Signalling and Screening Theory

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The contemporary labour market is characterised by imperfect information. This occurrence can produce a degree of uncertainty for the Human Resource function, in particular recruitment and selection. The lack of clarity concerning the productive capabilities of potential employees has led employers to seek alternative avenues when recruiting and selecting workers. Signaling and screening theory are an important element in the recruitment and selection process. The increasing qualifications obtained by the workforce is a phenomenon producing various challenges to recruitment and selection. Challenges such as undermining of the efficacy of signaling as well as complicating the recruitment and selection process. A number of actions can be…show more content…
Having more applicants to organise, employers may require additional resources for recruitment and selection. Additional testing may be undertaken to predict productivity such as more psychometric testing to assess the more subjective attributes. The use of additional resources in an attempt to sort out applicants can act to complicate the recruiting and selection process. There are a number of possible actions employers can take to deal with increasing qualifications obtained in the workforce. A greater emphasis can be placed on psychometric testing for mental traits in addition to selecting on credentials. As productivity and efficiency are the ultimate objectives sought by employers, qualities such as motivation have precedence over credentials. While generic abilities may be hard to distinguish due to imperfect information it is these traits possessed by employees that will have a direct bearing on performance. Therefore more psychometric testing such as personality tests attempt to overcome the informational gap that exists prior to employment. In addition it also alleviates the issue of increased qualifications by recruiting and selecting on these terms. Another possible course of action employers could take is a greater focus on fit at the organisational and team level. Selection based on qualifications usually focuses more on individual and job fit. Fit at different levels is important as
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