HRP Full Pack 14-09-2021

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7/12/2021

Introduction to
Human Resource Planning

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Agenda
 Meaning and concept of HRP
 Planning at different levels
 Integrated strategic planning and HRM
 Need for HRP and objectives of HRP
 Process of HRP
 Strategies for HR planners
 Benefits and limitations of HRP
 Guidelines for making HRP effective
 HRP at organization and unit level
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Source: https://buffer.com/state-of-remote-work-2020

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• Which HR functions are likely to be impacted now?


• What do you think is the role of HR planning during current pandemic?
• Will role of HRP increase or decrease during this period? If yes, why?
If no, why?
• How do you see the role of HR in workforce management in the
coming 3 to 5 years?
• Layoffs, recruitments, redesigning….

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Is Planning Doomed to Fail?


Planning in an uncertain world is doomed to failure. ~ Anonymous Manager
They think planning:
• is too inflexible and slow to respond to change;
• is biased towards control rather than innovation;
• is too conservative in assumptions and tends towards risk avoidance;
• relies on poor, usually over optimistic, forecasting.

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What has Organizational Change to do with Planning?

Organizational change has removed the requirement for


or the capability to do manpower planning through the:
• decentralization of decisions and the abandonment of
the central planning responsibility;
• transfer of responsibility for HR issues to line
managers;
• loss of manpower planning expertise during
devolvement and downsizing - too resource/skill/time
intensive to be maintained.
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Has HR Agenda Changed?

Some believe that the HR agenda has moved on or


previous problems have disappeared, removing the
impetus to plan.
• supply shortages are no longer a significant issue;
• a move to qualitative issues (e.g. upgrading skills,
improving performance, flexible working) away from
quantitative issues;
• more concerned with change management and
maximizing the contribution of the workforce.
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These criticisms of planning are


understandable.

Are they acceptable?

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Strategic Human Resource Planning

What is strategic human resource planning (SHRP)?

How did human resource planning (HRP) evolve?

What is strategy?

Why is SHRP needed?

What makes SHRP difficult in organizations?

How can the SHRP process be described?

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Human Resource Planning

Technical Managerial Strategic Operational

Forecasting HR HR issues affecting Formulate and Guide daily HR


Needs the organization implement decisions
organization’s long
term plans

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Evolution of Human Resources Planning

Henry Fayol (1841–1925) Stability of tenure of personnel.


Material organization is consistent with the objectives,
resources, and requirements of the business concern
(Fayol, 1930).

1960s Manpower planning formally evolved.

1970s Human resources planning replaced manpower


planning.

1990s Human beings represent intellectual capital to be


managed, just like other forms of capital (Brown, 1998).

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Meaning and concept of HRP


 A process by which an organization should move from its current manpower
position to its desired manpower position. Through planning management
strives to have the right number and right kind of people at the right
places at the right time, doing things which result in both the organization
and the individual receiving maximum long-run benefit. (E.W. Vetter)
 A process of determining and assuring that the organization will have an
adequate number of qualified persons available at the proper times,
performing jobs which meet the needs of the enterprise and which provide
satisfaction for the individuals involved. (Dale S. Beach)

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 It is an integrated approach to performing the planning aspects of the


personnel function in order to have a sufficient supply of adequately
developed and motivated people to perform the duties and tasks
required to meet organizational objectives and satisfy the individual
needs and goals of organizational members. (Leon C. Megginson)
 The process of determining manpower requirements and the means for
meeting those requirements in order to carry out the integrated plan of the
organization. (Coleman)
 A process in which an organization attempts to estimate the demand for
labor and evaluate the size, nature and sources of the supply which will
be required to meet that demand.
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 Human Resource Planner is one who systematically outlines the


activities that the manager is expected to undertake during a specified
period so that he/she is able to make his/her best contribution to
manage the demand and supply of human resources in a firm.
 HRP has a number of distinctive and limiting characteristics. It is conscious,
explicit, analytical, purposive, forward looking, dynamic, aggregate,
qualitative and quantitative.

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Global Fastest Growing Industries


by Revenue Growth (%) in 2020

1. Global Respiratory Ventilator Manufacturing 54.8%


2. Global Sugar Manufacturing 8.8%
3. Global Military Shipbuilding & Submarines 8.5%
4. Global Public Relations Agencies 6.3%
5. Global Auto Parts & Accessories Manufacturing 6.2%
6. Global Consumer Electronics Manufacturing 6.2%
7. Global Music Production and Distribution 6.2%
8. Global Pension Funds 5.8%
9. Global Airport Operation 5.0%
10. Global Engineering Services 4.9%
Source: https://www.ibisworld.com/global/industry-trends/fastest-growing-industries/
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The 10 Fastest Growing Industries in the US


Based on 2019-2020 Revenue Growth

1. Global Heavy-Duty Truck Manufacturing 29.0%


2. Global Deep-Sea, Coastal & Inland Water Transportation 23.6%
3. Global Casinos & Online Gambling 17.6%
4. Global Commercial Aircraft Manufacturing 17.0%
5. Global Car & Automobile Sales 16.6%
6. Global Oil & Gas Exploration & Production 15.3%
7. Global Airlines 13.2%
8. Global Management Consultants 12.4%
9. Global Automobile Engine & Parts Manufacturing 11.9%
10. Global Hotels & Resorts 11.8%
Source: https://www.ibisworld.com/global/industry-trends/fastest-growing-industries/
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Fastest Growing Occupations 2019-2029

Growth Rate,
Occupation 2020 Median Pay
2019-29
Wind turbine service technicians 61% $56,230 per year
Nurse practitioners 52% $111,680 per year
Solar photovoltaic installers 51% $46,470 per year
Occupational therapy assistants 35% $62,940 per year
Statisticians 35% $92,270 per year
Home health and personal care aides 34% $27,080 per year
Physical therapist assistants 33% $59,770 per year
Medical and health services managers 32% $104,280 per year
Physician assistants 31% $115,390 per year
Information security analysts 31% $103,590 per year
18 Source: https://www.bls.gov/ooh/fastest-growing.htm HRP

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Fastest Growing Occupations 2019-2029


Growth Rate,
Occupation 2020 Median Pay
2019-29
Data scientists and mathematical science
31% $98,230 per year
occupations, all other
Derrick operators, oil and gas 31% $47,920 per year
Rotary drill operators, oil and gas 27% $53,820 per year
Roustabouts, oil and gas 25% $39,420 per year
Speech-language pathologists 25% $80,480 per year
Operations research analysts 25% $86,200 per year
Substance abuse, behavioral disorder, and mental
25% $47,660 per year
health counselors
Forest fire inspectors and prevention specialists 24% $42,150 per year
Cooks, restaurant 23% $28,800 per year
Animal caretakers 23% $26,080 per year
19 Source: https://www.bls.gov/ooh/fastest-growing.htm HRP

Rationale for HR Planning


 Planning for substantive reasons, i.e. to have a practical effect -
 to optimize use of resources by making them more flexible;
 to acquire and grow skills which take time to develop;
 to identify potential problems;
 to minimize the chances of making a bad decision; and
 Planning because of the process benefits -
 to (re)gain corporate control over operating units;
 to understand the present in order to confront the future;
 to challenge assumptions/liberate thinking;

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 to co-ordinate/integrate organizational decision-making and actions;


 to link HR plans to business plans so as to influence them;
 to make explicit decisions which would allow later challenge;
 to stand back, provide an overview;
 to ensure long-term thinking is not driven out by short-term focus;
 to communicate plans so as to obtain support/adherence to them.

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Need for HR Planning


 Economic Conditions  Employee replacement
 Technological Conditions  Succession planning
 Government/Legal Conditions*  Labor Turnover
 Demographic Conditions  Expansion Plans
 Geographic Conditions  Assessing Needs
 Social Conditions
* 1) Equal employment and affirmative action,
2) Labor laws and regulations, and
3) Employment-at-will.

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Components of HR Planning

 Job analysis  Recruitment & Selection


 Workforce analysis –  Induction
Competencies, Absenteeism, Labor  Performance management
turnover
 Learning & Development
 HR Forecasting process
 Evaluation of HR programs and
 Ascertaining HR supply policies
 Succession management  HR Information systems
 Strategic options – downsizing/  HR Accounting Methods
restructuring/outsourcing

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Managerial Functions of HR Planning

Adequate supply Proper quality Effective utilization

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Enabling Managerial Functions of HRP

 Align human resource needs and organizational goals.


 Direct towards clear and well-defined objectives.
 Have the right number of people and the right kind at the right time doing work
for which they are economically most suitable.
 Take into account the principle of periodical reconsideration of new developments
and extend the plan to cover the changes during the given long period.
 Pave the way for an effective motivational process.
 Maintain adequate flexibility to suit the changing needs of the organization.

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HR Planning at Different Levels


National Level Sector Level Industry Level Unit Level Department Level

Helps to plan for Helps to plan for a Takes into Based on the Looks at the
particular sector like estimation of
educational account the manpower needs
agriculture,
facilities, health output/ human resource of a particular
industry, etc.
care facilities, Helps the operational level needs of the department in an
agricultural and government to of the particular particular organization.
allocate its company in
industrial resources to the
industry when
question. It is
development and various sectors manpower needs
based on the
employment depending upon the are considered.
priority accorded to business plan of
plans, etc. the company.
the particular
sector.

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Integrated Strategic Planning and HR


 HRP needs to be comprehensive, unified and integrated for the entire
organization.
Development and knowledge of organization’s overall purpose or mission or goals and
objectives.
1

Providing inputs by HR manager regarding key HR areas, capabilities and constraints


of HR and environment to corporate strategists.
2

The corporate strategists in turn communicate their needs and constraints to the HR
manager.
3

Integration of HR and other functional plans.


4
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 Four spans of corporate plan

Long term (5 or more years)


1

Intermediate term (3 years)


2

Operation cycle (1 year)


3

Short term (day-to-day or week-by-week)


4
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 Four levels of corporate plan vs. HR plan


Corporate-level plan - Employment policy, HRD policies, remuneration policies, etc.
HR strategies, objectives and policies should be consistent with company’s strategy.
1

Intermediate-level plan - SBUs prepare intermediate plans.


2

Operations plan - Prepared at the lowest business profit centre level.


3

Short-term activities plan - Day-to-day HR plans relating to handling employee


benefits, grievances, disciplinary cases, accident reports, etc.
4
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HR Planning Model

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A Theoretical Model of HRP

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Training & Development 32
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Objectives of HR Planning
 Assessing manpower needs for future and making plans for recruitment and
selection.
 Assessing skill requirement in future for the organization.
 Determining training and the development needs of the organization.
 Anticipating surplus or shortage of staff and avoiding unnecessary detentions or
dismissals.
 Controlling wage and salary costs.
 Ensuring optimum use of human resources in the organization.
 Helping the organization to cope with the technological development and
modernization.
 Ensuring career planning of every employee of the organization and making
succession programs.
 Ensuring higher labor productivity.
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Determinants of HR Planning
External Factors Determinants of HRP Internal Factors

Government Policies Company’s Strategies and Policies

Level of Eco. Development incl. Company’s HR Policy


Future Supply of Human Resources
Formal and Informal Groups
Business Environment Job Analysis
Level of Technology Time Horizons
International Factors Types and Quality of Information

Company’s Production & Operations Policy

Trade Unions

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Strategies for HR Planners


HR Planners should -
 collect, maintain and interpret relevant information regarding human
resources.
 periodically report manpower objectives, requirements and existing
employment and allied features of manpower.
 develop procedures and techniques to determine the requirements of different
types of manpower over a period of time from the standpoint of organization’s
goals.
 develop measures of manpower utilization as component of forecasts of
manpower requirement along with independent validation.

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HR Planners should -
 employ suitable techniques leading to effective allocation of work with a view
to improving manpower utilization.
 conduct research to determine factors hampering the contribution of
individuals and groups to the organization with a view to modifying or
removing these handicaps.
 develop and employ methods of economic assessment of human resources
reflecting its features as income generator and cost and accordingly
improving the quality of decisions affecting the manpower.

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Limitations of HR Planning
 Uncertainty of future
 Conservative attitude of top management
 Problem of surplus staff
 Short-sighted HR thinking
 Expensive process
 Time consuming
 Accuracy of forecasts
 HRP practitioners are sometimes perceived to be “HR experts” and not
“experts in the business.”

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Guidelines for making HRP Effective


 Integration with Organizational Plans
 Period of HR Planning
 Proper Organization
 Support of Top Management
 Involvement of Operating Executives
 Efficient and Reliable Information System
 Balanced Approach

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Benefits of HR Planning
 ‘Growing our own timber' rather than 'buying in' as necessary;
 The need for skills which are often in short supply;
 The complexity of the expertise required which leads to extended training with
consequently long recruitment lead times;
 Decisions are made over extended time scales particularly in capital intensive
industries;
 A perception that the organization's demand is stable, or at least predictable;
 Control of resources rather than laissez faire growth in organizations at a
particular stage of development.

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Strategic Management
Aligning HR with Strategy

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Agenda
 Implications of HR for organizational strategies
 HR manager’s need to understand strategy
 Organizational strategies including restructuring, growth and maintenance
 Business strategy vs. corporate strategy
 Linking HR process to strategy
 Steps used in strategic planning and its benefits.
 Importance of strategic planning
 Risks associated with not planning
 Approaches to linking strategy and HR, including the barriers to becoming a
strategic partner
 Characteristics of an effective HR strategy
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What is Strategy?
 Strategy is determination of the basic long-term goals and objectives of an
enterprise and the adoption of courses of action and the allocation of
resources necessary for carrying out these goals (Chandler, 1962).
 It is the formulation of organizational objectives, competitive scopes and
action plans for gaining advantage.
 Logical incrementalism is the process of subtly redirecting strategy to
accommodate changes in the environment which involves moving, shifting and
evolving as a dynamic process as conditions warrant changes. This is also called
emergent strategy.
https://www.youtube.com/watch?v=0BgMQkKMKaE

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 Intended strategy is the one that was formulated at the beginning of the
period.

 The realized strategy is what actually happened.


 Triggering events to stimulate a change in strategy
 New CEO
 Threat of change in ownership
 External intervention
 Performance gap
 Strategic inflection point
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Reality of the Strategic Process

Emergent strategy
Created from new
ideas and conditions.

Intended strategy Realized strategy


The agreed-upon strategy Executed representing
arrived at through the some planned and some
formal planning process. emergent strategy.

Discarded strategy
Deemed inappropriate due to
changing circumstances.

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Strategic Typologies

Strategies

Turnaround*
Corporate Business
Strategies Divestiture Strategies
Builds a competitive focus
Restructuring Liquidation
in one line of business
Bankruptcy
Growth
Incremental International Mergers &
Stability Acquisitions
* Also called as ‘retrenchment strategy’
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Strategic Planning Process


Where do we Where are we to
Who we are?
want to be? measure success?
Establish the Develop objectives Evaluate the
mission, vision performance
and values 7
1
What may What should
change? we do?
Analyze the Implement the
environment strategy
3 6
What is our How can we
advantage? compete?
Identify competitive Determine the
advantage competitive position
4 5
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1. Establish Mission, Vision and Values


Mission statement An articulation of the purpose of the organization and the value it
creates for the customers.
To save people money so they can live better. (Walmart)
Vision statement defines the long-term goa l of the organization.
To usher in the next industrial era and to “build, move, power, and cure the world. (GE)

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1. Values The basic beliefs that govern individual and group behavior in an organization.
• Act with uncompromising honesty and integrity in everything we do.
• Satisfy our customers with innovative technology and superior quality, value and
service.
• Provide our investors an attractive return through sustainable, global growth.
• Respect our social and physical environment around the world.
• Value and develop our employees’ diverse talents, initiative and leadership.
• Earn the admiration of all those associated with 3M worldwide
(3M)

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2. Develop objectives These are an expression, in measureable terms, of what an


organization intends to achieve.
3. Analyze the external environment Scanning and monitoring technology, laws and
regulations, the economy, socio-cultural factors, and changing demographics help managers
make reactive and proactive changes to strategic plan.
4. Identify the competitive advantage Identify the characteristics of the firm that
enable it to earn higher rates of profit than its competitors.
 Tangible assets Future economic resources that have substance and form from
which an organization will benefit.
 Intangible assets Future economic resources that have been generated from the past
organizational events.
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 Capabilities A complex combination of people and processes that represent the


Core competence: Antoarea
firm’s capacity of specialized
exploit expertise
resources that that isspecially
have been the result of harmonizing
integrated to achieve a
complex desired
streamsresult.
of technology and work activity (Prahalad & Hamel, 1990).
 Ex. Resource-based
Honda's expertise view
in engines.
(RBV)Honda was able1991)
(Jay Barney, to exploit this core
Suggests thatcompetency to develop
these resources and
a variety of quality products from lawn mowers and snow blowers to trucks and automobiles.
capabilities to provide a sustained competitive advantage must meet four criteria:
Characteristics of Core Competencies:
 They are valuable to the firm’s strategy;
• Provide a set of unifying principles for the organization and they are pervasive in all
 The are rare;
strategies.
They are
 access
• Provide to ainimitable.
variety of markets.
 inThey
• Critical are non-substitutable.
producing end products.
Core
 • Rare or competency (C. K. Prahalad & Gary Hamel, 1990) Resources and capabilities
difficult to imitate
that serve as a firm’s competitive advantage.
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 Dynamic Capabilities (Teece, et al. 1997) The ability to adapt and renew
competencies in accordance with changing business environment.
5. Determine the competitive position
 Low-cost provider strategy (Ex: Fast food business)
 Broad differentiation strategy (Ex: Zappos "Deliver wow through service”)
 Best-cost provider strategy (Ex: Chipotle Mexican Grill)
 Focused or niche market strategy based on lower cost (Ex: Krispy Kreme Doughnuts)
 Focused or niche market strategy based on differentiation (Ex: Rolls-Royce sells
limited number of high-end, custom-built cars)
6. Implement the strategy It is the process by which a strategy is put into action. It is
also called operational planning.
7. Evaluate performance

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Benefits of Strategy Formulation

• Clarity
• Coordination
• Efficiency
• Incentives
• Adjustment to change
• Career development

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TPK
 Define strategy. What are the various types of strategies?

 What is the strategic planning process?

 Define (a) Capabilities and (b) Core competencies


 What are the benefits of strategy formulation?

 What is competitive advantage?

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Strategic HRM

Attracts,
Overarching HR philosophies
develops,
motivates, and
Human Resources trains
Formal HR policies
Management employees for
effective
functioning of
Specific HR practices
the organization.

Strategic HRM is the interrelated HR philosophies, policies, and practices to


enable the achievement of the organizational strategy.

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Theories of Strategic Management of HR


Resource-based View (RBV)
This theory suggests that the management of resources and capabilities will lead
to competitive advantage, resulting in superior performance and value creation.

 Typical capabilities might include: Strategy


a) Adaptability; b) Flexibility; c) Speed of bringing new
products to market Competitive Advantage

 Typical resources might include:


Capabilities
a) Human resources; b) Proprietary knowledge;
c) Reputation Resources
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The Contingency Perspective


 It blends both the human capital and behavioral theories.
 It refers to the need to modify HR strategies relative to its business and
organizational strategies.
Human Capital Theory
 Human capital is the collective sum of employees’ attributes, experience,
knowledge, and commitment invested in the organization.
 Employees are viewed as a capital resource that requires investment.

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 Human capital also includes:


 Knowledge
 Education
 Vocational qualifications
 Professional certifications
 Work-related experience
 Competence of an organization’s employees
 The value added of human capital investments or the human capital return
on investment (ROI) can be calculated:
Total Revenue – (Operating Expenses – Total Compensation Costs)
Total Compensation Costs
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Behavioral Theory
 This theory suggests that different HR strategies are required to influence the
diverse behaviors of employees.
 HR’s role is to reinforce certain behaviors via the HR practices such as
recruitment, selection, training, compensation, and performance.
 HR’s role is to tactfully challenge and refocus baseless ideas of human behavior.
 This perspective is important as the HR department is tasked to define and
develop the behaviors necessary to achieve organizational capabilities of
innovation, speed and accountability.

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Strategic HR Planning
Reasons why strategic planning is so important:
1. Employees help an organization achieve success because they are its
strategic resources.
2. The planning process itself results in improved goal attainment.
 What happens if the strategy of the organization changes?
 Ensure HR planning such that human assets are managed and matched to
the new organizational strategy.
1. Improved goal attainment.
The goals of HRM strategies are to shape employee behavior so that its is
consistent with the direction organization identifies in its strategic plans.
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2. The Risks
Costs involved in HR Planning –
• Increased time and energy involved in decision-making.
• Greater potential for information overload.
• Impossible commitments to employees.
• An over concern with employee reactions which are incompatible with the
industry conditions.
Risks involved –
• Strategy formulation is relatively easy, implementation is far more difficult.
• It may create an impression among employees that that jobs are for life.
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• Organizations that commit to one strategy become blind to changes in the


environment and lose their flexibility.
Risks of not developing a strategy –
• Organizations that do not scan the environment actively face the danger of
being out of touch with reality.
• Companies that do not develop strategies find it difficult to gain competitive
advantage and control their own destiny.
3. Linking HR Process to Strategy
Aligning HR strategy with business strategy can be done in one of the following
ways:

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1. Start with organizational strategy and then create HR strategy;


2. Start with HR competencies and then craft corporate strategies based on
these competencies;
3. Do a combination of both in a form of reciprocal relationship.
Corporate Strategy Leads to HR Strategy
• Personnel needs are based on corporate plans. (Ex. McDonald’s)
HR Competencies Lead to Business Strategy
• Exploit employee competencies to develop new products or services. (Diversity
management efforts are building on this theme).
• Skills determine strategy relies heavily on employee capabilities, and not on
environment analysis.
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Reciprocal Independency between HR Strategy and Business Strategy


• In many ways, HR strategy generates the business strategy, and the business
strategy determines the HR strategy.
• HR becomes a business partner
• Key is concurrent strategy formulation
• HR senior management team moves from outsider status to insider status.
• HR managers to understand the numbers language of business or
outcomes of non-profit organizations.
• HR managers to understand the analysis of marketing, finance, operations,
etc.

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• Prepares cost benefit assessment of options within the HR domain.


• Sharpen entrepreneur instincts and scan the HR capabilities.
• Generate alternative solutions to problems.
• HR manager thinks and acts as a partner and problem solver.

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Strategic Partnering
• How do HR professionals become strategic partners?
• If a firm has one business strategy then working on HR strategy is fine.
• What happens when an organization has more than one business strategy and
more than one HR strategy?
• HR Strategy Differentiation
• The challenge is to treat employees in different divisions in an equitable
fashion while motivating different behaviors that align with the divisions’
strategies or functions. (Ex. 3M)
• HR strategy can be differentiated based on jobs/positions within divisions.
• Different positions assume different roles in strategy implementation.

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1. When a position is directly responsible for creating the strategic


capabilities of the business (Ex. Big pharma); and
2. When different job holders may vary substantially in their job performance,
then the position is considered a strategic position (Ex. Walmart).
• Organizations should have a special HR strategy for these strategic positions
to make sure that they can attract, motivate, and retain top players in these
positions.
• Even within the same positions, some individuals may deserve differential HR
strategy because human capital is (a) valuable for business strategy and (b)
unique.

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Characteristics of an Effective HRM Strategy


Purpose of HR strategy: To capitalize on the distinctive competencies of the
organization and add value through the effective use of human resources.
Effective HRM strategies include external and internal fit and focus on results.
 External Fit: HR programs must align or fit the overall strategy of the
organization. This is called the ‘best fit’ approach.
 Internal Fit: There are two types of internal fit viz., (a) a fit with other functional
areas and (b) HR programs must be consistent with each other.
 Focus on Results: Unless strategy contains performance measures i.e. is result
oriented, it will be difficult to know how successfully the strategy was
implemented.

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HR Program Employee human Organizational Organizational


capital and strategy outcomes
behaviors

Linking HR Programs to Organizational Outcomes

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Environmental Influence on HRM

HRP

2
Agenda
 Sources that HR planners use to keep current with business and HR trends
 How environment scanning is practiced
 Challenges in scanning the environment
 Delineating the environmental factors
 The role of the stakeholders

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Environmental Scanning Sources and Methods 3

Environmental scanning is the systematic monitoring of the major factors


influencing the organization to identify trends that might affect the formulation and
implementation of both organizational and HR strategies.

Environment covers factors as broad as national and multinational contexts that


influence an organization. It also includes industrial environment.

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Stages in Analysis of External Environment 4


Scanning Monitoring Forecasting Assessing

An attempt to A systematic After monitoring a An attempt to


identify early describe the
approach to trend, an attempt impact of the
signals of
following some to project the monitored trend
changes and on the
key indicators possible impact
trends in the organization,
that may affect on the and make a
environment.
the organization, organization. judgement of
This information
the probability of
is ambiguous, such as each of several
incomplete and legislative possible
unconnected. outcomes.
changes.
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Sources of Information 5

Sources of Information

Publications Professional Conferences Professional


Associations and Seminars Consultants
Newspapers, NHRDN Attending ManpowerGroup,
business ISTD conferences, AON Hewitt,
publications, HR SHRM seminars, Adecco India,
magazines, HRP Society conclaves, will Randstad India,
journals, keep you TeamLease,
The HR Club
informed or even
newsletters. World at Work Global
ahead of
InnovSource
emerging trends.
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Top 10 Trends in HRM - 2021 6


1. Make Employee Wellbeing a Top Business Mandate
2. Use the Coronavirus Pandemic to Accelerate Your Workplace Transformation
3. Invest in Mental Health as a Must Have Rather Than a Nice-to-Have Benefit
4. Re-engineer and Transform Corporate Learning, the Time is Now
5. Provide Internal Talent Mobility to Attract, Engage, and Retain Employees
6. Solving Business Problems Using People Analytics
7. Prepare for the Hybrid Office of the Future
8. Expand Employee Experience and Wellbeing Resources to the Entire Family Unit
9. Be Holistic in Creating A Diverse, Equitable, and Inclusive Workforce
10. Anticipate New HR Jobs of the Future
https://www.forbes.com/sites/jeannemeister/2021/01/14/10-hr-trends-for-the-next-normal-of-work/?sh=4d4e3f6b5fc4
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Top 8 Trends in HRM - 2021 7

 What should be the top HR strategies to ensure


business continuity?

 How to maintain the company culture while


employees work remotely?

 How to manage remote workforce while


keeping them engaged?

 What should be the right HR technology tools


to embrace the new work approach?

 What measures to be taken for employee well


being while they work from home?

https://empxtrack.com/blog/hr-trends-2021/
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Methods of Forecasting 8

Methods of Forecasting

Trend Delhi Scenario Nominal Impact


analysis technique planning group analysis
technique
Competitive intelligence is a formal approach to obtain information about your
competitors.

Methods - Study competitor’s website; Train employees to ask questions from vendors; Hire
competitor’s employees; Private detectives (unethical).

Evaluation of Information – Source credibility; Likelihood of information being correct.


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Challenges in Environmental Scanning 9

• HR strategists limit themselves to a two- to three-year time frame and extrapolate from
current trends.

• Isolating the Critical from the Insignificant

• Four criteria for identifying significant trends:

• Are there ripple effects?

• How profound are the impacts on people’s priorities, roles and expectations?

• How large is the impact scope (number of people impacted)?

• Will the change endure over time?


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Environmental Factors 10

Environmental
Environmental Factors
Factors

Political &
Economic Globalization legislative
climate factors
• Unemployment rate • Increasing? • Changes to laws
• Employee • Sovereignty and regulations
willingness to • Prosperity • Ethical issues?
commute • Jobs wages • Pay equity?
• Risky executive
• Value of rupee • Social legislation
behaviors?
• Public debt
• Interest rates

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Environmental Factors 11

Environmental
Environmental Factors
Factors

Demographic* Technological Social/cultural


factors factors factors

• Baby
LaborBoomer
marketGeneration 1946 1964
• Tools, machinery, • Right to privacy
• Generation
Diversity X/Gen X 1965 1979equipment, software • Work-life
• Generational • Every HR function has balance
Generation Y/ Millennials/
differences 1980 1995the potential to become • Contingent
Gen Y
managed electronically. workers
Generation Z 1996 2010
• E-learning • Violence at work
Gen Alpha 2011 2025
• Virtual work
* Study of population statistics
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Stakeholders 12

Stakeholders are groups of people who have an interest in the projects, policies, or
outcomes of an organization’s decisions. They are also called constituent groups. They
affect strategy formulation.
• The board of directors & Senior executives: Research shows that different types of
strategies require different types of managers and executives. Ex. Those with tolerance
for ambiguity – managed firm with a growth strategy more successfully than those with a
harvest strategy.
• Senior management: More interested in workforce planning and utilization, incentive
compensation, training and development, and performance management systems.
• Supervisors: Manage employees and their role in meeting organizational goals.

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• Employees: Employees expect efficient HRD, maintenance of confidentiality, clear HR


policies, job satisfaction, career advancement and fairness in the organization.
• Unions: Unionized employees can influence the organizational strategy in two ways – one
is a restrictive way and the other cooperative way. Key issues for unions are job security,
working hours, inflation protection, etc. A new trend to watch is unionization of managers.

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Responding to External Factors 14

Issues Priority Matrix helps determine which are the important trends that may affect an
organization.

Probable impact on Organization

High Medium Low

High High priority High priority High priority

Probability of
Medium High priority Medium priority Low priority
Occurrence

Low Medium priority Low priority Low priority

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A proactive approach –
The Environment Analysis Process 15

Scanning and Monitoring the


General Environment
Economics, Globalization,
Politics and legislation,
Technology, Demographics,
Social and cultural factors

HR Forecasting and Scanning and Monitoring the


Assessing Business Environment
Determining the issue priority Porter’s five-forces
SWOT analysis Stakeholders
Scenario planning

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The HR Forecasting Process

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Agenda
 Forecasting activity categories

 The strategic importance of HR forecasting


 Key personnel analysis conducted by HR forecasters

 Environmental and organizational factors affecting HR forecasting

 HR forecasting time horizons


 Determining net HR requirements

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HR Forecasting 3

Human resource planning is analyzing organization’s human resource needs


under changing conditions and developing the activities necessary to satisfy these
needs (Walker, 1980).

HR forecasting is ascertaining the net recruitment of personnel by determining the


demand for and supply of human resources now and in the future.

Implicit here is that supply and demand analyses should be conducted separately
(Walker, 1980).

Training and development, career planning, recruitment and selection, and


managerial appraisal are all stimulated by HR forecasting process.
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Forecasting Activity Categories 4

Forecasting Activity

Transaction-based Event-based Process-based


forecasting forecasting forecasting

Tracks internal change Concerned with the Focused on the flow or


instituted by the external environment. sequence of several work
organization’s managers. activities (e.g.
warehousing shipping
process)

HR forecasting processes use both quantitative and qualitative data. Accuracy of prediction
significantly improves when we use a variety of forecasting techniques (Patterson, 2003).
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Strategic Importance of HR Forecasting 5

1. Reduces HR costs
2. Increases organization’s flexibility
3. Ensures a close linkage to the macro business forecasting process
4. Ensures that organizational requirements take precedence over issues of resource
constraint and scarcity (HR supply and HR demand)
HR demand is the organization’s projected requirement for human resources.
HR supply is the source of workers to meet demand requirements, obtained either
internally (current members of the organization’s workforce) or from external
agencies.

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Key Personnel Analysis Conducted 6


by HR Forecasters
1. Specialist/Technical/Professional Personnel
• Key area of HR forecasting; Contributes to competitiveness; Benchmark
compensation schemes; Longer lead time is required on supply side.
2. Employment Equity-Designated Group Membership
• India does not have an all-encompassing anti-discrimination law in employment.
• Article 15, Constitution of India: Prohibits discrimination on the grounds of religion,
race, caste, sex and place of birth in providing equal employment opportunities.
• Does not prevent positive discrimination or affirmative action that is based on
discrepancies in gender, social or financial background or traditional caste-based
disadvantage.
• Article 16 empowers the state to make reservations.
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• Article 39 in Part IV, the Constitution of India: The state to ensure that citizens, men
and women equally, have the right to an adequate means of livelihood, right to
shelter, food, education and work.
• Designated groups are the groups deemed to require special attention due to the
persistent disadvantages they face in the labor market. Examples of such groups are
women, persons with disabilities, members of minorities, socially disadvantaged.
3. Managerial and Executive Personnel
• Pay attention to leadership talent and appraisals as this is the key for transforming
organizations.

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4. Recruits
• The relative balance of internal to external personnel to be selected for training courses
is a key factor in the HR forecasting and programming operations of many
organizations.

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Five Stages of HR Forecasting Process 9

1. Identify organizational goals, objectives, and plans.


2. Determine overall demand requirements for personnel.

3. Assess in-house skills and other internal supply characteristics.


4. Determine the net demand requirements that must be met from external,
environmental supply sources.
5. Develop HR plans and programs to ensure that the right people are in the right
place.

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HR Forecasting Time Horizons 10

# Time in Years>>> 1 2 3 4 5 >


Meets immediate operational needs. Time
1. Current forecast frame is current operating cycle or
maximum one year.

Goes beyond current operational


2. Short-run forecast
requirements

3. Medium-run forecast

Should be extremely flexible. It is a


4. Long-run forecast statement of probable requirements based
on certain assumptions.
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Outcomes of Forecasting 11

Prediction: It is a single numerical estimate of HR requirements associated with a


specific time horizon and set of assumptions.

Projection: Incorporates several HR estimates based on a variety of assumptions.

Envelope: An analogy in which one can easily visualize the corners of an envelope
containing the upper and lower limits, or “bounds,” of the various HR projections
extending into the future.

Scenario: A proposed sequence of events with its own set of assumptions and
associated program details associated with HR functions.

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Contingency plans: They are implemented when severe, unanticipated changes


to organizational or environmental factors completely negate the usefulness of the
existing HR forecasting predictions or projections. These are like backup plans.

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Determining Net HR Requirements 13

1. Determine HR demand
• Each organizational sub-unit has to submit its net personnel requirement to
the corporate forecasting unit.
• Planned future changes in organizational design or in restructuring, with their
associated increases or decreases in staffing levels must be incorporated into
the equation to revise the aggregate net departmental demand requirements.
• Consideration should be given to replacing non-productive paid time.
• All this will lead to net HR demand.
• Conduct a cost estimate or HR budget.

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2. Ascertain HR supply (includes internal supply and external supply) and skills
inventory-personal database record on each employee
• Internal supply refers to current members of the organizational workforce
who can be retrained, promoted, transferred, and so on to fill anticipated
future work requirements.
• External supply refers to potential employees currently undergoing training,
working for competitors, members of unions or professional associations, or
in a transitional stage, between jobs, or unemployed.
• Most organizations use a mix of both sources.
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• Reasons for using external labor sources


• Need to increase the labor force without increasing labor efficiency to
expand operations.
• External applicants introduce to the organization competitive insights and
highly creative novel operational techniques.
• Internal candidate may be more expensive than an external hire.
• Poaching the competitors (using headhunters).
• Organizational objectives may require a shift in operating techniques,
culture, and past practices.
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3. Determine NET HR requirements


• External supply requirements = Replacement needs + Change supply components
• Replacement = Hiring to replace all normal losses
• Change supply = Increase (or decrease) in the overall staffing level
• External supply = Current workforce size (Replacement % per year + Change % per
year)

3. Institute HR programs: HR shortage and HR surplus


• HR shortage = HR Demand > HR Internal supply
• HR surplus = HR Demand < HR Internal supply

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• HR shortage occurs when demand for HR exceeds the current personnel


available in the organization’s workforce.
• HR surplus occurs when the internal workforce supply exceeds the
organization’s requirement or demand for personnel.

Policy Options
• In case of HR shortage, attract new employees (full-time, part-time, contract or
freelance), recall the employees who were laid off, retired employees, use
temporary workers.

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In case of HR surplus, the options include -


• Job sharing occurs when two or more employees perform the duties of one full
time position, each sharing the work activities on a part-time basis.

• Work sharing is a program that aims to help organizations mitigate temporary


layoffs through redistribution of work, earnings and leisure time.

• Attrition is the process of reducing HR surplus by allowing the size of the


workforce to decline naturally due to the normal pattern of losses associated with
retirements, deaths, voluntary turnover, and so on.

• Hiring freeze is a prohibition on all external recruiting activities.


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Job Analysis

2
Agenda
 Job analysis

 Problems associated with job analysis


 The process of job analysis

 Specific job analysis techniques

 Competency-based approaches

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Definitions 3

Job is a group of related duties, tasks, and behaviors performed by one or more
individuals, viz., jobholders.

Positions are the number of individuals who are performing the duties, tasks, and
responsibilities of a specific job.

Departmentalization is the process of individual jobs being aggregated with


others. Departmentalization contributes to the performance of essential
organizational tasks without unnecessary duplication or redundancy.

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Job analysis

 The best job analysis method ‘depends on objectives and the situation at hand’ (Gael, 1988)

 The basic approaches to job analysis reflect (a) behavioral description, (b) behavioral
requirements, (c) ability requirements and (d) task characteristics (Fleishman and Quaintance,
1984).

 Job analysis is the procedure for determining the duties and skill requirements of a job and the
kind of person who should be hired for it.

 The systematic process of determining the skills, duties and knowledge required for
performing specific duties in an organization (Mondy et al., 1999).

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 Job analysis is a systematic study of a job to discover its specifications,


skill requirements, etc. for wage-setting, recruitment, training, or job-simplification purposes.

 Job analysis is the process of studying jobs to gather, analyze, synthesize and report
information about job responsibilities and requirements and the conditions under which work is
performed (Heneman and Judge, 2009).

 The analysis of sub-divided work in the organization, both at the level of the individual job and
for the entire flow of the production process (Belcourt et al.).

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Job Analysis 6

 Tasks Tasks, Performance  Knowledge


Standards, Knowledge,  Skills
 Duties Skills, Experience, Job  Abilities
 Responsibilities of job context, Duties, Equipment  Other attributes

Human Resource Job


Job Description
Specifications
Functions

 Job description and job specification are the written outcomes of the job analysis process.
 Job description emphasizes the duties or tasks to be carried out on the job.
 Job specifications emphasize identifying the competencies the jobholder must possess to be a
successful performer in the specified job.
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 Knowledge is the body of information, usually of a factual or procedural nature, that


allows an individual to perform a task successfully.
 Skill is the individual’s level of proficiency or competency in performing a specific task.
Level of competency is typically expressed in numerical terms.
 Ability is a more general, enduring trait or capability an individual possesses at the
time when he or she first begins to perform a task.
 Other attributes include work experience.
 Compensable factors are skills, efforts, responsibility and working conditions.

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 Job analysis is essential pre-requisite for the success of virtually all other HR
functions.

 Scientific management examines two main aspects of each job in the organization –
the methods employed and the time measurement for task completion.

 Knowledge  Cycle/production time


 Cognitive abilities required
 Mechanical abilities  Standard time
 Psychomotor abilities  Normal time
 Working conditions  Productivity

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Job Analysis & HR Planning 9

HR Planning Job Analysis


1

HR Demand HR Supply Job Description Job Specifications

Recruitment & Selection Globalization 3

2  Organize work
 Differentiate core work activities vs. activities that
Technology
can be outsources/curtailed.
 Structure organization
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Problems Associated with Job Analysis 10

1. Job analysis that is neither updated nor reviewed.


2. Job description or specification that is too vague.
3. Validity of content. Validity in psychological and employee testing is defined as the extent to
which a test instrument measures what it purports to measure.
Contamination and deficiency.
 Deficiency is an error of omission that occurs when a job description or specification fails
to incorporate important aspects of the job required for success.
 Contamination is an error that occurs when unimportant or invalid behaviors or attributes
are incorporated into a job description or specification.
4. Time and costs of job analysis.

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Process of Job Analysis 11

Maintain new methods and performance


5 standards for the job or process

4 Define and formalize new methods and


performance standards for the job or process

Examine the recorded data on the job or


3 process

Determine methods and analyze the job or Cost, time, flexibility methods, validity
2 process and reliability, acceptance.

Determine the job or process to be analyzed Benchmarks are external comparators for
organizational jobs and performance criteria.
1

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Common Methods of Job Analysis 12

Interviews Analysts may use 3600 evaluation that is “evaluation of attributes and
performance dimensions of a job from ‘the full circle’ around the job – that is,
feedback from subordinates, superiors, co-workers, clients, and the jobholder
himself/herself.”

Observation Direct observation - Observes the production line for worker behaviors and the
skills required for job success. Indirect observation – Video tape recording or
closed circuit camera records the job for subsequent analysis.

Questionnaires Standardized questionnaires – (a) the Functional Job Analysis, (b) the Job
Diagnostic Survey, and (c) the Position Analysis Questionnaire.
Common elements of questionnaires – (i) job related education, training and skill
requirements (ii) responsibility or accountability, (iii) effort required, and (iv) working
conditions

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Journals & Jobholders are asked to maintain a written record of their job activities,
Diaries and associated time expenditure, for a preset period.
Output and Useful for determining appropriate performance standards. Do not reveal
production qualitative or process aspects of the job.
analysis
Current job Examination of existing job descriptions and specifications.
descriptions
and
specifications

Most job analysts use multi-method approach that enables quantitative aspects as well as
qualitative aspects of each job to be analyzed.

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Examine the Recorded Data on the Job or Process 14

• What is the purpose of this job? Why does this exist?


• Where is the job physically performed? Are there compelling reasons why the job must be
performed there?
• What is the sequence of behaviors required for successful job performance? Are there ways to
modify the methods and process to improve the job both qualitatively or quantitatively?
• Who performs the job? What constitutes the employee specifications required for the job
success? Are the specifications optional or are they minimum standards required for success
on the job?
• What are the means of performing the job? Are the machines, materials, group processes, and
operating procedures congruent with effective performance of the job?

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Define and Formalize new Methods and Performance


15
Standards for the Job or Process
• Would you recommend any changes to materials, machinery, behavioral sequencing,
training, or procedures to improve performance on the job?
• Are there any duties or tasks that should be added to or deleted from the job?
• Would you recommend any changes in the specifications for individuals selected to
perform this job?
• What changes in working conditions would you recommend to improve performance on
this job?
• What is your rationale for these recommended changes?

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Job Description vs. Job Specification 16

Job Description Job Specification


Tasks, duties, responsibilities, and specific Person-focused, concentrate on the
behaviors required to be successful knowledge, skills, abilities, experience, and
performer. physical capabilities required for job
Duties are listed in the order of importance and performance.
critical ones are listed on the top.
Work time devoted to the performance of each
task is indicated.
Common to JD & JS
The job title, the job code or classification number, the compensation category, the department
or sub-unit, the supervising job title, the date of approved description or specification, and the
name of the job analyst.
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Maintain new Methods and Performance Standards 17


for the Job or Process
• Methods to implement new methods and prevent relapse of old, comfortable ways
 Communication and training
 Supervisory reinforcement
 Employee feedback
 Reward systems

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Specific Job Analysis Techniques 18

Critical incident technique Position analysis questionnaire Functional job analysis

• A qualitative process of job • A quantitative approach that • Analyses any job using
analysis that produces assesses job characteristics three essential elements
behavioural statements in six different dimensions viz., people, data and
along a range from superior and relate them to human things.
to inferior performance for a characteristics.
specific job.

NAME OR LOGO
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Critical Incident Technique 19

 A qualitative process of job analysis that produces behavioral statements along a range
from superior to ineffective performance for a specific job.
 In 1955, Flanagan and Burns designed a critical incident method of appraisal for
General Motors. They collected 2,500 reported critical incidences from all the plants.
 The incidents were classified into 16 critical requirements.
Physical and mental qualification: Physical condition, Coordination and arithmetic
computation, Understanding and repairing of mechanical devices, Judgment and
comprehension.
Work habits and attitudes: Productivity, Dependability, Accuracy of reporting, Getting
along with others, Initiative.
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Disadvantages of critical incident technique


 Critical incident is subjective.
 Lack of time of the rater is one major hindrance.
 Positive attitudes of an employee like obedience, faithfulness, honesty, etc. are not
given weightage here.
 Relies on memory.
 Has limited scope.

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Advantages of critical incident technique


 Person’s ability/caliber is best judged in critical conditions.
 Continuous appraisal, not year end judgement eliminates recency error.
 As evaluation is incident specific, the rater bias is minimized.
 Feedback can help improve the employee performance.
 Can lead to greater role clarity and improvement of work methods.
 Identifies near misses, which can have bearing on safety of critical applications.

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Position Analysis Questionnaire 22

 The Position Analysis Questionnaire was developed by Ernest McCormick.

 Questionnaire covering 194 different tasks which, by means of a five-point scale,


seeks to determine the degree to which different tasks are involved in performing a
particular job.

 Job elements are incorporated into six dimensions:

1. Information Input: How and where the employee obtains necessary information
for job functioning.
2. Mental Processes: The types of planning, reasoning, and decision-making
processes required by the job.

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23

3. Work output: The specific items produced by the worker and the tools he or she
employs to produce them.
4. Relationship with other workers: Important interpersonal contacts for the
jobholder.
5. Job context and work satisfaction: The physical and social working
environment.
6. Other job characteristics: Elements of the job that do not fall into the other five
dimensions.

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Functional Job Analysis 24

 Dr. Sidney Fine developed the quantitative approach to job analysis that uses a
collected list of the various functions or work activities that can make up any job.
 FJA employs a series of written task statements, each containing four essential
elements:
1. A verb related to the task action being performed by the worker;
2. An object that refers to what is being acted up on;
3. A description of equipment, tools, aids, and processes required for successful
completion of the tasks; and
4. The outputs or results of task completion.

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 FJA analyses any job using three essential elements: (1) people (important
interpersonal relations on the job); (2) data (obtaining, using, and transforming
data in aid of job performance; and (3) things (physical machinery, resources,
and the environment); each of these three dimensions is then rated by level of
complexity and importance.

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Competency Based Approaches 26

 Competency Any knowledge, skills, trait, motive, attitude, value, or other personal
characteristic that is essential to perform the job and that differentiates superior from
solid performance.
 Competency modelling is a systematic approach to identifying the competencies that
enable goal achievement.

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Traditional Job Analysis vs. Competency-based Modelling 27

Traditional Job Analysis Competency-based Modelling

KSAOs required to perform specific jobs and Competencies are pre-defined. Core
examines individual level competencies that competencies and role or specific
are common to a broader occupational group or competencies. Members of the organization in
an entire range of jobs. those positions are expected to have those
competencies.

Duties and task focused. Worker focused. Includes personality and value
orientation of worker.

Jobs studied in isolation. Jobs studied as part of a system and


organizational culture.

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Traditional Job Analysis Competency-based Modelling

Unions fear management abuse of authority in More relevant to today’s organizations as team
the competencies approach which lacks skills are important and managers seek
safeguards of written documentation and well- increased flexibility and control over worker’s
defined limits. behavior.

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Criticisms on Competency-based Modelling 29

 Criticized for its utility as competencies are so broad and often ill defined to be
practical use in guiding performance of job duties.
 Competencies focus more on behaviors than results.
 Confusion among workers, practitioners, and academics as to what exactly is
incorporated into effective competency modelling.
 Competency modelling is merely an extension of job analysis that focuses on what is
common across jobs.
 By focusing on broad general competencies, a large number of activities required for
an individual’s successful performance in a job remains unexplained.
 HR practitioners do not see much value in the competency modelling.

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Determining HR Demand

Dr. M. Bhaskara Rao

1 HRP

Trend/Ratio Analysis
Scatter plot A graphical method used to help identify the relationship
between two variables.

Trend analysis The study of a organization’s past employment levels over a


period of years to predict future needs. It extrapolates from
historical organizational indices.
Ratio analysis A method of determining future staff needs by using ratios
between some causal factor (such as sales volume) and the
number of employees needed. It analyzes the relationship
between an operational index and the number of employees
required.

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Five steps of trend analysis


1.Select the appropriate business/operational index
2.Track the business index over time
3.Track the workforce size over time
4.Calculate the average ratio of the business index to the workforce size.
5.Calculate the forecasted demand for labor.

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Scatter Plot
Size of Hospital No. of registered
(No. of beds) nurses
200 240
300 260
400 470
500 500
600 620
700 660
800 820
Relationship between Hospital size and
900 860 number of Registered Nurses
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Trend/Ratio Analysis
Ratio
Sales No. of
Year Sales/
(‘000 Rs.) Employees
Employee Figures for 2017 are the actuals.
2014 2800 155 18.06 Figures for 2018 and 2019 are the forecasts
2015 3050 171 17.83 or estimations.

2016 3195 166 19.25 The index used to forecast future demand
2017 3300 180 18.33 can be the most recent figure or an average
of the up-to-date period. In this example the
2018 3500 188 18.64
most recent ratio for the year 2017 was used
2019 3600 193 18.64 for forecasting.
2020 3850 207 18.64

5 HRP

Regression Analysis
• It is very effective forecasting technique for short-, medium- and long-range time
horizons.
• Regression analysis pre-supposes that a linear relationship exists between one or
more independent (causal) variables, which are predicted to affect the dependent
(target) variable - for instance, future demand for personnel.
• Regression projects into the future on the basis of the past historical relationship
between the independent and dependent variables.

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Regression Analysis
• Simple regression prediction model:
Y = The dependent variable (HR demand)
Y = A + BX
A = Constant
B = Slope of the linear relationship between X and Y
X = The independent variable (level of sales)

B =
Σ(X2) – N(X bar)2

A = Y bar - BX bar

7 HRP

Regression Analysis
• Simple regression prediction model: X Y
XY X2
Sales No. of people
Y = A + BX
2.0 20 40 4.00
Y = The dependent variable (HR demand)
A = Constant 3.5 32 112 12.25
B = Slope of the linear relationship between X
and Y 4.5 42 189 20.25
X = The independent variable (level of sales)
6.0 55 330 36.00
B =
7.0 66 462 49.00
Σ(X2) – N(X bar)2

A = Y bar - BX bar 23.0 215 1,133 121.50

B = 9.17 X bar = Y bar


4.6 = 43 Y = 0.82 + 9.17 X
A = 43 – 9.17 x 4.6 = 0.82

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Time Series Models

1. Times series models use past data to forecast future demand.

2. Use of simple moving averages for forecasting.

3. Another form is using weighted moving average. Here the more importance is
placed on recent data.

4. To capture seasonality or trends in demand, exponential smoothing is used which


uses all past data, but places much greater weight on the most recent demand data.

9 HRP

Time Series Analysis


Year Sales Actual Actual Employee Forecast Forecast employee
(‘000 Rs.) No. of Requirement number of requirement ratio (3-
Emplo- Ratio Sales/ employees year moving avg of
yees Employee required sales per employee

2014 2800 155 18.06

2015 3050 171 17.83

2016 3195 166 19.25

2017 3300 177 18.64

2018 3500 185 18.92 188 18.57

2019 3600 200 18.00 190 18.94

2020 3850 210 18.3 208 18.52

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Structural Equation Modeling


 Permits the use of more
variables and the development
of more complex models using
SEM.
 Use of SEM required robust data
observations requirements.

11 HRP

Qualitative Forecasting Techniques

1. Organization’s own line managers possess important insights into how future for
labor should or might change in the manager’s own area of responsibility.

2. The organization’s HR and business planning staff have critical information to


provide wise guidance in forecasting future levels of labor demand.

3. Business consultants, financial analysists, university researchers, union staff


members, industry spokespersons, and others possess detailed knowledge of
specific industries or types of organizational activity and are able to give rich,
detailed, and largely impartial judgements on future labor demand because of their
external perspective relative to the organization.

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4. Central, state and local government staff and officials are important individuals to
consult because of their knowledge of future environmental changes in labor and
business legislations.

Management Survey

Scenario Planning
Qualitative Forecasting
Techniques
Delphi Technique

Nominal Group Technique

13 HRP

Scenario Forecasting
 Scenario planning A method for imagining future possible organizational states
and the resulting capabilities, activities, or strategies that are necessary to
be successful in those future states.
 Scenarios generally considered are optimistic, realistic or most likely, and
pessimistic, extended into the time horizon.

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Delphi Technique
 It is named after Greek oracle at Delphi and developed by N. C. Dalkey and his
associates at the Rand Corporation in 1950.
 Delphi technique is a process in which the forecasts and judgements of a
selected group of experts are solicited and summarized in an attempt to
determine the future HR demand.
 It is a carefully designed program of sequential, individual interrogations (usually
conducted through questionnaires) interspersed with feedback on the opinions
expressed by the other participants in previous rounds.
 Key feature – Once a group of experts is selected, the experts do not meet face
to face.

15 HRP

 Advantages of Delphi Technique


 It avoids many of the problems associated with face-to-face groups such as
reluctance on the part of individual experts to participate due to (a) shyness,
(b) perceived lower status of authority, (c) perceived communication
deficiencies, (d) issues of individual dominance and groupthink and so on.
 Disadvantage of Delphi Technique
 Time and costs
 The process is greatly dependent on the individual knowledge and
commitment of each of the contributing experts.

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 If the experts are from single line of inquiry then it may limit their innovation
and creative courses of action.
 If sufficient attention has not been paid to developing criteria for the
identification and selection of experts, the personnel selected to derive the
demand forecasts may lack sufficient expertise or information to contribute
meaningfully to the process.

17 HRP

Steps Associated with Delphi Technique


 Define and refine the issue or question
 Identify the experts, terms and time horizon
 Orient the experts
 Issue the first round questionnaire
 Issue the first round questionnaire responses summary and the second round of
questionnaires
 Continue issuing questionnaires

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Nominal Group Technique


 NGT was developed by Andre Delbecq and Andrew H. Van de Ven.
 NGT is a long-run forecasting technique utilizing expert assessments.
 It is a decision-making technique that involves a group of experts meeting face
to face. Steps include independent idea generation, clarification and open
discussion, and private assessment.
 Differences with Delphi Technique
 The group meets face to face and interacts, but only after individual written
preparatory work has been done and all demand estimates have been publicly
tabled, or written on a flip chart, without discussion.
 Each demand estimate is considered to be the property of the entire group.
19 HRP

 The expert forecast is determined by a secret vote of all group members on


their choice of the tabled demand forecasts.
 Seven Steps of NGT
 Define and refine the issue or question and relevant time horizon.
 Select the experts.
 Issue the HR demand statement to the experts.
 Apply expert knowledge, state assumptions and prepare an estimate.
 Meet face to face.
 Discuss the demand estimates and assumptions.
 Vote secretly to determine the expert demand assessment.
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HR Budgets
 HR budgets are quantitative, operational or short-term demand estimates that
contain the number and types of personnel required by the organization as a
whole and for each sub-unit, division, or department.
 Staffing table contains information related to a specific set of operational
assumptions or levels of activity (e.g., maintain the current organization
structure, increase the sales level by 5 percent over last year's level). The
staffing table presents the total HR demand requirement, laid out in terms
of the number of people required by level (e.g., vice-presidents) and
function (e.g., marketing).

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Ascertaining HR Supply

Dr. M. Bhaskara Rao

1 HRP

Sources of Human Resource Supply

Internal Sources External Sources

Current employees who can be trained, Prospective employees in the labor market
transferred, or promoted to meet forecasted not currently working for the organization,
demand. including those who are employed
Reasons for preferring elsewhere and those who are unemployed
Current employees are already socialized who can be expected to join the
to the norms, rules and procedures of the organization to meet forecasted demand.
organization;
They possess detailed knowledge of their
performance and KSAs over time.

 Should we go for internal or external sources?

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HR Tools to Estimate Internal and External Supply Sources

Internal Supply Indicators External Supply Indicators

Human Resources Audits Labour market analysis


• Skill inventories Community attitudes
• Management inventories Demographic trends
• Replacement charts/summaries
Transition matrices & Markov Analysis

3 HRP

Skills Inventories

 Skills inventory is an individualized personnel record of each employee except those


currently in management or professional positions.
 Information contained in skills inventory
 Personal information
 Education, training, and skill competencies
 Work history
 Performance ratings
 Career information
 Hobbies and interests

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Management Inventories

 Management inventory is an individualized personnel record for managerial,


professional, or technical personnel that includes all elements in the skills inventory with
the addition of information on specialized duties, responsibilities, and accountabilities.

 Information contained in management inventory


 All the information that is contained in skills inventory
 A history of management or professional jobs held
 A record of management or professional training courses and their dates of completion
 Key accountabilities for the current job
 Assessment centre and appraisal data
 Professional and industry association memberships

5 HRP

Succession/Replacement Analysis

 Replacement charts are visual representations of who will replace whom in the event
of a job opening. Likely internal candidates are listed, along with their age, present
performance rating, and promotability status.
Used to keep track of potential internal candidates for the most critical positions.
 Replacement summaries are lists of likely replacements for each position and their
relative strengths and weaknesses, as well as information about current position,
performance, promotability, age, and experience.

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Succession Planning

 Succession planning is the process of ensuring a suitable supply of


successors for current and future senior or key jobs so that the careers of individuals
can be effectively planned and managed.
 Long-term succession planning deals with a process of providing training and work
experience to enable individuals to assume higher–level job appointments in future.
 Short-term succession planning deals with emergency replacement of individuals
who have quit, been terminated because of performance problems, have died, and so
on.

7 HRP

Succession Planning for Effective HR Planning

 Enables an organization to respond appropriately and stay on track when inevitable and
unpredictable changes occur, thus providing continuity and future direction even in the
turmoil of change.
 Helps develop people as they prepare for new experiences and jobs, and this
development can also help improve their performance in current positions.
 When employee performance is taken into account and they are promoted on this basis,
employees are positively motivated.
 Promotes new organizational structures and flexibility by explicitly providing back-ups to
various positions, thereby reducing organizational dependency on one employee.
 Saves time and money by having plans already in place to enable smooth internal
employee movement and continuity; therefore external hiring is an exception to the
process.
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Succession Readiness Code

 It is a code listed next to the names of all potential successors; contains elements of
essential information for succession planning viz., (a) the employee’s level of
performance in the current job and (b) the employee’s readiness for movement or
promotion.

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Management Succession/Replacement Chart

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Replacement Summary

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Succession/Replacement Table

 The succession/replacement table complements the succession/replacement chart in


that it provides additional information on each specific job, the incumbent jobholder,
and all potential internal successors.

The succession/replacement charts and tables are very useful tools for HR planners who
are analyzing the state of the current workforce.

What is the difference between succession planning and replacement planning?

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Replacement vs. Succession Planning

Replacement Planning Succession Planning

Fills an immediate need Builds a long-term pool of talent

Focuses on the now Looks at integrating policies throughout the


company
Maintains the status quo Helps determine candidates based on the role

May be limiting for current employees’ Looks at expanding the skills of current valued
employees

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Ripple or Chain Effects

 Ripple or chain effects are the effect caused when one promotion or transfer in the
organization causes several other personnel movements in the organization as a
series of sub-ordinates are promoted or transferred to fill the sequential openings.

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Markov Models/Analysis

 Most popular technique used for contemporary supply-side planning applications.


 Widely used for personnel planning processes.
 Most useful in stable work environments where career paths are better defined.
 Also referred to as probabilistic or stochastic model.
 The model produces a series of matrices that detail various patterns of movement to
and from the wide variety of jobs in the organization.
 A method of forecasting internal labor supply that involves tracking the pattern
of employee movements through various jobs and developing a transitional
probability matrix.

15 HRP

 It is a method of forecasting internal labor supply that involves tracking the pattern of
employee movements through various jobs and developing a transitional probability
matrix.
 An employee has five possible movement patterns in the organization:
 Remaining in the current job

 Promotion to a higher classified job


 A lateral transfer to a job with a similar classification level
 Exit from the job
 Demotion

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 Three steps for using a Markov model


1. Collect historical data on mobility rates between jobs in the organization;
2. Develop matrices to forecast future personnel movement between jobs;
3. Use the forecasts to analyze HR policies and programs, and initiate appropriate
measures.

17 HRP

 Markov Probability Matrix

2014>> Plant Fore- Team Production


Exit
2013 Manager person Leader Worker

Plant Manager (n=5) 0.80 0.20

Foreperson (n=35) 0.08 0.82 0.10

Team Leader (n=110) 0.11 0.70 0.07 0.12

Production Worker (n=861) 0.06 0.72 0.22

Projected supply (n=1011)

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 The sequences of
movements between
various job states are
referred to as Markov
Chains.

19 HRP

 Markov model has great value for determining -


 The number of personnel who move annually, and over specified time periods,
between various job levels.
 The number of external hires that are required by the organization, and where the
specific jobs are needed.
 The movement patterns and expected duration in specified jobs associated with
patterns of career progression for employees in the organization (career paths);
 The number and percentage of all starters at a particular job level who will
successfully attain a future target job level by a specified time period.

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Linear Programming

 It is a complex mathematical procedure commonly used for project analysis in


engineering and business applications; it can determine an optimum or best-supply
mix solution to minimum costs or other constraints.
 LP finds solutions to decision problems in which the objective function and the
constraints are linear functions of decision variables.

 Constraints can include – desired staffing ratios (the internal/external mix of


employees), minimization of turnover or total labor costs, optimum level of designated
groups (disabled, women, minorities, etc.).

 LP enables calculations of “what if” and helps us to determine the impact of these
changes.

21 HRP

 LP requires the relationship between variables to be linear among various constituent


elements.
 If the relationship is not linear, we have to use non-linear programing or quadratic
programing.

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Linear Programming

 x

23 HRP

Movement Analysis

 A technique used to analyze personnel supply, specifically the chain or ripple effect
that promotions or job losses have on the movements of other personnel in an
organization.
 The total number of personnel movement is always greater than or equal to the
number of vacant positions to be filled.
 Movement analysis can be performed for the whole organization, but doing it for
department/function is more desirable.
 Normal planning time horizon is one year.
 Movement analysis is calculated from top down.
 Calculate the movement figures for one authority or compensation level at a time.

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Movement Analysis

 5% increase for levels 6-9  Positions at start of year


 1 additional level 4 1 – level 4
 6 additional level 5 6 – level 5
 Historical annual loss rates
20 – level 6
Retirements
32 – level 7
o 2 positions level 5
40 – level 8
o 15% levels 6-9
Turnover 50 – level 9
o 10% levels 5 and 6
o 15% level 7
o 20% level 8
o 25% level 9
25 HRP

Number of Positions to be Filled

Staffing changes - Personnel losses


# of
Authority positions at Additions Retirements Turnover Positions
level the start of Total to be filled
the period % No.s % No.s % nos.

4 1 - 1 0 0 - 0 0 1

5 6 - 6 - 2 10 1 3 9

6 20 5 1 15 3 10 2 5 6

7 32 5 2 15 5 15 5 10 12

8 40 5 2 15 6 20 8 14 16

9 50 5 3 15 8 25 13 21 24

149 15 24 29 53 68
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Number of Positions to be Filled

Authority # of positions at the Staffing Personnel losses Positions to be


level start of the period changes filled

4 1 1 0 1
5 6 6 3 (2+10% of 6) 9

6 20 1 (5% 6
5 (15% of 20+10% of 20)
increase)

7 32 2 (5% 12
10 (15% of 32+15% of 32)
increase)

8 40 2 (5% 16
14 (20% of 40+ 15% of 40)
increase.)

9 50 3 (5% 24
20 (25% of 50+15% of 50)
increase)
 x 149 15 53 68
27 HRP

Personnel Movement
Level

Positions to Personnel
be filled Total ripple or chain movement movement

4 1 - - - - - 1
5 9 + 1 - - - - = 10

6 6 + 1 + 9 - - - = 16

7 12 + 1 + 9 + 6 - - = 28
8 16 + 1 + 9 + 6 + 12 - = 44

9 24 + 1 + 9 + 6 + 12 + 16 = 68
68 5 36 18 24 16 = 167

 99 promotions occur from current employees (internal sources) (5+36+18+24+16)


 All new hires originate from external sources i.e. 68.

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Vacancy/Renewal/Sequencing Model

 The Vacancy or Renewal or Sequencing model analyzes flow of personnel


throughout the organization by examining inputs and outputs at each hierarchical or
compensation level.
 They have more predictive power than Morkov models over short- and long-term
periods.
 Common time frame for this model one year into the future.
 Calculate personnel supply requirements one-level at a time in a top-down fashion,
beginning at the highest level.

29 HRP

Vacancy/Renewal/Sequencing Model Exercise


# of Personnel losses Internal
Promoted

External Hiring
Authority positions at during the year Promotions Level
level the start of outflows
% Nos. % Nos. % nos.
the period
1 (President) 1 100 1 100 1 1 1 0 0
2 (Vice President) 6 15 1 90 2 2 2 10 0
3 (Managers) 18 17 3 80 14 4 5 20 1
4 (Team Leaders) 45 20 9 70 32 9 13 30 4
5 (Associates) 88 25 22 45 40 14 31 55 17
6 (Trainees) 156 50 78 0 0 0 92 100 92
314 114 89 30 144 114
 Total outflows at any organizational level are equal to losses at that level plus promotions to higher level.
 Upward mobility rate [For level 4, it is 4 (promoted to level 3)/45 (Positions at the start for level 4)]= 8.8%.

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Vacancy Model

Level # of Personnel at Annual Promotion to Level External


the start of the year losses level outflows hiring

1 1 1 1 1 0

2 6 1 2 2 0

3 18 3 4 5 1

4 45 9 9 13 4

5 88 22 14 31 17

6 156 78 0 92 92

314 114 30 144 114

31 HRP

HR Supply and Retention Programs


 Cost of replacing current employees
 Retention planning is a vital component of effective HR supply
 Shortages of labor should stimulate flexible HR processes.

Hard Costs Soft Elements


o Advertisements o Lost business and customer contacts
o Headhunter and recruiting fees o Decreased quantity or quality of work due
o Interview training and travel costs to training and ‘learning curve gaps’

o Administration expenses o Orientation and training time

o Cost of lost production o Decline in team morale and productivity

o Bonuses or increased salaries to act as o Increased turnover due to follow me


inducements effect

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 Cost of replacing a trained worker ranges from 70 to 200 per cent of the departing
person’s annual salary.
 Retention can be facilitated by –
 Communication programs
 Maintaining and administering performance and compensation systems that
identify and differentially reward better performers
 Offering more flexible and attractive work arrangements (flexitime, telecommuting,
cafeteria-style benefit plans)
 Mentoring programs

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Succession Management

Dr. M. Bhaskara Rao


HRP

Organizational Propositions 2

Propositions on management New organizational propositions


 Bigger organizations are better  Smaller, as well as, bigger also means
organizations. [Think of Small is Beautiful – better.[IDEO is a global design company]
Economics as if People Mattered (1973)  Downsizing and decline, as well as growth,
by EF Schumacher] are also natural and even desirable phases
of an organization’s development.
 Unending growth is natural and desirable
process in organizational development.  Tight coupling and non-redundancy, as well
as slack resources and loose coupling, are
 Organizational adaptability and flexibility are also associated with adaptability and
associated with slack resources, loose flexibility.
coupling, and redundancy.
 Conflict and inconsistency, as well as
 Consistency and congruence are hallmarks congruence and consistency, are also
of effective organizations. indicative of organizational effectiveness.
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 Downsizing is a result of new organizational propositions and has become a strategy of


choice for organizations.
 More than 85% of Fortune 500 companies downsize, even though downsizing leads to
morale, trust and productivity related problems.
 Downsizing or Dumbsizing?
Only 46% organizations reduced expenses, 32% increased profits, 22% increased
productivity, 17% reduced bureaucracy.
 Downsizing – is intentional, involves in reduction of workforce, intends to improve
efficiency, and affects work processes.
 Are there effective and ineffective ways to downsize?
HRP

Evolution of Succession Management 4

Replacement Planning
 The process of finding replacement employees for key managerial positions.
 Replacement planning has evolved into succession management.
 Reasons:
 Broadening the focus
 Expanding the time horizon
 Creating a talent pool of replacements
 Improving the evaluation system

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Broader focus
 Starting point in replacement was the job.
 Starting point in succession management is the organizational strategy.
Time horizon
 Replacement planning was for immediate and short-term requirements.
 Succession management looks at long-term.
Talent pools
 Organizations have to develop talent pools with flexible skills and competencies rather
then depending on individuals.
HRP

 Talent pools are a corporate resource and not the property of individual divisions.
 Personnel planning evolved in to succession management. Helps in global
competition, environmental turbulence, de-layered organizations and new
technologies.
 Talent segmentation is as important as the customer segmentation.
 Succession management should also track the external candidates, and not just
the internal ones.
Rating System
 Several raters give current evaluations on an employee’s performance.

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Reasons for Succession Management Programs 7

 Improve internal candidate pools.


 Assure business continuity.
 Reduce skill gaps.
 Retain employees.
 Help individuals realize their career plans within the organization.
 Develop leaders more quickly.
 Encourage the advancement of diverse groups.
 Improve employees’ ability to respond to changing environmental demands.

HRP

Succession Management – Internal v. External 8

Internal
 Availability of reliable information about the candidate.
 Increases commitment and retention among employees.
 Corporate culture is preserved.
 Less internal disruption.
 Recruitment and selection costs are low.
External
 May have better skills to lead the organization through major transformation or change.
 Bring new knowledge and skills and prevents organization from inbreeding and stale.
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Replacement Planning v. Succession Management 9

Factor Replacement Planning Succession Management

Environment Stable Dynamic

Focus Jobs Strategy

Time frame 6-12 months 2 plus years

Selection criteria Job experience Competencies

Appraiser Immediate manager 3600 feedback

Selection pool Slated individuals Talent pools

Development Limited Flexible, multiple


HRP

Succession Management Process 10

1. Align succession management plans with strategy

2. Identify the skills and competencies needed to meet strategic objectives

3. Identify high-potential employees

4. Provide development opportunities and experiences

5. Monitor succession management

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 Succession management process is simple to understand, but difficult to implement.


1. Align succession management plans with strategy
 Amazon acquires Whole Foods Market
 What are the specialized skills and perspectives necessary to compete globally?
 How many managers possess these skills?
 What percentage of employees could represent the firm to the world?
 Strategic connections are important. Start with the business plan.
2. Identify the skills and competencies needed to meet strategic objectives
 Job-based approach
 Employees with significant experience as managers, having acquired skills will
make more successful.
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 Critiques say job-based approach is inadequate because jobs change rapidly.


 Competency-based approach
 Competencies are groups of related behaviors that are needed for successful
performance. They are measurable attributes that separate the successful
employees.
 Core competencies are characteristics such as thinking skills, that every member of
the organization is expected to possess.
 Role or specific competencies are characteristics, such as business knowledge,
shared by different positions within an organization.
 Unique or distinctive competencies are characteristics, such as expertise in media
relations, that apply only to specific positions within an organization.
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Managerial Competencies 13

General mobility skills and knowledge: Facilitate re-employment and


effectiveness in group processes, communication skills, flexibility, adaptation.

General managerial core competencies: Ability to build a cohesive team,


ability to persuade employees to accept organizational change.

Detailed job-specific competencies: Vary by function. In HR they include, the


ability to implement a change program, identification of best selection tool to
identify high potential candidates.

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3. Identify high-potential employees


 Regular discussions on succession force the leaders to think about the future of the
business and the kind of skills required.
 Executives own the succession and develop plans when they are integral part of the
success of the organization.
 Approaches to identify managerial talent
 Temporary replacements: Individual managers would have identified a designated
backup and potential successor.
 Replacement charts: Approach is rigid and may not work when organizational
structures are changing rapidly.
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15

 Strategic replacement: Identifies leadership competencies that a position requires


on the basis of organizational plans.
 Talent management culture: Managers actively scan the environment looking for
external talent. They develop both internal and external lists of high talent.
 Managers, not HR, have the responsibility for identifying and cultivating talent.
 Assessing talent for high potential talent should be done both fairly and accurately.
 Talent management discussions should not be politicized.

HRP

Techniques for Assessing Employee Potential 16

4. Provide development opportunities and experiences


 Performance appraisals
 Are leaders born or made?
 Should organizations produce their own managerial talent or buy it on the open
market?
Management Development Methods: Instead of just providing the training, provide
experience to realize leadership potential.
Promotions: An employee’s upward advancement in the hierarchy of an organization.
Job rotations: A process whereby an employee’s upward advancement in the hierarchy
of an organization is achieved by lateral as well as vertical moves.
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17

Rotation makes employees more satisfied, motivated, involved and committed.


Rotations are useful for orientation and career development.
Rotations increase employee experience.
Negative aspects of rotations: Time needed to learn new jobs; cost of errors while
learning; loss of efficiency due to lack of specialization; Short-term orientation among the
employees.
Special assignments and action learning: On-the-job learning is favored for
development of managerial skills. Risk taking is a part of such assignments.
Formal training and development: Recommended methods - role playing, case
studies, behavior modelling, action learning.

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Educational approach to broaden the intellectual skills and analytical ability are preferred.
Universities and corporate universities are used to teach conceptual skills.
Mentoring and coaching: Mentors are the executives who coach, advise and
encourage junior employees.
A combination of Experience, Exposure and Education is used by some companies.
‘Executive finishing schools’ for breeding the best leaders.
Coaches are paid counsellors from outside the organization.

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Benefits of External Coaching 19

For the Organization For the Individual


Retain high performers with incentives Reconnect the individuals with personal
other than financial rewards. values or missions.
Develop key employees for succession Provide clarity and focus to accelerate the
planning. achievement of goals.

Guide individuals and organizations Comprehensive learning time to optimize


skills by building competencies faster
through transition.
through one-on-one coaching.
Change skills and attitudes for long-term
Translate leadership theories and concepts
sustainable results.
into ‘useful insights’ to affect communication,
Give new perspectives on business decision making and overall strategies.
experience and practices.
HRP

20

5. Monitor succession management


 One measure is predicted ‘high potential replacements’ with the actual number
placed in the position.
 Increased engagement scores.
 Increased positive perceptions of development opportunities.
 High potentials’ perception of the succession management process.
 Higher participation in developmental activities.
 Greater numbers involved in mentoring process.

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21

 Internal ways to judge success of succession management (lag measures)


 Increased average number of candidates for key positions.
 Reduced average number of positions having no identified successors.
 Increased percentage of managers with replacement plans.
 Increased ratio of internal hires to external hires in key positions.
 Increased retention rates of key talent.
 Increased percentage of positive job evaluations after promotion.
 More positive assessment of the quality of preparedness for new roles.
 Increased number of bosses as talent developers.
HRP

Employee’s Role in Succession Management 22

 Traditional view of employer-employee relationships suggests that as organizations


develop employees, they must take into consideration employee aspirations and
goals.
 Transactional model is one in which benefits and contributions are exchanged for a
short period.

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Careers - Traditional v. Emerging 23

Characteristics Traditional Emerging

Employment contract Implicit Explicit

Duration Long term Useful term

Career responsibility Employer Self-directed

Career identity Organization Profession/occupation

Benefits Focus on security Focus on experience

Mindset Inward, political Outward, entrepreneurial

Development Formal training Work experience

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24

Characteristics Traditional Emerging


Career progression Vertical Horizontal

Employment stability Job security Employability

Role of manager Control/coordination Coach

Career goal Corporate success Meaningful contributions

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Managing Talent: The HR Role 25

 HR should own the talent management process to mitigate three types of risks to an
organization:
 Vacancy risk Unfilled key vacancies may lead to business losses and/or inability to
move forward on strategic goals.
 Readiness risk Employees should be motivated and qualified for occupying key
positions when opportunities arise.
 Transition risk Develop programs to retain key employees and monitor competitors
and others to be able to quickly identify external candidates.

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HRP in Restructuring

Dr. M. Bhaskara Rao

1 HRP

Definitions
Merger

Horizontal Merger Vertical Merger Conglomerate Merger


A merger is a
Merging of two consolidation
Buyer and seller merge Merger of two
competitors. to achieve synergies of companies competing in
The aim is achieve
of two
controlling factors two different markets.
economies of scale and organizations
affecting company’s
success.
Ex. Tata and VSNL;
withstand competition. Larsen & Toubro and
Ex. Lipton India and
into
Ex. Pixeraandsingle
Disney; Voltas
Brooke Bond India; organization.
Time Warner and Turner; Walt Disney and
Bank of Madura and Reliance and FLAG American Broadcasting
ICICI Bank Telecom Co.
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Acquisition An acquisition is the purchase of an entire company or a controlling


interest in it.
Consolidation Two or more companies join together and form an entirely new
company.
Takeover One company acquires another company.

3 HRP

The Urge to Merge


Reasons companies merge – Strategic benefits, financial benefits and/or the
needs of the CEO or managing team.
Strategic Benefits Slower methods
 Companies can grow through – leveraging current customers, opening new
markets internationally, corporate venturing and M&A. (Ex. Compaq and HP)
 Strengthening of the competitive position. (Ex. Pfizer and Warner-Lambert)
 To achieve complementarities.
 Operating synergy is referred to economies of scale through spreading of
overheads, increased specialization of labor and management, efficient use of capital
equipment.
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 Economy of scope advantage refers to the ability of a firm to use one set of
inputs to produce a wider range of products and services.
 Diversification Reducing dependency on one market or one product. (Ex. GE)
 Redefining businesses
 May achieve the benefits through vertical integration or horizontal integration.
 Vertical integration refers to the mergers and acquisitions of companies that have
buyer-seller relationship. (Ex. PepsiCo acquiring KFC, Taco Bell and Pizza Hut)
 Horizontal integration refers to the increase in market share and market power
that results from M&A of rivals. (Ex. Facebook and Instagram)

5 HRP

 Financial benefits
 Reduce expenses by reducing overhead count, factories and/or branches.

 Reduce variability in cash flow by lowering risks.


 Expect mature businesses to fund growing businesses.
 Tax advantages due to takeover.
 Expensive to enter new markets and to develop new products.
 By acquiring undervalued company financial gains accrue.

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 Management needs
 Managers may pursue their personal interests at the expense of stockholders. (Ex.
CEO pay, prestige)
 Need for power with growth strategies.

7 HRP

Merger Methods
 Management of one company contacts the management of the target company.
 Use of intermediaries, such as an investment banker, is common.
 Poison pills refers to the right of key players to purchase shares in the company
at a discount, that makes the takeover extremely expensive.
 White knights are buyers who are more acceptable to the targeted company.

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Success rate of Mergers


 Measure – increased shareholder value in public companies; increased RoI in private
companies.
 Microsoft wrote off 96 percent of the value of the acquired Nokia;
 Google unloaded the Motorola handset business for about 25 percent of what it
had paid;
 News Corp sold MySpace for $35 million, after paying $580 million to acquire it 11
years earlier.
 Only 15 per cent achieve the financial goals.
 Acquisition of related business is better than unrelated business. (Ex. UBL and Deccan
Airlines)
 No difference between a novice M&A team and an experienced team.
 Success rate varies by sector and by size. A larger firm can absorb a small firm
relatively easily. Service sector risks are greater.
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Financial impact
 Acquisition resulted in an average increase of 25 per cent for the target firms, and zero
economic profits for the bidding firms.

 McKinsey study found that only 23 per cent of mergers end up recovering the costs
incurred in the deal.
 Four out of five fail to produce any shareholder value.

 Non-acquiring companies out performed than acquiring companies.


 Many mergers fail because the buyer overextends itself financially.

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Reasons for failure of M&As


 Integration difficulties.
 Inadequate evaluation of target.
 Large or extraordinary debt.
 Inability to achieve synergy.
 Too much diversification.
 Managers overly focused on acquisition.
 Too large an acquisition.
 Difficult to integrate different organization cultures.
 Reduced employee morale due to layoffs and relocations.
11 HRP

Making and Acquisition Successful


Making the acquisition more competitive -
• Being a smarter provider of growth capital. Tata Group fund smaller companies and grow
successfully this way.

• Providing better managerial oversight. GE Capital applied its better management systems to
improve the profits of Burger King and Tim Horton’s.

• Transferring valuable skills. PepsiCola transferred its direct store delivery logistics system to make
Frito Lay (an acquired company) more successful.

• Sharing valuable capabilities. Proctor & Gamble shared its customer team capability and media
buying capability with their acquisitions.

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Impact on Human Resources


 Characterized by –
 Increase in insecurity among employees;
 Lower level of satisfaction at work;
 Less affective commitment;
 Loss of trust in the firms top managers.
 Nearly half of the senior executives in large acquisitions leave within a year of
the takeover and 75 per cent within three years.
 It takes 6 to 18 months for the organization to assimilate the results of an M&A,
the productivity loss during this period is estimated at 15 per cent.
13 HRP

 Sources of loss of employee productivity –


 Employees go underground.
 Overt sabotage occurs when employees deeply resent the turmoil the merger is
causing in their lives.
 Self-interested survival tactics emerge [hiding information from team members to accumulate a
degree of power].

 A resigned attitude appears.


 Employees spend at least one hour a day dealing with rumors and misinformation,
and/or engaging in job-search activities.
 Mergers are forged for strategic and financial reasons. But they succeed or fail for
human reasons.
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 Employee issues are responsible for the failure of one-third to one-half of


mergers.
 These issues include –
 the difficulty in blending cultures,
 reduction in service levels,
 poor motivation,
 loss of key people and clients, and
 loss of focus on longer-term objectives.

15 HRP

Cultural issues in mergers


 Culture is a set of important beliefs that members of an organization share. Social glue.
 Mismanagement of the culture is responsible for as high as 85 per cent of all merger
failures.
 In some cases firms that are aware of the difficulties of merging cultures attempt to
negotiate, in the form of a contract, many aspects in advance.
 Four options are open to those involved in M&As –
 Cultural pluralism where the partners co-exist
 Cultural integration where the partner organizations blend current cultures together
 Cultural assimilation where one organization willingly gives up its culture and is
absorbed by the culture of the acquirer or the dominant partner.

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 Cultural transformation where the partner companies abandon key elements of their
current cultures and adopt new norms.
 Deculturation where the acquired organization does not value the culture of the
dominant partner and is left in a confused, alienated, marginalized state.
 Separation where the two cultures resist merging and either the merged company
operates as two separate companies or divorce others.
 The level of difficulty in merging two cultures is increased when the merger is one
between companies from two different countries.
 Cultural assessment tools – Merging Cultures Evaluation Index.
 PwC suggests –
 Deploying role models
 Providing meaningful incentives
17 HRP

HR issues in M&A

Transition Team
Selection Compensation
Due Diligence

HR issues in M&A Performance Appraisal


Contingency Plan

HR Planning Labor Relations Training & Development

18
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HR issues in M&A
HR Planning
 The Contingency Plan
 Identify contact person and merger coordinator.
 Contact person develops a merger plan outlining the chain of command, methods for
communicating, procedures to follow during a takeover, and negotiation skills training
and media response training for senior team.
 Identify transition team.
 HR due diligence
 Due diligence is a process through which a potential acquirer evaluates a target firm
for acquisition.
19 HRP

 It includes a review of the following:


 Collective agreements

 Employment contracts
 Executive compensation contacts
 Benefit plans and policies
 Incentive, commission and bonus plans
 Pension plans and retirement policies
 Employment policies

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 Complaints about employment equity, health and safety, wrongful dismissal, unfair
labor practices, and applications for certifications and grievances.
 Once the legal obligations have been evaluated, the level of KSAOs must be
assessed.
 Ways to assess the employee capabilities –
 Reviewing all employee documentation and then conducting interviews with
managers at a minimum of four levels;
 Determining contractual obligations with regard to early retirements, terminations,
promised new jobs and pre-merger level of turnover.

21 HRP

 Transition team
 Urgency Staffing decisions such as terminating, hiring, evaluating, and training
become urgent. Job analysis should be conducted to identify duplication of jobs.
Uncertainty impedes productivity and new business development.
 Information gaps Communicate effectively the reasons for merger, impact on
employees, career opportunities in the new entity, etc.
 Stress A transition team may be the most important determinant of merger success.
 The transition team is responsible for retaining talent, maintaining the productivity of
employee performance, select individuals for the new organization, integrate HR
programs, and take first steps to integrate cultures.

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 The transition team is responsible for retaining talent, maintaining the productivity of
employee performance, select individuals for the new organization, integrate HR
programs, and take first steps to integrate cultures.
 Simultaneously HR planners must prepare plans by looking at the employee skills
inventories.
 Review of HR policies would reveal three different situations –
 Complimentary One company might focus on career development, while the other
focuses on benefits.
 Duplicated Both companies have identical HR information systems.
 Contradictory One organization uses performance measurement system, while the
other uses incentive pay program.
23 HRP

Selection
 Retention and Reduction are the critical areas to address immediately.
 How many employees does the merged company need?
 Check the benchmarks for the industry.
 Classify the employees – critical to ongoing operations; critical to retain through to the
close of the deal; highly marketable; potentially redundant.
 Reductions might be necessary, dismissals are heartbreaking.
 Restructuring demands number of decisions. Employees want to know their fate in the
new company.
 Will the company support them in financial planning, job relocation and career planning?
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Selection
 Retention and Reduction are the critical areas to address immediately.
 How many employees does the merged company need?
 Check the benchmarks for the industry.
 Classify the employees – critical to ongoing operations; critical to retain through to the
close of the deal; highly marketable; potentially redundant.
 Reductions might be necessary, dismissals are heartbreaking.
 Restructuring demands number of decisions. Employees want to know their fate in the
new company.
 Will the company support them in financial planning, job relocation and career planning?
25 HRP

 Dilemmas of those who stay with the acquired or merged company –


 Demotion
 Competition for the same job
 Termination
 The survivors of mergers have to make adjustments.
Compensation
 Two issues – (a) compensation system and (b) benefit plans.
Performance Appraisal
 Employee behavior during merger falls into these categories – (a) not knowing (remedied by
more communication), (b) not able (the solution is training) and (c) not willing (a strong case for
performance management through feedback and incentives).
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Training and development


 Conduct stress reduction and relaxation programs.
 Some long-term developmental programs may be put on hold.
Labor relations
 Will unionized employee agreements continue with the same working conditions and
benefits or will the contracts be re-negotiated?

27 HRP

Evaluation of Success
Training and development
 Financial measures,
 Customer service metrics,
 Human capital metrics, and
 Operational measures.
Achievement of operational efficiencies and synergies.

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10

Strategic International HRM

Dr. M. Bhaskara Rao

1 HRP

Key Challenges in International Context

Key HR challenges in
internationalization

Workforce Employment The role of HR Flexibility Security


diversity legislation function
The ability to
respond to
various demands
from a dynamic
competitive
environment.

2 HRP

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Strategic International HRM

Strategic International HR Planning


Involves projecting global talent supply, forecasting global talent needs, and developing a
blueprint to establish global talent pools within companies.
International HR planning has to fit with both the internal factors such as a firm’s
strategies, competencies, and existing HR systems, as well as external factors such as
local economic, political, social, cultural, legal, and HR systems.
MNCs globalize HR practices, pay systems, management development, employee
communications.

3 HRP

Follow local laws and conventions for wage determination, hours of work, forms of job
contract, and redundancy procedures.

Strategic International HRM definition

Human resource management issues, functions, policies and practices that result
from the strategic activities of multifunctional enterprises and that impact the
international concerns and goals of those enterprises.

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Strategic International HRM fit with International


Business Strategies
Fit
The degree to which the needs, demands, goals, objectives and/or structure of one
component are consistent with the need, demands, goals, objectives, and/or structure of
another component.
Strategic International HRM (SIHRM) should achieve internal and external fit for effective
implementation of a corporate strategy.
Internal fit refers to congruence between SIHRM approaches and policies and corporate
international strategies, the type of product or service, and the organizational structure
and culture.
External fit refers to matters concerning legal, political, economic, and cultural.

5 HRP

Stages in the Evolution of an Organization

The Domestic The Multi- The The


Stage domestic Multinational Global
Stage Stage Stage

The Domestic Stage


Strategy: Internationalizing by exporting goods abroad as a means of seeking new
markets.
 Seeking new markets by exporting goods, even while focusing on domestic markets.
 No presence in foreign markets through subsidiary. Only an export manager is
appointed.
 Very little demand on HR department.
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The Multi-domestic Stage


Strategy: Concentrates on the development of foreign markets by selling to foreign
nationals.
 A subsidiary is usually set-up.
 Polycentric perspective is developed. Use multi-domestic strategy to develop
culturally appropriate products for local markets.
 Adaptive IHRM Adopting local HR practices in their host country subsidiaries.
 Disadvantage: If the local HR manager does not know the corporate culture well
enough to reflect the overall corporate strategies and corporate principles, there
may be problems in the subsidiary HR system.
 HR is more sensitive to local legal and economic systems, than other systems.

7 HRP

The Multi-national Stage


Strategy: Standardizing the products and services around the world to gain efficiency.
 Promotes price-sensitive perspectives with limited emphasis on cultural differences.
 HR systems will be standardized across its subsidiaries all over the world.
 Explorative IHRM: Transferring home HRM systems to foreign subsidiaries
without modifying or adapting to the local environment. This reduces transaction
costs, ensures consistency of corporate policies and gains control over the
subsidiaries.
 Disadvantage: Possible problems with local government for subsidiary.

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The Global Stage


Strategy: Introducing culturally sensitive products in chosen countries with the least
amount of cost.
 Resources and materials within regional branches are reallocated globally to make
quality products at the lowest cost. Geocentric perspective is taken.
 Integrative IHRM approach combines home HR practices with local HR practices
and selects the most qualified people for the appropriate positions no matter where
these candidates come from.
 Decision-making regarding HR policies and practices will be jointly in the hands of
HQ and foreign subsidiaries.

9 HRP

Key HR Practices and Processes within an


International Context
Recruitment
Home-country nationals (HCNs) Individuals from the subsidiary country who know
the foreign cultural environment well.
Parent-country nationals (PCNs) Individuals from headquarters who are highly
familiar with the firm’s products and services, as well as with its corporate culture.
Third-country nationals (TCNs) Individuals from a third country who have intensive
international experience and know the corporate culture from previous working
experience with corporate branches in third country.
• Staffing decisions should be based on short- and long-term strategies.
• Follow best recruitment practices.

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Selection
• Personality as a selection criteria
• The Big Five Personality Model demonstrated to be crucial to expatriate adjustment.
[Emotional stability, extraversion, openness, agreeableness, and conscientiousness]
• Those who scored high on these five dimensions were found to be better adjusted to
overseas assignments.
• Trainability as a selection criteria
• Trainability refers to an individual’s ability to acquire certain skills to a desired level of
performance.
• Various cross cultural KSAOs may be classified according to their stable properties (e.g.
personality) versus their dynamic properties (e.g. knowledge and skills).
11 HRP

• Expats with minimum level of the stable characteristics would gain incremental success
in selection efforts.
• Other personal characteristics
• Three dimensions of cross cultural competencies:
• Self-maintenance competencies
• Relationship competencies
• Perceptual competencies

Perceptual competency includes multiple sub-processes, including sensory representation,


attention, executive processes, and possibly verbal memory processes, if the stimuli are easily
recognized or verbalized.

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Pre-assignment Training

• Cross cultural training (CCT) positively influences expatriate self-development,


interpersonal skills, and cross-cultural perception.
• Four steps for guiding the effective training –
• Training planning
• Training contents
• Training approaches
• Treating the international assignment as on-the-job training

13 HRP

Post-assignment Activities

• Repatriation
• Repatriation is the process of PCNs, TCNs, or even HCNs returning to their home
headquarters or home subsidiaries.
• People experience reverse culture shock on return to the home country.
• Consequences of reverse culture shocks:
• No appropriate position to return;
• Dissatisfaction with the standard of living on return;
• Co-workers may not be interested in hearing about the repatriate’s experiences;
• Repatriate’s job may not make as much use of internationally acquired KSAOs as it
could.

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• Only 14 per cent companies had formal repatriation strategy linked to career
management and retention.
• Career development
• Step 1 – International assignment is merely one step in an overall career development
plan.
• Step 2 – Ensure that the next step makes good use of the KSAOs developed
internationally.
• Ways repatriate’s international experience could be leveraged:
• Could be used as a trainer to future expatriates or provide input to the CCT process.
• Could be a long distance supervisor to other expatriates.

15 HRP

• Performance appraisal
• Broad categories of global assignments – technical/staff specialists and managerial.
• In addition to the normal job evaluation criteria, additional environmental factors that
are part of appraisal criteria are:
• The extent the position requires interaction.
• Subsidiaries bottom-line results.
• Volatility of foreign labor market.
• Telecommunication and transportation infrastructure.

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• Compensation
• Categories of cash outlays for expatriates and their families:
• Goods and services (food, clothing, personal care, recreation, transportation,
medicare)
• Housing
• Income taxes
• Reserves (savings, benefits, investments, social security taxes, etc.)
• Shipment and storage
• Payment to employees – home country/host country/combination
• Home leave allowance

17 HRP

• Firm needs a strategic approach to international compensation.


• Three policy options considered normally are –
• The home-based approach
• The host country approach
• The region-based approach

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• Labor relations
• Type of unions and rate of unionization are critical to international HR managers.
• Types of unions – industrial, craft, conglomerate and general.
• Industrial unions – All grades of employees in an industry.
• Craft unions – Based on skilled occupations across industries.
• Conglomerate unions – Represent members in more than one industry.
• General unions – Open to all employees in the country.
• In addition, we also have white collar unions.
• International HR managers have to devise strategies to improve the fit between their
labor relations activities and the external environment.

19 HRP

• Strategic compensation might be limited in countries with strong governmental or


union wage interference.
• Staffing may be affected in countries that limit the firm’s ability to implement
redundancy programs. Solution – Worker retaining, cross training.

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11

Outsourcing

Dr. M. Bhaskara Rao

1 HRP

Outsourcing

A contractual relationship for the provision of business services by an external


provider.
 Transferring high volume transactional work from HR department to an outside
contractor.
 Currently outsourcing is one of the most powerful trends reshaping the
management.
 Outsourcing differs from alliances, partnerships, and joint ventures in that the flow
of resources is one way, from the provider to the user.
 There is no profit sharing or mutual contribution in outsourcing.
 Much of the outsourced work is done outside the primary market.
 HRO HR Offshoring is the process of outsourcing HR activities to another country.
2 HRP

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Outsourcing HR Functions

 What could be outsourced?


Activities of an organizations that are -
 Rule based
 Repetitive
 Frequently undertaken
 Predictable
 Able to be fully or partly automated by technology
 Able to be delivered by remote sites

3 HRP

 HR functions that may be outsourced:


Function Activities
Compensation Payroll, Benefits, Compensation Administration, Pension
Recruitment Advertisements, Screening of applications, Testing, Reference
and Selection checking, Preliminary interviews, Salary negotiations at the executive
level, Exit interviews

Training Program delivery, Program design and development, Training


consulting to line departments, Training needs analysis, Program
evaluation, Strategic planning for training and development,
Administration, Developing training policy
Health and Safety Employee assistance programs, Wellness programs
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 Temporary staffing, absence management are also being outsourced.


 Outsourcing is also a response to the demand to reduce HR costs.
 Outsourcing to service providers with international expertise allows HR
departments to harmonize employee packages for a global workforce, while
complying with the local laws.
 Large organizations do not outsource the following HR functions:
 Functions that are deemed most critical such as recruitment, selection and
performance management.
 Employee relations disputes.
 Lack of providers of total HRM services.
5 HRP

Rationale for Outsourcing

 Six major reasons for outsourcing


 Financial savings
 Specialized vendors are more efficient, because they can spread costs of training
and undertaking research and development across more users.
 Outsourcing can result in cost savings ranging from 10 to 20 per cent.
 Labor productivity improves and cost savings objectives are achieved in about 50
per cent of the firms.
 Savings is a cost control. Companies are more cautious when charged by a vendor
than ‘free in-house service.’
 When usages of a service is variable or unpredictable, outsourcing makes sense.
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 Strategic focus
 “Not a single company can afford to even try and be the first in every thing.”
 Companies should focus on their core competency.
 What is core competency has four meanings – activities traditionally performed
internally; activities critical to business success; activities creating current or
potential competitive advantage; activities that will influence future growth or
rejuvenation.
 Non-core work is transactional. Core work is transformational.
 The real source of core competitive advantage is not products, but management’s
ability to consolidate skills and technologies into competencies to adapt to changing
circumstances.
7 HRP

 Core functions that should not be outsourced are – orientation, leadership


development, employee relations, final selection, performance management,
succession management, organizational change.
 By outsourcing non-core activities, executives would focus on value added roles.
 Mantra – Outsource transactions and insource transformations.
 Advanced technology
 Technology allows company to reduce transaction time and improves access to
technical service.
 Improved service
 Performance standards can be written into the contract more tightly.
 Confidentiality is a good reason to outsource. HRP
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4
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 Specialized expertise
 “Outsource when somebody can do better than you.”
 Specialized services are better for outsourcing. [Employee reference checks]
 Employees who are outsourced to the service provider may see opportunities for
career development.
 Access to leading practices is also a reason for outsourcing.
 Organizational politics
 Outsourcing helps to get rid of a troublesome department.

9 HRP

Risks and Limitations of Outsourcing

 Projected benefits v. Actual Benefits


 The largest hidden cost of outsourcing extensive effort required by management to
manage the outsourced activity.
 Reasons for cost overrides are system incompatibilities, and client demands outside
the standard vendor package.
 Service risks
 Organization loses flexibility of adding new features or enhancing or reducing
service, once it is dependent on an outsourcing agency.
 The risk of vendor entering the market and becoming a competitor prevails.

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 Employee morale
 Outsourcing is a form of restructuring and always results in displaced employees.
 Employees need a sense of identification and feeling of security and belonging.
When these are disrupted , employees feel resentful and retaliatory.
 About 1/3rd of HR professionals resist outsourcing.
 Consequences of outsourcing for employees – transferred to outsourcing agency,
transferred internally to other functions, outplaced, and/or offered voluntary
retirement.

11 HRP

 Security risks
 The major information risk for HR is loss of personnel information.
 Individual performance and medical histories are very sensitive.
 Reduced value
 Extreme levels of outsourcing hollow out a company. (Read book ‘Commoditization
and the Strategic Response’ by Andrew Holmes).
 Research finding: ‘Outsourcing an activity deemed to be routine and of low value
did not result in the remaining HR staff becoming focused on more “strategic” or
higher-value work.’
 When HR function is outsourced, the internal image of HR may deteriorate.
12 HRP

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Management of Outsourcing

 Factors critical for outsourcing –


 Cost-benefit analysis; Speed of work; Quality of product/service; Legal compliances.
 Preparing for Outsourcing
 Develop meaningful benchmarks and data.
 Develop change management skills.
 Develop contract and performance management skills.
 Develop communication channels and skills.

13 HRP

Process of Managing Outsourcing

Selecting the vendor Negotiating the Monitoring the


One or more vendors? contract arrangement

 Inform the outsourcing Align service levels with the Problems with outsourcing:
decision to affected business objectives.  Poor service definition.
function. But, when? Document baseline services,  Weak management
 Prepare RFP. using response time, processes.
response cost, and customer
 Invite internal/external Demand frequent and
satisfaction ratings.
bids. accurate reporting.
Include quality measures.
 Establish teams to Improve frequency and
Include technical and legal quality of communication.
evaluate these bids
experts in preparation.
Conduct satisfaction surveys.
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 Criteria for Evaluating Potential Outsourcers


 HR process expertise
 Prior expertise and track records
 Financial stability
 Service-level agreements in the contracts and compatibility of standardization
 Leading-edge technology and commitment to invest in more
 Cultural compatibility
 Readiness to invest in transition management

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12

Information Technology for


HR Planning

Dr. M. Bhaskara Rao


1 Human Resource Planning

HR applications with highest levels of IT support

Interface between
IT and HRM

Data storage Information Tools for Recruitment Web-based


retrieval analysis management job postings
Multi-rater
feedback
Monitoring
“HR without technology is becoming an performance
unthinkable proposition.” goals

2 HRP

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HR applications with lowest levels of IT support

Interface between
IT and HRM

Employee self- Ergonomic Diversity Benefit Employee assis-


assessment assessment needs initiatives records tance programs

3 HRP

IT and HRM

• IT usage in HR increases with the implementation of business strategy and delivering tangible
results.
• IT usage for HRM increases if associated with strategic roles such as business partner and
change agent.
• IT reduces traditional HR transactional tasks/costs.
• Employee benefits and payroll management can be automated or outsourced.
• Performance management and multi-rater feedback process are getting automated.

4 HRP

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New service delivery models

• Web-based HR
• Self service is a web-based service delivery model.
• Web-based HR service centres. (Job postings, personal data, access to learning solutions)
• E-recruiting and E-learning
• Pre-employment testing
• Enterprise portals
• These are knowledge communities that allow employees from a single or multiple companies
to access and benefit from specialized knowledge associated with tasks.

5 HRP

• Self service
• It is a technology platform that enables employees and managers to access and modify their
data via a web browser from a desktop or centralized kiosk.
• It is based on the principle that data is most effectively captured at source.
• Can be used for – personal information, emergency contact, travel reimbursement, enroll for
benefits or training classes, job openings, creating application materials, apply for a
position, check status of pending application, model retirement options, etc.
• Managers may use it for compiling information on employee absenteeism and turnover data,
to forecast HR demand, manage recruitment, annual appraisals, compensation planning.
• Employee self-service and manager self-service applications are changing service delivery
models.

6 HRP

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IT for HR Planning

• IT can support different steps for strategic HR planning such as satisfaction with the service
levels, organizational climate or engagement surveys, employee participation in training,
competencies, performance levels, etc.
• Workforce analytics
• The application and technologies for gathering, storing, analyzing, and providing access to
data to help users make better business decisions is referred as business intelligence.
• Workforce analytics should provide right information, in the right form, at the right time.
• Includes visual metrics, charts and data. Ex. Cost of HR function per employee, Cost per
benefit of an employee training program.
• Monitor enterprise goal attainment and identify performance deficiencies. Ex. Scorecard
illustrates performance of key metrics overtime. It may track revenue per employee, cost of
hire, or voluntary separation by length of service.

7 HRP

• Workforce management and scheduling


• Workforce scheduling and optimization software provides applications for deploying
employees most effectively.
• Forensic reporting
• The first signs of burnout may be higher levels of absenteeism or turnover or accidents.
These factors decrease productivity.
• Results of burnout are higher workers’ compensation rates, higher recruitment and selection
costs, and increase in demand for overtime.
• Needs better planning of the remaining workforce.

8 HRP

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• Skills inventories
• Valuable information for assessing the internal supply of talent.
• Skills inventory software contains personal record and skills profile of each employee (Skills
DB Pro).
• Skills inventories help managers to quickly identify employees with critical competencies and
ensure training is connected to strategic business needs.
• Automated skills inventories become an integral part of IT enhanced competence
management.
• Replacement charts
• Include predicted departure dates of the incumbents, shortlist of possible successors.

9 HRP

• Employee performance appraisal data and information about how ready possible successors
are to fill the managerial positions is included.
• Help decision makers determine which positions have sufficient bench strength.
• Succession management
• Succession management requires enormous information such as competencies, talent pools,
developmental plans, performance assessments from different sources, and developmental
opportunities.
• IT solutions can help manage this information and make succession management plans
more effective and wide-spread.

10 HRP

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• Succession Plus, Nardoni Strategic Solutions (NSS) (the premier succession planning and
development software for Fortune 500 companies now known as SUCCESSION Pulse); 360
On The Net (a web-based multi-rater assessment and development tool); Incentive
Compensation System (a team-based compensation system); HR Pulse (a competency-
based HR workstation and toolkit); plus a variety of custom human resource applications.

• Build talent strategy, Cisco Systems. Pathfinder Software Application. Helps employees
realize their career plans within the organization.

11 HRP

Big Data

• Big Data: The integration of digitized data from multiple sources and in multiple formats,
including structure and unstructured data.
• Structured data: Any form of data that can be organized into rows and columns. Other types
of structured data include sensor data.
• Unstructured data: Text documents, emails, audio, presentation's, geotags, images, videos,
etc.
• Five pillars of big data: Volume, Velocity, Variety, Veracity, Value

12 HRP

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AI and ML

• Artificial Intelligence: A software based ability to demonstrate learning and decision making.
• Machine learning: Machine learning is a branch of that focuses on the use of data and
algorithms to imitate the way that humans learn, gradually improving its accuracy.

13 HRP

HR Metrics and Workforce Analytics

• HR metrics
• Dashboards
• KPIs

14 HRP

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Different Solutions for Different Needs

• HRIS
• A comprehensive across the board software system for HRM that includes subsystems or
modules.
• Offers integral solution for the HR department.
• Includes software, hardware, support functions, and systems policies and procedures used
to gather, store, and report human resources data.

15 HRP

• Specialty products

• These are software solutions for specific/specialized applications that may or may not
interface with the main database.

• Compensation planning solutions, time and attendance software, managing training


schedules and budgets, training experiences, etc. are specialized applications.

Performance
Workforce Ready Sage Payroll Hiring Process
Review

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• Enterprise solutions
• ERP is a commercial software system that automate and integrate many or most of a firm’s
business processes.
• Cover the fullest range of organizational activities and processes.
• Used by large corporations, aiming to achieve substantial cost savings.
• SAP – Human Capital Management (HCM) is the HR part of ERP.
• Oracle - Global Core Human Capital Management, Workforce Management, Workforce
Service Delivery, Talent Management, HR Analytics.
• ERP promotes the use of a single, shared relational database for critical information
across the organization.
• ERP is very costly and requires long time for implementation.

17 HRP

Selecting Technology Solutions for HRM

• Conduct a needs analysis


• A systematic collection of information about the organization, its technical environment, and
the needs of its HR department.
• Look at the information process needs of the HR department.
• Explore the market place
• Issue a request for proposal
• Issue a request for proposal (RFP) to short-listed vendors. Two important parts of RFP –
first, description of company and second, systems requirements.
• Evaluate vendors and products
• Scripted demo is an in-person demonstration of the product that follows a clear agenda
that you have prepared for the vendor.
• Domo focuses on the organization’s needs. Obtain references from users of the products.

18 HRP

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Implementing and Evaluating Technology

• Typical implementation process


• Two types of implementation processes – Process driven approach, technology driven
approach
• Process driven approach adapts technology to existing HR processes.
• Technology driven approach adapts HR processes to technology.
• HRIS of ERP requires an effective organizational development strategy. It may require
selecting a project manager and a project team.
• Key success factors for HRIS include – top management support, face-to-face
communication in user training sessions, involvement of users early in the project.

19 HRP

• Business process re-engineering


• Business process re-engineering is the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service and speed.
• IT plays an important enabling role in business process re-engineering projects.
• Ensuring data security
• Employers have to protect employee’s personal records, medical records, and employment
tests.
• System should provide robust security.
• Only authorized persons should have access to employee data.
• Secure operating systems and dependable computer programs are important.
• Limiting access to computer resources.

20 HRP

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Evaluating HR Technology

• Attitudes toward IT are influenced by behavioral beliefs about technology usefulness and ease
of use.
• These beliefs are influenced by information satisfaction and system satisfaction, which result
from information quality and system satisfaction.
• More sophisticated evaluation includes analysis of the costs and benefits of the IT solution.
• Similarly return on investment (RoI) approach deals with savings through HR system.
• Competitive advantage
• Useful to assess the contribution of HR technology to competitive advantage.

21 HRP

• Occurs when HR systems facilitate the development of firm specific competencies, produce
complex social relationships, and generate tacit organizational knowledge.
• Technology applications available – development of internal labor markets though job
postings and career pathing, e-learning, e-recruiting, Employee Self Service (ESS) application
reinforces employee participation and engagement.
• Provide access to knowledge repositories.
• Knowledge management is a systematic and organizationally specified process for
acquiring, organizing, and communicating both tacit and explicit knowledge so that
employees may make use of it to be more effective and productive in their work.

22 HRP

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13

Downsizing & Restructuring

Dr. M. Bhaskara Rao


Human Resource Planning

Organizational Propositions 2

Propositions on management New organizational propositions


 Bigger organizations are better  Smaller, as well as, bigger also means
organizations. [Think of Small is Beautiful better.[IDEO is a global design company. ]
– Economics as if People Mattered  Downsizing and decline, as well as growth,
(1973) by EF Schumacher] are also natural and even desirable phases
of an organization’s development.
 Unending growth is natural and desirable
process in organizational development.  Tight coupling and non-redundancy, as well
as slack resources and loose coupling, are
 Organizational adaptability and flexibility are also associated with adaptability and
associated with slack resources, loose flexibility.
coupling, and redundancy.
 Conflict and inconsistency, as well as
 Consistency and congruence are hallmarks congruence and consistency, are also
of effective organizations. indicative of organizational effectiveness.
Human Resource Planning

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 Downsizing is a result of new organizational propositions and has become a strategy of


choice for organizations.
 More than 85% of Fortune 500 companies downsize, even though downsizing leads to
morale, trust and productivity related problems.
 Downsizing or Dumbsizing?
Only 46% organizations reduced expenses, 32% increased profits, 22% increased
productivity, 17% reduced bureaucracy.
 Downsizing – is intentional, involves in reduction of workforce, intends to improve
efficiency, and affects work processes.
 Are there effective and ineffective ways to downsize?
Human Resource Planning

Downsizing 4

Downsizing is a set of activities conducted for the purpose of improving organizational


efficiency, productivity, and competitiveness which affects the firm’s workforce size,
costs and work processes (Cameron, 1994).

Human Resource Planning

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Strategies for Downsizing 5

• Workforce reduction. A short-term strategy to cut the number of employees


through attrition, early retirement or voluntary severance packages, and layoffs or
terminations.
• Workforce redesign. A medium-term strategy in which organizations focus on
work processes and assess whether specific functions, products, and/or services
should be eliminated.
• Systematic change. A long-term strategy that changes the organization’s culture
and attitudes, and employee’s values, with the goals of reducing costs and
enhancing quality.

Human Resource Planning

Restructuring 6

• Portfolio restructuring. Involves changes to the organization’s business


portfolio.
• Financial restructuring. Includes financial changes such as reducing cash flow
or increasing levels of debt.

• Organizational restructuring. Any major reconfiguration of internal


administrative structure that is associated with internal management change
program.

Human Resource Planning

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Rationale for downsizing 7

• Declining profit
• Business downturn or increased pressure from competitors
• Merger with another company, resulting in duplication of efforts
• Introduction of new technology
• The need to reduce operating costs
• The desire to decrease levels of management
• Getting rid of ‘deadwood’

Human Resource Planning

Alternatives to Downsizing 8

• Medium-term cost adjustments • Short-term cost adjustments


- Extended employment with reduced - Hiring freeze
salary
- Mandatory vacation
- Voluntary sabbaticals
- Reduced workweek
- Lending/loaning employees
- Reduced overtime
- Exit incentives (golden parachute, golden
- Temporary benefits reduction
handshake, lucrative severance
packages) - Reduction in variable pay

- Job embeddedness strategies (flextime, - Reducing salary


on-site child care, etc,) - Obtaining cost reduction ideas
from employees

Human Resource Planning

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Inplacement v. Outplacement 9

• In-placement. Reabsorbing excess or inappropriately placed workers into a


restructured organization.

• Out-placement. Providing a program of counselling and job-search assistance


for workers who have been terminated.

Human Resource Planning

Planning for Downsizing 10

• Determine how many people will lose the jobs


• Determine who will be let go (Seniority, performance, or potential?)
• Determine how the reduction will be carried out
• Determine the legal consequences
• Design current and future work plans
• Communicate the termination decision, timing of decision, severance payment
settlements, etc.
• Implementing the decision
• Follow-up evaluation and assessment of impact

Human Resource Planning

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Survivor’s Perceptions 11

• Perceptions of justice
- procedural
- interactional
- distributive
• Negative attitudes and behavior
• Reduced performance capabilities
• Lower productivity
• Higher turnover intention

Human Resource Planning

Impact on Downsizers 12

• Social and organizational isolation


• Disruption in work-life balance
• The emotional stress of playing the executioner
• Emotional distance and numbness on the job
• Negative impact on company’s stock
• Financial performance degrading in case of 10% or more downsizing
• Effect on Reputation for Corporate Social Performance (RCSP)

Human Resource Planning

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Effective Downsizing Strategy 13

• Rightsizing
• Reduce number of layers/ levels rather than no. of positions
• Identify, develop and protect the valued employees
• Emphasize leadership skills
• Empower individuals
• Identify and protect core competencies
• Special attention for those who lose the job as well as those who remain
• Be selective and long-term oriented

Human Resource Planning

Changes in Psychological Contract 14

An unwritten commitment between employers and their employees that


historically guaranteed job security and rewards for loyal service.

Human Resource Planning

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Downsizing and High Involvement HRM 15

• Self-managed work teams


• Selective hiring
• Extensive training
• Labor-management committees
• Incentive-based compensation

Can we have High involvement HRM in a downsizing environment?

Human Resource Planning

Labor Relation Issues 16

• Interventionist approach. Early involvement of union in the restructuring


process and the involvement of a broad cross-section of the union membership in
the development and implementation of the new form of work organization.

• Pragmatic approach. Union relies on the employer to make workplace changes


and then negotiates with the management over the impact of such changes.

Human Resource Planning

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Doing Business through HR

Priyanka S

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1. What are the greatest HR frustrations? Frustration is usually the result of inefficiency
-spending valuable time duplicating data on disparate systems that aren’t integrated
-Are PTO requests and approvals becoming too time-consuming?
-Has employee turnover become so excessive that you’re exhausting your recruiting budget
by mid-year?
2. What is our organization doing on a regular basis that could be a waste of time?
3. What are our most critical needs for HR?
4. What level of customer service do we need?
5. What bonus features would benefit our organization most?

HRIS

Human resource information system (HRIS) can be


defined as a software or online solution that is used for
data entry, data tracking, and the data management of all
human resources operations of an organization.

A good HRIS provides the capability of effective


planning, controls HR costs, and improves employee
and managerial productivity.

Employee Information Management - a software or


online solution that is used for data entry, data tracking,
and the data management of all human resources
operations of an organization.

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HRIS Advantages HRIS Disadvantages


 compliance with state laws costly technology to update your system
 Update and streamline processes malfunctions or insufficient applications to
support your human resources needs
 analyses data and reports for internal and
external use finding a qualified specialist with human
resources functional area knowledge is difficult.
 accuracy of information
Unauthorized Access
 ability to perform HR audits using any
combination of parameters Specialized Knowledge
 Employees and managers can locate answers and Data Entry Errors
information quickly without HR intervention
The cost per-hire for another employee in a
Reduce paperwork and manual record keeping specialized field may be a stretch for some small
businesses
It retrieves information quickly and accurately
It allows quick analysis of HR issues
7

Human capital management (HCM) is a set of practices related to people resource management. These
practices are focused on the organizational need to provide specific competencies and are implemented
in three categories: workforce acquisition, workforce management and workforce optimization.
8

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HRMS is an array of software combining Human Capital Management (HCM) and


Human Resource Information System (HRIS) that help HR team to take care of an organization’s most
valuable assets, people, managing manually complex and time-consuming activities.

Human Resource Management System (HRMS) is a HR ware that enables the management of several
HR functions through the use of information technology.
HRMS is a digital personal assistant to do tedious work for HR professionals.
HRMS can be described as automation software that automates most of the tasks of the Human
Resource Management (HRM) process.

Gartner - HRMS as “Business applications for the management of HR-related transactions, best practices
and enterprise reporting.

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Human Resource Management Systems (HRMS ) is a the intersection between human


resource management (HRM) and information technology ( Information System).

11

The evolution of HRIS can be traced back in 1950's and 1960's when the first automated
systems (payroll system) was introduced. GE was the first to introduce the system.

During 1990’s, extensive studies were undertaken on the advantages of the introducing HRIS
in the organization and its influence on the overall human resource strategies and business
planning.

Early Belief - HRIS (Human Resources Information System) is only to manage employee
records, attendance/Time Sheet, leave, and shift up to generating Payroll through a software
application installed in a computer.

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Purpose of HRMS - Then

Eliminating Paper and Manual Processes – Reduce human intervention

Simplify Compliance and Reporting - HRMS systems also help ensure compliance with
HR laws and reduce the risk of fines, penalties, and missed deadlines.

Better Focus on What’s Important – Automate the operational and focus on the core

13

HRMS is a Hub - Everything in the organization comes


together to transform how to manage our workforce to
attain business goals and achieve success.
The new HR mandate is moving beyond automating
processes, reducing costs, and ensuring compliance and
towards building purposeful relationships across the
business to create a modern and engaging workplace.
HR as a strategic business today is moving towards
automation and Data Analytics. With AI becoming the
crunch word, everything is powered by having the right
information at the right time.
HR function is moving towards organizational efficiency
and predictive analytics. Moreover, the function is
moving away from tactical to strategic HR. The
relegation of Transactional HR to chatbots and
automation is indeed on.

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Objective :
Higher speed of processing and retrieval of data

Minimal or no duplication of efforts leading to reduced


cost

Classifying and reclassifying data to minutes

Predictive analysis - effective decision making

Improved quality of reports - Higher accuracy of


information/report generated

Fast response

Better work culture

Engaged workforce
HRMS is a amalgamation of processes, systems, methods,
and rules that automates the entire human resource World class employee experience

activities that strategically aligns the role and contribution Establishing of streamlined and systematic procedures
of people towards corporate goals
Higher transparency in the system

15

Data Management - Real-time data , invaluable as employees are increasingly being viewed
as customers and employee engagement has become a key part of the organizational puzzle.

Employee Self Service – An information suite that is available to employees in one central
hub. Focus on strategic tasks - improves the efficiency of the business’ functioning.

Easy Reporting - An HRMS allows you to generate a number of predefined statutory as well
as MIS reports immediately without set up. HR dashboards give you a quick view of critical
information, all on a single screen.

Efficiency and Cost Effectiveness

Improved Employee Engagement - An engaged employee is a productive employee.

100% Statutory Compliance - Modern cloud HRMS ensure compliance through regular
updates of statutory changes to the back end of the software, such that you are not forced to
go hunting for the nitty-gritty of legal changes in a constantly evolving legal landscape such
as that present in India.

Adopt Best Processes in the Industry - An HRMS is researched and set up in such a way
that it incorporates within it the best practices used in the space. A few examples of this
include checklists, predefined formats for letters, requests, etc and the like.

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17

An HRMS holistically automates the functions while maintaining an updated inventory of skills, abilities,
achievements, and profiles of the employees always available at the disposal of managers to aid rational
decision related to the efficient allocation of the workforce.
Effective Risk Management : HRMS electronically gathers and manage the documents and store files with
appropriate tags, thus increasing the responsiveness at the times of audits. Moreover, as the workflow is
streamlined, it gets easier to gauge the nonconformities from the standard procedures, thereby eliminating
the possibilities of legal penalties.
Optimal Efficiency: HRMS works on predictive analytics for the workforce, thus making it easier for
organizations to invest in right interventions at the right time. Therefore, the implementation of HRMS leads
to cost reduction
Transparent communication:. HRMS promotes superior communication between employees through
improved collaboration and open feedback mechanisms. With higher accessibility and share-ability,
communication gets streamlined by involving the right accountability centers.

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Streamlined Recruitment process: HRMS simplifies the recruitment process as it helps in creating a
unified pool of resumes from which hiring managers can draw the candidates that fit in the pre-defined
parameters to fill the vacancies. ATS.

HRMS systematizes manpower planning by ascertaining the demand across the business functions
and highlighting the need to supply candidates with relevant skills.

Self Service : HRMS offers a self-service interface to the employees and managers through which they
can update and access the information as per the need, thus reducing the administrative workload for
HR specialists.

Refine & Redefine the culture. HRMS extends its competence by executing activities like attitude and
sentiment surveys, career management plans, potential assessment, learning modules for employees,
affirmative action plans, exit interviews, and succession planning thus contributing towards the
improvement of the work environment in the companies.
19

Increasing organizational effectiveness: HRMS supports decision making and better control through
automated reconciliations that are known for their accuracy and timeliness. The overall efficacy of the
organization as an employer is instrumentally improved with HRMS.

Shift the focus: HRMS re-engineers the entire human resource function, thus shifting the focus of
companies from process-oriented HR to strategic HR.

Increasing Compliance : HRMS monitors, evaluates and controls the deviations experienced in HR
functional and tactical processes, thus managing compliance with state laws.

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21

HRMS is a high-performance software that creates a massive impact on the sustainability of enterprises
by making them flexible and responsive to change.
Data - Workforce analytics -provide Return-on-Investment (ROI) evidence for workforce-related
decisions, as well as gain insight on future workforce planning
It brings transparency in the system
develops a foundation for best human resource practices
HRMS is customized, affordable, secure and service oriented
Has advanced solutions catering specifically to the needs of the businesses - SOA

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 The workplace today is in a state of continuous, digital flux, HR systems and processes need
to adapt to a world that is datafied, technology-driven, and people-centric.

Technological advancements leading to innovative and customized solutions.

Need is of integrated systems for organizing, storing, retrieving and reviewing data.

Automation has facilitated accessibility, reliability and accuracy of information; improved


organizational effectiveness and provided a leadership edge by applying technology in various
operations – HR being at the CORE – the Human resources Databank.

23

The Emergence of Relationship Analytics -


Organizational Network Analysis
Social networks -employee connection -internal
connections
Talent Management and PMS - Developmental
inputs on the go for virtual, distributed teams.
Employee Experience -Curated, customized
experiences for specific career stages, Gamification
leading to stronger engagement
eLearning Authoring– E-Learning - self-learning.
Scheduling and Shift Planning - Mobility
Artificial Intelligence -Companies are moving
towards AI tools for predicting the outcomes of
their employee-defined objectives like KRA’s etc.
Software as a Service(SAAS) or Application
Service Provider’s (ASP’s) model – Convenient &
Flexible
Service-Oriented Architecture (SOA)

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15

Recruitment

Dr. M. Bhaskara Rao


Human Resource Planning

Online Recruting 2

 Broaden the pool of candidates


 Focus on the best sources
 Set yourself apart
 Use recruiting software to avoid being drowned in data
Peter Cappelli’s Four Step Process to Online Recruiting:
1. Attract candidates
2. Sort applicants
3. Make contact
4. Close the deal

Human Resource Planning

1
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When not to Use Professional Recruiter 3

Don’t use Professional Services Firm when –


 The candidate pool is small and known to management;
 The requirements of the open position and the competencies of the successful
candidate are clear;
 The position seeking to be filled is highly technical and demands very specialized
knowledge and expertise; and
 It is a low-level position.

Human Resource Planning

Stay involved even with Professional Recruiter 4

Stay involved even when you hire a professional recruiter.


 Select the consultant, not just the firm;
 Be aware of potential conflicts of interest; and
 Work as a team.

Human Resource Planning

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Case Interviewing 5

It is a method that subjects a job applicant to a scenario and business problem similar to
those encountered on the job.

Human Resource Planning

Eight Embedded Personal Interests 6

• Application of technology
• Quantitative analysis
• Theory development and conceptual thinking
• Creative production
• Counseling and mentoring
• Managing people and relationships
• Enterprise control
• Influence through language and ideas

Human Resource Planning

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