2.1. Functions and Evolutions of Human Resource Planning

  • Workforce/human resource planning
    • Process of anticipating current and future demand for workers in both the short and long term
    • Lessens hiring mistakes at the cost of time and money
    • A workforce plan includes
      • Careful consideration of current abilities and what will be needed in the future (short-term or long-term)
      • Identifying gaps and considering ways of addressing these
      • Noting any training needs
      • Developing training, recruitment and other personnel policies (e.g. appraisals, employee welfare)
    • Considers labour demand of an organization, which depends on:
      • Historical data: average length of service, labor turnover rate, etc.
      • Workload, specializations and flexibility of workforce
      • e.g. flexible workforce can deal with sudden shortage of staff
    • Capital Intensity (i.e. use of machinery)
    • Work study (time and motion study or efficiency studies)
      • Best number of people to complete a job efficiently
    • Derived demand (from forecast output)
    • Demand for labor depends on demand for product
    • Natural wastage (aging/retirement)
  • Staff/labor turnover
    • Percentage of workforce that leaves the company in a time period
    • (Number of leavers / Total number of staff) x 100
    • Low turnover suggests good workforce planning and recruitment
    • High turnover suggests incompetent employees and poor job satisfaction
    • Reason why people leave their jobs
      • CLAMPS (M.J. Yates)
        • Challenge, Location, Advancement, Money, Pride, (Job) Security
      • Poor morale, which is seen in:
        • Militant workforce
        • Frequent union representation to management
        • Low suggestion rates
        • Widespread rumors
  • Factors affecting workforce plan
    • Supply of labor
      • Demographic changes
        • Net birth rate
        • Net migration rate
        • Life expectancy and retirement age
        • Workforce flexibility, skills, and education
        • Women in workforce
        • Mobility of labor (geographic and occupational)
      • Flexibility of  internal workforce
      • Cost of living
      • Cost and availability of transportation
      • Rate of unemployment
    • Government
    • Finances
    • Structure of business
    • Effectiveness of communication
    • Morale of workforce
    • Leadership style of managers
    • Need for change/reaction to change
  • Recruitment process
    • Job analysis
      • Skill and training required for the job
      • Qualifications and personal qualities needed
      • Rewards needed to recruit and retain the job holder
    • Job description
      • Outlines the details of the job (i.e. duties and responsibilities)
      • Element of flexibility – not incredibly specific
        • “Any other reasonable job assigned by employer”
    • Person specification
      • Profiles ideal candidate
      • e.g. type of engineer, experience, skills
    • Job advertisement
      • Internal (w/in company)
        • Advantages
          • Cost effective
          • Less time needed to acclimate to company culture
          • Less risk
          • Motivational
        •  Disadvantages
          • Fewer applicants
          • Time consuming
          • No new ideas
          • Internal politics
    • External (outside the company)
      • Advantages
        • New blood (wide range of experiences)
        • Larger pool of applicants
      • Disadvantages
        • Even more time consuming
        • Expensive
        • Uncertainty
    • Need for TRAPS – truthful, relevant, accurate, positive, short
    • Application process (resume, cover letter, application form)
    • Selection process
      • Screen applications and shortlist suitable candidates
      • Interview the shortlisted candidates
      • Perform testing (if applicable)
      • Check each shortlisted candidate’s references
    • Offer job to best candidate
    • Sign the contract of employment
    • Carry out induction of new recruit
    • Monitor (paper trail)
  • Training
    • Process of providing opportunities for workers to acquire skills and knowledge
    • Training is the improvement of task-specific skills
    • Development involves enhancing personal skills that improve workforce flexibility
    • Benefits
      • Improve efficiency and effectivity
      • Less wastage
      • Higher morale
      • Adapt to change easily
      • Flexible workforce
    • Drawbacks
      • Cost
      • Employees may leave since they are qualified for better jobs
    • Types of training
      • Induction
        • Introduction to company policies, general info
        • May involve meeting other personnel, touring the premises, etc.
        • Advantages
          • Establishes expectations
          • Understand company culture
          • Morale booster
        • Disadvantages
          • Time consuming
          • Personnel have to be freed to work on the induction
          • Info overload
      • On the job
        • Learn from coworkers by experience
        • May involve being mentored by or shadowing senior managers
        • Advantages
          • Relatively cheap
          • Relevant job-specific skills are learned
          • Fewer disruptions to work
          • Establish team relationships
        • Disadvantages
          • Possibility of learning bad working habits
          • Trainers may lack the best training skills
          • Trainers may not be able to work properly
      • Off the job
        • Learn from specialists from third party (e.g. university, speakers)
        • Advantages
          • Expert expertise
          • Wide range of training
          • No distractions
          • Networking
        • Disadvantages
          • Expensive
          • Loss of output
          • Skills may be irrelevant
      • Cognitive
        • Theoretical training in the hopes of improving overall intelligence
        • Advantages
          • Improves brain function (memory, reasoning, etc.)
          • Knowledge may apply to a wide variety of situations
        • Disadvantages
          • Costly
          • May not be immediately practical/applicable
      • Behavioral
        • Practical training in order to improve employee attitudes/behaviors
        • Advantages
          • May make for more competent and assertive employees
          • Improves customer and intra-company relations
        • Disadvantages
          • Costly
          • Difficult to track progress
  • Appraisals
    • Annual formal assessment of performance judged against pre-set criteria
    • Reasons
      • Assess performance in line with job description and targets
        • Identify hindrances
        • Identify training needed
      • Reflect on performance (areas for improvement)
      • Praise good performance
      • Set new goals/targets
    • May be costly and time consuming (thus isn’t done often), subjective, offensive, and biased (especially when appraising someone higher up)
    • Appraisal Methods
      • Essay
        • Written appraisal on employee’s strengths and weaknesses
        • Flexible and more applicable when employees are put in different situations
        • Open-ended, subjective and takes a lot of time to train appraisers, and to appraise each employee
      • Rating system
        • Highly structured scale of employee performance
        • Faster to carry out, structured, equal treatment
        • Some traits assessed may not be relevant, perceived meaning of scale descriptors may not be universal
      • Peer
        • Same level employees on the business hierarchy appraises you
        • Appraiser and appraisee are familiar with requirements for job
        • Might be reluctant to criticize peers
      • Upwards
        • Employee appraises seniors
        • Subjective, appraiser afraid of appraisees
      • MBO (Management by Objectives)
        • Base all appraisal on how well employee has met his own objectives as determined by employer and appraiser
        • Objectives must be realistic
      • Formative
        • Appraisal during a specific job process
        • Used to get feedback to guide improvement
      • Summative
        • Appraisal after a specific job process
        • Compares the performance of an employee to a benchmark
      • 360 degree
        • Appraisal from many different sources (managers, peers, subordinates, customers, etc.)
        • Comprehensive – many perspectives
        • Subjective, influenced by group norms, time consuming
      • Self-Appraisal
        • Need for employees to set targets for improvement
    • Steps
      • Look at staff records and reports
      • Appraisal meeting
      • Appraiser writes a report
      • Appraiser and the appraisee sign the final report
      • Countersignature of a senior manager
  • Dismissals and redundancies
    • If employee performance is below par:
      • Issue advisory letter
      • Counselling – strategies for improvement
      • Dialogue concerning consequences
      • Dismissal and Redundancies
      • Monitor (paper trail)
    • Dismissal (by the business)
      • Must have valid reason which is included in the contract
        • Otherwise, unfair dismissal – company may be sued
      • Valid reasons include:
        • Employee incompetence or misconduct
        • Breach of legal requirements/contract
    • Redundancy
      • Occurs when there is a change in company structure, downsizing, etc.
      • Company cannot afford to pay employee or job stops existing
        • Voluntary – employee volunteers to be made redundant in exchange for a redundancy package (compensation)
        • Involuntary – may be done through LIFO or retention by merit
  • Changing employment patterns and practices
    • Factors
      • Employment sector (primary, secondary, tertiary)
      • Aging population
      • Labor supply
    • Flexible work structures
      • Teleworking/home working
      • Portfolio/Project based/Contractual working
      • Part time employment
      • Flexitime
      • Advantages
        • Increased flexibility for both
          • Work from afar
          • Flexible and extended work hours
        • Company needs only to train core employees
        • Employees exercise more autonomy
        • Less office overhead expense
      • Disadvantages:
        • Requires investment in ICT, which may be unreliable
        • Employees are harder to control
        • Less job security for employees
  • Outsourcing, offshoring, and reshoring
    • Outsourcing/subcontracting
      • Transferring the internal business activities to an external firm
      • e.g. business outsources bookkeeping duties to accounting firms
      • Reasons
        • Activities are not the core function of the business
        • Business lacks the specific skills
        • Cost reduction
      • Advantages
        • Better focus on core activities
        • Helps reduce production and labor costs
        • Ensures high quality standards
      • Disadvantages
        • Requires effective two-way communication, coordination and mutual trust
        • Subcontractors need to be monitored and managed properly
        • Quality inconsistency
        • Possibility of unethical practices
    • Offshoring
      • Transferring of internal business activities overseas
      • Usually done in countries with low minimum wage
      • Reasons
        • Cut down labor costs
        • Enter new markets in growing countries
        • Overcome political limitations and regulations
      • Advantages
        • Reduce labor cost
        • Help the business expand and gain exposure
        • Business has access to large talent pool
        • Stimulate host country’s economy (job opportunities, trade, etc.)
      • Disadvantages
        • Language and cultural barrier
        • Time difference
        • Communication
    • Reshoring
      • Bringing back offshore/outsourced personnel and services back to the original location
      • Reasons
        • Foreign labor costs are increasing
        • Problems with delivery/logistics
      • Advantages
        • Greater control
        • Increased proximity to customers/shorter supply chain
        • Product quality may increase
      • Disadvantages
        • May still be more costly
        • Local country may lack the labor supply
  • Innovation, cultural differences, and ethical considerations
    • Innovation
      • “Culture of innovation”
      • Company must hire innovative people and foster the environment for innovation
      • Involves training and development costs
      • Innovation also affects HR itself
        • Outsourcing, offshoring, Shamrock organization (see below)
    • Cultural differences
      • HR must manage cultural diversity within the company
        • Productivity may be affected due to conflicts arising from culture
      • Need to raise awareness on cultural differences between employees
      • May imply behavioral training is needed
    • Ethical considerations
      • Need to follow anti-discrimination laws
        • e.g. racial, sex, disability, etc.
      • Equal pay
      • Health and safety at work
        • Costs for training employees and ensuring a safe environment
        • May benefit from lower absenteeism, better image, and fewer compensation claims

 

btantheman2.1. Functions and Evolutions of Human Resource Planning