A human resource manager desires to have motivated employees who have excellent comprehension of their roles. Since employees are the heart of organizations, it is essential to acquire and retain workers with the needed talents. Recruitment serves as the fundamental process of obtaining individuals who can assist an organization attain its goal. Organizations can decide to either conduct internal or external recruitment. Currently, with the competitive nature of the market environment, a significant percentage of organizations prefer to execute internal recruitment. The proponents of this method argue that it enables firms to retain employees who understand its fundamental processes and culture. On the other hand, its critics posit that the method limits a firm’s ability to incorporate new talent and diverse thinking into its ranks. Despite these diverging views on external recruitment, its effectiveness depends on the organization’s hiring policies and willingness of the human resource department to implement them.

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Internal recruitment entails transferring or promoting employees from other positions within the firm (Kelly & Williams, 2014). An internal transfer and promotion policy is a directive that indicates that a firm can only fill its vacant positions from within. In this respect, it restricts the acquisition of new workers outside the organization. Additionally, the policy dictates how the promotion or transfer of employees should be handled. Although organizations differ on various elements of their internal recruitment policies, their objectives seem to converge. Mainly, an internal transfer and promotion policy tries to ensure that a firm fully utilizes the abilities of its present employees. Alternatively, others adopt this strategy as a way of minimizing risks and human resource expenses.

There are two types of internal transfer and promotion in a firm’s set-up. Firms can either conduct internal or interdepartmental changes. According to Kelly and Williams (2014), internal promotion entails a move to a higher level within the same working unit. On the other hand, interdepartmental promotion involves a move to a higher position in another department. As DeCenzo, Robbins, and Verhulst (2016) point out, an internal transfer and promotion policy must maintain equality, fairness, and merit. Failure to design an effective internal transfer and promotion policy can lead to employee fallout and dissatisfaction.

Several characteristics make an internal transfer and promotion policy successful. Firstly, the policy’s insistence on existing employees boosts their morale reinforcing their value of experience within the firm. An internal recruitment policy motivates workers to perform better. The idea behind internal recruitment is articulated in the motivational theories. Particularly, promotion or transfer are an incentive for performance. As a result, workers improve their performance to secure promotions to higher positions. When employees see their colleagues promoted, they are motived to work harder to acquire the same status.

Furthermore, an internal transfer and promotion policy is effective because it eliminates errors during the selection process. In this recruitment strategy, a firm selects individuals whose performance record and capabilities are available to it (Gangwar, 2016). This ability is an advantage that internal recruitment has over external recruitment. Organizations want individuals who can perform under minimal or no supervision. Employees acquired under internal selection have prior and advanced knowledge of their working environment and its regulations.

Employee development is another attribute that makes internal transfer and promotion policy effective. Under an internal recruitment policy, employees focus on improving their abilities with the aim of acquiring higher positions (Gangwar, 2016). In this respect, the method challenges the workforce to work harder to achieve recognition. Furthermore, the policy promotes employee loyalty. People who work in organizations utilizing an internal recruitment policy do not face external labor competition. Consequently, they focus on delivering the firm’s strategic goals as they are assured of their jobs. According to Kelly and Williams (2014), modern organizations use an internal transfer and promotion policy as a way of retaining talented and committed employees. When employees are loyal to an organization, they cannot be poached by lucrative compensations elsewhere.

The primary role of an internal transfer and promotion policy is to enhance workers’ engagement and retention. DeCenzo, Robbins, and Verhulst (2016) note that firms with internal recruitment policies have high chances of retaining their quality employees. Although some critics warn that the strategy can make employees perform poorly, Kelly and Williams (2014) argue that promotions are an effective incentive to promote performance. Moreover, the aspect of job security under internal transfer and promotion policy make employees engage actively in achieving an organization’s operational and strategic goals. Internal recruitment protects employees from external competition making them focus on their roles and responsibilities.

The purpose of recruitment is to improve a firm’s productive efficiency and profitability. According to Mohammad and Nicoleta (2016), an internal transfer and promotion policy stimulates increased production and lowers human resource expenditure. The policy increases production by motivating workers to work hard and focus on quality. Professionally, individuals want recognition and high salaries. These needs can only be attained through promotion. This improved input by employees increases the overall organizational production. Moreover, Mohammad and Nicoleta (2016) assert that an internal transfer and promotion policy improves profitability by lowering human resource expenses. By recruiting internally, firms obtain employees who are conversant with their culture, modes of production, and code of conduct. As a result, the firm saves orientation and training expenses. Through an internal transfer and promotion policy, organizations acquire individuals who are verified performers.

An internal transfer and promotion policy is beneficial to the development of employees and organizations. This policy improves employees’ performance, loyalty, and engagement. Additionally, it lowers organizations’ human resource expenses by eradicating orientation and training costs. However, human resource managers must ensure that their policy advocates for equality, fairness, and performance to prevent it from adversely affecting employees’ performance and commitment.