Vinay Krishna - HRM Case Study (Ch 6 ) PDF

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6. Employee Testing and SelectionCase Study: The InsiderCase Summary: A federal jury convicted a stock trader who worked fo r a well-known investment firm, along with two alleged accomplices, of insider trading. The trader got inside information about pending mergers from lawyers. The lawyers allege...

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6. Employee Testing and Selection Case Study: The Insider Case Summary: 1. A federal jury convicted a stock trader who worked for a well-known investment firm, along with two alleged accomplices, of insider trading. 2. The trader got inside information about pending mergers from lawyers. The lawyers allegedly browsed around their law firm picking up information about corporate deals others in the firm were working on. 3. Such “inside” information reportedly helped the trader (and his investment firm) earn millions of dollars. The trader would then allegedly thank the lawyers with envelopes filled with cash. 4. Federal and state laws prohibit them and investment firms have their own compliance procedures to identify and head off shady trades. 5. The problem is that controlling such behavior once the firm has someone working for it who may be prone to engage in insider trading isn’t easy. 6. “Better to avoid hiring such people in the first place” 7. The heads of several investment firms were discussing the conviction, and what they could do to make sure something like that didn’t occur in their firms. “It’s not just compliance,” said one. “We’ve got to keep out the bad apples.” Questions: 1. We want you to design an employee selection program for hiring stock traders. We already know what to look for as far as technical skills are concerned—accounting courses, economics, and so on. What we want is a program for screening out potential bad apples. To that end, please let us know the following: What screening test(s) would you suggest, and why? What questions should we add to our application form? Specifically how should we check candidates’ backgrounds, and what questions should we ask previous employers and references?

Ans. One of the easiest ways to avoid hiring mistakes is to check the candidate’s background thoroughly. Doing so is inexpensive and (if done right) useful. Commonly verified data include legal eligibility for employment, dates of prior employment, education, identification including date of birth and address to confirm identity, county criminal records (current residence, last residence), motor vehicle record, credit, licensing verification, Social Security number, and reference checks etc. There are two main reasons to check backgrounds - to verify the applicant’s information (name and so forth) and to uncover damaging information. How to Check a Candidate’s Background: Few ways to check a candidate’s background are: 1. Can verify the applicant’s current (or former) position and salary with his or her current (or former) employer by phone (assuming you cleared doing so with the candidate). May also try to discover more about the person’s motivation, technical competence, and ability to work with others etc. 2. Employers can get background reports from commercial credit rating companies for information about credit standing, indebtedness, reputation, character, and lifestyle of the Candidates. 3. Automated online reference checking tools such as Pre-Hire 360 etc can also for better results in Background Checks. 4. Companies can go through the Social Media of the candidate such as Facebook or Instagram or LinkedIn to evaluate the behaviour and interests of the Candidates before hiring. it’s probably best to get the candidate’s prior approval for social networking searches 5. Companies can use “employment screening services“ to check out the applicants. Eg: e Automatic Data Processing Inc., First Advantage, HireRight, Sterling Backcheck, Quetzal etc Questions for Previous employees and references: Few questions that can be asked are as follows 1. Date of Employment (From and to), Position(s) held, Salary history, Reasons for leaving, etc 2. Type of work candidate is responsible for, his relationship with coworkers, subordinates and superior etc 3. Candidate’s work attitude, ethics, integrity, professionalism and Confidentiality.

4. Any tendency towards unprofessional or unethical or dishonest work behavior (if any) 5. Overall assessment of the candidate and any other comments etc… Screening tests such as Written Honesty Test or Integrity tests (paper-and-pencil tests) can be made mandatory before hiring a candidate. These are psychological tests designed to predict the job applicant’s proneness to dishonesty and other forms of counterproductivity. Most measure attitudes regarding things like tolerance of others who steal and admission of theft-related activities etc. Big Five Personality tests can also help in evaluating various behavioural aspects of the candidate. Most of the time there would be telltale body signals from the candidates which employers must be watchful of. Employers may use graphology, (Handwriting Analysis) as well, though its validity is highly suspected. As per experts, sometimes asking blunt questions helps . There is nothing wrong with asking the direct questions, such as, “Have you ever stolen anything from an employer?” “Have you recently held jobs other than those listed on your application?” “Is any information on the application misrepresented or falsified? etc.. Questions to be added in the Application Form regarding assessment of the Candidate's Honesty and Integrity: 1. Background information such as Name, their current and former job position and companies they had worked in and salary with his/her current or former job. 2. Current and Former residence and immigration certificate (if applicable) 3. Reasons for leaving the current or Former job? 4. Criminal Record (If any) 5. Opinion about past Employers or their workplace. Bad mouthing behind someone's back or about Workplace is generally a sign of Personal Weakness and dishonesty.

2. What else (if anything) would you suggest? Ans. Sometimes hiring the right employees is just not enough. Companies have to incorporate the importance of being ethical and honest in the Employee Training. There must be occasional workshops regarding the same to all the employees. Integrity and honesty must become part of the Company’s Culture and Work Environment. Employees who adhere to such policies must be rewarded and proper (and severe) corrective action must be taken on those who don't adhere. Top Management must be the role model to all the employees in this trait....