1 What do you mean by forecasting? Describe the various types of forecasts
Ans Explain the meaning of forecasting In manpower literature, one finds it's difficult to differentiate between the words 'demand', 'need', 'requirements', 'projections', 'estimates' and 'forecasts'. Some use these terms as synonymous while others use them in distinct senses. 'Demand', from the economists' angle, is a schedule of relationships between quantities of that particular category of manpower demanded and a series of possible wage rates, i.e., manpower demanded varies with the wage rates - more at a lower wage rate than at a higher one. 'Need' refers to the number of people required to provide an ideal level of service. What is ideal is never achieved, because of structural, technological and other constraints. 'Requirements' are the functional composition of employment that will be necessary to produce goods and services within a specified timeframe to achieve social, cultural; economic and technological targets. 'Projections' predict the outcome of spontaneous forces, i.e., the outcome which is expected in the normal course of events and in the absence of external stimulus. They are mathematical extensions of 'data on manpower into the future whereas 'estimates' are educated guesses based on experience. 'Forecasts', on the other hand, refer to a prediction of the outcome when normal course of events are influenced and altered by external forces. Forecasts usually take into account both the projections and the estimates. For example, forecasts at the macro level could result in a statement of what would happen if economic growth was deliberately manipulated by government policy HR forecasting constitutes the heart of the HR planning process, and can be defined as ascertaining the net requirement for personnel by determining the demand for the supply of human resources now and the future. The success of HR plans depends on the accuracy of HR forecasting. The success of HR plans depends on the accuracy of the HR forecasts that are needed to implement the organizational strategies. These forecasts involve estimating the future requirements of the organization in terms of the nature and number of people. The information gathered through external environmental scanning and internal skills assessments are used to predict the future HR requirements of the organization. Business dictionary defines Manpower Forecasting as: The prediction of future levels of demand for, and supply of, workers and skills at organizational, regional, or national level. A variety of techniques are used in manpower forecasting, including the statistical analysis of current trends and the use of mathematical models. At national level, these include the analysis of census statistics; at organizational level, projections of future requirements may be made from sales and production figures. Manpower forecasting forms a part of manpower planning process. Explaining the types of forecasts 1 Types of Manpower Forecasting Having understood the objectives of manpower forecasts one needs to know that manpower forecasts could be categorized differently, depending on the purpose for which forecasts are made. Some of the major types of forecasts are briefly described here. 1) Short-Term Forecasts Short-term forecasts are very useful at the micro-level or we can also say company level, e.g., a chain hotel makes financial statement for its expenditures keeping in view both the ongoing projects and the projects in the pipeline. The financial provisions have to be made for both the expected and unexpected expenditures. Short-term forecasts are usually made for a period not exceeding two years aiming to facilitate estimation of financial provision for wages/salaries in the programmes/projects initiated. 2) Medium-Term Forecasts For most countries medium term is about two to five years - the horizon for planning. Medium term forecasts are useful in those offices where manpower is concerned with advising ministers or preparing contingency plans to meet the 'twists and turns of economic circumstances or international events'. 3) Long-Term Forecasts Forecasts for a period more than five years are considered as long-term forecasts. These forecasts are useful in educational planning, particularly relating to the highly skilled professional categories of manpower. They are also useful in the preparation of corporate plans incorporating productivity changes, technological changes and major organisational developments. 4) Policy Conditional Forecasts Policy conditional manpower forecasts are those which are determined by the policy towards the factors which influence the demand for manpower. Such manpower forecasts may be based on a rule of thumb, or on professional judgement, or on an explicitly specified model or any combination of the three. 5) Optimising Forecasts Optimising manpower forecasts are those which are obtained as solutions to an optimising model in which numbers demanded of various categories of manpower are so determined that either the end benefits are maximised, or cost of resources used in achieving a pre-determined end objective is minimised. 6) Macro and Micro Forecasts Macro forecasts are done usually at the national, industry sector and region state levels whereas Micro forecasts are made at the enterprise or department level. Macro manpower forecasts are used for planning, education and training facilities as well as to make decisions regarding choice and location of industries for development whereas Micro manpower forecasts are needed primarily for planning recruitment, promotion, training and counselling in accordance with the plan for the development of enterprise or department concerned. Forecasts at this level are, therefore, required to be in greater details as well as precise. The micro forecasts are usually expressed in terms of numbers required for each occupation, source and stage of recruitment, and scheduling of training. 2 What do you mean by Human Resource Accounting (HRA)? Discuss the objectives and advantages of HRA. Ans Definition of Human Resource Accounting According to, The American Accounting Associations committee (1973), human resource accounting is the process of identifying and measuring data about human resources and communicating this information to interested parties. So apart from calculating the costs and investments in processes like recruitment, hiring, placement and training, HRA also quantifies the value of employees in an organization. According to Eric Flamholtz (1971) HRA is defined as the measurement and reporting of the cost and value of people in organizational resources. Stephen Knauf (1983) has defined HRA as "the measurement and quantification of human organizational inputs such as recruiting, training, experience and commitment." Therefore, HRA can be defined as the process of identifying, recording, measuring human resources and communicating related financial information associated with the human resource to the interested users. Thus HRA not only involves measurement of all the costs / investments associated with the recruitment, placement, training and development of employees, but also the quantification of the economic value of the people in an organization. Featuring HRA related information is not a statutory requirement as per the Companies Act (1956). The Institute of Chartered Accountants of India has not defined any standard or measurement to report HRA. This does not make HRA a superficial analysis. There are a few organizations like BHEL and SAIL which understand the importance of HRA and emphasize on furnishing related information in their annual reports. Describing the objectives of HRA Human resource accounting is capable of helping the management in various ways it can support managerial decisions involving human resource allocation, projection and scheduling in the organization. The purpose of human resource accounting is to facilitate the managers in planning, supervising and controlling human resource in the most effective manner. The objectives of Human Resource Accoun cost/value information of Human Resource and associated processes to the management and assist Provide methods and standard for eva of furnishes cost/value information for making management decisions about acquiring, allocating, developing, and maintaining human resources in order to attain cost- effective basis of human asset control, that is, whether the asset is appreciated, depleted or conserved. the development of management principles by classifying the financial consequences of various practices. Describing the major benefits of HRA Apart from reporting the value of HR and HR processes, HRA also implies whether the processes are genuinely necessary and are adding value. It also highlights reducible and unnecessary costs. HRA not only helps in internal decision making but also influences external decisions. It helps investors and stakeholder to make investment decisions. For instance the cost of training and development will feature under expenditures in the balance sheet; whereas the returns on investment (ROI) of training, will not feature in the balance sheet. Thus it does not provide a complete picture to the investor. So if the organization is able to include such information in the annual/quarterly report, it will add a lot of value to performance and depict a true picture of the potential. It gives the promoters and investors a measure of efforts being made to enhance the organizational capability and a sense futuristic approach. HRA can also be deployed to gain a competitive edge over other organizations. For instance, let us consider company A and company B competing each other in the market. Currently company A is doing better than company B as it has a product advantage. However, company B has revamped its research to close this product advantage gap. Also company B has instituted HRA in the organization. In the long term, company B is more certain to be more successful as it has closed the technical gaps and also concentrated on valuing the human resource competence. This enables it to stay ahead of others as it is more preventive to any loss or inefficiency on account of human resource. HRA highlights the organizations efforts towards development of its employees and measures the performance of Human Resource Development Function. In conclusion, the major benefits expansion, diversification, changes in technological growth etc. has to be worked out with the availability of human resources for such placements or key positions. If such manpower is not likely to be available, HR accounting suggests modification of the entire corporate pl and change, as it enables the organisation to have the right person for the right job at the right time and that the human involvement in the organisation is not wasted and brings high returns to the form of increased in the selection process based on the level of skill, qualifications and experience of future human ange in value, aptitude and attitude of human resources and accordingly change the techniques of interpersonal management 3 Define Talent Engagement. Discuss the importance and levels of Talent Engagement Ans Definition of Talent Engagement Talent engagement is the concept which explains the degree to which a talent (employee) is emotionally bonded to his organization and passionate about his work. Talent engagement is the level of commitment and involvement a person has towards his organization and its values. An engaged talent (employee) is well aware of the organizations business context, and how to work with colleagues to improve performance in his/her job and thereby benefit the organization. Talent engagement forms a critical ingredient for an individual as well as the organizations success. Talent engagement is strongly influenced by the depth of the leadership and its qualities as well as organizations culture. Talent engagement creates an atmosphere for employees to go beyond job responsibilities to delight customers and promote business. It is a powerful retention strategy. The Describing the importance of Talent Engagement Managers should essentially cultivate engagement in the organization because failure to do that causes a lack of commitment and motivation amongst employees. Talent engagement is linked to talent turnover, customer satisfaction, loyalty and proces Achieve greater work- Increase ability to innovate Explaining the levels of Talent Engagement Studies revealed that there are 3 levels of engagement: 1 Engaged Talent Engaged talent performs consistently at high levels. Engaged talent is always ready to find out peoples expectations from them or their role so that, they can meet and exceed them. They are more curious about their company and their position in it. They work whole heartedly using their talent and strengths at workplace every day for the betterment of their organization. They work towards driving innovation in the organization and for moving it forward. 2 Not Engaged Talent This is a kind of talent that tends to concentrate more on the tasks allotted to them rather than the goals and outcomes expected. They have to be repeatedly told their responsibilities, so that they can complete their work. Consequently the focus shifts from accomplishing tasks rather than achieving an outcome. Employees who are not engaged tend to feel that their contributions are being overlooked, and their potential is not being tapped. The reason behind them feeling like this is that they do not have productive relationships with their managers or colleagues. And they do not produce any positive results for the organization also. 3 Actively Disengaged Employee These employees are consistently against almost everything. Apart from being unhappy at work they are far busier demonstrating their unhappiness. Actively disengaged employees undermine what their engaged colleagues accomplish. Actively disengaged workers cause great damage to the organization in general. It is better to retrench such employees. 4 Discuss in details the Employee Exit Process Ans Explaining the Employee Exit process in detail Importance of Employee Exit Process Having understood the cost of employee turnover let us see why we need to manage the employee exit process professionally, effectively and efficiently. Imagine every time you lose an employee as per the SHRM study your cost doubles for the month. Estimates of other sources indicate it costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees! Example of Company A Employee Turnover Cost Employee Level Work-force Distribution Employees Across Levels Attrition Rate Annual Cost of Salaries in INR Crores Entry 70% 700 51% 16.8 Middle 20% 200 18% 16 High 10% 100 2% 35 Total 1000 67.8 Employee Level Employee Turnover Cost as a percentage of Annual Salary Annual Salary in INR Lakhs Additional Cost due to employee turnover in INR Lakhs No. of Employees who leave in a month No. of Employees who left in a year Annual Cost of Employee Turnover in INR Crores Entry 40% 2.4 0.96 30 360 3.5 Middle 150% 8 12 3 36 4.3High 400% 35 140 0.17 2 2.9 otal 16% 10.6 This is a hypothetical example, showing that managing employee turnover can reduce costs by up to 10.6 Crores or 16% in the case of company A. Such cost reduction measures can make a company extremely profitable. Large organizations struggle to show a 15%-20% annual growth in profits. Therefore it is important to reduce manpower turnover or attrition. Employee Exit Process (Managing Organizational Release) The employee who wants to resign will discuss with his Manager, submits his resignation to his Manager. The Manager should put his comments on the resignation letter and forward it to HR. (these comments can be To be relieved by dd/mm/yyyy, or some other special comments) HR on receipt of the Resignation letter, enters in the software, the date of receipt of resignation letter, terms and conditions of resignation if any special is there. and comments of Manager, the payroll changes are made accordingly as per the relieving date decided, the software generates the receipt of resignation letter, along with a no dues format, with employee name, roll no, dept already preprinted on the no dues format. These letters and format are handed over by HR to employee, + details of PF transfer forms, withdrawal forms as applicable. All the payroll changes, PF changes are scheduled to take action on the relieving date in software. HR prepares the matter of Relieving letter and gives it to the Manager for suggestions / comments. The relieving letter is kept ready. Usually before / on the relieving day or some 2 days ago, the employee submits all no dues, and other forms to the HR and takes his relieving letter. The sample questions below will help to facilitate these goals. They must be used as soon as the employee and the organization are aware that the employee will be leaving. It is only appropriate not to leave these questions until the exit interview. How will the employees knowledge be advantageous to the organization; their opinions, experience, introductions to their contacts, colleagues etc., before the employee leaves? Will the employees meet up happily with managers or successor or colleagues to advice them so that the organization will benefit from their knowledge and experience before their departure? How to help the employees to pass on knowledge and experience to their successor before they leave the organization? How and when will the employee prefer to pass on knowledge to the successor? How does the organization agree for this knowledge to be transferred? Are employees happy to help the organization by naming a successor? Employers or HR managers will get the most for the organization and be able to best help to the departing employee by being positive, constructive, understanding and helpful, prior to and during the exit interview process. Treat people with respect and dignity, and usually they will respond in kind. 1 Operational Responsibilities This is termed as basic housekeeping. Immediately before or on the date of departure the employee looks into basic housekeeping issues. Many organizations have a chain of standard Exit Checklists for use. Here are suggested examples: IT - - laptops or other home computers Signature of Employee who reviews the checklist: _____________ /supplies/ equipment to production; take all personal belo complete (do not leave any work files in office) Signature of Employee who reviews the checklist: loyee who reviews the checklist: _____________ 2 Standardized Exit Survey This is documenting, employees general impressions, of the organization. Employers document the employees impressions of their work experience for later use in improving the organization functionalities. Forward thinking HR managers track the circumstances of employee exits as well as the outgoing perceptions of those employees. This information offers valuable insights for enhancing SOPs, employee incentive programs, organizational structure, managerial approach etc. To ensure that basic employee exit information can be evaluated reliably with statistical analysis, it must be collected in a standardized format and procedure. There are companies that specialize in this type of evaluation. Employee Exits should meet professional standards and legal requirements. 3 Face-to-Face Exit Interview This is viewed as the personal and professional closure. The employer and employee accomplish proper closure with a face-to-face exit interview. An exit interview is generally conducted by impartial persons such as an HR manager or a senior leader of the organization. The idea is that employee should tend to be more forthright than disagreeable. Some organizations engage a third party to conduct such interviews and provide honest feedback. The objective of an exit interview is to gather information to improve upon the lacunae it may have in its working conditions so that it helps in retaining other employees. A questionnaire includes common questions such as reasons for leaving, job satisfaction level, frustrations and feedback concerning the out organization and how employees should direct indi is a source of inputs for managing succession planning. In exit interviews, the interviewer has to listen more than talk and provide time and space to the employee to answer as they may be nervous. Ensure a meeting room is blocked and no interruptions occur during the process. The interviewer may reassure to the employee to speak up and not feel threatened. He should interpret, reflect and understand what employee is saying. The interviewer should resist from countering the employee. The idea is to draw inputs and feedback. Exit interview process and questions may vary depending on voluntary or involuntary attrition. Voluntary attrition is where employee wishes to discontinue service with the organization but the organization wants to retain such employees. Involuntary attrition is where employee wishes to continue service, but the organization does not want to retain such employees. A proper closure in the exit interview, for both the organization and departing employee encourages positive and professional ties between the two. Role of HR It is the HR which is widely viewed as a neutral body. HR is the only department to which employees usually open up to, because they feel that talking to HR does not pose any threat. Only HR can effectively design,implement and monitor the exit process to make improvements and reduce the employee turnover. 5 As an HR, you are asked to focus on the Talent Development Process in your organization .How would you define Talent Development? Explain the necessity of Talent Development from an HR perspective. Explain the model for achieving excellence in Talent Development Ans Development Architecture Organizations seeking talent development do much more than just looking at individuals; they seek for people or groups of people whove talent at different levels in the organization. They search for people who have great potential, experience, performance record, and who are seasoned, matured but still aggressively driving forward. And from this group they will select a few people to be organizational leaders or leaders of specialist functions within the organization. The organization has to take the responsibility of creating and maintaining the HR systems that help in attracting, selecting, deploying, developing, rewarding and retaining these talents. Talent development does not include only this much. The organization also needs to see that the careers of these talented people are well-managed and provide them enough opportunities to develop the skills and judgment they need as they move into key leadership roles. Organization must prepare and enable them to select the right practices for their organization and leading it in the right direction. Example: From History:The legendary Chanakya was known to be a great economist, and king maker. Chanakya was dishonored by King Nanda. Chanakya wanted to settle scores and therefore started looking for talent- a talented person,whom Chanakya, could groom to become a king one day and take over King Nandas kingdom. After travelling far and wide in the hunt for talent, Chanakya spotted a young child with talent (a born leader who showed the qualities of an emperor). Chanakya groomed the talent and made him king Chandragupta and also settled his score with King Nanda. Hence talent identification, talent attraction, talent development and talent engagement is not new to mankind. Over centuries just new terms have evolved. Example: From Corporate Corporations have also recognized that there is a need to improve their talent management strategies. The results of a study indicated that only 4% of respondents believe having world-class processes for talent acquisition, management, development, or compensation in place today. Organizations which integrate and optimize these processes can create a highperformance culture, a deep understanding of critical talent needs and future shortages, and a clear view of the best sources for new talent. Example: Various articles, news and magazines have said that Deloitte, one of the finest companies, has take up talent development as a crucial goal towards organizational improvement and success. The talent development architecture in todays corporate environment involves four dimensions. They are talent requirement, conversion from potential to polished performers, HR systems and processes and organizational programs. Let us learn more about the four dimensions. I) Talent Requirements There should be clear and detailed picture about the competencies and other characteristics that the organization wants in its talent pool, so that people can see what it takes to accomplish the job meticulously. II) Conversion from Potential to Polished Performers For this the organization will have to define the experiences, exposures and challenges that a talent has to undergo so that he/she can convert him/herself into high performers. III) HR Systems and Processes The organization needs to have a sound and integrated human resource systems and processes aligned to attracting, developing and retaining talent. IV) Professional Development & Leadership Programs Workforce learning is an essential strategy for supporting organization's strategic initiatives in dealing with the challenges of employee engagement and inclusion, retention, and improved performance. These programs may both be in-house or external and involve forms of learning associated with delivering on accountabilities. Some programs will focus on strategy and values while others will stress on how to develop competencies. 2 Necessity of Talent Development Talent development is necessary through automated and integrated learning management, performance management, and organization reduces turnover at critical positions, manages succession plans, minimizes business disruptions, and also takes care to reduce the risk of non- development is necessary to achieve extra ordinary goals. Extraordinary goals require extraordinary and recruitment will be the key issue for different organizations. So finding the proper talent and creating opportunities for its developing talent are the critical steps in retaining the top talents in an organization. The cost of replacing a valued employee is enormous. Organizations need to promote diversity and design strategies to retain people, reward high performance and provide opportunities for developm Performing organizations anticipate the leadership and talent requirement to succeed in the future. They do understand that it's critical to strengthen their talent pool through succession planning, professional development, job rotation and workforce planning. Hence, for that they need to identify the right talent and groom it the right way. 3 Processes and Approaches to Talent Development Talent management with a focus on soft skills, leadership development and succession planning is the defining trend in HR. Matching the right person to the right job is an acknowledged need in organizations. But one of the toughest challenges in selection often overlooked is matching the right candidate to his immediate boss. What makes that goal particularly tough is when the boss does not have a clue what kind of candidate would work well with him. Working with various tools, can be design and customize assessment exercises and materials. Employers also need to identify critical competencies that people will need to develop for their success. 4 Model for Achieving Excellence in Talent Development In order to achieve excellence in talent development, companies should focus on the following factors: Structure Functional profiles, competency models, and describing paths for growth are the things companies should implement. Other than these a yearly performance management cycle with some achievable targets should be set and incentive structures, career- and succession planning are some things which form an integral part of the talent management system. Selective Development Most of the successful organizations carry on a close examination of which are the talent programs and interventions that will be necessary to realize the company strategy. Process The total infrastructure for talent development should be such that it is a part of the day-to-day leadership culture. Coaching and training skills are to be developed by the managers who have an experience to execute talent management effectively. 3 Organizational Training Organizational Training mostly concentrate on organizations strategic business objectives and try to plan training which needs for projects and support groups. Effective training requires assessment of needs, planning, instructional design, and suitable training medium as well as storage for training process data. As an organizational process, the main components of training include a managed training development program, documented plans, personnel with appropriate mastery of specific disciplines and other areas of knowledge, and mechanisms for measuring the effectiveness of the training program. 6 Write short notes on the following: a)Recruitment b)Succession Planning Ans a) Meaning and objectives of Recruitment Recruitment William F Glueck Recruitment is a set of activities and organization uses it to attract potential job candidates possessing appropriate characteristics to help the organization reach its objectives. Byars & Rue Recruitment Involves seeking & attracting a pool of people from which qualified candidates for job vacancies can be chosen. Recruitment of applicants is a function that comes before selection. It helps to create a list of prospective employees for the organization so that the management can choose the right person for the right job at the right time from this list. The main goal or objective of the recruitment is to help in the selection process. Recruitment can be defined as: A process of finding and getting capable applicants or employees or manpower for employment. This process begins when new people or employees are sought or found. It ends when applicants matching the job description submit their resume and application. The result is a list of applications from which new employees are selected or chosen. Edwin B. Flippo has defined recruitment as, The process of searching the candidates for employment and stimulating them to apply for jobs in the organization. Recruitment is a continuous process. The firm attempts to develop a list of qualified candidates for the future manpower resource needs. The vacancies may or may not exist in the firm. Usually, the recruitment process begins when a manager realizes that there is a possibility of a vacancy or an anticipated (there may be) vacancy in the organization. present and future manpower needs of the organization in relation with planning & job evaluation a lot of candidates so that the management can select the right candidate for the right job from this list. acts as a link between the employers and the job seekers or job hunters and ensures that the placement of the right candidate at the right place at the right time. Manpower planning helps in finding out the number of employees or manpower an organization needs. The manager of an organization knows the kind of job openings available, the description of the job i.e. the tasks, duties and responsibilities and hence he can decide the job specifications i.e. employee or manpower skills, qualification, experience etc. required of the candidates. The next step is recruiting the right kind of people/manpower, with the right skill and at the right time. Recruitment is an un-ending process. It means that it is an on-going process for an organization. Why do we say that recruitment is an un-ending process? For the simple reason that some employees resign, some retire and some may die. More importantly organizations diversify, open new branches, launch new products in new markets. Hence new employees are required to join the organization. Recruitment is an important part of an organizations human resource planning and their competitive strength. Efficient human resources hired at the right time in the right place in the organization are important and can be a core competency or a critical advantage for the organization. b) Concept of Succession Planning Succession Planning A variation of career planning is succession planning which is conducted not for all employees in the organization by only for some selected vital roles and positions in the organization. It aims at identifying those employees who stand a chance of succeeding an executive on his retirement or promotion or any other eventuality. The succession plan lists the job role or position and the potential candidates for the job role. It has their name, current job designation, age, present performance, and by when they can be promoted. Such employees are groomed for the job role by their mentors, HR and supervisors. Remember if you have 5 probable candidates for succession to a vital job role, all these candidates harbor strong aspirations for the role. When the actual succession happens, only 1 of the 5 candidates makes it to the job. This leads to frustration, disappointment amongst the remaining 4 candidates. Remember these are 4 of your top performers. What happens when a few of them quit and go? Suddenly there is a gap in leadership in the departments in which they were operating. A plan needs to be in place to handle gaps in leadership, post announcing the successor for a vital job role. Also at least 2-3 contenders should be groomed for a position to be filled. These succession plans are supposed to be kept confidential. However with every successful high performing employee receiving offers every now and then, it is sometimes considered that this valuable succession plan should not be kept confidential but instead communicated to motivate the employees to stick around and not look out of the organization.