CMS1 Assignment 4: Human Resources Planning and Recruitment

One of the tools for mapping a firm's strategy to ensure strategic alignment is the Balanced Scorecard (BSC). The model has four related cells:

(1) financial (2) customer (3) processes (4) learning

In contrast to quantitative approaches, ______________ approaches to forecasting are less statistical.

qualitative

VABEs

values attitudes beliefs expectations

Although the terms mission and vision often are used interchangeably, the _______ statement ideally clarifies the long-term direction of the company and its strategic intent.

vision

Managers attend to a variety of external issues; however, the following six are monitored most frequently:

(1) Economic factors and development information, including general, regional, and global conditions (2) Industry and competitive trends, including new processes, services, and innovations (3) Technological changes, including information technology, innovations, and automation (4) Government and legislative issues, including laws and administrative rulings (5) Social concerns, including child care, elder care, the environment, and educational priorities (6) Demographic and labor market trends, including the age, composition, and literacy of the labor market, and immigration

Steps in strategic planning and human resource management:

(1) Establish mission, vision, and values for the organization (2) Ongoing environmental analysis of external opportunities and threats (3) Internal analysis of strengths and weaknesses (4) Formulate strategy (5) Strategy implementation (6) Evaluation and assessment

Stages of trend analysis:

(1) Select appropriate business factor (2) Plot a historical trend of the business factor in relation to the number of employees (3) Compute the productivity ratio for at least the past five years (4) Calculate human resources demand by multiplying he business factor by the productivity ratio (5) Project the firm's human resources demand out to the target year

Organizations can assess the horizontal fit of their HR practices in three essential steps:

(1) managers need to identify the key workforce objectives they hope to achieve (2) managers would identify each of the HR practices used to elicit or reinforce those workforce objectives (job design, staffing, training, appraisal, compensation, and so on). (3) managers would evaluate each HR practice on a scale of -5 (not supportive) to 5 (supportive)

Managers must continually forecast both the needs and the capabilities of the firm for the future in order to do an effective job at strategic planning. Managers focus on at least three key elements:

(a) forecasting the demand for labor (b) forecasting the supply of labor (c) balancing supply and demand considerations

Growth hinges on three related elements:

(a) increased employee productivity (b) a greater number of employees (c) employees developing or acquiring new skills

value creation in a cost/benefit scenario

(value = benefits - costs)

Low-Cost Strategy: Compete on Productivity and Efficiency

- A low cost strategy means keeping your costs low enough so that you can offer an attractive price to customers relative to your competitors. - Critical success factors for this strategy focus on efficiency, productivity, and minimizing waste. These types of companies often are large and try to take advantage of economies of scale in the production and distribution of goods and services so they can sell them at lower prices, which leads to higher market shares, volumes, and (hopefully) profits. - A low-cost strategy is linked to HR planning in several ways. The first has to do with productivity. The productivity of the best-performing staff can be five to twenty times higher than the productivity of the worst-performing staffs. The second way that low-cost strategies are linked to HR pertains to outsourcing.

Executive Search Firms

- In contrast to public and private employment agencies, which help job seekers find the right job, executive search firms ( often called 'headhunters' ) help employers find the right person for a job - Executive search firms do not advertise in the media for job candidates, nor do they accept a fee from the individual being placed. - The fees charged by search firms can range anywhere from 25 to 40 percent of the annual salary for the position to be filled. For the recruitment of senior executives, this fee is paid by the client firm, whether or not the recruiting effort results in a hire. It is for this practice that search firms receive the greatest criticism.

Steps for strengthening a firm's on-campus recruiting relationships

- Invite professors and advisers to visit your office and take them to lunch - Invite them to bring a student group to the office - Send press releases and newsletters by mail or e-mail to bring them up to date on the firm's latest news and innovations - Provide guest speakers for classes - Conduct mock interviews, especially in years when not interviewing for full-time or internship positions - Provide scholarships to students - Attend the campus career fair, even when the firm is not going to be hiring, so that its name becomes known by the faculty and students - Offer job-shadowing programs for students

Suggestions for creating a well-designed and well-promoted Employee Referral Program:

- Make the ERP part of the company culture - Be responsive - Up the ante - Provide rewards that employees value - Give employees the right tools - Measure results

Actions and attitudes that lead to excellent customer service can include the following:

- Speed of delivering normal orders - Willingness to meet extraordinary needs - Merchandise delivered in good condition - Readiness to take back defective goods and resupply new goods quickly - Availability of installation and repair services and parts

Factors that can affect a firm's recruiting strategy:

- a firm's recruiting abilities - whether to recruit externally versus internally - the labor markets for the types of positions it is recruiting for, including global labor markets - the strength of a firm's employment "brand"

The competitive environment includes:

1- the firm's customers 2- rival firms 3- new entrants 4- substitutes 5- suppliers

Warning signs of a weak talent 'bench'

1. It takes a long time to fill key positions 2. Key positions can be filled only by hiring from the outside 3. Vacancies in key positions cannot be filled with confidence in the abilities of those chosen for them 4. Replacements for positions often are unsuccessful in performing their new duties 5. Promotions are made on the basis of whim, favoritism, or nepotism

Organizations can achieve a sustained competitive advantage through people if they are able to meet the following criteria:

1. The resources must be valuable 2. The resources must be rare 3. The resources must be difficult to imitate 4. The resources must be organized

branding

A company's effort to help existing and prospective workers understand why it is a desirable place to work.

9-box grid

A comparative diagram that includes appraisal and assessment data to allow managers to easily see an employee's actual and potential performance

SWOT analysis

A comparison of strengths, weaknesses, opportunities, and threats for strategy formulation purposes

Differentiation Strategy: Compete on Unique Value Added

A differentiation strategy is often based on delivering a high-quality product, innovative features, speed to market, or superior service.

Balanced Scorecard (BSC)

A measurement framework that helps managers translate strategic goals into operational objectives

Markov analysis

A method for tracking the pattern of employee movements through various jobs

quality of fill

A metric designed to measure how well new hires that fill positions are performing on the job

nepotism

A preference for hiring relatives of current employees

employee profile

A profile of a worker developed by studying an organization's top performers in order to recruit similar types of people

trend analysis

A quantitative approach to forecasting labor demand based on an organizational index such as sales

applicant tracking system (ATS)

A software application recruiters use to post job openings, screen resumes, and contact via e-mail potential candidates for interviews, and track the time and costs related to hiring people

strategic vision

A statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent

SC AC + AF + RB + NC --- = --------------------------- H H

AC = advertising costs, total monthly expenditure AF = agency fees, total for the month RB = referral bonuses, total paid NC = no-cost hires, walk-ins, nonprofit agencies etc. H = total hires

Some researchers have found that inbreeding occurs gradually as part of a three-stage trend:

According to the Attraction-Selection-Attrition (ASA) model, in the first stage (Attraction) people with values similar to an organization are attracted to it and become employees. In the second stage (Selection), these employees then choose applicants similar to themselves. In the final stage (Attrition) employees who do not fit in leave. The result is an ultra-homogenized organization.

cultural audits

Audits of the culture and quality of work life in an organization

______________ is the ability to rapidly reallocate resources to new or changing needs.

Coordination flexibility

________________ are the underlying parameters for how a company intends to act toward its customers, employees, and the public in general.

Core values

Another qualitative forecasting method, the ________________, attempts to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.

Delphi technique

In assessing the composition of an organization's human capital architecture, employees can be classified according to the degree to which they create strategic value and are unique to an organization. Identify four groups to which an organization's human capital can be mapped.

Depending on their roles within an organization, individuals can be mapped into the following four groups: (1) Strategic knowledge employees: This group of employees has firm-specific skills directly linked to the company's strategy, and these employees are given considerable autonomy and discretion to perform their jobs. These employees are difficult to replace. Companies make long-term commitments to these employees. Typically these workers would include research and development (R&D) scientists in a pharmaceuticals company or computer scientists in a software development company. (2) Core employees: This group of employees has skills that are quite valuable to a company, but not particularly unique or difficult to replace. These employees are hired to perform a predefined job. Salespeople in a department store or truck drivers for a courier service would be examples of these types of workers. Managers' commitment to them is of a short-term nature. Generally managers make less investment in training and development and tend to focus more on paying for short-term performance achievements. (3) Supporting workers: This group of workers has skills that are of less strategic value and generally available to all firms. The scope of their duties is limited and there is little commitment from the company. Their employment relationships tend to be transaction based, focused on rules and procedures, with less investment in development. Examples of these types of workers would be clerical workers, maintenance workers, and staff workers in accounting and human resources. These types of workers are often hired from external agencies on a contract basis to support the strategic knowledge workers and core employees. (4) Partners and complementary skills: This group of individuals has skills that are unique, but not directly related to a company's core strategy. Examples of these types of workers would include attorneys on retainer, consultants and research lab scientists. Companies tend to establish longer term alliances and partnerships with these individuals and nurture an ongoing relationship focused on mutual learning.

skill inventories

Files of personnel education, experience, interests, skills, and so on that allow managers to quickly match job openings with employee backgrounds

What is the objective of firms that scan their internal environment and conduct cultural audits?

Firms that view their employee-oriented cultures as critical to their success undertake cultural audits to examine the attitudes and beliefs of their workforces as well as the activities they engage in. At one level, this analysis focuses on whether a firm's critical values are embraced and demonstrated by employees throughout the organization. Via cultural audits, companies have found ways to get the most from their employees by linking their values and ideas to profits.

staffing tables

Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements

How are HRP and strategic planning linked?

HRP and strategic planning are linked. HRP relates to an organization's strategic planning both in terms of its formulation and also in terms of its implementation. HRP provides a set of inputs into the strategic formulation process in terms of what is possible; that is, whether the types and numbers of people are available to pursue a given strategy. HRP also is important in terms of strategy implementation. Once a firm has devised its strategy, the company's executives must make resource allocation decisions to implement that strategy, including decisions related to the firm's structure, processes and human capital. All the available evidence suggests that the integration of HRP and strategic planning tends to be most effective when there is a reciprocal relationship between the two processes. When this occurs, a firm's top management team recognizes that strategic planning decisions affect—and are affected by—HR concerns. In the best of companies, there is surprisingly little distinction between strategic planning and HRP. The planning cycles are the same, and HRP issues are viewed as being integral to the management of the business.

Why is it important for managers to assess both vertical and horizontal fit?

Horizontal fit is a necessary, but insufficient, cause of strategic alignment. A company could have nearly perfect alignment among its HR practices, and they still might not be aligned with the competitive strategy.

Strategy formulation

Human resources planning provides a set of inputs into the strategic formulation process in terms of what is possible, that is, whether a firm has the type and numbers of people available to pursue a given strategy.

Horizontal Fit / Alignment

In addition to vertical alignment, or fit, managers need to ensure that their HR practices are all aligned with one another internally to establish a configuration that is mutually reinforcing.

7-S Framework

In the "Hard S" category are the strategy, which lays out the route that the organization will take in the future; the organizational structure is the framework in which the activities of the organization members are coordinated. Also in the "Hard S" category are systems and processes. These include formal and informal procedures that govern the everyday activities of a firm. In the "Soft S" category are shared values, or core values, which were discussed earlier in the chapter as a guiding parameter for strategic planning. This is tightly connected to the issue of style, which refers not only to the leadership approach of top managers, but also the way in which employees present themselves to the outside world (to suppliers, customers, and so on). Skills and staff relate directly to human resources management because at its most basic level, HR's role in the strategy implementation process is to reconcile (1) human resources demanded and (2) human resources available.

realistic job preview (RJP)

Informing applicants about all aspects of the job, including both its desirable and undesirable facets

core capabilities

Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers

internal labor market

Labor markets in which workers are hired into entry level jobs and higher levels are filled from within

replacement charts

Listings of current jobholders and people who are potential replacements if an opening occurs

Strategy implementation

Once the firm has devised its strategy, the company's executives must make resource allocation decisions to implement that strategy, including decisions related to the firm's structure, processes, and human capital.

Quality of Hire = ( PR + HP + HR ) / N

PR = Average job performance rating of new hires HP = % of new hires reaching acceptable productivity with acceptable time frame HR = % of new hires retained after one year N = number of indicators

passive job seekers

People who are not looking for jobs but could be persuaded to take new ones given the right opportunity

strategic planning

Procedures for making decisions about the organization's long-term goals and strategies

____________ approaches to forecasting involve the use of statistical or mathematical techniques.

Quantitative

_______________ results from having resources that can be used different ways and people who can perform different functions in different ways.

Resource flexibility

Environmental scanning by HR managers is the systematic monitoring of major external forces influencing the organization. What six external issues are monitored frequently?

Six external issues frequently monitored by HR managers are: (1) Economic factors and development information, including general, regional and global conditions (2) Industry and competitive trends, including new processes, services and innovations (3) Technological changes, including information technology, innovations, and automation (4) Government and legislative issues, including laws and administrative rulings (5) Social concerns, including child care, elder care, the environment and educational priorities (6) Demographic and labor market trends, including the age, composition and literacy of the labor market, and immigration.

Explain what is meant by strategic human resources management (SHRM)

Strategic human resources management combines strategic planning and human resources planning. SHRM can be thought of as the pattern of HR deployments and activities that enable an organization to achieve its strategic goals.

Distinguish between strategic planning and human resources planning (HRP)

Strategic planning involves a set of procedures for making decisions about the organization's long-term goals and strategies. Typically strategic plans have a strong external orientation that covers major portions of the organization. The plans especially focus on how the organization will position itself relative to its competitors in order to ensure its long-term survival, create value and grow. Human resources planning (HRP) is the process of anticipating and making provision for the movement of people into an organization, during their tenure within the firm and their movement out of the organization. Its purpose is to assist managers deploy their human resources (HR) as effectively as possible, where and when they are needed, in order to accomplish the organization's goals.

environmental scanning

Systematic monitoring of the major external forces influencing the organization

mission

The basic purpose of the organization as well as its scope of operations. It is a statement of the organization's reason for existing.

global sourcing

The business practice of searching for and utilizing goods sources from around the world.

organizational capability

The capacity of the organization to act and change in pursuit of sustainable competitive advantage

management forecasts

The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization's future employment needs

strategic human resources management (SHRM)

The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals

yield ratio

The percentage of applicants from a recruitment source that make it to the next stage of the selection process.

recruiting process outsourcing (RPO)

The practice of outsourcing an organization's recruiting function to an outside firm.

human resources planning (HRP)

The process of anticipating and providing for the movement of people into, within, and out of an organization

benchmarking

The process of comparing the organization's processes and practices with those of other companies

employee leasing

The process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees

human capital readiness

The process of evaluating the availability of critical talent in a company and comparing it to the firm's supply

succession planning

The process of identifying, developing, and tracking key individuals for executive positions

rerecruiting

The process of keeping track of and maintaining relationships with former employees to see if they would be willing to return to the firm.

values-based hiring

The process of outlining the behaviors that exemplify a firm's corporate culture and then hiring people who are a fit for them.

core values

The strong and enduring beliefs and principles that the company uses as a foundation for its decisions

Summarize the major steps that should be included in a planning process that integrates strategic planning and HRP.

There are several steps that should be included in a planning process that integrates strategic planning and HRP. Among these steps are the following: Step One. Mission, vision and values: The first step in strategic planning is establishing a mission, vision and values for the organization. The mission is the basic purpose of the organization, as well as its scope of operations. The strategic vision moves beyond the mission statement to provide a perspective on where the company is headed and what the organization can become in the future. Organizational core values are the strong enduring beliefs and principles that the company uses as a foundation for its decisions. Step Two. Environmental analysis: Successful strategic management depends on an accurate and thorough evaluation of the environment. Many factors in the general environment—factors a firm cannot directly control—can affect its strategic decisions. These include customers, rival firms, new entrants, substitutes, suppliers and the external supply of labor. Step Three. Internal analysis: As organizations conduct external analyses of environmental opportunities and threats, they also analyze their internal strengths and weaknesses. The focus is on the firm's core capabilities, the composition of its workforce and the values, attitudes, beliefs and expectations of its employees. Step Four. Formulating strategy: After managers have analyzed the internal strengths and weaknesses of the firm, as well as external opportunities and threats, they formulate corporate, business and HR strategies for the organization. A comparison of strengths, weaknesses, opportunities and threats normally is referred to as a SWOT analysis. Corporate strategy typically involves such issues as decisions involving growth and diversification, mergers and acquisitions, and strategic alliances and joint ventures. Business strategy commonly involves decisions on low-cost strategy (compete on productivity and efficiency), differentiation strategy (compete on value added) and functional strategy (ensuring alignment). Step Five. Strategy implementation: Beyond formulating the appropriate strategy, managers must implement the plans effectively. This typically involves establishing the proper balance between supply-and-demand considerations. Implementation activities involving human resources can include downsizing, outsourcing, offshoring and layoff decisions. Step Six. Evaluation and assessment: Assessing a firm's effectiveness is not merely a final step but commences the process again since planning is cyclical in nature. The evaluation and assessment step involves measuring a firm's strategic alignment and ensuring strategic flexibility for the future.

Core Employees

This group of employees has skills that are quite valuable to a company, but not particularly unique or difficult to replace (such as salespeople in a department store or truck drivers for a courier service). These employees tend to be employed in traditional types of jobs. Because their skills are transferable, managers frequently make less investment in training and development and tend to focus more on paying for short-term performance achievements.

Strategic Knowledge Workers

This group of employees tend to have unique skills that are directly linked to the company's strategy and difficult to replace (such as research and development scientists in a pharmaceuticals company or computer scientists in a software development company). These employees typically are engaged in knowledge work that involves considerable autonomy. Companies tend to make long-term commitments to these employees, investing in their continuous training and development, and perhaps giving them an equity stake in the organization.

Partners and Complementary Skills

This group of individuals has skills that are unique and specialized, but frequently not directly related to a company's core strategy (such as attorneys on retainer, consultants, and research lab scientists). Although a company perhaps cannot justify their internal employment given their indirect link to the firm's strategy, these individuals have skills that are specialized and not readily available to all firms. As a consequence, companies tend to establish longer-term alliances and partnerships with them and nurture an ongoing relationship focused on mutual learning. Considerable investment is made in the exchange of information and knowledge.

Supporting Workers

This group of workers typically has skills that are less central to creating customer value and generally available in the labor market (such as clerical workers, maintenance workers, and staff workers in accounting and human resources). Individuals in these jobs are often hired from external agencies on a contract basis to support the strategic knowledge workers and core employees. The scope of their duties tends to be limited, and their employment relationships tend to be transaction-based, focused on rules and procedures, and less investment is made in their development.

Taking Action: Reconciling Supply and Demand

Through HRP, organizations strive for a proper balance between demand considerations and supply considerations. Demand considerations are based on forecasted trends in business activity. Supply considerations involve determining where and how candidates with the required qualifications can be found to fill a firm's vacancies.

value creation

What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted

What are (at least) three key elements of forecasting when managers engage in the process of human resources planning?

While internal analysis of the three Cs (capabilities, composition and culture) may reveal a great deal about where the organization is today, things change. In an important sense, strategic planning is about managing that change. Managers must continually forecast both the needs and the capabilities of the firm for the future in order to do an effective job at strategic planning. Managers focus on (at least) three key elements: (1) forecasting the demand for labor; (2) forecasting the supply of labor; and (3) balancing supply-and-demand considerations.

__________ recommendations are the way most job positions are filled.

Word-of-mouth

__________ help indicate which recruitment sources are most effective at producing qualified job candidates.

Yield ratios

An _________________ system can automatically track and calculate quality of fill statistics, time to fill, yield ratios, and costs of recruitment.

applicant tracking system (ATS)

In the context of human resource planning, internal analysis focuses especially on "the three Cs" :

capabilities, composition, and culture.

Flexibility can be achieved in two primary ways:

coordination flexibility and resource flexibility

Research has shown that a candidate who has been treated well by a potential employer will, on average, tell one other person. On the other hand, a candidate who has been treated poorly - perhaps receiving a tardy rejection letter or no letter at all - will, on average, tell __________ other people.

eleven

Vertical Fit (or vertical alignment)

focuses on the connection between the business's objectives and the major initiatives undertaken by HR.

It is not uncommon for firms to attempt to gain secrets from their competitors by __________ their employees.

hiring away

The HR metrics a firm collects fall into two basic categories:

human capital metrics and HR metrics. Human capital metrics assess aspects of the workforce, whereas HR metrics assess the performance of the HR function itself.

When data are gathered on managers, these inventories are called ____________.

management inventories

What are the two approaches to HR forecasting?

quantitative qualitative

Both skill and management inventories - broadly referred to as talent inventories - can be used to develop employee____________, which list current jobholders and identify possible replacements should openings occur.

replacement charts

Human resources planning relates to strategic planning in several ways, but at a fundamental level, we can focus on two issues:

strategy formulation and strategy implementation.

The cost of various recruiting procedures can be computed using _____________________

the average source cost per hire (SC/H)

Managers often hire external candidates rather than promote their current employees because

they have a tendency to overvalue unfamiliar candidates and undervalue known ones.

The ___________ metric refers to the number of days from when a job opening is approved to the date the person ultimately chosen for the job is selected.

time-to-fill