Decision 2 in HR

8/11/2019 Decision 2 in HR

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Quantitative and Qualitative

Factors in Decision Making


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Quantitative and QualitativeFactors in Decision Making


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Quantitative Factors


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Investment Appraisal

Payback period

NPV

ARR


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Quantitative Factors

But: such data provides only partof the story

Other factors need to be taken intoaccount, particularly the effects ofdecisions on stakeholder groups andtheir response to such decisions, e.g. The takeover of Manchester United by

Malcolm Glazer might make financial sensebut the reaction of the supporters mightmake the move unworkable


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Qualitative Factors


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Qualitative Factors

Qualitative factors look to takeaccount of these other issues

that may influence the outcomeof a decision

Can be wide ranging and especially

need to consider the impacton human resources andtheir response to decisions


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SWOT

A decisions (for example, investment in a newproduction plant) could be considered not onlyin financial terms but also to apply other

techniques of decision makingto look at wider issues:

A SWOT analysis might be part of this:

Strengths

Weaknesses Opportunities

Threats


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PEST

Might also need to factor in other externalissues that might influence the decisionmaking process which can be summarised as:

Political Economic

Social

Technological

Political could be in its widest sense,e.g. the internal politics of a firm as well asthe national and international political effect


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PEST

The decision to site a series of wind turbines ina coastal area might be justified on financialgrounds but:

What is the reaction of the localcommunity?

Does government policy support suchplanning developments?

Are there social impacts e.g. noisepollution, damage to eco-systems, etc?

Such factors may make the differencebetween success and failure


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Human Resources Management

Impact on a firms human resourcesis essential to consider,in particular the effects on:

Motivation

Morale

Recruitment and Retention

May be difficulty to assess and measure May need to distinguish between short term

effects and long term


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Stakeholder Analysis

Wider impacts on stakeholder groups may alsobe necessary, such stakeholders include:

Employees

Shareholders

Managers

Environment

Local Community

Suppliers Government

Consumers


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Decision Making

Eventual decision may rest on thebalance between the perceived effectsof quantitative and qualitative

If the long term effect on the workforcefor example was to reduce productivityor increase absence because ofthe impact on motivation and morale,

the fact that a decisionmakes financial sense may be shelved! Qualitative by its nature, therefore,

is very subjective

Decision 2 in HR

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