessed on 15 August 2012).

4.2.9 CASE EXAMPLE:

Recruitment and selection at Marriott

Marriott international is a leading lodging company with its presence in 73

countries. Marriott follows the spirit – to serve to be the foundation of Marriott
culture. By spirit-to-serve means that Marriott considers their people to be the most
important asset. Marriott recognizes the contributions from all the employees using
performance reward system. Sprit-to-serve also means that the guests or customers
of Marriott appreciate quality, Consistency & Personalized service.

The recruitment team of Marriott guides the potential employers regarding the
recruitment process to minimize the applicant’s stress. The recruitment & selection
process evaluates the applicant for the following competency areas:

• Leadership
• Managing execution
• Building relationship
• Learning and applying professional expertise
• Generating talent and Organizational and Capability

Source: www.marriott.com/careers