You are now in the position of making a decision, but you have to justify your decision to the CEO. Using the economic tools and frameworks we have developed, provide economic arguments in defense of all three available options to you (promote, retain at the entry level for another year, terminate). Then make a decision and defend it using economic principles
- The structure of your firm has two lower-level positions: an entry level position in which each employee receives a one year contract and a second level position (i.e., one step up from entry level) in which employees receive three year contracts. At the end of the first year, entry level employees undergo a formal evaluation that has three possible outcomes: a promotion to the second level position with a three year contract, a renewal of the one year contract for a second year at the entry level, or termination from the firm. At the end of the three year contract at the second level, employees undergo a similar formal evaluation resulting in either renewal for another three years or termination. The firm makes initial hires at both the entry level and second level positions.
As the firm’s HR manager, you have a job applicant you are interested in hiring who has the resume qualifications of someone that you would typically hire at the second level position (with a three year contract). Although you firm has open positions at the entry level, your firm does not currently have any open second level positions, but you anticipate growth will enable you to have a second level position open in one year’s time. Because you like the applicant and don’t want him to take another job, you offer him a job at the entry level position. Even though he is overqualified, you expect he will both enjoy the job and be productive. He accepts and signs the standard one year contract which all entry level employees receive. Because of his qualifications, both you and the applicant expect for him to be promoted to the second level with a three year contract at the end of the first year evaluation.
- You are now in the position of making a decision, but you have to justify your decision to the CEO. Using the economic tools and frameworks we have developed, provide economic arguments in defense of all three available options to you (promote, retain at the entry level for another year, terminate). Then make a decision and defend it using economic principles.
- The initially hired employee now wants to be promoted given that his first-year contract is over and there is an open second level position. He undergoes the formal evaluation required at the end of the first-year contract for the entry level employee, but the evaluation scores are poor. You are surprised given that his resume suggested he would be a promising second level employee. What is one economic explanation for the unexpectedly poor evaluation scores?
- The contract and evaluation structure for this firm has a few modifications relative to the simple probationary period discussed in the lecture. What is one of those modifications and what are the advantages of that modification from the firm’s perspective relative to the simple probationary period?
We generally know that the small business owners often used to handle the HR related task themselves as the business faces the growth hiring of the full-time human resource professionals becomes a mandatory principle. The larger the company is the larger the departments are available. The companies who are bigger have n different department of human resource where a a few members works together and in that particular case and human resource manager or the director overseas their work and also used to develop the recruitment process and the strategies that will enhance the growth of the organisation. In general language we can say the HR department used to manage the employees life cycle. This features involve on boarding the employees, training them, managing the skills, also managing the relationships, and providing them growth in their career.
The role of human resource manager is that they are responsible for day to day activities planning and execution of all the strategies in the HR department. Also the role of HR manager is to form the strategies that are involved in the recruitment process and also look towards the staff benefits.
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