HRM : A Key To Competitiveness

David E. Terpstra

HUMAN RESOURCE MANAGEMENT PRACTICES

COULD HELP PREPARE ORGANIZATIONS FOR THE
“BIG GLOBAL GAME”.
The article identifies seven HRM practices that might
help firms survive and prosper in the global economy:

(1) recruitment studies;

(2) validation studies;

(3) cognitive aptitude and ability tests;

(4) biographical information blanks;

(5) structured interviews;

(6) goal setting;

(7) rigorous evaluations of development activities.

RECRUITMENT STUDIES

 Research has found that some recruiting sources yield greater

proportions of high-performing employees than other sources.

For example, studies have indicated that informal sources (such

as direct applications and employee referrals) may yield higher
performing and more stable employees than formal recruiting
sources.

If organizations would expand the recruiting sources that they

employ and track the effectiveness of those sources, they could
end up being more profitable.
VALIDATION STUDIES

Validation studies are typically done to allow organizations to

estimate how well their selection devices (for example written
tests, interviews, or work-sample tests) predict future employee
performance.

The information yielded by validation studies lets HR managers

choose and use the more predictive selection devices; this in
turn results in more accurate selection decisions and higher-
performing employees.

Research has shown that the use of information generated

through validation studies may lead to annual productivity
increases in the millions for a single organization.
COGNITIVE APTITUDE AND ABILITY TESTS

A large body of research indicates that cognitive aptitude

and ability tests successfully predict performance for many
types of jobs and occupations.

In fact some qualitative and quantitative reviews have

concluded that cognitive aptitude and ability tests are
superior to all other alternative selection methods in
terms of identifying those who will be successful on the
Job.
BIOGRAPHICAL INFORMATION BLANKS

Biographical information blanks (BIBs) and weighted

application blanks (WABs) ask applicants questions about their
education, work history, background, life experiences, attitudes
and interests.

Statistical analyses are performed in order to determine

which responses to these questions are related to future work
performance, and job applicants are selected on the basis of
their weighted responses to the questions asked.

Very few organizations use either BIBs or WABs to select

new employees.
STRUCTURED INTERVIEWS

Interviews are used virtually by all organizations for selection

purposes; and many of these organizations place more weight on
the interview than on all other predictors used in the selection
process to arrive at a final hiring decision.

Interviews may be either unstructured or structured in

nature.

 In unstructured interviews, the format is quite loose and

each applicant may be asked a different set of questions.

Structured interviews are much more rigid and all job

applicants are asked the same set of questions in the same
order. Furthermore, the questions are drawn from a formal job
analysis and are all job-related in nature.
GOAL SETTING

A wide variety of motivational and employee development

techniques have been advanced that promise to increase the
performance of existing or current employees.

Goal-setting theory proposes that specific goals result in

greater effort than more general goals, that more difficult goals
(when accepted) lead to greater effort than easier goals and that
feedback on goal-directed behavior and goal achievement
increases effort and performance.

Goal setting applications are based on solid principles of

motivation theory and the empirical evidence indicates that they
work for many organizations.

The same cannot be said for many other practices that are
offered to organizations with the promise of increasing
performance and profitability.
RIGOROUS EVALUATIONS

One final HRM practice that is infrequently performed but

which has the potential to influence an organization’s profit
picture.

That practice is the rigorous evaluation of motivation and

training and development activities.

The HRM literature uniformly recommends that organizations

should use principles and methods of experimental and quasi-
experimental design rigorously to evaluate their motivational and
training and development programmes.

In the absence of a formal and rigorous evaluation study, an

organization might be more apt to continue to use an expensive
motivation or development activity that has no real effect on
employee performance or organizational productivity.
SUMMARY AND CONCLUSION

The global economic environment which is emerging will present

some interesting challenges and opportunities to organizations.

Some organizations will go under, some will survive and some will
not only survive but prosper.

One of the keys to an organization’s fate may lie in its HRM

practices.

Potential employees and potential HRM practices should be chosen

on the basis of empirical data.

Firms which use sound staffing practices are more profitable.