MMZC 441 Human Resource Management Lecture 3

MMZC 441/ MMVA ZC441 Human Resource Management

BITS PilaniPilani Campus

Session 3 Date 17/08/2015 By : Jayashree Mahesh

BITS Pilani

Pilani Campus

Text Book : Aswathappa K., Human Resource Management- Text and Cases, Tata McGraw Hill, 7th Edition, 2013.

Chapter 4: Human resource Planning

Chapter 5 : Analysis of Work, Designing Jobs and Job Evaluation

BITS Pilani

Pilani Campus

Chapter 4: Human resource Planning

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Chapter 4 -Learning Objectives

Understand the nature and importance of HRP

Identify and describe factors affecting HRP

Describe the stages in HRP process

List pre-requisites for effective HRP

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Human Resource Planning

Human resource planning is the process by which an organization ensures that it

has the right number and kind of people, at the right places, at the right time,

capable of effectively and efficiently completing those tasks that will help the

organization achieve its overall objectives.

It is the process of formulating plans to fill future openings based on an analysis

of positions that are expected to be filled and whether these will be filled by inside

or outside candidates

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Objectives of Human Resource Planning

1. Forecast personnel requirements

2. Cope with changes

3. Use existing manpower productivity

4. Promote employees in a systematic way

5. Facilitating in succession planning

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Factors Affecting HRPOrganisationalGrowth Cycleand Planning

Type andStrategy ofOrganisation

HRPTime

Horizons

Type andQuality of

ForecastingInformation

EnvironmentalUncertainties

Outsourcing

Nature ofJobs beingFilled

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HRP Process

1. Environmental scanning

2. Forecasting & analyzing demand for HR

3. Forecasting & analyzing supply of HR

4. Developing action plans to match HR demand & supply

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HRP ProcessEnvironment

Organisational Activitiesand Policies

HR Needs Forecast

SurplusRestricted HiringReduced HoursVRS, Layoff, etc

HR Programming

HRP Implementation

Control and Evaluationof Programme

HR Supply Forecast

ShortageRecruitmentSelection, etc

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Environmental Scanning

• Systematic process of studying & monitoring the external environment of the

organization in order to pinpoint opportunities & threats.

• Involves long range analysis of employment.

• Factors include economic factors, competitive trends, technological changes,

socio-cultural changes, politico-legal considerations, labour force composition &

supply, & demographic trends.

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Environmental Scanning

Ex., competitive pressures are likely to increase resulting in enhanced productivity requirements &

HRP objective may be ‘to increase employee productivity by 5% in 2 yrs.’ which will require the firm

to determine current employee productivity (output / employees)

Attempts to answer 2 questions:

Which jobs need to be filled (or vacated) during the next 12 months?

How & where will we get people to fill (or vacate) these jobs?

Demand & supply of labour in loose & tight labour market

Major impact of the shortage of skilled workforce (tight labour market) in India has been on staff cost

(increased by 35% in 2005)

Fast growing sectors like retail, ITeS, telecom are new & do not have historical talent to bank on & hence

they are hiring from other sectors with skill sets that are relevant to their industries

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Forecasting HR Demand

• FORECASTING ‘makes use of information from the past & present to identify expected future

conditions’.

• Forecasts are not perfectly accurate & as the planning scope becomes shorter the accuracy of

forecasts increases

• HR demand forecasts may be internal / external

• External factors as competition (foreign and domestic), economic climate, laws and regulatory bodies,

change in technology and social factors.

• Internal factors include budge constraints, production levels, new product and services, organizational

structure etc..

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Methods of Demand Estimation

1. Management Judgment

Top-Down Approach

Bottom Up Approach

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2. RATIO-TREND ANALYSIS

RATIO between output & manpower deployed to achieve that output is establishedat a given point of time

• Eg., revenue per employee, sales vol. per salesperson, service contract per engineer, units producedper employee, etc.,

Historical ratio between:

• Some causal factor (sales volume)

• No. of employees required (number of salesperson)

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• Example: Hotel management staff open 20 more bedrooms. As per past

trend, 55 bedroom requires 60 staff, hence ratio of staff to bedroom is 1.09

• For more 20 bedrooms - 21.8=22 staff required

• So total 22 + 60= 82 staff required

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3. REGRESSION ANALYSIS

Drawing a statistical comparison of past relationship among variables

• Statistical relationship between no. of patients (business factor) & employment level of nurses in

a nursing home may be useful in forecasting the no. of employees that will be needed if the no.

of patients increases by say 20%

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LINEAR REGRESSION ANALYSIS

Relationship between two variables which is directly & precisely proportional

• Production output & manpower are the twovariables & the relationship between thesetwo is plotted on a graph by drawing a “lineof best fit”

Analysis aims at providing a measure of the extent to which changes in the values of two variables are correlated with one another

X

x

x xa

xx

bProduction level

x

x

Y

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4. Delphi Technique

• Experts go through several rounds of estimates with no face-to-face meeting

• Incorporates future plans & knowledge of experts related to mkt., industry &

technical development

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5. Work-Study Technique:

1.Planned output for next year

2. Standard hours per unit

30 Planned hours for the year

4. Productive hours per man/year

(allowing normal OT, absenteeism and idle time)

5. Number of direct workers required

: 20000 units

: 5

: 100000

: 2000

: 50

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Forecasting & Analyzing HR Supply

The supply analysis covers:

1. Existing human resource

2. Internal supply forecasts relate to conditions inside the org. such as age

distribution of workforce, terminations, retirements, etc. Example- employee

replacement chart

3. External supply forecasts relate to external labour market conditions &

estimates of supply of labour to be available to the firm in the future in different

categories

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1. Present Employees

2 types -

• Skills inventory: describes the skills & knowledge of non-managerial employees & is used

primarily for making placement & promotion decisions

• Management inventory: contains the same information as in skills inventory, but only for

managerial employees which describes the work history, strengths, weaknesses, promotion

potential, career goals

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Uses of a Human Resource Information Systems (HRIS)

HR Planning and Analysis• Organisation Charts• Staffing Projections

Employee and Labour Relations• Union Negotiation Costing

• Auditing Records• Attitude Survey Results• Exit Interview Analysis• Employee Work History

Health, Safety and Security• Safety Training

• Accident Records• Material Data Records

• Skills Inventories• Turnover Analysis

• Absenteeism Analysis• Restructuring Costing• Internal Job Matching

• Job Description Tracking

HRIS

Equal Employment• Affirmative Action Plan

• Applicant Tracking• Workforce Utilisation• Availability Analysis

Staffing• Recruitment Sources

• Applicant Tracking• Job Offer Refusal Analysis

Compensation and Benefits• Pay Structures

• Wage/Salary Costing• Flexible Benefit Administration

• Vacation Usage• Benefits Usage Analysis

HR Development• Employee Training Profiles

• Training Needs Assessments• Succession Planning

• Career Interests and Experience

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2. Internal Supply

Techniques are:

1. Inflows and Outflows

2. Turnover rate

3. Conditions of work and absenteeism

4. Productivity level

5. Movement among jobs

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1. Inflows and Outflows:

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2. Turnover rate:

LABOUR WASTAGE ANALYSIS

Traditionally LW is measured by the employee turnover index (% wastage index)

• (No. of employees leave in year / avg. employees) x 100

Turnover classified into:

• Avoidable separations (resignations & dismissal)

• Unavoidable separations (retirement, death, & marriage)

Turnover rate = [(No. of separation / M] x 100

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3. Conditions of work and absenteeism

= {(number of persons - days lost)/ (average number of persons* number of

working days)}*100

4. Productivity level

5. Movement among jobs

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3. Methods of Forecasting External HR SupplyINTERRELATED FACTORS THAT MUST BE CONSIDERED IN PROJECTING EXTERNAL HR SUPPLY

• Government estimates of population available for work

• Net migration into and out of the area

• Numbers entering the workplace

• Numbers leaving the workplace

• Numbers graduating from schools / colleges

• Changing workforce composition

• Technological shifts

• Industrial shifts

• Trends in the industry (actions of competing employers)

• Economic forecasts

• Government regulations & pressures such as job reservations for certain groups

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HR Plan ImplementationStrategy HR Initiative

Strategies for ManagingShortages

• Recruit new permanentemployees

• Offer incentives to postponeretirement

• Re-hire retirees part-time• Attempt to reduce turn-over• Work current staff overtime

• Subcontract work to anothercompany

• Hire temporary employees• Redesign job process so that

fewer employees are needed

Strategies for ManagingSurplus

• Hiring freeze• Do not replace those who leave

• Offer VRS schemes• Reduce work hours• Leave of absence

• Across the board pay-cuts• Layoffs

• Reduce outsourced work• Employee training

• Switch to variable pay plan• Expand operators

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Managerial Succession Planning

A systematic & deliberate process of identifying, developing & tracking key individuals within

the firm to prepare them for assuming senior & top-level positions in future.

Eg., SAIL poaching from global players & preparing a ‘defence system’ wherein 2nd & 3rd

line of command is being prepared; IBM, ExxonMobil, GE, etc., have already hired its

CEO for 2010

Eg., Godrej, Marico (fly. owned business) in India have ‘drop dead’ succession plan which

keeps the wheel moving where a promoter of the fly-owned firm may always be around

to guide the company

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Action Decisions in HR Planning

• After the supply of and demand for workers has bee n analyzed, the two

forecasts must be compare d. Whenever there is a gap between the two

estimates, a course of action must be c hosen.

• If the supply of workers is less than the demand, then it can be filled with

present employees who are willing to work overtime

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• If there is a shortage of skilled employees, then train and /or promote

present employees; recruit less skilled employees; recall employees who

were previously laid off.

• Possible solutions to an employee surplus are:- attrition, early retirements,

demotions, layoffs, terminations

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• Organizations are using more Part-time workers, subcontractors and independent

professionals as a response to intense global competition, rapid technological change

and information is the key to successful HR planning. A human resource

• information system (HRIS) is an integrated way to acquire, store, analyze and control

information flow through an organization.

• A highly developed HRIS can increase the efficiency and response times of tracking

applicants, skills inventory, career planning and employee service programs ears caused

by recent workforce reductions

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Summary

Human Resource Planning

Methods of Forecasting

HR Demand and Supply methods

Succession planning

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BITS Pilani

Pilani Campus

Chapter 5 : Analysis of Work, Designing Jobs and Job Evaluation

Chapter 5 -Learning Outcome:

Understand the nature of job analysis and describe the process of conducting

job analysis

Understand job design and describe how it is done

Identify techniques of job design with explanation of each

Understand the job evaluation methods

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Job

• Job

- Generally defined as “a set of closely related activities carried out for pay.”

- The world Development Report 2013, define jobs as “…are labour activities that generate

income, monetary or in kind, without violating fundamental rights and principles at work.”

• Job Analysis

- Refers the process of collecting information about a job.

- It involves collection of information that should include knowledge, skill and ability (KSA).

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The Nature of Job Analysis

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The Nature of Job Analysis

Job analysis

- The procedure for determining the duties and skill requirements of a job and the kind of

person who should be hired for it.

Job description

- A list of a job’s duties, responsibilities, reporting relationships, working conditions, and

supervisory responsibilities—one product of a job analysis.

Job specifications

- A list of a job’s “human requirements,” that is, the requisite education, skills, personality,

and so on—another product of a job analysis.

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Job Analysis

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Job Analysis offers Competitive Advantage to a Firm

Laying the foundation for

HRP

employee hiring

t & d

performance appraisal

wage and relay fixation

safety and health

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Process of Job Analysis

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1. Strategic Choices as:

o Employee involvement

o Level of Details

o Timing and frequencies

o Past-Oriented versus Future Oriented

o Sources of Job Data

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2. Information Gathering:

• type of data

• Methods to use

• Who should collect the data?

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3. Information Processing:

Job Description

Job Specification

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Writing Job Descriptions

A job description

- A written statement of what the worker actually does, how he or she doesit, and what the job’s working conditions are.

Sections of a typical job description

• Job identification

• Job summary

• Responsibilities and duties

• Authority of incumbent

• Standards of performance

• Working conditions

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Sample Job Description

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Purpose of Job Analysis

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Methods of Collecting Job Data

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I: Observation Method

AdvantagesInformation source

• Provides first-hand information- Observing and noting the physical

activities of employees as they go

about their jobs

• Reduces distortion of

information

Disadvantages

• Time consuming

• Difficulty in capturing entire job

cycle

• Of little use if job involves a high

level of mental activity

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II: Interview Method

Interview formats

• Structured (Checklist)

• Unstructured

Advantages

• Quick, direct way to find overlooked

information.

Disadvantages • Distorted information

Information sources- Individual employees

- Groups of employees with same job

- Supervisors with knowledge of the job

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III: Questionnaire Method

Information sourceHave employees fill out questionnaires to

describe their job-related duties and

responsibilities.

Questionnaire formats- Structured checklists

- Opened-ended questions

AdvantagesQuick and efficient way to gatherinformation from large numbers of employees

DisadvantagesExpense and time consumed in preparing and testing the questionnaire

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IV: Participant Diary

Information source

Workers keep a chronological diarylog of

what they do and the time spent in each

activity

Advantages

• Produces a more complete picture of the job

• Employee participation

• Distortion of information• Depends upon employees to accurately recall

their activities

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Disadvantages

V:Quantitative techniquesVI: Management position description

• Position analysis questionnairehttp://www.paq.com/

• Analyze job in terms of employee activities.• 194 items , grouped into five basic activities:

• Decision making/communication

• Performed skilled activities

• Physical activities

• Operating vehicles/equipment

• Processing information

• Management position description questionnaire (208 items , classified into

13 categories)

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VII: Functional job analysis

A standardized method by which different jobs can be quantitatively rated ,classified and compared based on data, people, things scored

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Caselet summary

• Large quantity of liquid split by machine operator on the flooraround the machine

• Machine operator’s job description include keeping machine inclean operating order

• Service worker to assist the operator in various ways such asgetting the tools and materials

• Sweeper to execute various cleaning jobs, but his dutiescommence after the shift ends.

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Job Design

• Job design is the conscious efforts to organize tasks, duties andresponsibilities into one unit of work. (the way tasks are combined to formcomplete jobs)

• Impact on organisations and employee objectives

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Job Characteristics Model

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Guidelines for Job Design

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Factors Affecting Job Design

Organizational Factors:

• Characteristics of Task

• Work Flows

• Work Practices

Environmental Factors:

• Employees ability and availability

• Social and Cultural Expectations

Behavioural factors:

• Feedback

• Autonomy

• Use of Abilities

• Variety

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Job Design Approaches

From Specialized to Enlarged Jobs

- Job enlargement

• Refers to the expansion of the number of different tasks performed by employee in a single job..

- Job enrichment

• Redesigning jobs in a way that increases the opportunities for the worker to experience feelings

of responsibility, achievement, growth, and recognition.

- Job rotation

• Moving a trainee from department to department to broaden his or her experience and identify strong and weak

points to prepare the person for an enhanced role with the company

• Systematically moving workers from one job to another to enhance work team performance.

• Flexibility in scheduling, adapting to changes, vacancies .

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Job Rotation

TasksDrill holes

Week 1

Tasks TasksAssemble Test

Parts Component

Week 2 Week 3

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Job Enlargement

Employee 1 Employee 2 Employee 3

Tasks Tasks TasksDrill holes Drill holes Drill holesAssemble Parts Assemble Parts Assemble PartsTest Test Test

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Job enrichment

Task 2(controlling)

Task 1(doing)

OrderingmaterialsPlanningworkload

Drill holesAssembleParts

Test

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Job Reengineering

• Pattern breaking

• Realignment with corporate goals

• Abolition of power structure

• Work flow redesigning

• Enhancing IT applications

• Redefining titles and positions

• Establishing learning organization

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Job Design Approaches

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Job Analysis in a “Jobless” World

Why Managers Are Dejobbing Their Companies

Dejobbing- Broadening the responsibilities of the

company’s jobs

- Encouraging employee initiative.

Internal factors leading to dejobbing- Flatter organizations

- Work teams

- Re-engineering

External factors leading to dejobbing.• Rapid product and technological change

• Global competition• Deregulation,

• Political instability,• Demographic changes

• Rise of a service economy

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Job Analysis in a “Jobless” World

Why Use Competency Analysis? (cont’d)

- Maintain a strategic focus

• Describing the job in terms of the skills, knowledge, and competencies the worker needs is

more strategic.

- Measure performance

• Measurable skills, knowledge, and competencies are the heart of any company’s

performance management process.

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The Personal Effectiveness Index (For Associates and Executives)

Competency Definition

Technical and Professional expertise Demonstrated knowledge and skills within a particular functional domain.

Teamwork A cooperative attitude between those working together on a task/series of tasks and jobs

Initiative A preference to act and doing more than what is required or expected

Decision making and Problem solving An ability to select a course of action amongst several alternatives.

Communication An ability to impart or exchange thoughts and ideas orally and in written

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Job Evaluation

• It is the process of analyzing and assessing the various jobs systematically to

ascertain their relative worth in the organization.

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Deference Between Job Evaluation and Performance Appraisal Difference between Job Evaluation and Performance Appraisal

Job Evaluation Job Appraisal

The job is rated, keeping in view such factors as Employee is rated on the basis of his orresponsibility, qualification, experience, working her performanceconditions, etc. required for performance of the job.

A job is rated before the employee is appointed to Evaluation takes after the employeeoccupy it. has been hired and placed on a job

The purpose is to establish satisfactory wage The purpose is to effect promotions,differentials offer reward, award punishments,

assess training needs, resort to lay-offs,transfers, etc.

It is not compulsory. Many organisations carry on Compulsory. It is done regularly for allwithout it. Where it is followed, it is mainly for lower jobs.level jobs.

Job evaluation committee (comprising internal and Appraisal is done by employeesexternal experts) is constituted for the purpose of themselves, peers, superiors, group ofevaluation. people, or combinations of these.

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Job-evaluation ProcessObjectives of Job

evaluation

Job Analysis

Job description

Job evaluationprogramme

Wage survey

Employeeclassification

Job specification

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Methods of Job Evaluation

AnalyticalMethods

• Point RankingMethod

• FactorComparisonMethod

Job EvaluationNon-

AnalyticalMethods• RankingMethod

• Job-GradingMethod

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Ranking Method

• This is the simplest and the most inexpensive method of evaluation. The

evaluation is done by assessing the worth of each job on the basis of its title

or on its contents, if the latter is available. The job is not broken down into

elements or factors. Each job is compared with others and its place is

determined

• Drawbacks - Job evaluation may be subjective, as the jobs are not broken

into factors. It is hard to measure whole jobs.

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Job Ranking by Olympia Health Care

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GRADING /CLASIFICATION Method

• This method does not call for a detailed or quantitative analysis of job factors. It is based on the job as a whole

• Under this method the number of grades if first decided upon, and the factors corresponding to these grades are then determined

• Facts about jobs are collected and are matched with the grades, which have been established.

• The essential requirements of this method are to frame grade descriptions to cover discernible differences in degree of skill, responsibility and other job characteristics.

• Job grades are arranged in the order of their importance in the form of a schedule.• The lowest grade may cover jobs requiring greater physical work under close

supervision, but carrying little responsibility. Each succeeding grade reflects a higher level of skill and responsibility, with less and less supervision

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GRADING /CLASIFICATION Method (Contd.)

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Advantages It’s simple and inexpensive. In organizations where number of jobs is small, this method yields

satisfactory results

Disadvantages Job description are vague and are not quantified. Difficulty in convincing employees about the inclusion of a job in a

particular grade because of vagueness of grade descriptions.

Point Method

• This system starts with the selection of job factors, construction of

degrees for each factor, and assignment of points to each degree.

Different factors are selected for different jobs, with accompanying

differences in degrees and points. The range of grades and scores is

also predetermined- for example, from 210 to 230 points, the 5th

grade; 231 to 251 points the 6th grade and so forth. A given fob is

placed on a particular grade, depending on the number of points itscores.

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Procedure for Establishing Point Method of Job Evaluation

Select Job Cluster

Identify Compensable Factors

Determine Degrees and Define EachCompensable Factors

Determine Factor Weights

Determine Factor Point Values

Validate Point System

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A Point Method Example

1. Select Job Cluster - Assume we are going to develop point system for the

administrative job cluster

2. Identify Compensable Factors - Assume compensable factors identified

are education, job knowledge, contacts, complexity of duties, and initiative

3. Determine Degrees and Define Each Compensable Factors - In

administrative job cluster, Education, Job Knowledge, and Initiative have

been determined to have five degrees; Contacts has four; and Complexity

of Duties has three

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A Point Method Example (Cont.)

FACTOR: CONTACTS

Level (Degrees) Points

IV Usual purposes of contacts are to discuss problems and possible 90

solutions, to secure cooperation or coordination of efforts, and to get

agreement and action; more than ordinary tact and persuasiveness required.

III Usual purposes of contacts are to exchange information and settle 66

specific problems encountered in course of daily work.

II Contacts may be repetitive but usually are brief with little or no 42

continuity.

I Contacts normally extend to persons in immediate work unit only. 18

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FACTOR: COMPLEXITY OF DUTIES

III Performs work where only general methods are available. Independent action and judgment are required regularly to analyze fact, evaluate situations, draw conclusions, make decision, and take or recommend action.

II Performs duties working from standard procedures or generally understood methods. Some independent action and judgment are required to decide what to do, determine permissible variations from standard procedures, review facts in situations, and determine action to be taken, within limits prescribed.

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I Little or no independent action or judgment. Duties are so standardized and simple as to involve little choice as to how to do them.

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4. Determine Factor Weights - Assume the committee believes thateducation is quite important for administrative job cluster andsets the weight for education at 35%. The weights of other fourfactors were determined by the committee to be:

Job Knowledge—25Contacts—18

Complexity of Duties—17

Initiative—5

The percent total is 100%

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5. Determine Factor Point Values - Committee determines total number of

points for the plan. Number may vary, but 500 or 1,000 points may work

well. Committee has determined that a 500 point system will work.

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Job Evaluation Worksheet (500-Point System)

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6. Validate Point System - Each committee member should take a random sample of jobs within chosen job cluster and calculate weights for each job selected

Point total for Administrative 2 job is determined to be 239 points

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Job Evaluation Worksheet for Administrative 2 Position

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Point method

Advantages -

A job is split into a number of factors. The worth of each job is determined on the basis of its factors and not by

considering the job as a whole.

The procedure adopted is systematic and can easily be explained to the employees.

The method is simple to understand and easy to administer.

Disadvantages -

Employees may disagree with the points allotted and to factors and their degrees identified.

Serious doubts are expressed about the range of points allotted and matching them with the job grades, for

example- a score range of 238 to 249 is grade seven and the next range of 250 to 271 is grade six. A

variation of one point makes all the difference.

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Documents

MMZC 441 Human Resource Management Lecture 3