Human Resource Issues of HSBC - Case Study Example

Human Resource Issues of HSBC Table of Contents Introduction 3 Factors affecting recruitment process 3 Model related to the recruitment process 4 Selection Procedure followed by the company 5 Components of a structured interview 7 Effectiveness of the selection process 9 Conclusion 12 Recommendation 12 Reference List 14 Bibliography 15 Appendix 16 Introduction HSBC is considered to be one of the worlds’s leading banks with a strong network covering around 73 countries and it was established in the year 1865 (Shen, 2005). It is an organization that operates globally with thousands of employees from different backgrounds. HSBC was first headquartered in Hong Kong and Shanghai and the new headquarters is in United Kingdom (Schuler, Jackson and Tarique, 2011). The recruitment and the selection process of the organization plays a key role in recruiting efficient employees who are able to handle the challenges that the organization faces. Factors affecting recruitment process A recruitment process carried out by a company depends on the several factors and it should be such that the HR managers can select ideal candidates for the post. HSBC uses various social media websites and newspapers to advertise for the job vacancy in their company (Dahan, et al., 2010). However there is a need that the newspapers ad reaches the right candidate looking for the job in the post that the company is offering. The process of sorting the applications should be done by the HR managers such that the potential candidates get a chance to participate in their recruitment process. Further before allowing the candidates for the recruitment process HSBC ensures that the document verified by the candidates is valid. The cost of carrying out the recruitment process also plays a key role in arranging the various rounds for the candidates to be recruited (Williamson, Lepak and King, 2003). It needs proper planning and implementation of the recruitment process. HSBC prepares its placement papers by appointing experts of various fields because the questions should such that it is able to judge the problem solving skills of the candidates. The professionals are paid extra remuneration for their contribution to the recruitment process. The company plans for a cost effective way of conducting the recruitment process such that too much fund is not invested in the process. HSBC’S recruitment process is fair and transparent and it focuses in selection of the right candidate for the post that they are offering (Collins, 2007). The HR managers also ensure that the selection process conducted by the company is valid in selection of potential candidates as employees. The newly hired candidates are trained by the company to make them efficient. Hence the entire process of the recruitment has to be framed in a structured way such that it can be implemented successfully. Since the newly hired candidates plays a key role in maintaining the reputation of the company hence care needs to be taken while hiring the right candidates. Another factor that affects the interview process is based on the capability of the HR managers to identify the potential candidates for the job vacancy of HSBC (Collins, 2007). The decision making process of the hiring managers contributes to the hiring of efficient candidates for the post. Model related to the recruitment process A model has been considered by the researcher which is known as the selection process model generally used by the hiring managers to conduct the selection process. The model indicates the theoretical interrelationship among the organizational variables such as advertising, job analysis, short listing of the potential candidates and recruitment of the candidates (Galanaki, 2002). It also matches with the recruitment and selection criteria followed by HSBC and the model serves as a best practice instrument for the recruitment as well as selection process. The model covers the activities of the recruitment process on a strategic, operational and tactical level. The model comprises of the critical success factors that influence the recruitment process such as approval by the selection committee, orientation, aptitude test, interview process and finally training the newly hired candidates. The selection process is generally carried out to fill in the vacancy within the organization and it is carried out through a detailed process. The HR managers of HSBC follow the steps that are specified within the model in order to ensure that the candidates are eligible for participating in the recruitment process and the candidates hired are capable of handling the tasks allotted to them. The model specifies the entire recruitment process carried out by the company along with the training provided to the candidates post recruitment (Collins and Stevens, 2002). Selection Procedure followed by the company Selection in a company can be of various types depending on the post for which the recruitment is to be carried out. In order to hire competent candidates HSBC considers several rounds of the recruitment procedure. The selection of an appropriate employee is very important particularly when the selection is made for a bank (Collins and Stevens, 2002). This is because a bank serves a number of customers and the employees in a bank have to be efficient enough to handle large number of customers simultaneously. There are various steps followed by the company for carrying out the recruitment process. Figure 1: Flow Chart showing the recruitment process followed by HSBC (Source: Collins and Stevens, 2002) At first the managers need to ensure the need of the manpower within the company and they need to advertise for the position in the newspapers and also publish the news in media as well as the journals. The human resource department of the bank is also responsible for stating the skills and knowledge required to be eligible for the post. Further the candidates applying for the post are called for the interview process by the HR managers of HSBC (Roberson, Collins and Oreg, 2005). The managers’ sort out the job applications received and then takes decision regarding the candidates to be called for the interview process. There are three approaches for selecting right candidates. The first criteria deals with the psychometric approach which deals with the systematic analysis of the job demands and the assessment of potential employees to make right choices in case of candidates selection. The approach involves logical steps to be taken and the rational decision making of the HR managers. The second approach deals with the decision action perspective which states that the successful selection of the candidates depends on the positive expectation, commitments and motivation of both the candidate as well as the recruiter. The third approach is that of the exchange perspective which depends mainly on the process of negotiation between the candidate and the recruiter (Collins and Stevens, 2002). Much information is exchanged between both the parties in order to derive compatibility. The compatibility in turn determines whether the candidate can prove to be dedicated employee or not. HSBC carries out the interview in four steps. The first step involves an aptitude test that is to be conducted for all the candidates who are called for the interview. Then the qualified candidates are called for the group discussion sessions where the candidates are divided into separate groups and then they are given a topic for discussion. The group discussion session is meant to assess the communication skills as well as the thinking capacity of the candidates (Ferris, Berkson and Harris, 2002). The last two rounds comprise of the Technical as well as the HR rounds where the candidates’ technical skills are assessed and their dedication towards the job is verified by the HR managers by interacting with the candidates. The willingness to work of the candidates can be judged by the HR managers through their responses. However the empirical data suggests that the numbers of employees have declined in the recent years and in India there are around 30,000 employees and the reason is possibly due to job cuts (Ferris, Berkson and Harris, 2002). Thus the company aims at recruiting around 10,000 employees in the next few years in India as well as other parts of the world to serve its growing customer base (Ferris, Berkson and Harris, 2002). Components of a structured interview The interview process that is conducted in HSBC measures the various aspects of the candidates before hiring them for the position. It assesses the social skills of the candidate is tested. A good interviewer within HSBC is able to analyse the skills within the candidates depending on their presentation as well as their responses to certain interview questions (Ferris, Berkson and Harris, 2002). The interview questions are framed in such a manner that it evaluates the candidates’ decision making power in case of challenges that they may face within the organization. Certain interviews are often based on the job experience of the candidates in order to analyse the skills that they have developed during their previous job. HSBC conducts the interview in two rounds which involves a technical round in order to evaluate the technical skills as well as the knowledge of any software that may be useful for the post for which they have applied (Ferris, Berkson and Harris, 2002). Further the HR round refers to a session with the HR manager of the company who assesses the personality traits as well as the behavioural characteristics of the candidates which contributes to the ultimate decision regarding the suitability of the candidate for the post. The evaluation process of HSBC comprises of various steps. The HR managers of HSBC provide scores to the responses of the candidates. They take a detailed note of the candidates’ responses and evaluate them thoroughly in order to ensure the suitability of the candidate for the job. However before the interview the candidate has to face two other rounds comprises of an aptitude test as well as a group discussion session (Galanaki, 2002). The aptitude test is meant for evaluating the basic knowledge of the candidate and the analytical skill that the candidate possesses. The aptitude test mainly consists of simple questionnaire on the subjects studied by the candidates in academics. The group discussion round analyses the candidates capability to work in team and listen to the views shared by the team members. It also analyses the capability of the candidates to develop and share their own views instantaneously on a particular topic. These processes are mainly used by the HSBC to choose the right candidate for the organization. However the line managers of the organization are efficient enough to handle a team of employees and train them in order to overcome the challenges. They are also supposed to inform the higher authority regarding the performance of the teams within an organization. The employees are considered as the assets of the organization and their performance has an impact on the organization’s performance (Collins, 2007). Hence the HR managers of HSBC are careful enough to hire candidates for the various posts in the organization. The hiring of the candidates also depends on the work experience of the candidates (Galanaki, 2002). There are some posts within the organization that hires employees who are well experienced in the field whereas the company also visits various institutions to hire fresher as they believe that the fresh candidates are highly enthusiastic to work in the challenging atmosphere and they can easily understand the company requirements for achieving success. Hence the selection procedure for such candidates is also different as they lack the work experience for the relevant post. The company also takes care of the newly hired employees by providing them with proper training in order to make them deal with the challenges such that they can perform well even under pressure. Imparting proper training to the newly hired candidates is considered to be an important principle followed by HSBC (Collins, 2007). Well trained candidates are expected to perform well and maintain the company’s reputation in the international markets (Schuler, Jackson and Tarique, 2011). Effectiveness of the selection process The human resource managers of HSBC conduct a unique selection process for hiring candidates for the various posts. It advertises in the local newspapers and magazines regarding the vacancies within the organization. The managers also take initiatives in clearly stating the job descriptions in order to avoid controversy among the applicants. Advertising in the news papers regarding the job vacancy within HSBC is considered to be an effective initiative by the managers because it informs the interested candidates about the vacancy and they can apply for the post. Further HSBC uses a very thorough evaluation of the candidates who are to be recruited (Schuler, Jackson and Tarique, 2011). This is because the newly hired candidates would play a key role in working with various teams in an organization and hence their communication skills should be evaluated before hiring. The aptitude test conducted by the company evaluates the basic knowledge as well as the analytical skills of the potential candidates. The group discussion round evaluates the communication as well as the decision making skills of the individuals. HSBC appoints expert supervisors who are capable of evaluating the responses of the candidates during the aptitude test as well as the group discussion session. The marking for the group discussion session depends on the presentation of the views of the candidates as well as listening to others’ views and then arriving at a solution for the issue under discussion (Schuler, Jackson and Tarique, 2011). The successful candidates are allowed to participate in the final round of interviews. The technical round it meant to judge the candidates knowledge regarding working on a computer. Since in the modern days most of the transactions are carries out online hence the company requires employees who are well versed with the technical skills. The personality of the candidates are assessed by the interviewers during the HR round when the candidates often have to face questions by the interviewer that judges their decision making power. However the selection procedure followed by HSBC is highly effective in hiring efficient as well as dedicated employees for the organization. Post recruitment training sessions carried out by the company are also important to judge whether the newly hired candidate is capable of following the training process accordingly or not (Shen, 2005). Training plays a key role in making the candidates accustomed to the work process followed by the company. The managers of HSBC impart training as well as the motivational skill development sessions to the newly hired candidates (Shen, 2005). The freshly picked graduates from the educational institutions are to be trained in a different manner in order to introduce them to the professional work atmosphere. The training and development program arranged by the company for the newly hired workers are helpful to them in order to understand the work culture and it also inculcates self-confidence among the individuals to participate in the decision making process. Further the company appoints line managers who play the role of the team leaders in order to handle various teams as well as train the newly hired members of the teams to cooperate with the team members and also share their views that would contribute to the welfare of the organization. They are also responsible for communicating with the clients and explaining the project to the team members and make them work accordingly for the success of the project (Shen, 2005). Since HSBC is an international bank operating all over the world it has large number employees and the HR managers are hiring new employees to serve the large number of customers. The employees newly hired are trained for the banking transactions that take place and the way they deal with their loyal customers. The bank has got various departments and hence the candidates hired for a particular department are to be trained in a special way to handle the customers (Schuler, Jackson and Tarique, 2011). Since a bank is considered under service sector, its objective is to provide services to its customers and thus expand its customer base. Hence the HR managers of HSBC checks for personality traits of candidate as well as the convincing power within them. These skills are further enhanced by imparting the employees with proper training (Schuler, Jackson and Tarique, 2011). Conclusion The researcher covers the entire recruitment process that is carried out by HSBC. The bank hires candidates for various posts within the organization and it follows a process selection model to carry out the different steps of the recruitment process. The HR managers within HSBC hire employees for various posts by considering various factors. They plan their process and the steps to be followed for conducting the entire process. As the employees are considered as important assets of the organization the hiring mangers carefully recruits the employees for the organization. The HR managers at first advertise for the job vacancy within their organization and carry out a short listing of the candidates applying for the post. The candidates are further called to participate in the recruitment process. The process comprises of evaluation of the skills of the candidates in various fields. The process starts with an aptitude test to analyse the basic skills of the candidates and then it ends with the final round of interview where the interviewer analyses the decision making as well as the problem solving skills of the candidate. The research states interview process followed by HSBC is highly efficient because the newly hired employees of HSBC are found to have contributed to a great deal in order to maintain the organization’s reputation. Recommendation The research reflects that HSBC conducts an effective recruitment procedure and hires employees who are dedicated to their work. However there are several factors that the HR managers need to take care while conducting the recruitment process. It is highly recommended that HR managers ensure that the advertisements reach the candidates interested in the job. Further short listing of the bio-data is important to provide opportunity to the potential candidates to participate in the recruitment process. The hiring of an efficient employee for the organization is very important as the employees contribute to the future growth prospect of the organization. Hence it is the duty of the HR managers to understand the requirement of the organization and search for appropriate candidates for the post. Proper screening of the candidates is necessary to understand their capability to handle the challenges faced by organization. The HR managers are recommended to structure their interview process in case large number of candidates is to be recruited. Often the recruitment process consumes a lot of time as HSBC follows so many steps for recruiting efficient employees. Hence the company may appoint several supervisors to supervise the recruitment process such that it is completed within the scheduled time. The line managers of the company are expected to the handle the various teams efficiently such that the team members perform well. Reference List Collins, C. J. and Stevens, C. K., 2002. The relationship between early recruitment-related activities and the application decisions of new labor-market entrants: a brand equity approach to recruitment. Journal of applied psychology, 87(6), pp. 1121. Collins, C. J., 2007. The interactive effects of recruitment practices and product awareness on job seekers employer knowledge and application behaviors. Journal of Applied Psychology, 92(1), pp.180. Dahan, N. M., Doh, J. P., Oetzel, J. and Yaziji, M. 2010. Corporate-NGO collaboration: co-creating new business models for developing markets. Long Range Planning, 43(2), pp. 326-342. De Cieri, H., Fenwick, M. and Hutchings, K. 2005. The challenge of international human resource management: Balancing the duality of strategy and practice. The International Journal of Human Resource Management, 16(4), pp. 584-598. Ferris, G. R., Berkson, H. M. and Harris, M. M., 2002. The recruitment interview process: Persuasion and organization reputation promotion in competitive labor markets. Human Resource Management Review, 12(3), pp. 359-375. Galanaki, E., 2002. The decision to recruit online: a descriptive study. Career Development International, 7(4), pp. 243-251. Roberson, Q. M., Collins, C. J. and Oreg, S., 2005. The effects of recruitment message specificity on applicant attraction to organizations. Journal of Business and Psychology, 19(3), pp. 319-339. Schuler, R. S., Jackson, S. E. and Tarique, I., 2011. Global talent management and global talent challenges: Strategic opportunities for IHRM. Journal of World Business, 46(4), pp. 506-516. Shen, J., 2005. Human resource outsourcing: 1990-2004. Journal of Organisational Transformation and Social Change, 2(3), pp. 275. Williamson, I. O., Lepak, D. P. and King, J., 2003. The effect of company recruitment web site orientation on individuals’ perceptions of organizational attractiveness. Journal of Vocational Behavior, 63(2), pp. 242-263. Bibliography Khandekar, A. and Sharma, A., 2005. Organizational learning in Indian organizations: a strategic HRM perspective. Journal of Small Business and Enterprise Development, 12(2), pp. 211-226. Manning, A., 2000. Pretty vacant: Recruitment in low‐wage labour markets.Oxford Bulletin of Economics and Statistics, 62(s1), pp. 747-770. Pappas, J. M. and Flaherty, K. E., 2006. The moderating role of individual-difference variables in compensation research. Journal of Managerial Psychology, 21(1), pp. 19-35. Saks, A. M. and Uggerslev, K. L., 2010. Sequential and combined effects of recruitment information on applicant reactions. Journal of Business and Psychology, 25(3), pp. 351-365. Turban, D. B. and Cable, D. M., 2003. Firm reputation and applicant pool characteristics. Journal of Organizational Behavior, 24(6), pp. 733-751. Appendix The organization chosen for conducting the research is HSBC Bank headquartered in UK. The bank serves a large number of the customers worldwide and is expected to expand its business farther. It offers a wide range of the financial services to its customers comprising of personal banking services, net banking services, corporate banking as well as business banking. The company has a significant presence in the world’s financial markets and it started it business in Hong Kong. The company has a large number of employees who serves its huge customer base and the bank has earned huge profits over the years. The hiring managers of HSBC conduct an analysis on the candidates’ ability to handle challenges within the organization and the employee’s efficiency contributes to the company’s success in the international market. Figure 2: Graph showing dividends and earnings per share of HSBC (Source: Schuler, Jackson and Tarique, 2011) The graph shows that the dividends as well as the earnings per share for HSBC have been rising over the years from 1995 to 2005. Hence the bank has been performing well over the years. Read More