manpower planning and resourcing_completemu0001
TRANSCRIPT
Spring 2010(Jan-June)
Master of Business Administration-MBA Semester 3
MU0001 – Manpower Planning and Resourcing - 2 Credits
(Book ID: B0816)
Assignment Set- 1 (30 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Q.1 Elaborate on the Human Resource cost accounting method along with its merits and
limitations [10]
Answer:
Historical Cost Approach
This approach was developed by Brummet, Flamholtz and Pyle. According to this approach, the
actual cost incurred on recruiting, selecting, training, placing and developing the human
resources of an enterprise are capitalized and written off over the expected useful life of human
resources. The procedure followed for human resource asset is the same as that of other
physical assets. Any amount spent on training and developing human resource increases its
efficiency, hence capitalized. The amortization of human resource assets is also done in the
same way as that of other physical assets. The asset is written off over its useful life. If the asset
is liquidated prematurely, then it is underwritten and the amount is charged to revenue account.
On the other hand, if it has a longer life than expected, its amortization is rescheduled.
Merits
This method has the following merits :
This method is simple to understand and easy to work out.
The traditional accounting concept of matching cost with revenue is followed in this method. It can
help a firm in finding out a return n human resource investment.
Limitations:
This method has the following limitations:
It is very difficult to estimate the number of years an employee will be with the firm.
It is difficult to determine the number of years over which the effect of investment on employees
will be realized. The extent to which the employee will utilize knowledge acquired is also
subjectively estimated.
It is also difficult to fix a rate of amortization. A number of methods have been derived to write off
depreciation on fixed assets but in the case of human asset, it will generally be on a constant
basis.
The value of an asset decreases with amortization. In case of human resources, the situation is
just the reverse. With the acquisition of experience and training in the course of time, the utility of
employees increases rather than decreasing.
It is easy to find out the total of human factor but it is difficult to see the contribution of each
person. Had there been one person in the organization, then his contribution to the enterprise
could be measured. But this is not the case. There are large numbers of people working in
different positions and their contribution cannot be measured separately. No solution to this
problem has been found so far.
Replacement Cost Approach
This approach was developed by Rensis Likert & Eric G. Flamholtz. The cost of replacing
employees is used as the measure of company’s human resources. The human resources of a
company are to be valued on the assumption as to what it will cost the concern if existing human
resources are required to be replaced with other persons of equivalent experience and talent.
This approach corresponds to the historical cost approach mentioned earlier except that it allows
for changes in the cost of acquiring and developing employees in place of taking their historical
cost.
In replacement cost approach, the costs of recruiting, selecting, training, developing, etc. of new
employees to reach the level of competence of the existing employees are measured. Likert has
suggested determination of value of total human organization on the basis of assumption that a
similar organization is to be created from scratch.
Merits
This method has the following merits:
This approach has the advantage of adjusting the human value of price trends in the economy
and thereby provides more realistic value in inflationary times.
It has the advantage of being present-oriented.
Limitations
This method has the following limitations:
It may not always be possible to obtain such a measure for a particular employee.
It is not always possible to find out the exact replacement of an employee.
This method does not reflect the knowledge, competence and loyalties concerning an
organization that an individual can build over time.
It is difficult to find out the cost of replacing human resources and different persons may arrive at
different estimates.
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Q.2 Discuss the steps in Manpower Planning. [10]
Answer:
Process of Manpower Planning
The process of human resource planning is one of the most crucial, complex and continuing
managerial functions which, according to the Tata Electrical Locomotive Company “embraces
organization development, management development, career planning and succession planning.”
The process has gained importance in India with the increase in the size of business enterprises,
complex production technology and the adoption of professional management technique. It may
be rightly regarded as a multi-step process, including various issues, such as:
a) Deciding goals or objectives
b) Estimating future organizational structure and manpower requirements
c) Auditing human resources
d) Planning job requirement and job descriptions and
e) Developing a human resource plan.
a) Deciding goals or objectives: Human resource planning fulfils individual, organizational
and national goals; but, according to Sikula, “The ultimate mission or purpose is to relate
future human resource to future enterprise needs so as to maximize the future return on
investment in human resources.” In effect, the main purpose is one of matching or fitting
employee abilities to enterprise requirements, with an emphasis on the future instead of
present arrangements. The objectives may be laid down for a short-term (i,e, for one year).
For example, the short-term objective may be to hire 25 persons from schedule tribes or
backward class for the purposes of training. The long- term objective may be to start a new
industry, to expand the market, to produce a new product, to develop its own sales force
rather than depend on distributors, or to have minority group members eventually in position
of middle and upper management cadres.
b) Estimating the future organizational structure or forecasting
the manpower Requirements:
The management must estimate the structure of the organization at a given point in time. For
this estimate the number and type of employees needed must be determined. Many
environment factors affect this determination. They include business forecasts expansion and
growth, design and structural changes, management philosophy, government policy, product
and human skills mix and competition.
Forecasting provides the basic premises on which the manpower planning is built.
Forecasting is necessary for various reasons which have been stated below:
(a) The eventualities and contingencies of general economic business cycle (such as
inflation, wages, prices, costs and raw materials supplies) have an influence on the short-
range and long-run plans of all organizations.
(b) An expansion following enlargement and growth in business involves the use of
additional machinery and personnel, and a re-allocation of facilities, all of which call for
advance planning of human resources.
(c) Changes in management philosophies and leadership styles.
(d) The use of mechanical technology (such as the introduction of automatic controls, or
the mechanization of materials handling functions) necessitate changes in the skills of
workers, as well as a change in the number of employees needed.
(e) Very often, changes in the quantity or quality of products or services require
changes in the organization structure. Plans have to be made for this purpose as well.
After estimating what the future organization structure should be, the next step is to draw up
the requirements of human resources, both for the existing department and for new
vacancies. For this purpose, a forecast of labour force is needed, and requisition should be
obtained from different departments, i,e., forecast has to be made in returns of functional
category; the members needed; and the levels at which they are required. Vacancies,
occurring in any department, should be notified in writing by different department heads to the
personnel department, stating clearly the number of vacancies to be filled, job or category-
wise types of personnel needed, their technical qualification and experience and the reasons
for acquisition (I.e., whether for replacement or addition); a statement of duties, type of jobs
pay scales, age, and previous experience should also be made. Requisitions should be
based on accurate job specifications by first line supervisor. They should, as for as possible,
state the exact demands of a job.
In determining the requirements of human resources, the expected losses which are likely to
occur through labour turnover- quits, retirements, death, transfers, promotions, demotions,
dismissals, disability, resignations, lay-off and other separations- should be taken into
account.
Changes in the human quality resulting from the experience gained in the jobs during the
period and the training achieved also need to be considered. The addition of new lines of
production and new projects also influence the demand estimates of human resources. The
basic fact to remember is that the human resource in an organization constantly changes in
terms of its present and future size.
Additional human resources are gained through new employment of personnel, promotions,
through transfers and demotions; but personnel is lost through voluntary quits, death
dismissals, termination and retirements.
After making adjustments for wastage, anticipated and expected losses and separations, the
real shortage or surplus may be found out. If a shortage is there, efforts are made to meet it
either by new recruitments or promotion from within, or by developing the existing staff. If
there is a surplus, it is to be decided how it will be dealt with, i.e., whether there should be
transfers, lay-offs, retrenchment or reduction in the hours of work of all.
Underestimation of the quality and number of the employees required would lead to shortfalls
in performance, while overestimation would result in avoidable cost to the organization.
According to Dr. Ram Tarneja, “Management can ensure control of labour costs by avoiding
both shortages and surpluses of manpower through proper manpower planning.”
It may be noted that for purposes of manpower planning, the main dimensions to be taken
into consideration are:
(i) The total number of personnel available: This could be obtained from the pay-rolls
and other personnel records, such as the applications for employment. The total
number has to be classified on some basis, such as manual workers (i.e., daily-rated,
weekly-rated or monthly-rated); clerical employees, ministerial staff, managers and
other executives; specialists and skilled and unskilled workers; sex-wise distribution,
etc.
(ii) The job-family: A detailed job-description for each position such as stenographers
who may belong to various departments, e.g. finance, marketing, personnel, public
relation, general administration, etc.
(iii) Age distribution of the employees, available in the present departments, say in the
age-group 20-29 years; 30-45 years, 46 years and above.
(iv) Qualification and experience desire, such as a person with 5 years or 10 years
experience in a particular branch/ job; and whether under-graduate, post- graduate or
MBAs or gradates in Science, Commerce, Arts, Engineering, Professional Diploma-
holders, etc; or with specialized knowledge in the field of marketing, finance, computer
programming or engineering work.
(v) The salary range etc.
c) Auditing Human Resources: Once the future human resource needs are estimated, the
next step is to determine the present supply of manpower resources. This is done through
what is called “Skills inventory.” A skills inventory contains data about each employee’s skill
abilities, work preference and other items of information which indicate his overall value to the
company. A sample
skill inventory proforma is been below:
Skill Inventory Performa
Personnel factors
Name ……………………… Birth Place……………..…………..
Age……………………………… Occupation of parents……………..……
Sex……………………………… Present address …………………………
Dependants …………………… Permanent address……………………..
Marital status ………………… Telephone number (if any) …….………
Education and Training
School …………………………………………………………………………..
Degrees/Diplomas obtained………………………………………………….
Training undergone……………………………………………………………
Experience and Skills
Job areas ………………………
Special skill (such as ability to speak write foreign languages)…………..
Job titles…………………………. Reasons for leaving ……………………
Supervisory responsibility……………………………………………………..
Job dates ……………………………………………………………………… �
Additional Information
Salary …………………………………… Test results ……………….……
Grade …………………………………… Performance ratings ………….
Absenteeism record…………………… Location of relatives …………..
Disciplinary record ……….…………… Appraisal data……………… .
Career plans …………………………… Any other information…………
The above facts are usably recorded by an employee in some forms from which the
information is fed into a computer. Other data pertaining to his performance ratings and his
superiors’ evaluation of his potential for promotion may also be fed into the computer. The
result may either be kept in a file (on tape or otherwise stored) containing information as to
the number of employees in the organization, and other data about each employee, and an
indication of his fitness for promotion. A specimen employee information card is given below:
Employee Information Card
Employee No……………. Address ………………Town…………………
Dept.………………. ` Code. ……………………………. �
Position…………………………..
Exp. Date…………………………
Employee status : Regular/ Part-time/Co-operative
Shift : 1/2/3
Marital status : Married/Single/Widowed/
Separated/Divorced
No. of dependent children : 1/2/3/4/5
Relatives in company : Yes/No. If yes, who?
Union membership : (which one)
Experience of skill : Clerical/mechanical/sales/supervisory/ others
Special training : Departmental/on-the /vestibule
Accidents : Loss time
Hospitalization : Yes/No
Member of the credit union : Yes/No
Absenteeism Days………….
Date……………
Operator………..
Some organizations do not compile a skills inventory but prepare organization charts to
determine how many people, at what level, in what position and what kind of experience and
training would be required to meet the objectives. These charts show a person’s age, the
number of years he has been in a particular position, and his fitness for promotion. These
charts or skill inventories help in determining and evaluating the quantity and quality of the
present human resources of an organization. They tell us what exist in stock and what is
needed to be added to that stock, taking into account the capability qualification, experience a
Manning table which into account the employees. Some companies maintain a manning table
which lists all the jobs in the unit and the number of workers holding each job. Other
companies also use Replacement charts, which show the present performance of each
position holder and the promotional potential of possible replacements.
d) Planning job requirement and job descriptions
Once the present manpower resources are determined, the personnel department can
estimate what changes will occur in the present labour force in the next few years, say 5
years.
Job Analysis: After having decided how many persons would be needed, it is necessary to
prepare a job analysis, which records details of training, skills, qualification, abilities,
experience and responsibility, etc. which are needed for a job. Job analysis includes the
preparation of job descriptions and job specifications.
e) Developing a Human Resource Plan: This step refers to the development and
implementation of the human resource plan which consists in finding out the sources of labour
supply with a view to making an effective use of these sources. The first thing, therefore, to
decide on the policy is- whether the personnel should be hired from within through promotional
channels or should it be obtained from an outside source. The best policy which is followed by
most organizations is to fill up higher vacancies by promotion and lower level position by
recruitment from the labour market.
The labour market is a geographic area from which employers recruit their work force and labour
seeks employment. Here the force of demand and supply interact. A labour market generally has
the following characteristics:
(a) It highly unstructured and unorganized, for a majority of workers are illiterate and ignorant
and do not have any information about available job opportunities.
(b) The procedures by which companies recruit workers and the methods by which workers
go about getting jobs are highly variable.
(c) A great range of wage rates for the same occupation exits in the labour market depending
upon the attitude of the management towards wage levels, the employer’s ability to pay and
the productivity of labour.
(d) Labour is mostly not mobile either because it has incomplete or inaccurate knowledge of
job opportunities and available wages or because of lack of job security.
(e) The supply of labour fluctuates and is influenced by the population in the labour market
the attractiveness of job (benefits, service wage, rates, and the reputation of a company), the
extent of unemployment and the particular skills that are in demand.
(f) Manual labour for unskilled jobs has been replaced by activities that require skills, scientific
knowledge, technical acumen and professional training.
Various external factors influence the outflow and inflow of manpower resources. A few such
factors that operate at local level are:
(i) Population density at various distances from the factory or work place:
(ii) Local unemployment level, particularly of the categories which are relevant for the
operation of the organizations
(iii) Availability of part time labour
(iv) Current competition for similar categories of manpower from other organizations:
(v) Output from the educational system (general as well as technical);
(vi) Pattern of in-migration and out-migration within the area and between it and
(vii) Transport facilities and communication pattern.
At the corporate level, other factors operate, viz.,
(i) Trends in the growth of the working population;
(ii) Government training schemes and system of technical, vocational, professional, and
general education, and their out-turn;
(iii) Impact of social security measures on manpower supply;
(iv)Mobility of the products of the technical, professional and vocational institutions;
(v) Cultural factors and customs, social norms, affecting school leaving age, labour force
participation of women, children and young persons.
The personnel manager should have a thorough knowledge of the labour market. Which
particular source in the labour market will be tapped depends upon the policy of a firm, the
position of labour supply, the arrangement with labour unions, and Government regulations.
However, it is always safe for the personnel manager to be in close liaison with these different
sources and use them as and when the need arises.
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Q.3 Healwell Pharma Company has been functioning for the last 15 years. The company decided
to computerize the office 7 years ago. Now it has decided to use the application of information
system in HRM.
Suggest how and in what activities they could use the information system.
[10]
Answer:
Information System Applications in Human Resource Management
A unified data model provides a single, accurate view of HR activities ranging from recruitment,
employment, training, performance management, compensation management and real time
management. Oracle human resource leverage workflow and internet-based processes optimize
various HRM activities. The system maintains global HR data in case of Trans-national
companies and total organizational human resource data in case of national companies in a
single location for accurate and easy availability.
The system of applications of Information Technology (IT) in HRM is referred to as Human
Resource Module. HRIS merges some of HRM functions with the IT field, wherein the planning
and programming of data processing systems have evolved into standardized routines and
packages of Enterprise Resource Planning (ERP) software. ERP integrates the human resource
module with finance, production, and sales and administration modules.
Generally, traditional HRM functions are common to all organizations. They consist of tracking
data regarding personal histories, family details, skills, capabilities, experiences, pay, benefits
and grievances. Performance of these functions are increasingly complex, must be performed at
the lowest possible cost and also at a fast rate, which pose increased challenges for HR
professionals. Organizations have started to automate these functions by introducing HRIS
technology.
Development of client -server HRIS enables HR executives to assume responsibility and
ownership of their systems compared to client-server architecture, which came largely in the form
of mainframe computers and necessitated heavy capital investment to purchase program
proprietary software. HRIS is developed around six main areas of human resource management
viz., e-recruitment/applicant tracking, e-training, e- payroll,
e-benefits, e-self service and e-time and labour management.
E-recruitment / Applicant Tracking
E-recruitment manages job descriptions and job vacancies, search for candidates and the
interview process. It is also referred to as an applicant-tracking system; this is a web-based
application that enables the electronic handling of organizational employment needs.
These activities include posting job advertisement on web sites to stimulate and attract
candidates, known as job boards. Job boards allow candidates to apply on-line and the
candidates’ data are stored on a database that allows searching, screening and filtering of
applications. The application tracking system shortlists the candidates and arranges for interview
and recruitment-related activities.
E-recruitment maintains profiles, searches for and refers jobs to colleagues and follows the
recruitment process. It integrates resume extraction capabilities using the Magnaware /
Mohomine extraction engine to search for potential candidates. It uses event-driven applicant
tracking and manages positions on multiple external websites. E-recruitment/applicant tracking
system reduce administrative tasks, cost and time required to perform recruitment activities.
E-training
E-training provides a complete, scalable and open infrastructure that allows organizations to
manage, deliver, and track employee training participation in on-line or classroom-based
environments. Trainees interact with content and/or trainers at their own pace. Managers set the
business flow from order processing to delivery and performance management to training output
automatically. E-training systems deploy content to global learners; make use of mixed media
and multiple discrete sites on a single instance of the application, define competencies attained
by trainees, and update the trainees’ competency profiles. It aims to ensure that HRM provides
the right resources, competent and experienced trainers, and consolidate training initiatives on a
scalable and cost effective basis. In addition, it aims to measure training effectiveness.
E-training, provides learning opportunities not only to employees, but to customer and all other
stakeholders by providing one-stop administration, automated catalogue distribution and
enrollment and collaborative sites with other strategic partners.
E-payroll
E-payroll models automatically collect data regarding employee attendance and work record for
the purpose of evaluating work performance, they calculate various deductions including tax, and
generate periodic pay cheques and tax reports. Payroll modules in turn send data and accounting
information to the general ledger for posting and subsequent operations and they frequently
integrate e-payroll with e-finance management.
Payroll systems can define standard rules for automatically assigning and changing employee
salary by using simple formulae. They are able to control processing rules and calculations using
fast formula and use logic for complex cases. They can manage global compensation with one
application by implementing a core payroll engine and installing local extensions to add the
necessary functionality, reporting and process for individual countries.
E-payroll is able to process from data, simultaneously, fully reconciled results and multiple
employee groups. By preparing paperless online pay slips, the system is able to reduce
administrative costs and time for the total operations. Employees too can view their exclusive
data and get personalized reports.
E-benefits
E-benefits administration models enable HR professionals to track and administer diverse and
complex benefit plans, employee benefit programs which may involve transpiration medical and
health care, insurance, pension, profit-sharing, and stock option benefits. Such modules, through
internet-based automation, can enable HR to improve benefits support and analysis whilst
reducing time and costs involved in the administration, while increasing the consistency decisions
on compliance issues at various levels across the organization.
E-self service human resource
E-self service HR modules collect process and manage all other kinds of data and information.
For example, employees’ demography profiles and addresses recruitment, selection training,
development, promotions, capabilities, skill mapping and compensation planning. Such a module
would allow individual employees to update and use employee-specific information, personalized
to an individual’s role, experience, work content, language and information needs. Thus,
individual employee and managers are empowered to update information in order to streamline
business processes, reduce costs and errors, increase speed, and enhance service.
This module helps employees in managing everything from profiles including skills, resumes,
contact details, self-appraisal data, bank data, learning, benefits and payroll. It empowers
managers to operate transfers, employee training enrollment, performance appraisals,
competency mapping, career planning and development and terminations.
E-time and labour
E-time and labour automates entire time and attendance records keeping process and operations
through an automatically generated virtual time card. It provides an intuitive, web-based interface.
The time and labour management module, by interacting with information technology, collects
and evaluates time and work information. This module provides broad flexibility in data collection
methods, human resource distribution capabilities and data analysis, and helps in establishing
organizational cost accounting capabilities. This module allows entering time via web browser,
mobile device and time card. It defines rotation plans based on shifts and work plans and
employee mobility among departments or units. It supports policies for holidays, over-time, and
rounding. It improves reporting, extracting, and processing with a single database of employee
time-related information. This module is integrated automatically with other modules of human
resource management like payroll and benefits.
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Master of Business Administration-MBA Semester 3
MU0001 – Manpower Planning and Resourcing - 2 Credits
(Book ID: B0816)
Assignment Set- 2 (30 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Q.1 What is scenario planning? Explain [10]
Answer:
Scenario Planning
Scenario planning is sometimes described as a formal strategic planning technique, but it can
also be regarded as an informal approach to thinking about the future in broad terms, based upon
an analysis of likely changes in the internal and external environment.
A scenario can be defined as ‘an imagined sequence of future events’ (Oxford English
Dictionary). Scenario planning is a simple, more or less formalized process for establishing a view
about any changes that can be foreseen to the scale and type of activities in the organization and
to its structure, and for identifying any external environment changes that are likely to affect it.
The aim is to obtain a better understanding of the possible situations that may have to be dealt
with in the future. It is described by Reilly (1999) as follows: “Scenario planning tries to open
minds to a range of possibilities that organizations may have to confront. These possibilities are
then ordered to produce a series of internally consistent postures of alternative futures… it is an
intellectual process that seeks to identify issues and examine the possible consequences of
events.”
The creation of a scenario involves making broad assessments of likely internal developments in
the direction in which the organization is going and the implications this has on people
requirements. The assessments may have to be made in the absence of any articulated business
plan, and thus involve questioning top management and key line managers on how they see the
future, and asking them to interpret what this means in terms of their human resource needs.
Assessments also have to be made on likely changes in the external environment as it may affect
the labour market.
Estimating Future Human Resource Requirements
Scenario planning is in some situations as far as it is possible to go in estimating future people
requirements, but where it is feasible and appropriate, attempts can be made to produce demand
and supply forecasts, and to determine what action needs to be taken if the forecasts indicate the
possibility of a human resource deficit or surplus.
Demand forecasting
Demand forecasting is the process of estimating the future numbers of people required and the
likely skills and competences they will need. The ideal basis of the forecast is an annual budget
and longer term business plan, translated into activity levels for each function and department, or
decisions on downsizing’. In a manufacturing company the sales budget would be translated into
a manufacturing plan giving the numbers and types of products to be made in each period. From
this information the number of hours to be worked by each skill category to make the quota for
each period would be computed.
Details are required of any plans or projects that would result in demands for additional
employees or different skills: For example, setting up a new regional organization creating a new
sales department, carrying out a major project or developing new products or services. As far as
possible, plans should also be reviewed that could result in rationalization, and possibly
downsizing, as a result of a cost reduction drive, a business process re-engineering exercise,
new technology leading to increased productivity , or merger or acquisition.
The demand forecasting techniques that can be used to produce quantitative estimates of future
requirements are described below.
Managerial or expert judgment
This is the most typical method of forecasting and may be linked to some form of scenario
planning. It simply requires managers or specialists to sit down, think about future workloads, and
decide how many people are needed. This can be no more than guesswork unless there is
reliable evidence available of forecast increases in activity levels or new demands for skills.
Ratio trend analysis
This is carried out by studying past ratios between, say, the number of direct (production) workers
and indirect (support) workers in a manufacturing plant, and forecasting future ratios, having
made some allowance for changes in organization or methods. Activity level forecasts are then
used to determine (in this example) direct labour requirements, and the forecasts ratio of indirect
to direct would be used to calculate the number of indirect workers needed.
Work study techniques
Work study techniques can be used when it is possible to apply work measurement to calculate
how long operations should take and the number of people required. Work study techniques for
direct workers can be combined with ratio trend analysis to calculate the number of indirect
workers needed.
Forecasting skill and competence requirements
Forecasting skill requirements is largely a matter of managerial judgment. This judgment should,
however, be exercised on the basis of a careful analysis of the impact of projected product
market development and the introduction of new technology either information technology or
computerized manufacturing.
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Q.2 Discuss the different elements of Talent Management [10]
Answer:
The Elements of Talent Management
Talent management starts with the business strategy and what it signifies in terms of the talented
people required by the organization. Ultimately, its aim is to develop and maintain a talent pool
consisting of a skilled, engaged and committed workforce. Its elements are described below:
The resourcing strategy:
The business plan provides the basis for human resource planning, which defines human capital
requirements and leads to attraction and retention policies and programmes for internal
resourcing (identifying talent within the organization and developing and promoting it).
Attraction and retention policies and programmes:
These policies and programs describe the approach to ensure that the organization both gets and
keeps the talent it needs. Attraction policies lead to programmes for external resourcing
(recruitment and selection of people from outside the organization). Retention policies are
designed to ensure that people remain as committed members of the organization. The outcome
of these policies is a talent flow that creates and maintains the talent pool.
Talent audit:
A talent audit identifies those with potential and provides the basis for career planning and
development, ensuring that talented people have the sequence of experience supplemented by
coaching and learning programmes that will fit them to carry out more demanding roles in the
future. Talent audits can also be used to indicate the possible dangers of talented people leaving
(risk analysis) and what action may need to be taken to retain them.
Role development:
Talent management is concerned with the roles people carry out. This involves role development-
ensuring that roles provide the responsibility, challenge an autonomy required to create role
engagement and motivation. It also involves taking steps to ensure that people have the
opportunity and are given the encouragement to learn and develop in their roles. Talent
management policies also focus on role flexibility- giving people the chance to develop their roles
by making better and extended use of their talents.
Talent relationship management:
Talent relationship management is the process of building effective relationships with people in
their roles. It is concerned generally with creating a great place to work but giving them a voice
and providing opportunities for growth. The aim is to achieve talent engagement ensuring that
people are committed to their work and the organization. As Sears (2003) points out, “It is better
to build an existing relationship rather than try to create a new one when someone leaves.”
Performance management:
Performance management processes provide a means of building relationships with people,
identifying talent and potential, planning, learning and development activities and making the
most of the talent possessed by the organization. Line managers can be asked to carry out
separate ‘risk analysis’ for any key staff to assess the likely hood of their leaving. Properly carried
out performance management is a means of increasing the engagement and motivation of people
by providing positive feedback and recognition. This is part of a total reward system.
Total reward:
Total reward strategies provide for both financial and non-financial rewards, can contribute to the
engagement and commitment of talented people by demonstrating that they are devalued for
their contribution and by operating fairly and consistently. Paying competitive rates will affect the
ability of organizations to attract and retain people but there is a limit to the extent to which
companies can compete with the ‘pull of the market’ as Cappelin (2000) points out. Retention or
loyalty bonuses (golden handcuffs) are used by some companies but again, as stressed by
Cappelin, there is limit to their effectiveness as bribes. If talented people want to go they will go.
Learning and development policies and programmers are essential components in the process of
developing talent – ensuring that people acquire and enhance the skills and competencies they
need. Policies should be formulated by reference to employees’ success profiles which are
described in terms of competencies and define the qualities that need to be developed. Employee
success profiles can be incorporated in role profiles.
Learning and development activates are also important means of developing managers and
gaining the engagement and commitment of talented staff by giving them opportunities to grow in
their present roles and to progress to higher level roles.
Career management:
Career management consists of the processes of career planning and management succession.
Career planning shapes the progression of individuals within an organization in accordance with
assessments of organization needs, defined employee success profiles and the performance,
potential and preferences of individual members of the enterprises.
Management succession planning takes place to ensure that, as far as possible, the organization
has the managers it requires to meet future business needs.
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Q.3 Due to the recent recession, FinPlus Finance company has to downsize the current
employees. In this scenario what are the responsibility of an HR professional?. What kind of plan
can they prepare?. [10]
Answer:
Managing Organizational Release – The Role of the HR Function
The HR function is usually given the task of managing organization release and, in its involuntary
form; this is perhaps the most distasteful, onerous and stressful of all the activities with which HR
people get involved. In effect, the function is being asked to go into reverse. Having spent a lot of
positive effort on employees’ resourcing and developing, it is now being placed in what appears
to be an entirely negative position. HR people are indeed acting, however unwillingly, as the
agents of the management who made the ‘downsizing’ decisions or want to ‘let someone go’
(there are more euphemisms in this area of management than the rest of the areas put together).
Being placed in this often invidious position means that there are ethical and professional
considerations to be taken into account, as discussed below.
A more positive aspect of the function’s involvement in organizational release is the part HR
people can play in easing retirement and analyzing the reasons given by employees for leaving
the organization so that action can be taken to correct organizational shortcomings.
Ethical and professional considerations:
HR professionals may have no choice about taking part in a ‘downsizing’ exercise – that is, if they
wish to remain with the organization. But they can and should make an important contribution to
managing the process in order to minimize the distress and trauma that badly handled
redundancies can create, or the distress and bad feeling that unfair or uncouth disciplinary
practices can engender. They can press for policies and actions that will minimize, even if they
cannot eliminate involuntary redundancy. They can emphasize the need to handle redundancies
sensitively, advising line managers on the approach they adopt, helping them to communicate the
decision to employees, advising generally on communication within and outside the organization
and laying on counseling and outplacement services. Professionally, they should ensure that
there are proper redundancy procedures (including those relating to consultation) which are in
line with codes of practice and legal requirements, and they must see that these practices are
followed.
Similarly, a professional approach to discipline means that HR specialists should ensure that
there are disciplinary procedures which confirm to codes of practice and take into account legal
implications. They have to communicate these procedures to line mangers, provide training in
how they are applied and advice on their use. Ethically, personnel professionals should do their
best to see that people are treated fairly in accordance with the principles of natural justice.
Redundancy
‘Downsizing’ is one of the most demanding areas of people management with which HR
professionals can become involved. Their responsibilities, as discussed below, are to:
Plan ahead to achieve downsizing without involuntary redundancy;
Advise on and implement other methods of reducing numbers or avoiding redundancy;
Encourage voluntary redundancy, if other methods fails;
Develop and apply a proper redundancy procedure;
Deal with payment arrangements for releasing employees;
Advise on methods of handling redundancies and take part as necessary to ensure that they are
well-managed.
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