2. HR management
August 30, 2022

2.4 Motivation and demotivation

Full video class on YouTube, summary and notes on Instagram, class extracts on TikTok, text below. Have fun!

Class objectives:

  • [Some HL] Discuss motivation theories (AO3)
  • Explain different types of rewards and training (AO2)
  • [HL only] Explain and calculate labour turnover (AO2, AO4)
  • [HL only] Explain different types of appraisal and recruitment (AO2)
  • [HL only] Compare & contrast internal and external recruitment (AO3)

The main point of this class is to understand a lot of stuff that relates to HR. On the one hand, the amount of information you need to process is high, but on the other hand, everything is pretty easy to understand and digest.

Motivation theories (some HL)

Discuss motivation theories (AO3)

Motivation refers to the reasons for behaving in a certain way, desire/effort/passion to succeed and reach certain achievements. It can be intrinsic (driven by internal factors, when you do something because you want to do it) and extrinsic (driven by external factors, when you do something because you will get a reward or will not get a punishment for doing it). Motivation is important, because if staff is motivated, it will result in job satisfaction that will lead to high productivity and high quality output, which will eventually result in higher profitability. Demotivated staff, on the contrary, will be dissatisfied with their job, will have low productivity and produce output of low quality, which will eventually result in low profitability.

In this part of class we will discuss 6 motivation theories. The last 3 are HL only.

Figure 1. Taylor's scientific management

According to Taylor’s Scientific Management theory, managers are in charge of planning, direction and control, whereas subordinates are rewarded using performance-related pay: the more they work, the more money they get. In addition, according to Taylor, there is a strict division of labour and specialisation at a workplace and all the tasks and expectations are clearly set and communicated to employees. All hiring decisions are made based on “scientific” objective parameters, not on how much a manager might potentially like the candidate emotionally.

Some of the things Frederick Taylor said: “What the workmen want from employers beyond anything else is higher wages” and “In the majority of cases, man deliberately plans to do as little as possible”. This sounds quite cynical, and yet Taylor’s theory works for some organisations up until now, even though the theory is about 100 years old.

On the one hand, Taylor’s theory works well for people who are driven by money. It also works for simple routine jobs where output can be easily quantified. In addition, the idea that “the more you work, the more you earn” is in line with certain cultures. On the other hand, mental output (such as teaching) is hard to measure, which makes the theory completely inapplicable to some professions. Besides, not all people are motivated by money. In addition, the more educated and experienced people are, the more they want to have a say in how things are done, except for merely being paid for performing certain tasks.

Figure 2. Maslow's hierarchy of needs

According to Maslow’s Hierarchy of Needs theory, people progress in their needs from the lower to the top level: once they are satisfied with physiological needs, they will be motivated by security; once they are satisfied with security, they will be motivated by social needs, etc. The five levels of needs (from the lowest to the highest) are:

  1. Physiological (basic) needs
  2. Security (safety) needs
  3. Social (love & belonging) needs
  4. Esteem (ego) needs
  5. Self-actualisation

According to Maslow, people can’t skip any levels and won’t be motivated by more than one level ahead. For example, if security needs aren’t satisfied, you won’t be motivated by self-actualisation, because only social needs will motivate you.

On the one hand, the theory is really straightforward and easy to use. It can be applied across all industries. In addition, the theory suggests that true motivation is only intrinsic, thus it forces managers to think of ways how to develop employees’ intrinsic motivation. On the other hand, in reality the hierarchy of needs is unique for all people. In addition, the levels in the hierarchy are impossible to measure and it is impossible to know whether you crossed the line between certain needs or no. And lastly, what motivates Jeff Bezos, who is definitely self-actualised? Or Elon Musk? Does it mean that they are very demotivated people now?

Figure 3. Herzberg's two-factor theory

According to Herzberg’s Two-Factor theory, there are two factors (surprise-surprise!) that impact motivation at a workplace. The first one is called hygiene factors — aspects of work that do not motivate but must be met to prevent dissatisfaction: organisational rules, regulations, policies, working conditions, pay. These things don’t motivate, but their absence really demotivates. Think about school toilet: I doubt it really motivates you, but I’m sure if there was no toilet, you’d be pretty demotivated. The second kind of factors is called motivators — factors that lead to the psychological growth of workers and hence increase satisfaction and performance at work: achievement, recognition, responsibility, advancement. Motivators motivate, haha! But if hygiene factors aren’t in place, then motivators won’t work at all (think about toilet again: does achievement matter when you don’t have a chance to pee?).

In addition to that, Herzberg believed that motivation can be achieved through job enlargement (more variety in tasks, but not more challenging), job enrichment (more complex and challenging tasks to maximise potential and sense of achievement) and job empowerment (delegating decision-making power to workers). So, enlargement and enrichment refer to number of tasks and their responsibility, and job empowerment refers to decision-making. For some reason, many of my students think that enlargement + enrichment = empowerment. This is not true! I hope the picture below will help you understand it:

Figure 4. Rob enlargement and job enrichment

Another thing that my students usually point out and make fun of is that Herzberg only considered intrinsic motivation as a true motivation. He called extrinsic motivation “movement”, so every time I assign homework to my students, they say “movement”…

On the one hand, hygiene factors open a new perspective: “what might motivate employees?” instead of “why are they demotivated?” which makes managers think in an unconventional way and be creative in motivating their subordinates. Two-factor theory promotes the individual needs: what motivates one employee, does not motivate another employee. In addition, it considers the complex nature of motivation: what motivates today, might not motivate tomorrow, because hygiene factors and motivators are dynamic and inflexible. On the other hand, two-factor theory can’t be applied to low-skilled low-paid labour because enrichment and empowerment will not work. Also, Herzberg’s research was based on accountants and engineers only, so there is no data that it will work across most professions. And lastly, not all employees will be motivated by enlargement/enrichment as it implies more work and responsibilities.

Standard Level students can relax now and make a cup of tea with a sandwich, but Higher Level students please stay with me for 3 more motivation theories.

Figure 5. McClelland’s acquired needs theory

According to McClelland’s acquired needs theory, all employees have three needs:

  1. Achievement — desire to succeed, master skills and achieve goals. People who have achievement as their main need prefer to work on their own, prefer medium-risk tasks and work best when creative and innovative solutions are required.
  2. Affiliation — need to be around others and be loved/admired. People who have affiliation as their main need are excellent team players, they are usually very happy but it matters to them a lot what others think of them.
  3. Power — desire to lead and inspire others. People with this type of need make good managers and prefer high-risk tasks, but are not necessarily the happiest people in an organisation.

The trick is that only one or two of these needs dominate in different people. Once managers can understand, which needs prevail in an employee, they will be able to think of appropriate motivators.

On the one hand, the focus of the theory is beyond identifying needs, it’s also about developing/acquiring needs, which opens a new way of thinking and a new motivation approach to managers. In addition, if managers use this theory, employees get tasks based on their personal needs. On the other hand, most people have all three needs that take turns at different times, so it’s hard to identify what really motivates people.

Figure 6. Deci and Ryan’s self-determination theory

According to Deci and Ryan’s self-determination theory, there are 2 types of motivation: autonomous (when you do something because you want to, can be either intrinsic or extrinsic) and controlled (when you do something for reward). They don’t conflict each other and one can be transformed into the other by people’s own efforts. The most productive employees internalise controlled motivation, i.e make it autonomous.

According to Deci and Ryan, all people have 3 types of universal needs:

  1. Competence — need to succeed, achieve, develop.
  2. Relatedness — care for and be cared by others, be part of the group.
  3. Autonomy — self-endorsed behaviour, need to be in charge of own choices and make decisions.

Employees are motivated when all 3 needs are met. So, managers should identify which of these three is least developed and make sure it becomes satisfied so that employees could be motivated to perform their tasks well.

On the one hand, the needs are universal and apply to everyone, so theory is pretty easy to use. In addition, theory promotes self-determination of employees, thus shifting the emphasis to developing intrinsic motivation. On the other hand, it is hard to identify how much of each need different employees require. Besides, many employees are driven only by rewards and aren’t able to internalise motivators if there’s no personal benefit, which makes the theory quite inapplicable to them.

Figure 7. Adams's equity theory and Vroom's expectancy theory

Actually these are two different theories, but they are related and similar and were developed at pretty much the same time. I guess that is why IB put them together.

According to Adams’s Equity theory, employees compare their efforts and rewards to those of their colleagues. They become demotivated if their inputs are greater than the outputs. Inputs —contributions made by employee. Outputs — financial and non-financial rewards rewards that employees get in return for their contributions. Workers are motivated only if their input-output ratio is equitable (fair) in relation to others in the workplace. In order to understand equity theory, consider how you might feel if your teacher gave you a low predicted grade for Business Management despite the fact that you put in a huge amount of effort into studying BM, and yet your classmate who put in very little effort was rewarded with a higher predicted grade.

Keep in mind that equity is not the same as equality. And fairness is not the same as sameness. Equity theory does not say that everyone has to be equal and treated in exactly the same way. It says that there should be equity among one’s inputs and outputs.

According to Vroom’s Expectancy theory, people act in a certain way because they expect certain outcomes for their behaviour. If there are no desired outcomes, employees will not alter their behaviour. For example, employees might think “if I work hard, I will get a promotion”. According to Vroom, what drives people is motivation force, which equals to expectancy times instrumentality times valence (MF = E x I x V). Expectancy is the belief that you will achieve the goal of you work hard (“I’ll get promoted if I work hard”). Instrumentality refers to potential benefits for achieving the goal (“I’ll get a pay raise and a company car if I get promoted”). Valence is an evaluation of potential benefits that determines the behaviour (“but I will have to spend 20% more time at work and will have to wear a tie every single day and will spend less time with my family”). All these three things multiplied together result in motivation force, that can be weak or strong, depending on the variables.

Let’s summarise equity and expectancy theory as if they were one theory. On the one hand, it provides a new perspective to managers: how employees see each other in relation to each other or how employees perceive rewards. In addition, it provides managers a new approach: changing rewards/outputs in order to change behaviour. On the other hand, it doesn’t always work: sometimes people act against their best interests because there are other variables in place (in addition to MF, E, I and V). Inputs and outputs cannot be quantified, as well as some rewards, which makes theory hard to apply. And lastly, it is quite subjective: people have different understandings of what ‘fairness’ and ‘rewards’ are.

Rewards and training

Explain different types of rewards and training (AO2)

There’s quite a lot of info in this part of class. In order to make it more digestible, let’s breakout down onto 3 parts: financial rewards, non-financial rewards, training.

Financial rewards

Financial rewards are cash benefits that are given to employees in return for their efforts and achievements. There are 8 types of financial rewards that the IB wants you to know: salary, wage (including time rate and piece rate), commission, performance-related pay (PRP), profit-related pay, employee share ownership schemes, fringe benefits. As always, it might be a good idea, to make notes using the table below.

Figure 8. Table for comparing types of financial rewards

Salary is a type of financial reward that is a sum of money is divided by 12 and paid in equal instalments monthly. Actually, the most important point here is not that it’s paid monthly (it doesn’t have to be like this, it can be paid twice a month too), but that it’s the same amount every time you get salary. On the one hand, salary is stable and you can easily predict your future income. On the other hand, employees are not motivated to work harder because salary is fixed and there is no need to put more effort than required by the contract.

Wage is a type of financial reward where employees are paid based on the amount of output they produce (piece rate) or the amount of time they spend at work (time rate). Piece rate, on the one hand, is fair and directly relates to output produced. It’s Taylor’s Scientific Management (see previous part of class) in action: the more you produce, the more you are paid. However, employees aren’t really motivated to produce high quality output, because only quantity matters when it comes to payment. So quality standards and clear expectations have to be set with employees who are paid piece rate. With regards to time rate, it encourages employees to stay at work longer and do more work. In addition, overtime rates are usually paid for extra work and it is a great chance to earn more. However, time does not always relate to quality and efficiency and many employees may choose to work slowly deliberately, in order to get paid more.

Important tip. Many students think that the main difference between salary and wage is that salary is paid monthly and wage is paid weekly. No no no! Even though these features of salaries and wages are true, it doesn’t necessarily have to be this way. You can pay salary weekly, and wage — monthly. What matters is that wage is directly related to output produced (piece rate) or time spent at work (time rate), and salary is fixed regardless of the effort, time and output. In case of salary, the employer relies on professionalism of workers and dismisses workers in case they don’t meet contractual obligations. Please don’t say that the main difference is that wage is weekly and salary is monthly. Cheers!

Commission is a type of financial reward that is a percentage of the deals/sales that an employee makes. For example, real estate agent A gets 5% commission for selling a house. If he sells a house worth $100.000, he’ll get $5.000. But if he sells a house worth $1 million, then commission will be $50.000! On the one hand, it is great to be rewarded for results and it motivates to make as many sales as possible. However, sometimes there are things in the external environment that are beyond salespeople’s control. For example, in times of recession and economic downturn, people spend less money, thus all salespeople earn lower commission, despite their skills and efforts.

Performance-related pay (PRP) is a type of financial reward that is usually a bonus that is paid in addition to salary. Simply speaking, it’s like piece rate, but for jobs that don’t involve production of tangible output (teaching, interior design, engineering, etc.), where the output may be hard to measure and thus performance targets are established based on metrics and KPIs other than the amount of output. On the one hand, it is a great way to motivate people who get salaries to work harder. On the other hard, performance targets are hard to set and may be subjective which might actually result in decreased productivity and demotivation.

Profit-related pay is a type of financial reward that is based on a portion of the profit that the organisation makes. On the one hand, it motivates people to work harder. For example, manager A receives 1% of profit in addition to salary. The higher the profit, the more money manager A makes, which is supposed to motivate manager A to work harder. On the other hand, sometimes low profit might be caused by external factors, such as recession, which results in lower profits despite the efforts of employees. In this case, staff might feel pretty demotivated.

Employee share ownership schemes is a type of a financial reward that implies giving company’s shares to employees as a bonus. Companies can either give some portion of shares to employees for free or sell shares to employees at a discounted rate or use a combination of these methods. Regardless of the method, employees are incentivised to work harder because they become shareholders (owners) of the company and understand that their contributions are directly related to the value of the company (and thus share price). However, employees who do not work hard enough (and actually devalue the company) jeopardise hardworking employees’ benefits. So, with employee share ownership scheme everyone is tied together and someone’s shortcomings might have a negative impact on the entire staff.

Fringe benefits is a type of a financial reward that is given to employees in a non-cash form (company car, company accommodation, medical insurance, tuition for children, gym or spa membership, etc.). On the one hand, it increases the net (“take home”) salaries to employees. For example, if company pays for everything, then employees are able to save most of their earnings. However, for some employees who do not use fringe benefits much, a cash compensation might be more appropriate.

Non-financial rewards

Non-financial rewards are non-cash benefits that are given to employees in return for their efforts and achievements. There are 6 types of financial rewards that the IB wants you to know: job enrichment, job rotation, job enlargement, empowerment, purpose/opportunity to make a difference, teamwork. As always, it might be a good idea to make notes using the table below.

Figure 9. Table for comparing types of non-financial rewards

We have already briefly discussed job enrichment, job enlargement and job empowerment in the previous part of class when we were learning Herzberg’s theory. Please mind the differences between these three.

Job enrichment is a type of non-financial reward that refers to an increase of challenge and responsibility, but not the increase in the number of tasks. Simply speaking, it’s a “level up” in tasks. For example, if someone’s job was to teach Business Management Standard Level course, job enrichment can be teaching Business Management Higher Level. On the one hand, it generally motivates people who like achievement and want to excel at their jobs. However, for some professions and people, job enrichment can be perceived as punishment and have a demotivating effect.

Job enlargement is a type of non-financial reward that refers to an increase in number of tasks, without increase in the challenge and responsibility levels. There is no “level up” in job enlargement. For example, if someone’s job is to teach one group of Standard Level Business Management students, job enlargement would be increasing it to two groups of SL students. On the one hand, it might work similar to job enrichment and have a motivating effect because it’s more challenging. On the other hand, if it’s simply giving more duties to someone, it will only demotivate.

Empowerment is a type of non-financial reward that refers to giving employees more decision-making opportunities and making them more in charge of their jobs. For example, empowered employees might be supervised less and provided with more freedom in how to do their jobs. On the one hand, people usually feel motivated when they feel that they are trusted with performing certain tasks without much supervision. On the other hand, empowered employees might not always manage the responsibility they were entrusted with very well and it might result in decreased productivity.

Important tip. Job enlargement and job enrichment are related and can be assigned to one category, but job empowerment and job rotation are not related to them. Very often students think that enlargement + enrichment = empowerment. This is not true. Enlargement and enrichment refer to the number of tasks and level of responsibility. Empowerment refers to decision-making. Rotation refers to switching jobs.

Job rotation is a type of non-financial reward that implies changing the working station with colleagues. For example, at a car factory, a team of 3 engineers might perform 3 tasks: painting, polishing and assembly. In order to make the job for these 3 engineers more interesting, they might all learn to perform these 3 tasks and take turns, as opposed to one person always doing one type of job. On the one hand, it’s motivating and it makes job less tedious. In addition, it makes the workforce more flexible: if painter is sick, assembler or polisher can take over his duties in his absence. However, it takes time to learn new tasks and productivity might decrease at the time of training. In addition, it is not applicable to all professions. For example, if I am rotated with an IB Mathematics teacher, I doubt I will be able to teach much…

Purpose/opportunity to make a difference is a type of non-financial reward that is providing employees with chances to be the advocate of positive social change. On the one hand, it might work very well in non-profit organisations (review NPOs in 1.2) where people usually do not work for money, but for a chance to achieve social goals. On the other hand, if a for-profit organisation overemphasises social aims and opportunities to make a difference, it might cause misunderstanding and dissatisfaction among staff.

Teamwork is a type of non-financial reward that implies organisation of employees into teams inside horizontal flat structures. It implies reduction of direct strict control and supervision inside teams and laissez-fair leadership. On the one hand, it can be really motivating for teams of skilful employees who can manage themselves well. On the other hand, teamwork implies shared responsibility, thus low performance of certain team members may have a negative impact on the entire team.

Training

Training is the process of providing opportunities for workers to acquire employment-related skills and knowledge. It can also be called professional development (PD). Training can be short-term and long-term. In a way, when you go to college for 4 years, it is actually a long-term training, because what you basically do there is acquiring employment-related skills… Training can be non-compulsory as well as obligatory, especially in professions that involve a certain physical risk to life. For example, miners, power supply station workers, factory workers have to have Health and Safety training before they are allowed to work. On the one hand, training develops employees and their skills and helps them to do their jobs more efficiently and exchange their knowledge with colleagues. However, training increases chances for employees to leave their current workplace and go to a better place, especially if training results in a well-recognised certification. For example, if IB school ABC provides IB workshops to its teachers, all teachers will get a certificate of attendance that makes them more employable and experienced. These teachers might use these certificates to apply for a job in school XYZ that pays higher salaries and provides better bonuses to teachers.

There are many types of training, but we will only focus on what IB wants you to know: induction, on-the-job and off-the-job. As usual, I suggest you make notes using the table below.

Figure 10. Table for comparing types of training

Induction training is a type of training aimed at introducing new employees to the organisation. It includes meeting key personnel, office tour, learning about new job role, company policies and practices. Induction training helps to settle in quicker, reduce potential mistakes, integrate into the corporate culture, get to know colleagues before actually starting work at a new place. However, job isn’t done during induction training.

On-the-job training is a type of training that takes place on-site. It saves costs, job gets done, output is produced, trainees get a chance to get to know colleagues, and there is no need to travel outside the workplace. However, mentor’s bad habits are passed on to the trainee, job isn’t done very well (because teaching, learning and working takes place at the same time), and mentor is not necessarily a good teacher, he/she is just a more experienced worker and there’s no guarantee that he/she knows well how to pass on knowledge.

Off-the-job training is a type of training that takes place off-site. On the one hand, this kind of training is provided by professional coaches whose job is to teach. In  addition, this training implies no distractions, because employees are off-site and their main task is to learn. And lastly, off-the-job training usually results in certificate of attendance which is recognised outside of workplace, so employees increase their chances of employability. On the other hand, this type of training is usually expensive and it is not necessarily in line with company culture or objectives, because it is provided by an external organisation. Another drawback could be the fact that usually this kind of training takes place after work or on weekends, which means that employees have to sacrifice personal time for it.

Turnover, appraisal, recruitment (HL only)

Explain and calculate labour turnover (AO2, AO4)

Explain different types of appraisal and recruitment (AO2)

Compare & contrast internal and external recruitment (AO3)

There’s quite a lot of info in this part of class too. In order to make it more digestible, let’s breakout down into 3 parts: turnover, appraisal, recruitment.

Turnover

Labour turnover is the rate at which employees leave a workplace and get replaced. The formula is: labour turnover = leaving staff ÷ total staff x 100. The opposite of turnover is retention. If staff turnover is 30%, then staff retention is 70%.

Organisations usually try to maintain high levels of staff retention, however 100% retention is not always desirable, because it might lead to the so-called “dead wood” — a situation when no fresh ideas and no new people come to organisation. The opposite of “dead wood” is “fresh blood”, which is generally good in moderation. Too much of anything is unhealthy for an organisation — be it high levels of staff retention, or high levels of staff turnover.

Appraisal

Appraisal is the formal assessment of an employee’s performance over a particular period (usually annually) that is usually conducted as an interview. On the one hand, appraisal helps employees to improve and increase productivity. At the same time, appraisal system makes sure the process is recorded which makes it more convenient to analyse data. On the other hand, it might demotivate and stress out staff if it’s too formal. In addition, it might be biased and subjective if expectations are not clearly communicated to employees. The types of appraisal are:

  1. Formative appraisal “forms” the employee. It is a developmental and learning process. The main idea is to help employees learn and improve, not to assess their results against certain criteria.
  2. Summative appraisal measures performance against standards and summarises employees’ achievements over a time period. It is more “test-like” because the main idea is to assess performance, not to help learn. Usually it is the most stressful type of appraisal.
  3. Self-appraisal is an opportunity for self-reflection. It helps employees to identify their own achievements and areas for improvement. The main idea of self-appraisal is to identify one’s own needs, rather then provide a second opinion. Usually it is the least stressful type of appraisal and at the same time the most motivating, because employees are given a chance to develop intrinsic motivation.
  4. 360-degree feedback is a collection of feedback from all colleagues, all levels of hierarchy, sometimes even customers. It is a great opportunity to hear from people other than senior staff (boss) who are usually perceived as the main criticisers. It gives a second opinion from several different perspectives.

Recruitment

Recruitment is the action of finding new people to join an organisation. For learning purposes, let’s break down the recruitment process into 8 stages and then discuss each stage in more detail:

  1. Vacancy arises
  2. Job analysis
  3. Job description & Person specification
  4. Job advertisement
  5. Receiving applications
  6. Short-listing
  7. Interviews (& Testing)
  8. Vacancy filled (& Rejecting & Contracts)
Figure 11. Vacancy arises

Stage 1. Vacancy arises. At this initial stage, the employer understands that a new person is needed either to replace a former employee or to take over some new duties. Basically, it is just an understanding that new person needs to be hired.

Figure 12. Job analyses

Stage 2. Job analysis is the process of identifying and recording the responsibilities for a job. It might refer to recollecting what the previous employee in that position did or it might refer to thinking about what the potential duties in the new position might be.

Figure 13. Job description and person specification

Stage 3. Job description (JD) and person specification (PS) are two documents that summarise the results of job analysis. Job description (JD) is a list of duties and responsibilities carried out by someone employed to do a specific job (this is a document about the job that needs to be done). Person specification (PS) is a document which outlines the requirements, qualifications, expertise, physical characteristics etc. for a specified job (this is a document about the ideal candidate for the job).

Figure 14. Job advertisement

Stage 4. Job advertisement refers to letting other people know that the vacancy is open for applications. Job can be advertised either to current staff, or to anyone outside the organisation, or both. So, there are two types of recruitment: internal recruitment, when a vacancy is filled by one of the current employees; and external recruitment, when a vacancy will be filled by someone new to the business.

Figure 15. Internal and external recruitment

If an organisation is using internal recruitment to fill the vacancy, then it might advertise job on a company website, or via email, or on a notice board. On the one hand, internal recruitment is cost-effective, there less down-time for new hires to settle in, there is less risk that the new hire won’t fit in, and it is motivating for all employees because they’ll know they can grow and get promoted in an organisation. On the other hand, internal recruitment implies fewer applicants (they are limited to within the organisation itself only), ’dead wood’ (when there are no newcomers and fresh ideas), and it might cause some internal political issues, if a new hire was chosen based on favouritism or other subjective criteria, as opposed to the contributions to the organisation.

If an organisation is using external recruitment to find the best candidate, then it might advertise job in newspapers, on the internet, via recruitment agencies, in job centres, using headhunting, by university visits, or employee referrals. Please leave a comment if you want me to elaborate more on what these things mean. On the one hand, external recruitment implies ’fresh blood’ (new ideas from people with a completely different perspective), a wider range of experiences, and larger pool of applicants (not limited with organisation itself). On the other hand, with external recruitment there is a greater degree of uncertainty (because candidates are completely new to the organisation), it might be more time-consuming (because the pool of potential candidates is unlimited), and it can be expensive if a recruitment agency is involved or if HR needs to process many applications.

Important tip. Keep in mind that it doesn’t have to be "either/or". Organisations can use internal and external recruitment at the same time.

Figure 16. Receiving job applications

Stage 5. Receiving applications. At this stage, candidates apply for the job that is advertised. Applications may include up to 3 documents:

  1. Application form — a brief form that employers create in order to help shortlist the best applicants before inviting them for an interview. It’s created by an organisation and filled in by the applicants.
  2. CV (resumé) is a summary of education, qualifications, work experience and other relevant characteristics of a candidate. Candidates prepare their own CVs themselves. Try to create one for yourself now and update it every year. It will help you to stay focused on your career.
  3. Cover letter is a brief supporting letter that candidates write while applying to job where they state why they are the best match for the given vacancy.

Keep in mind that it’s not always all 3 documents. Sometimes just CV is enough, sometimes employers ask for more supporting documents.

Figure 17. Short-listing

Stage 6. Short-listing refers to creating a list of the best applicants that will be invited to the next stage — interviews. In addition, at this stage, organisations notify candidates that were not shortlisted (rejected), thank them for their applications and wish them good luck in their future applications.

Figure 18. Job interview

Stage 7. Interviews and testing. So, shortlisted applicants are invited for an interview — a face-to-face meeting where the recruiters and applicants ask each other questions related to the potential employment. Interviews can be one-to-one, two-to-one (usually an expert in the related field of work and someone from HR), or a panel interview (more than two interviewers). If the interview went well, then the recruiters might want to contact candidate’s references (previous employers or teachers or both) and ask them for a reference letter. References are similar to college application recommendation letters. They are usually confidential (the candidate does not see them, they go directly from references to recruiters) and usually they include some sort of an evaluation form and/or a letter.

If the interview is not enough, recruiters might also arrange some tests to the candidates. It can be an aptitude  test (examines professional skills), a psychometric test (assesses candidate’s personality), a group situation test (examines candidate’s behaviour in a group of people), or an intelligence test (measures IQ or other metrics of intelligence).

Figure 19. Vacancy filled

Stage 8. Vacancy filled (plus rejections and contracts). At the final stage, recruiters make the decision about who to offer job to (i.e. about who is the best-fit candidate), unsuccessful applicants are informed that they did not get the job and thanked for participation. Successful candidates are offered a contract of employment.

Contract of employment is a written agreement that might include the following: job title, duties, dates of employment, hours and days of work, rates and methods of pay, holiday and sick leave, pension scheme arrangements, disciplinary procedures, termination and period of notice, names and signatures of both parties.

Employment (and thus, contract) can be part-time or full-time (depends on the hours spent at work) and permanent or temporary (depending on the period of employment).

Just to be clear, one of the assessment objectives for this part of class was “compare & contrast internal and external recruitment (AO3)”. So, in case you missed it, the types of recruitment are internal and external. You are expected to be able to evaluate them. In order to do so, see the pros and cons of these types of recruitment above (stage 4: job advertisement).

Let’s look back at class objectives. Do you feel you can do these things?

  • [Some HL] Discuss motivation theories (AO3)
  • Explain different types of rewards and training (AO2)
  • [HL only] Explain and calculate labour turnover (AO2, AO4)
  • [HL only] Explain different types of appraisal and recruitment (AO2)
  • [HL only] Compare & contrast internal and external recruitment (AO3)

Make sure you can define all of these:

  1. Motivation
  2. Intrinsic motivation
  3. Extrinsic motivation
  4. Demotivation
  5. Scientific management
  6. Taylor
  7. Hierarchy of needs
  8. Maslow
  9. Physiological needs
  10. Security needs
  11. Social needs
  12. Esteem needs
  13. Self-actualisation
  14. Two-factor theory
  15. Herzberg
  16. Hygiene factors
  17. Motivators
  18. Movement
  19. Job enlargement
  20. Job enrichment
  21. Job empowerment
  22. McClelland [HL]
  23. Acquired needs theory [HL]
  24. Achievement [HL]
  25. Affiliation [HL]
  26. Power [HL]
  27. Deci and Ryan [HL]
  28. Self-determination theory [HL]
  29. Autonomous motivation [HL]
  30. Controlled motivation [HL]
  31. Competence [HL]
  32. Relatedness [HL]
  33. Autonomy [HL]
  34. Adams [HL]
  35. Equity theory [HL]
  36. Inputs [HL]
  37. Outputs [HL]
  38. Vroom [HL]
  39. Expectancy theory [HL]
  40. Motivation force [HL]
  41. Expectancy [HL]
  42. Instrumentality [HL]
  43. Valence [HL]
  44. Financial rewards
  45. Salary
  46. Wage
  47. Time rate
  48. Piece rate
  49. Commission
  50. PRP
  51. Profit-related pay
  52. Employee share ownership schemes
  53. Fringe benefits
  54. Non-financial rewards
  55. Job enrichment
  56. Rob rotation
  57. Job enlargement
  58. Empowerment
  59. Opportunity to make a difference
  60. Teamwork
  61. Training
  62. Induction training
  63. On-the-job training
  64. Off-the-job training
  65. Professional development (PD)
  66. Staff turnover [HL]
  67. Staff retention [HL]
  68. “Dead wood” [HL]
  69. “Fresh blood” [HL]
  70. Appraisal [HL]
  71. Formative appraisal [HL]
  72. Summative appraisal [HL]
  73. Self-appraisal [HL]
  74. 360-degree feedback [HL]
  75. Recruitment [HL]
  76. Job analysis [HL]
  77. Job description (JD) [HL]
  78. Person specification (PS) [HL]
  79. Job advertisement [HL]
  80. Short-listing [HL]
  81. Job interview [HL]
  82. Internal recruitment [HL]
  83. External recruitment [HL]
  84. Application form [HL]
  85. CV (resumé) [HL]
  86. Cover letter [HL]
  87. Contract of employment [HL]

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