Program & Batch: PGDM 2014-16

Term: 3

Course Name: Human Resource Management

Name of the faculty: Dr. Hardik Shah

Topic/ Title : Recruitment PracticesA comparative study between the Travel industry and the Automobile industry in India

Original

or Revised Write-up:Original

Group Number: 3

Contact No. and email of Group Coordinator:

Kirti ChablaniNo: 7053143189Email: ft14kirtipishuchablani@imt.ac.in

Group Members: Sl. Roll No. Name1 140103040 Atul Gupta2 140102039 Christy B Mathai3 140101083 Kirti P Chablani4 140103107 Natasha Lobo5 140101108 Nivesh Gupta6 140103137 Rohan Nagar7 140102138 Vaibhav Khandewal

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Acknowledgements

We would like to use this opportunity to express our gratitude for the support that we received through the course of this project until completion. The guidance, advice and criticism have helped in guiding us in several aspects.

We would like to thank Dr Hardik Shah for his support and guidance. We would also like to thank all the people who provided us with the facilities required and information required to complete this project successfully.

 

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Table of Contents

Acknowledgements....................................................................................................................2

List of tables, figures and abbreviations....................................................................................4

Introduction................................................................................................................................5

Problem Formulation.................................................................................................................7

The Travel Industry....................................................................................................................7

The Automobile Industry (Mahindra Trucks & Buses).............................................................9

Major challenges faced:...........................................................................................................12

Standard best practices.............................................................................................................13

References................................................................................................................................14

List of tables, figures and abbreviations

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Flow chart of the recruitment process…………………………………………………………5

Sources of recruitment in Travel industry……………………………………………..………9

Recruitment and selection at Mahindra T&B…………………………………………...……11

Interview process at Mahindra T&B…………………………………………………………11

Introduction

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Recruitment is arguably the most important of the human resource functions because the sourcing of people is essential for e1conomic activity to take place in an organization. The quality of people in the organization can determine the success or failure of an effective human resource management system. The prime objective of recruitment is to find suitable candidates to meet organizational needs in the most cost effective manner possible.

At this point, it is essential to highlight the difference between recruitment and selection-two words that are more often than not, used interchangeably. Recruitment is meant to attract genuinely suitable candidate and carefully examine their credentials in order to produce a shortlist for further investigation in the selection process. The objective can be successfully achieved provided human resource planning and job analysis have been carried out and applied. The recruitment process should be systematic and follow a certain pattern which is explained in the flow chart diagram

Fig 1: Flow chart of the recruitment process

The requirements of an effective recruitment and selection process may be conveniently examined under the following headings:

1. Determining the vacancies2. Sourcing strategy3. Recruitment policy4. Preparing and publishing information5. Processing and assessing applications6. Notifying applicants

Determining the vacancies is the first step in the procedure and is considered with the demand. Job vacancies occur when an organization or work unit is set up, there is expansion; reorganization takes place through changes of policy, technology, location, M&A, demergers or most commonly when employees leave an organization or need to be replaced. Sound human resource planning analysis could ensure that there is no perpetual existence of job vacancies.

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Job description and person specification sourcing strategy

send application form and request

CVpre selection

short listtests (optional)interview/GDsreferences/medical

appointment induction program follow-up

The new trend in recruitment is contract hiring that departs from full-time, normal working hours. The advantage of this is that it allows the organization to access new labour markets including short term, part-time, working from home, term-time working, annualized hours, twilight shifts and call out contracts among a variety of working time available. Apart from the above mentioned options, franchise operations and subcontracting arrangements provide opportunities for work to be carried out without employers bearing the costs and risks of traditional recruitment and employment methods.

The concerns with supply and availability of resources and the particular avenues through which they are likely to be obtained are covered under sourcing strategy. There are various factors that impact the availability of resources at micro and macro levels. The sourcing strategy must not fail to consider options of internal organizational sourcing as it may be possible to fill job vacancies from within the organization through transfers and promotions. It can be beneficial to the organization to consider internal sourcing because existing employees are already familiar with the culture and practices, it could be more cost effective and less time consuming. It could also be used as a means for career development.

Recruitment policy is largely a matter of making choices within a framework of legal rules and requirements. The legal framework covers several areas under the Factories Act and the Commercial Establishments Act and this will affect choices of recruitment methods, advertisements and the process used. The archetypical recruitment process consists of three types- single tier entry, two tier entry points and multiple tier entry points- which represent the ideal types of hiring policies but in reality, there may be a mixture of these.

Decisions on recruitment policies have a big impact on career management and organization culture. A formal recruitment policy facilitates understanding in larger and widely dispersed organizations. A common policy of hiring encourages wider understanding of both the anti-discrimination policies and the significance of recruitment for the organization’s culture. Various sources for external hiring such as institutional agencies, private employment agencies, advertisements in the press or other media, the internet, company website etc should also be mentioned.

Special attention and skill is required in preparing and publishing information. The information published should adhere to certain conditions. It should give a favourable image of the company, should not contradict employment laws, and should aim to attract the attention of maximum number of potentially suitable candidates. It should also answer questions such as the details of the job in terms of skills, duties, opportunities, rewards, conditions and special circumstances. Details on how the application is to be presented can also be mentioned. Preparing and publishing information includes job advertisement and the detailed format of the application form.

This is then followed by processing and assessing applications, notifying applicants and administration of the recruitment process. Post this, the selection process begins.

Human resource planning involves the assessment of future requirements, assessment of current resources and availability of resources in the future, labour turnover etc. New trends such as digital recruitment, recruitment through social medial platforms etc are becoming increasingly popular.

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Problem Formulation

There are various factors due to which the recruitment practices of various companies in different industries differ. Some of them are as follows

Organizational objectives Personnel policies of a particular organization Micro economic and macro-economic factors Differences in the sources used for recruitment Financial implications Recruitment costs to the company Industry that the organization functions in

Recruitment planning should be done in such a way that the above factors are not ignored. The industry in which the organization functions is a major determinant of recruitment practices. For example, the hiring practices in the service sector versus hiring trends in the manufacturing sector may vary to quite a large extent. The skills required, job descriptions and the resources required differ to a large extent.

This, in turn, leads to differences in the recruitment planning and other human resource practices in both the sectors. This study aims to capture the reasons for the differences in these practices. While manufacturing involves the production of tangible products by conversion of inputs to outputs, services require the assembly and sale of intangible commodities such as travel, education etc. The nature of the job to be done is of high importance in recruitment planning. There are several instances such as greater demand for a product, increase in the number of people who wish to go on vacations etc which trigger the need for employing resources in companies.

The objectives of the study are as follows

1) To understand the impact of accurate recruitment planning on reducing costs2) To evaluate the challenges faced while designing recruitment practices3) To understand the industry best recruitment practices

This project aims to achieve three main objectives which will explain the reasons for the differences in recruitment practices between two industries.

The Travel IndustryAs per the WTTC (World Travel and Tourism council) report, India’s travel and tourism industry is expected to grow by 7.3 per cent in 2014. Through this, it will outperform the general economy by 2.5 percentage points. The industry includes travel companies, intermediaries, online travel providers, hotels, tour guides and everything in between. The human resource in this industry requires a set of hard skills and soft skills in order to engage customers and provide economic value to the company.

The soft skills required can be mainly grouped under social skills and organizational skills. Social skills include areas such as communication skills and working with others as part of a team. The industry deals in services and hence do not have tangible products which a

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customer can feel and touch before making a purchase. Therefore, it becomes necessary for the human resources employed in this industry to make an extra effort to push the service to the customer, who relies entirely on the people in most cases.

Organizational skills such as time management, decision making, prioritising, planning and co-ordination, multitasking etc. are highly valued. From a travel consultant to a tour manager/guide, these skills are imperative because the day doesn’t always go as planned. The phrase, “Customer is King”, rightly applies to this industry as the demands of clients vary as per their requirements and they could be fussy and picky about the services being provided to them.

Bearing all this in mind, recruiters have to plan the process of recruitment in order to ensure that they get the “right fit”, for the job. An important aspect of this industry is that the business is impacted by the seasons. For example, March to July is peak season in India because several families go on holidays when their children have summer vacations. The recruiter would also need to keep these fluctuations in the business volume in mind.

Sources for recruitment used are as follows: Graduates and Post graduates

Students are hired as trainees when they pass out from college. Most of these students hired should have done their education in Tourism. For example, Bachelors in Tourism Management or Masters in Tourism Administration or Bachelors in Hotel Management or Bachelors in Commerce along with a specialization in Tourism Management., etc. In most companies, these students are hired either as executive trainees (after completing their Bachelors programmes) or management trainees (after completing their masters programs). They are then put through an on-the-job training period for a span of 6 months to 12 months, post which they become a confirmed employee (based on performance).

LateralsThe industry does demand some amount of specialization skills in order to carry out business transactions. For this purpose, the companies carry out lateral hiring-lateral hires are mostly from competitor companies in the same business or similar business. They understand how the business works and do not require extensive training as far as the skills are concerned. Laterals are hired mostly when the company is in a hurry to replace an open position and would require the new employee to begin work immediately by relying on the employees skills earned through experience. Lateral hires are mostly not made at entry level positions.

Employee ReferralsThe employee referral program encourages existing employees to refer their friends or family for a particular job in exchange for some incentives. This method of recruitment is applied in combination with 2-3 other methods as companies may not want too many relatives or friends of a particular employee working in the same organization. This program helps to hire people both at the entry level and as laterals.

Online job portalsRecruiters turn to online job portals when there is a serious lack in supply of resources. The millennial generation is always available connected through the internet and mostly upload their job requirements on online portals. Recruiters mostly have a tie-up with these portals in order to find the right fit for the job position. They

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could also access the open resumes available on the portal if they wish to save on costs. This form of hiring has gained popularity in recent times.

Contract employeesDue to the seasonal nature of the business, employees are also sourced on a contract basis during peak season times in order to deal with the increase in customer demands. The contract employee is not on the pay roll of the company but is on the pay roll of the contractor.

Internal transfersMost companies today encourage cross-functional transfers. After an employee has completed a certain number of years in the company, he/she could apply for a cross functional transfer. However, only a few positions can be fulfilled in this manner because it would depend on various factors.

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Fig2. Sources of Recruitment in the Travel Industry

campus recruitmentlateralsemployee referralsjob portalscontract employeesinternal transfers

The Automobile Industry (Mahindra Trucks & Buses)

About CompanyMahindra Truck & Bus division, formerly called Mahindra Navistar/Mahindra International Limited is JV between Mahindra & Mahindra and Navistar International based in United States of America. It provides engineering services for the design and development of truck and bus products. The company was founded in 2005 and is headquartered in Mumbai, India. The distribution network used is of M&M. The company’s three plants are located in Mumbai, Pune & Zaheerabad.The company works in three businesses:

Manufacturing trucks and buses in India for sale in domestic as well as foreign markets

Engineering services for design and development of trucks and buses for Navistar Enable Navistar to use India as significant supply base for components and materials

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Manpower Planning at Mahindra T&BAccording to structure of Mahindra T&B, MD heads seven departments which in turn is headed by one HOD each for every department.For starters, human resources management takes all the requirements of HOD. This consists of following:

1. Permanent and contract employees- the number of workers required to exercise for a financial year

2. No. of trainees required for engineering as well as management positions3. Band wise breakup for new recruits4. Requirement for summer interns on ad-hoc basis

After requirement collection, analysis is done. In case of increase or decrease in the manpower compared with the same for last year, a proper justification needs to be asked. Structure is formalized after the final compilation of data is done by HR. This formalized report is put forward for approval of MD of Mahindra Truck & Bus division & Sr. VP, Human Capital of M&M Auto Sector. The whole process is completed before March every year.

Job Description at Mahindra T&BAfter the initial requirements are finalized, HR lists down the set of unique and critical positions in each department. The work profiles that are completely different from other are categorized as "unique positions" while the positions having significant impact on the business and manning of this position is absolutely important are categorized under "Critical positions". Mahindra T&B uses two formats for description. Hay's format for critical positions and One page format for rest all.

Recruitment & selection at Mahindra T&B

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As per flowchart, Mahindra T&B has 3 tier interview processesOfficer to Manager 1st round Supervisor

2nd round HOD & HRSr. Manager 1st round Supervisor

2nd round HOD & HR3rd round MD and Sr. VP HR

DGM & Above 1st round Supervisor & HOD2nd round HR & MD3rd round Sr. VP HR & Chairman

Psychometric tools used by Mahindra T&BMahindra Truck & Bus division uses two psychometric tools. Both are listed below

1. Thomas Profiling Systems : It is a leading international managerial aid for recruitment activities. It enables employers to realize full potential of employees by identifying and utilizing individual strengths. It assists managers in motivating, energizing and stimulating individuals in work environment. It also helps in raising self-esteem and enthusiasm levels of employees. The standardised assessment instruments include Personal Profile Analysis (PPA), Human Job Analysis (HJA), Team Assessment System (TSA) and Assessments for Selection and Training (TST). Each test takes not more than 5 minutes. Results are translated into highlights of individual intellectual

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strengths.

2. MBTI : Myers-Briggs Type Indicator is a self-report questionnaire designed to make Jung's theory of psycho-logical types understandable and useful in everyday life. It identifies valuable difference between normal, healthy people which can be a source of misunderstanding and miscommunication later on. It helps in identifying unique gifts of each employee. It enhances motivation, natural strengths and potential areas for growth. It is used for variety of purposes including:

a. Self-understanding and developmentb. Career development and explorationc. Organization developmentd. Team buildinge. Management and leadership trainingf. Problem solvingg. Relationship counsellingh. Education and curriculum developmenti. Academic counsellingj. Diversity and multicultural training

Sources for recruitmentIdentifying right candidates and reaching out to them is very important for recruitment planning. For this purpose, a variety of media is used to spread the word about recruitment process. Some of them are:

a. Newspaper advertisementsb. Employment agenciesc. On campus recruitmentd. Deputation from other organizationse. Employee recommendationsf. Labour unionsg. Gate hiring

Apart from this, with the advent of social media, companies are moving towards hiring through specialized portals like job portals and networking sites like LinkedIn.

Major challenges faced: Fresh graduates (mostly executive trainees) may not remain in the company for a long

period of time. The costs involved in training these employees are high and hence leads to a loss for the company

Most students hired through the campus recruitment program may wish to pursue their higher education and this serves as a threat to the company

In cases of online job portals, many resumes need to be scanned in order to find a few that may qualify for the selection process. A meeting would then need to be scheduled with the potential recruits in order to begin the selection process. There are no-shows in many cases and this leads to loss of time for the recruiter

Internal transfers sound easy, but may be a highly complex process with several approvals required, both from the department letting go of the employee and from the department that would be absorbing the employee. The cost of the employee would need to be transferred. This method of hiring may also give way to internal politics

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Lateral hires are more costly than most other methods. Since they come with prior experience, their existing salaries would need to be increased and adjusted to best meet the demands. They may not accept offers if the company fails to meet their negotiations. Another aspect to note is that most of them have to serve a notice period ranging anywhere from 45 to 60 days. If the recruiting company requires them on an urgent period they will have to buy out their notice period.

The seasonal nature of the business also may pose to be a problem for the company in many cases. The company should never over-recruit or under-recruit. In case of an excess number of employees, it will increase the costs to the company.

Standard best practices

A good HR planning system of the organization should be able to answer the following questions.

1. What should be the size of workforce required?Estimation needs to be made about the average productivity of the staff and based on that estimation; size of workforce needs to be planned.

2. What would be major functional areas for which personnel would be required?The requirements gathered from various operational heads should be broken down into functional areas e.g. accounts, finance, IT, audit, sales etc. This will require HR personnel to foresee a lot of complications that can be involved after the new recruits are put to work.

3. What would be the characteristics of personnel?Further analysis and foresight is required to chalk out the characteristics of personnel to be put on the functional areas defined above. The functional areas will need to be further broken down into levels of expertise and the skill levels required for them. The anticipated job description will have its basis on the same. For example, the Internal Audit department would require some Audit Assistants, some Audit Supervisors and one Internal Auditor. Each of these categories of people will have a different job description and skill requirements.

4. Where would we find appropriate people?A target pool needs to be created by looking up information about colleges and other institutes in local area. Information about other companies from same sector in local area should also be available in the target pool. Recruitment portals can also be used to increase target pool size.

5. What kind of training and inductions systems should be there for the staff?Training and induction system for the staff will have to be customized according to functional areas and characteristics of personnel. For example a sales person require training in processes, procedures and products but a person joining at the middle management level would require training in operational and financial analysis. A combination of in-house and external trainings can also be planned.

Recruitment, training and deployment will have to be in accordance with the HR plan.

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Referenceshttp://yourstory.com/2014/07/online-travel-india/https://www.recruiter.com/i/best-practices-in-recruiting/http://www.euromonitor.com/travel-and-tourism-in-india/reporthttp://www. mahindratruckandbus .com/

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