SUMMER INTERNSHIP PROJECT REPORT ON PSYCHOMETRIC TESTS FOR RECRUITMENT AND SELECTION AT LARSEN AND TOUBRO HEAVY ENGINEERING DIVISION IN PARTIAL FULLFILLMENT OF AWARD OF MASTER BUSINESS ADMINISTRATION- HUMAN RESOURCE SUBMITTED BY: ADITI GAUTAM A0102309173 MBA-HR AMITY BUSINESS SCHOOL
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SUMMER INTERNSHIP PROJECT REPORT
ON
PSYCHOMETRIC TESTS FOR RECRUITMENT AND SELECTION
AT
LARSEN AND TOUBRO
HEAVY ENGINEERING DIVISION
IN PARTIAL FULLFILLMENT OF AWARD OF MASTER BUSINESS ADMINISTRATION- HUMAN RESOURCE
SUBMITTED BY:
ADITI GAUTAM
A0102309173
MBA-HR
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY
INTRODUCTION
Today one of the most important decisions faced by any organization is recruiting the right
people. Some organizations appear to be highly effective while others struggle. Recruitment and
selection plays a vital role in planning of human resource of an organization.
Recruitment is the process of identifying and attracting a group of potential candidates from
within and outside the organization to evaluate for employment. Once these candidates are
identified, the process of selecting appropriate employees for employment can begin. This means
collecting, measuring, and evaluating information about candidates’ qualifications for specified
positions. Organizations use these practices to increase the likelihood of hiring individuals who
have the right skills and abilities to be successful in the target job.
This research is divided into two parts. Part one of this research includes deals with the
comparative analysis of the recruitment models L&T and Godrej & Boyce.
Conducting a gap analysis of the recruitment model of L&T.
Part two of this research deals with the study of psychometric tests which are used in the
recruitment and selection process and proposing a recruitment model for L&T.
PSYCHOMETRIC TESTS
Psychometric tests have been used since the early part of the 20th century and were originally
developed for use in educational psychology. These days, outside education, we are most likely
to encounter psychometric testing as part of the recruitment or selection process. Tests of this
sort are devised by occupational psychologists and their aim is to provide employers with a
reliable method of selecting the most suitable job applicants or candidates for promotion.
These are powerful tools used by organizations for the selection, development and management
of people. They provide help to management in areas such as motivation and team building.
When used in recruitment they ensure that candidates are treated fairly and measured against a
common yardstick. Tests can be used to challenge the stereo typed judgements made by
interviews and often enable a more objective analysis to take place than possible by interview
alone.
EXECUTIVE SUMMARY
The purpose of this project is to have in depth knowledge and analysis about the chosen topic of
interest. In a larger perspective the project intended at studying the recruitment and selection
process of L&T (HED), finding out the reasons of attrition and problems in the existing model of
the organization. Conducting a comparative analysis of recruitment process of L&T and Godrej.
The second part of the research deals with the detail study of the psychometric tests which are
used in the recruitment and selection processes. In the end proposing a modified model for L&T.
Following are the objectives of the study:
PART- ONE
To understand the recruitment and selection process at L&T (HED).
To critique the recruitment and selection process of L&T (HED).
To understand the recruitment process of Godrej and Boyce.
To conduct a gap analysis of recruitment process of L&T and Godrej & Boyce.
PART- TWO
To study the psychometric tests in detail
To propose a modified model of recruitment for L&T (HED).
LARSEN & TOUBRO
Larsen and Toubro is one of the largest engineering and construction organization in India. It
was founded in 1938 by two Danish engineers Henning Holck Larsen and Soren Kristian
Toubro in Mumbai.
It is one of the largest and most respected companies in India’s private sector. The company’s
businesses are supported by a wide marketing and distribution network and have established a
reputation for strong customer support.
The company has six operating divisions (ODs):
Engineering and Construction Projects (E&C)
Heavy Engineering Division (HED)
Electrical & Electronics (EBG)
Machinery & Industrial Products (MIPD)
IT and Technology Services.
OVERVIEW OF L&T (HED)
L&T's Heavy Engineering Division has established a reputation in global markets for quality
products. The Division manufactures and supplies custom designed and engineered critical
equipment and systems to the needs of core-sector industries and the defense sector. It is the
preferred supplier of equipment for a select range of products, globally.
The various sectors in which HED deals with:
Hydrocarbon sector : this sector includes the manufacturing of precision custom
engineered critical static hi tech equipment and systems for oil and gas refinery, cracker
petrochemical and fertilizer industries.
Defense sector : this sector includes the manufacturing of integrated naval combat
systems, land based systems, missile systems etc.
Aerospace sector : this sector includes the manufacturing of rocket motor casings,
convergent and divergent nozzles, titanium gas bottles, solar array deployment
mechanisms.
Nuclear Power secto r : this sector includes the manufacturing of pressurized heavy water
reactors (PHWRs) and fast breeder reactors (FBRs).
Ship Building sector : This sector includes the manufacturing of specialized ocean going
vessels, high tech vessels and prefabrication facilities.
The manufacturing units are in Powai, Vizag, Bangalore, Hazira, Ranoli, Coimbatore, Talegoan,
Sohar (Oman).
HED HR & PERSONNEL
HED-HR carries out these functions like Organizational management, Personnel administration,
Manpower management accurately; the broad scope of HR is divided into four main categories
and further sub-categories, namely;
Employee Benefits: Leave Rules, Medical benefits, Long term awards
Performance Management System (PMS): FAIR, MRF
Talent Acquisition: Recruitment, Amantran Scheme
Training & Development: Orientation, Staff Training, Leadership Schemes
RECRUITMENT PROCESS IN HED:
The objective HED is to ensure channeled selection of resources to enable achievement of the
company’s business goals.
For talent acquisition, HR team is very important, it ensures that the selection procedure of the
human assets be such that they are capable of selecting the best talent, in accordance with the
objectives of creating a pool of skilled and capable employees.
AMANTRAN SCHEME
Amantran scheme is the employee referral scheme which is used in HED. The employees who
currently working with L&T qualifies under this scheme can refer a friend of colleague for a
suitable position. If the referred employee gets selected the referral will get incentives.
RECRUITMENT AND SELECTION
Recruitment is the process of identifying and hiring best qualified candidates within or outside of
an organization for a job vacancy in timely and cost effective manner. The recruitment function
is very important for the human resource department of any organization. It provides the
organization with the people who have talents needed to achieve the strategic goals.
Recruitment and selection is an important strategy for shaping the culture of the organization.
Hiring of human assets is not an easy task, in order to select the right people with appropriate
skills and qualifications, it is necessary to implement the relevant recruitment strategies which
will help in the selection of the right candidate.
STAGES IN RECRUITMENT AND SELECTION PROCESS
STAGE 1 : ESTABLISHING THE BASIC FACTS (JOB ANALYSIS)
In this stage the analysis of various positions is done. Job analysis includes collecting
information about the duties, responsibilities, requirements, necessary skills and outcomes and
work environment of a particular job. The outcome of a job analysis is job description.
In job description , the first step is to prepare a person’s specification which defines the
background, education training personality and other characteristics of the person best suited to
fill the vacancy.
A portrait of an ideal candidate is drafted which helps in short listing of people for interview.
STAGE 2 : ATTRACTING A FIELD OF CANDIDATES (SOURCING)
In this stage, sourcing of candidates is done. Companies attract candidates from the pool of
talent. There are various ways by which a company can do sourcing:
Recruitment advertising
External services
Employment agencies
Candidate registers
Advertising agencies
Selection consultants
STAGE 3: ASSESSING THE CANDIDATE (SCREENING AND SELECTION)
This stage is the most important in this whole process and for the candidates it is stressful.
Different companies have their own respective selection procedures. Generally this stage
includes an aptitude test (entry level), interview round and result. At senior level most of the
companies do not take aptitude test but they prefer to take personality test and interview only.
There are various selection techniques:
Application form
Group discussion method
Interview
Psychometric tests (Aptitude and personality tests both)
Assessment Centre
General intelligence tests
The aptitude and intelligence tests measure the abilities like problem solving, decision making,
adaptability to change in circumstances.
The personality tests assess the behavior of a person and helps in tapping down his interpersonal
skills.
STAGE 4: PLACEMENT AND FOLLOW UP
In this stage candidates are hired and verification of their documents takes place.
EXISTING RECRUITMENT MODEL OF L&T
Requirement and Requisition
Sourcing of CVs
Recruitment round
Scrutiny by Dept.
Written Test
Technical Interview
Position Approval Round with GM/VP
HR Verification
Exit
NO
RECRUITMENT MODEL OF L&T
The current recruitment model of L&T discuss about the traditional methods of recruitment and
selection. The model starts with the human resource planning which includes planning of
workforce, critical job analysis is done in order to create a vacancy. A portrait of an ideal
candidate is drafted which helps in screening of the candidates.
Sourcing of resumes is done through various methods like posting job vacancies in newspapers,
internet portals, recruitment agencies etc. Various resumes reach the organization. After the
sourcing of resumes, the screening process starts in which the appropriate resumes are selected.
The selected candidates are then called for the written test which measures the aptitude of the
candidates.
There is a cut off score in the written test. Candidates who qualify the written test are selected
for the technical interview round. This round measures the technical skills of the candidates.
After the technical interview round there is a position approval round with General Manager or
Vice President. It is the formal introduction of the candidate with the seniors. Negotiation of
salary also takes place. When this round gets over the HR verification round takes place which
consists of verification of documents.
The HR verification is an important step for those candidates who have applied for the vacancies
which are available in Oman. The candidates have to go under medical check up before joining
the organization. This medical check up is done by the hospitals which are certified by the
organization. without the medical check up the Oman government will not permit the candidate
to work in their nation.
LITERATURE REVIEW
ATTRITION AND RETENTION
ATTRITION
The above recruitment model of L&T has some drawbacks due to which there is high attrition
rate in the organization, employees are leaving the company by working two to three years.
If the perception of the company by the labor pool is negative then there are serious recruitment
problems which are faced by the organization.
Solving recruitment issues will provide us with good pool of new employees. If these people
want to join the organization then it’s the organization which has to make efforts on its part that
this pool will contain good men and women who will make excellent additions to the company.
Based on various research papers I have tried to find out the causes of attrition and how the
above recruitment model can be modified through psychometric tests so that it will help in
reducing the attrition rate. Today attrition is one of the major problems faced by the HR
managers of the manufacturing industry.
The impact of attrition has received considerable attention by senior management, HR
professionals and industrial psychologists. It has proven to be one of the most costly and
seemingly intractable human resource challenges confronting organizations. There are many
reasons due to which the employees leave the organization. When employee is leaving the
organization is considered as attrition in one organization, it appears as talent acquisition by
other organization and for an individual it is considered as career growth and better quality of
life. (Ammu Anantharaja “ Causes of Attrition in organization: study of mid-size organization
in India”, Volume eight, No.11,2009 )
When employee leaves an organization, there is a drain from the area of knowledge
management. Attrition is a pain area in any organization that intends to have a knowledge
management system in place. In a famous article , attrition (through normal retirement or through
resignations) has been discussed as one of the pain areas in the field of knowledge management,
because vacancy of a position might be easier to fill in through the proper people-sourcing
approaches, but filling in the knowledge gap is not. This is particularly in context of a tough
economy where the concept of all-size-fits-all is no longer working, and vacancy of a position by
attrition is basically vacancy of a knowledge-base, and this vacancy in knowledge base cannot be
filled in by any person. ( Survo Raychaudhuri “Attrition Analytics: A Markov Analysis Attempt
for Attrition rate prediction and stabilization”, White Paper, Wipro Technologies).
The Knowledge Harvest
American Productivity and Quality Centre (APQC) has categorized three knowledge types that
are under attack through attrition:
1. Cultural Knowledge: this includes the management practices, values and respect of
hierarchy.
2. Historical Knowledge: this includes the organization’s journey from the day it was
founded till present.
3. Functional Knowledge: this includes the technical and operation processes.
The recruitment strategies of an organization should be modified on the basis of the type of
knowledge it needs from the market. It is evident that attrition rate among junior employees (2-4
yrs) would be higher for the functional knowledge part – associated with technical and
operational processes. (Survo Raychaudhuri, Attrition Analytics: A Markov Analysis Attempt
for Attrition rate prediction and stabilization”, White Paper, Wipro Technologies)
Organization should predict the attrition zones and these zones depend upon the type of
knowledge which is important to the organization. HR professionals should design such plans so
that they can stop the loss of employees from those critical positions.
Organizations tend to spend huge sums of money on recruitment, for web-postings, job fairs, ads,
employee referral bonuses, etc, and end up with 50% employees leaving before reaching any
level of proficiency.
Proper testing and screening, training, introduction of the apprenticeship scheme, aptitude
testing (10%), realistic job previews (8%), structured behavioral interviews (3%) can help in
preventing attrition.
RETENTION
Retention of existing employees is one of the major challenges to any organization. The
importance of retention rests in following reasons:
High turnover often leaves customers and employees in the lurch; departing employees
take a great deal of knowledge with them. This lack of continuity makes it hard to meet
organization’s goals and serve customers well.
The replacement of employees costs money. The cost of replacing an employee is
estimated as up to twice the individual’s annual salary.
Recruiting employees consumes a great deal of time and effort, much of it futile.
( Barb Wingfield, Janice Berry Retaining your employees: Fifty Minute series book)
In many organizations, losing employees has a domino effect. When one employee leaves, others
often wonder about opportunities elsewhere. Those other opportunities start to look better as
employees pick up the slack for those who have moved on.
Growth and development is an essential part of an employee’s career. If an employee can not
foresee his path of career development in his current organization, there are chances that he’ll
leave the organization as soon as he gets an opportunity. The work profile on which the
employee is working should be in sync with his capabilities. The profile should not be too low or
too high.
This work profile can be matched with the employee’s capabilities by using psychometric tests
such as Thomas Profile.
The goals of organization and individual goals should be synchronized in order to gain the
employee satisfaction.
The role of training and development also plays a major role in the retention of employees.
Employees should be trained and given chance to improve and enhance their skills.
Organization should not limit the resources on which organization’s success depends. Need for
trainings can be recognized from individual performance reviews, individual meetings, employee
satisfaction surveys and by being in constant touch with the employees.
Psychometric tests can help in this process by measuring the effectiveness of a training program.
Sometimes, relationships with supervisors and bosses become the reason to leave the
organization. The management is sometimes not able to provide an employee a supportive work
culture and environment in terms of personal or professional relationships. There are times when
an employee starts feeling bitterness towards the management or peers. This leads to less job
satisfaction and attrition. A supportive work culture helps grow employee professionally and
boosts employee satisfaction.
Interpersonal relationship and its orientation towards behavior can be measured by using FIRO-B
test. We can also measure the particular team role of a person by using Belbin Team Role.
(Manoj Parmesh, “ The need for new recruitment strategies”, HR Perspective, Weatherford
India Business Unit)
PART ONE:
PROBLEMS FACED BY (HED) LARSEN AND TOUBRO
DATA COMPILED FROM EXIT INTERVIEWS
Employee retention starts with recruitment and early departures arise from the wrong recruitment
process. Following are the main reasons why an employee leaves organization:
1. Job expectation
The job assigned to the employee was not he was expecting. Unexpected job
responsibilities lead to job dissatisfaction. The employer should clearly discuss with
employees what are their expectations and ask what they expect from organization.
2. Job and person mismatch
If a certain type of job is assigned to the employee which mismatches his personality then
he will not be able to perform well and will find reasons to quit the job.
3. Difficulty with superiors
“People leave managers not companies”. Many employees leave the organization
because of their immediate superiors and bosses. If your superior is awful with you then
it directly impacts on your emotional health and productivity.
4. Job Stress
Job stress can lead to the imbalance between work and life which lead to employee
leaving the organization.
5. Work Life Imbalance
The employer should match the benefits and work life services to the needs of your
people in the form of non traditional work schedules, extra holidays, simple comfortable
office space.
6. Compensation
Better compensation packages being offered by other companies.
7. New Job Offer
An attractive job offer which an employee thinks good for him with respect to job
responsibility, growth, learning, better work environment and compensation.
8. Higher Studies
An employee leaves an organization in order to pursue higher studies.
9. Better Opportunities Abroad
An employee leaves his company because there are better career opportunities abroad.
10. Culture Fit
If an employee is not able to adapt the work culture of the organization he might face
problems. A drastic change in the culture may give a culture shock to the employee.
ANALYSIS OF GAPS
1. Job expectation
At the time of recruitment process discuss with the potential candidates what they expect
from the organizations. Show them a clear picture of job. A correct assessment should be
done in order to know the expectations of candidates. There should be a match between
candidates’ expectations and what organization will provide them.
2. Job and person mismatch
There should be a perfect match between job and personality of potential candidate.
Personality assessment of employee can be done through various personality tests like
MBTI, 16PF and behavior event interview.
3. Difficulty with superiors
Different superiors or managers can stress out employees like can be too controlling, too
critical, too suspicious. They forget that the employees are not fixed assets they are
human beings. Psychometric tests can help the employees in determining the limit up to
which they can withstand stress, how they behave in stressful situations and working
style of an individual.
4. Culture fit
Every organization has its own culture of work and potential candidates have preferences
to work in particular organizational cultures. Psychometric tests determines in what kind
of a culture a candidate wants to work. At the time of recruitment if psychometric testing
is done it can help us in determining the working style of an individual.
PSYCHOMETRIC TESTS AS TOOL FOR RECRUITMENT AND SELECTION
Psychometrics is the branch of science which deals with scientific measurement of personality
and intelligence.
This branch of psychology is primarily concerned with the construction and validation of
measurement instruments such as questionnaires, test and personality assessment. Psychometric
analysis is done to measure what a person talks and thinks about. It is designed to measure the
concept of intelligence of an individual.
In an organization, the psychometric tools are used to select the right people for the right job and
to increase the organization effectiveness.
Various tools are employed for this purpose but an organization will chose only those tools that
match their specification.
Psychometric tools are used for assessing the behavioral aspects of an individual, it is also used
for appraisals, stress management and various training needs. Psychometric tests play a very
useful role in both the assessment and development of individuals.
psychometric tests
personality tests aptitude and ability test
Personality tests
Personality is defined as the particular pattern of behavior and thinking that prevails across time
and contexts, and differentiates one person from another.
Personality tests describe the character pattern of behavior, thoughts and feelings of a person.
Some examples of personality tests are MBTI, FIRO B, 16 PF etc.
Ability Tests
These tests measure general mental ability or intelligence of an individual. Ability tests can
categorized into the following:
Achievement test: Measures the previous learning and knowledge.
Aptitude test: Measures potential for acquiring a specific skill.
Intelligence test: Measures the potential to solve problems and adapt to changes.
Ability tests are used at the initial stage of the selection process. The candidates who score high
in this test are then selected for further stages.
Psychometric tests aim to measure attributes like intelligence, aptitude and personality, providing
a potential employer with an insight into how well you work with other people, how well you
handle stress, and whether you will be able to cope with the intellectual demands of the job.
Most of the established psychometric tests used in recruitment and selection make no attempt to
analyze your emotional or psychological stability.
As an indicator of your personality, preferences and abilities, psychometric tests can help
prospective employers to find the best match of individual to occupation and working
environment. As a recruitment and selection tool, these tests can be applied in a straightforward
way at the early stages of selection to screen-out candidates who are likely to be unsuitable for
the job or, using a more sophisticated approach, to provide guidance on career progression to
existing employees. Because the results of psychometric tests are used to influence such
important personnel decisions it is vital that the tests themselves are known to produce accurate
results based on standardized methods and statistical principles.
Psychometric testing is now used by over 80% of the Fortune 500 companies in the USA and by
over 75% of the Times Top 100 companies in the UK. Information technology' companies,
financial institutions, management consultancies, local authorities, the civil service, police
forces, fire services and the armed forces all make extensive use of use psychometric testing.
RECRUITMENT PRACTICES AT GODREJ AND BOYCE
Godrej & Boyce Mfg. Co. Ltd. the holding company of the Godrej Group, started its journey
with the manufacture of high quality locks in 1897. Today, this company has 15 diverse
business divisions offering consumer, office, and industrial products and services of the highest
quality to every corner of India and across the globe.
Divisions of Godrej:
Appliances, AV Solutions (Prima), Construction, Electricals & Electronics, Furniture (Interio),
Lawkim Motors, Locks, Material Handling, Precision Engineering, Precision Systems, Process