SELECTION AND HIRING THE RIGHT CANDIDATE:Application Blank, Orientation

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SME Management (MGT-601)

Lesson 27

SELECTION AND HIRING THE RIGHT CANDIDATE

It involves a number of activities which may be performed either by the owner-manager himself or with the

assistance of specialists.

Following is the process of selection.

� Application Blank

It contains a written record of candidates qualifications, name, experience, references etc. from a perusal of

the record, a broad idea can be formed about the applicant' potential.

� Personal Interview

The purpose of this interview is to ascertain technical competence of the candidate and his capacity to meet

the requirements of the position. The fundamental mistakes committed in interviewing are;

1) Not spending enough time analyzing the requirements of the job to be filled.

2) Failing to ask right questions to test strengths and weaknesses of the candidate,

3) Relying too much on gut reaction instead of making an objective analysis.

� Checking References

References listed by the applicant should be cross checked through telephone and preferably through a

written letter.

�

Employment Tests

Though not a sole criterion of selection, these tests are making the employee selection more efficient. These

are;-

1) Aptitude test to measure mechanical, electrical, manual dexterity and other potential talent.

2) Achievement test to measure performance (skill proficiency)

3) Intelligence test to measure general mental abilities e.g. verbal ability, reasoning, comprehension etc.

4) Personality test to select managers.

�

Final Interview

It is designed to final impression based on earlier assessments and particularly to ascertain interpersonal

competence (capability to go along well with others), whether he has autocratic/democratic disposition,

cooperativeness, rigidity flexibility. The interviewer should do well to adopt a balanced approach. He should

guard against "Halo effect" i.e. forming rational judgment on the basis of first impression. What happens is

that the interviewer forms a favorable or unfavorable impression of the applicant very early and searches for

confirmation. To guard against it, the interviewer should withhold judgement until after the interview.

� Physical Examination

Physical examination to determine whether the prospect meets health standards demanded by the job.

Orientation

The new employee should be provided thorough orientation regarding company policies and specific nature

of the job. It markedly reduces apprehension during the first few days of the employee. He should be

introduced to colleagues, explained as to how the job fits into overall goals of the company, the operations

and conditions of employment. Some employers have" Employee Handbooks" containing written

information about salient aspects of company e.g. company's expectations of employees, pay-policies,

working conditions, fringe benefits etc.

Wage and Salary Administration

Principal object of a compensation plan is to motivate employees to achieve higher levels of performance.

Following are the elements of wage and salary administration.

SME Management (MGT-601)

Wage & Salary Level.

Wage & Salary Structure.

Individual Wage Determination.

Method of Payment.

Individual Compensation or fringe benefits.

Management Control.

1- Wage & Salary Levels and Structure

The wages should be established by reference to the following:-

1. Prevalent Wage Levels in Industry.

2. Compliance with Minimum Wages Laws and other enactments governing compensation.

3. Standards and Values of the entrepreneur.

4. Consent of Trade Union.

By adhering to the above, a small firm can hire and retain productive work force.

2-Wage Determinations and Method of Payment

Determination of compensation for each position is the second step in salary administration. More

responsibilities and more difficult a job, higher should be the pay-packet. Also establish a range of

compensation for each position. The wage structure must be such that the staff has the motivation to work

for vertical movement. The incentives and fringe benefits associated with each position should also be

settled. To attract qualified, hardworking and loyal staff, small firms may introduce special awards.

Benefits to be offered to managers pose special problem. The popular forms of benefits given to

them include:

1. Stock Option.

2. Profit Sharing.

3. Use of Company Vehicle.

4. Club Membership.

Small firm should use its limited resources carefully and devise a productive salary administration. Broad

objectives of a good salary program include; maintenance of competitiveness, capacity to attract managers

of superior caliber, rewarding superior performance and motivating staff to achieve higher production

levels. Two more ingredients of efficient compensation plan are:-

1. It should link reward and performance,

2. It should ensure payment of reward as soon as after achievement.

Compensation plans suitable for small businesses are:-

1. Straight salary.

2. Hourly wage-to reward employees whose work is difficult to measure or where employer has no

control over output.

3. Piece rate.

4. Commission based on sales.

5. Combination of salary and commission.

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