HR Job Analysis & Strategic Planning
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The document discusses concepts related to job analysis, strategic planning, and human resource planning. It begins by outlining learning objectives covering topics like the importance of job analysis and disaster planning. It then provides details on conducting job analysis, including determining job requirements and developing job descriptions. The document also discusses using job analysis for legal compliance and strategic human resource planning. Finally, it covers strategic planning processes and challenges like managing worker surpluses or shortages through forecasting.
![4-1
Human Resource Management
13th
Edition
Chapter 4
Job Analysis,
Strategic Planning, &
Human Resource Planning
Copyright © [2014] Pearson Education](https://image.slidesharecdn.com/mondyhrm13inppt04-150216192940-conversion-gate01/85/mondy-hrm13-inppt04ppt-1-320.jpg)
![Learning Objectives
• Describe the importance of disaster planning, explain
why job analysis is a basic human resource tool, and
give the reasons for conducting job analysis.
• Describe the types of information required for job
analysis and describe the various job analysis methods.
• Identify who conducts job analysis and describe the
components of a job description.
• Explain Standard Occupational Classification (SOC),
O*NET, job analysis for team members, and describe
how job analysis helps satisfy various legal
requirements.
4-2Copyright © [2014] Pearson Education](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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HR Job Analysis & Strategic Planning
- 1. 4-1 Human Resource Management 13th Edition Chapter 4 Job Analysis, Strategic Planning, & Human Resource Planning Copyright © [2014] Pearson Education
- 2. Learning Objectives • Describe the importance of disaster planning, explain why job analysis is a basic human resource tool, and give the reasons for conducting job analysis. • Describe the types of information required for job analysis and describe the various job analysis methods. • Identify who conducts job analysis and describe the components of a job description. • Explain Standard Occupational Classification (SOC), O*NET, job analysis for team members, and describe how job analysis helps satisfy various legal requirements. 4-2Copyright © [2014] Pearson Education
- 3. Learning Objectives (Cont.) • Describe the need for the human resource manager to be a strategic partner, explain the strategic planning process, and describe the human resource planning process. • Describe forecasting human resource requirements and availability and how databases can assist in matching internal employees to positions. • Identify what a firm can do when either a shortage or a surplus of workers exists and explain strategic succession planning in today’s environment. • Describe manager and employee self-service and explain some job design concepts. • Describe the importance of global talent management. 4-3Copyright © [2014] Pearson Education
- 4. 4-4 HRM in Action: Disaster Planning •Should focus on possible catastrophes and also smaller events such as a building fire, water leak, or computer crash •Despite the type of disaster, the result is usually the same •Customers want assurance that the business can continue operation after a disaster Copyright © [2014] Pearson Education
- 5. 4-5 Job Analysis Systematic process of determining: – Skills – Duties – Knowledge required for performing jobs in an organization Copyright © [2014] Pearson Education
- 6. 4-6 Job • Consists of group of tasks that must be performed for organization to achieve its goals • May require the services of one person, such as the president • May require the services of 75 people, such as machine operators in a large firm Copyright © [2014] Pearson Education
- 7. 4-7 Position • Collection of tasks and responsibilities performed by one person • There is a position for every individual in an organization Copyright © [2014] Pearson Education
- 8. 4-8 Job Analysis Should Answer • What physical and mental tasks does the worker accomplish? • When is the job to be completed? • Where is the job to be accomplished? • How does the worker do the job? • Why is the job done? • What qualifications are needed to perform the job? Copyright © [2014] Pearson Education
- 9. 4-9 When Job Analysis Is Performed • When the organization is founded and a job analysis program is initiated • When new jobs are created • When existing jobs are changed significantly Copyright © [2014] Pearson Education
- 10. 4-10 Job Analysis: A Basic Human Resource Management Tool Tasks Responsibilities Duties Job Analysis Job Descriptions Job Specifications Knowledge Skills Abilities Staffing Training and Development Performance Appraisal Compensation Safety and Health Employee and Labor Relations Legal Considerations Copyright © [2014] Pearson Education
- 11. 4-11 Job Description/Job Specification • Job Description: Provides information regarding the essential tasks, duties, and responsibilities of the job • Job Specification: minimum acceptable qualifications a person needs to perform a particular job Copyright © [2014] Pearson Education
- 12. 4-12 Job Analysis Methods • Questionnaires • Observation • Interviews • Employee recording • Combination of methods Copyright © [2014] Pearson Education
- 13. Questionnaires • Structured questionnaires given to employees • Typically quick and economical • Potential problems: –Employees might lack verbal skills –Employees might to exaggerate the significance of their tasks 4-13Copyright © [2014] Pearson Education
- 14. 4-14 Observation • Analyst watches worker perform job tasks and records observations • Used primarily to gather information emphasizing manual skills • Often insufficient when used alone • Difficult when mental skills are dominant in a job Copyright © [2014] Pearson Education
- 15. 4-15 Interviews • Interview both employee and supervisor • Interview employee first, helping him or her describe duties performed • After interviews, analyst normally contacts supervisor for additional information Copyright © [2014] Pearson Education
- 16. 4-16 Employee Recording • Employees describe daily work activities in diary or log • Valuable in understanding highly specialized jobs • Problem: Employees might exaggerate job importance Copyright © [2014] Pearson Education
- 17. 4-17 Combination of Methods • Analysts usually use more than one method • Clerical and administrative jobs: Questionnaires supported by interviews and limited observation • Production jobs: Interviews supplemented by extensive work observation Copyright © [2014] Pearson Education
- 18. 4-18 Conducting Job Analysis People who participate in job analysis should include, at a minimum: •Employee •Employee’s immediate supervisor Copyright © [2014] Pearson Education
- 19. 4-19 Job Description • Document that states: –Tasks –Duties –Responsibilities • Needs to be relevant and accurate Copyright © [2014] Pearson Education
- 20. 4-20 Items Frequently Included in a Job Description • Major duties performed • Percentage of time devoted to each duty • Performance standards to be achieved • Working conditions and possible hazards • Number of employees performing job • Who the employees report to • The machines and equipment used for job Copyright © [2014] Pearson Education
- 21. Proper Language in the Job Description • Keep each statement crisp and clear: • Structure sentences in classic verb/object and explanatory phrases • Always use present tense of verbs • Use explanatory phrases telling why, how, where • Omit any unnecessary articles • Use unbiased terminology • Avoid using words which are subject to differing interpretations 4-21Copyright © [2014] Pearson Education
- 22. 4-22 Content of a Job Description • Job Identification – Job title, department, reporting relationship, and job number or code • Job Analysis Date – Aids in identifying job changes that make description obsolete • Job Summary – Concise overview of job • Duties Performed – Major duties of job Copyright © [2014] Pearson Education
- 23. 4-23 Job Specification • Minimum qualifications worker should possess • Should reflect minimum, not ideal, qualifications • Often a major section of a job description Copyright © [2014] Pearson Education
- 24. Problems If Job Specifications Are Inflated • Could systematically eliminate minorities or women from consideration • Compensation costs could increase • Vacancies could be more difficult to fill 4-24Copyright © [2014] Pearson Education
- 25. Standard Occupational Classification (SOC) • Job descriptions for all U.S. workers in more than 800 occupations • 2010 SOC replaces the 2000 system 4-25Copyright © [2014] Pearson Education
- 26. Representative SOC Descriptions for HR Professionals • 13-1071 Human Resources Specialists • Perform activities in the human resource area. Includes employment specialists who screen, recruit, interview, and place workers. Excludes "Compensation, Benefits, and Job Analysis Specialists" (13-1141) and "Training and Development Specialists" (13-1151). • Illustrative examples: Staffing Coordinator, Personnel Recruiter, Human Resources Generalist 4-26Copyright © [2014] Pearson Education
- 27. Representative SOC Descriptions for HR Professionals (Cont.) • 11-3111 Compensation and Benefits Managers • Plan, direct, or coordinate compensation and benefits activities of an organization. Job analysis and position description managers are included in "Human Resource Managers" (11- 3121). • Illustrative examples: Wage and Salary Administrator, Employee Benefits Director, Compensation Director 4-27Copyright © [2014] Pearson Education
- 28. 4-28 O*NET, the Occupational Information Network • Comprehensive government-developed database of: –Worker attributes –Job characteristics • Primary source of occupational information Copyright © [2014] Pearson Education
- 29. 4-29 Job Analysis for Team Members • With team design, there are no narrow jobs • Work that departments do is often bundled into teams • Last duty shown on standard job description, “And any other duty that may be assigned,” is increasingly becoming THE job description Copyright © [2014] Pearson Education
- 30. 4-30 Job Analysis and the Law • Fair Labor Standards Act: Employees categorized as exempt or nonexempt • Equal Pay Act : Similar pay must be provided if jobs, as shown in job descriptions, are not substantially different • Civil Rights Act: Basis for adequate defenses against unfair discrimination Copyright © [2014] Pearson Education
- 31. 4-31 Job Analysis and the Law (Cont.) • Occupational Safety and Health Act (OSHA): Employer must specify job elements that endanger health or are considered unsatisfactory or distasteful by most people • Americans with Disabilities Act (ADA)/ADA Amendments Act: Employer must make reasonable accommodations for disabled workers Copyright © [2014] Pearson Education
- 32. 4-32 HR as a Strategic Partner • Sharp deviation from what has traditionally been an administrative role for HR • HR professionals are increasingly expected to act as a strategic partner with upper management Copyright © [2014] Pearson Education
- 33. 4-33 Possible Strategic Tasks for HR • Making workforce strategies fundamental to company strategies and goals • Increasing HR’s role in strategic planning; mergers; and acquisitions • Developing awareness and/or an understanding of the business • Help line managers achieve their goals Copyright © [2014] Pearson Education
- 34. 4-34 Strategic Planning • Process by which top management determines overall organizational purposes and objectives and how they are to be achieved • Strategic planning at all levels can be divided into four steps Copyright © [2014] Pearson Education
- 35. 4-35 Strategic Planning and Implementation Process MISSION DETERMINATION Decide what is to be accomplished (purpose) Determine principles that will guide the effort ENVIRONMENTAL ASSESSMENT Determining external conditions, threats, and opportunities Determining competencies, strengths, and weaknesses within the organization. External: Internal: OBJECTIVE SETTING Specifying corporate-level objectives that are: • Challenging but attainable • Measurable • Time-specific • Documented (written) STRATEGY SETTING Specifying and documenting corporate-level strategies and planning STRATEGY IMPLEMENTATION Copyright © [2014] Pearson Education
- 36. 4-36 Strategy Implementation • Leadership • Organizational Structure • Information and Control Systems • Technology • Human Resources Copyright © [2014] Pearson Education
- 37. 4-37 Human Resource Planning (Workforce Planning) Systematic process of: –Matching the internal and external supply of candidates with job openings anticipated in the organization over a specific period of time Copyright © [2014] Pearson Education
- 38. 4-38 Human Resource Planning Process External Environment Internal Environment Strategic Planning Human Resource Planning Forecasting Human Resource Requirements Comparing Requirements and Availability Forecasting Human Resource Availability Surplus of Workers Demand = Supply No Action Shortage of Workers Recruitment Selection Restricted Hiring, Reduced Hours, Early Retirement, Layoffs, Downsizing Copyright © [2014] Pearson Education
- 39. 4-39 Requirements Forecast • Determining: –Number –Skills –Location of employees that organization will need at future dates in order to meet goals Copyright © [2014] Pearson Education
- 40. 4-40 Techniques for Forecasting Human Resource Requirements • Zero-base forecast • Bottom-up forecast • Relationship between volume of sales and number of workers required Copyright © [2014] Pearson Education
- 41. 4-41 Zero-Base Forecast • Uses current level of staffing as starting point for determining future staffing needs • Essentially the same procedure as zero-base budgeting • Key is a thorough analysis of human resource needs Copyright © [2014] Pearson Education
- 42. 4-42 Bottom-Up Forecast • Each level of organization, starting with lowest, forecasts its requirements to provide aggregate of employment needs Copyright © [2014] Pearson Education
- 43. 4-43 The Relationship of Sales Volume to Number of Employees Number of Employees 500 400 300 200 100 0 10 20 30 40 50 60 Sales (thousands) Copyright © [2014] Pearson Education
- 44. 4-44 Availability Forecast • Determination of: – Whether firm will be able to secure employees with necessary skills – Sources from which to obtain employees Copyright © [2014] Pearson Education
- 45. 4-45 Human Resource Databases • Contain employee information • Permit management to make HR decisions • Many workers needed for future positions likely already work for the firm Copyright © [2014] Pearson Education
- 46. Shortage of Workers Forecasted • Innovative recruiting • Compensation incentives • Training programs • Modified selection standards 4-46Copyright © [2014] Pearson Education
- 47. 4-47 Surplus of Employees When a comparison of requirements and availability indicates a worker surplus will result, most companies look to alternatives to layoffs, but downsizing may ultimately be required Copyright © [2014] Pearson Education
- 48. Trends & Innovations: Alternatives to Layoffs • Although layoffs can be a necessary cost- cutting measure, alternatives include: – Restricted hiring policy – Early retirement – Encouraging workers to use vacation time – Swapping employees – Moving employees from full-time to 30 hours a week without reducing health benefits 4-48Copyright © [2014] Pearson Education
- 49. 4-49 Trends and Innovations: Alternatives to Layoffs (Cont.) • Job-sharing arrangements • Reduce the work week • Offer an unpaid holiday option • Sabbaticals for selected employees Copyright © [2014] Pearson Education
- 50. Examples of Firms with No Layoff Policy • Cleveland’s Lincoln Electric—No lay off for economic reasons • Southeastern Freight Lines—Goal of keeping all employees working and maintaining all benefits and wage levels 4-50Copyright © [2014] Pearson Education
- 51. 4-51 Succession Planning • Process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant • Goal is to help ensure a smooth transition and operational efficiency Copyright © [2014] Pearson Education
- 52. Small Business Succession Planning • Just as, or more, important for small businesses • Company could face economic and tax disasters • Just 10% survive to the third generation • Disaster stories are readily available 4-52Copyright © [2014] Pearson Education
- 53. 4-53 Manager Self-Service • Use of software and corporate network to automate paper-based processes • Reduce the administrative workload for HR • Give managers more control over HR processes Copyright © [2014] Pearson Education
- 54. 4-54 Employee Self-Service (ESS) • Processes that automate formerly labor- intensive transactions for employees and HR professionals • ESS applications can free up valuable HR staff time, reducing administrative time and costs Copyright © [2014] Pearson Education
- 55. 4-55 Job Design Process of determining: –Specific tasks to be performed –Methods used in performing these tasks –How a job relates to other work in organization Copyright © [2014] Pearson Education
- 56. 4-56 Job Enrichment • Basic changes in content and level of responsibility of job to provide greater challenge to worker • Provides a vertical expansion of responsibilities Copyright © [2014] Pearson Education
- 57. 4-57 Job Enlargement • Changes in scope of job to provide greater variety to worker • All of the tasks at the same level of responsibility • Sometimes called cross- training Copyright © [2014] Pearson Education
- 58. 4-58 Job Rotation • Moving employees from one job to another to broaden their experience • Often required for higher-level tasks • Can be effective in protecting a company against the loss of key employees Copyright © [2014] Pearson Education
- 59. 4-59 Reengineering • Fundamental rethinking • Radical redesign of business processes • Aims to achieve dramatic improvements in critical measures of performance such as: – Cost – Quality – Service – Speed Copyright © [2014] Pearson Education
- 60. 4-60 A Global Perspective: Global Talent Management • Strategic endeavor to optimize use of human capital • Enables an organization to drive short- and long-term results • Builds culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals Copyright © [2014] Pearson Education
- 61. 4-61
Editor's Notes
- A firm’s disaster plans should focus on possible catastrophes that range from natural calamities such as hurricanes, earthquakes, and floods to smaller events such as a building fire, water leak, or computer crash. Even the recent financial crash would be a factor to consider in disaster planning. Certainly the 2010 oil spill disaster on the Gulf coast caused many companies along the coast to review and update their disaster plan. In fact, the environmental disaster in the Gulf of Mexico has brought into focus the danger of a disaster plan built on wishful thinking. Despite the type of disaster, the result is usually the same. Business has been interrupted for an undetermined amount of time, there has been a loss of contact with consumers and clients, and the firm’s financial situation has been harmed. When a disaster occurs, there are always significant human resource issues to address. Management should not be surprised if employees choose to take care of their families first as opposed to concerning themselves with the company survival.
- Job analysis identifies the tasks needed to perform the job through a systematic process of determining the required skills, duties, and knowledge. With job analysis, the tasks needed to perform the job are identified. Traditionally, it is an essential and pervasive human resource technique and the starting point for other human resource activities. In today’s rapidly changing work environment, the need for a sound job analysis system is critical. New jobs are being created, and old jobs are being redesigned or eliminated. A job analysis that was conducted only a few years ago may now be obsolete and must be redone. Some have even suggested that changes are occurring too fast to maintain an effective job analysis system.
- A job is a group of tasks that must be performed for an organization to achieve its goals. It may require the services of one person or many.
- A position is the collection of tasks and responsibilities performed by one person. In a work group consisting of a supervisor, two senior analysts, and four analysts, there are three jobs and seven positions.
- Job analysis provides a summary of a job’s duties and responsibilities, its relationship to other jobs, the knowledge and skills required, and working conditions under which it is performed. Job analysis is conducted after the job design, worker training, and performance of the job is underway. Facts about the job as it currently exists are gathered by asking questions similar to those posed in this slide. Then, the answers are analyzed and recorded.
- Job analysis is performed at three specific times: When the organization is founded and a job analysis program is initiated for the first time When new jobs are created, and When jobs are changed significantly as a result of new technologies, methods, procedures, or systems. This includes changes due to increased emphasis on teamwork, empowerment of employees, or managerial interventions, such as quality management systems.
- In today’s rapidly changing work environment, job analysis is critical to meet company objectives. As new jobs are created, old jobs may need to be redesigned or eliminated.
- Job analyses provide data that forms the basis of the job description and job specification, both of which impact virtually every aspect of human resource management, as we see in this slide. The job description is a document that provides information regarding the essential tasks, duties, and responsibilities of the job. The job specification is incorporated into the job description document and spells out the minimum acceptable qualifications a person needs to perform a particular job. In practice, both the job description and job specification are combined into one document with the job specification presented after the job description.
- Job analysis is conducted in different ways according to an organization’s needs and resources. Selecting a specific method should be based on how the information will be used, such as for job evaluation, pay increases, development, etc. The most common methods of job analysis are discussed in the following slides.
- Questionnaires are typically quick and economical to use. The job analyst administers a structured questionnaire to employees, who identify the tasks they perform. But some employees lack the verbal or written skills to provide the desired information and others exaggerate their tasks by suggesting more responsibility than actually exists.
- Job analysts use the observation method to watch the worker perform job tasks and records their observations. This method is used primarily for jobs emphasizing manual skills, although it can help identify interrelationships between physical and mental tasks. Observation alone is not sufficient for conducting job analyses where mental skills are dominant.
- Interviewing both the employee and supervisor provides a good understanding of the job. The analyst first interviews the employee to describe the duties performed. Then, she contacts the supervisor for additional information, to check the accuracy of the information obtained from the employee, and to clarify certain points.
- Sometimes, job analysis information is gathered by having employees describe their daily work activities in a diary or log. With this method, the problem of employees exaggerating job importance may have to be overcome. Even so, valuable understanding of highly specialized jobs, such as, recreational therapist, may be obtained in this way.
- An analyst usually combines methods, such as in the examples shown here, to produce accurate job descriptions and specifications.
- At the minimum, the employee and the employee’s immediate supervisor should participate in job analysis. Large organizations may have one or more job analysts, small organizations may use line supervisors, and other organizations my hire consultants. Regardless of approach, the analyst should—before conducting job analysis—learn as much as possible about the job by reviewing organizational charts and talking with individuals acquainted with the jobs to be studied.
- Information obtained through job analysis is crucial to developing job descriptions. This document should provide accurate, explicit and concise statements of what employees are expected to do, how they do it, and the conditions under which the duties are performed.
- The job description details major duties, the percentage of time devoted to each duty, performance standards, working conditions and potential hazards, the number of employees performing the job and to whom they report, and the equipment used on the job.
- Keep each statement in the job description crisp and clear: Structure your sentences in classic verb/object and explanatory phrases. If necessary, use explanatory phrases telling why, how, where, or how often to add meaning and clarity. Omit any unnecessary articles such as "a," "an," "the," or other words for an easy-to-understand description. Use unbiased terminology. For example, use the he/she approach or construct sentences in such a way that gender pronouns are not required. Avoid using words which are subject to differing interpretations. Try not to use words such as "frequently," "some," "complex," "occasional," and "several."
- The job description contains several components as seen here: The job identification section includes the job title, department, reporting relationship, and job number or code. Job titles can be misleading, especially between one company and another. The job analysis date is placed on the job description to identify job changes that would make the description obsolete. Some firms have place an expiration date on the document to ensure periodic review of job content and minimize the number of obsolete job descriptions. The job summary is a short paragraph that states job content. The body of the job description delineates the major duties to be performed. Essential functions may be shown in a separate section to aid in complying with the Americans with Disabilities Act.
- The job specification documents the minimum acceptable qualifications that a person should possess to perform a particular job.
- Job specifications should always reflect the minimum, not the ideal qualifications for a particular job. Otherwise, inflating the specifications causes the problem seen in this slide: Minorities or women might be disqualified and the organization could be charged with discrimination. Ideal candidates will have to be compensated more than candidates with minimum skills. Job vacancies will be harder to fill because ideal candidates are more difficult to find than minimally qualified candidates.
- The federal government recently released the 2010 Standard Occupational Classification (SOC) system, which updated job descriptions for all U.S. workers in more than 800 occupations. It replaces the 2002 system. This update permits professional organizations and labor groups to seek recognition or a higher profile for their members’ occupations by gaining a separate listing or reclassification.
- O*NET, the Occupational Information Network, is a comprehensive, government-developed database of worker attributes and job characteristics. It’s the nation’s primary source of occupational information, which provides a common language for defining and describing occupations, as well as capturing rapidly changing job requirements. It’s the foundation for facilitating career counseling, education, employment, and training activities.
- Historically, companies have established permanent jobs and filled these jobs with people who best fit the job description. The jobs then continued in effect for years to come. In many firms today, people are being hired as team members. Whenever someone asks a team member, “What is your job description?” the reply might well be “Whatever.” What this means is that if a project has to be completed, individuals do what has to be done to complete the task. With team design, there are no narrow job descriptions. Today, the work that departments do is often bundled into teams. The members of these teams have a far greater depth and breadth of skills than would have been required in traditional jobs. Formerly, there might have been 100 separate job classifications in a facility. With team design, there may be just 10 or fewer broadly defined roles of teams. Another dimension is added to job analysis when teams are considered: Job analysis may determine how important it is for employees to be team players and work well in group situations.
- Fair Labor Standards Act: Employees are categorized as exempt or nonexempt, and job analysis is basic to this determination. Nonexempt workers must be paid time and a half when they work more than 40 hours per week. Overtime pay is not required for exempt employees. Equal Pay Act: If jobs are not substantially different, employees performing them must receive similar pay. When pay differences exist, job descriptions can be used to show whether jobs are substantially equal in terms of skill, effort, responsibility, and working conditions. Civil Rights Act: Human resource management has focused on job analysis because selection methods need to be clearly job related. Job descriptions may provide the basis for an equitable compensation system and an adequate defense against unfair discrimination charges in initial selection, promotion, and all other areas of human resource administration. When job analysis is not performed, defending certain qualifications established for the job is usually difficult. In the Griggs v Duke Power Company case, the company stated that supervisors must have a high school diploma. However, the company could show no business necessity for this standard.
- Occupational Safety and Health Act: Job descriptions are required to specify elements of the job that endanger health or are considered unsatisfactory or distasteful by the majority of the population. Showing the job description to the employee in advance is a good defense. Americans with Disabilities Act (ADA)/ADA Amendments Act: Employers are required to make reasonable accommodations for workers with disabilities who are able to perform the essential functions of a job and job analysis is needed to obtain this information. Key elements used to determine essential functions include physical skills, mental skills, job duties, and behavioral skills. The EEOC defines reasonable accommodation as any modification or adjustment to a job, an employment practice, or the work environment that makes it possible for an individual with a disability to enjoy an equal employment opportunity. The ADA Amendments Act expands the definition of “disability” and many more applicants and employees are eligible for reasonable accommodations. Certainly stating that every task in a job is essential sends a red flag to the EEOC.
- Today, HR professions are increasingly taking on the role of being a strategic partner with upper management. In this role HR professionals are able to focus on matters that are truly important to the company as a whole. In moving from a transactional to a strategic model, HR professionals work toward solving strategic problems in the organization. No longer is an administrative and compliance role appropriate as their primary jobs. HR executives today need to think like the CEO in order to become a strategic partner in achieving organizational plans and results. In doing so, they understand the production side of the business and help to determine the strategic capabilities of the company’s workforce, both today and in the future. HR professionals need to be agile in their thinking as they adapt to the ebbs and flows of business. Therefore, HR executives are ensuring that human resources support the firm’s mission. HR professionals have changed the way they work. Working as a strategic business partner requires a much deeper and broader understanding of business issues. What exactly strategically should HR be doing? Possible strategic tasks for HR include: making workforce strategies fundamental to company strategies and goals; increasing HR’s role in strategic planning; mergers; and acquisitions; developing awareness and/or an understanding of the business; and helping line managers achieve their goals.
- HR professionals have changed the way they work. Working as a strategic business partner requires a much deeper and broader understanding of business issues. What should HR be doing strategically? Possible strategic tasks for HR include: making workforce strategies fundamental to company strategies and goals; increasing HR’s role in strategic planning; mergers; and acquisitions; developing awareness and/or an understanding of the business; and helping line managers achieve their goals.
- Strategic planning is the process by which top management determines overall organizational objectives and how they are achieved. HR executives are highly involved in this process as the company may need to diversify or downsize to gain competitive advantage in the marketplace.
- Strategic planning on all levels of the organization can be divided into four steps: Determining the organizational mission Assessing the organization and its environment Setting specific objectives or direction, and Determining strategies to accomplish these objectives. The strategic planning process described here derives from the SWOT (strengths, weaknesses, opportunities, and threats) framework that affects organizational performance.
- Strategy implementation follows the strategic planning process. It requires changes in the organization’s behavior, which can be brought about by changing one or more organizational dimensions which include: management’s leadership ability, organizational structure, information and control systems, production technology, and human resources.
- Human resource planning (workforce planning) is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specific period of time. Workforce planning has evolved from a knee-jerk planning undertaking to a fundamental strategic function. It includes business plan, human resource data, and statistical interactions. It is also incorporated into the business and financial planning process, so it provides a foundation for a plan that is aligned with the business strategy. As organizations exited the recent recession, there was evidence that they were becoming more focused on workforce planning. A recent poll found that 53 percent of the respondents conducted, or planned to conduct, a strategic workforce planning assessment during 2010–11 to identify skills gaps.
- This slide illustrates the human resource planning process. Human resource planning has two components: requirements and availability, which determine if the firm needs to hire or reduce the number of its employees and how.
- A requirements forecast determines the number, skill, and location of employees the organization will need at future dates to meet its goals. Before human resource requirements can be projected, demand for the firm’s goods or services must be forecasted. This prediction is then converted into people requirements for the activities necessary to meet this demand. If a firm manufactures personal computers, activities can be stated in terms of the number of units to be produced, number of sales calls to be made, number of vouchers to be processed, etc.
- Several of the better-known techniques for forecasting human resource requirements are seen here. Some are qualitative and others are quantitative.
- Essentially, the same procedure is used for human resource planning as for zero-base budgeting, whereby each budget must be justified again each year. If an employee retires, is fired, or leaves the firm for any reason, the position is not automatically filled. Instead, an analysis is made to determine whether the firm can justify filling it. Equal concern is shown for creating new positions when they appear to be needed. The key to zero-base forecasting is a thorough analysis of human resource needs. Frequently, the position is not filled and the work is spread out among remaining employees as often is the case with firms that downsize. Plans may also involve outsourcing or other approaches as an alternative to hiring.
- It is based on the reasoning that the manager in each unit is most knowledgeable about employment requirements. Beginning with the lowest-level work units in the organization, each unit manager makes an estimate of personnel needs for the period of time encompassed by the planning cycle. As the process moves upward in the company, each successively higher level of management in turn makes its own estimates of needs, incorporating the input from each of the immediately preceding levels. The result, ultimately, is an aggregate forecast of needs for the entire organization. This process is often highly interactive in that estimated requirements from the previous level are discussed, negotiated, and re-estimated with the next level of management as the forecast moves upward through the organization. The interactive aspect of managerial estimating is one of the advantages of this procedure because it forces managers to justify their anticipated staffing needs.
- Historically, one of the most useful predictors of employment levels is sales volume. The relationship between demand and the number of employees needed is a positive one. A firm’s sales volume is depicted on the horizontal axis, and the number of employees actually required is shown on the vertical axis. In this illustration, as sales decrease, so does the number of employees. Using such a method, managers can approximate the number of employees required at different demand levels. Quantitative methods such as regression analysis can be helpful in determining the number of workers needed.
- The availability forecast determines whether the firm can secure employees with the necessary skills, and from which sources. The human resource manager must look to internal sources—that is, current employees—and external sources—meaning the labor market, or a combination.
- A human resource database contains employee information so management can make HR decisions. Such information might include: work history and experience, specific skills and knowledge, licenses or certifications held, completed organizational training, education, performance evaluations, assessment of strengths and weaknesses, promotion potential, current job performance, field of specialization, job preferences, geographic preferences, career goals and aspirations, anticipated retirement date, and personal history.
- A shortage of worker forecasted often demands innovative recruiting. Workers in a high-demand situations may be lured by premium pay or “signing bonuses,” flexible work hours, telecommuting, etc. Special training programs may offer remedial education and skills training to attract candidates. Another approach is to lower employment standards, such as hiring an inexperienced worker and training him to do the job.
- When an employee surplus looks likely, most companies consider alternatives to layoffs—as we’ll see in the next slide.
- At times, layoffs can be a necessary cost-cutting measure but they can generate increased turnover, create anxiety among remaining staff, lower morale, and decrease productivity. More popular alternatives include: a restricted hiring policy that reduces the workforce by not replacing employees as people leave, early retirement, swapping employees within the construction market, and reducing a full-time employee to 30 hours a week without losing health benefits.
- Another alternative to layoffs is permitting an employee to go from full-time to 30 hours a week without losing health benefits. Some companies may offer job-sharing arrangements. This arrangement can enable organizations to retain top talent in lieu of layoffs while having minimal impact on the overall labor budget. For example, employee benefits can be fairly managed on a per-employee basis, as two 20-hour-a-week part timers may have comparably pro-rated, scaled back benefits. Other companies may reduce the workweek from five days to four thereby having a 20 percent reduction in wages. Some companies may offer an unpaid holiday option where instead of taking two weeks off, employees are being asked to take five, with three being unpaid.
- The classic case of a firm that believes a no layoff policy is best for continuous well-being of the firm is Cleveland’s Lincoln Electric, a manufacture of arc welding equipment. Since the 1930s, this $3 billion company has kept its promise to its American employees to never lay them off for economic reasons. For decades, wages were 20 to 30 per cent above industry averages. The firm believes a stable workforce provides a long-term competitive advantage. In difficult times, hours are reduced, people are reassigned and white-collar salaries are cut. As long as workers meet the firm’s performance standards, no one will be laid off. Another example of a company with a no layoff policy is Southeastern Freight Lines, a regional firm that prides itself as a less-than truckload transportation services provider. When the recession began, Southeastern formed a “Keep Our People Working” task force to develop strategies for each unit with goals of keeping all employees working and maintaining all benefits and wage levels. Creative ways were found such as reducing costs for outsourced services and refurbishing trucks instead of buying new ones.
- Succession planning is the process of ensuring that qualified persons are available to assume key managerial positions, once they become vacant. Nothing could be as important to the strategic well-being of a company as ensuring that a qualified person is in place to lead the company both now and in the future. This succession planning definition includes untimely deaths, resignations, terminations, or the orderly retirements of key managerial personnel. The goal is to help ensure a smooth transition and operational efficiency, but the transition is often difficult.
- Succession planning is often a neglected aspect for small businesses since most succession planning is thought of in terms of replacing CEO and key executives within larger business. But, succession planning is just as, or more, important for small businesses. A problem however, is that only 31 percent of small business owners say their businesses are extremely or very prepared for such an event. Without proper succession planning created by an untimely death of a small business owner, the company could face economic and tax disasters. Often the small business owner’s argument against succession planning may be, “we’re too small,” “we’re too new,” “we have good people in place,” or “I’m not going anywhere soon.”
- Manager self-service (MSS) is the use of software and the corporate network to automate paper-based human resource processes that require a manager’s approval, record-keeping or input, and processes that support the manager’s job. MSS software can reduce the administrative workload for HR and give managers more control over HR processes. Manager self-service is increasingly using a mobile format to conduct performance reviews and e-learning. It is also used for recruiting and on-boarding, performance management, succession planning, and career development.
- Employee self-service (ESS) consists of processes that automate transactions that previously were labor-intensive for both employees and HR professionals. ESS applications can free up valuable HR staff time, reducing administrative time and costs. Employee self-service systems are more popular than ever and widely accepted by employees and employers. They have become part of a larger movement towards automation and web-enabled technology that is becoming a part of our daily lives. There are several types of self-service applications, including interactive voice response, Internet, and intranet. The systems create a single, secure repository for confidential payroll and human resources information and processes. Some of the areas that an ESS addresses include company administration, human resources, benefits, and payroll. Human resources task include maintenance of personal information, emergency contacts, maintenance of dependents and beneficiaries, job postings, and employee development.
- New jobs are rapidly being created, so job design is the necessary process of determining the specific tasks to be performed, the methods used in performing these tasks, and how the job relates to other work in the organization.
- Job enrichment involves making basic changes in the content and vertical level of responsibility of a job to provide greater challenges to the worker, often improving job performance and satisfaction.
- There is a clear distinction between job enrichment and job enlargement. Job enlargement is defined as increasing the number of tasks a worker performs, with all of the tasks at the same level of responsibility. Job enlargement, sometimes called cross-training, involves providing greater variety to the worker. For example, instead of knowing how to operate only one machine, a person is taught to operate two or even three, but no higher level of responsibility is required. Workers with broad skills may become increasingly important as fewer workers are needed because tight budgets. Some employers have found that providing job enlargement opportunities improves employee engagement and prevents stagnation.
- Job rotation (cross-training) moves employees from one job to another to broaden their experience. Higher-level tasks often require this breadth of knowledge. Rotational training programs help employees understand a variety of jobs and their interrelationships, thereby improving productivity. Job rotation is often used by organizations to relieve boredom, stimulate better performance, reduce absenteeism, and provide additional flexibility in job assignments. Also, if the task to be accomplished is boring or distasteful, job rotation means that one person will not be stuck with it for all times. Individuals who know how to accomplish more than one task are more valuable both to themselves and the firm. Staffing then becomes more flexible and these multi-skilled workers are then more insulated from layoffs. If job rotation is to be effective, management must be sure to provide sufficient training so that each individual in the rotation can perform the task in a similar manner.
- Reengineering is “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed.” Reengineering essentially involves the firm rethinking and redesigning its business system to become more competitive. It emphasizes the radical redesign of work in which companies organizes around process instead of by functional departments. Incremental change is not what is desired; instead, deep-seated changes are wanted that will alter entire operations at one time. Essentially, the firm must rethink and redesign its business system from the ground up. Reengineering focuses on the overall aspects of job designs, organizational structures, and management systems. It stresses that work should be organized around outcomes as opposed to tasks or functions. Reengineering should never be confused with downsizing even though a workforce reduction often results from this strategy. Naturally, job design considerations are of paramount concern because as the process changes, so do essential elements of jobs.
- Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Six key components of talent management include recruitment, compensation and rewards, performance management, succession management, engagement and retention, and leadership development. Talent management attempts to ensure that the right person is in the right job at the right time. A fully integrated talent management system helps answer many questions that a CEO may ask such as, “Do I have the executive talent to lead an initiative?” or “How long before we have enough knowledge and skills within the organization for the initiative to take hold?” They want assurance that they have the workers available to achieve their business goals, both now and in the future.