Staffing need, decision making, internal and external influences

User Generated

46Ubyzrf

Business Finance

Description

Please make sure each question is answered with at least 300 word count in apa format and should have a cumulative minimum of 1,500 words and include at least four peer reviewed journal articles


1. Describe the differences among trend, ratio, and regression analysis methods for forecasting staffing needs, and when each might be most appropriate.

2. What are the four main categories of internal and external influences on staffing decision making?

3. Describe the differences among job requirements, competency-based, and rewards job analysis techniques, highlighting the strengths and weaknesses of each approach.

4. What is the O*Net, and how does it relate to job analysis? What are the components of O*Net, and when might an employer want to consider the information from this source?

5. Develop a competency-based model for an organization you're familiar with, starting from the mission and values and going down to a few specific job titles.

Unformatted Attachment Preview

Chapter Three Planning G A Learning Objectives and Introduction T Learning Objectives E Introduction S Internal and External Influences , Organizational Strategy Organizational Culture Labor Markets Technology D E Human Resource Planning A Process and Example Initial Decisions N Forecasting HR Requirements Forecasting HR AvailabilitiesD Reconciliation and Gaps R Staffing Planning A Staffing Planning Process Core Workforce Flexible Workforce Outsourcing 1 1 Diversity Planning 2 Demography of the American Workforce 3 Business Case for Diversity T Planning for Diversity S Legal Issues Affirmative Action Plans Legality of AAPs and Diversity Programs AAPs for Veterans and Individuals With Disabilities EEO and Temporary Workers 0077862414_ch03_p089_150.indd 89 11/19/13 12:56 AM Summary Discussion Questions Ethical Issues Applications Endnotes G A T E S , D E A N D R A 1 1 2 3 T S 0077862414_ch03_p089_150.indd 90 11/19/13 12:56 AM Chapter Three Planning 91 Learning Objectives and Introduction Learning Objectives • Recognize internal and external influences that will shape the planning process • Understand how strategic plans integrate with staffing plans • Become familiar with statistical and judgmental techniques for forecasting G HR requirements and availabilities • Know the similarities and A differences between replacement and succession planning T • Understand the advantages and disadvantages of a core workforce, a flexible workforce, and outsourcingEstrategies for different groups of employees • Learn how to incorporate diversity into the planning process S • Recognize the fundamental components of an affirmative action plan , Introduction D Human resource (HR) planning is the process of forecasting the organization’s E developing action plans and programs for fulfuture employment needs and then filling these needs in ways thatAalign with the staffing strategy. HR plans form the basis of all other activities N conducted during staffing. An organization that thoroughly considers its staffing needs and how these needs fit with the external D to recruit the right number and type of candienvironment will find it much easier dates, develop methods for selecting R the right candidates, and evaluate whether its programs are successful. A learning about the employment environment, Essentially, HR planning involves determining how many employees an organization will need in the future, and assessing the availability of employees in both the internal and external markets. 1 The HR planning process involves several specific components that we cover in 1 planning decisions, forecasting HR requirethis chapter, including making initial ments and availabilities, determining 2 employee shortages and surpluses, and developing action plans. 3 The chapter begins with an overview of internal and external influences on the T HR planning process, like organizational strategy and culture, labor markets, and technology. Next, we provide anSoverview of the process of HR planning, including a review of methods for forecasting HR requirements and availability. The staffing planning process includes distinguishing between the core and flexible workforces, as well as understanding the environment for outsourcing. Diversity programs have become an increasingly important part of the staffing planning process, so they are also discussed. The major legal issue for HR staffing planning is that of affirmative action plans (AAPs). A different legal issue, that of equal 0077862414_ch03_p089_150.indd 91 11/19/13 12:56 AM 92 Part Two Support Activities employment opportunity (EEO) coverage for temporary employees and their agencies, is also discussed. Internal and External Influences Planning does not occur in a vacuum. All aspects of the planning process must consider both internal and external influences. The two most important internal influences on the planning process are theG organization’s strategy and the organization’s culture. There are three major sourcesA of external influence on HR and staffing planning, namely, product market conditions, labor markets, and technology. Exhibit 3.1 T provides specific examples of these influences, which are discussed next. Organizational Strategy E S influence , The first, and most important, on the planning process is the organization’s overall strategy. Staffing managers must be intimately familiar with all aspects of the organization’s future plans and goals so they can respond by hiring D E A Exhibit 3.1 Examples of Internal and External Influences on Staffing N ORGANIZATIONAL D STRATEGY • Current financial and human resources in the organization R • Demand for products and/or services • Competitors and partners A • Financial and marketing goals ORGANIZATIONAL CULTURE 1 • The expressed vision of executives • The degree of hierarchy and bureaucracy 1 • Style of communication 2 • • • • LABOR MARKETS 3 KSAOs sought Labor demand: employment patterns, Labor supply: labor force, demographic trends, KSAOs available T Labor shortages and surpluses S Employment arrangements TECHNOLOGY • Elimination of jobs • Creation of jobs • Changes in skill requirements 0077862414_ch03_p089_150.indd 92 11/19/13 12:56 AM Chapter Three Planning 93 the right number of people with the right KSAOs (knowledge, skill, ability, and other characteristics) in a timely manner. Some of the techniques we will review for staffing planning are based on a view of the organization’s historical staffing levels. This is a good place to start, because previous practice is an important guide to setting a baseline for future needs. However, all planning must be conducted with an eye to the future as well. The Society for Human Resource Management proposes that strategic planning involves a thorough knowledge G of the organization’s current situation as well as a sense of the strategic vision of the organization.1 Breaking down the organization’s A and threats (SWOT) is a common method strengths, weaknesses, opportunities, for understanding strategy. The T internal assessment phase of the SWOT analysis focuses on physical and financial E resources, as well as structure and culture. The external assessment phase looks to learn about economic, demographic, and techS the organization in the future. nological trends that will influence Effective staffing planning must , begin with a dialogue between HR representatives and organizational leaders.2 HR managers should be aware of core aspects of the organization’s operations, including financial and marketing considerations. Additionally, it is important to D see how the organization sees itself changing in the future so that staffing strategies E to meet these needs can be developed. Participating in activities like annual planning meetings and reviewing financial stateA experts emphasize that this dialogue must be a ments are essential. Strategic HR ­two-­way communication. In many N cases, the current workforce and its capabilities will influence overall organizational plans. HR managers who are aware of internal human capital resources willDbe much more effective in an advisory capability when discussing future plans with R the other executives. Organizational Culture A Organizational culture is a very1complex topic, in part because culture is so difficult to define. In essence, culture is the set of intangibles that influences attitudes 1 of the factors that can influence an organiand behavior in organizations. Some zation’s culture include the expressed vision of executives, the degree of hierar2 chy and bureaucracy, the history of interactions among departments, and the style 3 organization. For example, an organization in of communication throughout the T are emphasized will call for a very different set which structure and predictability of staffing practices relative to an Sorganization in which flexibility and innovation are core values. The relationship between the organization and labor unions or other employee organizations (such as professional organizations like the American Medical Association or the state Bar Association) is also an extremely important part of culture. To understand culture, HR managers should spend time talking with senior executives, administer and evaluate employee survey data, and conduct focus groups. 0077862414_ch03_p089_150.indd 93 11/19/13 12:56 AM 94 Part Two Support Activities Just because culture is intangible does not mean it is not important. Michael Davis, the chief human resources officer at General Mills, encourages HR managers to build “an integrated set of programs and policies that reinforce and bring value to life.” He further notes that when the company’s espoused values are inconsistent with the practices that employees encounter on a ­day-­to-day basis, problems with motivation, communication, and retention will follow.3 Matching culture to planning occurs in numerous ways. Deciding the types of attitudes and values that employees should have in order to G achieve a person/organization fit is entirely dependent on culture. An organization with a participative culture should ensure that planning involves representativesAfrom many different perspectives. Decisions related to how succession planning should be managed are also influenced by the T degree to which the organization’s members value opportunities for growth and E development relative to stability and predictability. These are just a few of the ways S process. in which culture can impact the planning In conjunction with the staffing ,planning process, the organization’s staffing philosophy should be reviewed. The results of this review help shape the direction and character of the specific staffing systems implemented. The review should focus on internal versus external staffing D and diversity philosophy. External and internal staffing is aEcritical matter because it directly shapes the nature of the staffing system, as well as sends signals to applicants and employees A alike about the organization as an employer. Exhibit 3.2 highlights the advantages and disadvantages of external and internal staffing. Clearly there are ­trade-­offs to N consider in deciding the optimal ­internal-­external staffing mix. The point regardD ing time to reach full productivity warrants special comment. Any new hire, either internal or external, will require time R to learn the new job and reach a full productivity level. In some ways, external A hires may be able to reach job productivity faster. This is because external hires are usually selected because they have experience in a job similar to the one they will be taking, whereas internal hires are promoted into jobs they have not1previously held. On the other hand, internal new hires have an advantage in terms of person/organization fit because they are 1 already familiar with the culture, policies, procedures, and relationships among organizational members. Internal hires may have also received special training and 2 development to prepare them for the3new job. In terms of diversity, the organization must be sure to consider or develop a T a ­diversity-­conscious employer and the sense of importance attached to being commitment it is willing to make S in incorporating diversity elements into all phases of the staffing system. As we describe later in the chapter, an organization’s overall philosophy toward diversity will be shaped by the cultural value the organization attaches to diversity as well as the b­ usiness-­related consequences of ­diversity-­related practices. Many choices throughout the staffing process will follow from the organization’s attitudes toward diversity, ranging from deciding where to recruit to what types of qualifications are most important for new hires. 0077862414_ch03_p089_150.indd 94 11/19/13 12:56 AM Chapter Three Exhibit 3.2 Planning 95 Staffing Philosophy: Internal Versus External Staffing Advantages Disadvantages • Positive employee reactions to promotion from within • No new KSAOs into the organization • • May perpetuate current underrepresentation of minorities and women Internal • G Quick method to identify A job applicants T E Less expensive S , • Less time required to reach full productivity • Inexperienced employees may require more training time • • Negative reaction by internal applicants • External • D E A Brings in employees with new KSAOs N D Larger number of minorities and women to draw from R A Large labor market to draw from 1 • Experienced employees may require less training time1 Labor Markets • Small labor market to recruit from • Time-consuming to identify applicants • Expensive to search external labor market • More time required to reach full productivity 2 3 T S In and through labor markets, organizations express specific labor preferences and requirements (labor demand), and persons express their own job preferences and requirements (labor supply). Ultimately, person/job matches occur from the interaction of demand and supply forces. Both labor demand and supply contain quantity and quality components, as described below. Labor shortages, labor surpluses, and a variety of possible employment arrangements are also discussed. 0077862414_ch03_p089_150.indd 95 11/19/13 12:56 AM 96 Part Two Support Activities Labor Demand: Employment Patterns Labor demand is a derived demand, meaning it is a result of consumer demands for the organization’s products and services. Knowing the organization’s strategy and projections for future KSAO needs will guide the search for labor demand information. In particular, the labor market for the occupations the organization needs to staff will be greatly affected by the product market. For example, in the field of software design, the increased use of tablet computers since 2010 increased G skills in designing applications for related demand for programmers who gained operating systems. A To learn about labor demand, national employment statistics are collected and T analyzed. They provide data about employment patterns and projections for industries, occupations, and organization size. E Most organizations will need to examine not just aggregated statistics, like the overall unemployment rate, but also occuS As an example, the Bureau of Labor Stapational and regional employment data. , tistics in 2013 estimated that the unemployment rate for structural iron and steel workers was 21.9% and the rate for telemarketers was 23.1%. At the other extreme, the unemployment rate for physician assistants was 1.2% and the rate for petroD leum engineers was 0.6%.4 Projections to year 2018 indicate that E most job growth will occur in the services sector, led by the education and health services industries, followed by business A and professional services. Manufacturing and federal government employment will remain steady, and declines willN occur in mining and agriculture.5 D Labor Demand: KSAOs Sought Remployers are not widely measured, except KSAO requirements or preferences of for education requirements. Data collected by the Bureau of Labor Statistics A suggest a continued increase in demand for individuals with college degrees or higher. The number of jobs requiring a bachelor’s degree is expected to increase 1 degree is expected to increase 19%, and 17%, the number requiring a master’s the number requiring a doctoral degree 1 is expected to increase 22%. In contrast, the number of jobs requiring only ­short-­term ­on-­the-job training is expected to 2 demand for education most likely reflects increase by only 9%.6 The increasing advances in technology that have made 3 many jobs more complex and technically demanding.7 T A very thorough and systematic source of information about KSAOs needed for jobs is the Occupational OutlookSHandbook. It does not indicate KSAO deficiencies; rather, it provides detailed information about the nature of work and the training and KSAOs required for the entire spectrum of occupations in the United States. Surveys of HR professionals and employees consistently reveal that critical thinking skills, creativity, diversity, ethics, and lifelong learning are seen as especially relevant skills for today’s employees.8 0077862414_ch03_p089_150.indd 96 11/19/13 12:56 AM Chapter Three Planning 97 Labor Supply: The Labor Force and Its Trends Quantity of labor supplied is measured and reported periodically by the Bureau of Labor Statistics in the US Department of Labor. An example of basic results for July 2002–2012 is given in Exhibit 3.3. It shows that the labor force, including both full- and ­part-­time employees, reached about 155 million individuals (employed and unemployed) and that unemployment ranged from 4.6% to 9.6%. The data for 2009–2010 clearly show the effects of a major economic slowdown. The subseGis reflected by the decreased unemployment rate quent gradual economic recovery in 2012. A Data reveal several labor force trends that have particular relevance for staffing T is slowing, going from an annual growth rate organizations. Labor force growth of around 2% in the early 1990sE to a projected rate of 1% by the year 2018. There are increasingly fewer new entrants to the labor force. This trend, coupled with the S of the new entrants will have, creates major severe KSAO deficiencies that many , adaptation problems for organizations. Demographically, the labor force has become more diverse, and this trend will continue. Data starting in the 1980s and projected through 2018 show a slow trend D toward nearly equal labor force participation for men and women, a slight decrease in the proportion of whites in the workforce, and large proportional growth in the E representation of Hispanics and Asians. There will also be a dramatic shift toward fewer younger workers and moreAworkers over the age of 55. Other, more subtle labor forceNtrends are also under way. There has been a slight upward movement overall in theDaverage number of hours that people work and a strong rise in the proportion of employees who work very long hours in certain R A Exhibit 3.3 Labor Force Statistics 1 1 218 2 145 3 136 T 8.4 S 67 2002 Civilian noninstitutional population (in millions) Civilian labor force (in millions)    Employed (in millions)    Unemployed (in millions) Labor force participation rate (%) Unemployment rate (%) 5.8 2004 2006 2008 2010 2012 223 229 234 238 243 147 140 8.1 66 5.5 152 145 7.0 66 4.6 155 147 8.9 63 5.8 154 139 14.8 65 9.6 155 142 12.5 64 8.1 Source: US Department of Labor, “The Employment Situation,” July 2002, July 2004, July 2006, July 2008, July 2010, July 2012. 0077862414_ch03_p089_150.indd 97 11/19/13 12:56 AM 98 Support Activities Part Two occupations, such as managers and professionals. Relatedly, there is an increase in holding multiple jobs, with 6.2% of employed people holding more than one job. The number of immigrants in the population is growing; nearly 1 in 10 people is foreign born, the highest rate in more than 50 years. New federal and state policies are increasingly pushing welfare recipients into the labor force, and they are mostly employed in ­low-­wage jobs with low educational requirements. People historically out of the labor force mainstream—such as those with disabilities and the growing number of retirees—may assume G a greater presence in the labor force.9 A Labor Supply: KSAOs Available T that 40% of employers indicated that high A survey of 431 HR professionals found school graduates lack basic skills inEreading comprehension, writing, and math required for e­ ntry-­level jobs, and that 70% of employers said high school graduS ates are deficient in work habits such as professionalism, critical thinking, personal , 10 Most respondents believed college graduaccountability, and time management. ates were somewhat better prepared for work, but 44% of applicants with college degrees were still rated as having poor writing skills. There are also shortages D required in contemporary manufacturing of employees with the high skill levels 11 environments. Economists and sociologists are quick to note that these skills E shortages are being reported despite consistent gains in standardized test scores A and educational attainment in the labor force since the 1960s.12 Thus, it appears the Nskills is increasing, as we noted earlier, not problem is that demand for advanced that the supply of skilled workers is decreasing. This idea is reinforced by another D survey of 726 HR professionals which found 98% of respondents reported that the competition for talented workers has R increased in recent years.13 Data such as these reinforce the serious KSAO deficiencies A reported by employers in at least some portions of the labor force. Labor Shortages and Surpluses 1 When labor demand exceeds labor supply 1 for a given pay rate, the labor market is said to be “tight” and the organization experiences labor shortages. Shortages tend 2 to be job or occupation specific. Low unemployment rates, surges in labor demand 3 in certain occupations, and skill deficiencies fuel labor quantity and labor quality shortages for many organizations. The shortages cause numerous responses: T • • • • • • 0077862414_ch03_p089_150.indd 98 Increased pay and benefit packages S Hiring bonuses and stock options Alternative work arrangements to attract and retain older workers Use of temporary employees Recruitment of immigrants Lower hiring standards 11/19/13 12:56 AM Chapter Three Planning 99 • Partnerships with high schools, technical schools, and colleges • Increased mandatory overtime work • Increased hours of operation These types of responses are lessened or reversed when the labor market is “loose,” meaning there are labor surpluses relative to labor demand. Employment Arrangements G Though labor market forces bring organizations and job seekers together, the specific nature of the employment A arrangement can assume many forms. One form is whether the person will be employed full time or part time. Data show that T about 83% of people work full time and 17% work part time.14 Although many E people prefer p­ art-­time work, approximately 23% of p­ art-­time workers are seeking ­full-­time employment. S A second arrangement involves , the issue of flexible scheduling and shift work. The proportion of the workforce covered by flexible shifts has steadily grown from 12.4% in 1985 to 27.5% in 2004. Many of these workers are covered by formal flextime programs. Work hours are D often put into shifts, and about 15% of f­ ull-­time employed adults work evening, night, or rotating shifts.15 E often considered in combination, are (1) variTwo other types of arrangements, ous alternative arrangements toA the traditional employer–employee relationship, and (2) the use of contingent employees. Alternative arrangements include the N organization filling its staffing needs through the use of independent contractors, Dtemporary help agency employees, and employ­on-­call workers and day laborers, ees provided by a contract firm R that provides a specific service (e.g., accounting). Contingent employees do not have an explicit or implicit contract for ­long-­term A employment; they expect their employment to be temporary rather than long term. National data on the use of alternative employment arrangements and contingent employees were gathered by the1US Bureau of Labor Statistics in 2005. It found that 89.3% of surveyed individuals worked in a traditional employer–employee 1 of these individuals (97.1%) considered themarrangement, and the vast majority selves noncontingent. The most2prevalent alternative was to work as an independent contractor (7.5%), followed by ­on-­call employees and day laborers (1.7%), 3 (.9%), and employees provided by a contract temporary help agency employees firm (.6%). The percentage of contingent employees in these alternative arrangeT ments ranged from 3.4% (independent contractors) to 60.7% (temporary help S employees). Unfortunately, there has not been a data collection effort on the use of alternative employment arrangements since 2005, but most indicators suggest that alternative employment arrangements have increased over time. Exhibit 3.4 shows several other workforce trends identified in a survey of 1,247 HR professionals. The cost of health care has long been an issue identified in this survey, which is conducted every two years. The aging workforce has also 0077862414_ch03_p089_150.indd 99 11/19/13 12:56 AM 100 Part Two EXHIBIT 3.4 Support Activities Major Workforce Trends • Continuing high cost of health care in the United States • Increased global competition for jobs, markets, and talent • Growing complexity of legal compliance for employers • Large numbers of baby boomers leaving the workforce at around the same time • Economic growth of emerging markets • Greater need for cross-cultural understanding G in business settings A Source: J. Schramm, Workplace Forecast, 2011 (Alexandria, T VA: Society for Human Resource Management, 2011). E S , been an issue of note. More recent surveys focus on global issues such as international competition for talent as well as the economic growth of emerging markets. D E Changes in technology can influence the staffing planning process significantly. In some cases, technology can serveA as a substitute for labor by either eliminating or dramatically reducing the need for N certain types of workers. The economy as a whole has shown decreased demand for positions like clerical workers, teleD phone operators, and manufacturing operators as technology has replaced labor R changes in software that have made comas an input to production. Ironically, puters easier for nonspecialists to use A have eliminated many jobs in computer Technology programming. At the same time, technology can serve to create new jobs as new business opportunities emerge. In place of the 1 jobs that are eliminated, demand for technical occupations like robotics engineers, systems and database analysts, and 1 software engineers has increased. The expansion of e‑commerce and other 2 demand for those who design and manage ­Internet-­based services has increased websites. Increasing productivity as 3 a result of technological change can also spur increased firm performance, which in turn will create more jobs. Often these new T set of KSAOs than previous jobs, meanjobs will require a completely different ing that increased staffing resourcesSwill have to be devoted to either retraining or replacing the current workforce. Research conducted in both the United States and Germany shows that computerization has led to an increase in the demand for highly educated specialists, leading to an overall increased market demand for skills in science and mathematics, which has led to dramatic increases in wages for individuals with these skills.16 Employers that adopt new technology for any aspect of their operations will also have to consider how to tap into labor markets that have these skills. 0077862414_ch03_p089_150.indd 100 11/19/13 12:56 AM Chapter Three Planning 101 Human Resource Planning After a solid understanding of the internal and external environments has been acquired, a more detailed set of plans to address organizational needs in light of these environmental influences can be considered. Human resource planning (HRP) is a process and set of activities undertaken to forecast an organization’s labor demand (requirements) and internal labor supply (availabilities), to compare these projections to determine employment gaps, and to develop action plans for G addressing these gaps. Action plans include planning to arrive at desired staffing A levels and staffing quality. A general model depicting the T process of HRP is presented first, followed by an operational example of HRP. Detailed discussions of the major components of E HRP are then given.17 S , Process and Example The basic elements of virtually any organization’s HRP are shown in Exhibit 3.5. As can be seen, the HRP process involves four sequential steps: D 1. Determine future HR requirements E 2. Determine future HR availabilities 3. Reconcile requirements andAavailabilities—that is, determine gaps (shortages and surpluses) between theNtwo 4. Develop action plans to close D the projected gaps An example of HRP, including Rresults from forecasting requirements and availabilities, is shown in Exhibit 3.6. The exhibit shows a partial HRP conducted by A (sales and customer service). It involves only an organization for a specific unit two job categories (sales [A] and customer service [B]) and two hierarchical levels 1 1 Exhibit 3.5 The Basic Elements of Human 2 Resource Planning 3 T (1) Forecast Labor Requirements S Compare (3) Determine Gaps (4) Develop Action Plans (2) Forecast Labor Availabilities 0077862414_ch03_p089_150.indd 101 11/19/13 12:56 AM 0077862414_ch03_p089_150.indd 102 102 Part Two Support Activities Exhibit 3.6 G A T E S , Operational Format and Example of Human Resource Planning D E Forecast for Workforce— A One Year Requirements Availabilities N 110 71 D R 15 22 A Organizational Unit: Sales and Customer Service Job Category and Level A1 (Sales) A2 (Sales manager) B1 (Customer service representative) B2 (Customer service manager) Current Workforce 100 20 200 Reconciliation and Gaps 39 (shortage) 7 (surplus) 250 140 110 (shortage) 15 25 1 22 3 (shortage) 335 400 255 145 (shortage) 1 2 3 T S Action Planning Recruitment Selection Employment Retention Compensation Training and development 11/19/13 12:56 AM Chapter Three Planning 103 for each category (entry level [1] and managerial level [2]). All of the HRP steps are confined to this particular organizational unit and its job categories/levels, as shown. The current workforce size (number of employees) is given for each job category/ level. Requirements and availabilities are predicted for one year, and the results are shown in the relevant columns. After the reconciliation process, final gap figures are agreed on and entered into the gap column. These gap data serve as the G basic input to action planning. Because the gaps show both shortages and a surplus, and because the gaps vary in severity relative A action plan will probably have to be develto the current workforce, a specific oped and implemented for each job T category/level. The resulting four staffing (and other) plans should bring staffing E into an orderly balance of requirements and availabilities over the course of the planning period. S identify and illustrate the rudiments of HRP. The above process and example Within them are several distinct ,components that require elaboration. We turn now to these components, emphasizing that each one represents a factor that must be considered in HRP and that specific choices must be made regarding the operational details for each component. D E A Before HRP per se can be undertaken, several critical decisions must be made. N These decisions will shape the nature of the resultant HRP process, and they will D namely, the gap estimates. The quality and influence the output of the process, potential effectiveness of the action R plans developed from the gap estimates are thus at stake when these initial decisions are confronted and made. A Initial Decisions Strategic Planning We have already discussed the 1 need to integrate organizational strategy into the HRP process. In addition, the development of a strategy for HR should also be the 1 decisions should be made before more concrete first element of HRP. Several key plans are considered.18 First, a vision 2 based on the overall organizational strategy should be developed. This often3means deciding what values and core competencies all members of the organization should possess, and considering principles T that will support these. Second, potential strategies for achieving planning process goals should be discussed. It is best at this point to think of whole systems of goals S (e.g., integrate all KSAO information for the workforce and future planning needs) rather than specific concrete goals (e.g., conduct recruiting at a local college campus). Too much focus on implementation details early in the strategic planning process can lead to a patchwork approach that involves elements that do not fit together well. Third, contingency plans should be developed and considered. For example, what happens if certain key employees leave the organization? What happens if there is a change in the economy that reduces the supply of needed KSAOs 0077862414_ch03_p089_150.indd 103 11/19/13 12:56 AM 104 Part Two Support Activities in the labor market? Use of simulation software that shows potential future outcomes for a variety of actions and responses is one way to evaluate the likelihood of potential ­worst-­case scenarios and plan for how to respond should they arise. Fourth, methods for obtaining feedback relative to goals and objectives should be in place. This is a crucial stage, as it involves specifying the types of data that will be used to determine whether the planning process is successful or whether changes need to be made. HRP can be performed on a ­plan-­bG asis, ­project-­basis, or ­population-­basis. When HRP takes place as an integral part of an organization’s strategic planning process, A is a wise approach because it helps inteit is referred to as ­plan-­based HRP. This grate the organization’s strategic planning T process with HR implications. However, not all important business developments E are captured in formal business plans, particularly if they occur rapidly or unexpectedly. Organizational responses to these S projects, rather than in changes to the changes that occur in the form of special total business plan, are referred to as,p­ roject-­based HRP. In addition, many organizations do HRP outside the formal planning cycle for critical groups of employees on a regular basis. This often occurs for jobs in which there are perennial shortages of employees. Planning focused onD a specific employee group is referred to as ­population-­based HRP. E A Planning Time Frame Since planning involves looking intoNthe future, the logical question for an organization to ask is, How far into the future should our planning extend? Typically, D plans are divided into long term (three years and more), intermediate (one to three R Organizations vary in their planning time years), or short term (one year or less). frame, often depending on which of A the three types of HRP is being undertaken. For ­plan-­based HRP, the time frame will be the same as that of the business plan. In most organizations, this is between three and five years for ­so-­called strategic planning and something less than 1 three years for operational planning. Planning horizons for ­project-­based HRP vary depending on the nature of the projects 1 involved. Solving a temporary shortage of, say, salespeople for the introduction of 2 for only a few months, whereas planning a new product might involve planning for the s­ tart-­up of a new facility could 3 involve a lead time of two or more years. ­Population-­based HRP will have varying time frames, depending on the time necessary for labor supply (internal as T well as external) to become available. As an an organization, the planning time frame will example, for ­top-­level executives in S be lengthy. Job Categories and Levels The unit of HRP and analysis is composed of job categories and hierarchical levels among jobs. These job category/level combinations, and the types and paths of employee movement among them, form the structure of an internal labor market. 0077862414_ch03_p089_150.indd 104 11/19/13 12:56 AM Chapter Three Planning 105 Management must choose which job categories and hierarchical levels to use for HRP. In Exhibit 3.6, for example, the choice involves two jobs (sales and customer service) and two levels (entry and managerial) for a particular organizational unit. Job categories are created and used on the basis of the unit of analysis for which projected shortages and surpluses are being investigated. Hierarchical levels should be chosen so that they are consistent with or identical to the formal organizational hierarchy. The reason for this is that these formal levels define employee promotions (up levels), transfers (across G levels), and demotions (down levels). Having gap information by level facilitates planning of internal movement programs within the internal labor market.AFor example, it is difficult to have a systematic ­promotion-­from-within programTwithout knowing probable numbers of vacancies and gaps at various organizational E levels. S Head Count (Current Workforce) The basic unit of analysis for workforce planning is not the number of employ, ees needed. Rather, to account for the amount of scheduled time worked by each employee, staffing needs are stated in terms of f­ull-­time equivalents (FTEs). To determine FTEs, simply define D what constitutes f­ ull-­time work in terms of hours per week (or other time unit) andEcount each employee in terms of scheduled hours worked relative to a full workweek. If full time is defined as 40 hours per week, a person who normally works 20 A hours per week is counted as a .50 FTE, a person normally working 30 hours per week N is a .75 FTE, and so on. It is also often advisable to take current authorized vacancies into account when assessing head count. D Roles and Responsibilities R Both line managers and staff specialists (usually from the HR department) become A involved in HRP, so the roles and responsibilities of each must be determined as part of HRP. Most organizations take the position that line managers are ultimately 1 quality of HRP, but the usual practice is to have responsible for the completion and HR staff assist with the process.1 As noted previously, in an ideal situation there will be a constant flow of information among those involved in HRP, with line managers indicating how needs2are expected to change, and HR staff describing the KSAO resources within and3outside the organization that can be used to meet these needs in the future. T The process begins with line staff evaluating their current capabilities and future S the organization. The HR staff then takes the needs based on strategic plans for lead in proposing which types of HRP will be undertaken and when, and in making suggestions with regard to comprehensiveness, planning time frame, and job categories and levels. Final decisions on these matters are usually the prerogative of line management. Once an approach has been decided on, task forces of both line managers and HR staff are assembled to design an appropriate forecasting and action planning process and to do any other preliminary work. 0077862414_ch03_p089_150.indd 105 11/19/13 12:56 AM 106 Part Two Support Activities Once these processes are in place, the HR staff typically assumes responsibility for collecting, manipulating, and presenting the necessary data to line management and for laying out alternative action plans (including staffing plans). Action planning usually becomes a joint venture between line managers and HR staff, particularly as they gain experience with, and trust for, one another. Forecasting HR Requirements G Forecasting HR requirements is a direct derivative of business and organizational A planning. As such, it becomes a reflection of projections about a variety of factors, such as sales, production, technological change, productivity improvement, and T the regulatory environment. Many specific techniques may be used to forecast HR E or judgmental in nature, and they are usually requirements; these are either statistical ­tailor-­made by the organization. In forecasting future needs, it is essential to conS sider not just the status of the workforce but also the expected changes in needs due to strategic considerations. F ­ orward-­t,hinking HR experts note that data can inform HRP when it comes to prior needs and trends, but effective planning also entails con19 sidering how changes in the internal and D external environments will alter forecasts. E Statistical Techniques A are available for use in HR forecasting. A wide array of statistical techniques Prominent among these are regression Nanalysis, ratio analysis, trend analysis, time series analysis, and stochastic analysis. Brief descriptions of three of these techD niques are given in Exhibit 3.7. The use of integrated workforce R planning software, which can be combined with data from other organizational databases, has made it easier to use these staA As we noted earlier, HR practitioners are tistical techniques than it was in the past. also increasingly expected to support their proposals and plans with hard data. The three techniques shown in Exhibit 3.7 1 have different strengths and weaknesses, as we will see. We present these approaches in order from those requiring the least data collection to those requiring the1most. Trend analysis is the simplest approach, because it uses data only on previous 2 staffing levels over time to predict future needs. Trend analysis is useful when 3 organizations have data mostly on historical staffing levels with less detailed information on specific predictors. The decomposition of data into specific time periods T of demand is often used in health careSand retail settings, where staffing levels vary greatly over the course of a year or even at different times of the day. The trend analysis approach implicitly assumes that the pattern of staffing needs in the past will be predictive of the future but does not take any external factors, like the overall state of the economy or product market demand, into account. Ratio analysis is a more sophisticated approach that uses data from prior sales figures or other operational data to predict expected head count. In the example in Exhibit 3.7, estimates of sales growth are used to predict how many employees will 0077862414_ch03_p089_150.indd 106 11/19/13 12:56 AM Chapter Three Planning 107 Exhibit 3.7 Examples of Statistical Techniques to Forecast HR Requirements (A) Trend Analysis 1. Gather data on staffing levels over time and arrange in a spreadsheet with one column for employment levels and another column for time. 2. Predict trend in employee demand by fitting a line to trends in historical staffing levels over time (this can G be done by using regression or graphical methods in most spreadsheet programs). Aby dividing each period’s demand by 3. Calculate period demand index the average annual demand. T Example: January demand E index = Avg. January FTE/Avg. annual FTE 4. Multiply the previous year’s FTEs by the trend figure, then multiply this S figure by the period’s demand index. Example: A retail store, finds that the average number of employees over the past five years has been 142, 146, 150, 155, and 160. This represents a consistent 3% increase per year; to predict the next year’s D average demand, multiply 160 by 1.03 to show a 3% expected increase. Over this same E time period, it averaged 150 FTEs per month, with an average of 200 FTEs in December. This means the December A demand index is 200/150 = 1.33, so its estimate for next year’s Nwill be (160 × 1.03) × 1.3 = 219 FTEs. December FTE demand D Examine historical ratios involving R workforce size. $ sales No. of new customers A Example: ? (B) Ratio Analysis 1. 1.0 FTE 1.0 FTE ? 2. Assume ratio will be true in future. 1 3. Use ratio to predict future HR requirements. Example: $40,0001sales is past ratio 1.0 2 FTE (b) Sales forecast is $4,000,000 3 (c) HR requirements 100 FTEs (a) T Statistically identify historical predictors of workforce size. S (C) Regression Analysis 1. Example: FTEs a b1 sales b2 new customers 2. Only use equations with predictors found to be statistically significant. 3. Predict future HR requirements, using equation. Example: 0077862414_ch03_p089_150.indd 107 (a) FTEs 7 .0004 sales .02 new customers (b) Projected sales $1,000,000 Projected new customers 300 (c) HR requirements 7 400 6 413 11/19/13 12:56 AM 108 Part Two Support Activities be needed. This technique is useful for incorporating data from other functional areas to predict the future. However, this model cannot directly account for any changes in technology or skill sets that might change these ratios. The regression analysis technique can be used with historical predictors and can make more statistically precise estimates of future expectations by taking several factors into account simultaneously. In the example, sales data and new customer data from organizational records are used to predict staffing needs in the past. Then the estimates from these predictions are G combined with projections for the future to generate future FTE requirements. This procedure is more thorough than the ratio A only a single predictor of workforce size. analysis approach, which incorporates However, collecting enough data to T make good estimates can be ­time-­consuming and requires judgment calls. E S Judgmental Techniques Judgmental techniques represent human , ­decision-­making models that are used for forecasting HR requirements. Unlike statistical techniques, judgmental techniques use a decision maker who collects and weighs the information subjectively and then D The decision maker’s forecasts may or turns it into forecasts of HR requirements. may not agree very closely with those E derived from statistical techniques. This is not necessarily a weakness of either approach. Ideally, the precision of statistical techniques should be coupled with o­ A n-­the-ground knowledge represented by judgmental techniques to provide estimates N that have both rigor and relevance. Implementation of judgmental forecasting can proceed from either a t­op-­down D or ­bottom-­up approach. In the former, top managers of the organization, organiR knowledge of business and organizational zational units, or functions rely on their plans to predict what future head counts A should be. At times, these projections may, in fact, be dictates rather than estimates, necessitated by strict adherence to the business plan. Such dictates are common in organizations undergoing significant change, such as restructuring, mergers, and ­cost-­cutting actions. 1 In the ­bottom-­up approach, l­ower-­level managers make initial estimates for their 1 unit (e.g., department, office, or plant) on the basis of what they have been told or 2 presume are the business and organizational plans. These estimates are then consolidated and aggregated upward through successively higher levels of management. 3 Then, top management establishes the HR requirements in terms of numbers. T S Scenario Planning Scenario planning is a technique that has been explored in a variety of fields to predict future outcomes in an uncertain environment.20 The previous methods we have described are all designed to give a specific estimate for the number of people who will be needed in the organization in the future. Scenario planning provides a range of estimates based on various possible changes in the external and internal environments. For example, ratio analysis uses forecasts of future product demand 0077862414_ch03_p089_150.indd 108 11/19/13 12:56 AM Chapter Three Planning 109 to predict how many FTEs will be required; in our example in Exhibit 3.7, 100 FTEs will be required based on sales forecasts. Scenario planning provides a range of possible FTE requirements based on a variety of potential product demand levels; thus, three distinct estimates of FTE requirements will be developed for ­worst-­case, expected, and ­best-­case demand levels. The advantage of scenario planning is that it allows HRP to incorporate uncertainty and prepare for the unexpected. Because it explicitly acknowledges ways that the future might be different from G the past, it also incorporates judgmental techniques. Considering all the complex factors that go into various scenarios is often A is often part of the process. These programs challenging, so simulation software allow managers to change various T features of a situation to see how an outcome (in this case, projected FTEs) will change. E Evidence suggests that the process of doing scenario planning can change the ways decision makers think by promoting more holistic views of a problem that S incorporate a wide range of factors.21 , Forecasting HR Availabilities D given for the current workforce and their availIn Exhibit 3.6, ­head-­count data are ability as forecast in each job category/level. These forecasted figures take into E account movement into and out of each job category/level and exit from the orgaA Described below are three approaches for forenizational unit or the organization. casting availabilities: manager judgment, Markov Analysis, and replacement and N succession planning. D R Manager Judgment Individual managers may use their A judgment to make availability forecasts for their work units. This is especially appropriate in smaller organizations or in ones that lack centralized workforce internal mobility data and statistical forecasting capabili1Exhibit 3.6, assume the manager is asked to make ties. Continuing the example from an availability forecast for the entry 1 sales job category A1. The template to follow for making the forecast and the results of the forecast are shown in Exhibit 3.8. To the current staffing level in A1 (100)2is added likely inflows to A1 (10), and then likely outflows from A1 (37) are subtracted to yield the forecasted staffing availability 3 (73). Determining the inflow and outflow numbers requires judgmental estimates T as to the numbers of promotions, transfers, demotions, and exits. As shown at the S involve an upward change of job level within or bottom of Exhibit 3.8, promotions between job categories, transfers are lateral moves at the same job level across job categories, and demotions are downward changes of job level within or between job categories. Separate forecasts may be done for the other job category/levels (A2, B1, and B2). To provide reliable estimates, the manager must be very knowledgeable about both organizational business plans and individual employee plans or preferences for 0077862414_ch03_p089_150.indd 109 11/19/13 12:56 AM 110 Part Two Exhibit 3.8 Support Activities Manager Forecast of Future HR Availabilities Job Category/Level: Sales (A1) Time 1 Inflows Current Staffing Level 100 Promotion 0 Transfer 9 Demotion 1 Outflows Promotion 10 Transfer 15 GDemotion 0 AExit 12 Time 2 Forecasted Staffing Avail. 73 T E Note: Promotion is A1 to A2, A1 to B2, B1 to B2, or B1 to A2; transfer is A1 to B1, A2 to B2, B1 to A1, or B2 to A2; demotion is A2 to A1, A2 to B1, B2 to B1,Sor B2 to A1. , staying in their current job versus moving to another job. Knowledge of business plans will be helpful in judging the likely internal mobility opportunities for employees. Business expansion, for example,Dwill likely mean expanding internal mobility opportunities. Knowledge of employee plans or preferences will help pinpoint which employees are likely to change jobs orEleave the work unit or organization. The estimated staffing availabilityA (n = 73) in Exhibit 3.8 coincides closely with the availability estimate (n = 71) derived from forecasting based on Markov Analysis results, discussed below. This isN intentional. Markov Analysis uses historical mobility data and probabilities to forecast future availabilities, while managers’ D judgment uses current knowledge of business and employees’ plans to forecast R employee movements person by person. Results from these two approaches to A coincide, but they can be quite close if the availability forecasts will not necessarily manager is knowledgeable about past mobility patterns, employee mobility intentions, and mobility opportunities. 1 judgment to forecast availabilities is that A major problem with using manager the manager may lack the necessary1business plan and employee intention information to provide solid estimates, as opposed to casual guesstimates. In addition, 2 if there are large numbers of employees and job category/levels in the work unit, 3 task may overwhelm the manager. Markov the sheer complexity of the forecasting Analysis presents a way out of thisTdilemma, since it substitutes historical data about internal mobility and exit rates for the manager’s judgment as a basis for S making availability forecasts, and it simultaneously considers all types of possible employee movement in the forecasts. Markov Analysis Markov Analysis is used to predict availabilities on the basis of historical patterns of job stability and movement among employees. Consider again the four job category/levels (A1, A2, B1, and B2) in the sales and customer service unit in 0077862414_ch03_p089_150.indd 110 11/19/13 12:56 AM Chapter Three Planning 111 Exhibit 3.6. Note that between any two time periods, the following possibilities exist for each employee in the internal labor market: 1. Job stability (remain in A1, A2, B1, or B2) 2. Promotion (move to a higher level: A1 to A2, A1 to B2, B1 to B2, or B1 to A2) 3. Transfer (move at the same level: A1 to B1, B1 to A1, A2 to B2, or B2 to A2) 4. Demotion (move to a lowerGlevel: A2 to A1, A2 to B1, B2 to B1, or B2 to A1) 5. Exit (move to another organizational unit or leave the organization) A These possibilities may be thought T of in terms of flows and rates of flow or movement rates. Past flows and rates may be measured and then used to forecast the future Ebased on assumptions about the extent to which availability of current employees, past rates will continue unchanged S in the future. For example, if it is known that the historical promotion rate from A1 to A2 is .10 (10% of A1 employees are promoted , to A2), we might predict that A1 will experience a 10% loss of employees due to promotion to A2 over the relevant time period. To conduct Markov Analysis we must know all of the job stability, promotion, D transfer, demotion, and exit rates for an internal labor market before we can forecast future availabilities. E are shown in Exhibit 3.9 for the organizaThe elements of Markov Analysis tional unit originally presented in A Exhibit 3.6. Refer first to part A of Exhibit 3.9, where movement rates between two time periods (T and T+1) are calculated N for four job category/level combinations. This is accomplished as follows. For D number of employees at time period T, and each job category/level, take the use this number as the denominator for calculating job stability and moveR ment rates. Next, for each of these employees, determine which job category/ level they were employed in atAT+1. Then, sum up the number of employees in each job category/level at T+1, and use these as the numerators for calculating stability and movement rates. Finally, divide each numerator separately by 1 the denominator. The result is the stability and movement rates expressed as 1 proportions, also known as transition probabilities. The rates for any row (job category/level) must add up to 2 1.0. For example, consider job category/level A1. Assume that at time T in the past, 3 that at T+1, 240 of these employees were still A1 had 400 people. Further assume in A1, 40 had been promoted toTA2, 80 had been transferred to B1, 0 had been promoted to B2, and 40 had exited the organizational unit or the organization. The S resulting transition probabilities, shown in the row for A1, are .60, .10, .20, .00, and .10. Note that these rates sum to 1.00. By referring to these figures, and the remainder of the transition probabilities in the matrix, an organization can begin to understand the workings of the unit’s internal labor market. For example, it becomes clear that 60%–80% of employees experienced job stability and that exit rates varied considerably, ranging from 10% to 35%. Promotions occurred only within job categories (A1 to A2, B1 to B2), not between 0077862414_ch03_p089_150.indd 111 11/19/13 12:56 AM 112 Part Two Support Activities Exhibit 3.9 Use of Markov Analysis to Forecast Availabilities A. Transition Probability Matrix Job Category and Level T B. T 1 A1 A2 B1 B2 Exit A1 A2 B1 B2 .60 .05 .05 .00 .10 .60 .00 .00 .20 .00 .60 .00 .00 .00 .05 .80 .10 .35 .30 .20 Forecast of Availabilities Current Workforce A1 100 A2 20 B1 200 B2 15 60 1 10 0 10 12 0 0 20 0 120 0 0 0 10 12 22 140 22 71 G A T E S , D E A job categories (A1 to B2, B1 to A2). Transfers were confined to the lower of the two levels (A1 to B1, B1 to A1). Only occasionally did demotions occur, and only within N a job category (A2 to A1). Presumably, these stability and movement rates reflect D specific staffing policies and procedures that were in place between T and T+1. With these historical transitional R probabilities, it becomes possible to forecast the future availability of the current A workforce over the same time interval, T and T+1, assuming that the historical rates will be repeated over the time interval and that staffing policies and procedures will not change. Refer now to part B of Exhibit 3.9. To forecast availabilities, simply take1the current workforce column and multiply it by the transition probability matrix shown in part A. The resulting availability figures 1 (note these are the same as those shown in Exhibit 3.6) appear at the bottom of the 2 and B2 = 22. The remainder of the current columns: A1 = 71, A2 = 22, B1 = 140, workforce (80) is forecast to exit and3will not be available at T+1. Limitations of Markov Analysis. T Markov Analysis is an extremely useful way to capture the underlying workings S of an internal labor market and then use the results to forecast future HR availabilities. It is, however, subject to some limitations that must be kept in mind.22 The first and most fundamental limitation is that of sample size, or the number of current workforce employees in each job category/level. As a rule, it is desirable to have 20 or more employees in each job category/level. Since this number serves as the denominator in the calculation of transition probabilities, with small sample sizes there can be substantial differences in the values of transition probabilities, 0077862414_ch03_p089_150.indd 112 11/19/13 12:56 AM Chapter Three Planning 113 even though the numerators used in their calculation are not that different (e.g., 2/10 = .20 and 4/10 = .40). Thus, transition probabilities based on small samples yield unstable estimates of future availabilities. A second limitation of Markov Analysis is that it does not detect multiple moves by employees between T and T+1; it only classifies employees and counts their movement according to their beginning (T) and ending (T+1) job category/level, ignoring any intermittent moves. To minimize the number of undetected multiple moves, therefore, it is necessaryGto keep the time interval relatively short, preferably no more than two years. A third limitation pertains toAthe job category/level combinations created to serve as the unit of analysis. These T must be meaningful to the organization for the HRP purposes of both forecasting E and action planning. Thus, extremely broad categories (e.g., managers or researchers) and categories without any level designations should be avoided. NoteS that this recommendation may conflict somewhat with organizations with a ­non-­bureaucratic or ­team-­based structure. , Finally, the transition probabilities reflect only gross, average employee movement and not the underlying causes of the movement. Stated differently, all employees in a job category/level are assumed to have an equal probability of movement. D This is unrealistic because organizations take many factors into account (e.g., E seniority, performance appraisal results, and KSAOs) when making movement A of these factors, the probabilities of movedecisions about employees. Because ment may vary among specific employees. N Individual Internal ForecastsD RMarkov Analysis approaches are designed to estiBoth the managerial judgment and mate future internal HR availabilities A for large numbers of employees. Replacement and succession planning focus on identifying individual employees who will be considered for promotion, along with a thorough assessment of their current capabilities and deficiencies, coupled with training and development plans to erase any defi1 ciencies. Through replacement and succession planning, the organization constructs 1 internal talent pipelines that ensure steady and known flows of qualified employees to higher levels of responsibility2and impact. Replacement planning precedes succession planning, and the organization 3 may choose to stop at just replacement planning rather than proceeding into the more complex succession planning process.23 Replacement and successionTplanning can occur at any and all levels of the organization. They are most widely S used at the management level, starting with the chief executive officer and extending downward to the other officers or top managers. They can also be used throughout the entire management team, including the identification and preparation of individuals for promotion into ­entry-­level management. They may also be used for linchpin positions—ones that are critical to organization effectiveness (such as senior scientists in the research and development function of a ­technology-­driven organization) but not necessarily housed within the management structure. 0077862414_ch03_p089_150.indd 113 11/19/13 12:56 AM 114 Part Two Support Activities Replacement Planning. Replacement planning focuses on identifying individual employees who will be considered for promotion and thoroughly assessing their current capabilities and deficiencies. Training and development plans to improve the fit between capabilities and requirements are also developed. The focus is thus on both the quantity and the quality of availability. The results of replacement planning are shown on a replacement chart, an example of which is shown in Exhibit 3.10. The chart is based on the previous sales–customer service unit in Exhibit 3.6. The focus is onG replacement planning for the sales manager (A2) from the ranks of sales associates (A1) as part of the organization’s “grow A strategy. The top part of the chart indicates your own,” p­ romotion-­from-within HR T by replacement planning, as well as the the organizational unit and jobs covered minimum criteria for promotion eligibility. E The next part shows the actual replacement chart information for the incumbent department manager (Woo) and the two S Stemke) in the menswear department at the eligible sales associates (Williams and Cloverdale store. The key data are length of service, overall performance rating, , and promotability rating. When the incumbent sales manager (Woo) is promoted to group sales manager, both sales associates will be in the promotion pool. Williams will likely get the position because ofDher “ready now” promotability rating. Given his relatively short length of serviceE and readiness for promotion in less than one year, Stemke is probably considered a “star” or a “fast tracker” whom the organizaA replacement charts could be developed tion will want to promote rapidly. Similar for all departments in the store and for N all hierarchical levels up to and including store manager. Replacement chart data could then be aggregated across stores to D availability. provide a corporate composite of talent R has been greatly accelerated by human The process of replacement planning resources information systems (HRISs). A Many HRISs make it possible to keep data on KSAOs for each employee based on job history, training, and outside education. Software also allows organizations to create lists of employees who are ready to move into specific positions, 1 and to assess potential risks that managers or leaders will leave the organization. The ability to keep track of employees 1 inventories of skill sets means that staffing across the organization by standardized 2 managers will be able to compare a variety of individuals for new job assignments quickly and consistently. A large database of candidates also makes it possible 3 to seek out passive internal job candidates who are not actively looking for job changes but might be willing to takeTnew positions if offered. Many organizations that use integrated database systemsSto track candidates across a variety of locations report they are able to consider a larger pool of candidates than they would with a ­paper-­based system. Some HRISs automatically alert HR when key positions become open, and thus the process of finding a replacement can get under way quickly. The development of comprehensive replacement planning software is typically quite expensive, with costs reaching hundreds of thousands of dollars. The software is probably most useful for large organizations that are able to capitalize on the costs of a large system. However, smaller organizations may 0077862414_ch03_p089_150.indd 114 11/19/13 12:56 AM 0077862414_ch03_p089_150.indd 115 G A Organizational Unit: Merchandising—Soft Goods T Replacement for: Department Sales Manager (A2) E Pipelines for Replacement: Department Sales (A1)—preferred; External Hire—last resort Minimum Eligibility Requirements: Two years’ full-time S sales experience; overall performance rating of “exceeds expectations”; promotability rating of “ready now” or “ready in < 1 yr.” , Exhibit 3.10 Replacement Chart Example Department: Menswear Store: Cloverdale Incumbent Manager Seng Woo Promote to Group Sales Manager Replacement Shantara Williams Sales Manager Replacement Promote to 8 1 expectations X Exceeds 1 2 X Ready now Ready in < 1 yr. 3 T Years S in Job Overall Performance Rating Meets expectations Not promotable Below expectations Promotability Rating 2 X Exceeds expectations Ready in 1–2 yrs. Meets expectations Not promotable Below expectations Promotability Rating Ready now X Ready in < 1 yr. Ready in 1–2 yrs. Not promotable 11/19/13 12:56 AM 115 Sales Manager Overall Performance Rating Ready in 1–2 yrs. Below expectations Planning Lars Stemke Years in Job Meets expectations Chapter Three Promote to D E Overall Performance Rating A expectations X Exceeds 7 N Promotability Rating DReady in < 1 yr. X Ready now R A Years in Job 116 Part Two Support Activities find it possible to create their own databases of skills as a means of facilitating the internal replacement process.24 Succession Planning. Succession plans build on replacement plans and directly tie into leadership development. The intent is to ensure that candidates for promotion will have the specific KSAOs and general competencies required for success in the new job. The key to succession planning is assessing each promotable employee for KSAO or competency gaps, and where G there are gaps, creating employee training and development plans that will close the gap. A survey conducted by the Society for A that over half of HR professionals indicated Human Resource Management showed that their organization had implemented T some form of succession planning.25 Continuing the example from replacement planning, Exhibit 3.11 shows a sucE cession plan for the two promotable sales associates. The organization has develS oped a set of general leadership competencies for all managers, and for each management position (such as department sales manager), it indicates which of , those competencies are required for promotion, in addition to the minimum eligibility requirements. It is the focus on these competencies, and the development plans to instill them in candidates forDpromotion who lack them, that differentiates replacement and succession planning. E It can be seen that Williams, who is “ready now,” has no leadership compeA of an i­n-­house training course on budtency gaps, with the possible exception get preparation and monitoring, which N she is currently completing. Stemke, while having “star” potential, must undertake development work. When he successfully D completes that work, he will be promoted to sales manager as soon as possible. Alternatively, he might be placed in the R organization’s acceleration pool. This pool contains ­high-­potential individuals like A Stemke from within the organization who are being groomed for management positions generally, and for rapid acceleration upward, rather than progressing through the normal promotion paths. It should be noted that replacement 1 and succession planning require managers’ time and expertise to conduct, both of which the organization must be will1 ing to provide to those managers. Moreover, there must be effective performance appraisal and training and development systems in place to support replacement 2 and succession planning. For example, 3 overall performance and promotability ratings, plus assessment of competency gaps and spelling out development plans, could occur annually as part of the T performance appraisal process conducted by management. In addition to identifying S the skills needed immediately, succession plans should also identify skills needed in the future. Finally, promotability and development assessments require managers to make tough and honest decisions. A study of successful succession management in several Fortune 500 organizations concluded, “Succession management is possible only in an organizational culture that encourages candor and risk taking at the executive level. It depends on a willingness to differentiate individual performance and a corporate culture in which the truth is valued more than politeness.”26 0077862414_ch03_p089_150.indd 116 11/19/13 12:56 AM Chapter Three Planning 117 Exhibit 3.11 Succession Plan Example Organizational Unit: Merchandising—Soft Goods Department: Menswear Position to Be Filled: Department Sales Manager (A2) Leadership Competencies Required • Plan work unit activities • Budget preparation and monitoring G • Performance management of sales associates A T Eligible Replacement Promotability Rating Competency E Gaps Development Plans S. Williams Ready now Budget prep Now completing in-house training course L. Stemke Ready in < 1 year Plan work Shadowing sales manager S , D E Budget prep A Perf. mgt.N D R A Starting in-house training course Serving as sales manager 10 hours per week Taking course on performance management at university extension 1 1 The reconciliation and gap determination process is best examined by means of an 2 the example in Exhibit 3.6. Attention is now example. Exhibit 3.12 presents intact directed to the reconciliation and3gaps column. It represents the results of bringing together requirements and availability forecasts with the results of external and internal environmental scanning.TGap figures must be decided on and entered into the column, and the likely reasons S for the gaps need to be identified. Reconciliation and Gaps Let’s first consider job category/level A1. A relatively large shortage is projected due to a mild expansion in requirements coupled with a substantial drop in availabilities. This drop is not due to an excessive exit rate but to losses through promotions and job transfers (refer back to the availability forecast in Exhibit 3.9). For A2, decreased requirements coupled with increased availabilities lead to a projected surplus. Clearly, changes in current staffing policies and procedures will have to be made to stem the availability tide, such as a slowdown in the promotion 0077862414_ch03_p089_150.indd 117 11/19/13 12:56 AM 0077862414_ch03_p089_150.indd 118 Part Two Support Activities Exhibit 3.12 118 G A T E S , Operational Format and Example of Human Resource Planning D E Forecast for Workforce— A One Year Requirements Availabilities N 110 71 D R 15 22 A Organizational Unit: Sales and Customer Service Job Category and Level A1 (Sales) A2 (Sales manager) B1 (Customer service representative) B2 (Customer service manager) Current Workforce 100 20 200 Reconciliation and Gaps 39 (shortage) 7 (surplus) 250 140 110 (shortage) 15 25 1 22 3 (shortage) 335 400 255 145 (shortage) 1 2 3 T S Action Planning Recruitment Selection Employment Retention Compensation Training and development 11/19/13 12:56 AM Chapter Three Planning 119 rate into A2 from A1, or to accelerate the exit rate, such as through an early retirement program. Turning to B1, note that a huge shortage is forecast. This is due to a major surge in requirements and a substantial reduction in availabilities. To meet the shortage, the organization could increase the transfer of employees from A1. While this would worsen the ­already-­projected shortage in A1, it might be cost effective and would beef up the external staffing for A1 to cover the exacerbated shortage. Alternately, a massive external staffing program could G be developed and undertaken for B1 alone. Or, a combination of internal transfers and external staffing for both A1 and B1 could be A staffing becomes a candidate for consideration, attempted. To the extent that external this will naturally spill over into other T HR activities, such as establishing ­starting-­pay levels for A1 and B1. Finally, aEvery different strategy would be to develop and implement a major retention program for employees in customer service. S shortage. This gap is so small, however, that For B2 there is a small projected for all practical purposes it can ,be ignored. The HRP process is too imprecise to warrant concern over such small gap figures. In short, the reconciliation and gap phase of HRP involves coming to grips with projected gaps and the likely reasons D for them. Quite naturally, thoughts about future implications begin to creep into E the process. Even in the simple example shown, it can be seen that considerable action will have to be contemplated and undertaken A for the organizational unit. That will involve to respond to the forecasting results mixtures of external and internalNstaffing, with compensation as another likely HR ingredient. Through action planning, these possibilities become real. Staffing Planning D R A After the HRP process is complete, it is time to move toward the development of specific plans for staffing. This 1 is a vital phase of the planning process, in which staffing objectives are developed and alternative staffing activities are generated. The objectives are the targets the1organization establishes to determine how many employees will be needed and in2 which job categories. The activities are the specific methods, including recruiting 3 and selection strategies, that will be used to meet these objectives. We devote special attention in this section to one of the most T planning: Should the organization use a core critical decisions made during staffing workforce or a flexible workforce, S or should parts of the workforce be outsourced? Staffing Planning Process Staffing Objectives Staffing objectives are derived from identified gaps between requirements and availabilities. Thus, these objectives respond to both shortages and surpluses. They may require the establishment of quantitative and qualitative targets. 0077862414_ch03_p089_150.indd 119 11/19/13 12:56 AM 120 Part Two Support Activities Quantitative targets should be expressed in head count or FTE form for each job category/level and will be very close in magnitude to the identified gaps. Indeed, to the extent that the organization believes in the gaps as forecast, the objectives will be identical to the gap figures. A forecast shortage of 39 employees in A1, for example, should be transformed into a staffing objective of 39 accessions (or something close to it) to be achieved by the end of the forecasting time interval. Exhibit 3.13 illustrates these points. For each cell, enter a positive number for ­head-­count additions and a negative G number for ­head-­count subtractions. Qualitative staffing objectives refer to the qualities of people in ­KSAO-­type A these may be stated in terms of averages, terms. For external staffing objectives, such as average education level for new T hires and average scores on ability tests. Internal staffing objectives of a qualitative nature may also be established. These E may reflect desired KSAOs in terms of seniority, performance appraisal record S ­off-­the-job training, and so forth. over a period of years, types of on- and The results of replacement and succession planning, or something similar to , that, will be very useful to have as well. Generating Alternative Staffing Activities D With quantitative and, possibly, qualitative objectives established, it is necessary E to begin identifying possible ways of achieving them. At the beginning stages of generating alternatives, it is not wiseA to close the door prematurely on any of them. Exhibit 3.14 provides a full range ofN options for dealing with employee shortages and surpluses. As with previous planning processes, the focus is not on specific D programs at this stage but rather on broad classes of potential activities. As shown in the exhibit, both short-R and l­ ong-­term options for shortages, involving a combination of staffing and workloadAmanagement, are possible. ­Short-­term options include utilizing current employees better (through more overtime, productivity 1 1 Exhibit 3.13 Setting Numerical Staffing Objectives 2 Job 3 Category Objectives T and New Hires Promotions Level Gap S Transfers A1 A2 B1 B2 – 39 +7 –110 –3 52 0 +140 +2 –6 +2 –5 +4 –3 –8 –3 –1 Demotions Exits 0 0 –2 0 –4 –1 –20 –2 Total + 39 –7 +110 +3 Note: The objective is to close each gap exactly. 0077862414_ch03_p089_150.indd 120 11/19/13 12:56 AM Chapter Three Planning 121 Exhibit 3.14 Staffing Alternatives to Deal With Employee Shortages and Surpluses Employee shortage Long-term options Recalls Increase overtime or part time Hires G A T Permanent in-transfers E S Increase , Increase subcontracts Short-term options productivity D Temporary E Temporary assignments A hires N D R Employee surplus A Long-term options Freeze hires and use attrition Permanent out-transfers Freeze hires and use attrition Layoffs Reduce overtime or part time Excused absences 0077862414_ch03_p089_150.indd 121 1 1 2Retirement 3incentives T S Transfer work in Temporary assignments Transfer work out Retrain Buy back vacation or holidays Transfer work out Short-term options Retrain Transfer work in Reduce workweek Temporary shutdown or layoffs Retrain or train Accumulate surplus 11/19/13 12:56 AM 122 Part Two Support Activities increases, and buybacks of vacation and holidays), outsourcing work to other organizations (subcontracts, transferring work out), and acquiring additional employees on a ­short-­term basis (temporary hires and assignments). L ­ ong-­term options include staffing additional employees (recalling former employees, transferring in employees from other work units, adding new permanent hires), enhancing skills (retraining), and pushing work to other organizations (transferring work out). Assessing and Choosing Alternatives G As should be apparent, a veritable smorgasbord of alternative staffing activities are A of these alternatives needs to be assessed available to address staffing gaps. Each systematically to help decision makers T choose from among them. The goal of assessment is to identify E one or more preferred activities. A preferred activity offers the highest likelihood of attaining the staffing objective within the S or at a tolerable cost, and with the fewest time limit established, at the least cost negative side effects. A wide variety, of metrics are available to assess potential activities. First, a common set of assessment criteria (e.g., time for completion, cost, and probability of success) should be identified and agreed on. Second, each alternative should be assessed according D to each of these criteria. In this way, all alternatives will receive equal treatment, E and tendencies to jump at an initial alternative will be minimized. A All of these alternatives must be considered within the broader context of how the organization creates and structures its workforce. This involves the key straN tegic issue of core versus flexible workforce usage. The choice should be considD philosophy, in particular, the difference ered in light of the organization’s staffing between an internal or external emphasis. R Many of the staffing activity alternatives are more applicable to one type of workforce than another. A Core Workforce 1 A core workforce, defined as regular f­ ull-­time and p­ art-­time employees of the orga1 nization, forms the bulk of most organizations’ workforces. The key advantages of a core workforce are stability, continuity, and predictability. The organization can 2 depend on its core workforce and build strategic plans based on it. Several other advantages accrue to the organization3from using a core workforce. The regularity of the employment relationship fosters T a sense of commitment and shared purpose toward the organization’s mission. In addition, the organization maintains the legal S right to control employees working in its behalf, in terms of both work process and expected results, rather than having to divide or share that right with organizations providing a flexible workforce, such as temporary employment agencies. Finally, the organization can directly control how it acquires its workforce and the qualifications of those it employs through the management of its own staffing systems. By doing so, the organization may build not only a highly qualified workforce but also one more likely to be retained, thus lessening pressure to continually restaff. 0077862414_ch03_p089_150.indd 122 11/19/13 12:56 AM Chapter Three Planning 123 Several disadvantages of a core workforce exist. The implied permanence of the employment relationship “locks in” the organization’s workforce, with a potential loss of staffing flexibility to rapidly increase, reduce, or redeploy its workforce in response to changing market conditions and project life cycles. Reducing the core workforce, in particular, can be very costly in terms of severance pay packages, low morale, and damage to the organization’s reputation as a good employer. Additionally, the labor costs of the core workforce may be greater than that of the flexible workforce due to (1)Ghigher wages, salaries, and benefits for the core workforce, and (2) the fixed nature of these labor costs, relative to the more variA workforce. By using a core workforce, the able costs associated with a flexible organization incurs numerous legal T obligations—particularly taxation and employment law compliance—that could E be fully or partially avoided through the use of flexible workforce providers, which would be the actual employer. Finally, use of a core workforce may deprive theSorganization of new technical and administrative knowledge that could be infused,into it by use of flexible workers such as programmers and consultants. Consideration of these numerous advantages and disadvantages needs to occur separately for various jobs and organizational units covered by the HR plan. In this D way, usage of a core workforce proceeds along selective, strategic lines. Referring E back to the original example in Exhibit 3.6, staffing planners should do a unique core workforce analysis for theA sales and customer service unit, and within that unit, for both sales and customer Nservice jobs at the entry and managerial levels. The analysis may result in a decision to use only ­full-­time core workers for the managerial jobs, both ­full-­time D and ­part-­time core workers for sales jobs, and a combination of ­full-­time core customer service representatives augmented by both R ­full-­time and ­part-­time temporary customer service representatives during peak A sales periods. Once the job and work unit locations of the core workers have been determined, specific staffing planning for effective acquisition must occur. This involves planning of recruitment, 1 selection, and employment activities; these topics will be covered in subsequent chapters. 1 2 Flexible Workforce The two major components of 3 the flexible workforce are temporary employees provided by a staffing firm and independent contractors. Planning for usage of the T flexible workforce must occur in tandem with core workforce planning; hence, it S should begin with a review of the advantages and disadvantages of a flexible workforce.27 The key advantage is staffing flexibility. The flexible workforce may be used for adjusting staffing levels quickly in response to changing technological or consumer demand conditions and to ebbs and flows of orders for products and services. Other flexibility advantages are the ability to quickly staff new areas or projects and the ability to fill in for core workers absent due to illness, vacations, and holidays. Relative to the core workforce, the flexible workforce may also present 0077862414_ch03_p089_150.indd 123 11/19/13 12:56 AM 124 Part Two Support Activities labor cost advantages in the form of lower pay and benefits, more variable labor costs, and reduced training costs. It should be noted, however, that the temporary workforce provider shoulders many of these costs and simply passes them on to the organization through the fees it charges for its services. Another advantage for the organization is possibly being relieved of many tax and employment law obligations, since flexible workers are often not considered employees of the organization. For temporary employees, however, the organization may be considered a ­co-­employer subject to some legal G obligations, especially pertaining to EEO. An emerging advantage is that the flexible workforce, especially in the professional A source of new knowledge about organiand technical ranks, may be an important zational best practices and new skillsTnot present in the core workforce, especially “hot skills” in high market demand. In E a related vein, organizations use temporary or interim top executives to fill in until a permanent hire is found and on board, Sprojects requiring their expertise.28 Finally, to spur change, and to launch special usage of a flexible workforce relieves , the organization of the need to design and manage its own staffing systems, since this is done by the flexible workforce provider. An added advantage here is that the organization might use flexible workers on a tryout basis, much like a probationary D period, and then hire into its core workforce those who turn out to be a solidEperson/job match. Many temporary workers are “temp-to-perm,” meaning that the organization will hire them permanently if A they perform successfully in the temporary role. Such an arrangement is usually negotiated up front with the staffing N services company. These numerous advantages must be weighed against several potential disadvantages. Most important is the legalD loss of control over flexible workers because they are not employees of the organization. Thus, although the organization has R great flexibility in initial job assignments for flexible workers, it is very limited in A the amount of supervision and performance management it can conduct for them. Exacerbating the situation, frictions between core and flexible workers may also arise. Core workers, for example, may 1 feel that flexible workers lack knowledge and experience, are just “putting in time,” receive the easy job assignments, and do not act like committed team players.1Also, flexible workers may lack familiarity with equipment, policies, procedures, 2 and important customers; such deficiencies may be compounded by a lack of training in specific job requirements. Finally, it 3 should be remembered that the quality of the flexible workforce depends heavily on the quality of the staffing andTtraining systems used by the provider of the flexible workers. The organization may S end up with flexible but poorly qualified workers. If the review of advantages and disadvantages of flexible workers confirms the strategic choice to use them in staffing, plans must be developed for the organization units and jobs in which they will be used, and for how they will be acquired. Acquisition plans normally involve the use of staffing firms and independent contractors, both of which perform the traditional staffing activities for the organization. Hence, in contrast to the substantial and sustained staffing planning that must 0077862414_ch03_p089_150.indd 124 11/19/13 12:56 AM Chapter Three Planning 125 occur for the core workforce, planning for the flexible workforce is primarily a matter of becoming knowledgeable about potential sources and lining them up in advance of when they will be needed. Staffing Firms Recall that staffing firms (also called temporary help agencies) are the legal employers of the workers being supplied, though matters of ­co-­employment may G arise. Hence, the staffing firm conducts recruitment, selection, training, compensation, performance appraisal, andAretention activities for the flexible workers. The firm is also responsible for ­on-­site supervision and management, as well as all T required insurance premiums. For such serpayrolling and the payment of legally E vices, the firm charges the organization a general fee for its labor costs (wages and benefits) plus a markup percentage of labor costs (usually 40%–50%) to cover S these services’ costs plus provide a profit. There may be additional charges for , as extra testing or background checks, or skill specially provided services, such training. ­Temp-­to-perm workers may be hired away from the firm (with its permission and for a special fee) by the organization to become regular employees in the Dthe firm may provide an o­ n-­site manager to help core workforce. For larger clients the organization plan its specificEstaffing needs, supervise and appraise the performance of the temporary workers, Ahandle discipline and complaints, and facilitate firm–organization relations. With such additional staffing services, the firm functions increasingly like a staffingN partner rather than just a staffing supplier. Use of a staffing firm requiresDadvanced planning, rather than a panicky phone call to a firm at the moment of staffing need. In addition to becoming aware of firms that might be accessed, it isRwise to become familiar with their characteristics and services. Shown in Exhibit A 3.15 are the various factors and issues to become knowledgeable about for any firm. When the organization chooses a firm, both parties should enter into a formal 1 should cover such matters as specific services written agreement. The agreement to be provided, costs, steps to ensure 1 that the flexible workers are employees of the firm (such as having an ­on-­site manager for them), and the process for terminat2 ing the firm–organization relationship. It is best to have legal counsel prepare and 3 review the agreement. The organization may decideTto establish its own i­n-­house staffing firm. When this is done, the employees of the firm may even be employees of the organization. Managers thus have readilySavailable flexible workers to whom they can turn, without having to go through all the planning steps mentioned above. Independent Contractors An independent contractor (IC) provides specific task and project assistance to the organization, such as maintenance, bookkeeping, advertising, programming, and consulting. The IC can be a single individual (self-employed, freelancer) or an 0077862414_ch03_p089_150.indd 125 11/19/13 12:56 AM 126 Part Two Support Activities Exhibit 3.15 Factors to Consider When Choosing a Staffing Firm Factor Issues Agency and Its Reputation How long in business; location; references from clients available. Types of Workers Provided What occupation and KSAO levels; how many available. Planning and Lead Time Does agency help client plan staffing levels and needs; how G be provided. quickly can workers Services Provided A Recruitment What methods are used; how targeted and truthful is T recruitment process. Selection What selection techniques are used to assess KSAOs. E Training What types of training, if any, are provided before workers S are placed with client. Wages and Benefits How are wages ,determined; what benefits are provided. Orientation How does the agency prepare workers for assignment with client; does agency have an employee handbook for its D workers. Supervision How does agency E supervise its workers on site of client; does agency provide ­on-­site manager. A client to hire its temporary workers as Temp-to-Perm Does agency allow permanent employees. N Client Satisfaction How does agency attempt to gauge client satisfaction with Dcosts. services, workers, Worker Effectiveness R Punctuality and Attendance Does the agency monitor these; what is its record with previous clients.A Job Performance Is it evaluated; how are the results used. Retention How long do workers remain on an assignment voluntarily; how are workers1discharged by the agency. Cost 1 Markup What is the percentage over base wage charged to client 2 (often it is 50% to cover benefits, overhead, profit margin). 3 extra beyond the markup (e.g., temp-­ For Special Services What services cost to-­perm); what are those costs. T S employer with its own employees. Neither the IC nor its employees are intended to be employees of the organization utilizing the IC’s services, and care should be taken to ensure that the IC is not treated as an employee (see Chapter 2).29 As with staffing firms, the organization must take the initiative to identify and check out ICs for possible use in advance of when they are actually needed. It is desirable to solicit and examine references from past or current clients of the IC. In 0077862414_ch03_p089_150.indd 126 11/19/13 12:56 AM Chapter Three Planning 127 addition, as much as possible the organization should seek to determine how the IC staffs, trains, and compensates its employees. This could occur during a preliminary meeting with the IC. In these ways, the organization will have cultivated and screened ICs prior to when they are actually needed. Outsourcing Outsourcing of work functions can G be defined as the transfer of a business process to an external organization. This is a more drastic step than simply using ICs or temA porary employees. The primary difference is that when processes are outsourced, T a completely finished product from the external the organization expects to receive source. This means the organization E does not direct or control the way in which work is performed; rather, it only receives the end result of the work. Within the S norm for organizations to completely outsource HR department, it has become the payroll tasks, meaning that data from , the organization are sent to a ­third-­party vendor that assesses taxes and withholdings and takes care of either directly depositing or sending out paychecks for employees.30 Organizations outsource for D a variety of reasons. An obvious reason for outsourcing of manufacturing and E routine ­information-­processing tasks is the availability of less expensive labor in the global market. Often, specialized vendors can achieve economies of scale for A routine tasks that are performed across a variety of organizations. Organizations N also outsource functions that have highly cyclical demand so that they do not have to make major capital outlays and go through the D cost of hiring and training permanent workers to perform tasks that may not be R organizations outsource functions that require needed in the future. Sometimes specific expertise that cannot beAeconomically generated ­in-­house. Smaller organizations that require legal services, for example, often choose to hire an external law firm rather than establish their own pool of legal specialists. As we have noted, many organizations also outsource 1 routine business functions, such as having ­third-­party vendors take care of payroll or benefits administration tasks. 1 One variant of outsourcing is termed “offshoring,” which means that products or services are provided by an 2 external source outside of the country where the 31 organization’s core operations take 3 place. The outsourcing of manufacturing to ­lower-­wage countries has a long history, and this practice is likely to continue T unabated. For example, in the computer industry it is common for large companies to have many subcomponent electronic parts manufactured by ­third-­party vendors S overseas, with final assembly of products performed domestically. Many companies have outsourced routine computer programming and telephone help services to ­third-­party providers in India because of the availability of a highly skilled labor force that typically draws only a fraction of the wages paid in North America. Offshoring is no longer limited to blue- and ­pink-­collar jobs. There has been a dramatic increase in offshoring ­white-­collar technical and professional work in the ­twenty-­first century, fueled by improvements in global education, an increasingly 0077862414_ch03_p089_150.indd 127 11/19/13 12:56 AM 128 Part Two Support Activities positive climate for business in China and India, and increased demand for products and services in multinational organizations. The decision to outsource is likely to be controversial.32 Outsourcing is usually done for activities that have low added value for the organization. Normal transactional or procedural work that is easily replicated is likely to be outsourced. ­High-­value-added operations that are core to the organization’s business strategy almost certainly should not be outsourced. Although most managers are aware that it is unwise to outsource work that G is fundamental to a business’s core operations, there are still many cases where organizations discover, too late, that they A done internally. Additionally, offshoring outsourced work that should have been has been the focus of media and political T scrutiny. Extremely low wages and dangerous working conditions provided E by external partners in foreign countries have created a backlash against certain companies that have offshored manufacturing S conditions in overseas “sweatshops” has jobs. Negative press about poor working been especially prominent in the clothing industry. When outsourcing, an organi, zation needs to make certain that it is not losing too much control over its major work processes. Just because a business process has been outsourced does not mean that the organization has lost the D responsibility (and this sometimes includes legal liability) for the actions of external E partners. A N Diversity Planning D Diversity programs arise out of a recognition that the labor force i...
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work. Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work Good luck in your study and if you need any further help in your assignments, please let me know Can you please confirm if you have received the work? Once again, thanks for allowing me to help you R MESSAGE TO STUDYPOOL NO OUTLINE IS NEEDED

Report: HRM practices staf ng

HRM practices staf ng
by HAL

General metrics
12,674

1,989

86

7 min 57 sec

15 min 18 sec

characters

words

sentences

reading
time

speaking
time

Writing Issues
No issues found

Plagiarism
This text seems 100% original. Grammarly found no matching text on
the Internet or in ProQuest’s databases.

Report was generated on Saturday, Nov 24, 2018, 9:44 PM

Page 1 of 2

Report: HRM practices staf ng

Unique Words

27%

Measures vocabulary diversity by calculating the
percentage of words used only once in your
document

unique words

Rare Words

31%

Measures depth of vocabulary by identifying words
that are not among the 5,000 most common English
words.

rare words

Word Length

5.2

Measures average word length

characters per word

Sentence Length

23.1

Measures average sentence length

words per sentence

Report was generated on Saturday, Nov 24, 2018, 9:44 PM

Page 2 of 2


Running head: UNIT 2 ANALYSIS

1

Unit 2 Analysis: HRM practices in staffing
Name
Course
Date

UNIT 2 ANALYSIS

2
Unit 2 Analysis: HRM practices in staffing

Describe the differences among trend, ratio, and regression analysis methods for
forecasting staffing needs, and when each might be most appropriate
Human resources managers need to forecast what the future human resources needs of
the company will be like to ensure that the company hires more employees as necessary to
perform its activity without substantial issues. They use three different types of forecasting
methods in the assessment of such future staffing needs: trend analysis, ratio analysis, and
regression analysis (Zhu et al., 2017). Trend analysis refers to the use of past historical data to
forecast future behavior. Applied to human resources management and the forecast of staffing
needs, such trend analysis would use the historical needs of staff in the company as the primary
source of information to evaluate how many employees it will need to hire, if any at all, in the
future. Ratio analysis, on the other hand, estimates the staffing needs of each of the operational
processes of the company. For example, a modification in the process that results in a higher
efficiency would decrease the staffing needs, since those employees available are able of
producing the necessary output more efficiently. Lastly, the regression forecast analysis derives
the staffing needs from a relatively complex model that accounts for several operational
variables, such as sales, the production level, and the existing resources.
One of the most critical parameters in such forecast analysis of staffing needs is the
operational index, which evaluates the increase, or decreases, in the company's staffing needs as
a function of the expected growth, or declines, in the company's performance. For example, the
operational index trend analysis model thus focuses on the assumption that if the company had a
need of x employees in the past to be able of satisfying the demand of the sold units, it could
then use the forecasted future demand as a means to estimate the future staffing needs since the

UNIT 2 ANALYSIS

3

sales per employee are likely to remain constant. While this approach may prove valid in many
circumstances, it is necessary to consider how the excessive increase in the labor force of a
company often results in the decrease of the operational efficiency, as the labor resources are no
longer the limiting factor of the company’s performance beyond such critical staffing level.
What are the four main categories of internal and external influences on staffing decision
making?
Human resources managers have different internal and external variables that may assist
in staffing decision making (Marsden, 2017).
For example, the internal influences that affect the decision making regarding the staff
management in the company include the policy regarding the hiring of new staff, the promotion
policies, and the training policies (Marsden, 2017). These influences are internal, as they require
the human resources manager to evaluate the needs of the company and the available human
resources in the company. These variables are closely related to each other. For instance, the
human resources manager will evaluate the skills required to perform the different tasks in the
company. Once he has made a list of necessary skills, he will determine whether any of the
employees have such needs or if it is possible to train any of them in the acquisition of these
skills. In the case that the human resources manager does not manage to either find the necessary
skills nor teach any of the employees on the development of such skills, he will need to hire a
new employee that already possesses these skills. Similarly, the promotion policy depends on the
availability of employees that can be promoted either because they have extensive experience
and the human resources manager believes that they will perform a higher quality job at a higher
level, or because they have worked for the company a time long enough to earn a promotion.

UNIT 2 ANALYSIS

4

On the other hand, external influences that may affe...


Anonymous
Great! Studypool always delivers quality work.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags