We discussed the ‘buy or build’ model for hiring for the firm.

Buy model Build model

 Lateral entries are permitted for the
hiring. So, the lead time to fill the
job opening is very less and it
doesn’t require long term planning.
 Training & Development
requirement is low.
 Employee loyalty is very low, as the
employees don’t have emotional
attachment to the firm.
 Buy model begets the weak culture
within the firm.
 Conflicts & confrontations are high.
 As employees bring in the diverse
experience with them, they bring in
the new ideas which bolsters the
innovation within the firm.
 Entry points are limited, employee
talent is developed within the firm.
It results in the high lead time to
prepare the employees for the
leadership positions. So, long term
planning is required for the
retention of the talent and
succession of the right employee.
 High investment in training &
development is required.
 As employee talent is developed
within the firm over a period of long
time, the employee loyalty is very
high.
 Build model begets the strong
culture within the firm.
 Conflicts & confrontations are low.
 Firm gets deprived of the industry
insights and the employees are able
to generate limited ideas.

For the given case, Cypress is following the buy model, they provide the raise which is 0.5%
higher than the average of the three highest paying companies. Buy model fits the
requirement of the firm because Cypress needs very high number of innovative products
(more than 50 new chips per year), and the buy model brings in the employees with the
fresh perspectives and ideas which support the innovations within the firm. Though the buy
model creates a weak culture, it doesn’t matter as the culture is not of the significant
importance for the given industry. (Had it been the hospitality industry, the culture would
have mattered a lot.)
Then we discussed the science of interviewing.
1. Using the big guns:
It has various implications, some candidates might infer that the management is very
controlling as the top managers are part of the recruitment team. Some candidate might
find it intimidating, some might think that the firm is going through slump as the top
management has nothing to do except the recruitment. Some candidates might feel
valuable. So, effectiveness of using the big guns is a question mark.
 2. Make interview tough and technically demanding:
Interview process should be tough enough to weed out the bad candidates, but making
the process very tough would not help with the screening process and the firm might
loose out on some good candidates. Though the firm claims that their process is
effective, as the process is not benchmarked its effectiveness can’t be proved.
3. Interviews should lead to detailed assessments of the strengths and weaknesses
Interview process should remove all possible subjectivity from the process and should
clearly assess the strengths and weaknesses of the candidates.
After the candidate is selected, apart from the written contract, there exists a psychological
contract between the firm and the employee. For example, the employee expects that
he/she would get minimum 8% wage increase per annum and the firm might expect that
the employee put in the extra hours to complete the tasks. If the psychological contract is
breached, it hits the employee immediately as the employee closely associates him/herself
with this contract. That affects the employee morale adversely and hence the employee
motivation and commitment goes down.