Employees are basically identified as the most powerful operant force of all businesses and industries today. Striving to accomplish organizational goals, HR practitioners attract, select, and recruit the most talented, skilled, and trained personnel. Therefore, recruitment from both internal and external sources is one of the main functions of HR management. The objectives of this paper are to explore factors contributing to companies’ preferences for internal recruitment and estimate benefits and limitations associated with this practice of HR management.
The review of publications pertinent to the subject under scrutiny testifies to the significance of the theme chosen. Much attention is paid to the recruitment in almost every activity devoted to the performance of human resource professionals. However, there seem to be some ambiguities in the evaluation of organizations’ predilections for internal recruitment and its advantages over external recruiting practices (Mathis & Jackson 2011, p. 182; Noe & Wright 2011, p. 140; Nazir et al. 2012, p. 156; Zaman 2012, p. 72; Waldman 2013). In addition, prospects, benefits, issues, problems, and trends of internal recruitment, the identification of its economic efficiency, and the optimal combination of internal and external recruiting technologies are still examined insufficiently. Although Bayo-Moriones & Ortin-Angel (2006) claim that preferences for internal recruitment are explained by numerous concepts, the review of internal recruitment-oriented publications has revealed that theoretical grounds of internal hiring methods are limited to the theory of planned behaviour (Jaidi et al. 2011). Tournament models and job assignment models, which originate from personnel economics, are only considered by DeVaro and Morita (2013, p. 229).
Apart from insignificant divergences in the definition, all scholars state that internal recruitment is a personnel-related strategy directed towards the total workforce existing within an organization. It involves the promotion of employees in accordance with their skills, competence, flexibility, motivation, level of expertise, and loyalty to a company (Bayo-Moriones & Ortin-Angel 2006; Pinnington et al. 2007; Mathis & Jackson 2011; Noe & Wright 2011, p. 139; Nazir et al. 2012, p. 157; Georgia et al. 2013, p. 5).
Researchers claim that a company’s preferences for internal recruitment are influenced by multiple contributing factors, such as the degree of competition in the market, international and national legislation, regional and sectorial specifics, technical and social development, demographics, prospects of labour market, business objectives, organizational structure, culture, and size, and characteristics of technologies used (Mathis & Jackson 2011, p. 188; Noe & Wright 2011, p. 139; Bidwell & Keller 2013, p. 1036; Georgia et al. 2013, p. 2). In addition, Zaman identifies human resources needs and objectives within an organization as the most influential factor (2012, p. 72). Analysing data of Spanish managers’ choice of internal recruitment, Bayo-Moriones and Ortin-Angel emphasize the importance of such causes as “specific human capital, private information and adverse selection, and moral hazard problems” (2006, p. 467). According to Georgia et al., methods of internal recruiting are implemented by HR managers so that they can provide all employees with equal promotion opportunities and improve organizational culture through the minimization of personnel’s complaints about unlawful discrimination and unfair treatment (2013, p. 11).
Furthermore, the use of internal sources entails numerous advantages that emerge due to economic and social grounds. Comparing internal and external recruitment practices, researchers determine such benefits associated with internal hiring as low costs of attracting personnel with required skills and knowledge, increased employees’ motivation, job satisfaction, loyalty to their organization, improvements in social-psychological environment, transparency of personnel policies, the preservation of remuneration rates prevailing in an organization (external applicants may raise higher demands for wages as compared with those existing in a company at the moment), a high degree of manageability of a current staffing situation, possibilities of targeted staff development, opportunities to avoid unprofitable turnover, and labour productivity growth (if a promotion coincides with an applicant’s wishes) (Bayo-Moriones & Ortin-Angel 2006; Pinnington et al. 2007; Noe & Wright 2011; Nazir et al. 2012; Zaman 2012; Bidwell & Keller 2013; DeVaro & Morita 2013; Georgia et al. 2013).
By implementing internal recruiting, an organisation creates favourable conditions for career and professional development of its own employees. Relying on internal sources, a company promotes talented and competent applicants whose skills, abilities, and personal characteristics are well-known to senior managers (Noe & Wright 2011, p. 140). DeVaro and Morita (2013) state that managerial positions are more effectively filled through internal recruitment. The toolkit of internal recruitment includes economically expedient procedures, such as the use of on-campus presence and recruitment advertising, bulletin boards, job posting, internal data base search for internal prospective applicants, company publications, or personal letters to notify positions available (Jaidi et al. 2011, p. 139; Nazir et al. 2012, p. 157; Zaman 2012, p. 72; Raziq & Shaikh 2015, p. 105). Internal information sources positively influence job pursuit intentions and attitudes in employees (Jaidi et al. 2011, p. 140).
However, in accordance with the reviewed publications, internal recruitment is characterized by some limitations. In order to attract, select, and hire a professional with required skills and knowledge from the global talent pool, organisations existing in highly competitive environments should use external sources because of the limited choice of personnel (Mathis & Jackson 2011, p. 188; Georgia et al. 2013, p. 11). A larger number of candidates can be reached through external recruitment. Moreover, Waldman (2013) claims that internal recruitment can lead to bureaucratic restrictions sidelining talented outsiders and reducing activities of employees who seek a higher position. The emergence of tensions and conflicts in an organisation is possible if there are several candidates for a new post.
According to Reitzig (2011), the occurrence of business unit and site biases negatively influences the process of promotion due to human resource managers’ preferences for co-workers. Sole internal recruitment is negatively perceived by gifted job-seeking students (Jaidi et al. 2011, p. 153). In fact, internal hire is not equally effective in all organisations; according to Bidwell and Keller (2013), this strategy is more suitable for companies with a large grade ratio of junior to senior workers. However, contradicting this statement, the research conducted by Raziq and Shaikh (2015) provides data testifying to the prevalence of internal recruitment methods in small and medium-size organisations (p. 105).
Thus, controversial findings of the literature review necessitate pursuing further research on internal recruitment, specifically, factors contributing to organisations’ preferences for this method of personnel hiring, its benefits, and limitations.
It is assumed that contemporary organisations utilise methods of internal recruitment more widely than those specific to external recruiting. The propositions of this research also state that practices of internal recruitment lead to economic, structural, and cultural improvements in contemporary business units. However, taking into consideration controversial findings of the literature review, it is essential to study the issue under scrutiny without personal prejudices and misconceptions. Reliable findings obtained through relevant research methods are far more important than speculative reasoning. Therefore, this research will be carried out in conformity with principles of a positivist approach in order to reveal and objectively evaluate factors contributing to organisations’ preferences for internal recruitment, as well as benefits and limitations of this HR practice. Scientific knowledge begins with empirical observations of facts and phenomena. “Reality is objectively given and can be described by measurable properties, which are independent of the observer (researcher) and his or her instruments” (Myers 2009, p. 37).
Although deduction and induction are inextricably linked, the research will be more deductive. Deductive methods allow searching for and finding such ideas, in which internal contradictions would be reduced to the minimum. In other words, the deductive method helps to make research more convincing. Estimating general trends in the implementation of internal recruitment, it is possible to deduce particular factors contributing to its use in different organisations. The combination of methods specific to qualitative and quantitative designs will provide findings congruent with the research purposes.
The main task of collecting information is to provide the confirmation (verification) of working hypotheses or their disconfirmation. In order to obtain comprehensive information, I am going to collect primary data by conducting tape recorded face-to-face interviews. Interviews allow obtaining answers to research questions in personal communication. In comparison with other types of surveys, an interview contributes to free interactions and improves the sincerity of respondents’ answers; it will be possible to monitor interviewees’ reaction. However, depending on circumstances, some interviews can be performed by telephone or e-mail. Nevertheless, the reliability of results can be diminished by respondents’ frankness and honesty. In addition to interviews, secondary data of published documents, such as statistics and narratives from human resource professionals, will be used.
The intent of this research is the generalisation to a population. Large samples diminish the probability of deviants (Myers 2009, p. 83). Therefore, the research will engage 100 or more informants selected according to the value and relevancy of information they can provide. In order to obtain in-depth knowledge of investigated subjects, participants of this study will be human resource practitioners and employees of small, medium-size, and large companies.
The research will be conducted in accordance with an ethical code of conduct. “Research ethics refers to the moral principles guiding research from its inception through to completion and publication of results” (British Psychological Society 2010, p. 5). Although the participation in this research is not associated with potential harm, participants’ informed consent is obligatory in order to ensure that respondents will not be deceived, constrained, or forced to take part in the study. All individuals will be informed about the objectives and scope of the research, questions that will be asked, the use of results, and the level of anonymity. In order to provide participants with anonymity and confidentiality, their pseudonyms or initials will be used in tapes and transcripts. Every informant will remain anonymous during the process of data collection.
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