RECRUITMENT/SELECTION AND TRAINING/DEVELOPMENT PRACTICES: VALUE-ADDED CONTRIBUTION TOWARDS ORGANIZATIONAL EFFECTIVENESS

Transcription

1 RECRUITMENT/SELECTION AND TRAINING/DEVELOPMENT PRACTICES: VALUE-ADDED CONTRIBUTION TOWARDS ORGANIZATIONAL EFFECTIVENESS ABANG EKHSAN ABANG OTHMAN * Abstract : The purpose of this paper is to examine the applications of key human resource management functions of recruitment/selection and training/development and explore perceptions on their value-added contribution towards organizational effectiveness in the context of two major Japanese owned multinational electronics companies in Malaysia. A mixed-methodological approach via case studies and questionnaire surveys was used for this study. Overall 29 questionnaires from the two companies were analyzed. In addition, the views of the Executive Director, Head of HR, line mangers and engineers were sought regarding their role, involvement, policies/ practices and their perceptions on the value-added contributions of HR towards organizational effectiveness. Analysis of the questionnaire responses and interviews shows that there are similarities between their practices and the tenets of traditional Japanese management system (JMS) with some modifications and adaptations to meet local context. The overall findings indicate that their recruitment/ selection and training/development practices are influenced by their JMS which encourages specific human capital creation through a well elaborated and integrated HRM practices linking towards organizational goals. Their systematic and effective management of HR system lead to an especially important source of competitive advantage, hence, contributing towards organizational effectiveness. Though by no mean to be conclusive, the result of this study support the notion that higher strategic HRM effectiveness correlates positively towards organizational effectiveness. This paper provides some insights and practical implications to HR practitioners and line managers into approaches to strategic HRM practices as a source of competitive advantage. Introduction In today s increasingly competitive global environment, human resource management (HRM) has been recognized as a critical dimension of strategic The author is currently on study leave pursuing his Doctor of Philosophy degree in Human Resource Management at Hosei University, Japan. This study is part of his doctoral thesis entitled Strategic HRM practices: perspectives of Malaysian and Japanese parents companies and subsidiary companies in Malaysia. The author would like to thank Professor Fujimura Hiroyuki and Associate Professor Hong Kian Sam for their valuable comments and suggestions on earlier drafts of this paper and the two anonymous companies for providing access and support. * Faculty of Cognitive Sciences and Human Development, Universiti Malaysia Sarawak, Malaysia

2 74 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution management (Beer et al., 1984; Tichy, Fombrun and Devana, 1984). Similarly, the field of HRM has sought to become integrated into the strategic management process through the emerging discipline referred to as strategic human resource management (SHRM) (Wright and McMahan, 1992). The ongoing interest in SHRM reflects the growing awareness that human resources are the key component that can help an organization become more effective and achieve a competitive advantage (Becker and Gerhart, 1996). However, a large question remains unanswered: Does organizations actually put SHRM into real practice? If they do, what are the practices like and its value-added contribution towards organizational effectiveness? Interestingly, Armstrong and Long (1994) noted that there has indeed been plenty of rhetoric about SHRM. Despite the uncertainties, there was a number of interesting and thorough empirical studies of HRM/SHRM had been carried out which provides some evidence of the way it is applied within the organizations (Becker and Gerhart, 1996; Dyer and Reeves, 1995; Huselid et al., 1995; Khatri, 2000; Pfeffer, 1994) and showing the effectiveness of SHRM practices. However, there is still little understanding of the mechanisms through which SHRM practices influence organizational effectiveness. Retrospectively, prior to the more recent emphasis on and pleas for SHRM practices, organizational recruitment/selection and training/development remained relatively unchanged, having evolved into a relatively standardized approach frequently labeled as traditional (Storey, 2001). According to Holbeche (2001) recruitment should not be simply a question of filling gaps but should focus proactively on bringing into organization the skills and experience which cannot be built from within. Undeniably, effective recruitment/selection is critical to success of the organization. Similarly, HR teams are often criticized for developing training/development strategies which do not match business priorities. The question that needs to be addressed in the context of training/ development strategies is how to ensure that people are trained and developed to their full potential and maximum effectiveness in line with organizational strategies and objectives. Notably, organizational effectiveness is influence by the existence of systematic HR policy and practices. By effectively managing the key HRM practices of recruitment/selection and training/ development, organizations should be able to attract and retain qualified employees who are motivated to perform, hence, will contribute to organizational effectiveness. Against the above background and in examining the evidence of its reality in practice, the purpose of this paper is to examine the applications of key human resource management functions of recruitment/selection and training/ development and explore perceptions on their value-added contribution towards organizational effectiveness in the context of two major Japanese owned multinational electronics companies in Malaysia. This study adds to existing knowledge and contributes to overcoming the dearth of empirical research on

3 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution the importance of strategic HRM practices in Malaysia and hopefully, will provides some insights and practical implications to HR practitioners and line managers into approaches to strategic HRM practices as a source of competitive advantage. Review of Literature Recruitment/selection and training/development Recruitment/selection and training/development represent two of the four key functions of HRM necessary and critical to support organizational strategies. From this perspective, strategic recruitment/selection and strategic training/ development occurs when practice is aligned with and into the strategic planning process of the organizations. Hsu and Leat (2000), noted that there appears to be some general agreement among a number of leading American and European researchers (e.g. Beer et al., 1984; Bratton, 1994; Brewster and Bournois, 1991; Guest, 1989a) that, whatever models and perspective on HRM are used, they believe that both recruitment/selection and training/development policies and practices should be done strategically and be perceived as integral. They emphasized that recruitment/selection and training/development not only seek to attract, obtain, retain, and retain the human resources the organization needs to achieve the strategic goals, but may have significant impact upon the composition of the workforce, the ultimate fit with the organization s needs and culture, and upon long-range employment stability and human development (cited in Hsu and Leat, (2000). Today s organization cannot ignore the fact that a key element of an organization s resource capability is its people and greater attention is being given to the recruitment/selection process than ever before. Recruitment/ selection is just one of the key human resource (HR) practices that need to be integrated into a coherent bundle by organizations in order to support the delivery of business or corporate strategy. Newell and Rice (1999) noted that for some, recruitment/selection lies at the very centre of human resource practices in organizations where appointment decisions represent one of the most crucial ever taken by employers. While the recruitment/selection is typically the responsibility of the HR Director/Personnel, line managers in all the business units of an organization also have an important role in the recruitment/selection process. Redding and Catalanello (1989) noted that the argument is convincing. Strategy-linked training may be essential to the success of contemporary firms challenged by increasing global competition, accelerating technological change, and shifting workforce demographics. In fact, according to Redding and Catalanello (1989) several leading organizations, including Motorolla, General Electric, and Hewlett-Packard, credit their business success to training. 75

4 76 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Similarly, Mestre and Stainer (1997) noted that in Japan, all new employees are perceived as interchangeable and, as such, are almost considered as non-entities since there is no difference between one individual and another. It is believed that this approach is such an intrinsic asset in Japanese companies that most are far more concerned with recruiting people who have the right attitude to learning than to selecting those with the best existing skills for the job. Case studies by Dedoussis (1995) on Japanese manufacturing firms established in Australia found that recruitment practices by Japanese companies focuses on candidates in the age groups who are hired directly according to demands of each firm. Additionally work experience is highly valued and little importance is attached to educational qualifications. However, formal educational qualifications are important in the case for managerial positions in bigger firms. His findings on recruitment in two larger firms, NEC and Toyota, differ from this pattern. In these two firms mid-career recruitment is used only when vacancies cannot be filled internally, while limited scale periodic recruitment of young graduates had in the past been introduced in anticipation of further business expansion. Recruitment at NEC focuses on the age group as candidates in this age are considered less likely to leave than younger employees and yet be adaptable enough to pursue a career with a dynamic organization. Another study by Gregory and Jain (1991), on HRM practices of Japanese and Malaysian Companies found that their Japanese subsidiary companies followed the recruitment policy of their parent companies. However, this practice is not as elaborate as that in the parent companies where direct contact is made with the educational institutions, and the interview may be conducted on campuses. In the case of Malaysian firms, there is some dissimilarity in their recruitment practices as compared to Japanese firm s practices. Based on author s observation and experience, HRM practices in Malaysia have shown that the full time local employees were recruited mainly through newspaper advertisement and by walk in interview. In some cases recruitment/selection are based on family and close friend recommendation. On another case study by Abdullah and Keenoy (1995) on the Japanese managerial practices in the Malaysian electronics industry noted that available vacancies are first offered to currently serving employees. Qualified applicants are assessed based on performance and seniority. With applicants of equal merit, seniority is used as the decisive criteria. Failing this method, employees are circularized in the hope that someone among their friends or relatives may be suitable. Only after this would the post is advertised outside the company. Interestingly, the company believes this practice helps to enhance the family spirit a view endorsed by union representatives. Another important features related to HR development is total employee participation. To improve continuously the process of quality control, Japanese

5 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution firms have developed various forms of organizational learning mechanisms such as the suggestion system. According to Zhao (1991) in about 40 years, for instance, Toyota has received some 20 million ideas for improvement through the employee suggestion programs. New ideas and suggestions not only provide inputs and benefits for producing good quality products, but also motivate workers and keep them highly committed (Yang, 1994). Similarly, the emphasis on coordination and co-operation across departments makes it imperative for firms to encourage multifunctional skills so that workers will be able to learn cross-functional skills and share with one another to accomplish organizational goals. The continuous practice of job rotation contributes to strong and effective work teams, which are the key for better product quality and organizational effectiveness. Strategic HRM contributions towards organizational effectiveness The potential for HRM function to play a significant role in increasing valueadded and achieving competitive advantage may be considerable. A number of studies have shown positive relationship between HR practices and organizational effectiveness. For instance, Mac Duffie (1995) found that bundles of HR practices were related to productivity and quality in his sample of worldwide auto assembly plants. Delery and Doty (1996) found significant relationships between HR practices and accounting profits among a sample of banks. Lepak and Snell (1996), found that among their sample of manufacturing firms, certain combinations of HR practices were related to operational performance indicators. Another study by Guthrie (2001) on corporations in New Zealand had found that their HR practices were related to turnover and profitability. Similarly, Huselid (1995) in his comprehensive study of the relationship between HR practices and firm performance demonstrate that the confluence or set of HR practices used by firm clearly relates to firm outcomes of turnover, productivity, and financial performance. In a more cautious view, Ulrich (1997) noted that although there may be many intervening variables, however, this type of empirical assessment demonstrates that HR practices do relate to firm results. Despite the positive relationship between better HRM/SHRM practices, the issue of how to measure the contributions of Strategic HRM process has achieved a great deal of attention in the literature. Often, there are just vaguely referred to as improvements in organizational effectiveness (Cook and Ferris, 1986; Devanna et al., 1984), yet as Evans (1986) points out as cited in Truss and Gratton (1994) the issue of the criteria by which HRM policies should be evaluated is fundamental since any concept of strategy implies goals and outcomes. Generally, the existing research seems to suggest a positive relationship between HR and organizational effectiveness. However, contrary to Becker and Huselid (1998) claim, this body of research tends to lack sufficient 77

6 78 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution methodological rigor to demonstrate that the relationship is actually causal in the sense that SHRM practices when instituted will lead to organizational effectiveness. They further noted that little, if any, research has utilize rigorous designs to test the hypothesis that by employing SHRM practices actually results in organizational effectiveness in a causal sense. However, recent theoretical work in business strategy has given a boost to the prominence of HR in generating sustained competitive advantage. According to the resource-based view (RBV) of the firm (Barney, 1991; Wright and McMahan, 1992) believed that firms can develop sustained competitive advantage only by creating value in way that is rare and difficult for competitors to imitate. In fact, numerous researchers have noted that HR may be the ultimate source of sustainable competitive advantage. Although traditional sources of competitive advantage such as natural resources, technology, economies of scale, and so forth, create value, the resource-based argument is that these sources are increasingly easy to imitate, especially in comparison to a complex social structure such as employment system. If that is so, HR strategies may be an especially important source of sustainable competitive advantage (Pfeffer 1994; Wright and McMahan, 1992). Additionally, Russso and Fouts (1997) noted that it is the firm s ability to employ its organizational capabilities, its ability to assemble, integrate and manage human resources that matters because human resources are not inherently productive. Objectives of the Study Given the above review, the general emphasis of this study is to examine the applications and processes two key HRM functions of recruitment/selection and training/development and explore the perception on its value-added contribution towards organizational effectiveness. The research aims to address the following related questions: 1. (i) What are the organization s strategic approaches in recruitment/selection and training/development practices? And how does it support the business/corporate strategy? 2. (ii) What are the perceptions on the value-added contribution of recruitment/selection and training/development practices towards organizational effectiveness? The next sections of the paper provide the methodologies and findings. Finally, some of the key findings and implications for researchers and practitioners are provided, followed by the discussion and conclusion. Research Methodology Research design The research used a mixed-methodology approach via semi-structured random interviews and questionnaire surveys supplemented by secondary data on

7 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution companies documents and reports. The main source of data for the case studies is based on empirical data gathered through on-site interviews. Each plant was personally visited on two separate occasions in March and July A total of 31 respondents were interviewed. The samples of respondents interviewed were General Manager Corporate HR, Executive Director, senior line managers, engineers, executives and operators. Among the questions asked were on the strategic recruitment/selection and training/development practices and policies, the integration of these key HR functions with the overall strategy. Through the interview, additional questions and probes arises enable respondents to be asked on a much broader scale on emerging issues pertaining to recruitment/selection and training/development. The interviews were conducted in a semi-structured approach. The aim of these semi-structured interviews with different parties from the HR and non-hr was to get a cross-section of view and to give the breadth and depth of managerial opinion. Interviewees were given a set of interview schedule framework prior to the actual interview. All interviews were tape recorded with the permission of the interviewees, and the text was transcribed. The transcribed text then becomes the data that was analyzed in relations to the objectives of the study as per research questions. The result of the study shown in the following tables provides descriptive statistical information (e.g., frequency counts and percentages, and mean score) for all items with five-point likert scale. The data obtained from the interview findings were summarized, discussed and where possible are presented in verbatim. A total of 50 questionnaires, 25 questionnaires for each company were sent to the Head of HR/Director of HR and Head/Director of Manufacturing/Line Mangers of both Company A and Company B. Overall 29 questionnaires were received and analyzed for a response rate of 58 percent. Of the 29 questionnaires received, (n = 15) were returned by Company A and (n = 14) were returned by Company B. Instrument The questionnaire was divided into two parts. Part A contained items relating to personal and organizational profile. Part B (Section 1) contained (i) 10 items relating to the strategic approaches in recruitment/selection practices and (ii) 7 items pertaining to selection criteria. Part B (Section 2) contained (i) 9 items on the organization s strategic approaches in training/development practices, and (ii) 12 items on training/development methods. Finally, Part B (Section 3) contained 8 items on the extent of SHRM practices (recruitment/selection and training/development) as practiced contribute to organizational effectiveness. The responses on the items in Part B (Sections 1, 2, and 3) were in the form of a five-point likert Scale, requiring respondents to choose from 5 given responses i.e., 1 = Little or No Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; and 5 = Very Great Extent. 79

8 80 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Questionnaire constructs and measures The questionnaire and interview questions were designed to test various propositions derived from the HRM/Strategic HRM literature. The questionnaire and interview items were identified and adopted from earlier work of past researchers (Armstrong and Long, 1994; Budhwar and Khatri, 2002; Dyer and Reeves, 1995; Gregory and Jain 1991; Guest, 1991; Schuler, 1992; Schuler and Jackson, 1999; Sheehan, 2005; Ulrich, 1997) to suit the needs of this study. The main reasons for adopting these items was that they came from established authors who specialized in the field of HRM/SHRM and whose work which incorporates HRM/SHRM issues has been widely cited. Details of questionnaire constructs and measures in used to access answers to the research questions are presented as follows: Part A: Personal and organizational profile This refers to the respondent s position in the organization, academic field and qualifications, participating company s years in operation and whether the company had a Personnel/HR Department. Part B (Section 1): Recruitment/selection This refers to application of key HRM practices in the recruitment/selection practices. The practices should be aligned with and integrated into the strategic planning processes of the organization. Recruitment/selection was measured using the following items: (i) 10 items relating to the strategic approaches in recruitment/selection practices: whether recruitment/selection is closely linked with the business/ corporate strategy; whether recruitment/selection needs are based on solid preparatory work through job analysis; whether recruitment and selection strategies include developmental and succession plans; whether recruitment and selection strategies are in place and deliver in line with the goals of the organization; whether applicants specifications reflect current as well as future organizational needs; whether appropriate skills are in place to support the recruitment/selection strategies; whether induction, training/development and mentoring programs are available to support the recruitment program; whether HR and line managers are jointly involved in the recruitment/selection process; and whether job description is used a basis for the interview and (ii) 7 items on the use of following selection criteria: experience in a related job; ability to perform the specific job requirement; ability to work in teams; match/fit with company s values; academic qualifications as required; competencies as required; and belief that the candidate has the right attributes.

9 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Part B (Section 2): Training/development This refers to the application of key HRM practices in the training/development practices. The practices should be aligned with and integrated into the strategic planning process of the organization. Training/development was measured using the following items: (i) 9 items relating to strategic approaches in training/development practices: whether training/development is closely linked with the business/corporate strategy; whether training and development is an integral part of HR strategy; increasing focus on team building; performance feedback through evaluation; training/development forms an integral part of performance evaluation; development of all employees to close skill gaps; training to meet future needs; training to meet current needs; and promoting continuous learning and (ii) 12 items on training/development methods for managerial staff: orientation program; job rotation; on the job training; off the job training; multi-skilling; external training; special projects; competency based training; specialized skill training; cross function training; coaching/mentoring; and soft skills training. Part C (Section 3): Value-added contributions towards organizational effectiveness This refers to the value-added contribution of the of the two key SHRM practices of recruitment/selection and training/development towards organizational effectiveness. Value-added contribution of SHRM practices was measured using the following items: (i) Organizational effectiveness adopts two types of measurement: operational outcomes and financial outcomes as proposed by Dyer and Reeves (1995) based on eight items. Operational performance will be measured in terms of employee turnover; absenteeism rate; skill development; employee productivity and product quality; and financial performance will be measured in terms of organizational growth, return of investment and profitability. Despite this qualitative and descriptive measurement on organizational effectiveness, nevertheless, the strength of the data collected through in-depth interviews and cross-section of views with key informants and key stakeholders. Additionally, the semi-structured interviews with probes will be used to deepen the response to a question, therefore, increasing the richness and depth of responses. In the subsequent sections the empirical results are presented and key findings and implications, discussions and conclusions will be presented. Profile of case study organization Company A was established in Malaysia in 1973 is a subsidiary of a leading Japanese manufacturer of bipolar integrated circuits, MOS-integrated circuit 81

10 82 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution and discrete equipment for the application of telecommunications, audio, television, facsimiles, printers, DVD and other applications. Company B was principally engaged in the manufacturing of room air-conditioners. It was established in Malaysia in 1972 to specialize in the manufacture, sales and service of air-conditioners. Empirical Findings The findings from the questionnaire survey and case studies are detailed and illustrated below with tables supplemented by some excerpts of interviews from the interview records of the researcher, to give clearer views of interviewees comments. Profile of respondents The majority of the respondents participating in the questionnaire survey from Company A and Company B were HR Director, Executive Director, line managers from production, engineering and managers and assistant managers from HR departments. Similarly, the majority of the respondents from both companies had graduated with bachelor s degrees in various academic fields including engineering, business studies, social sciences, economics and human resource management. Thus the respondents were highly educated and qualified. This could possibly reinforce the accuracy and relevancy of the study s findings. The two companies reported having a HR department. Both companies had been established in Malaysia for more than 20 years. Recruitment/selection practices The findings on the overall mean score on key features of strategic recruitment/ selection practices for Company A and Company B as shown in Table 1 was (3.51) and (3.66) respectively, indicating a slight difference of overall mean score. Both companies have used the key features of recruitment/selection practices to varying degrees for attracting potential applicants into their organization. The top three highest mean score for items on key features of strategic recruitment/selection practices for Company A include: (i) recruitment/ selection are linked with business or corporate strategy (4.07), (ii) recruitment/ selection process are integral part of HR strategy (4.00), and (iii) HR and line management jointly involved in the recruitment/selection process (3.67). For Company B, the top three highest mean score was: (i) recruitment/selection are linked with business/corporate strategy (4.00, (ii) recruitment/selection process are integral part of HR strategy (4.00), and (iii) appropriate skills are in place to support the strategies (3.86). Comparatively, the first two items with the highest mean score for the two companies was similar. Both companies indicating their recruitment/selections were tailored to the demands of the overall business/corporate strategy. The results indicate that both companies employed a strategic recruitment/selection practices.

11 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Strategic approaches in recruitment/selection Table 1. Item Company A (N = 15) Company B (N =14) Mean SD Mean SD a. Recruitment/selection are linked with business/corporate strategy b. Recruitment/selection based on job analysis c. Recruitment/selection process are integral part of HR strategy d. Recruitment/selection include developmental and succession plans e. Recruitment/selection deliver against the goals of the organization f. Applications specifications reflect current as well as future needs g. Appropriate skills are in place to support the strategies h. Induction, training/development and mentoring programs available i. HR and LM jointly involved in recruitment/selection process j. Job description is used as the basis for interview Average Mean Score Notes: 1 = Little or No Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; 5 = Very Great Extent Table 2. Selection criteria Item Company A (N = 15) Company B (N = 14) Mean SD Mean SD a. Experience on the related job b. Ability to perform the specific job requirement c. Ability to work in teams d. Right match/fit with company s values e. Right academic qualifications are required f. Right competencies are required g. Belief that the candidates has the right attitude Average Mean Score Notes: 1 = Little or No Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; 5 = Very Great Extent 83

12 84 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Similarly, the results on selection criteria as shown in Table 2 show there is elements of strategic practices in their selection criteria process. The overall mean score on selection criteria for Company A and Company B were moderately high with (3.64) and (3.62) respectively. Generally, both companies used wide selection criteria i.e., experience on the related job, ability to perform the specific job requirement, ability to work in teams, right match/fit with company s values, right academic qualifications and right competencies are required and the belief that the candidates has the right attitude were all important criteria for selection. Gregory and Jain (1991), asserted that while it has been noted widely in the literature that the Japanese companies practice hiring of fresh high school, college and university graduates, however, there are some modifications concerning recruitment/selection practices by their subsidiaries companies in the host country, perhaps to suit the requirement of the local requirement. Interview findings: Company A On the recruitment/selection practices, every department will do their own manpower requirement. However, HR is responsible for the overall planning of manpower with inputs from the respective departments. After finalizing their manpower requirement, the respective departments will submit their requisition to HR for GM s and MD s approval. For instance, in 2008, the company is planning to produce new product in Malaysia which will be transferred from Japan. Hence, as part of their manpower planning and development programs their Manufacturing Department will have to send two of their existing engineers to Japan for one year training. The manpower planning is a continuous process and for this purpose it was done much earlier, about a year prior to deployment to Japan for training. When the two of them leave, the departments will get replacement either through internal promotion or recruitment from outside. Administratively, the Manufacturing Department will discuss with HR but for identifying and selecting of staff to be trained to Japan or to be promoted will be have to be done by the Manufacturing Department through what can be called as a delegated responsibility an understanding between HR and the line management because they felt that the respective department is more appropriate and know better who to send and to be trained. The advertisement and announcement of vacancies and the short listing of candidates will be done by HR Administrative Services Department. However, the interviewing process will be with the involvement of the respective departments on a collective responsibility depending on the positions. On company s policy on selections criteria, the company emphasized on the suitability of candidate. They give priorities to candidates with positive attributes and characteristics e.g., responsible, disciplined, versatile and team player and expect them to assimilate to the organizational objectives. Under their Global Recruitment Program, the Company s HR is working with

13 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution universities through the Deans and lecturers for their recommendations on sourcing of potential graduates. On the external recruitment, the company s recruit either fresh graduates or in some case they recruit those with experience particularly on higher and critical positions. Additionally, they also recruit potential Malaysian graduates to be who are studying in their final year in universities in Japan. These potential applicants are directly recruited by their HR team in Malaysia with cooperation from their parents company. In answering to the questions related to strategic recruitment/selection practices, the following explanations were made by the executives: Normally, we have the 3 year mid-term planning. However, it changes depending on the market in the next 3 years and also the planning by our Headquarters. For example, on the transfer of product that is currently produced in Japan to Malaysia, HQs will notify us at least one year prior to the transfer of production. Therefore, we still have enough time to plan for our manpower. In the case of short-term requirement e.g., we have two terms in a year. So in this short-term there will certainly be ups and down. Internally, we will have transfer of manpower depending on where it is much needed. Unless, if the total volume is significantly increasing, than we will need to recruit our manpower. Basically, it depends whether we will recruit or deploy. For our direct manpower staff (operators), the recruitment will depend on the volume. The increased in production will also lead to the increase in our manpower. Our basis of calculating our manpower requirement will be based on key performance per manpower. We will benchmark and use it as our productivity record (Senior HR Manager, Administrative Services Department). In the case of engineers, their jobs are different. E.g., in one line we only have one process engineer, whether the line produce 10 or 20 million pieces we still need one process engineer even when the production is going down. Normally, even with the increased in the production, we will not be increasing the number of engineers, except when there s transfer of production from our parent company in Japan to Malaysia. In this case, we need to start recruiting new engineers to prepare them for the new production that was transferred here. However, our increase of engineers is not normally parallel with our production quantity (Senior Section Manager, IC Department). On the requisition of manpower by the respective departments, HR will calculate the labor cost and come up with the structure. We will present it to the management. The purpose is to see whether an increase in production line, production amount and quantity are in line with the increase of manpower and labor cost. During the low production time, there are times that certain times the lines are producing at low capacity (HR Manager, Administrative Services Department). When asked on how do they deploy their staff during the low capacity period? The HR Manager, Administrative Services Department explains: 85

14 86 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Considering at this moment, we do have around 20 percent of temporary operators. We seldom terminate their contract even though production was down. We normally look at the next six months whether the trend are still good or is it a temporary production down. If it is just temporary production down, we will send them for training on our management innovation project to improve our productivity. Our factory operators have various skills and they are multi skilled. Our workers not only specialize on processing but these workers have been trained to do all other process or products. For instance, when the demand for one particular product is low, then these workers can be mobilized elsewhere according to their skills. The following is some of the replies by Department Manager, Manufacturing Department which illustrates on the line involvement in the recruitment/ selection practices. We will do our own manpower planning. My line managers will do the planning in accordance with our production requirement either on a long-term or shortterm. In order to determine our manpower need, we will calculate our manpower requirement based on the number of machine and also by looking at our efficiency rate of our current and past manpower. Another consideration is by looking at the demand and supply. We recruit and select based on our job description requirements. We are involved directly on the recruitment/selection of operators, technicians, and engineers. In fact, we will determine the candidates that we want to employ because HR cannot really understand our manpower needs, it s too technical sometimes. However, we work closely with HR. As for our selection criteria, a part from their academic result, we also look at their attitude through our probing. Normally, through the interviewing process, we will be able to see whether they can fit in or not. Another important criteria is their ability to work together as a team. Interview findings: Company B The respective departments will do their own manpower planning and they will send their manpower need to Corporate HR for overall manpower planning. The request for the new manpower need will be made by requisition to Corporate HR for consideration. HR will then evaluate their request by assessing on the manpower needs, and to ensure whether it had been accounted earlier in their business plan. Additionally, the respective departments have to justify on their manpower requirement e.g., request of manpower due to meeting additional business requirement or due to resignation. As part of their strategic recruitment/selection practices, the Assistant Manager Recruitment and Selection stressed that HR is not order takers when it comes to requisition of manpower. Importantly, HR will have to assess and match it with the organizational requirement prior making decision on the manpower request.

15 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution The Assistant Manager, Recruitment and Selection further describe their strategic recruitment/selection practices as follows: 87 HR will also discuss with the line managers on their manpower needs. Sometimes, if it is not a highly skill requirement, HR will propose for internal transfer. HR has to play a strategic role in order to be a business partner with their line managers. Finally, we have to justify to our Managing Director before we can actually recruit. Our MD will decide whether there s a need to recruit or not. Generally, he knows because he joined the meeting together with the Factory, HR, Finance and Sales. We advertised for vacant positions either internally, in the Job Street, through our website and also in newspapers. Our panel of interviewer involved HR and the respective manager from the departments that request the manpower. Generally, we have either one or two stages of interview depending on the position. For much higher position, our GM and MD will also be involved. For junior engineers, we normally take fresh candidates and some with one or two years experience. We also need an experienced staff for a quick fix request. For our direct staffing, we usually have 3 months manpower forecast. When they have confirmed the numbers, we will start the recruitment/ selection process. The factory representative will also be involved in the interviewing process. The selection process is not that critical because they are just unskilled workers and will be trained later in the factory. We will try to get the one with the good character and will also give them mathematical test. The factory representative will do the competence checking whether the candidates are fit to do the job or not. Once accepted they will report and will have to attend the 3 days orientation prior being deployed to the factory. Another explanation on the strategic recruitment/selection practices was made by Manager, Manufacturing Engineering, he says: Under our production strategy we will plan our manpower based on our process flowchart. Once this was done, we will discuss with the line supervisors on the number of manpower we required. Once the number has been determined, we will send our requisition to Corporate HR for advertisement and announcement. Our usual practice is we normally shortlist candidates with Cumulative Grade Point Average (CGPA) of 3 above with strong mathematics and science for engineering position. Sometimes we do conduct behavioral kind of interviewing system for our indirect staff though not fully implemented. For example, we asked question like, today you have a very important function, and however you are required to stay overtime, what is your respond? Generally, from the way they respond we would be able to gauge their character. We also have some standard questions and based on the answer we know the type of character one s is having. (Manager, Manufacturing Engineering) Generally, both companies are adapting flexible employment as their HR strategy. Their recruitment/selection of engineers focus on core talent with

16 88 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution skills required to match with the company s needs. They also embarked on contingent employment management through fixed term and contract staff depending on company s production requirements. Their manpower planning processes typically addresses future needs as well as current needs. Engineers and other executives positions are filled either internally or externally identified in advance. As noted they place great emphasis on the personality trait and characteristics of potential applicants that have the right match with the organizational need. Strategically, both companies emphasize that the potential candidates must have the ability to learn new skills and adapting to the cross functional activities, hence, in their selection they look for applicants who can be developed to meet their production and organizational need. Training/development practices The result on strategic approaches in training/development practices in Table 3 indicate the overall average mean score for Company A and B was (3.31) and (3.80) respectively, indicating that the overall response was above the midpoint score of between Moderate Extent and Great Extent. The mean score results also indicate both companies show higher means score on training and development linked with business/corporate strategy, training/development are an integral part of HR strategy, and training to meet future needs and current needs. These indicate that both Company A and Company B employed elements of strategic training/development process. Generally, interview evidence demonstrates company s emphasis given to the continuous improvement of individual talents through job related training, internal and external training, assignments under different manager, special projects. These are to ensure that the required skills are available to meet the changing business requirements and company s competitive advantage. On methods of training/development as shown in Table 4 shows the average mean score for Company A and B was (2.96) and (3.65) respectively. The top three highest mean score for items on methods of training/development practices of Company A include: (i) orientation program (3.40), (ii) on the job training (3.79), and (iii) specialized skill training (3.67). For Company B, the top three highest mean score was: (i) orientation program (4.07), (ii) on the job training (4.00), and (iii) specialized projects (3.79). Both companies shows higher mean score on orientation program and on the job training. The results indicate a wide and varying degree of training/development methods was used by both companies. The varying degrees could possibly be due to the nature of production whereby Company B is very much labor intensive as compared to Company A which is a semi-conductor company. Although production automation and mechanization are considerably important, however, overall production still depends on the quality and productivity of their human resources. Hence, the need for a continuous training as emphasized by both companies.

17 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Table 3. Strategic approaches in training/development Item Company A (N = 15) Company B (N =14) Mean SD Mean SD a. Training/development are linked with business/corporate strategy b. Training/development are an integral part of HR strategy c. Increasing focus on team building d. Performance feedback through evaluation e. Training/development an integral part of performance evaluation f. Development of all employees to close skill gap g. Training to meet future needs h. Training to meet current needs i. Promotes continuous learning Average Mean Score Notes: 1 = Little or No Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; 5 = Very Great Extent Methods of training/development Item Company A (N = 15) Company B (N =14) Mean SD Mean SD a. Orientation program b. Job rotation c. On the job training d. Off the job training e. Multi-skilling f. External training g. Special projects h. Competency-based training i. Specialized skill training j. Cross function training k. Coaching/mentoring l. Soft skills training Average Mean Score Notes: 1 = Little or No Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; 5 = Very Great Extent Table 4.

18 90 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution Interview findings: Company A After the company s restructuring in 1999, all training/development functions of their executives and non-executives was fully devolved to the Strategic Innovation Department (SMI). They are responsible to provide training/ development for executives, operators and technicians. They work very closely with other line managers. As required, the respective departments will submit the list of staff that needs to be trained and SMI will arrange training schedule and program. This is to ensure that their staffs are multi-skilled. After the staff s training, SMI also conducts theoretical assessment test and hands-on test to assess the staff. The following comments were made by HR Manager, Administrative Services Department and the Senior Manager Training and Development Strategic Innovation Department, describing their training/development process: Our training programs were based on our organizational strategy. It is top down because whatever we want to strategize for the next 6 months has to be based on our overall organizational strategy. We will come up with our training/ development strategy map which has to be integrated with the overall organizational strategy. For our new automotive production, our Engineering Department will have to identify what kind of engineer and knowledge they require. Since automotive production is of high quality, the department will identify those experienced engineer to be send to Japan for training. A part from utilizing our current staff, we will have to recruit new engineers to replace the engineers that were end to Japan. We will also get the support from our parent company in Japan for their engineers to come here and assist us with the setting up and training. For new operators and technicians, they have 5 days of training which is equivalent to 40 hours of training prior sending them to the production lines. Additionally, the line mangers will have to endorse before they goes to the production line. We have our yearly training schedule which is compulsory to all the staff of which everyone will have to fulfill. A part from that, the departments can also request their staff to be trained. We also keep the data of their training records to ensure that they comply with the training requirement. We do our own TNA and work closely with SMI. We have discussion with SMI and provide training inputs to them. Sometimes we will request training to Japan e.g., when we have new production lines where we require specific skills which are not available here. We have to continue training our staff to be multi-skilled, productive and efficient. We cannot keep on recruiting because we need to control our labor cost in order to be competitive. In answering to the questions on the methods of training for executives and non-executives, The Manager Strategic Management Innovation Department said:

19 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution We have Off Job and OJT training which is a combination of theory and practical training. We are now embarking on multi-media and e-training. We also have individual competency based training. If their performances are low, we will find out the problems and we will coach and monitor their performance. Our aim is to create the high potential. Those high potential will be recognized by promoting them or training them overseas. I have attended quite a number of training/development programs ever since with the company. The staffs have better opportunities to be trained either locally or overseas. Some of our operators and technicians have been trained in Japan. We attended Off Job and on the job training. As part of our annual training program we are also required to attend computer training, statistical tools training and also the motivational and leadership training. When I first joined the company, I have to attend our induction program and training programs for operators prior going to the line. In early years our training program was not systematic. However, with the establishment of SMI our training/development becomes more organized and there are more training opportunities for the staff. Interview findings: Company B In contrast to Company A having fully devolved their training/development functions for executives and non-executives to a separate department, Company B Corporate HR Department handles the training/development for their executive s staff. However, the training/development for non-executives staff was fully devolved to the HR Manufacturing Department. For the executives training/development programs, Corporate HR will do the overall training needs analysis (TNA) which is base on the company s mission plan and staff development plan. From there, Corporate HR will generate the courses for the year and also through the recommendations from the line managers. The following comments on the training/development process for the executives and non-executives were made by Assistant Manager, Training and Development Corporate HR and Manager, Training and Development Manufacturing Department respectively. Their comments were as follows: Apart from the common courses they also design the target base courses e.g., mission plan base i.e., the management staffs have to do benchmarking. Now, the trend is you have to benchmark with others to know where you are. So we have to conduct the course on strategic benchmarking. Let say in their mission plan they specify that they need to reduce the cost since it is one of the main issue of the company. So we will have to come up with courses that link to the organizational goals. Everyone has the chance to be trained. Our plan is to cater for everyone, depending on what kind of training that is useful to them. Some of the training is just specific for certain management staffs, e.g., like value engineering, which the purpose is to make the product cheaper and efficient. In this case it involves certain group like the research and development (R&D). 91

20 92 Abang Ekhsan Abang Othman, Recruitment Selection and Training Development Practices: Value-Added Contribution We do our own TNA here and determine the kind of training required for our staff in particular the non-executives staff i.e., operators and technicians. We have classroom training, OJT and Off Job training. The staff will also be on rotation to make them become multi-skilled. After the orientation program conducted by Corporate HR, the new recruits will be deployed to the factory. At the factory, they will be trained for two weeks before working on the production line. They will also be placed on a buddy system. The training is planned according to schedule. We also have the license system to determine whether a person is eligible to do such process or not. Depending on what they have been trained and what skill they posses, that will determine the kind of job they are going to perform. Only those who are qualified can perform the job The Executive Director, Manufacturing Department was also asked on the training/development process of their manpower, he emphasized on the importance of training/development which indicates his commitment on the importance of training: I really emphasized on the importance of developing our manpower. The No.1 is how to basically skill up our people. Like it or not, we have to continuously to be competitive. Therefore, we have to reduce defects, loss time due to machine breakdown, cycle time improvement, improvement on productivity and quality. We have to constantly improve, so we allocate a lot of training to develop the skills level of our staff. We also collaborate with our local university to train our supervisors on a six months course and also we have overseas training program to Japan. Company B develops their employees both through internal and external training. They have OJT, Off JT, job rotation, as well as classroom training to name a few. They believe these developmental practices as the key to their better product quality and labor productivity, hence contributing to the overall organizational effectiveness. As part of their training/development programs, every year the company send 20 over staffs to Japan for the off the job training. They include operators, supervisors and leaders specially selected for the 2 months off the job training. Perceptions on value-added contribution of SHRM towards organizational effectiveness In order to measure the perceptions on the value-added contribution, respondents were asked to indicate to what extend does the combinations of strategic HRM practices (recruitment/selections and training/development) contribute to the overall organizational effectiveness. The results on the overall assessment of perceived organizational effectiveness as shown in Table 5 indicates the average mean score for Company A and Company B was (3.63) and (4.02) respectively.