Read the following passage.

New Grow Ltd. is a company manufacturing electronic goods. Since the demand for the company's products increased in the market, the level of production had to be increased. This required recruitment of more people in production department.

Kapil, the HR manager, conducted an analysis which revealed the number and type of employees available in the department. Kapil used the internal sources first for recruiting a few employees. For the rest of the recruitment, he decided to use various suitable external sources like advertisement, placement agencies, campus recruitment and web publishing.

He followed a process for the purpose of selecting the best candidates and conducted a series of employment tests and interviews. Ten people were finally selected and after the medical examination their contract of employment was prepared. Since the new employees had to handle highly sophisticated machinery, the training was given to them away from the workplace by creating work environments in the separate laboratory.

The employees got trained well and with increased workforce, the company could achieve its target of high level of production.

Identify the correct statements with respect to Internal sources of recruitment.

A. Transfers and promotion are the two important sources of internal recruitment.

B. Internal recruitment induces fresh talent in the organization.

C. Internal recruitment simplifies the process of selection and placement.

D. Selecting employees through internal recruitment reduces their motivation.

E. Internal recruitment is a costly process.

Choose the correct answer from the options given below.

A and C only

The correct answer is option 2- A and C only.

A. Transfers and promotion are the two important sources of internal recruitment.- This is true. There are two important sources of internal recruitment, namely, transfers and promotions, which are discussed below:
(i) Transfers: It involves shifting of an employee from one job to another, one department to another or from one shift to another, without a substantive change in the responsibilities and status of the employee.
(ii) Promotions: Business enterprises generally follow the practice of filling higher jobs by promoting employees from lower jobs. Promotion leads to shifting an employee to a higher position, carrying higher responsibilities, facilities, status and pay. Promotion is a vertical shifting of employees. This practice helps to improve the motivation.

B. Internal recruitment induces fresh talent in the organization.- This is wrong. External source brings fresh talent. The present employees may be insufficient or they may not fulfill the specifications of the jobs to be filled. External recruitment provide wider choice and brings new blood in the organisation. However, it is expensive and time-consuming.

C. Internal recruitment simplifies the process of selection and placement.- This is true. Internal recruitment simplifies the process of selection and placement. The candidates that are already working in the enterprise can be evaluated more accurately and economically. This is a more reliable way of recruitment since the candidates are already known to the organisation; 

D. Selecting employees through internal recruitment reduces their motivation.- This is wrong. Employees are motivated to improve their performance. A promotion at a higher level may lead to a chain of promotion at lower levels in the organisation. This motivates the employees to improve their performance through learning and practice. Employees work with commitment and loyalty and remain satisfied with their jobs. Also peace prevails in the enterprise because of promotional avenues;

E. Internal recruitment is a costly process.- This is wrong. It is very costly to recruit staff from external sources. A lot of money has to be spent on advertisement and processing of applications.