Install macOS as a Guest OS without depending on external 'OS X image file.hdd' file

I can successfully install recent versions of macOS such as El Capitan using Parallels 11. But I end up having to create, and depend on, an extra file physically stored on the real (host) Mac. The Parallels installation wizard prompts me to create and name this mystery file. That file is named "OS X image file.hdd" by default. That file must be tracked and kept with the main .pvm file; without it the VM becomes unusable with a series of error messages complaining about its absence.



I assume this is for the "Recovery Partition", a feature by Apple. If so, I do not really care about having a recovery partition. I doubt it would do any good for a virtual environment anyways. And I regularly backup <knock on wood> my main VM file, the '.pvm' file. I know it is possible to install Mac OS X on a real Mac without the Recovery Partition but I do not know how to do this with Parallels.

I have opened a page on Ask Different (Apple Stack Exchange) on this topic.

 

Hardware > Boot Order > Select boot device on startup. Make sure to mount the media in your VM when launching. It works fine with a USB installer.