EMM 512: MANUFACTURING RESOURCE MANAGEMENT

LECTURE ONE

HUMAN RESOURCE

1.0 INTRODUCTION:

This topic introduces the learner to the most important factor in the manufacturing process – the
human factor.

1.2 LECTURE OBJECTIVES

By the end of the lecture, the learner should be able to:

1.2.1 define key terms in manufacturing resource management

1.2.2 Describe the human resource management process

1.2.3 Explain the various sources recruitment

1.2.4 Describe the selection process

1.2.5 Explain the various kinds of training programs

1.2.6 Explain the importance of measuring performance

1.2.1 DEFINATION OF TERMS

Manufacturing - is the production of goods through the use of labor, machinery, tools and
biological or chemical processing or formulation. Manufacturing can either mean transforming
raw materials into finished goods on a large scale, or the creation of more complex items by selling
basic goods to manufacturers for the production of items such as automobiles, aircraft, or
household appliances.

Resource - A resource is a source or supply from which benefit is produced. Typically, resources
are materials, money, services, staff, or other assets that are transformed to produce benefit and,
in the process, may be consumed or made unavailable. Benefits of resource utilization may include
increased wealth, meeting needs or wants, proper functioning of a system, or enhanced well being

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Management - Management is a process of planning, decision making, organizing, leading,
motivation and controlling the human resources, financial, physical, and information resources of
an organization to reach its goals efficiently and effectively.

1.2.2 The Human Resource

Human Resource are the people who work for an organization in jobs that produce the products or
services of the business/organization.

Human Resource is also the name of department or functional area from where human resource
employees provide human resource services to the rest of the organization.

People are the most important asset in the organization thus an organization must hire, bring on
board, pay, satisfy, motivate, engage, manage, develop and retain employees.

1.2.2.1 Manpower Planning

Also called Human Resource Planning consists of putting right number of people, right kind of
people at the right place, right time, doing the right things for which they are suited for the
achievement of the goals of the organization.

It has to be a system and is carried out in a set procedure as follows:

Steps in Manpower Planning

1. Analyzing the current manpower inventory- Before a manager makes forecast of future
manpower, the current manpower status has to be analyzed. For this the following things
have to be noted-

• Type of organization

• Number of departments

• Number and quantity of such departments

• Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting.

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 2. Making future manpower forecasts- Once the factors affecting the future manpower
forecasts are known, planning can be done for the future manpower requirements in several
work units.

The Manpower forecasting techniques commonly employed by the organizations are as follows:

i. Expert Forecasts: This includes informal decisions, formal expert surveys and
Delphi technique.

ii. Trend Analysis: Manpower needs can be projected through extrapolation

(projecting past trends), indexation (using base year as basis), and statistical
analysis (central tendency measure).

iii. Work Load Analysis: It is dependent upon the nature of work load in a
department, in a branch or in a division.

iv. Work Force Analysis: Whenever production and time period has to be analyzed,
due allowances have to be made for getting net manpower requirements.

v. Other methods: Several Mathematical models, with the aid of computers are used
to forecast manpower needs, like budget and planning analysis, regression, new
venture analysis.

3. Developing employment programmes - Once the current inventory is compared with

future forecasts, the employment programmes can be framed and developed accordingly,
which will include recruitment, selection procedures and placement plans.

4. Design training programmes - These will be based upon extent of diversification,

expansion plans, development programmes, etc. Training programmes depend upon the
extent of improvement in technology and advancement to take place. It is also done to
improve upon the skills, capabilities, knowledge of the workers.

1.2.2.2 Importance of Manpower Planning

1. Key to managerial functions- The four managerial functions, i.e., planning, organizing,
directing and controlling are based upon the manpower. Human resources help in the

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 implementation of all these managerial activities. Therefore, staffing becomes a key to all
managerial functions.

2. Efficient utilization- Efficient management of personnel becomes an important function

in the industrialization world of today. Setting of large-scale enterprises require
management of large-scale manpower. It can be effectively done through staffing function.

3. Motivation- Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmes, i.e., incentive plans to be framed for further
participation and employment of employees in a concern. Therefore, all types of incentive
plans become an integral part of staffing function.

4. Better human relations- A concern can stabilize itself if human relations develop and are
strong. Human relations become strong trough effective control, clear communication,
effective supervision and leadership in a concern. Staffing function also looks after training
and development of the work force which leads to co-operation and better human relations.

5. Higher productivity- Productivity level increases when resources are utilized in best
possible manner. higher productivity is a result of minimum wastage of time, money,
efforts and energies. This is possible through the staffing and its related activities
(Performance appraisal, training and development, remuneration)

1.2.2.3 Need of Manpower Planning

Manpower Planning is a two-phased process because manpower planning not only analyses the
current human resources but also makes manpower forecasts and thereby draw employment
programmes. Manpower Planning is advantageous to firm in following manner:

1. Shortages and surpluses can be identified so that quick action can be taken wherever
required.

2. All the recruitment and selection programmes are based on manpower planning.

3. It also helps to reduce the labor cost as excess staff can be identified and thereby
overstaffing can be avoided.

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 4. It also helps to identify the available talents in a concern and accordingly training
programmes can be chalked out to develop those talents.

5. It helps in growth and diversification of business. Through manpower planning, human

resources can be readily available and they can be utilized in best manner.

6. It helps the organization to realize the importance of manpower management which

ultimately helps in the stability of a concern.

1.2.3 Sources Recruitment

Recruitment is the process of searching for prospective employees and stimulating them to apply
for jobs in the organization. it involves attracting and obtaining as many applications as possible
from eligible job seekers.

The eligible and suitable candidates required for a particular job are available through various
sources. These sources can be divided into two categories:

1.2.3.1 Internal Sources of Recruitment

i) Promotions:
The promotion policy is followed as a motivational technique for the employees who work hard
and show good performance. Promotion results in enhancements in pay, position, responsibility
and authority. The important requirement for implementation of the promotion policy is that the
terms, conditions, rules and regulations should be well-defined.

ii) Retirements
The retired employees may be given the extension in their service in case of non-availability of
suitable candidates for the post.

iii) Former employees

Former employees who had performed well during their tenure may be called back, and higher
wages and incentives can be paid to them.

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iv) Transfers
Employees may be transferred from one department to another wherever the post becomes
vacant.

v) Internal advertisement
The existing employees may be interested in taking up the vacant jobs. As they are working in
the company since long time, they know about the specification and description of the vacant
job. For their benefit, the advertisement within the company is circulated so that the employees
will be intimated.

1.2.3.1.1 Benefits of Internal Sources of Recruitment:

a) The existing employees get motivated.
b) Cost is saved as there is no need to give advertisements about the vacancy.
c) It builds loyalty among employees towards the organization.
d) Training cost is saved as the employees already know about the nature of job to be
performed.
e) It is a reliable and easy process.

1.2.3.1.2 Limitations of Internal Sources of Recruitment:

a) Young people with the knowledge of modem technology and innovative ideas do not get
the chance.
b) The performance of the existing employees may not be as efficient as before.
c) It brings the morale down of employees who do not get promotion or selected.
d) It may lead to encouragement to favoritism.
e) It may not be always in the good interest of the organization.

1.2.3.2 External Sources of Recruitment:

i) Press advertisement
This source offers a wide choice for selecting the appropriate candidate for the available post. It
gives publicity to the vacant posts and the details about the job in the form of job description and
job specification.

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ii) Campus interviews
The company officials personally visit various institutes and select students eligible for a
particular post through interviews. Students get a good opportunity to prove themselves and get
selected for a good job. It is the best possible method for companies to select students from
various educational institutions. It is easy and economical.
iii) Placement agencies
A databank of candidates is sent to organizations for their selection purpose and agencies get
commission in return.

iv) Employment exchange

People register themselves with government employment exchanges with their personal details.
According to the needs and request of the organization, the candidates are sent for interviews.

v) Walk in interviews
These interviews are declared by companies on the specific day and time and conducted for
selection.

vi) E-recruitment
Various sites such as jobs.com, naukri.com, and monster.com are the available electronic sites on
which candidates upload their resume and seek the jobs.

vii) Competitors:
By offering better terms and conditions of service, the human resource managers try to get the
employees working in the competitor’s organization.

1.2.3.2.1 Benefits of External Sources of Recruitment

a) New talents get the opportunity.
b) The best selection is possible as a large number of candidates apply for the job.
c) In case of unavailability of suitable candidates within the organization, it is better to
select them from outside sources.

1.2.3.2.2 Limitations of External Sources of Recruitment:

a) Skilled and ambitious employees may switch the job more frequently.

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 b) It gives a sense of insecurity among the existing candidates.
c) It increases the cost as advertisement is to be given through press and training facilities to
be provided for new candidates.

1.2.4 The selection process

The selection process is quite lengthy and complex as it involves a series of steps before making
the final selection. The procedure of selection may vary from industry to industry, company to
company and even from department to department. Every organization designs its selection
process, keeping in mind the urgency of hiring people and the prerequisites for the job vacancy.

1. Preliminary Interview: The preliminary interview is also called as a screening interview

wherein those candidates are eliminated from the further selection process who do not meet
the minimum eligibility criteria as required by the organization.

Here, the individuals are checked for their academic qualifications, skill sets, family
backgrounds and their interest in working with the firm. The preliminary interview is less
formal and is basically done to weed out the unsuitable candidates very much before
proceeding with a full-fledged selection process.

2. Receiving Applications: Once the individual qualifies the preliminary interview, he is

required to fill in the application form in the prescribed format. This application contains
the candidate data such as age, qualification, experience, etc. This information helps the
interviewer to get the fair idea about the candidate and formulate questions to get more
information about him.

3. Screening Applications: Once the applications are received, these are screened by the
screening committee, who then prepare a list of those applicants whom they find suitable
for the interviews. The shortlisting criteria could be the age, sex, qualification, experience
of an individual. Once the list is prepared, the qualified candidates are called for the
interview either through a registered mail or e-mails.

4. Employment Tests: In order to check the mental ability and skill set of an individual,
several tests are conducted. Such as intelligence tests, aptitude tests, interest tests,

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 psychological tests, personality tests, etc. These tests are conducted to judge the suitability
of the candidate for the job.

5. Employment Interview: The one-on-one session with the candidate is conducted to gain
more insights about him. Here, the interviewer asks questions from the applicant to
discover more about him and to give him the accurate picture of the kind of a job he is
required to perform.

Also, the briefing of certain organizational policies is done, which is crucial in the
performance of the job. Through an interview, it is easier for the employer to understand
the candidate’s expectations from the job and also his communication skills along with the
confidence level can be checked at this stage.

6. Checking References: The firms usually ask for the references from the candidate to cross
check the authenticity of the information provided by him. These references could be from
the education institute from where the candidate has completed his studies or from his
previous employment where he was formerly engaged. These references are checked to
know the conduct and behavior of an individual and also his potential of learning new jobs.

7. Medical Examination: Here the physical and mental fitness of the candidate are checked
to ensure that he is capable of performing the job. In some organizations, the medical
examination is done at the very beginning of the selection process while in some cases it
is done after the final selection.

Thus, this stage is not rigid and can take place anywhere in the process. The medical
examination is an important step in the selection process as it helps in ascertaining the
applicant’s physical ability to fulfill the job requirements.

8. Final Selection: Finally, the candidate who qualifies all the rounds of a selection process
is given the appointment letter to join the firm.

Thus, the selection is complex and a lengthy process as it involves several stages than an
individual has to qualify before getting finally selected for the job.

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1.2.5 Training Programmes

Training consists of planned programs undertaken to improve employee knowledge, skills, attitude
and social behavior so that the performance e of the organization improves considerably. It is a
short process applied to technical staff and to members in various levels of management. When
applied to the lower-level staff it is called training but to the senior level staff it is called managerial
development program.

1.2.5.1 Objectives of Training and Development

The purpose of training and development can be explained as below:

a) Improving quality of work – training and development helps companies to improve the
quality of work done by their employees. They concentrate on a specific area thereby
improving the quality of work.
b) Enhance employee growth – every employee who takes development programme becomes
better at his job. It provides perfection and required practice; thus, employees are able to
develop professionally.
c) Prevents obsolescence – employees are able to be up to date with new technology and fear
of being thrown out of the job is reduced.
d) Assisting new comer – it helps new employees to get accustomed to new methods of
working, new technology, the work culture of the company etc.
e) Bridging the gap between planning and implementation – plans made by companies expect
people to achieve certain targets within a certain time limit with certain quality; for this
employee performance has to be accurate and perfect. Training helps in achieving
accuracy and perfection.
f) Health and safety measures – training and development identifies and teaches employees
about the different risks involved in their jobs, the different problems that can arise and
how to prevent them. This helps to improve the health and safety measures in the company.

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1.2.5.2 Training Methods

Training methods for junior staff;

a) On-the-job training
b) Apprenticeship training
c) Vestibule training
d) Job rotation
e) Classroom method

Training methods for managerial staff;

Training for managerial staff can be either on the job method or off the job methods. On the job
methods include;

a) Job rotation
b) Planned progression
c) Coaching and counselling
d) Under study
e) Junior board

Off the job methods include;

a) Classroom method
b) Simulation
c) Business games
d) Committee
e) Conference
f) Readings
g) In basket training

1.2.6 Performance Measurement

• Performance measurement is the regular measurement of outcomes and results, which

generates reliable data on the effectiveness and efficiency of programs.

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 • Performance measurement is the process of collecting, analyzing and/or reporting
information regarding the performance of an individual, group, organization, system or
component.

Input - Resources (human resources, employee time, funding) used to conduct activities and
provide services.

Activity - these are individual tasks funded by projects or programs. It is the smallest unit of work
e.g., conducting a training workshop, providing ITC equipment, etc.

Output - these are products or services delivered. It is a product of a specific activity e.g., number
of people trained, number of seminars conducted etc. Output information does not tell anything
about the actual results achieved or consequences of the products/services delivered, it shows the
scope or size of what the inputs and activities produce.

Outcome - An outcome represents a specific result a program is intended to achieve. An outcome

can also be defined as the specific objective of a specific program. Outcomes can be of the
following types;

a) End Outcomes (Objectives): This is the highest-level objective

towards which a program works. It is what the program has been
designed to achieve ultimately. This is what managers can
materially affect or influence and for which they are willing to be
held responsible.
b) Intermediate outcome (result): this is a result that must occur in
order to reach the higher-level, end outcome/objective. Progress
must be made before the end outcome/objective can be achieved.
Program Area Intermediate Outcomes End Outcomes
Information 1. Increase in independent Free Flow of Information
sources of information. (alternative wording: Freer Flow
2. Increase in private sector of Information)
media outlets
3. Increased use of IT
technologies

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Human rights 1. Legislation promoting Human rights protections
human rights enacted. conform to international
2. Increased advocacy for standards/commitments
adherence
3. Human rights commissions/
committees established.

Indicators - An indicator is an instrument that helps you measure change over time. Because it
measures change over time, an indicator is a means of detecting progress or lack of progress to
intermediate outcomes (intermediate results), and to end outcomes and higher-level objectives.

An indicator should be:

• Useful for program management

• Appropriate to the outcome (don’t measure height with a thermometer)

• Direct – it measures the outcome as stated

• Relevant and important to the outcome (and larger mission, if applicable)

• Reflects determination about extent of program influence over the outcome (if there is no
program influence, it shouldn’t be an outcome, and so you shouldn’t be measuring it)

• Sensitive to change

• Based on reliable and valid data

• Operational – data collectors understand what data is needed and how to collect it.

Indicators can be either quantitative or qualitative. A quantitative indicator uses counts or

percentages while a qualitative indicator is generally a rigorous form of assessment.

Outcomes Indicators
End outcome: Free flow of Information 1. Percent (%) of population that trusts
available new sources.
2. % of population receiving news,
disaggregated by source - radio, TV,
newspapers.

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 3. % of people that say they trust news sources
above
Intermediate outcome: Increase in private 1. Number of non-government/private sector
sector media outlets media outlets.
2. Number of non-government/private sector
news sources

1.2.6.1 Why Measurement Performance

In the never-ending improvement, measurement plays an important role in

✓ Identifying and tracking progress against organizational goals

✓ Identifying opportunities for improvement
✓ Comparing performance against both internal and external standards

Reviewing performance of an organization is also an important step in formulating the direction

of the strategic activities.

It is important to know where the strengths and weaknesses of the organization lie and as part of
plan-to-do-check-act cycle.

Performance measurement plays a key role in quality and productivity improvement activities thus
it is needed to:

i) Ensure customer requirements have been met

ii) Be able to set sensible objectives and comply with them
iii) Provide standards for establishing comparison
iv) Provide visibility and ‘scoreboard’ for people to monitor their own performance level
v) Highlight quality problems and determine areas of priority attention
vi) Provide feedback for driving the improvement effort

1.2.6.2 Performance Measurement Framework

A good performance measurement framework will focus on the customer and measure the right
things. It must be:

i) Meaningful, unambiguous and widely understood.

ii) Owned and managed by the teams within the organization

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 iii) Based on the high level of data integrity
iv) Data collection should be embedded within the normal procedures
v) Able to drive improvement
vi) Linked to critical goals and key driver of the organization

There are four steps in performance measurement framework:

a) The strategic objectives of the organization are converted into desired standards of performance
b) Metrics are developed to compare the desired performance with the actual achieved standards
c) Gaps are identified
d) Improvement actions are initiated.

These steps are continuously implemented and reviewed.

An organization need to evolve its own set of metrics using any existing metrics as a starting point in
understanding current performance. To ensure they trigger the improvement cycle, they should be in three
main areas:

a) Effectiveness – this is about the process output and doing what was planned to be
done. The effectiveness metrics should reflect whether the desired results are
being achieved and the right things accomplished. Metrics should include quality
eg level of service, quantity e.g. tonnes, timelines eg speed of response etc.

Effectiveness = actual output ÷ Expected output x 100%

b) Efficiency – this is about the process input eg labor, staff, equipment and measures
of performance of the system management.

Efficiency = Resources actually used ÷ Resources planned to be used × 100%

c) Productivity – outputs ÷ inputs

Expected productivity = expected output ÷ Resources expected to be consumed

Actual Productivity = Actual Output ÷ Resources actually consumed

1.2.6.2 Elements of Good Performance Measure

i) Leadership and commitment

ii) Good planning and a sound implementation strategy
iii) Appropriate employee involvement
iv) Simple measure and evaluation
v) Control and improvement

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