Step 1: Identify the concept being tested.
The question asks for the merits of internal sources of recruitment, that is, filling vacancies from among the organisation's own existing employees through transfer or promotion.
Step 2: Explain the concept.
Since internal recruitment draws on people already known to the management, it tends to save time, money and effort compared to hiring from outside.
Step 3: State the four merits.
First, it motivates employees, since the promise of promotion pushes them to work harder and stay loyal. Second, it is economical, as it cuts down the cost and time otherwise spent on advertising and elaborate selection procedures. Third, it is simple and reliable, because the management already knows the ability and conduct of its own employees, so there is less risk in the decision. Fourth, employees need less training, since they are already familiar with the organisation's work culture and procedures.
Step 4: Final answer.
Internal sources of recruitment motivate employees, are economical, allow simple and reliable selection, and reduce the training and orientation time needed for the new role.