Which of the following statements is NOT correct?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → When a company taps external sources, the existing staff work less hard, as outsiders take up the new jobs.

Option (1) External recruitment may lead to dissatisfaction among existing employees, as they feel their chances of promotion are reduced. — True. This is a limitation of external sources. Existing employees may feel that their chances of promotion are reduced.

Option (2) Under internal recruitment, the spirit of competition among the employees may be hampered. — True. This is a limitation of internal sources. When posts go only to insiders, the spirit of competition among employees may be hampered.

Option (3) When a company taps external sources, the existing staff work less hard, as outsiders take up the new jobs. — False. The effect is the other way round. When outsiders apply, the existing staff have to compete with them. So they work harder to show better performance. This is the merit of competitive spirit.

Option (4) Promotion helps to improve the motivation, loyalty and satisfaction level of employees. — True. Promotion gives a higher post, status and pay. It improves the motivation, loyalty and satisfaction of employees.

NCERT (2026-27 Edition): “(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, loyalty and satisfaction level of employees. It has a great psychological impact over the employees because a promotion at the higher level may lead to a chain of promotions at lower levels in the organisation.”

“Limitations of Internal Sources … (iv) The spirit of competition among the employees may be hampered; and”

“Merits of External Sources … (iv) Competitive Spirit: If a company taps external sources, the extisting staff will have to compete with the outsiders. They will work harder to show better performance.”

“Limitations of External Sources 1. Dissatisfaction among existing staff: External recruitment may lead to dissatisfaction and frustration among existing employees. They may feel that their chances of promotion are reduced.”