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Recruitment and Hiring is an important aspect of Human Resources Management, for it is here that candidate employees first come into contact. In recent decades, the process of interviewing and screening candidates for possible employment has become more systematic and sophisticated. Corporate laws have also caught up with the needs of organizations. Vice versa, more regulations are imposed on companies to comply with basic standards during recruitment and hiring. In other words, corporate laws pertaining to usage of employee/candidate information have gotten stringent over the years. This is a positive development, for otherwise, important private information will be subject to misuse and exploitation. The rest of this essay will outline key laws, regulations and principles for recruiters to mull over as they discharge their duties in the HRM department.

It is common practice for employers to scrutinize past behavior of a potential employee and make sure that the latter is not prone to criminal or other disruptive behavior. (Connerley, et. al., 2001, p.73) But conducting background checks on prospective employees is wrought with risk. Previous employers are also caught in a quagmire for the risk of eliciting a defamation suit from disgruntled former employees. Hence, employers should make sure that they abstain from giving false or defamatory statement regarding their former employees. Other criteria that could lead to a defamation claim are: “an unprivileged publication to a third party; fault amounting at least to negligence on the part of the publisher; and either action-ability of the statement irrespective of special harm or the existence of special harm caused by the publication.” (Long, 1997, p.190) Hence, in order to comply with state and federal laws, careful avoidance of defamation of former employees is crucial.

The Civil Rights Act of 1964 is the foundation for modern corporate defamation laws. It lays out the limits and expectations of the legal relationship between workers and their managers, especially Title VII of the Act. The courts and state legislatures, having identified that the employees are the ones holding upper hand in defamation suits have promulgated statutory reforms in recent years. It is perhaps a measure of these reforms that “in an effort to increase the free exchange of references, at least twenty-six states now provide some type of statutory immunity for employers when they provide a reference. Prior to 1995, only five states had such laws.” (Long, 1997, p.190)

Hence it is important for employers to ensure no discrimination exists, either in the form of racism, sexism or ageism in the hiring process. It is also important that the tests for selection and appraisal are standardized in order to prevent claims of arbitrary and / or discriminatory hiring practices. (Fuss & Snowden, 2004, p.54) Disparate Treatment and Disparate Impact are two theories under Title VII of the United States Civil Rights Act. Together, they were intended to prohibit discriminatory actions on part of employers toward racial, sexual or class minorities. The theory of Disparate Treatment first came into judicial discourse in the Griggs v. Duke Power Co. During and after this case, the term “business necessity” became central to deciding such cases. If business managers treat minorities in a disparate manner in the absence of compelling business needs, then their action can be construed as discriminatory and in violation of provisions under Title VII. In all disparate treatment cases,

“whether the issue is the truth or falsity of the employer’s reason for its action, or the co-existence of legitimate and illegitimate motives, whether the plaintiff puts on direct or circumstantial evidence, or both, the issue at the liability stage is simply whether the plaintiff has shown, by a preponderance of the evidence, that discrimination was a motivating factor in the employment decision.” (Drachsler, 2005, p.230)

The Civil Rights Act of 1991, further extended these provisions and consolidated the list of prohibitions. But the application of Disparate Treatment theory to any given case is never straight-forward, for management decisions are based upon so many factors, with prejudice and discrimination (if any) often playing out in subtle and indirect ways. Judge Magnuson elaborated on 1991 amendments thus:

“Absent from the statute is the requirement that discrimination be a “substantial” factor, a “but-for” factor, or the necessary and sufficient cause of the employment decision. Instead, Congress unambiguously required that discrimination be “a” motivating factor in the employment decision. Any analytical paradigm that requires greater proof to prevail on liability contradicts the express language of the statute.” (Drachsler, 2005, p.230)

Another aspect of HRM that falls within the purview of Hiring and Recruitment is the Employee Referral program. There are both advantages and disadvantages in using an employee referral campaign (ERC) for recruiting staff members. A clear advantage is that a new candidate is brought to the notice of the management by an incumbent employee. And if the reputation of the incumbent worker is impressive, it can then be taken as a rough guideline of the candidate’s likely proficiency. In this case, a certain degree of security is created through personal association between the established and the prospective employees. Another advantage of employee referral campaigns is that they help promote the brand value of a company through word-of-mouth publicity. In order for an existing employee to bring his contacts into the company, he/she must first have a positive perception about the status and worthiness of the company. On the flip side, a poor response to an employee referral campaign can usually indicate an unmotivated workforce perceiving no incentive either for themselves or for their contacts in availing job opportunities with the company. One other obvious advantage of an ERC is that it cuts down recruitment related expenditure by eliminating the need for advertising, job fairs, hiring agencies, etc. In certain domains, highly specialized positions are best filled through personal channels and not through traditional recruitment processes, making a case for ERCs.

On the negative side, employee referral campaigns can also create conflict-of-interest scenarios for the management, when they make an assessment that is inconsistent with that of the referring employee’s. For example, a candidate being recommended by an employee could be estimated to be either unsuitable or unqualified for the vacant position. In such a case, the management usually ends up causing disappointment for both parties by declining to hire. More importantly, it’s relationship with the currently employed worker might take a negative turn. Even if the candidate is found to be suitable and sufficiently qualified for the role, there is no way that the referring employee could be held liable for the performance and conduct of the candidate upon employment. We should also remember that an employee makes a referral for the monetary incentive and it is unlikely that he/she would either have the inclination or time to exercise discretion in the choices.

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