BX3023-Economic Growth and Sustainable
Question 1 : Hiring a worker
You are the HR manager of a firm and one or two similar vacancies need to be filled. You put an ad in the newspaper and receive 100 application letters. You are not looking forward to interviewing all 100 (too expensive) but decide to rely on a credential (i.e. a screening device) to reduce the list of applicants to 10, who you will interview
a) Which two key characteristics must your screening device have for this to be a sensible approach?
You’re not sure about the validity of your credential and decide to randomly pick eight applicants from the ten that meet the credential and two from the 90 who do not meet the credential. These 10 applicants will be interviewed.
You have done your interviews and end up with two candidates (Shane and Archie) who you think fit the job description best. Shane meets the credential, Archie does not. So you are a bit puzzled about the validity of the screening device you applied.
You proceed with both candidates and enter wage negotiations. You offer both applicants a job. However you include a probationary component in both job contracts.
b) Argue why the probationary component is a wise move given your distrust of the screening device?
Both workers accept the job offer and subsequently join your firm. Now it is time to review your recruitment procedure and you conclude that the credential you used was too stringent. So next time, you will use a less stringent credential and subsequently a less stringent first cut.
c) Argue what this change implies for the number of Type I (false positive) and Type II (false negative) errors?
d) Given your answer under c), would it now be more likely that you hang on to a probationary component in wage negotiations? Justify your answer.
Question 2 : Job design
The two workers that you have employed under Question 1, now need to be fitted into the organisation. You have depicted the skill sets of both workers and the job requirement of the two identical jobs in Figure 1, which shows that Shane possesses all skills (and more) that Archie has.
a) Would you team up these two workers? Justify your answer.
At the end of the probationary period you evaluate both workers and decide to retain Shane, but not Archie. You judge that your firm is better off with multi-skilled workers and Shane fits that description better.
b) Give two potential characteristics of your firm or its environment that explain why you are looking for multi-skilled workers?
To broaden the skills of Shane you decide he should do further training. You (i.e. the firm) decide to pay for the training, but there is a clause in the training contract: if Shane decides to leave the firm within five years after completing the training, he will have to repay the training costs completely
c) Argue what type of training Shane will do: firm specific or general training?
One advantage of multi-skilled workers is that they are better able to develop innovations within the firm, which benefit the firm.
d) Argue whether it is better to offer Shane general or firm specific training to maximise the capacity to innovate?
Question 3 : Turnover
Shane (the same one as under questions 1 and 2) completed the training. The five years that he cannot leave without repaying training costs are now over. You have to protect your firm against potential raiders who may target Shane, who you do not want to lose.
One way of dealing with the potential threat of workers leaving is limiting the cost of workers who leave.
Workers who leave.
a) Give two ways in which you can limit the costs of worker turnover
Assume Shane indeed gets raided. He informs you about it and wonders whether you are willing to match the offer he received from a competing firm.
b) Discuss the disadvantages from matching that offer apart from the additional wage costs you incur for Shane
You match the offer and Shane decides to stay. However, the economic recession bites a bit harder than expected and you need to lay-off a few workers. That said, you do not want to lose Shane
c) Would you propose to set up a buy-out scheme to get the required number of layoffs? Justify your answer.
d) Generally speaking, which workers would have the least value to the firm and hence be workers the firm would prefer to lay-off? Justify your answer.