Unit 2: Acquisition of Human Resource

Chapter Notes
Chapters Covered: 5 · 6 · 7 · 8 · 9

Chapter Topic

5 Human Resource Planning (HRP)

6 Job Analysis

7 Recruitment

8 Selection

9 Placement, Induction & Retention

Chapter 5: Human Resource Planning (HRP)

Definition
Dessler et al (2012) Process of deciding what positions the firm will have to fill, and how to fill them.

Mondy & Noe (2012) Systematically reviewing HR requirements to ensure the required number of
employees, with required skills, are available when and where needed.

Fisher et al (2010) Concerned with the flow of people into, through, and out of an organization;
anticipating need for labour and planning programmes to ensure the right mix of
employees and skills.

Five Key Questions in HRP

• How many employees do we need — in terms of numbers?
• What are we looking for — skills, knowledge, experience, abilities (quality)?
• Where do we need employees — location, division, department?
• When do we need them — immediately, in 3 months, 6 months?
• How long do we need them — limited period or long period?

Features of HRP
• Forward looking — Assesses future HR requirements in advance, considering market fluctuations and
demand forecasts.
• In sync with organizational needs — Subject to revision, tuned to organizational requirements.
• In tune with corporate plan — Integral part of overall corporate plan, reflecting management thinking.
• Proactive — Assesses internal and external changes; ensures strategic objectives are met without
disruption.
• Get qualified people at the right time — Short-term (2 years) and long-term (5+ years) plans.

Objectives of HRP
• Forecast personnel requirements — Determine future manpower needs.
• Cope with changes — Adapt to market conditions, technology and government regulations.
• Use existing manpower productively — Maintain skills inventory to utilise resources better.
• Promote employees systematically — Provides basis for management decisions on promotions.

Importance of HRP
• Reservoir of talent — People with requisite skills readily available.
• Prepare people for future — Training and development in advance.
• Expand or contract — Continuous supply of skilled people for scaling operations.
• Cut costs — Appropriate HR budget; control manpower costs.
• Succession planning — Prepares people for future challenges; 'hot list' of promising candidates.

Process of HRP
The process consists of three major steps:

Demand Forecasting Supply Forecasting Determine Manpower Gaps &

Formulate HR Plans
• External factors • Organizational • Internal supply analysis • External Skill shortage: Full time, Part time,
factors • Workforce factors • supply analysis Recalls Surplus staff:
Forecasting techniques Terminations, Layoffs, Demotions,
Retirement → FORMULATE HR
PLANS

Demand Forecasting Techniques

• Judgmental / Bottom-up — Opinions from unit/branch managers summed up.
• Top-down forecasting — Senior managers discuss trends, business plans, scenarios.
• Delphi technique — Expert consensus via anonymous notes (no face-to-face).
• Trend analysis — Statistical method using an organizational index (e.g., production-to-worker ratio).
• Computer models — Include variables such as direct labour hours, sales forecasts.
• Workforce analysis — Study of manpower flows (leaves, retirements, transfers, resignations).
• Workload analysis — Calculate persons required for planned output, adjusting for absenteeism and idle
time.
• Job analysis — Identifies abilities and skills required to perform jobs efficiently.

Formulating HR Plans
• Recruitment plan — Number, type, timing and how people are to be recruited.
• Redeployment plan — Transferring or retraining existing employees for new jobs.
• Redundancy plan — Identifies redundancies; plans for retraining, golden handshake, layoff.
• Training plan — Number of trainees/apprentices; new or revised courses.
• Productivity plan — Work simplification, mechanization, incentives.
• Retention plan — Strategies to avoid wastage; compensation policies and working conditions.

Limitations of HRP
• Accuracy — Tracking future trends is difficult; inaccuracies arise from poor departmental forecasts.
• Preparation — Demands elaborate preparation, careful monitoring, and management support.
• Support — May be used as a cost-cutting tool; employees/unions resist increased workload.
• Resistance — Unions brand HRP as a 'scientific management' exercise.
• Numbers game — Excessive focus on quantitative aspects may discount motivation and morale.

Effective HRP Guidelines

• Objectives — Must fit overall organizational objectives.
• Top management support — Plan must enjoy consistent top management backing.
• Employee skills inventory — Up-to-date inventory of previous jobs, qualifications, performance, mobility.
• HR information system — Computerized system with individual demographics, career progression,
appraisals.
• Coordination — Separate HR planning division in large organizations to integrate plans.
Chapter 6: Job Analysis

Definition
A job is a collection of tasks, duties and responsibilities. Job analysis is a systematic and detailed examination
of jobs — what a job holder is supposed to do (job description) and what skills/competencies are needed (job
specification).

Mondy & Noe Process of determining the skills, duties and knowledge required for performing
jobs.

Cascio et al Obtaining information about jobs including tasks and personal characteristics
necessary to do them.

Dessler et al Procedure for determining the duties and skill requirements of a job and the kind
of person who should be hired.

Benefits of Job Analysis

• Human resource planning — Forecasts HR requirements in terms of knowledge and skills.
• Recruitment — Determines how and when to hire people for future openings.
• Selection — Proper understanding of job needed to select the right person.
• Placement & orientation — Place people on jobs suited to their interests and aptitude.
• Training — Determines if a current/potential job holder requires additional training.
• Counselling — Managers can counsel employees about career options.
• Employee safety — Reveals unsafe conditions associated with a job.
• Performance appraisal — Compares what employee should do with what they have done.
• Job design & redesign — Locate weak spots; simplify and improve existing steps.
• Job evaluation — Finds relative worth of a job based on difficulty, skills and knowledge.

Job Analysis: Who, When and Which Jobs?

Who?
Best to use supervisors, job incumbents or a combination. Incumbents offer a clear view of actual work.
External analysts provide more objective, unbiased opinions.

When?
• When the organization is established and a job analysis programme is taken up for the first time.
• When new jobs are created.
• When jobs undergo radical transformation due to changes in technology, methods or systems.

Which Jobs?
• Jobs critical to the organization's success.
• Jobs that are difficult to learn and perform.
• Jobs where new hires are recruited regularly.
• Jobs created for women, disabled personnel, ex-servicemen, minorities.
• Jobs needing examination to avoid violations of government rules.
• Jobs that need to be done differently due to new technologies.

Process of Job Analysis

 • Organizational analysis — Overall picture of various jobs; linkages between jobs and organizational
objectives.
• Selection of representative positions — Representative sample of jobs to be analysed (cost and time
constraints).
• Collection of job analysis data — Data on job characteristics, required behaviour and personal
qualifications.
• Preparation of job description — Contents of job in terms of functions, duties, responsibilities and
operations.
• Preparation of job specification — Converts job description into personal attributes (traits, skills, training,
experience).

Methods of Collecting Job Analysis Data

• Job performance — Analyst actually performs the job to gain first-hand experience.
• Personal observation — Analyst observes worker doing the job; good for manual, short-period activities.
• Critical incidents (CIT) — Job holders describe incidents from past experience; qualitative,
behaviourally-focused.
• Interview — Questions to incumbents and supervisors, individual or group; time-consuming and costly.
• Panel of experts — Senior job incumbents and supervisors with extensive knowledge; group interview.
• Diary method — Job incumbents keep diaries/logs of daily activities over a specific period.
• Questionnaire method — Widely used; structured questionnaire covering all job tasks and behaviours;
economical.

Behavioural Factors in Job Analysis

• Exaggerate the facts — Managers and employees inflate job importance for higher pay levels.
• Employee anxieties — Fear that analysis will put them in a 'straitjacket', limiting initiative.
• Resistance to change — When jobs are redefined, employees must handle new, possibly harder
responsibilities.
• Overemphasis on current efforts — Analysis should not focus only on what employees currently do.
• Management 'straitjacket' — Managers may refuse to describe what employees should do, causing
confusion.

Job Description (JD)

A written statement of what the job holder does, how it is done, under what conditions and why. It
differentiates the job from others and defines its outer limits.
Contents: Job title · Code number · Department · Job summary · Job activities · Working conditions · Social
environment.

Job Specification (JS)

Summarizes the human characteristics needed for satisfactory job completion — education, experience, skills,
knowledge and abilities (SKAs). It is a logical outgrowth of a job description.
• Essential attributes — SKAs a person must possess.
• Desirable attributes — Qualifications a person ought to possess.
• Contra-indicators — Attributes that will handicap successful job performance.
Chapter 7: Recruitment

Definition
Recruitment is a 'linking function' — bringing together those with vacancies and those seeking jobs. It is the
process by which organizations identify and attract individuals to fill job vacancies.

Fisher (2010) Process by which organizations locate and attract individuals to fill job vacancies.

Flippo Process of searching for prospective employees and stimulating them to apply for
jobs.

Mathis & Jackson (2010) Process of generating a pool of qualified applicants for organizational jobs.

Features of Recruitment
• Locating and attracting talent — Process of locating and attracting qualified people.
• Linking process — Links job seekers with employers wanting to fill vacancies.
• Positive process of building a talent pool — Seeks a fairly large pool so the recruiter has a choice.
• Vital function — Every organization undertakes it; compelled to go the extra mile in a knowledge
economy.

Objectives of Recruitment
• Attract job seekers with relevant qualifications.
• Project a positive and favourable image of the company.
• Encourage a large number of potential candidates to apply.
• Create a wide choice for the company.
• Determine present and future needs in sync with overall strategy.
• Give candidates enough information to decide whether to apply.

Process of Recruitment
• Identify required numbers and sources of supply — Number of vacancies, type of employees required,
and possible supply sources.
• Publicize job details — Detailed information about job opportunity, growth prospects, compensation.
• Encourage prospective job seekers to apply in large numbers — Encourage only qualified people.
• Evaluate recruiting effort — Find out whether the company is able to meet recruiting criteria.

Recruitment vs. Selection

Basis Recruitment Selection

Meaning Encourages qualified applicants to apply for Chooses the most suitable candidate for
job openings vacant posts

Purpose Creates a large talent pool Choose right candidates from applicants
with relevant qualifications

Nature Encourages large number of qualified job Prevents entry of unsuitable candidates for
seekers to apply job openings
Recruiter's Just an invitation to prospective job seekers; Results in a contract of service between the
obligation no agreement between job seekers and recruiting company and the selected
recruiting company at any stage. employee.

Sources of Recruitment
Internal Sources
Persons already working in the organization — promotions, transfers, job postings, referrals from internal
employees, retrenched/retired employees.
• Merits: Improves morale · Better evaluation · Promotes loyalty · Less training needed · Less costly · Tried
and tested.
• Demerits: Discourages new blood · Internal sources may dry up · No innovation on jobs requiring original
thinking · Seniority-based promotions may not select the most capable.

External Sources
Employees from other organizations, employment exchanges, educational institutions, unions, friends/relatives,
search firms, walk-ins, internet.
• Merits: Wide choice · Injection of fresh blood · Talent based on merit · Good corporate governance.
• Demerits: Expensive · Takes more time · Demotivating to long-serving internal candidates · No guarantee
of cultural fit.

Methods of Recruitment
Internal Methods
• Promotions and transfers — Promotion = move to higher level; Transfer = lateral movement.
• Job posting and bidding — Publicize openings on bulletin boards, intranet, electronic media.
• Employee referrals — Word-of-mouth; referrer gives realistic picture; effective for hard-to-fill positions.

External Methods
• Campus recruitment — Visit IITs, IIMs, colleges; preliminary screening done on campus.
• Advertisements — Newspapers, journals, radio, TV; appropriate for large target groups spread
geographically.
• Private employment search firms — Computerized lists of qualified applicants; up to 30% of annual
salary fee.
• Employment exchanges — Statutory requirement under Employment Exchanges Act, 1959.
• Gate hiring and contractors — Blue-collar workers; word-of-mouth publicity.
• Unsolicited applicants / walk-ins — Applications received at various points; kept in data bank.
• Internet recruiting — Company websites, job portals ([Link], [Link], etc.); fast and
cost-effective.
Chapter 8: Selection

Definition
Selection is the process of picking individuals possessing relevant qualifications, requisite knowledge
and required experience. It strikes a fine balance between what the applicant can do and what the
organization requires.

Mondy et al (2010) Process of choosing from a group of applicants the individual best suited for a
particular position and organization.

Raymond Noe et al (2012) Process by which an organization attempts to identify applicants with the
necessary knowledge, skills, abilities and other characteristics to help achieve
goals.

Steps in the Selection Process

Step Stage Description

Step 1 Reception Create a favourable impression; present possibilities honestly and clearly.

Step 2 Screening Preliminary interview to cut costs; HR junior executive elicits suitability info.
Interview

Step 3 Application Blank Collects personal, academic, demographic and employment history data.

Step 4 Selection Tests Employment/psychological tests to sample behaviour and match candidates
to job requirements.

Step 5 Selection Interview Oral examination; synthesizes information about abilities and the
requirements of the job.

Step 6 Medical Checks physical suitability; reveals health problems that may affect efficiency.
Examination

Step 7 Reference Checks Verifies academic achievements and past job performance from two or three
references.

Step 8 Hiring Decision Line manager makes final decision; intimates both successful and
unsuccessful candidates.

Types of Selection Tests

• Intelligence tests — Mental ability; measures memory, vocabulary, numerical ability, perception.
• Aptitude tests — Potential to learn certain skills (clerical, mechanical, mathematical).
• Personality tests — Measure individual characteristics (careful, hard working, tolerant, outgoing, etc.).
• Achievement tests — What the applicant can do currently (typing test, shorthand, work sampling).
• Simulation tests — Duplicate activities an employee faces at work; commonly used for managerial
positions (assessment centres).
• Graphology tests — Analysis of handwriting for personality and emotional make-up.
• Polygraph tests — Record physical changes (respiration, blood pressure) to judge truthfulness.
• Integrity tests — Measure honesty; predict tendency to steal or act unacceptably.

The Assessment Centre Approach

An extended work sample using group and individual exercises to simulate the type of work the candidate will
do. A team of 6–8 trained assessors evaluates performance. Common exercises:
• The in-basket — Candidate deals with reports, memos, letters and materials from the simulated job.
• Leaderless group discussion — Group arrives at a decision; evaluates interpersonal skills and
leadership.
• Business games — Simulated competing companies; tests planning, organizational, and leadership
abilities.
• Individual presentations — Communication skills evaluated via oral presentations.
• Structured interview — Series of questions on achievement, motivation and commitment.

Types of Selection Interviews

• Non-directive interview — No specific format; open-ended questions; broad and flexible.
• Directive / Structured interview — Predetermined questions; improves reliability and reduces bias.
• Situational interview — Applicant responds to a hypothetical incident; responses evaluated against
benchmarks.
• Behavioural interview — Focuses on actual past work incidents rather than hypothetical situations.
• Stress interview — Aggressive, embarrassing questions to see how applicant copes under stress.
• Group discussion interview — Groups discuss problems with a time limit; observers watch for leadership
qualities.
• Panel / Board interview — Three to five interviewers take turns; consensus on suitability; limits personal
biases.

Common Interviewing Mistakes

• Halo effect — One marked characteristic dominates appraisal of entire personality.
• Leniency — Consistent leniency or toughness due to confidence/rigidity issues.
• Candidate order error — Rating affected by the order in which candidates are interviewed.
• Projection — Interviewer selects candidates who resemble himself in age, appearance, opinions.
• Stereotyping — Allowing cultural background or origin to unduly influence the assessment.
Chapter 9: Placement, Induction & Retention

Placement
Mathis & Jackson (2012) Process of fitting a person to the right job.

Werther & Davis (2010) Posting of an individual to a new job.

Placement assigns a specific job to each selected candidate, matching employee skills and qualifications with a
rank and responsibilities. Key principles:
• Match candidate's skill with the job — Mismatch leads to lack of commitment.
• Deliver what you promise — Do not assign work that does not match competencies.
• Person-job misfit is costly — Underqualified or overqualified recruits suffer low morale; may quit.
• Put new recruits at ease — Induction/orientation training for 1 week to 3/6 months.
• Benefits could surprise many — Proper placement improves productivity, retention and efficiency.

Induction / Orientation
Task of introducing new employees to the organization, its policies, procedures and rules. A formal orientation
programme typically lasts 1 day to 2 weeks in most organizations.

Objectives of Induction
• Removes fears — Helps new employee adjust to new people, workplace and work environment.
• Creates a good impression — Makes newcomer feel at home; develops sense of pride.
• Acts as a valuable source of information — Communicates specific job requirements and puts employee
at ease.

Steps in the Induction Programme

• Welcome to the organization; show around workplace and facilities.
• Give brief profile of the company (printed manual with benefits, holidays, dress codes, rules).
• Provide details about work groups and extent of unionism.
• Give overview of future training opportunities and career prospects.
• Clarify doubts; encourage employee to come out with questions.
• Introduce the employee to team and supervisor.

Content of Induction Programme

Topics covered fall under: 1. Organizational issues (history, policies, layout, disciplinary procedures) · 2.
Employee benefits (pay, vacations, insurance, training) · 3. Introductions (supervisors, co-workers, trainers) ·
4. Job duties (location, tasks, safety, objectives).

Socialization
Process through which a new recruit begins to understand and accept the values, norms and beliefs held by
others in the organization. Three stages:
• Pre-arrival stage — Recognizes each individual arrives with values, expectations and attitudes; training
orients them.
• Encounter stage — Individual encounters the dichotomy between expectations and reality. 'Reality shock'
occurs when expectations don't match.
• Metamorphosis stage — New hires internalize learned behaviours; feel at home and understand how to
handle the job.

Retention
Employee retention is the ability of an organization to retain its employees. A retention rate of 80% means
the organization kept 80% of its employees in a given period.

Importance of Retention
• Hiring good employees is costly; replacements are not readily available.
• Training and grooming new recruits is wasteful if they leave.
• Key employees take organizational secrets, data and winning strategies when they leave.
• Experienced employees perform better and in a cost-effective way.
• Team spirit is impacted badly when key employees leave.

Why Employees Leave

• Failure to connect with bosses (tough, arrogant, abusive).
• Inability to get along with colleagues.
• Unfriendly working environment; little room for informal relations.
• Managers/supervisors unwilling to listen.
• Unfriendly supervisors impacting motivation and morale.
• Limited growth opportunities; lack of vertical growth.
• Higher compensation elsewhere.
• Unchallenging, boring and monotonous job duties.
• Better work climate available elsewhere.

Employee Retention Strategies

• 1. Equity and job security — Treat employees fairly; provide emotional and financial security.
• 2. Communication — Clear expectations; transparent evaluation; measurable goals.
• 3. Pride and teamwork — Sense of achievement; proper training; enthusiastic teammates.
• 4. Fun — Making work enjoyable without disrupting productivity.
• 5. Recognition — Real recognition and genuine appreciation.
• 6. ASK — Assure subordinates they are free to express opinions without fear.
• 7. Work — Make work interesting, challenging and motivating.
• 8. Talent — Hire people who fit organizational culture; assign right jobs for right people.
• 9. Pay and benefits — Pay competitively; 'if you pay peanuts, you get only monkeys and donkeys.'

HR and Employee Retention

When an employee resigns, HR should find the reasons and see whether any remedial steps can be initiated.
Key strategies:
• Sit with the employee and discuss matters openly.
• Assure of all possible help; make clear that the organisation wants to retain talent at any cost.
• Consider moving the employee to a compatible team if unhappy with the existing team.
• For salary issues, consider various options without upsetting others.
• Conduct motivational activities; single out top performers for praise, recognition and reward.
• Base exercises on proper performance review so lagging employees are motivated.