EXPLORATION OF RECRUITMENT
PRACTICES IN SMALL ORGANIZATIONS
FROM THE STRATEGIC PERSPECTIVE
Master thesis, M.Sc.
Specialization: Human Resource Management
University of Groningen, Faculty of Economics and Business
August 14, 2008
GINTARE CEPINSKAITE Student number: 01741837
13A Taco Mesdagstraat 9718 KH Groningen Tel.: +31 (0)62-6991874 E-mail: G.Cepinskaite@student.rug.nl
University supervisor: Dr. F. Walter
Acknowledgments: Helpful comments on earlier drafts of this thesis were given by Dr. F. Walter, for which I am grateful. I am also thankful for the support of my closest family and friends, who
kept me motivated to successfully finish this master thesis. Finally, I want to thank all the interviewed small business-members for providing data and being patient in answering my never
ABSTRACT
Table of Contents ABSTRACT INTRODUCTION...………..5 Problem Description………6 Research Question……….………...8 Research Framework………...9
Organization of the Paper………..10
RECRUITMENT IN SMALL ORGANIZATIONS: CONTEMPORARY APPROACH………11
Strategic Objectives and Recruitment Objectives……….12
Strategic Recruitment Objectives and Type of Potential Employee………..13
Type of Potential Employee and Recruitment Source/Method……….14
Summary...….………15
METHODOLOGY………....15
Sample and Data Collection…..……….15
Data Analysis………...………..18
RECRUITMENT PRACTICES IN SMALL ORGANIZATIONS: FINDINGS..………19
Strategic Recruitment Objectives………....………..20
Strategic Recruitment Objectives and Type of Potential Team Member...23
Person-business fit...23
Person-team fit………...24
Type of Potential Team Member and Recruitment Source/Method...………..25
Recruiting for Team Effectiveness: A Model of Recruitment Practices in Small Organizations……….30
CONCLUSION………...31
Theoretical Contributions………..32
Practical Implications ……….………...33
Limitations and Future Research Directions………..34
INTRODUCTION
Recruitment practices, as the activities by which new employees are brought into organizations, are crucial for small organization’s survival, success and competitiveness (Brush, Greene & Hart, 2001). Small organizations (usually employing less than 50 employees) are among those that in developed countries account for approximately 95% of all enterprises and employ 66% of the workforce (UNCTAD, 2005; also see
Observatory on European SMEs [Nov.2006-Jan.2007]). The above numbers speak for themselves indicating that small organizations not only play a major role in world-wide economy, but are also the source of most new jobs.
Despite small businesses’ contribution to the world’s economy (Audretsch & Thurik, 2001), the interest in human-resource management (HRM) systems (including recruitment) in small organizations is comparatively recent (Price, 2007). Therefore, little is known about how small business-owners develop recruitment practices. In general, recruitment is perceived as a process where recruitment objectives drive recruitment practices (Breaugh, 1992). Traditionally, recruitment was directed towards establishing a so called person-job fit where the immediate needs of the specific job vacancies were the main drivers of the recruitment practices (Wanous, 1980). Therefore, in the traditional approach to recruitment practices, the most important recruitment objective was to identify and attract the right person for the specific job (Rynes & Barber, 1990).
where the most important recruitment objective is to identify and attract the right person for the organization (in terms of strategic business objectives; Millmore, 2003). Further, the new theoretical approach led to a considerable debate about what business strategy is; and therefore how various human resource practices (including recruitment) can be strategic if most of the time business strategy is reactive to various emergent business demands (Beardwell, 2007). This debate has focused on recruitment practices in large organizations. Yet, the debate of the strategic approach to various human resource practices could contribute to explaining recruitment practices in small organizations. So, the purpose of this study is to broaden the understanding of recruitment practices in small organizations by investigating recruitment practices in small organizations from the strategic perspective.
Problem Description
Besides the general lack of structured approaches to recruitment practices in small organizations (e.g., see Barber, 2006), I see the lack of attention to strategic issues in the literature on recruitment practices in small organizations, namely: the interpretation of recruitment objectives and neglect of the organizational context in which recruitment practices occur. Next, both of the issues are discussed in more detail.
As it was indicated before, any type of organization attaches some kind of purpose to their recruitment practices (Breaugh, 1992). For example, in the traditional sense employers were trying to achieve person-job fit, whereas from the strategic perspective employers are trying to achieve person-organization fit by applying specific recruitment practices. However, the conclusions regarding recruitment objectives (in any type of the organization) are achieved by almost exclusive reliance on applicant rather than
In order to understand why small business-owners recruit the way they do
recruitment practices should be investigated from the organization’s perspective starting with the context in which recruitment practices occur. However, the conclusions about recruitment practices in small organizations are usually made ignoring the small business context. Recruitment practices in small organizations are if not directly, then implicitly compared with recruitment practices in large organizations. Moreover, such large vs small organization comparison creates an opposition between formal (that dominate in large organizations) and informal (that dominate in small organizations) recruitment practices (Taylor, 2006; Taylor, Shaw & Atkinson, 2003). For example, according to Williamson’s (1975) efficiency imperative, large organizations, that are involved in recurring transactions try to formalize recruitment procedures in order to economize costs. Thus, small organizations that do not recruit that often and for that many positions, try to decrease the cost per applicant by applying informal practices (for similar
arguments see Marsden and Campbell [1990]).
However, recruitment practices in small organizations are not entirely informal. According to Kotey and Slade’s (2005) research on HRM practices in small
organizations, the level of formalized recruitment practices increases with organizational growth. This finding suggests that small business-owners might be choosing particular recruitment practices because they fit with their organization’s context (Cassell, Nadin, Gray & Clegg, 2002).
low priority” in small organizations as “managers struggle to ensure survival” (p. 486). That is, the level of informality in small organizations is associated with small
organizations’ ability to overcome barriers to their success. Thus, if small organizations want to perform successfully they have to be able to respond to various emerging business demands, whereas an accurate response to emerging business demands can be achieved by applying informal recruitment practices.
Different from these ideas, the second approach to the relationship between
organizational context and recruitment practices emphasizes the role of strategy in small organizations. For example, according to Hanks, Watson, Jensen and Chandler (1993), small organizations tend to be oriented towards aggressive search for opportunities and product development. Therefore, instead of following a formal business strategy small business-owners follow their intuition (for similar arguments see Mintzberg, Ahlstrand and Lampel [1998]). That is, in this case the level of informality in small organizations is associated with small organizations’ ability to pursue business opportunities.
Consequently, if business strategy itself is flexible (in terms that it can always be adapted to new business opportunities), then recruitment practices in small organizations also have to be flexible.
In sum, there is a transition from studying small organizations’ practices in the light of large organizations’ practices; however, there is still a lack of research that would explicitly show how strategic objectives of small business-owners influence recruitment practices in small organizations (e.g., see Barber’s [2006] arguments emphasizing the lack of strategic approaches to recruitment practices in small organizations)
Research Question
objectives and recruitment objectives. In general, the strategic approach to recruitment practices emphasizes the value of human capital for organization’s survival, success and competitiveness (Saks, 2005). Moreover, the match between business strategy and recruitment strategy is the main focus of the strategic recruitment literature (e.g., see Millmore, 2003). Having the above in mind, in case of strategic recruitment practices in small organizations strategic objectives of small business-owner could possibly overlap with the recruitment objectives. Thus, the general research question for this investigation is: How do strategic business objectives influence recruitment objectives and determine recruitment practices in small organizations?
Research Framework
In order to have a clear structure of recruitment development in small organizations, recruitment practices will be analyzed from a process perspective (e.g., see Breaugh & Starke, 2000). Saks’s (2005) definition of the strategic recruitment indicates the
multiplicity of recruitment. For example, according to Saks (2005), recruitment consists of the potential employee identification and attraction activities taken by the organization. Moreover, recruitment can be perceived not only as specific activities but also as
activities that are organized in a specific order (e.g., see Breaugh, 1992). The literature provides several models of the recruitment process, but for the purpose of identification of the relationship between strategic business objectives and recruitment objectives I will use three organizational activities suggested by Breaugh and Starke (2000). Breaugh and Starke’s (2000) framework for recruitment strategy development is based on the
relationship between strategic business objectives and recruitment objectives. Moreover, the offered framework includes three fundamental and interrelated stages that could represent a process of strategic recruitment in small organizations (see Figure 1).
*** Insert Figure 1 about here ***
Breaugh and Starke (2000), consists of the organizational decision on the type of
potential employee (i.e., specific characteristics of the potential employee that could help organization to realize its strategic objectives). Finally, during the third stage
organization has to identify where potential employees are (i.e., recruitment source – labour market sector); and to choose a recruitment method or methods that offer the best scenario for attracting qualified employees (i.e., advertisements and/or referrals, etc.) (for the difference between recruitment sources and recruitment methods, see Mondy, Noe and Premeaux, [2002]; or Breaugh, [1992: 53]).
In sum, I will explore recruitment practices in small organizations considering the relationship between strategic business and recruitment objectives that drive recruitment practices in small organizations. Moreover, responding to calls for attention towards research of recruitment practices from the organizational perspective (Saks, 2005; Taylor, 2006), recruitment in small organizations will be investigated as a process that consists of three major stages: strategic objectives and recruitment objectives; type of potential employee; and recruitment source/method. The before-mentioned recruitment stages will serve as a guiding framework for this investigation.
For the purposes of this study, any profit organization employing no more than 25 employees will be included in the research (The number of employees is based on the definition of small and medium-sized (SMEs) enterprises provided by the European Commission [EC, 2003].). This definition encompasses small businesses without regard to their growth orientation, as well as young and mature small organizations, since recruitment is practiced in any type of small business. In addition, no distinction among occupational characteristics (e.g., managerial or operational positions) will be made. Furthermore, only independent businesses (with no more than two co-owners) will be included in the study, because “small organizations that are sub-divisions of larger groups are likely to be subject to policies made elsewhere” (Bacon, Ackers, Storey & Coates, 1996: 85). Moreover, the focus will be on those recruitment practices which small businesses use to recruit from the external as opposed to internal labour market.
Organization of the paper
characteristics of recruitment practices that are relevant to each of the stages of the
strategic recruitment process in small organizations. The stages of the recruitment process will be discussed from the contemporary/strategic perspective to recruitment practices, and in turn, the arguments about development of recruitment practices in small
organizations will be framed. In the methodology section I will introduce the process of empirical research and explain the logic of steps taken in order to answer the research question. In the findings section I will introduce the main findings; and finally, in the conclusion section the suggestions for future research will be presented.
RECRUITMENT IN SMALL ORGANIZATIONS: CONTEMPORARY APPROACH
In general, recruitment research has been rooted in the traditional - psychometric model where the potential employee’s profile is assembled by careful job (including key tasks and responsibilities) analysis (Wanous, 1980). On the other hand, as it was
mentioned before, changes in socioeconomic conditions transformed the traditional approach to recruitment practices by shifting the emphasis on careful considerations how specific personal attributes of the potential employee could facilitate the achievement of strategic business objectives (Millmore et al., 2007).
Recruitment practices in small organizations will be investigated from the
contemporary – strategic approach. First, the contemporary approach incorporates the key features of the traditional recruitment practices. Second, the contemporary approach is more appropriate considering recruitment-related decision-making in today’s small business context, that is where recruitment-related decisions are rooted in both long-term (i.e. potential employee for future changes in organization) and short-term (i.e. potential employee for immediate needs of specific job vacancies) interests of small business-owners (e.g., see Harney & Dundon, 2006).
In order to build a theoretical base for investigating strategic recruitment in small organizations, the following section will be structured to reflect the relationships between variables from the model of strategic recruitment process. That is, first the specifics of the relationship between strategic objectives and recruitment objectives in small
organizations will be discussed. Then the presentation of the relationship between
theorizing will be presented regarding the relationship between type of potential employee and recruitment source/method.
Strategic Objectives and Recruitment Objectives
The most important feature that defines strategic recruitment is the match (strategic alignment) between strategic business objectives and recruitment objectives. According to Millmore (2003), if organizations recruit strategically the recruitment process must consist of three interdependent primary features: strategic considerations; a long-term perspective (person specifications and job descriptions should reflect future as well as more immediate organizational/role demands); and formalized human resource planning (HRP) that serves as a vital link between recruitment and organizational strategy. That is, according to Millmore (2003), the match between strategic business objectives and recruitment objectives can only be achieved through a formalized HRP. However, Millmore’s (2003) approach to strategic recruitment practices (which is based on the objectively rational decision-making model) probably would not be found among small organizations.
As it was mentioned before, business strategy (strategic business objectives) in small organizations is developed in a specific way. The explanation of strategy development in small organizations that reflects small business reality is provided by Mintzberg (1979) and Mintzberg et al., (1998) who argue, that small businesses are organic structures and business strategy revolves around the business-owner’s vision. This means that small organizations are typically dynamic (due to the high degree of uncertainty) and are run following, not a charted plan, but the business-owner’s vision (which in Sisson and Storey’s, [2000] terms is “the overarching view of where the organization could, and perhaps should, be heading” [p.60]). Actions and decisions in small organizations are usually not based on a systematically outlined strategy, but more on intuitive decision-making, that is, relying on intuition, judgment, wisdom, experience or insight of business-owners (Mintzberg et al., 1998).
The dynamic nature of strategic business objectives suggests that in case of strategic recruitment (where strategic business objectives have to be matched to
typically follow more general strategic objectives (vision) which, in turn, to some extend overlap with recruitment objectives. (Due to this possibility of overlapping, the
relationship between strategic recruitment objectives and recruitment objectives will be called strategic recruitment objectives.) For example, according to Barrett, Neeson & Billington (2007), small business-owners are looking for the so called right staff for their organizations, suggesting, that the type of the potential employee is defined according to the business-owner’s vision. Thus, the match between strategic recruitment practices and recruitment objectives in small organizations will be achieved once small business-owners direct their recruitment practices towards searching for such type of potential employees that could help organizations to achieve strategic business objectives.
Strategic Recruitment Objectives and Type of Potential Employee
As it was mentioned before, the primary feature of the strategic recruitment is the match between strategic business objectives and recruitment objectives. Strategic recruitment objectives, according to Breaugh and Starke (2005), dictate what type of potential employee an organization needs. Moreover, the type of potential employee in contemporary approach is associated with the potential employee’s future behaviour in the organization. For example, scholars have shown, that organizations (can) look for people who can adapt readily to future-changes in the organization or they can “recruit people who will become agents of change or shapers of the organization’s future destiny” (Millmore et al., 2007: 302; also see Schuler and Jackson’s [1987] identified twelve behavioural continua that can be matched to each of Porter’s [1980] three types of organizational strategies). Thus, long-term (future-oriented) recruitment practices can be directed not only at future-changes in terms of job-related tasks and responsibilities, but also “in part, at jobs that do not exist yet” (Millmore et al., 2007: 302). On the other hand, the immediate needs of specific job vacancies also have to be met. In this case, the
occupational requirements for the particular job determine the differences among the types of potential employees.
strategic recruitment have to recruit not only for the current but also for the future
business demands. In other words, small business-owners have to decide whether to look more for people with placid personalities who fit the prevailing organizational culture, or seek for people who would fit the job description, or look for versatile and adaptable individuals who are prepared for future changes.
Type of Potential Employee and Recruitment Source/Method
Once decided on the type of the potential employee, small business-owners have to decide on the particular recruitment source and/or method which would provide the organization with the potential employee (Breaugh & Starke, 2000). Usually studies that try to find a relationship between the type of potential employee and recruitment
Summary
After presenting various theories regarding recruitment practices in small
organizations that are relevant to three major stages of the strategic recruitment process, several strategic recruitment characteristics emerged. The first stage of strategic
recruitment represents the relationship between strategic business objectives and recruitment objectives in small organizations. It seems that in case of the above
mentioned relationship it is a visionary rather than systematically outlined strategy that drives recruitment practices in small organizations. That is, instead of matching a clearly defined business strategy to the recruitment strategy, small business-owners seem to adapt their recruitment objectives to the emergent strategic direction or emergent business demands. In other words, small business-owners’ vision to some extend overlaps with recruitment objectives resulting in what was called strategic recruitment objectives.
The second stage of strategic recruitment represents the relationship between strategic recruitment objectives and type of potential employee. The strategic perspective on recruitment practices in small organizations suggests that recruitment can be strategic if recruitment activities are directed towards looking for such a type of potential
employee that could meet both current and future business demands. It means that small business-owners should look for a potential employee who besides the job-specific knowledge, skills, and abilities would also meet the requirements of organization-specific competencies.
The third stage of strategic recruitment represents the relationship between the type of potential employee and recruitment source/method. The literature on recruitment practices in small organizations emphasizes the dominance of informal recruitment methods that, in turn, could be associated with such individual qualities as trust or attitude.
METHODOLOGY Sample and data collection
4 organizations were from the Netherlands. (See Appendix A for the more explicit background information on the case study organizations). Each organization employed not more than 25 employees, with an average of 7.5 employees per organization. The youngest investigated organization was 1.5 years old and the oldest was 10 years old at the time of the interview. The sample organizations came from a wide range of industries including management consulting, software developing, food service providers and one traveling agency. The size of the organization and its complete independence in terms of the ownership were the main sample criteria. However, the sample itself was formed following “replication logic”, where each case was carefully selected so that it either could predict similar results (a literal replication) or produce contrasting results but for predictable reasons (a theoretical replication; Yin, 1994: 46).
In total 10 semi-structured interviews were conducted. 7 of the interviews were made with small business-owners. Right after the interviews with the business-owners 3 supplementing interviews were made with employees from the following organizations: A (informal interview with an intern), C (interview with a waitress) and D (interview with an administrator). All of the interviewed business-owners were male. The youngest business-owner was 26 years old and the oldest was in his early fifties. All except one interview were conducted in the particular organization’s environment, which besides the interview allowed for a brief observation of the workplace itself. Before each of the interviews with the small business-owners, the official website of the organization was examined for some directive information and additionally, an Internet search engine was employed for finding out more information on the investigated organization.
meant by their statements; also statements were checked by observing the interviewees’ reaction to a particular interpretation of his/her previous statement.
During the interviews, the ordering of the questions was of crucial importance, for I began not with the specifics of the organization’s recruitment practices, but with the broader context — the organization’s history, products, technology and general
orientation to the future of the current business which is important for the investigation of recruitment objectives. This approach defined the content of the interview as well as facilitated the collection of data related to recruitment practices (Sandberg, 2005). All (except one informal interview) in-depth, open-ended interviews were recorded with the permission of the interviewees and transcribed verbatim so that the raw data could be systematically managed and analyzed. Appendix B gives the questions used to guide the first-phase interviews with small business-owners (the interview questions for employees were made in regards of data that was gathered during the interview with the business-owner).
In order to achieve clarity about the emerging themes and constructs that were created by analyzing the data of the interviews described before, I conducted some follow-up interviews with small business-owners. Before the interviews all 7 small business-owners were presented with preliminary findings from the data analysis – that is each of the small business-owners was presented with a cause map reflecting recruitment practices in the organization. These findings were sent to each of the small business-owners electronically as an attachment (together with instructions on how to read the map) asking to come up with comments on the presented cause maps. In total, 6 interviews were made with a maximum length of 30 minutes (due to business
The goal of such sequenced data collection was to increase substantially the depth of material covering the decision-making process about recruitment practices in each of the studied organizations or, in Creswell and Miller’s (2000) terms, this was “a validity procedure” where I searched for convergence among multiple and different sources of information to form themes or constructs in the study (p. 126).
Data analysis
In order to find out, how far strategic considerations drive recruitment practices in small organizations, the collected data about recruitment practices in small organizations was translated into categories and later into the final themes following a cognitive mapping (McDonald, Daniels & Harris, 2004) as well as an interpretive approach (Sandberg, 2005). After the initial interviews the raw data from each organization were developed into maps. That is, mapping helped to manage research data and ideas about recruitment practices in small organizations, for, it allows to “capture the conversation with all of its contradictions, meandering threads, underlying priorities and contextual explanations in a way that linear prose never can” (McDonald et al., 2004: 78). In other words, it helps to uncover the objectives of the recruitment practices that lie behind the interviewees reasoning.
The maps were completed following Eden and Ackerman’s (1998) practical suggestions on cognitive mapping. The basic idea of cognitive mapping is that the
As it was mentioned before, the initial findings were supplemented by the data from the follow-up interviews with 6 small business-owners, which in turn served as a final set of data. Having this final set of data, I kept on assessing the initial interview transcripts with the edited maps as well as I kept on checking my own interpretations against the sense of alternative perspectives. Moreover, I checked not only for similarities, but especially for the differences within and across the cases, until I believed I found the most meaningful interpretation of each small business-owner’s way of understanding recruitment practices (Sandberg, 2005). The themes were considered established only when they remained stable. Finally, after themes were generated, the representative examples and quotations were selected in order to add voice to the text (Wolcott, 1990), as presented in the following section.
RECRUITMENT PRACTICES IN SMALL ORGANIZATIONS: FINDINGS
The analysis of recruitment practices in small organizations from the strategic perspective led to several important findings. The major finding of this study is that recruitment practices in small organizations are directed towards building an effective team. Moreover, it was found that team-building (as a strategic aspect of recruitment practices in small organizations) dictates the type of potential employee an organization needs and in turn, influences the decision regarding specific recruitment source/method. That is, recruitment practices in small organizations are associated with team member search. Moreover, it was found, that potential team members in small organizations are identified according two types of fit, namely: person-business fit and person-team fit. Furthermore, the findings of the study suggest, that small business-owners prefer to use informal recruitment methods (and local labour market’s sector accordingly) because these are perceived as the means of finding a person who would contribute to the team’s effectiveness.
Further the findings are presented by specifying three major stages of the strategic recruitment process: first, the findings related to the strategic recruitment objectives in small organizations will be discussed by introducing a team as a strategic aspect of recruitment practices in small organizations. Second, during the discussion of the
the relationship between the type of potential employee and recruitment source/method findings regarding the recruitment source/method of potential team member will be introduced. Finally, based on the findings of the research, a model of strategic recruitment practices in small organizations will be proposed.
Strategic Recruitment Objectives
The major finding of this study shows, that the strategic nature of recruitment practices in small organizations lies in recruitment practices directed towards team-building. Why team? The small number of employees and the business-owner’s involvement in daily business activities encourage development of social relationships among people in the organization. Relationships in small organizations were not only emphasized by interviewees, but were also obvious from the observations of the
behaviours of organization members. At the time of the interview with C’s owner I could clearly see what the owner meant by describing a cocktail bar as “different than other places”. The difference in C was its “friendly atmosphere” (C: Employee interview). For example, once I came to the bar to conduct interviews I was greeted with smiles and nice welcoming of the staff. This was a usual Monday evening. The owner was a bit busy serving customers at the bar, so I had to wait. At the meantime, I could observe how the owner and two other female bar-tenders were interacting. The behaviour seemed to be very informal. That is, they called each other by their first names, shared jokes not only among each other but also with bar customers and giggled. It seemed that the owner and two other bar-tenders were having fun while working together. Moreover, according to G’s owner, “fun at work is very important”, for it “motivates employees”. Therefore small business-owners even try to create a special, motivating atmosphere for work. On the other hand, this motivating, friendly atmosphere, or simply put social relations among individuals involved results in what is called a team. The interviews showed that small business-owners associate their business with a team and each of the employees is perceived as a team member. Consequently, team is a recurring theme around which different patterns of recruitment practices emerge in small organizations.
team as a developing structure. As interviews showed, small business-owners expect potential employees if not to become agents of change then to adapt to future changes by working together with other employees (team members). For example:
…I look for people that are mutually beneficial to work for each other … I always look for somebody to fit into a team in their own way. It does not mean that they have to like each other, but in a way that they can get maximum of each other … they both have to get stronger out of it and do the end result... …Our target group is people with ideas…having a good company that is capable of moving people in any direction they ask for is our goal and if you get somebody who can make it easier – why not? If you have more people that can make a chance of success bigger – let’s do it! Of course, there are more mouths to feed but if you see an opportunity and it is good enough- why not [recruit somebody]?...(A: Owner interview)
As the above example shows, the small business-owner is looking for somebody who could grow/develop professionally by working with others. That is, A’s owner tries to bring about the conditions that are needed for business-evolution (“people that can make a chance of success bigger”, get “maximum, “stronger” out of working together). Moreover, A’s owner is concerned with the professional potential of the employees, which suggests, that there is a will to create a team which would be capable of meeting any future business demands.
Involvement in everyday business activities provides small business-owners with an opportunity to constantly examine the state of business (keep informed about the business directions) and more importantly, the effectiveness of employees. The importance of employee effectiveness is related to the organizational goal – to maximize the profit. The interviews showed, that once employee effectiveness becomes low (due to the business demands that current employees cannot meet) small business-owners start looking for a potential team member. For example, as G’s owner explained:
person too. But as I am still the owner of the company I hope people will work harder and harder… (G: Owner interview)
As the above example shows, the small business-owner is not willing to employ somebody new unless despite of extra effort (“I hope people will work harder and harder”) current employees cannot cope with emergent business demands. In other words, despite of responding, rather than predicting business demands, to some extent recruitment in small organizations is strategic, for it is directed towards creation of an effective team. That is, in the recruitment case and from the business-owner’s
perspective, the goal of the recruitment in small organizations is to create profitable business by focusing on the relationships among individuals involved.
The finding, that small organizations direct their recruitment practices towards team-building is in agreement with several assumptions regarding recruitment practices in small organizations. For example, in literature review of HRM practices in small organizations across Europe, Stavrou-Costea and Manson (2006) argue that small businesses may recruit by focusing on the fit of the applicants to “the existing group structures” of the organizations because duties and responsibilities in small organizations are broader and less specified (p. 114). That is, small organization owners expect their employees to handle multiple duties when needed and, more importantly, take on future jobs as they arise (Heneman, Heneman & Judge, 1997). Similarly, when addressing the issues of HRM practices in small organizations Heneman, Tansky and Camp (2000) suggested investigating HRM practices from team’s perspective. The authors suggested to focus future research on investigating a shared set of values and believes that team members might have regarding the effective operation of the team. Unfortunately, I could not find research that would focus particularly on recruitment practices in small
organizations from the team’s perspective. Moreover, scholars acknowledge a lack of existing theory regarding teams with hiring authority (e.g., see Forbes, Borchert, Zellmer-Bruhn and Sapienza’s [2006] investigation on entrepreneurial team formation].
Strategic Recruitment Objectives and Type of Potential Employee
As it was indicated before, when recruiting small business-owners identify potential employees in terms of two types of fits. That is, when recruiting, small
business-owners look for somebody who would not only fit into the business context but also could be a part of a team.
Person-business fit. Organizations do not operate in a vacuum but are embedded in
business-specific environments (in terms of industry/market type). That is, the interviews showed that the business context (industry/market) dictates what kind of knowledge, skills and abilities potential employee must have. For example, A provides relocation services and is focused on the Chinese and Indian markets. Therefore A’s owners are looking for diversity in cultural backgrounds among their potential team members, that is, somebody with the “local knowledge” (A: Owner interview).
If the first trigger of deciding on the type of the potential employee stems from the experienced business context in its widest sense, then the second trigger comes from personal experiences of the environment of the owned business - that is competitive strategy of the organization. For example, in case of D, its strategy is to be “all about people and communication” (D: Webpage material). Therefore the business is directed towards establishing a “friendly and liberal atmosphere” (D: Employee interview). Moreover, by creating a special atmosphere D’s owner expects to attract not only a specific type of customers, but also specific types of employees:
…I’m looking much more for personality rather than skills or experience because in this business, I think, it is much more about how you communicate, how you interact with people, and skills – we can teach you…
…I know what kind of people I want to attract but it is also…we are looking for staff who would be a bit similar to people we want to serve because they recognize each other and it makes communication easier… (D: Owner interview)
case waiters/waitresses/bar-tenders), who would be “a bit similar” (D: Owner interview) to their customers. A similar situation can be found in C which is a cocktail bar. In order to achieve competitive advantage C’s owners have created 20 pages customer service manual for their employees where such requirements as smile and proficiency in English language are among the first ones. As one of C’s employees explained, C is like “home for Erasmus students” and they like it when staff (referring to the waitresses who are also students) can communicate with them in English. (The support for the idea that profit-maximizing employers may desire a workforce that is demographically similar to the customers can also be found in the literature [e.g., see Leonard, Levine & Joshi, 2004])
Person-team fit. When identifying the type of the potential employee, small
business-owners consider not only person-business fit, but also person-team fit. That is, individual characteristics of the potential employee are directed towards matching the rest of the people who work in the organization. Nevertheless, the person-team fit depends on the degree of actual task interdependence among employees. In other words, some people (from the same organizations) need to work fairly closely with each other, whereas others need to work fairly independently. For example, F is a software developer and most of its employees are IT students from the nearby University who have to work closely together on various projects. Nevertheless, F’s owner employed an accountant who obviously does not develop software, but is perceived as one of the team members. The difference in task interdependence within employees from the same organization requires small business-owners to look for potential employees who would fit into the team but - in some cases for independent work and in some cases for a team-work. The explanation of the person-team fit where the level of task interdependence among employees is low stems from the following example:
The above fragment from the interview with G’s owner shows, that the team is associated with value similarity among employees. G is a national reseller of special holiday deals and major job activities in G consist of “talking to people on the phone” (G: Owner interview). Therefore, good skills in talking to customers or what G’s owner calls “be natural on the phone” is what determines the type of employee. Therefore, the purpose of the recruitment, in G owner’s view is related to “finding the right person for the right job” (G: Owner interview).
As it was indicated before, another type person-team fit is associated with a high degree of task interdependence among employees. Therefore, sometimes small business owners have to look for a potential team member who could do team-work. For example:
…if I see two people from a group working together and both of them have their strengths and weaknesses and I put them together, and then see that they like to work together, excel, then this is to me the main point. At the same time I am not afraid to put two people together just for the heck of the experiment to see if they can work together and if they get into a conflict, how they solve this conflict. It is very important to see that happening in them because it tells me a lot how they actually balance their own ideas, their own emotional feelings towards what the end result should be…(A: Owner interview)
In A’s case, some of the employees have to work together, or are even “put” together by the business-owner. As later A’s owner explained, such “experimenting” helps to identify the weakest parts of the team and complement them by the strengths of a new team member. That is, the type of potential team member, who has to work closely is associated with team-work qualities (“balance their own ideas, their own emotional feelings towards what the end result should be”).
As it was indicated before, team is a strategic aspect of recruitment practices in small organizations. As the above examples show, the type of potential employee is indicated by complementing the rest of the team-members with specific strengths, which, in turn, could guarantee that future business demands will be met successfully.
Type of Potential Employee and Recruitment Source/Method
means of finding a person who would contribute to the team’s effectiveness. In general, interviews with small business-owners demonstrated, a variety of recruitment methods used, namely: word-of-mouth (by the business-owner and by employees), referrals (social networks as well as business-to-business recommendations), Internet (vacancy ads on the owned website and ads on the special job-websites), career centers at universities, walk-ins, window ads, newspaper ads, recruitment agencies and head-hunting. Nevertheless, small business owner’s complained about the lack of quality, high prices and length (in terms of time) that is common for the formal recruitment methods (e.g., newspaper ads, recruitment agencies or head-hunting). Therefore, when looking for a specific type of potential employee, small business owners prefer and apply first informal recruitment methods, which, according to small business-owners, are cheap, fast and, most importantly, “work well” (A: Owner interview). For example:
…It [networking] is a more natural way of connecting with people…you know each other directly or through a mutual friend and it is easy to get in
touch…(B: Owner interview)
Or
…I tried head-hunting myself, I was impressed by the glossy packaging of this person and his public image – it was false…and the first signals about it came from the rest of the team, and later from the clients… I also tried employment agency once, but I did not like it a lot and since then I do not use their
services… (E: Owner interview)
As interviews showed, the quality of the recruitment method is associated with type of the potential team member, namely: person-business and person-team fit. For example:
sometimes can have a completely different opinion about a person. That is why I prefer to put people together myself…We do not look for a person for a paycheck but we do it for ourselves… (A: Owner interview)
The excerpt from the interview with A’s owner depicts the motivation that lies behind the decision to use informal recruitment method. A’s owner wants to find the right person for his team and therefore prefers to look for people himself (because he knows best what type of person is the best for the team) rather than using any type of mediators. Similarly, Bass (1982) emphasizes the importance of knowledge of interpersonal
compatibility, which eases communication and smoothens interaction among team members. Moreover, according to Gabarro (1990), interpersonal knowledge among team members is the primary focus of individuals during the early phases of team development and is essential for team functioning. Following the idea of knowledge of interpersonal compatibility it is important to note, that recruitment in small organizations can be done not only by the owners, but also by other employees. According to E’s owner, 90% of E’s staff is university students who once found out (through their friends) of the possibility to do an internship with the organization and stayed or were recognized as “experts” and were employed by the owner. Such strategy as word-of-mouth among the employees, according to E’s owner, is useful because:
…I encourage trust. People, in a sense, guarantee one for the other, and also control each other afterwards…
… If I am adapting to you [in case of recognized expert] it does not mean that you can do nothing. I mean, I expect the same from them - to work
hard…Person who does nothing is naturally thrown away from the team by the rest of the members… (E: Owner interview)
local Chinese community A’s owner decides to ask the Chinese he works with about the potential employees from the Chinese community. As A’s owner explains:
…I ask those [Chinese] who work for me at the moment… this is the best way because it is difficult to get in contact with Chinese, they are in their own community, society… if you want to get good local people, you better use local people yourself… (A: Owner interview)
Moreover, the above findings regarding informal recruitment practices support the argument that if members of a team would look for a potential team member with
particular expertise themselves then such recruitment method could have a positive effect on the whole team’s effectiveness (see Klimoski and Jones [1995] who discussed team-staffing issues). That is, in the case of E, team-members “naturally throw away” the unacceptable team-member who affects the team’s performance, and in the case of A its owner (who is also a team-member) tries to look for a potential employee who would make his team stronger.
Furthermore, as the interviews showed, small business-owners intensify the search by including formal recruitment methods usually when such difficulties occur: a pool of potential employees from informal sources becomes exhausted or is limited. For
…Networking, as a recruitment tool is fine, I think, but it is more about selection… If you select somebody because you think: “maybe he can do the job”…I needed help and it was hard to find good people, so I hired people I had my doubts about and it turned out to be a disaster they took no
responsibility…tests, assessment, in this part I can make some improvements… (B: Owner Interview)
As the above example shows, recruitment from the exhausted labour pool had a destructive influence on small business and made B’s owner think of making his recruitment more “professional”.
Another example of when small business-owners start using formal recruitment methods stems from C’s case. C’s owner decided to establish business in a foreign
country. As the interview with C’s owner showed, C owner’s network was limited and he had no other way but to look for potential employees using advertisements in the
newspapers and currently started using the job-websites on the Internet. Nevertheless, C’s owner tries to create the network through his current employees. That is, due to
difficulties in finding potential employees, small business-owners try to overcome the problem of limited labour pools by creating them. For example, the number of employees in C depends on the season, therefore, as one of C’s employees explained, C keeps in touch with seasonal employees that later C could re-employ them. Similarly, A and F have special databases with potential employee CV’s. Somehow differently, but also in order to create a pool of potential employees E’s owner tries to create “fun team-work” (E: Owner interview) atmosphere in the organization. According to E’s owner, such atmosphere helps in “spreading a good word” (E: Owner interview) about E and to attract more potential employees.
As the above presented findings show, potential employees for small businesses are mainly found relying on employer’s or employees’ networks which, in turn, are
Recruiting for Team Effectiveness: A Model of Recruitment Practices in Small Organizations
The purpose of this research was to explore how strategic business objectives influence recruitment objectives and determine recruitment practices in small
organizations. The results suggest that small organizations do recruit strategically by focusing on the recruitment for team effectiveness. Which means, that small business-owners expect to meet their business objectives by composing an effectively working team. In other words, the organization is perceived as a socially cohesive construct – a team - and therefore each of the employees is perceived as a team member. Based on the findings a model, for understanding how recruitment practices are developed in small organizations, was designed (see Figure 2).
*** Insert Figure 2 about here ***
The model describes a sequence of three distinct and interdependent stages of the recruitment process in small organizations. The first stage is a starting and the most important stage, for it influences the rest of the recruitment process. According to the findings, recruitment practices in small organizations are directed towards the creation of an effective team. That is team-building is a strategic aspect of recruitment practices in small organizations. Due to the importance of the effective functioning of a team,
recruitment objectives in small organizations overlap with strategic objectives resulting in strategic recruitment objectives.
The second stage is related to the type of potential employee that the small organization is looking for. The type of potential employee is characterized by a
Low level of task interdependence is related to the so called person-job fit and high level of task interdependence requires potential employee to be able to do team-work.
Nevertheless, it is important to bear in mind, that if team-building is a strategic aspect of recruitment practices in small organizations then small business-owners are looking for such type of potential employees, who would make an effective team. That is, whether type of the potential employee is defined in person-job fit or ability to do team-work small business owners expect their new employees to be a part of a team and be able to adapt to future changes.
The final stage of the recruitment practices in small organizations is related to the relationship between the type of potential employee and recruitment source/method. According to the findings of this study, small business-owners prefer to look for potential employees in their close environments by using networks. It means that small business-owners prefer to rely on local labour market sectors that could be reached through various networks. The importance of attracting somebody who is familiar with at least one of the employees from the organization or somebody who is recommended is associated with the right fit (person-business and person-team), and, in turn, with a good or even better business performance. Nevertheless, due to exhausted or limited labour pools small business owners tend to expand their pool of potential employees by including formal recruitment methods, or supplement these formal recruitment methods by creating small organization-specific labour pool.
In sum, the implication of the above described model is that it depicts the overlap of strategic objectives with recruitment objectives, which, in turn, determines recruitment practices in small organizations.
CONCLUSION
team effectiveness is associated with successful achievement of business goals. Based on the findings, a model of recruitment practices in small organizations is designed. The model consists of three recruitment stages, namely: strategic recruitment objectives; type of potential employee; and recruitment source/method. The three mentioned stages are interdependent. The strategic recruitment objectives are the drivers of recruitment practices in small organizations. As it was mentioned before, the strategic aspect of recruitment practices lies in team-building. Based on the findings, small organizations determine the type of potential employee by person-business fit and person-team fit. Moreover, when searching for potential team-members small business owners prefer to use informal recruitment methods, for these are associated with better
employee-organization fit. Formal recruitment methods are used in case of exhausted or limited labour pools from the owners’ or employees’ networks. Finally, in order to avoid the inefficiency of potential employees small business owners try to create a potential employee labour pool.
Theoretical Contributions
There are several important contributions that were made by this research. First, by using a strategic perspective on recruitment practices in small organizations research manages to give an explanation why small organizations recruit the way they do. That is, the research provides a model of recruitment practices in small organizations depicting the overlap of strategic business objectives with recruitment objectives, which, in turn, determines recruitment practices in small organizations. Due to the scarce research that could explain recruitment practices in small organizations (e.g., see Cardon & Stevens, 2004), the current investigation is extremely important in adding value to recruitment research in small organizations.
from typical teams, the team of small organization has a hiring power, and more importantly, every team member can contribute to the team-building process.
The current research also contributes to providing an explanation of the so called informality of the recruitment in small organizations. According to the findings, informal recruitment methods are perceived as means of finding the right person for the team. That is, potential employee in case of small organizations is associated with a potential team member. Informal recruitment methods play an important role in the team-building process and suggest that there is a process of becoming a potential team member.
Having the above in mind, the current research could contribute not only to new ways of thinking about recruitment practices in small organizations, but also to new ways of looking at team research (for a recent review on team research, see Mathieu, Maynard, Rapp & Gilson [2008]) .
Practical Implications
Due to the exploratory nature of the current research, one should interpret the current findings with care. However, there can be several practical implications made for practitioners. First, as it was argued before, recruitment practices can play a vital role in small organization’s survival, success and competitiveness. Therefore, small business owners when recruiting should consider such recruitment practices that would contribute to the team’s effectiveness. As findings showed, small business-owners perceive their organizations as teams where every employee is a team member. So, when recruiting it would be advisable to involve other team members as referrals of potential employees. Moreover, some team-related policies could help small business-owners to make sure that everybody is a team member. For example, maybe small business-owners should spare some time for meetings or discussions with the rest of employees. During such meetings or discussions the weakest parts (in a sense of skill, knowledge deficiencies in a team) of the team could be discussed and solutions of how to organize work or to find the right person for the team could be encouraged.
recruitment practices that would fit small business teams that are characterized with a varying degree of task interdependence among employees. An appreciation of small business as a unique social construct may facilitate recruitment practices most applicable to small organizations.
Limitations and Future Research Directions
Despite the contributions to the existing small business research and team composition research, this study has limitations. First, given that this is an exploratory study, care must be taken in generalizing the findings, for the findings were based on 7 small organizations in two European (Lithuanian and Dutch) cities. In order to avoid the possibility of country-specific bias and test the generalization of the findings from the current research future inquiries should be done by including small organizations from different cultures.
Moreover, although small business-owner’s perspective is appropriate (and in this case necessary) to provide data on recruitment practices, more members of the
organization should to be included in future research. As the results from the current research suggest, the whole organization seems to be perceived as a team and, it turn, employees are perceived as team members. Therefore recruitment practices in small organizations are directed towards finding a right team member. Having the above in mind, future studies should include a bigger number of team members in order to find out how exactly their perceptions of the organization influence recruitment practices. As current findings have shown, employees also play a role in a team-building process. That is, besides their own network small business-owners also use employees’ network in order to search for potential team members. Therefore, by including more employees in the future recruitment research it would be possible to capture the dynamics of the whole network structure that recruitment practices in small organizations seem to be based on.
Furthermore, according to the findings, small business-owners look for particular type of team members hoping to create a strong team which might strengthen the business against future uncertainties. Thus, future research could investigate the actual effectiveness of recruitment practices in small organizations considering it as a possible factor for small organizations failure or success. Qualitative research methods allowed capturing the objectives behind the recruitment practices in small organizations. However, due to the high degree of failures among small businesses it would be appropriate to test if small business-owners’ hopes become true. That is, if small business-owners indeed create effectively working teams. Longitudinal research in combination with qualitative and quantitative research methods would help to evaluate the importance of team-building practices in small organizations.
Another important suggestion for future research would be to investigate the relationship between the number of employees and the perception of team. The average number of employees in this research was 7.5. So, it would be interesting to see, if the objectives of recruitment practices change when the number of employees increases, for there might be a relationship between recruitment practices and core/peripheral
employees in small organizations.
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