An Assignment

on

Markov Analysis and Monte Carlo Simulation

Course: Advanced Research Methods in Human Resource Management (HRM-527)

Submitted to:

Professor Ali Ahsan

Department of Management

University of Dhaka

Submitted by:

Md. Golam Rabbe

ID: 22-153

Human Resource Management (Section A)

Date of Submission:

9th March, 2021

 Markov Analysis
There are four levels in the given organization. The data is as follows:

21 28%
Level 4

4%

Level 3 86 21%

8%

Level 2 132 36%

12%

Level 1 178 52%

45%

Figure 1: Data of the recruitment, promotion and turnover

Here it is seen that, every year 45% employees are recruited in the first level and
52% of them leave the organisation while 12% gets promoted to the upper level. In
the next section, the changes due to promotion leave and recruitment will be
discussed through Markov Analysis.

Year 0
Level 1 178
Level 2 132
Level 3 86
Level 4 21
 Markov Analysis of Year 0 to 1:

Level 1 Level 2 Level 3 Level 4 Exit

Recruitment 45% (178*0.45)=80

Level 1 178 (178*0.36)=64 (178*0.12)=21 (178*0.52)=93
Level 2 132 (132*0.56)=74 (132*0.08)=11 (132*0.36)=47
Level 3 86 (86*0.75)=65 (86*0.04)=3 (86*0.21)=18
Level 4 21 (21*0.72)=15 (21*0.28)=6
Total 144 95 76 18 164
number at
each level

Graphical Representation of year 0 to 1:

21 6
Level 4

Level 3 86 18

11

Level 2 132 47

93

Level 1 178 21

80

Figure 2: Employees at the end of year 1

 Markov Analysis of Year 1 to 2:

Level 1 Level 2 Level 3 Level 4 Exit

Recruitment 45% (144*0.45)=65
Level 1 144 (144*0.36)=52 (144*0.12)=17 (144*0.52)=75
Level 2 95 (95*0.56)=53 (95*0.08)=8 (95*0.36)=34
Level 3 76 (76*0.75)=57 (76*0.04)=3 (76*0.21)=16
Level 4 18 (18*0.72)=13 (18*0.28)=5
Total 117 70 65 16 112
number at
each level
Graphical Representation of year 1 to 2:

18 5
Level 4

Level 3 76 16

Level 2 95 34

17

Level 1 144 75

80

Figure 3: Employees at the end of year 2

 Markov Analysis of Year 2-3:
Level 1 Level 2 Level 3 Level 4 Exit
Recruitment 45% (117*0.45)=53
Level 1 117 (117*0.36)=42 (117*0.12)=14 (117*0.52)=61
Level 2 70 (70*0.56)=39 (70*0.08)=6 (70*0.36)=25
Level 3 65 (65*0.75)=49 (65*0.04)=2 (65*0.21)=14
Level 4 16 (16*0.72)=12 (16*0.28)=4
Total number 95 53 55 14 104
at each level

Graphical Representation of year 2 to 3:

21 4
Level 4

Level 3 65 14

Level 2 70 25

14

Level 1 117 61

53

Figure 4: Employees at the end of year 3

 Markov Analysis of Year 3-4:
Level 1 Level 2 Level 3 Level 4 Exit
Recruitment 45% (95*0.45)=43
Level 1 95 (95*0.36)=34 (95*0.12)=12 (95*0.52)=49
Level 2 53 (53*0.56)=30 (53*0.08)=4 (53*0.36)=19
Level 3 55 (55*0.75)=41 (55*0.04)=2 (55*0.21)=12
Level 4 14 (14*0.72)=10 (14*0.28)=4
Total 77 42 45 12 84
number at
each level

Graphical Representation of year 3 to 4:

14 4
Level 4

Level 3 55 12

Level 2 53 19

12

Level 1 95 49

43

Figure 5: Employees at the end of year 4

 Markov Analysis of Year 4 to 5:
Level 1 Level 2 Level 3 Level 4 Exit
Recruitment 45% (77*0.45)=35
Level 1 77 (77*0.36)=28 (77*0.12)=9 (77*0.52)=40
Level 2 42 (42*0.56)=24 (42*0.08)=3 (42*0.36)=15
Level 3 45 (45*0.75)=34 (45*0.04)=2 (45*0.21)=9
Level 4 12 (12*0.72)=9 (12*0.28)=3
Total 63 33 37 11 67
number at
each level

Graphical Representation of year 4 to 5:

12 3
Level 4

Level 3 45 9

Level 2 42 15

Level 1 77 40

35

Figure 6: Employees at the end of year 5

The final Number of Employees after Five Year:
Level 1 63
Level 2 33
Level 3 37
Level 4 11
 Monte Carlo Simulation

Number of employees in each level is as follows:

Level 1 178
Level 2 132
Level 3 86
Level 4 21

Analysis of Level1:

Recruitment Promotion to Level 2 Turnover

Number of Number of Number of Number of Number Number
new recruits days promotions days of of days
turnovers
10 5 6 30 10 25
12 10 7 25 13 18
14 15 8 15 16 18
16 15 9 15 19 16
18 20 10 10 21 14
20 30 11 5 24 9

Recruitment in level 1:

Recruitment Number of days Probability Cumulative Random

Numbers Probability Intervals
10 5 0.05 0.05 00-04
12 10 0.10 0.15 05-14
14 15 0.15 0.30 15-29
16 15 0.15 0.45 30-44
18 20 0.20 0.65 45-64
20 35 0.35 1.00 65-99

Finding Number of Recruitments at level 1:

Year Random Number Number of Recruits for the

Year
1 58 18
2 02 10
3 89 20
4 11 12
5 69 20
Total Number of Recruits in level 1 80
Promotion to Level 2:

Number of Number of days Probability Cumulative Random

Promotions Probability Intervals
6 30 0.30 0.30 00-29
7 25 0.25 0.55 30-54
8 15 0.15 0.70 55-69
9 15 0.15 0.85 70-84
10 10 0.10 0.95 85-94
11 5 0.05 1.00 95-99

Finding Out the number of promotions of level 1 to level 2:

Year Random Number Number of Promotion for the

Year
1 81 9
2 56 8
3 57 8
4 24 6
5 66 8
Total Number of Promotions to Level 2 39

Turnover in level 1:

Number of Number of days Probability Cumulative Random

turnovers Probability Intervals
10 25 0.25 0.25 00-24
13 18 0.18 0.43 25-42
16 18 0.18 0.61 43-60
19 16 0.16 0.77 61-76
21 14 0.14 0.91 77-90
24 9 0.09 1.00 91-99

Finding out the turnover number in level 1:

Year Random Number Number of Turnover for the

Year
1 45 16
2 99 24
3 05 10
4 38 13
5 04 8
Total Number of Turnover 71
Total Employees after 5 years in level 1:

𝑇𝑜𝑡𝑎𝑙 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑒𝑔𝑖𝑛𝑖𝑛𝑔+𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑐𝑟𝑢𝑖𝑡𝑠−𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜 𝑙𝑒𝑣𝑒𝑙 2−𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟

=178+80−39−71
=148

Analysis of Level 2:

Promotion to level 3 Turnover

Number of Number of days Number of Number of days
promotions turnovers
3 35 6 25
4 25 8 20
5 15 10 20
6 10 12 15
7 10 14 10
8 5 16 10

Promotion in level 2:

Number of Number of days Probability Cumulative Random

Promotion Probability Intervals
3 35 0.35 0.35 00-34
4 25 0.25 0.60 35-59
5 15 0.15 0.75 60-74
6 10 0.10 0.85 75-84
7 10 0.10 0.95 85-94
8 5 0.05 1.00 95-99

Number of employees promoted to level 3 from level 2:

Year Random Number Number of Promotion for the

Year
1 18 3
2 32 4
3 78 6
4 23 3
5 35 4
Total Number of Promotion to Level 3 20
 Turnover in level 2:

Number of Number of days Probability Cumulative Random

turnovers Probability Intervals
6 25 0.25 0.25 00-24
8 20 0.20 0.45 25-44
10 20 0.20 0.65 43-64
12 15 0.15 0.80 65-79
14 10 0.10 0.90 80-89
16 10 0.10 1.00 90-99

Number of turnover in level 2:

Year Random Number Number of Turnover for the

Year
1 65 12
2 22 6
3 83 14
4 90 16
5 97 16
Total Number of Turnover 64

Total Number of employees after five years in level 2:

𝑇𝑜𝑡𝑎𝑙 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑒𝑔𝑖𝑛𝑖𝑛𝑔+𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛𝑠 𝑓𝑟𝑜𝑚 𝑙𝑒𝑣𝑒𝑙 1−𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜
𝑙𝑒𝑣𝑒𝑙 3−𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
=132 + 39 − 20 − 64
=87
Analysis of Level 3:

Promotion to level 4 Turnover

Number of Number of days Number of Number of days
promotions turnovers
1 40 2 25
2 25 4 25
3 10 6 25
4 10 8 15
5 10 10 5
6 5 12 5

Promotion in level 3 to level 4:

Number of Number of days Probability Cumulative Random

Promotion Probability Intervals
1 40 0.40 0.40 00-39
2 25 0.25 0.65 40-64
3 10 0.10 0.75 65-74
4 10 0.10 0.85 75-84
5 10 0.10 0.95 85-94
6 5 0.05 1.00 95-99

Number of promotions:

Year Random Number Number of Promotion for the

Year
1 49 2
2 78 4
3 30 1
4 19 1
5 30 1
Total Number of Promotion to Level 4 9
Turnover in level 3:

Number of Number of days Probability Cumulative Random

turnovers Probability Intervals
2 25 0.25 0.25 00-24
4 25 0.25 0.50 25-49
6 25 0.25 0.75 50-74
8 15 0.15 0.90 75-89
10 5 0.05 0.95 90-94
12 5 0.05 1.00 95-99

Finding out the number of turnover in level 3:

Year Random Number Number of Turnover for the

Year
1 42 4
2 39 4
3 88 8
4 16 2
5 77 8
Total Number of Turnover 26

Total Number of employees after five years in level 3:

𝑇𝑜𝑡𝑎𝑙 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑒𝑔𝑖𝑛𝑖𝑛𝑔+𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛𝑠 𝑓𝑟𝑜𝑚 𝑙𝑒𝑣𝑒𝑙 1−𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜

𝑙𝑒𝑣𝑒𝑙 3−𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
=86 + 20 − 9 − 26
=71
Analysis of Level 4:

Turnover
Number of Number of days
promotions
0 60

1 20

2 10

3 5

4 5

Turnover in level 4:

Number of Number of days Probability Cumulative Random

turnovers Probability Intervals
0 60 0.60 0.60 00-59
1 20 0.20 0.80 60-79
2 10 0.10 0.90 80-89
3 5 0.05 0.95 90-94
4 5 0.05 1.00 95-99

Finding out the number of turnover in level 4:

Year Random Number Number of Turnover for the

Year
1 87 2
2 74 1
3 94 3
4 62 1
5 56 0
Total Number of Turnover 7
Total Number of employees after five years in level 4:

𝑇𝑜𝑡𝑎𝑙 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑒𝑔𝑖𝑛𝑖𝑛𝑔+𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛𝑠 𝑓𝑟𝑜𝑚 𝑙𝑒𝑣𝑒𝑙 1−𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜

𝑙𝑒𝑣𝑒𝑙 3−𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟

=21 + 9 − 7
=23

Final Decision:

To draw a final decision, here we need to compare between the two tools based on the data.

Level Markov Analysis Monte Carlo Simulation

Level 1 63 148
Level 2 33 87
Level 3 37 71
Level 4 11 23

After the final calculation, it is seen that there is a huge gap between Markov analysis and
Monte Carlo Simulation. The reason behind this is: we know that Monte Carlo is done based
on random numbers and there is no biasness in the analysis. On the other hand Markov
Analysis is done on the basis of a fixed percentage which can be biased and unrealistic. From
this point of view Monte Carlo is more reliable and authentic than Markov analysis.