UNIT 2 HRM PDF

UNIT 2 Human resource planning (HRP) is a continuous, data-driven process that helps organizations ensure they have the right people with the right skills in the right places at the right times. The process involves: Analyzing current workf...

UNIT 2 Human resource planning (HRP) is a continuous, data-driven process that helps organizations ensure they have the right people with the right skills in the right places at the right times. The process involves: Analyzing current workforce: Evaluating the current staff and key skills Forecasting future needs: Based on business goals, forecasting the future demand for labor Identifying gaps: Identifying any gaps between current and future needs Developing strategies: Developing strategies to address gaps, such as increasing staffing, providing training, or changing roles Monitoring: Monitoring the HRP strategies Contingency planning: Preparing for unexpected events that could impact the workforce Human resource planning plays a crucial role in the success of any organization. It involves strategically aligning the workforce with the organization's goals and objectives, ensuring the right people with the right skills are in the right positions at the right time. In this blog post, we will explore the importance of human resource planning and how it contributes to organizational success. 1. Anticipating and Adapting to Change: In today's rapidly evolving business environment, organizations face constant change. Human resource planning enables organizations to anticipate and adapt to these changes effectively. By forecasting future workforce needs and analyzing current skill sets, organizations can proactively address skill gaps, technological advancements, industry trends, and regulatory changes. This allows them to stay ahead of the curve and remain competitive in the market. 2. Strategic Workforce Alignment: Human resource planning ensures that the organization's workforce is aligned with its strategic goals and objectives. It helps HR professionals understand the skills and competencies needed to drive success in various roles. By aligning the workforce with the organization's strategy, HR planning enables better resource allocation, improved decision-making, and enhanced overall performance. 3. Efficient Talent Acquisition: An effective human resource planning process facilitates efficient talent acquisition. By identifying future workforce needs and skill requirements, organizations can streamline their recruitment efforts. They can attract and hire candidates with the right qualifications, experience, and cultural fit. This not only saves time and resources but also increases the likelihood of bringing in top talent that can contribute to organizational success. 4. Optimal Resource Utilization: Human resource planning enables organizations to optimize resource utilization. By analyzing the existing workforce, HR professionals can identify areas of surplus or shortage in skills and talent. This helps in making informed decisions regarding workforce restructuring, reassignments or training and development initiatives. As a result, organizations can make the most efficient use of their human capital, reducing costs and maximizing productivity. 5. Succession Planning and Leadership Development: One critical aspect of human resource planning is succession planning. By identifying key positions within the organization and developing a talent pipeline, organizations can ensure a smooth transition when leadership or critical roles become vacant. Succession planning helps in developing future leaders and retaining institutional knowledge, fostering organizational continuity and stability. 6. Employee Engagement and Retention: Human resource planning contributes to employee engagement and retention. When employees see a clear path for growth and development within the organization, they are more likely to be engaged and motivated. By identifying opportunities for training, career advancement, and skill enhancement, HR planning helps in creating a positive work environment that fosters employee loyalty and reduces turnover. 7. Cost Savings: Effective human resource planning can result in cost savings for organizations. By anticipating future workforce needs and skill requirements, organizations can avoid last-minute hiring or external recruitment, which can be expensive and time- consuming. Additionally, by identifying areas of surplus in the workforce, organizations can reassign employees internally rather than recruiting externally, reducing recruitment and onboarding costs. (A) Quantitative Considerations: (i) The Economic Considerations relating to determination of economic situation and in the light of that future sales and production estimates are made. These estimates affect manpower requirements. (ii) Expansion programmes in future also affect future manpower requirements. (iii) Availability of existing manpower resources of different kinds should be kept in mind. This is helpful in forecasting future manpower requirements. (iv) Rate of labour turnover is an important instrument with the help of which estimates with regard to future manpower requirements can be made. It provides required information statistically i.e. how many employees have left and joined the organisation during a specific period of time. Labour turnover rates are calculated by applying separation method, replacement approach and flux method. In the light of labour turnover rate future manpower requirements can be estimated, (v) Resignations and retirements, promotion, demotion, separation, transfers, dismissals and lay off etc. are other important considerations to be borne in mind before initiating the process of human resources planning. (vi) Changes in the management thinking, philosophy and plans etc. also affect manpower plans. Technological changes and diversifications etc. bring about changes in the skills and performance of workers. (B) Qualitative Considerations: (i) Work-load analysis. It is a technical aspect of manpower planning. It includes and studies auditing of human resources, study of work standards and demand analysis etc. (ii) Auditing of Employees Involves Preparation of Skill Inventory. Skill inventory covers data regarding skill and work priorities pertaining to work of different categories of workers. Big organisations prepare organisational charts and other employee information cards for this purpose. (iii) Study of work standards is necessary for the quality of workers required. It is indispensable for preparing job analysis which includes job specifications and job descriptions. Job description The job description is a brief statement that tells the general information about the job. In plain English, it is where the nature of the job is described. The job description is briefly taken from the job analysis, and it comprises of information about the workplace, duty-timing, salary, responsibilities, and other general information. Job specification The job specification derives from the job description; it is one of the most important readable information for the job-hunter as it tells about the eligibility criteria for the certain post. The job specification holds information regarding the eligibilities for the vacancy. It lets applicants know what skills, level of experience, education, and abilities are required for the role. As mentioned in our Candidate series, a good CV (curriculum vitae) is one that is tailored to a job’s specifications. Using a job’s specification in an application is like answering a recruiter’s questions before they have even asked them and sets those apart from others. Definitions of a job description and a job specification A job description is a document that states an overview of the duties, responsibilities, and functions of a specific job in an organisation. A job specification is a statement of the qualifications, personality traits, skills, etc. required by an individual to perform the job. Differences between a job description and a job specification Content A job description usually lists out the job title, location, job summary, working environment, duties to be performed on the job, etc. A job specification lists out the qualifications, experience, training, skills, emotional attributes, mental capabilities of an individual to perform the job. Measures A job description measures the tasks and responsibilities attached to the job. A job specification measures the capabilities that the job holder must possess to perform the job. Usefulness A job description offers ample information about the job which helps the management in evaluating the job performance and defining the training needs of an employee. A job specification helps the candidates who are applying for a job to analyse whether they are eligible for a particular job or not. Benefit A job description statement helps the organisation to be clear about 'Who should do what'. A job specification statement helps the management to make decisions regarding promotion, bonuses, internal transfers, and salary increases. What is recruitment? Recruitment refers to the process of identifying, attracting, interviewing, selecting, hiring and onboarding employees. In other words, it involves everything from the identification of a staffing need to filling it. Depending on the size of an organization, recruitment is the responsibility of a range of workers. Larger organizations may have entire teams of recruiters, while others only a single recruiter. In small outfits, the hiring manager may be responsible for recruiting. In addition, many organizations outsource recruiting to outside firms. Companies almost always recruit candidates for new positions via advertisements, job boards, social media sites, and others. Many companies utilize recruiting software to more effectively and efficiently source top candidates. Regardless, recruitment typically works in conjunction with, or as a part of Human Resources. What is recruiting in HRM? Human Resource Management, otherwise known as HRM or HR for short, is the function of people management within an organization. HR is responsible for facilitating the overall goals of the organization through effective administration of human capital — focusing on employees as the company's most important asset. Recruitment is the first step in building an organization's human capital. At a high level, the goals are to locate and hire the best candidates, on time, and on budget. At its core, recruiting is a rather simple concept--it encompasses identifying candidates and hiring them to fill open positions. However, effective recruiting combines a bit of art with science. It requires implementing repeatable processes that will lead to reliable results, on the one hand. On the other, it requires sophistication to think outside the box in order to find your ideal candidate. SOURCES OF RECRUITMENT Recruitment is referred to as the process which involves searching for potential candidates and influencing them in order to fill the vacant positions in the organisation. The purpose of recruitment is to find qualified candidates for the development of the organisation. Sources of recruitment refers to various modes of connecting with the job seeker for completing the task of finding potential employees. In simple words, sources of recruitment is the medium through which communication regarding the vacant positions is made aware to the prospective candidates. There are generally recognised two sources of recruitment, which are internal and external sources. Let us discuss these sources in detail in the following lines. Internal Sources Internal sources of recruitment refers to the recruitment of employees who are already a part of the existing payroll of the organisation. The vacancy for the position can be informed to the employee through internal communication. There are different types of internal hiring in the organisation and they are as follows: 1. Promotion: Promotion is referred to as the change of designation of the employee. It involves shifting of the existing employee to a higher position within the organisation and providing that employee with more responsibility and a raise in pay. Promotion helps in motivating the other employees of the organisation to work hard so that they also become eligible for promotion. 2. Transfer: Transfer refers to the shifting of an existing employee from one department to another department in an organisation. 3. Employee Referrals: It can happen that the organisation in an effort to cut down costs on hiring is looking for employee referral. The employees are well aware of the job roles in the organisation for which manpower is required. These employees will refer potential candidates by screening them based on their suitability to the position. 4. Former employees: Some organisations have the provision of hiring retired employees willing to work part time/full time for the organisation. Advantages of Internal Sources Following are the advantages of the internal sources: 1. The organisation saves money on hiring programmes which translates to higher revenue for business. 2. It makes selection and transfer of employees very easy. 3. Internal source of recruitment serves as a morale booster for the existing employees. 4. It provides a sense of loyalty towards the business which results in improved productivity. 5. As existing employees will be aware of the working pattern of the organisation, therefore it will take much less time for the re-hires to get adapted to working conditions. Disadvantages of Internal Sources Following are some of the disadvantages of the internal sources: 1. Internal recruitment causes reduction in the morale of those employees who are not selected or considered for appraisal. 2. It discourages capable persons from outside to join to work in the company. 3. It can lead to conflict if one employee is selected for promotion, while the others are not considered. External Sources External sources of recruitment seek to employ candidates that have not been recruited anytime before in the organisation. Introduction of fresh talent among the workforce leads to growth and development of the business. Following are the some of the external sources of recruitment: 1. Advertisement: Advertisements serve as a great source of information regarding any job opportunities. This type of source is used for recruitment of middle level employees, or high level employees. 2. Employment Exchanges: Employment exchanges serve as a source of recruitment for the people as it is run by the government. 3. Employment portals: In this age of technology, development in the field of hiring has taken place. Nowadays many employment portals are open where one can find information about job openings. 4. Educational Institutions: Educational institutions also serve as a good source of recruitment as many students or say resources will be available at once under one roof. 5. Recommendation: This can also be a good source of recruitment as an existing employee will be able to provide better recommendation for other candidates. Advantages of External Source Following are some of the advantages of external sources. 1. It helps in availability of proper skilled labour. 2. There will be availability of new ideas from employees hired using external sources. 3. The employees join as knowledgeable persons which reduces the training time required for new hires. Disadvantages of External Source 1. It can lead to unhappy employees as the existing employees may feel that they deserved an opportunity for growth. 2. It can lead to lack of cooperation between the new hires and the existing employees. 3. It is a lengthy process where the employee needs to appear for many rounds. SELECTION Human resource selection is the process of choosing qualified individuals who are available to fill positions in an organization. In the ideal personnel situation, selection involves choosing the best applicant to fill a position. Selection is the process of choosing people by obtaining and assessing information about the applicants with a view to matching these with the job requirements. It involves a careful screening and testing of candidates who have put in their applications for any job in the enterprise. It is the process of choosing the most suitable persons out of all the applicants. The purpose of selection is to pick up the right person for every job. According to Dale Yoder, “Selection is the process in which candidates for employment are divided into two classes-those who are to be offered employment and those who are not”. According to Thomas Stone, “Selection is the process of differentiating between applicants in order to identify (and hire) those with a greater likelihood of success in a job”. In the words of Michael Jucius, “The selection procedure is the system of functions and devices adopted in a given company for the purpose of ascertaining whether or not candidates possess the qualifications called for by a specific job or for progression through a series of jobs.” According to Keith Davis, “Selection is the process by which an organisation chooses from a list of screened applicants, the person or persons who best meet the selection criteria for the position available.” Thus, the selection process is a tool in the hands of management to differentiate between the qualified and unqualified applicants by applying various techniques such as interviews, tests etc. The cost incurred in recruiting and selecting any new employee is expensive. The cost of selecting people who are inadequate performers or who leave the organisation before contributing to profits proves a major cost of doing business. Selection Process Every organisation creates a selection process because they have their own requirements. Although, the main steps remain the same. So, let’s understand in brief how the selection process works. Preliminary Interview This is a very general and basic interview conducted so as to eliminate the candidates who are completely unfit to work in the organisation. This leaves the organisation with a pool of potentially fit employees to fill their vacancies.  Receiving Applications Potential employees apply for a job by sending applications to the organisation. The application gives the interviewers information about the candidates like their bio-data, work experience, hobbies and interests. Screening Applications Once the applications are received, they are screened by a special screening committee who choose candidates from the applications to call for an interview. Applicants may be selected on special criteria like qualifications, work experience etc. Employment Tests Before an organisation decides a suitable job for any individual, they have to gauge their talents and skills. This is done through various employment tests like intelligence tests, aptitude tests, proficiency tests, personality tests etc. Employment Interview The next step in the selection process is the employee interview. Employment interviews are done to identify a candidate’s skill set and ability to work in an organisation in detail. Purpose of an employment interview is to find out the suitability of the candidate and to give him an idea about the work profile and what is expected of the potential employee. An employment interview is critical for the selection of the right people for the right jobs. Checking References The person who gives the reference of a potential employee is also a very important source of information. The referee can provide info about the person’s capabilities, experience in the previous companies and leadership and managerial  skills. The information provided by the referee is meant to kept confidential with the HR department. Medical Examination The medical exam is also a very important step in the selection process. Medical exams help the employers know if any of the potential candidates are physically and mentally fit to perform their duties in their jobs. A good system of medical checkups ensures that the employee standards of health are higher and there are fewer cases of absenteeism, accidents and employee turnover. Final Selection and Appointment Letter This is the final step in the selection process. After the candidate has successfully passed all written tests, interviews and medical examination, the employee is sent or emailed an appointment letter, confirming his selection to the job. The appointment letter contains all the details of the job like working hours, salary, leave allowance etc. Often, employees are hired on a conditional basis where they are hired permanently after the employees are satisfied with their performance. Importance of the Selection Process 1. Proper selection and placement of employees lead to growth and development of the company. The company can similarly, only be as good as the capabilities of its employees. 2. The hiring of talented and skilled employees results in the swift achievement of company goals. 3. Industrial accidents will drastically reduce in numbers when the right technical staff is employed for the right jobs. 4. When people get jobs they are good at, it creates a sense of satisfaction with them and thus their work efficiency and quality improves. 5. People who are satisfied with their jobs often tend to have high morale and motivation to perform better.  In human resource management (HRM), testing and interviews are part of the selection process to identify the best candidates for a job. The goal is to ensure that the right person is hired to contribute to the company's success. Here are some things to consider when using tests and interviews in HRM: Types of tests There are many types of tests that can be used, including cognitive ability tests, personality tests, job knowledge tests, physical ability tests, and background checks. Interview process The interview process involves recruiting candidates, setting criteria, developing interview questions, and scheduling interviews. It's important to develop a rapport, be honest, and manage the interview process. Test reliability and validity A test needs to be both reliable and valid to be useful. For example, a scale that consistently reports the same weight every day is reliable, but if it's off by 5 lbs, it's not valid. Factors to consider When selecting candidates, it's important to consider their qualifications, experiences, skills, and overall attitude. There are several types of tests and interviews that are used to evaluate a candidate for a job, including: Personality tests These tests help recruiters understand how a candidate might get along with others and if they're a good cultural fit for the organization. Aptitude tests These tests assess a candidate's knowledge of a subject relevant to the job they're applying for. They're often standardized and compare a candidate's performance to others in the same age group and experience level.  Situational interviews These interviews present candidates with hypothetical work situations and ask how they would respond. Cognitive tests These tests evaluate a candidate's thought processes and reactions when reading information, making decisions, and exploring options. Physical ability tests These tests measure a candidate's physical aptitudes, such as strength, endurance, or cardiovascular capacity. They're only used for jobs that require specific physical skills. Written tests These tests evaluate a candidate's ability to understand and draw conclusions from written text. Behavioral interviews These interviews use past performance as a predictor of future behavior. They're used to test a candidate's analytical ability and communication skills. Placement and induction are two processes in human resource management that help new employees adjust to their roles and organizations: Placement Matches qualified candidates to job roles that suit their skills and abilities. Placement is part of the recruitment process and aims to improve employee morale and reduce turnover. Induction Introduces new employees to their job role, department, and company culture. Induction aims to build confidence, reduce confusion, and help new employees feel comfortable in their roles. some more details about placement and induction: Placement Placement should be done with minimal disruption to the employee and organization. Induction  Induction can include orientation sessions and training, and can also include welcoming employees, orienting them with supervisors, and providing company information. Socialization Socialization is the ongoing process of employees learning workplace values and norms beyond initial induction. In human resources (HR), turnover is the number of employees who leave a company over a specific time period. It can be measured as a percentage or by the total number of employees who left. Turnover can be caused by a variety of factors, including: Job dissatisfaction Employees may be unhappy with their job duties, work environment, or the company's direction. Work-life balance Employees may feel overworked or that their work-life balance is not being respected. Poor company culture A toxic or negative work environment can lead to employee dissatisfaction. Personal reasons Employees may leave for personal reasons such as marital problems, divorce, or relocating to a new city. Turnover can be costly for organizations, as it can lead to the need to hire and train new employees. Some examples of turnover costs include: Recruitment of replacements, Administrative hiring costs, Lost productivity, Costs of training, and Public relations costs. Retirement is when an employee chooses to stop working for a company or completes their desired work period. It is a significant milestone in an employee's life, and HR professionals can play a key role in helping employees transition smoothly. Here are some things to consider when it comes to retirement in HRM: Voluntary Retirement Scheme (VRS)  A company may offer a VRS to reduce its workforce by asking employees to retire early. Employees who have worked for the company for at least 10 years and are over 40 years old may be eligible for VRS. Offboarding HR professionals can help ensure a smooth transition for retiring employees by updating documentation, transferring responsibilities, and organizing farewell events. Retirement planning Retirement planning can help employees survive after they stop working. Retirement letter A retirement letter includes formal information about the employee and their plans. Employee retirement plans In human resources (HR), a layoff is when an organization terminates or suspends the employment of some or all of its employees, either temporarily or permanently. Layoffs are often involuntary and are not the result of employee error. Some common reasons for layoffs include: Lack of work or money Reorganization Cost-cutting measures Automation Technological advancements Mergers and acquisitions Financial trouble Bankruptcy Inability to obtain raw materials or components  Layoffs can cause stress for both the laid-off employees and those who remain, and can also negatively impact the customer experience. In the long run, layoffs can cost the company more than they save. In human resources (HR), retrenchment is the process of terminating employees to reduce a company's workforce for economic reasons. It's usually a strategic choice to cut costs, downsize operations, or adjust to market changes. Here are some things to know about retrenchment: Reasons Retrenchment is typically due to economic reasons, such as company restructuring, mergers, or cost-cutting measures. It's not usually a reflection of an individual employee's performance. Compensation Retrenched employees are usually paid compensation, which can include severance payments, outstanding wages, and other entitlements. Last resort Retrenchment should be considered a last resort. When deciding if an employer's retrenchment decision was fair, a court will consider whether there was a real reason and if it was unavoidable. Negative effects Retrenchment can have negative effects on morale and productivity. It can also damage a company's reputation and make it harder to attract new employees. In human resource management (HRM), discharge is when an employer ends an employee's employment, also known as a firing. It can happen for a variety of reasons, including: Poor performance: The employee's performance may be poor. Policy violation: The employee may have violated company policies. Misconduct: The employee may have engaged in misconduct. Mutual understanding: The employee and employer may agree to the separation as part of the organization's procedures. At-will clause: The employment agreement may include an at-will clause, which gives either party the power to end the employment relationship.  Poor fit: Management may decide that the employee is a poor fit for the organization. Discharge is different from dismissal, which is when an employee is temporarily removed from the organization as punishment.