Transition based forecasting: forecasting that focuses in tracking internal change instituted by the organization s managers.

Chapter 6 The Forecasting Process HR forecasting: the heart of the HR planning process, can be defined as ascertaining the net requirement for personnel by determining the demand for and supply of human resources now and in the future Transition based forecasting: forecasting that focuses in tracking internal change instituted by the organization s managers. Event- based forecasting- forecasting concerned with changes in the external environment Process-based forecasting: forecasting not focused in a specific internal organizational; events but on the flow or sequence of several work activities. Benefits of HR forecasting: 1. Reduces HR costs 2. Increases organizational flexibility 3. Ensures a close linkage to the macro business forecasting process 4. Ensures the organizational requirements take precedence over issues of resource constraint and scarcity. Human resource demand: the organizations projected requirement for human resources Human resources supply: the source of workers to meet demand requirements, obtained either internally (current workers/members of the organizations workforce) or from external agencies. Key personnel analyses conducted HR Forecasters/personnel categories: 1. Specialist/technical/professional personnel 2. Employment equity-designated group membership -designated groups: identifiable groups deemed to need special attention; in the case of Canadian HR these are people of aboriginal descent, women, people with disabilities, and members of visible minorities. 3. Managerial and executive personnel 4. Recruits To effectively obtain sufficient numbers of trained people, the forecasting process has five stages: 1. Identify organizational goals, objectives, and plans 2. Determine overall demand requirements for personnel 3. Assess in-house skills and other internal supply characteristics

4. Determine the net demand requirements that must be met from external, environmental supply sources 5. Develop HR plans and programs to ensure that the right people are in the right place Prediction: a single numerical estimate of HR requirements associated with a specific time horizon and set of assumptions Projections: several HR estimates based on a variety of assumptions Envelope: an analogy in which one can easily visualize the corners o an envelope containing the upper and lower limits or bounds of the various HR projections extending into the future Scenarios: a proposed sequence of events with its own set of assumptions and associated program details Contingency plans: plans to be implemented when severe, unanticipated changes to organizational or environmental factors completely negate the usefulness of the existing HR forecasting predictions or projections Determining Net HR requirements: 1. Determine HR demand 2. Ascertain HR supply internal supply: current members of the organizational workforce who can be retrained, promoted, transferred, and so on to fill anticipated future HR requirements External supply: potential employees who are currently undergoing training (uni students) working for competitors, members of unions or professional associations, or are in a transitional stage, between jobs, or unemployed. 3. Determine net HR requirements 4. Institute HR programs: HR deficit and HR surplus HR deficit: when demand for HR exceeds the current personnel resources available in the organization s workforce (HR internal supply) HR surplus: when the internal workforce supply exceeds the organization s requirement or demand for personnel Job sharing: when two or more employees perform the duties of one full0time position, each sharing the work activities on a part-time basis Attrition: the process of reducing an HR surplus by allowing the size of the workforce to decline naturally because of the normal pattern of losses associated with retirements, deaths, voluntary turnover, and so on. Hiring freeze: a prohibition on all external recruiting activities

Chapter 7: HR Demand Trend analysis: examining the relationship overtime between an operational index such as level of scales and the demand for labour is a relatively straight forward quantitative demand forecasting technique commonly used by many organizations. 5 steps to conducting an effective trend analysis: 1. select the appropriate business/operational index 2. track the business index overtime 3. track the workforce size overtime 4. calculate the average ratio of the business index 5. calculate the forecasted demand for labour Delphi technique: a carefully designed program of sequential, individual interrogations (usually conducted through questionnaires) interspersed with information and feedback on the opinions expressed by the other participants in previous rounds. Six steps to the Delphi technique: 1. Define and refine the issue or question 2. Identify the experts, team and time horizon 3. Orient the experts 4. Issue the first round questionnaire 5. Issue the first round questionnaire summary and second round questionnaires 6. Continue issuing questionnaires

Chapter 13 Outsourcing Outsourcing: a contractual relationship for the provision of business services by an external provider -surveys show that nearly all organizations have outsourced parts of their HR functions. Functions most likely to be to be outsourced are temporary staffing, payroll, training, recruiting, and benefits administration. Three reasons why large corporations do not 100% outsource HRM: 1. The functions that are deemed most critical, such as recruitment, selection, and performance management, are rarely outsourced. 2. Situations that are impossible to predict, such as industrial relations disputes, creates an unpredictability that makes it difficult to develop a contractual arrangement. 3. The lack of providers of total HRM services. -if an organization needs experts and cannot afford to hire or train them, outsourcing may be a solution; it is becoming a more popular trend. Six major reasons why organizations choose to outsource: 1. Financial savings: to save money, organizations believe that costs can be reduced by outsourcing a function such as payroll. Cost control is also related to the issue of money 2. Strategic focus: outsourcing tasks that are non-core activities allow for in-house employees to focus on their value-added roles. Example: Nike s core competency is product design, and the company outsources nearly everything else. 3. Advanced technology: because organizations want to improve technical services, and may not be able to find technical talent, or they need quick and reliable access to new technology, they may outsource this talent as well. 4. Improved service: quality improvement can also be a reason to outsource. Managers can chose best of breed vendors that have outstanding track records and more flexibility in hiring and rewarding their employees. 5. Specialized expertise: organizations who wish to specific expertise also to choose to outsource. The motto is outsource when someone can do it better than you 6. Organizational politics: some organizations outsource to get rid of a troublesome department.

Risks and Limitations of outsourcing: 1. Projected benefits versus actual benefits: the incurred costs ended up being more than the company expected, and at times, the company will not renew their outsourcing arrangement as the saving costs were not achieved. 2. Service risks: if contract needs to be changed partially through, then the flexibility is lost, the outsourced company may enter the market as a competitor. Companies can lessen the risk of this by creating strategic blocks terms in the contract that limit the replication of certain competitive advantages, such as propriety technology, or also spreading the outsourcing among many vendors. 3. Employee morale: can lead to disintegration of employee culture. When outsourcing is discussed or decided upon, it decreases employee morale as people fear of job lossm early retirement, much like downsizing. Outsourcing also may start talented employees to start job searching or cause anxiety to other employees resulting in lost production. 4. Reduced value: extreme outsourcing can result in a company being empty, hollow like a shell. Vendor may sell a company s know how or secrets to a competitor. Management of outsourcing: outsourcing must be subjected to a cost-benefit analysis. Then, the following must occur: Selecting the vendor: 1. Inform the staff of the affected function 2. Prepare a request for proposal (RFP) describes the responsibilities to be outsources and invites potential providers to present their proposal for carrying out the job 3. Invite internal and external bids 4. Establish a team to evaluate these bids Negotiating the contract: establishing a benchmark including quality measures. Negotiations tend to be imbalanced, user organizations need to hire an expert to protect their interests. Monitoring the arrangement: most frequent causes for outsourcing problems are: 1. Poor service definition: outsourced project or function must be clearly defined. 2. Weak management processes: a person needs to be assigned to monitor that the results are as expected; in complex arrangements, it may take a team, called the stay-back team, to do this monitoring.

Chapter 14: Evaluation of HR Programs and Policies Nine compelling reason for measuring HRM effectiveness: 1. Labour costs are most often a firm s largest controllable cost. 2. Managers recognize that employees make the difference between the success and failure of projects and organizations 3. Organizations have legal responsibilities to ensure that they are in compliance with laws 4. HR managers and professionals cannot distinguish between a fad and a valid change program 5. Measuring and benchmarking HR activities will result in continuous improvements. Performance gaps can be identified and eliminated. 6. Audits will bring HR closer to the line functions of the organization. 7. Data will be available to support resource allocations 8. Investors want this information 9. HR managers are more likely to be welcomed at the boardroom table, and to influence strategy, if they use measures to demonstrate the contribution of their function. The 5C Model of HRM Impact Compliance: senior management depends on HR expertise to ensure that organizational practices comply with the law. Many HR departments were started because of the need to record compliance with employment standards, such as hours worked and overtime payments. Not only is HR asked to comply with the law, but they currently asked to also be ethical. This includes developing a code of conduct, protection for whistleblowers, and the redesign of orientation and training programs to include curriculum on ethics. Client Satisfaction: tracking success of client complaints and customer satisfaction have found to predict financial performance, on a lagged basis. This means that if employee morale drops, management can expect to see customer satisfaction drop within the next six months. Managers are turning to stakeholders or client perceptions of the HR department to determine the effectiveness of the HR performance. Advantages of measuring client satisfaction 1. Reminds HR that it is still a service and that it must deal with the expectations of its clients. The clients, in turn, use assessment criteria that are important to them, such as response time and helping them to meet their goals. 2. Surveying clients about their unmet needs increases the credibility of the HR function 3. Initiating and managing change by surveying stakeholders before, during, and after a change program increases the possibility that the HR department will understand the

clients perceptions; identify resistance to change, and overcome such resistance, and prove that the change program meets its goal Methods of Measuring Client Satisfaction: Informal feedback Surveys Critical incident method Problems with Measuring Client satisfaction Culture Management High expectations of clients Professional affiliations Cost Control: this includes downsizing and outsourcing ad increasing the use of technology Often, companies try to reduce head count in the HR department as part of their strategy to save costs. increasing efficiency- results achieved compared to resource inputs. Measures of efficiency include the following: *time *volume *cost cost of employee behaviour Contribution Financial Measures: survival: if a company survives, then the organization is a success. The contributions of HRM practices should be judged against a life or death index. profits or return on investments: indicate the relative success of the organization to meeting its goals. Approaches to Measuring HRM Practices: * Activity-based measures: the number of employees completing training, the number of employees hired. * Costing measures: the cost of training program, the cost per hire * client satisfaction: the manager has a problem solved; the HR department changed an employee s benefits information quickly.

Cost-benefit analysis: the relationship between the costs of a program and its benefits Direct costs: the hard costs that can be measured by expenditures Indirect costs: the soft cost whose value can be estimated but not measured easily by financial expenditures. utility analysis: a method of determining the gain or less that results from different approaches audit: a measurement method that assesses progress against plain. benchmarking: a tool that can enhance organizational performance by establishing standards against which processes, products, and performance can be compared and improved. Four sources of benchmarking partners: * internal (e.g. compare university recruitment with high-tech recruitment, or compare previous year recruitment with this year s recruitment) *competitive (compare exact functions of a competitor) *sector: some sector associated establish HR benchmarking sub-committees, which share information. * best in breed organizations (whose products, culture, and so on may not be comparable) except for competitors, many organizations are willing to share this information if there is an incentive for them. Balanced scorecard: a balanced set of measures to show contribution to organizational performance Successful Management: alignment: the measure and the potential results must offer some value to the strategy or goals of the organization actionable: choose only those measures that can be controlled. Obtain metrics on things like employee commitment or turnover, items for which you can develop action plans. trackability: a good metric must be trackable over time so that improvements, as a result of the introduction of solutions. Such measures such as time to hire should be tracked weekly for all positions. comparability: try to choose measures that can be compared across units and even with best-in-world organizations. drill deep: know in depth scores to be able to spot problems report and communicate a limited number of measures: the availability of databases allows us to accumulate mountains of data, but very little meaningful information.

Chapter 9: Succession Management Succession Management: the process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization. Succession management was previously called replacement planning -replacement planning has evolved into succession management by: 1. broadening the focus 2. expanding the time horizon 3. creating a talent pool of replacements 4. improving the evaluation system -organizations must prepare for unexpected and expected turnover -ensures the continuity in leadership by developing the next generation of players -plans for replacement of retiring staff Reasons for succession management: 1. Provide opportunities for high potential workers 2. Identify replacement needs 3. Increase the talent pool of promotable employees 4. Contribute to implement the organization s strategic business plans 5. Help individuals realize their career plans 6. Tap the potential for intellectual capital 7. Encourage the advancement for diverse groups 8. Improve employees ability to respond to changing environmental demands 9. Improve employee morale 10. Cope with the effects of voluntary separation programs 11. Decide which workers can be eliminated 12. Cope with the effects of downsizing 13. Reduce headcount to essential workers only Five Steps for succession management: 1. Align succession management plans with strategy -start with a business plan -using environmental scanning, managers try and predict where the org will be in the next three-five years 2. Identify the skills and competencies needed to meet the strategic objectives -job based approach: focus on duties, skills, job experience, and responsibilities required to perform the job ** not adequate because jobs change rapidly -competency-based approach: focus on measureable attributes that differentiate successful employees from those who are not -hard and soft 3. Identify high potential employees 4. Provide development opportunities and experiences

5. Monitor succession management