Balancing Innovation and Challenges in Linkedin Hrm Strategies

Introduction to LinkedIn's HRM Practices

Human resource management(HRM) is a growing factor in contributing to a firm's overall organizational performance, by creating job satisfaction and overall organizational commitment. (Korff,Biemann & Voelpel, 2017). Through the different management of people, it can be realized that workers respond better to certain methods and it is the team’s responsibility to apply to the correct management to its workers. LinkedIn is an online social recruiting company which combines social media and technology to create a recruitment platform for its clients which is starting to dominate the development in recruitment practices, making it easier for employers to find talent (Lee, 2013). This report will analyze the HRM approachLinkedIn uses to manage and recruit its employees and show that not all methods used are necessarily the most beneficial, outlining the positives and drawbacks of the firms approaches. It will relate the problems and main factors to theory and give a recommendation as to how the HRM of LinkedIn can continue to be successful.

Strategic and E-Recruitment Approaches at LinkedIn

Choosing the correct strategic human resource management (SHRM) is dependent on the organizational model and overall strategy of a company, i.e. the SHRM must coincide with the objective of the firm (Riccucci, 2016). The best fit model complies two factors coming together, external and internal fit allowing the CRM function to meet the organizational strategy. Boxall and Purcell (2000) state that external fit is when the SHRM fits the organization's stage of development and competitive strategy usually when there will be growth in range and number of employees. In the case study by Schifrin and Shaw (2015), it is understood that the company’s vast growth had meant that its recruitment for employees had inclined dramatically. Therefore, it can be said that Linked in has used the strategy of best fit due to its growth in order to continue to be efficient while in this development stage. It also means that the human resource strategy is more in line with the overall organizational strategy.

However, LinkedIn may then lose some control over its strategy in the management of human resources due to having to be more tailored to the organizational strategy which could possibly reduce performance.

LinkedIn its self as a company is an e-recruitment business because it runs online, meaning companies that are looking to hire employees will advertise or be able to see people's profiles on LinkedIn and look to hire the most appropriate candidate.LinkedIn is able to use its own platform called LinkedIn talent solutions, to attract and find the right candidates for its positions, with over half of hirings in 2014 coming from this method (Schifrin & Shaw, 2015).

Through the use of e-recruitment or online recruitment it has been said that a wider pool of potential employees can be found, this is because most people seeking jobs are now online and easier to access their information/profiles. Moreover, it has been found that due to e-recruitment there has been a reduction of approximately 30% in the time taken to hire the correct candidate, due to the elimination certain steps that are required in traditional methods. Additionally, it has been said that costs can be up to nine-time lower because of cheaper or free advertising online (Melanthiou, Pavlou & Constantinou, 2015). This means LinkedIn can find employees faster, cheaper and more suited to the job.

The selection process is vital for a business because it needs to be done correctly and efficiently to employ the correct worker for a position as well as keep the cost to the minimum, as this will result in how well the job is completed, consequently affecting the output to the firm (Wienclaw, 2013).

LinkedIn's Selection and Performance Strategies

LinkedIn seems to have 5 stages in their selection process:

1. The pool of applicants - recruitment team identify appropriate candidates

2.Phone screening/call - a way to improve efficiency early on in the process.

3.Meeting and tour - casual meeting with the hiring manager and tour of the site.

4.On-site interview - thorough day of interviews with team

5. Meeting with Linked in executives -candidates meet the people at the top to get to know the business (Schifrin & Shaw, 2015).

There are two types of selection approaches, there’s the rational (or systems) approach or the processual approach. LinkedIn uses more of a processual approach, which refers more to whether the candidate fits with the culture and is willing to change as well as the job (McKenna & Beech, 2002).

LinkedIn seems to use this approach more because they are constantly changing internally and looking to hire internally, they expect people to be creative and understand the values of the company (Schifrin & Shaw, 2015).

Possible drawbacks of this method are spending more time to select the best all-around candidate rather than just best for the job, and if they are right for the job, it may be harder to see straight away if the candidate is able to function in other roles and adapt to the business culture. ForLinkedIn, it seems like this is still the best option.

Reward Management and Employee Engagement in LinkedIn

Performance related pay consists of the payment or rewards an employee receives from performing to a high standard, with the goal to motivate workers and enhance performance (Saxena, 2009). The case study by Schifrin and Shaw (2015) states that LinkedIn uses performance related pay with heavy pay-outs to those that perform exceptionally. This enablesLinkedIn’s employees to be rewarded for their hard work and motivates them to perform at a high level all year seeing as pay is dependent on performance.

Although this is a good strategy to have, employees may become competitive with other workers in similar positions which may limit the scope in terms of the values of the company. Moreover, pay, being a form of extrinsic motivation has also been said to affect intrinsic motivation as people can lose the motivation from the satisfaction of the work its self (Salaman, Storey & Billsberry, 2006).

Performance appraisal can be seen as the way in which employees of a business are evaluated, to understand where they are motivated and where performance is highest, to then be rewarded appropriately (Fletcher, 2001). LinkedIn has three main steps of appraisal, firstly, employees evaluate themselves, then they are evaluated by their managers, and finally receive peer feedback (Schifrin& Shaw, 2015). LinkedIn seems to use this method to see to that the employee can be paid and rewarded correctly. Additionally, with the use of performance appraisal an employee can see if they are corresponding to the organizational objectives through feedback and self-assessment, and then make changes to their style or adapt to the company values.

One thing that may be problematic about using this is that it can potentially be biased or inaccurate, which means that those employees rather than working harder my just be demotivated. If the strategy isn’t implemented properly it can also be time costly as well as expense.

Reward policies are in place to make sure employees are rewarded fairly and correctly in line with their work and performance with the aim to improve overall organizational goals (Murlis & Armstrong, 2007). Total reward is a part of reward management. It refers to the way a firm allocates its rewards most efficiently to attract/ retain candidates in return for their skills to be able to meet the organization's aims and objectives (Jiang, Xiao, Qi & Xiao, 2009). It is clear that LinkedIn uses total reward as they offer an employee value proposition which includes a compensation package offering a variety of perks (Schifrin & Shaw, 2015). With the use of total reward, LinkedIn is able to retain employees and also attract new and more adequate ones. This is because the offer of this total reward acts as an incentive to work for them. In turn, it is likely that motivation will be higher and performance will improve.

However, the total reward may not be all that simple as it may not apply to the organizational culture. LinkedIn’s culture is relaxed in the sense that it trusts employees and treats them fairly, but the employee value proposition could be seen as putting a value on an employee and making putting a lot of pressure on them to meet certain goals, which goes against their morals.

Refers to individuals involved in helping a firm succeed as well as gaining personal satisfaction, making a more desired, productive and loyal workforce (Macey & Schneider 2008). LinkedIn has a clear model of engaging employees through their performance related pay system making each individual evaluate themselves. But also, the integrity part of their culture and letting employees be responsible for what they do gives them engagement (Schifrin & Shaw, 2015). Therefore, the organizational culture of LinkedIn seems to support the idea of employee engagement and promotes employees to contribute where they can. Consequently, this can enable employees to be more motivated and more confident about engaging with the employer or speaking up with the aim to be successful in achieving goals, in turn improving performance and reducing labor turnover.

However, it depends on whether the manager actually listens to the employee that wants to engage and how regular they meet. For example, with LinkedIn meeting formally once every year and in groups more regular said in by Schifrin and Shaw (2015) this may not be enough to sustain valuable worth from the employee engagement.

Linked in have a strong and positive culture that makes its management of people very successful. Although this is the case, there are some problems that have been outlined which can be avoided.

Firstly, through the recruitment and selection process LinkedIn use, they aim to hire the most appropriate candidate for the job. This job requires flexibility to meet the constantly changing and moving around of jobs environment within LinkedIn. One way to find this candidate more easily and to make sure the employee is right(in order to eliminate waste of time) would be to give more of a job insight through the use of interns or trial the candidates in different positions. This would allow the management team to see who can work more efficiently in different environments.

Secondly, LinkedIn uses performance related pay methods which can contradict their organizational culture of not being controlling or allowing workers to be free, but really, they have to make sure they are meeting targets regularly if they stand a chance of getting higher pay. As said before this can limit intrinsic motivation, not giving them as much freedom. Again, giving new candidates the chance to trail the job may allow them to find out if the job is suitable for them and give them an insight into the culture of the organization.