“Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.”

Five merits of internal sources of recruitment are:

(1) Familarity with the policies: Internal sources of recruitment is considered as best practice because the internal candidates are well familiar with the policies of the enterprise. Management does not have to exert in familarising them with the rules, policies etc., of the company.

(2) No need of References: The organisation knows the abilities and loyalties of its employees. It does not require anybody’s reference about their ability, integrity and moral character.

(3) Economical: Recruitment from within the organisation is economical in the sense that employers do not have to spend on the advertisement, contractors, etc. Moreover it also saves time required in administering various tests etc.

(4) Balancing of Staff: There may be some departments having ample staff and some others having shortage of staff. Transfers as internal source of recruitment helps in solving the problem of overstaffing and understaffing in the different departments of the organisation.

(5) Enhances Employees Morale: Promotion within the organisation enhances employees morale. The policy of internal promotion makes them enthusiastic and optimistic. Promotions within organisation are positive morale builders.