Human Resource
Management
Employee Training and Retention
Concepts Checklist
Strategic Segmentation
Breakeven Analysis Human Capital
Employee Retention
Internal Labour Market
Cost Benefit Analysis
RoIP
Salary Benchmarking
Competency Framework Assessment Centre
Human Capital – Gary Becker
Human capital is a measure of the economic value of Not all labour is equal and quality can be improved by
an employee’s skill set investing in them
Firm-specific human capital vs. General purpose human capital Competitor-specific human capital
Regional or cluster competitiveness: Silicon valley, Indian diamond industry
Social and Symbolic benefit: gift exchange, signal employees of their values, reinforce culture, cross-training for inter-dependent jobs
Cost-benefit analysis of training may be distorted: Important benefits could be intangible or are manifested only in long run
It also ignores social and symbolic aspects of training
Arrow Electronics – Sprout Programme
Sprouts expected “Grow with company” After 2 years, many left for higher salaries
WHAT went wrong?
Strategic Segmentation - HRM
Divide population segments
Derived from Marketing Framework:
Decide which one to target
Customize product price, optimize value exchange
Strategic segmentation vs. Peanut-butter approach in training
E.g.: Hamara Angels
HR Strategic Segmentation Framework: Sprouts programme as strategic segmentation
How can strategic segmentation backfire?
Difficult to convince existing employees
Buy-in by line managers
Source: John W. Boudreau and Ravin Jesuthasan (with Tower Watson), Transformative HR-How Great Companies Use Evidence-Based Change for Sustainable Advantage, Jossey-Bass,
A Wiley Imprint
Are you suggesting some segments are better than others?
NO, it means some segments need to BEHAVE differently than others
CME Group expansion strategy (USA & elsewhere)
Jobs directly responsible for new growth or expansion Existing job (supporting existing business and new growth plan)
ROIP: Return on Improved Performance, a tool for training investment decision
Source: John W. Boudreau and Ravin Jesuthasan (with Tower Watson), Transformative HR-How Great Companies Use Evidence-Based Change for Sustainable Advantage,
Jossey-Bass, A Wiley Imprint
Flight attendants are face of organisation, their performance improvement will add relatively higher value (flying
experience of customers)
[Link]
Performance based incentive more for attendants, pilot keep higher base salary (we don’t wan
them to take unnecessary risk)
Breakeven Analysis in HRM
Breakeven analysis
[Link]
Costing Human Resources (Cascio)
Three categories:
1. Separation costs
2. Replacement costs
Communication of job availability
Pre-employment administrative functions
Testing and entrance interviews
Staff meetings
Travel/moving expenses
Employment medical exams
Background check & dissemination of information
3. Training costs
Salary Benchmarking and Employee Retention
Cost of replacing a worker could be 1.5 to 2.5 times the worker’s annual salary
Market linked pay is becoming common in many industries
Salary survey: Many surveying agencies (Mercer, Towers Perrin, Radord, Clark consulting surveys etc.)
e.g. BPO employees retention
Development culture-How stars are made
Is the success of individual 'star' employees transferable to other
businesses?
Is it the team/institution that is key to the high performance or is
it mainly down to the individual concerned?
Examined careers of more than 1000 star analyst at Wall Street
investment banks
Most stars who switch firms turn out to be meteors, quickly losing luster in their
new settings.
Star analysts who change firms suffer an immediate and lasting decline in
performance.
Powerfully demonstrates the centrality of teamwork to any star's performance.
Take development as “a process, not an event.” Have significantly lower employee turnover
Varied dev. practices rather than affiliating with one method Can offer lower compensation than firms with no dev. culture
Firms with Development culture
Develop a meaningful percentage of their stars internally Ongoing, open-ended development of beginner and mid-career
Continuous assessments and constructive feedback Individualized developmental agendas
Deloitte University: Cross-fertilization via peer mentoring
[Link] Mutual critiquing of work products