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2.1. Functions and Evolutions of Human Resource Planning Summary

  • 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 staffCapital 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 the
      demand for product
  • Staff/labor turnover
    • Percentage of workforce that leaves the company in a period (Number of leavers / Total number of staff) x 100Low turnover suggests good workforce planning and recruitmentHigh turnover suggests incompetent employees and poor job satisfaction
    • The 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 request 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 workforceCost of living cost and availability of transportation rate
        of unemployment government Finances Structure of business effectiveness of communicationMorale 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 neededRewards 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 candidates.g. type of engineer, experience, skills
      Job advertisement
      • Internal (w/in company)
        • Advantages
          • Cost effective less time needed to acclimate to company cultureLess riskMotivational
           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 consumingExpensiveUncertainty
      Need for TRAPS – truthful, relevant, accurate, positive, short application process (resume, cover letter, application form)Selection process
      • Screen applications and shortlist suitable candidatesInterview 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 effectivityLess wastageHigher moraleAdapt 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 cultureMorale booster
        Disadvantages
        • Time consuming personnel have to be freed to work on the induction into overload
      On the job
      • Learn from coworkers by experience may involve being mentored by or shadowing senior managers
      • Advantages
        • Relatively cheapRelevant job-specific skills are learnedFewer disruptions to work establish team relationships
        Disadvantages
        • Possibility of learning bad working habitsTrainers 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 expertiseWide range of training no distractions networking
        Disadvantages
        • ExpensiveLoss of outputSkills may be irrelevant
      Cognitive
      • Theoretical training in the hopes of improving overall intelligenceAdvantages
        • Improves brain function (memory, reasoning, etc.)Knowledge may apply to a wide variety of situations
        Disadvantages
        • CostlyMay not be immediately practical/applicable
  • Appraisals
    • Annual formal assessment of performance judged against pre-set criteria reasons
      • Assess performance in line with job description and targets
        • Identify hindrancesIdentify 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 MethodsEssayWritten appraisal on employees’
        • strengths and weaknesses flexible and more applicable when employees are put in different situations Open-ended, subjective and take 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 universalPeerSame-level employees on the business hierarchy appraises youAppraiser and appraisee are familiar with requirements for job might be reluctant to criticize peersUpwardsEmployee appraises seniorsSubjective, appraiser afraid of appraiseesMBO (Management by Objectives)Base all appraisal on how well an employee has met his own objectives as determined by the employer and appraiserObjectives must be realistic
        Formative
        • Appraisal during a specific job process 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 perspectivesSubjective, 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 letterCounselling – strategies for improvementDialogue concerning consequencesDismissal and RedundanciesMonitor (paper trail)
      Dismissal (by the business)
      • Must have a the valid reason which is included in the contract otherwise, unfair dismissal – the
        • company may be sued
        Valid reasons include:
        • Employee incompetence or misconduct reach of legal requirements/contract
    • Redundancy
      • Occurs when there is a change in company structure, downsizing, etc.
      • A company cannot afford to pay employees or job stop 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 employmentFlexitimeAdvantages
        • Increased flexibility for both
          • Work from afarFlexible and extended work hours
          • Company needs only to train core employees
          • Employees exercise more autonomyLess 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 firme.g. business outsources bookkeeping duties to accounting firmsReasons
        • 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 and ensures high-quality standardsDisadvantagesRequires effective two-way communication, coordination and mutual trust subcontractors need to be monitored and managed properly Quality inconsistencyPossibility of unethical practices
      Offshoring
      • Transferring of internal business activities overseas usually done in countries with low minimum wage reasons
        • Cut down labor costsEnter new markets in growing countriesOvercome political limitations and regulations
        Advantages
        • Reduce labor cost Help the business expand and gain exposure business has access to large talent poolStimulate host country’s economy (job opportunities, trade, etc.)DisadvantagesLanguage 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 controlIncreased proximity to customers/shorter supply chain product quality may increase
      • Disadvantages
        • May still be more costly
        • Local countries 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 costsInnovation 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

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