HUMAN RESOURCE MANAGEMENT

Session details • Session 1 - Introduction to Human Resource

Management

• Session 2 - HR Planning, Recruitment, Selection, Placement and Induction

• Session 3 - Personnel Development Programme

• Session 4 - Job Compensation

• Session 5 - Promotions, Demotions, Transfers, Separation, Absenteeism and Turnover

• Session 6 - Quality of Work Life

• Session 7 - Counselling for Effective HR Development

• Session 8 - Human Relations

Pranothi Nelson

Session 5

Succession Planning, Promotion, Demotion, Transfer, Separation, Absenteeism, Labour Turnover

Succession Planning

• Succession Planning is an ongoing process that identifies necessary competencies, and then works to assess, develop, and retain a talent pool of employees, in order to ensure a continuity of leadership for all critical positions.

• It is a specific strategy, which spells out the particular steps to be followed to achieve the Company’s mission, goals, and initiatives identified through Manpower Planning.

• It is a plan formulated to implement, and customize and meet the business needs of department(s) thereby contributing to the organisational manpower requirements.

• Succession planning is a lifelong process encompassing everything aimed at ensuring the continuity of the business through the next generations (Family managed business perspective)

• A proactive and future focused process, which enables the company to assess, evaluate and develop a talent pool of individuals who are willing and able to learn and occupy higher positions when needed.

• A method, which helps the organisation in preserving its information and knowledge that will be lost due to retirement, promotion and attrition.

• A tool to meet the necessary manpower requirements of the company in terms of quality and quantity, by addressing competency and skill gaps.

Core Principles Underlying Succession Planning

1. Leaders really do matter … in managing/driving

accountability, results, culture.

2. Performance is what counts … top performers over

high potentials

(the “what” & “how” both count).

3. Today’s top performing leaders aren’t necessarily

tomorrow’s …

even our best leaders can fall behind or derail.

4. Talent is an enterprise resource … willingness to share talent

makes the system work.

5. A broad set of experience & assignments is the best classroom..

yet a balanced approach is still necessary for development.

6. It’s incumbent upon today’s “top-100” to leave a legacy of

future talent … current leaders must teach, mentor, & role

model others on what it takes to succeed.

7. Invest in the best … focus the rest.

Assessment of Key Positions

Identification of Key Talent

Assessment of Key Talent

Generation of Development Plans

Development Monitoring & Review

Key Elements

Succession Planning: Key Elements

1. Assessment of Key Positions:

• What are the competencies and experiences needed

to qualify for each key position?

2. Identification of Key Talent:

• Typically people at the top two levels of the organization

and high potential employees one level below. • Identified by their management’s assessment of their performance and potential for advancement.

3. Assessment of Key Talent:

• For each person on the radar screen, primary development

needs are identified focusing on what they need in order to be ready for the next level.

Succession Planning: Key Elements

4. Generation of Development Plans:

• A development plan is prepared for how we will help the

person develop over the next year.

5. Development Monitoring & Review

• An annual or semi-annual succession planning review is

held to review progress of key talent and to refresh or revise their development plan.

Succession Planning: Key Elements

Understanding your HIPO Leaders The Performance-Potential Grid

Workhorse or

Keepers Stars or

Growers

Underperformer

or Deadwood Question

Marks

Perfo

rm

an

ce

Future Potential

HIGH

LOW HIGH

How can we move people between groups?

Where do the non-performers fit in the organization? Should they be forced out?

Are our resources allocated properly?

Understanding your HIPO Leaders The Talent Matrix

“Diamond in the

rough”

- Loose Cannon

- Problem Child

“Consistent Star” Fully Developed

Excellent in role

Need new opportunities

Doin

g t

he

Rig

ht

Th

ing

s

Getting the Right Results

“Future All-

round Star”

“Future Utility

Player”

“Future Utility

Player” Solid Citizen

Solid in Role

“Utility Pro” Fully Competent in Role

Still Developing

Nearly ready for more

responsibility

“Take Action Now” Not developing

Not competent

No potential

In wrong job

Move out

“Future Pro” Still Developing

Not yet exceptional in role

Has potential to improve

Monitor development

“Technical Pro” Fully competent in role

Reached potential

Circle of Leadership

Assess the

Present

Make Commitment to

Leadership Continuity

Evaluate &

Reward

Identify & Develop

Individual Talent

Establish a Succession

Planning Program

Assess the Future

Needs

15

Pitfalls to Avoid

• Lack of leadership

• Lack of communication

• Lack of transparency

• Lack of understanding

• Making assumptions about future growth

• Lack of follow up

• Not institutionalized

Mentoring – a Cousin of SP

• What is it?

– Structured, trusting relationship

• What do mentors do?

– Provide individuals with

• Support

• Counsel

• Friendship

• Reinforcement

• Constructive Example

– Are good listeners who want to help individuals develop

Indian examples • The planning happens at least three years before transition.

• In all these cases, except HCL Infosystems, the faces of successors were projected internally and externally well before the actual transition.

• Usually, there is a generational shift. In all these succession plans, there is a minimum age difference of 10 years.

• Understanding of customers may come from an outsider but understanding of delivery would come from someone who has spent time internally.

• In all our examples concerning offshore companies, it is internal people who have been promoted to the top job.

Promotions

• The advancement of an employee from one job position to another job position that has a higher salary range, a higher level job title, and, often, more and higher level job responsibilities, is called a promotion.

• Sometimes a promotion results in an employee taking on responsibility for managing or overseeing the work of other employees. Decision making authority tends to rise with a promotion as well.

Features of promotion

• Movement by up one level on the organizational chart.

• Desirable due to the impact a promotion has on pay, authority, responsibility, and the ability to influence broader organizational decision making.

• Visible sign of esteem from the employer.

• A promotion is a powerful communication tool.

• Form of recognition for employees who make significant and effective work contributions.

• Individual contributors must be eligible for promotions that recognize and reward their role as contributors.

Demotion

• A demotion is a compulsory reduction in an employee's rank or job title within the organizational hierarchy of a company, public service department, or other body.

• It leads to the loss of other privileges associated

• An employee may be demoted for violating the rules of the organization by a behavior such as excessive lateness, misconduct, or negligence.

• A move to a position at the same rank or level elsewhere in the organization is called a lateral move or deployment.

• Demotion: An employee is said to be demoted when he is downgraded from the present job and is reduced to a lower cadre of service.

Transfer

• A transfer is a relocation of an employee to the same class in a different department or job site or to a related classification within the same salary range.

• A transfer is an approach to helping employees develop a career path.

• A transfer provides experience in other areas of an employee's current department or in a new department within the business.

• Gain wider and broader experience within the business.

• Transfer provides an opportunity for an employee to learn and grow.

Advantages of a Transfer • Alternate career path

– Gains new knowledge and skills by performing a different job that requires new skills and provides different responsibilities.

– Overcomes boredom and dissatisfaction with his or her job by having a new and different job with changed responsibilities and tasks.

– Receives a new challenge, a chance for the employee to expand his or her accomplishments, reach, impact, and potentially, influence different aspects of the workplace and organization.

Separation

• Any termination of employment. It is generally classifiable as a layoff, voluntary quit, or discharge.

• Voluntary Separation

– The original resignation letter is submitted to Human Resources

– a copy kept for the department files.

– The checklist is given to the resigning employee

– supervisor signs the form and submits the completed separation checklist to Human Resources

• Involuntary Separation

– As soon as the decision to separate the employee has been established, the separation checklist

– It is the immediate supervisor's responsibility to make sure the Separation Checklist is completed, signed and returned to Human Resources on the last workday.

Absenteeism

• It refers to workers absence from their regular task when he is normally scheduled to work.

• The according to Webster’s dictionary “Absenteeism is the practice or habit of being an absentee and an absentee is one who habitually stays away from work.”

• According to Labour Bureau of Shimla : - Absenteeism is the total man shifts lost because of absence as percentage of total number of man shifts scheduled to work. In other words, it signifies the absence of an employee from work when he is scheduled to be at work.

• Absence may be

– authorised

– Unauthorised

– wilful or caused by circumstances beyond one’s control.

Causes of absence

• Job situation

• Personal factors

• Attendance factors

Job situation factors include:

• Job scope – a high degree of task repetitiveness is associated with absenteeism although job dissatisfaction itself is a contributory rather than a primary cause of absence.

• Stress - This can be attributed to workload, poor working conditions, shift work, role ambiguity or conflict, relationships and organizational climate.

• Frequent job transfers increase absenteeism.

• Management style — the quality of management, especially immediate supervisors, affects the level of absenteeism.

• Physical working conditions.

• Work group size — the larger the organization, the higher the absence rate.

Personal factors include

• Employee values

• Age

• Sex

• Personality

Attendance factors include:

• Reward systems — as pay increases, attendance improves.

• Sick pay schemes may increase absenteeism.

• Work group norms can exert pressure for or against attendance.

Control of absenteeism

• Commitment

• Trust

• Information

• Documented attendance policy

• Regular training for managers and team leaders

• Communication

• Counselling for employees at return-to-work

• Disciplinary procedure – this must be operated fairly and consistently

Effects of absenteeism

• Decrease in Productivity :

– Employees may be carrying an extra workload or supporting new or replacement staff.

– Employees may be required to train and orient new or replacement workers.

– Staff morale and employee service may suffer.

• Financial Costs :

– Payment of overtime may result.

– Cost of self-insured income protection plans must be borne plus the wage costs of replacement employees.

– Premium costs may rise for insured plans.

• Administrative Costs :

– Staff time is required to secure replacement employees or to reassign the remaining employees.

– Staff time is required to maintain and control absenteeism

Employee turnover

• Employee turnover (sometimes known as ‘labour turnover, ‘wastage’ or ‘attrition’) is the rate at which people leave an organization.

• It can be disruptive and costly.

• It is necessary to measure employee turnover and calculate its costs in order to forecast future losses for People Resourcing planning purposes and to identify the reasons that people leave the organization

• Plans can then be made to attack the problems causing unnecessary turnover and to reduce costs.

Methods to measure employee turnover

Cost of employee turnover

• Factors affecting the cost of employee turnover

• Direct cost of recruiting (replacements (advertising, interviewing, testing, etc).

• Direct cost of introducing replacements (induction cost).

• Direct cost of training replacements in necessary skills.

• Leaving costs – payroll and HR administration.

• Opportunity cost of time spent by HR and line managers in recruitment, induction and training.

• Loss of output from those leaving before they are replaced.

• Loss of output because of delays in obtaining replacements.

• Loss of output while new starters are on their learning curves acquiring the necessary knowledge and skills.

Factors affecting retention

• Early-career employees – career development

• Mid-career employees - the ability to manage their careers and satisfaction from their work are important.

• Late-career employees - security.

• The other factors that affect retention are:

– company image;

– recruitment, selection and deployment;

– leadership

– learning opportunities

– performance recognition and rewards.

Possible reasons for leaving

• More pay.

• Better prospects (career move).

• More security.

• More opportunity to develop skills.

• Unable to cope with job.

• Better working conditions

• Poor relationships with manager/team leader.

• Poor relationships with colleagues.

• Bullying or harassment.

• Personal – pregnancy, illness, moving away from area, etc.

Possible actions to deal with employee turnover problems

• Deal with uncompetitive, inequitable or unfair pay systems

• Design jobs to maximize skill variety, task significance, autonomy, control over work and feedback, and ensure that they provide opportunities for learning and growth.

• Develop commitment to the work (job engagement) not only through job design but also by organizing work around projects with which people can identify more readily than the company as a whole.

• Encourage the development of social ties within the company. In the words of Cappelli

• (2000), ‘loyalty to companies may be disappearing but loyalty to colleagues is not’.

• Ensure that selection and promotion procedures match the capacities of individuals to the demands of the work they have to do

• Reduce the losses of people who cannot adjust to their new job – the ‘induction crisis’ by giving them proper training and support when they join the organization.

• Improve work–life balance by developing policies

• Select, brief and train managers and team leaders so that they appreciate the positive contribution they can make to improving retention.

• Ensure that policies for controlling bullying and harassment exist and are applied.

Indian Scenario

• According to a recent Towers Watson's research, 56% of employees in India believe that they must leave their organization to advance to a better job, making Employee Retention one of the most critical issues faced by organizations today.

RETENTION SUCCESS MANTRAS • Quality of Work Life

• Support

• Open Communication

• Employee Reward Program

• Career Development Program

• Performance Based Bonus

• Recreation facilities

Case study

• You have received an e-mail from your boss, the HR director, with the message: ‘We hear a lot about integrating the HR strategy with the business strategy but what does this mean? What are the problems in doing it? How do we overcome these problems?’

• Reply.