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Sources of Recruitment - Internal Sources

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Estimated time: 11 minutes
CBSE: Class 12
CISCE: Class 12

Introduction

  • Internal sources of recruitment consist of the people who are working or have worked in the enterprise.
  • It is the process of finding employees from the existing work force of the organisation.
CBSE: Class 12
CISCE: Class 12

Types of Internal Sources

  • Promotion – Moving an employee from a lower job to a higher job with more pay, status, and responsibilities.
  • Transfer – Shifting an employee to a similar job in another factory/branch without change in pay, status, or responsibilities.
  • Ex-employees – Rehiring people who previously worked in the company.
  • Recommendations by employees – Recruiting applicants introduced by existing employees (relatives, friends), sometimes via union agreements.
CBSE: Class 12
CISCE: Class 12

Merits

  • Motivation & morale: Promotion opportunities motivate employees and improve morale.
  • Reduces turnover & absenteeism: Employees wait for promotions, reducing tendency to leave.
  • Cheaper recruitment: Information about candidates already available; lower cost.
  • No induction training needed: Internal candidates already know the organisation.
  • Simpler selection & placement: Candidates are known; selection is more reliable.
  • Acts as training: Transfers prepare employees for higher responsibilities.
  • Balances workforce: Transfers help move staff from surplus to shortage departments.
  • Loyalty & satisfaction: Promotion prospects foster loyalty among employees.
     
CBSE: Class 12
CISCE: Class 12

Demerits

  • Inbreeding: Lack of fresh talent and new ideas enters the organisation.
  • Limited choice: May lead to unsuitable promotions due to restricted candidate pool.
  • Lethargy: Employees may become lethargic if promotions are time-bound and guaranteed.
  • Cannot fill all vacancies: External recruitment is still needed; internal sources are insufficient alone.
  • Hampers competitive spirit: Healthy internal competition may be reduced.
  • Reduced productivity: Frequent transfers may negatively affect productivity.
CBSE: Class 12
CISCE: Class 12

Key Points: Internal Sources

  • Internal sources recruit from within the organisation – no outsiders involved.
  • The four types are promotion, transfer, ex-employees, and recommendations.
  • NCERT focuses on only two types: transfer (horizontal) and promotion (vertical).
  • Transfers involve no change in pay, status, or responsibilities.
  • Promotions involve greater responsibilities, pay, facilities, and status.
  • Key merit: cheaper, faster, and familiar candidates with no induction required.
  • Key demerit: in-breeding and inability to fill all vacancies internally.
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