Case Study 1 : ENRON: A Not So Happy Ending to a Good Recruiting Plan Enron Corp

Question

Case Study 1: ENRON: A Not So Happy Ending to a Good Recruiting Plan

Enron Corporation was launched in 1985, with the merger of Houston Natural Gas and InterNorth, a Nebraska company. In 1990, Enron—which was just a natural gas transportation company at the time—started a new division to trade natural gas. The company went from being a “stodgy” gas pipeline company to being a “world-class” company overnight. Enron soon became a $55 billion empire, trading gas, electricity, minerals, water, paper, and broadband capacity.

A critical part of Enron’s success was the company’s employee value proposition (EVP). The EVP focused on Enron as a dealmaker and was designed to attract the top talent the company needed to continue to move it forward. The EVP pro-vided employees with the opportunity to do something “big” and to change how business was done in other industries. Jobs were restructured to give employees a lot of elbow room and headroom. Traditional gas pipeline employees were not the employees needed for this new, never-before-tried venture.

Internal job movements at Enron were an important part of the EVP. Managers were strongly encouraged to allow employees to move within the company. The goal was to not hold anyone back. When the Global Broadband unit was launched, 100 top performers from around the company were brought together in Houston. By the end of the day, 50 had been recruited for the new project. Overall, the recruiting strategy focusing on internal recruitment paid off. The business continued to grow and attract entrepreneurial employees.

The company that thought it had no way to go but up came crashing down in 2001 when it was charged with illegal activities. By 2004, Enron’s corporate officers faced numerous charges of wrongdoing, and the company was a shell of its former self. Managers were charged with manufacturing profits, hiding debt, and bullying Wall Street to buy into its questionable accounting and investment practices. An extensive amount of downsizing had occurred, and many employees had lost all of their retirement savings after Enron’s stock collapsed. Faced with bankruptcy and a sullied reputation, the company struggled to continue but finally made the decision to cease to exist once all litigation concludes.

At one time, Enron’s recruiting efforts were described as a model for other employers. Enron portrayed itself as an exciting company with lots of growth opportunity—a firm in which employees experienced a great deal of autonomy and responsibility.

Questions

Enron did a lot of things right from a recruiting standpoint. Discuss its recruiting strategy and why it worked.

Do you think that Enron’s overall recruitment EVP and strategy played any role in the problems that resulted at Enron? If so, what and how?

Discuss why it’s important to create a recruiting message that’s attractive but that doesn’t “oversell” the company.

Assume that in a few years Enron decides to reconstitute itself in some form. Develop a recruiting strategy that the company could use to attract employees.

Case Study 2: Virtual Selection at National City Corporation

National City Corporation, a multistate banking firm with headquarters in Cleveland, Ohio, employs around 32,000 people. The company has been named one of “The Top 100 Employers” by The Black Collegian magazine. National City, founded in 1845, is one of the nation’s largest financial holding companies.

National City uses a computerized simulation of specific job-related tasks known as “Virtual Job Tryout” to select candidates for jobs. In effect, job candidates get to audition for the job they want. The company believes that this type of assessment does more than help the company select the right people. The process also gives National City Corporation a distinctive recruiting experience that creates a unique impression on applicants and helps build the employer brand of the company.            

National City worked with a consulting firm to develop several virtual simulations. The simulations have audio and video interactivity and are quite appealing to younger job applicants such as Gen Y’ers. Call center applicants, for instance, are given scenarios requiring them to solve customer service problems. Branch manager applicants have to demonstrate their skills at developing client relationships and making quick personnel decisions. Of course, these online assessments are just part of the overall selection process, but they are the next step in getting hired after completing the application process.

The firm believes that this part of its selection process is an educational tool that helps potential employees learn about the company. According to one of the consultants involved in the development of the simulation, innovative companies are looking for unique experiences such as this one to make their selection process standout.

Questions

Discuss the pros and cons of using virtual assessment for employee selection. To answer this question, you may want to do further research on the concept.

What concerns would you have about this selection process if you were an applicant?

Describe the steps the company would need to take to ensure that the selection process is nondiscriminatory and fair.

Do you think all types of employees would respond the same to virtual assessment? Why? Why not?

For what types of skills is virtual assessment best suited (e.g., interpersonal, analytical, business, engineering, other)? Explain your response.

Are there jobs for which this type of assessment would not be appropriate?

Directions

Please answer all the questions for the two case studies below. Answers should be thorough and complete for each question. Please write your responses in a word document for submission and use the APA format as a guideline. Double space and use a 12 point font. The combined responses should be at least 200 words in length. Use the following information to support you in completing this assignment correctly.

All questions answered and addressed

Answers indicate that symptoms were recognized

Actual causes of the problem were uncovered

Answers indicate that you identified major goals of the organizations, units, and/or individuals in the case

Answers indicate that longer-term performance problems and those requiring immediate attention have been recognized and considered

Identified appropriate alternative actions

Give in-text citation (APA)

Cite your references

Course Subject: Intro to Human Management (HR353): Book-Human Resource Management 2nd edition; Managing Employees for Competitive Advantage

Explanation / Answer

Answer:

1. Enron did a lot of things right from a recruiTng standpoint. Discuss its recruiTng strategy and why it worked. Answer: Enron’s recruiTng strategy was mostly internal recruiTng. ±his choice of recruitment for Enron was the smart thing to do, at the Tme. ±here are several advantages of internal recruiTng; more cost eFecTve, the exisTng employees already know the company operaTons and culture, the advancement opportuniTes was a moTvaTon for employees, and the past performance data is available for all of the internal applicants. ±he Enron employees were groomed to move up in the organizaTon. With the internal recruitment strategy, the current employees feel valued and are less likely to seek opportuniTes outside of the company.

2. Do you think that Enron’s overall recruitment EVP and strategy played any role in the problems that resulted at Enron? If so, what and how?

Answer: Enron’s overall recruitment employee value proposition (EVP) and strategy played an important role in the problems aroused at Enron. The recruiting strategy focusing on internal recruitment paid off. The business continued to grow and attract entrepreneurial employees. Retaining talent was never an issue at Enron because the HR department was effitient. But with the amount of growth that was happening at that company, there was very little time to actually sit back and analyze the jobs people were doing. What looked to be like excellent jobs with no deficiencies, in the end, turned out to be a bunch of lies.

3. Discuss why it’s important to create a recruiting message that’s attractive but that doesn’t “oversell” the company.

Answer: Employee recruiting requires planning and strategy development to attract quality candidates to match the employment opening. A central goal of a recruitment message is to attract applicants who will be the best fit with the job and the organizations. The information conveyed to prospective applicants should address the advantages of working for the organization, such as relocation allowances and other special perquisites, as well as the nature of the competencies sought. The recruitment message helps the company to tell a positive ‘story’ about why employees would want to work for the company. The goal for the company is to stand out during the recruitment process in order to attract top talent’ recruitment is marketing.

4. Assume that in a few years Enron decides to reconstitute itself in some form. Develop a recruiting strategy that the company could use to attract employees.

Answer: Enron’s downfall was a cause of bad corporate ethics followed by the human resources at the company. Now, rebuilding the company back would require it to focus on the ethics, corporate social responsibility part during designing the recruitment strategy. The value propositions they offer, truth in hiring, and the groups they target send signals not only to potential employees but to the world at large. Enron would more focus on below things in developing a new recruitment strategy.

• Value Proposition Offered: The work/life balances company’s offer their employees and the degree of corporate social responsibility they exhibit are among the factors that determines the firm’s value proposition. The development of such value proposition would enhance the reputation of the company and its ability to recruit employees.

• Truth-in-hiring: Enron must develop ways to reduce the probability of a truth-in-hiring.

Case Study-2

1. Discuss the pros and cons of using virtual assessment for employee selection. To answer this question, you may want to do further research on the concept.

Answer: There are many pros of using virtual assessment for employee selection. Virtual Assessment gives a clear view: The virtual job tryout assesses a variety of competencies the company considers key to job performance, including technical knowledge, troubleshooting, achieving results, building relationships and providing customer service. The applicants have to perform what they are expected to do in the position that they are applying for. The company can obtain a clear view of whether the candidate will able to perform according to expectation of company or not. Also global reach is an advantage: The virtual assessment is done by using technology, therefore, the potential employee can apply for a particular job posting from any corner of the world. The greater number of job seekers reached the greater the chance that one of those is the most competent applicant for the position.

2. What concern would you have about this selection process if you were an applicant?

Answer: Being the practical based selection method, virtual assessment eliminates the many more weakness, which is usually, comes in the selection process. However, employers must concern on the virtual assessment environment, organization should make the easy environment of the virtual work, and the level of assessment should be equal and same for all the candidates. As virtual assessment is practical based selection method. Another concern may be on the biasness based on religion, color, sex, culture etc. As virtual assessment is practical based selection method.

3. Describe the steps the company would need to make to ensure that the selecTon process is nondiscriminatory and fair.

Answer: The company must de´ne their job posTng clearly. They should de´ne what competencies are required for that specific position. They must develop the same set of questions and must ask the same questions for every candidate. Potential applicants’ responses should be recorded and the company must select the best suited applicant. The selection commiµee should not ask any personal questions. Applicants should be evaluated on the basis of their performance at every stage of the recruitment process including any meetings, assessments, or presentations to avoid an unfair selection process.

4. Do you think all types of employees would respond the same to virtual assessment? Why? Why not?

Answer: No. All types of employees would not respond the same way to the virtual assessment. If all types of employees responded the exact same way than why would the testing even be needed? The point is to see the different responses from potential applicants. Everyone is different, we all react differently.

5. For what type of skills is the virtual assessment best suited (e.g., interpersonal, analytical, business, engineering, other)? Explain your response.

Answer: I would say that interpersonal and business skills are best suited to test using the virtual assessment, including positions in sales, marketing, call centers, and consulting. Call center candidates can be given scenarios to solve customer service problems, while branch manager applicants can be given an opportunity to demonstrate their ability to foster relationships with clients and make quick personnel decisions.

6. Are there jobs for which this type of assessment would not be appropriate?

Answer: The virtual assessment is not suitable for hardware and mechanical engineering and the medical field because these positions run into very complex and time consuming situations on a daily basis. Also, they may need to analyze critical information that isn’t be flexible to share through simulation. The work which is related to more numerical and scientific data cannot be evaluated through the virtual assessment.

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