Establishment Phase - Meaning & Definition

Published in Human Resources Terms by MBA Skool Team, Last Updated: December 09, 2015

What is Establishment Phase?

The Establishment Phase is the first phase of the employment cycle. It deals in the process of understanding the kind of human resource required for the organization to achieve its goals.

The components of this phase are:

• Work force planning

• Recruitment

• Selection

• Employment Arrangement and Remuneration

Work force Planning

Anticipating the future manpower needs of the organization and developing strategies to meet those needs. Constant monitoring and planning of human resources is an integral part of this phase.

It involves

1. Planning:

• Understanding the number of employee that might be required in the future

• The kind of qualifications and skills necessary which might be necessary

• Time by when the need might arise

• Type of employee required

2. Job analysis:

Understanding the nature of job by determining the following aspects of the job:

• Duties and responsibilities involved

• Degree of supervision required in the job

• Equipment required for performing the job

Steps of Job analysis:

1. Job Description:

• Specifies the nature of job that has to be performed

• Duties and responsibilities needed for performing the job

• Location of the job


2. Job Specification:

• Qualification and skill needed to perform the job


It is the process of attracting appropriate candidates from whom the most suitable person may be selected.

Sources for Recruitment

Recruitment can be made internally from the organization or from external sources

The possible external sources to attract recruits can be:

• Advertisements in print media or social media

• Campus recruitment

• Employee referrals

• Consulting agencies


It is the process of selecting the most suitable candidate from the pool of possible recruits.

Process of recruitment:

• Tests: written or verbal

• Interviews: Technical, HR, behavioural

• Background checks

Employment Arrangements and Remuneration

Selected candidates are offered suitable compensation packages. This depends upon:

• Designation offered

• Position in organization hierarchy

• Skill and knowledge of candidate

• Experience of candidate (overall and relevant)


Hence, this concludes the definition of Establishment Phase along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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