Multiple factors may predetermine the success of modern companies, and effective human resource management (HRM) is one of them. Leaders need to recruit and hire the best people, and employees should meet organizational expectations. Some managers prefer formal approaches and follow specific rules and regulations to ensure all employees get equal opportunities and rewards. There are also many leaders who avoid formality and follow their unique ideas and styles. PremiumSoft is an example of a company, the leaders of which hire creative people to maintain innovation and development through a mix of formal and informal forms of control. Ren Lin and Roi Choi are co-founders who have established a team-centric working environment for 24 people and continue searching for professional staff. This report will analyze their recruitment, selection, and performance management strategies to identify weak and strong elements and give recommendations for improvement and high-level performance evaluation. New graphic rating and behavioral observation scales, performance feedback, referrals, and monitoring can be applied. PremiumSoft has a solid background and many positive and creative ideas to become competitive and ready to hire the best talents.
Recruitment and Selection Strategy
Lin and Choi did not follow specific standards and obligations when they decided to organize a new company. They addressed their personal needs and interest to understand that people did not want to spend much time understanding design and programming details. They chose to create software products and applications to facilitate database management. They hired 22 individuals and divided them into three departments – software development, marketing, and customer service. Each department has a supervisor, but more attention is paid to software development because it is the initial organizational goal. One of the recent decisions is to expand the staff by 25%, which requires the evaluation of current recruitment sources, selection processes, and necessary changes.
Current Recruitment Sources
Today, organizations have access to a variety of recruitment sources, including official websites, agencies, job boards, and social media. At this moment, PremiumSoft is satisfied with the chosen sources and prefers to place advertisements on online recruitment websites where people are free to send their applications and fulfill the essential criteria. The company has three Hong Kong universities with good reputations from which they choose graduates and offer them jobs. Due to the small size of the organization and their personal selection preferences, the leaders of PremiumSoft do not find it necessary to consider other sources of recruitment. The pros of these choices are time-saving and the possibility of recognizing the right people. The staff does not spend many resources on ad creation or searching for people but uses the already offered database. However, such approaches have certain limitations: not many individuals meet their expectations, and not all applicants have experience in employment.
Organizational culture is one of the most remarkable characteristics of PremiumSoft. Lin and Choi maintain a relaxed and trustful working environment where task orientation and mutual collaboration are enhanced. Managers and leaders pay attention to selecting their future colleagues, and several principles are regularly followed. For example, most employees joined the company as university graduates. Therefore, applications of individuals with computer science degrees from solid universities are recognized first. Another selection criterion includes the choice of final year projects, and they choose students who investigated programming language proficiency. Then, managers initiate interviews during which they communicate with potential employees and evaluate their abilities and appropriateness to become a part of their professional team. They exclude shy individuals with poor communication skills and underline friendliness and awareness of the company’s culture. In other words, PremiumSoft relies on human feelings, not systems. On the one hand, the advantages are evident: increased trust, employee satisfaction, and understanding of the goals and progress. On the other hand, the shortages of professional incompetence, a lack of order, and work-life balance might affect the development and future of the organization.
Changes in Recruitment Sources
Despite the rapid and logical success of the already taken steps, PremiumSoft can implement some changes to improve its recruitment sources. According to the case, not many steps are taken to attract applicants and strengthen the brand and reputation of the organization. Current recruitment sources are electronic recruiting, advertisements on specific sites, and direct applicants. PremiumSoft might address private employment agencies that help to connect applicants and employers based on specific criteria, location, and personal interests. The services of public employment agencies may be inappropriate for the company because of the possibility of missing important details and the uniqueness of the company’s culture. Finally, relying on the results of their quarterly and weekly meetings and discussions, PremiumSoft should consider the creation of its talent pipeline where it is possible to enhance practical skills and nourish with crucial cultural and organizational knowledge.
Changes in Selection Methods
The selection process corresponds to the principles and beliefs of PremiumSoft leaders. Still, methodological improvements are recommended to allow managers to access better human resources. In addition to screening applications, checking backgrounds, and interviewing, the company misses such an important element as testing. In this case, no tests are mentioned to check the candidates’ professional skills and psychological conditions. Pre-employment tests reveal many personal aspects: job knowledge, cognitive abilities, emotional resistance, and self-assessment. Therefore, PremiumSoft can add several aptitude or personality tests to measure applicants and their readiness to support the already established working environment and contribute to growth and innovation.
Performance Management Strategy
Performance management strategies are usually developed to help managers evaluate their employees and monitor current achievements and failures for further improvement. The main goal is to ensure a positive working environment where all individuals are aware of the company’s mission and vision, complete their tasks, and introduce high-quality projects. Addressing this particular perspective, PremiunSoft’s strategy is not formal because leaders use the small size of the organization as an excuse not to evaluate their employees officially. They rely on personal evaluations of their supervisors in each department. However, direct communication and regular meetings allow controlling most activities and examining contributing outputs. Lin’s approach has certain pros and cons, and although some initial steps of performance management are missing, the company does not experience severe damage or unpredictable losses.
Most performance management activities should pursue strategic, administrative, and developmental purposes. The company does not apply such concepts as validity, reliability, and acceptability in its performance reports. Staff evaluations are initiated by supervisors; they are informal, unsystematic, and irregular, depending on workload, probation periods, and daily observations. For example, communication between a supervisor and employees occurs when the department is behind schedule or underperforms tasks. The essence of performance evaluation is to check the quality of the work and contributions to innovation and the company’s development. It is expected that employees share new ideas, solve problems, and maintain creativity.
Lin’s Approach Pros and Cons
The analysis of Lin’s approach to performance management reveals several ambiguous issues. It is possible to agree with the leader that formality is not always a critical determinant of organizational success. As such, personal observations, examining activities, and providing feedback are enough to initiate a performance management process and check how employees’ results are associated with the organization’s goals. Still, any strategy implies the presence of a certain scheme or structure, which is absent in PremiumSoft. There are no formal measurement methods to rate employees and differentiate their achievements. Lin believes that such a lack of systematization and differentiation does not provoke problems because most employees are happy and satisfied. However, employees want to be rewarded for their work and check the progress within a team, questioning the appropriateness of Lin’s approach a bit.
Suggestions to Improve the Performance Evaluation of Employees
When a company gets some suggestions to improve its performance levels, evaluation processes, or overall activities, it does not mean something bad has happened. Organizational shifts and recommendations prove that the staff has enough resources and experience to achieve better results. PremiumSoft has proved itself as a professional group of unique people who create new ideas even if the size is not big and the conditions are not systematic. Employees’ appraisal is not formal in the company, and as performance management presupposes measurement and some order, several methods and operational techniques for evaluations may be offered. Not to overload the leader with high obligations and requirements, such steps as implementing a graphic rating scale and a behavioral observation scale should be taken.
Graphic Rating Scale
One of the ways to assess employees is to use graphic rating scales with several criteria. There is no need to introduce an extensive list of traits that are not necessary for the company. PremiumSoft focuses on employee loyalty, attention to innovation, organizational development, and trust. Thus, such dimensions as knowledge, communication, teamwork, creativity, and problem-solving can be chosen. These areas are important to most positions in any department, and it will be interesting to see what people think of themselves and how they rate their skills. At the same time, supervisors complete a similar scale about each worker. As there are currently only 22 employees, this procedure will not be time-consuming.
Behavioral Observation Scale
Another suggestion includes the creation of behavioral observation scales with the help of which supervisors examine activities and behaviors necessary to perform the company’s tasks effectively. The frequency of preferred behaviors is usually rated from almost never and almost always, and the list of behaviors depends on what information is interesting to the leader. The examples are communication, support, knowledge exchange, and actual contributions. Not all behaviors are applicable: being late for work, excessive chatting, or personal talks during work hours. These activities should be mentioned in the list to check if there are any concerns about employees to solve them as early as possible and avoid turnover.
Measuring performance is a significant element in any organizational process. Employees need to understand that their work is recognized and properly evaluated. Although Lin shares feedback with his people, the current evaluation strategy may be improved. The leader uses only one approach to create an opinion about employee performance: positive and negative. However, the main principle of total quality management is applying several types of regular feedback, including subjective and statistical. Until the company has people who develop trustful relationships and demonstrate loyalty to its culture, no additional problems in communication and cooperation emerge. Still, small organizations cannot predict all conflicts, competitors, and performance changes. Thus, several feedback sessions should be planned to reveal problems, give recommendations, and find effective solutions.
Advice to Attract and Retain the Best Talents and Maintain Culture
Keeping in mind PremiumSoft’s culture and growth purposes, several pieces of advice can be given to Lin and Choi to attract new interesting people and retain the best talents in their team. This organization has already proved itself as a capable group of individuals who prefer flexibility and trust over control and regulations. Instead of dealing with papers and reports, managers spend more time communicating and creating the required products. The company has a certain database of potential employees within the three respected universities and a recruitment website. This time, finding at least six new people is necessary to develop a new product line.
Referrals and Cooperation with Universities
PremiumSoft’s co-founders rely on their intuition and feelings instead of following a particular system for hiring and retaining the best talents. However, attracting new employees is a current necessity for the company. Not to betray its culture and vision, the advice includes the promotion of referrals and cooperation with familiar individuals and facilities. For example, the already hired employees who have proved themselves as reliable may invite their friends to join the team. This approach will strengthen the chosen way of communication and collaboration and enhance trust in professional relationships. Universities may also offer their talents, reducing selection and attraction periods. In other words, when the company starts involving reliable individuals, the chances to continue the line of hiring the best experts in the field are high.
Job Satisfaction Monitoring
One of the reasons for a person not to leave a company is determined by satisfaction level. Lin admits his confidence that all employees are happy to work there, and those who have some concerns are free to go and find new sources of inspiration. To ensure that the best talents are retained, PremiumSoft might pay more attention to monitoring job satisfaction and recognizing problems at their early stages to offer some changes. In most cases, job satisfaction surveys are systematic and regular. Not to challenge PremiumSoft’s culture and attitudes, new monitoring steps should not be too informal and obligatory but rather an entertaining idea for the staff. It should not take much time to ask 22 employees, including supervisors, managers, and ordinary workers, to answer several questions and rate their presence in the company. Employers, in their turn, will see what people think of the environment, what changes may be offered, and if further shifts are beneficial or damaging.
PremiumSoft’s structure, role distribution, and the quality of relationships are the main contributors to the company’s success and competitive advantage. Leaders do not find it necessary to focus on formality and systematic reviews but prefer to rely on interpersonal connection and trust. Thus, most recommendations and advice given in this report do not impose obligatory formality and systematization of the work because this approach contradicts the organization’s already accepted culture and collaboration style. PremiumSoft needs to consider referrals as an effective way to find the best talents and support its mission and vision. Behavioral observations, satisfaction monitoring, and informal scales do not affect the leadership and management styles but add more ideas to enhance cooperation, recruitment, and overall performance.