Human Resource Management

The People Pipeline

HRM manages the full arc of a person's relationship with the firm. In knowledge businesses, the people pipeline is the production line.

Planning forecasts the headcount, skills, and timing the strategy needs against attrition. Recruitment fills the funnel's top. Internal recruitment is cheap, fast, and motivating, but recycles the same DNA. External recruitment imports fresh perspectives at high cost and risk.

Selection narrows the funnel using tools measured by validity (how well they predict performance). The pipeline is multiplicative:

$$\text{hires} = \text{applicants} \times p_{\text{screen}} \times p_{\text{interview}} \times p_{\text{accept}}$$

If 200 applicants face 30% screen, 25% interview, and 40% acceptance rates, you get 6 hires. Improve any rate and the whole pipeline widens.

Selection and Appraisal

Structured interviews and work samples predict performance well. Unstructured 'chat' interviews predict little beyond interviewer confidence.

Performance appraisal closes the loop via goals, scales, and 360-degree feedback (boss, peers, reports, self). Watch for raters' diseases like halo, leniency, and recency. Compensation balances internal equity against external competitiveness.