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EMPLOYEE RESOURCING NOTES

 Employee resourcing is that part of human resource management (HRM) which


focuses on the recruitment and release of individuals from organisations, as well
as the management of their performance and potential while employed by the
organisation.
 Price (2007) defines employee resourcing as strategic approach to managing
people by minimizing costs, maximizing employee value and obtaining the
correct combination of behavioral attributes for the job and the organisation.
Thus, employee resourcing does not end with attraction and retention of
employees, the organisation should be able to exploit this resource to achieve
superior organisational performance.
 Employee resourcing strategy is concerned with ensuring that the organisation
obtains and retains the people it needs and employs them efficiently. It is,
therefore, a key part of the process of human resource management.
 The rationale behind employee resourcing is found in the resource based view.
 People resourcing is concerned with ensuring that the organization obtains and
retains the human capital it needs and employs them productively.
 Employee resourcing therefore involves staffing (i.e. Recruitment, selection,
retention and dismissal), performance (i.e. Appraisal and management of
performance), administration (policy development, procedural development,
documentation) and change management (the importance of the resourcing
function as a change agent).
 Management of the entry, stay and exit of employees in an organisation.
 It is also about those aspects of employment practice that are concerned with
welcoming people to the organization and, if there is no alternative, releasing
them.
 HRM resourcing policies address two fundamental questions:
1. What kind of people do we need to compete effectively, now and in the
foreseeablefuture?
2. What do we have to do to attract, develop and keep these people?
Elements
• human resource planning;
• Work life balance
• Work flexibility
• Job analysis
• talent management;
• recruitment
• selection interviewing;
• selection testing;
• introduction to the organization;
• Training and development
• Reward management
• Release from the organization.
The traditional view of employee resourcing concentrated on obtaining people
with the right range of skills and attitudes for the organisation. This sounds fine in
principle but there is a tendency to interpret this in terms of existing skills and
attitudes, so that managers tend to recruit people who display the same
characteristics as themselves. However, creativity, innovation and flexibility are
key issues in today's modern business environment and new thinking is not likely
to result from people who display the same or similar characteristics to those
already within the organisation. Peters and Waterman, in In search of
excellence suggest that superior organisational performance comes from
employing individuals that are mavericks. In their view, the usual selection
methods requiring evidence of continuous and verifiable employment actually
work against the organisation that is seeking a freethinker.

APPROACHES TO EMPLOYEE RESOURCING

The integration approach to SHRM focuses more significantly on the link between HRM
strategy formulation and performance. It emphasizes the alignment of HR policies and
practices within the HRM area and with other strategies across the organisation outside
the area of HRM. Within this approach we distinguish three possible foci for integration:
horizontal, vertical and combined integration.
Horizontal integration. Here the focus is on the organisation developing a range of
interconnected and mutually reinforcing HR practices, the argument being that such
alignment will always produce superior results whatever the accompanying
circumstances. Underlying this assertion is the premise that there exists a set of HR
best practices that fit together and mutually reinforce each other. Synergy is a key
emphasis of horizontal integration or, alternatively, of internal fit. Synergy will be
achieved if the combined performance of a set of HR policies and practices is greater
than the sum of their individual performances.

The assumption that best HR practices work in all contexts has been labelled as the
universalistic model (Delery and Doty, 1996). According to Osterman (1994) and
Huselid(1995), who are among the mainstream universalistic theorists, the underlying
assumptions of this model are:
1 a linear relationship exists between HR practices and business performance;
2 best HR practices are universally applicable; and
3 internal fit is the key concept.
The best practice approach is based on the assumption that there exists a set of
practices that will lead to high commitment or high performance in organizations when it
is implemented regardless of context.
Although support for a universalistic approach to HRM exists, there are notable
differences across studies as to what that approach should look like. Pfeffer (1994)
considers employment security, selective recruiting, high wages, incentive pay,
employee ownership, information sharing, participation, empowerment, job
redesign/teams, training and skill development, cross-training, symbolic egalitarianism,
wage compensation and promotion from within to constitute significant best HR
practices. There may be many combinations of practices that result in identical
organisational outcomes (Doty, Glick and Huber, 1993), the so-called principle of
equifinality. However, this challenges the concept of a universal ‘best practice’ model.

Vertical integration. Here, the organisation is seeking to develop a range of HR


practices that fit the business’s strategies outside the area of HRM. The logic here is
that performance will be improved when the right fit, or match, between business
strategy and HR practices is achieved. For example, generally, when pursuing an
innovation strategy, organisations emphasise HR practices that encourage cooperative,
interdependent behaviour and foster exchange of ideas and risk taking. For the quality
strategy, the emphasis will be on seeking to enhance quality through ensuring highly
reliable behavior from individuals who identify with the goals of the organisation. For a
cost leadership strategy, HR seeks to maximise efficiency through managerial
monitoring and close control of employee activities (Schuler and Jackson, 1987).
External fit, best fit and strategic fit are considered to be alternative expressions of
vertical fit that determine the so-called contingency model (Delery and Doty, 1996).
According to Schuler and Jackson (1987) the underlying assumptions of this model are:
1 a non-linear relationship exists between HR practices and business performance;
2 the impact of the HR practices on business performance is different for the different
levels of the critical contingency variable; and
3 external fit is the key concept.
The contingency approach is based on the assumption that HR strategy will become
more efficient when it is linked to the environment of the business. The approach
asserts that HRM policies must be synergistic and consistent with organizational
strategy if superior organizational performance is to be achieved. This approach holds
the view that employee resourcing strategies and firm performance are influenced by
the firm’s environment and circumstances
Combined integration. When an organisation formulates its strategy by combining
internal and external fit it is called combined integration. This approach makes use of
bundles of HR practices. The logic here is that different combinations of HR practices
will lead to higher business performance, depending on the organisational context
(MacDuffie, 1995). Richardson and Thompson (1999) argue that an organisation with
bundles of interrelated HR practices that complement and reinforce each other (i.e.
horizontal integration) should have a higher level of performance, provided it also
achieves high levels of fit with its business strategy (i.e. vertical integration). Delery and
Doty (1996) refer to this combined integration approach as the configurational model.
According to MacDuffie (1995) and Delery and Doty (1996), who are among the
mainstream configurational theorists, the underlying assumptions of this model are:
1 a non-linear relationship exists between configurations of HR practices and business
performance;
2 multiple unique configurations of HR practices result in maximal business
performance, referring to the concept of equifinality; and
3 the configurations are assumed to be ideal types that are theoretical constructs rather
than empirically observable phenomena; and
4 internal and external fit are both key concepts.
RESOURCE BASED VIEW (RBV)
This approach assumes that sustained competitive advantage can be obtained only
from an organization’s SWOT (strengths, weaknesses, opportunities and threats) by
exploiting the organization’s internal strengths and external opportunities, whilst
minimizing its internalweaknesses and the effects of external threats. To achieve this
competitive advantage the organisation needs four attributes.
1. It adds value
2. It is rare in the market place
3. It is hard or impossible to imitate
4. There are no real substitutes.
The application of this to HRM is a comparatively recent phenomenon. The question to
be answered is 'are an organization’s human resources a key source of its competitive
advantage?' The answer is 'yes' if, viewed as a single resource, employees have the
four attributes above.
The people add value to customers -Almost certainly yes
The human resource is rare in the market place
It is hard or impossible to imitate-It may not be hard to get good people but it is
usually a long term activity to build up the social networks etc. that characterised high
performing organisations
There are no real substitutes-Unless people can be replaced by technology there is
no substitute
The Resource Based View explains why organisations with large headcounts are either:
(a) Thinning down (to make technology rather than people their source of
competitiveadvantage) or
(b) Moving production to locations where staff costs are low cost (making low cost and
therefore low price their competitive advantage) or
(c) Moving into the professional, knowledge-based service sector (where it is the quality
of people that gives the competitive advantage).

Atkinson (1984) Flexible Firm Model

Atkinson’s Flexible Firm Model analyses the segmentation of the workforce utilizing the
concepts of core and periphery as Figure illustrates.

Fig. 1: Atkinson’s (1984) Flexible Firm Model


Adapted from Atkinson (1984)

According to Brewster et al (2003) the Flexible Firm Model is based on a break with
unitary and hierarchical labour markets and organization of internal means of allocating
labour, in order to increase a core workforce and a cluster of peripheral employment
relations. Thus, the Flexible Firm Model redefines the organization into two broad
segments i.e. the core and the periphery. The core is made up of highly skilled group of
employees with internal career paths. This group of workers have a positive
psychological contract and high degree of job security as the organization is most likely
to build their strategies around these workers. Resources are easily availed for training
in firm specific skills not readily bought in and are closely associated with functional
flexibility. The second segment which is the peripheral workforce is mainly concerned
with the organization’s day to day activities that are important but not vital to the
organization that is the development of qualitative or numerical flexibility. Employees in
this segment are offered a job not a career. Brewster et al (2003) assert that the main
focus of the flexible firm model is to closely match organizational (labour) resources with
work demand, increasing the efficiency of human resource utilization while dampening
the effects of market volatility and uncertainty, thereby increasing organizational
effectiveness. For the peripheral group, there is minimal organizational commitment,
negative psychological contract and a high degree of job insecurity. Management’s
major thrust is to ensure worker compliance with preset rules and regulations. If the
organization needs to beef up its workforce either the core or peripheral workforce, the
secondary peripheral workforce solves this through part time temporary or
subcontracting work. Thus, there is no disruption of organizational activities.

Atkinson (1984) suggested four main types of flexibility, which are functional flexibility,
numerical flexibility, temporal flexibility, and financial flexibility. Functional flexibility
allows employees to combine skills and competencies in order to increase their mobility
across the various channels of production. It relies on extensive training and thus it is
likely to be pursued when there is no longer a stable relationship between employees
and the organization (Sarantinos 2007). It entails horizontal or vertical multi skilling,
teamwork and job rotation. Sarantinos (2007) describe numerical flexibility as the
possibility of the organization to adapt the number of its labour on a short-notice,
increasing or decreasing it as it sees fit. This category of employees is more easily
replaceable and hired according to the needs of the organization. Thus, it has much
more to do with varying the size and the structure of the workforce and it include
temporary contracts, agency work, labour pool, part-time, outsourcing, subcontract and
freelance. Temporal flexibility entails shifting working hours so as to meet production
demands. It involves shift work, rostering, annualized work, part time, sabbatical leave,
variable working pattern and compressed workweek. Sarantinos (2007) asserts that
financial flexibility is linked with efforts on behalf of the organization to reduce labour
costs in order to protect profitability. It is closely linked with performance related pay and
output –driven reward. It enables the organization to adjust its wage and salary
outgoings in accordance with fluctuations in output.

Atkinson split the organisation into two groups:


The 'core' group, which is permanent, displaying functional flexibility characteristics.
Core workers may display common features and may have firm specific skills that would
be hard to buy in.
The peripheral workers, who are offered numerical and distance flexibility and are used
and discarded as required by demand. The peripheral worker provides a buffer allowing
functional flexibility to be exploited to the full. Contracting out takes responsibility for all
problems concerning adjustments in contractual arrangement e.g. wage rates and hours
worked. The organisation can then concentrate on its core activities.

Human Resource Architecture


Lepak and Snell’s (2002) HR Architecture is a way of describing HR systems within a
single organization. It is a concept developed by Lepak and Snell (2002) for studying
alternative employment relationships used by firms in allocating work. According to
Holbeche (2007) HR architecture is used to identify HR practices, employment modes
and employment relationships for different employee cohorts based on the degree to
which their human capital is strategically valuable and unique. The HR Architecture
according to Becker and Huselid (2006) is composed of the systems, practices,
competences and employee performance behaviors that reflect the development and
management of the firm’s strategic human capital. Lepak and Snell made the
observation that not all jobs and employees are equally valuable to an organization and
that the use of multiple HR Systems may reflect these differences and yield better
outcomes. They came up with four types of employment relationships based on the
degree to which workforce skills are of high or low value and firm specific or generally
available. They focused on the strategic value and uniqueness of human capital as the
principal drivers of employment modes and HR configurations.

Fig. 2: Human Capital Characteristics and Employment


(4) Alliances / Partnerships (1) Knowledge Based Employment
 Commitment Based HR
 Collaborative based HR
configuration
Configuration

(3)Contractual Work Arrangements (2) Job Based Employment

 Compliance based HR  Productivity Based HR


Configuration configuration
Low High

Strategic Value

Adapted from Lepak and Snell (1999)

Human Capital in quadrant 1 is critical to the organization’s attainment of goals.


According to Horibe (1999) organizations are likely to build their strategies around these
workers who use their heads more than their hands to produce value. The employment
mode is structured around the skills and competencies of the employees rather than the
execution of programmed tasks and job routines. Quadrant 2 has Job-based
Employment. Employees in this quadrant have knowledge that is valuable but not
unique and are likely to be managed for the job they do more than for their firm specific
use of knowledge. These workers are expected to contribute to a firm by performing a
specific set of tasks or activities based on a standardized knowledge domain (Lepak
and Snell 2002). Quadrant 3 has Contract Work and contains human capital that is
neither of particularly high strategic value to a firm or unique. According to Stewart
(1997) one job holder is pretty much as good as another and thus the organization may
rely on outsourcing. There is no close employer-employee relationship as the firm may
simply focus on the economic aspects of the contract and strive to ensure worker
compliance with preset rules, regulations and / or procedures. The last quadrant has
Alliances / Partnerships. According to Becker and Huselid (2006) the firm would rely
on alliances or partnerships for human capital that is unique but of insufficient strategic
value to employ internally. The organization is able to exploit the services for human
capital through partnership without incurring the entire costs of internal employment
while gaining the ability to maintain an ongoing relationship that is necessary for
application of unique and specialized skills. The concept seeks to explain the different
HR configurations within a single organization.

EMPLOYMENT FLEXIBILITY
Flexible Resourcing Strategies
Flexibility is a key issue in human resource management. The concept of 'flexibility' can
cover a number of different aspects. Blyton and Morris, in Human Resource
Management and the limits of flexibility, define flexibility in four different ways:
 Numerical flexibility, which is the ability to vary the numbers employed at short
notice inresponse to fluctuations in demand for labour. This can be achieved by
using a mixtureof different types of employment contract – for example, a
combination of full-timepermanent, part-time permanent, full and part-time
temporary/fixed term contracts, etc.
 Temporal flexibility refers to variations in the pattern of hours worked, to respond
tobusiness demands and employee needs. Using strategies such as annualized
hours isone way of achieving temporal flexibility.
 Functional flexibility is where employees may be multi-skilled and involved in a
widerange of tasks, with fewer boundaries between jobs. This type of flexibility
encouragesteam working practices and in its ultimate form destroys the
distinction between craftand operator jobs and tasks.
 Wage flexibility is where wages offered are individualised rather than
standardized, bythe use, for example, of performance related pay or pay for skills
offered rather thantasks allocated. Similar arrangements include 'cafeteria' style
benefits whereemployees can 'choose' a range of benefits according to their own
preferences.
It is important to remember that flexibility, although desirable, can sometimes come at
the expense of other strategies. Torrington and Hall, in Human Resource Management,
note that numerical flexibility, if achieved through the use of temporary contracts and/or
outsourcing, may have an adverse impact on the achievement of a quality strategy.

Why might we want to increase flexibility?


1. To focus resources and attention on core activities
2. To reduce waste by increasing the speed with which the organisation can adapt
tomeet changing market needs
3. To take advantage of staff available in the external labour market
4. To clarify career development routes
5. To reduce the power of trades unions.
Why are organisations using more flexible working arrangements?
 Its potential value as a recruitment and retention tool in a tight labour market
 The changing profile of the workforce (for example, with more women in the
labour market and an ageing population, it is increasingly common for workers to
have caring responsibilities outside the workplace)
 Advances in technology (facilitating, for example, remote working and hot
desking arrangements)
 An increasing need for businesses to be able to deliver services to customers on
a 24/7 basis.

Does the flexible firm exist in practice?


The flexible firm model is useful in showing what flexible organisations might seek and
how they might go about keeping things flexible, research has failed to show a wide
scale adoption of the flexible firm model. So we cannot yet say, 'this is the way
everyone structures their organisation'. However, there is no doubt that the elements of
the model are present in most middle to large organisations, to some degree or another,
even if the model is not adopted in a wholesale fashion.

What strategic approaches can be taken towards flexible working?

Here, principally, we mean the organization’s working arrangements in terms of working


time, working location and the pattern of working:
 Part-time working: Anything less than full-time hours.
 Term-time working: A worker remains on a permanent contract but can take
paid/unpaidleave during school holidays.
 Job-sharing: A form of part-time working where two (or occasionally more)
peopleshare the responsibility for a job between them.
 Flextime: Allows employees to choose, within certain set limits, when to begin
and endwork.
 Compressed hours: Compressed working weeks (or fortnights) don't
necessarilyinvolve a reduction in total hours or any extension in individual choice
over which hoursare worked. The central feature is reallocation of work into fewer
and longer blocksduring the week.
 Annual hours: The period within which full-time employees must work is defined
over awhole year.
 Working from home on a regular basis: Workers regularly spend time working
fromhome.
 Mobile working/teleworking: This permits employees to work all or part of their
workingweek at a location remote from the employer's workplace.
 Career breaks: Career breaks, or sabbaticals, are extended periods of,
normallyunpaid, leave of up to five years or more.
Organisations are showing more understanding of employee's responsibilities outside
work.
According to a study by the UK government, in 1998, 84 per cent of UK managers
believed it was up to an individual employee to balance their work and family
responsibilities. By 2004 this had fallen to 65 per cent.
How should we implement flexible working practices?
Effectively communicating and implementing flexible working is likely to require effort
and energy. The kind of challenges you might encounter include:
 Overcoming concerns about operational pressures and meeting
customerrequirements
 Line managers' current ability to effectively manage flexible working
 Line managers' current attitudes toward flexible working
 Your existing organisational culture
 A lack of support at senior levels.
Here are some ideas:
1. Establish a clear process for how flexible working works in your organization
2. Ensure there are clear roles and responsibilities for employees, line managers
and HR
3. Assess the current levels of support you offer your line managers and ensure it
issufficient
4. Invest in ongoing communication and awareness raising
5. Assess how conducive your organisational culture is to flexible working and take
actionaccordingly
6. Make use of pilots (when introducing new initiatives) and trial periods (for
individualflexible working arrangements) to highlight potential problems with
flexible workingarrangements
7. Build in opportunities and mechanisms to monitor and evaluate progress with
flexibleworking.

HUMAN RESOURCE PLANNING (H R P)


Definition 1
“HRP includes estimation of how many qualified people are necessary to carry out the
assigned activities, how many people will be available, and what, if anything, must be
done to ensure personnel supply equals personnel demand at the appropriate point in
the future.”
Definition 2
“HRP is a process, by which an organization ensures that it has the right number and
kind of people at the right place, at the right time, capable of effectively and efficiently
completing those tasks that will help the organization achieve its overall objectives.”
Definition 3
“HRP is a process of translating organizational objectives and plans into the number of
workers needed to meet those objectives.”
MEANING / PURPOSE OF HRP
• In simple words HRP is understood as the process of forecasting an organization’s
future demand for and supply of the right type of people in the right numbers.
• It is only after HRP is done, that the company can initiate and plan the recruitment and
selection process.
• HRP is a sub-system in the total organizational planning.
• HRP facilitates the realization of the company’s objectives by providing right type and
right number of personnel.
• HRP is important because without a clear-cut manpower planning, estimation of an
organization’s human resource need is reduced to mere guesswork.

NEED & IMPORTANCE OF HRP


Forecast future personnel needs:To avoid the situations of surplus or deficiency of
manpower in future, it is important to plan your manpower in advance. For this purpose
a proper forecasting of future business needs helps you to ascertain our future
manpower needs. From this angle, HRP plays an important role to predict the right size
of manpower in the organization.
Cope with change:HRP enables an enterprise to cope with changes in competitive
forces, markets, technology, products and government regulations. Such changes
generate changes in job content, skills demands and number of human resources
required.
Creating highly talented personnel:Since jobs are becoming highly intellectual and
incumbents getting vastly professionalized, HRP helps prevent shortages of labor
caused by attritions. Further technology changes would further upgrade or degrade jobs
and create manpower shortages. In these situations only accurate human resource
planning can help to meet the resource requirements. Further HRP is also an answer to
the problems of succession planning.
Protection of weaker sections: A well-conceived personnel planning would also help
to protect the interests of the special population, physically handicapped, children of
socially oppressed and backward classes who enjoy a certain percentage of
employments notwithstanding the constitutional provisions of equal opportunity for all.
International strategies: International expansion strategies largely depend upon
effective HRP. With growing trends towards global operations, the need for HRP further
becomes more important as the need to integrate HRP more closely into the
organization keeps growing. This is also because the process of meeting staffing needs
from foreign countries grows in a complex manner.
Foundation of personnel functions: HRP provides essential information for designing
and implementing personnel functions such as recruitment, selection, personnel
development, training and development etc.
Increasing investments in HR: Another importance is the investment that an
organization makes in human capital. It is important that employees are used effectively
throughout their careers. Because human assets can increase the organization value
tremendously as opposed to physical assets
Resistance to change & move: The growing resistance towards change and move,
self-evaluation, loyalty and dedication making it more difficult to assume that
organization can move its employees everywhere. Here HRP becomes very important
and needs the resources to be planned carefully.
Other benefits: Following are the other benefits of HRP.
1. Upper management has a better view of HR dimensions of business
2. Management can anticipate imbalances before they become unmanageable and
expensive.
3. More time is provided to locate talent
4. Better opportunities exists to include women and minorities in future growth plans
5. Better planning of assignments to develop managers
6. Major and successful demands on local labor markets can be made.
HRP SYSTEM
HRP System as such includes following elements or sets for planning.
Overall Organization Objectives
Business Environment
Forecasting Manpower Needs
Assessing Manpower Supply
Matching Manpower Demand-Supply factors

HRP PROCESS
Organizational Objectives & Policies: -
The objectives of HR plan must be derived from organizational objectives like specific
requirements of numbers and characteristics of employees etc. HRP needs to sub-
serve the overall objectives by ensuring availability and utilization of human resources.
Specific policies need to be formulated to address the following decisions.
• Internal Hiring or External Hiring?
• Training & Development plans
• Union Constraints
• Job enrichment issues
• Rightsizing organization
• Automation needs
• Continuous availability of adaptive and flexible workforce

Manpower Demand Forecasting: -


It is the process of estimating the future quantity and quality of people required.
The basis should be annual budget and long term corporate plans
Demand forecasting should be based on following factors.
Internal Factors: -
• Budget constraints
• Production levels
• New products and services
• Organizational structure
• Employee separation
External Factors: -
• Competition environment
• Economic climate
• Laws and regulatory bodies
• Technology changes
• Social Factors

Reasons for Manpower Demand Forecasting: -


• To quantify jobs
• To determine the Staff-mix
• To assess staffing levels and avoid unnecessary costs
• Prevent shortages of people
• Monitor compliances of legal requirements with regards to reservations

Manpower Forecasting Techniques: -


Management Judgment: In this technique managers across all the levels decide the
forecast on their own judgment. This can be bottom-up or top-down approach and
judgments can be reviewed across departments, divisions and top management can
conclude on final numbers of manpower required.
Ration-Trend Analysis: This technique involves studying past ratios, and forecasting
future ratios making some allowance for changes in the organization or its methods.
Work Study Techniques: It is possible when work measurement to calculate the length
of operations and the amount of manpower required. The starting point can be
production budget, followed by standard hours, output per hour; man-hours required etc
could be computed.
Delphi Techniques: This technique solicits estimates from a group of experts, and
HRP experts normally act as intermediaries, summarizes various responses and report
the findings back to experts.
Manpower Supply Forecasting: -
This process measures the number of people likely to be available from within and
outside the organization after making allowance for absenteeism, internal movements
and promotions, wastages, changes in hours and other conditions of work.
Reasons for Manpower Supply Forecasting:
• Clarify Staff-mixes exist in the future
• Assess existing staff levels
• Prevent shortages
• Monitor expected future compliance of legal requirements of job reservations

Supply Analysis covers:


Existing Human Resources: HR Audits facilitate analysis of existing employees with
skills and abilities. The existing employees can be categorized as skills inventories
(non-managers) and managerial inventories (managers)
Skill inventory would include the following;
• Personal data
• Skills
• Special Qualifications
• Salary
• Job History

Company data
• Capabilities
• Special preferences
Management inventories would include the following
• Work History
• Strengths
• Weaknesses
• Promotion Potential
• Career Goals
• Personal Data
• Number and Types of Subordinates
• Total Budget Managed
• Previous Management Duties

Internal Supply: -
Internal supply techniques help to assess the following
• Inflows and outflows (transfers, promotions, separations, resignations, retirements
etc.)
• Turnover rate (No. of separations p.a. / Average employees p.a. X 100)
• Conditions of work (working hours, overtime, etc.)
• Absenteeism (leaves, absences)
• Productivity level
• Job movements (Job rotations or cross functional utilizations)

External Supply: -
External sources are required for following reasons
• New blood,
• New experiences
• Replenish lost personnel
• Organizational growth
• Diversification
External sources can be colleges and universities, consultants, competitors and
unsolicited applications.

JOB ANALYSIS
JOB:
“Job is a ‘group of tasks to be performed every day.”
JOB ANALYSIS
Definition 1: (Process of Collecting Information)
“Job Analysis is a process of studying and collecting information relating to operations
and responsibilities of a specific job. The immediate products of this analysis are ‘Job
Description’ and ‘Job Specifications’.”
Definition 2: (Systematic Exploration of Activities)
“Job Analysis is a systematic exploration of activities within a job. It is a basic technical
procedure that is used to define duties and responsibilities and accountabilities of the
job.”
Definition 3: (Identifying Job Requirements)
“Job is a collection of tasks that can be performed by a single employee to contribute to
the production of some product or service, provided by the organization. Each job has
certain ability requirements (as well as certain rewards) associated with it. Job Analysis
is a process used to identify these requirements.”

4) Job Analysis is a process of collecting information about a job. The process of job
analysis results into two sets of data.
Job Description
Job Specification
As a result Job analysis involves the following steps in a logical order.
Steps of Job Analysis
1. Collecting and recording job information
2. Checking the job information for accuracy
3. Writing job description based on information collected to determine the skills,
knowledge, abilities and activities required
4. Updating and upgrading this information

PURPOSE OF JOB ANALYSIS: -


• Human Resource Planning (HRP): - The numbers and types of personnel are
determined by the jobs, which need to be staffed. Job related information in the form of
Job Analysis serves this purpose or use.
• Recruitment & Selection: - Recruitment precedes job analysis. It helps HR to locate
places to obtain employees. It also helps in better continuity and planning in staffing in
the organization. Also selecting a good candidate also requires detailed job information.
Because the objective of hiring is to match the right candidate for right job
• Training & Development: Training and development programs can be designed
depending upon job requirement and analysis. Selection of trainees is also facilitated by
job analysis.
• Job Evaluation: Job evaluation means determination of relative worth of each job for
the purpose of establishing wage and salary credentials. This is possible with the help
of job description and specifications; i.e. Job Analysis.
Remuneration: Job analysis also helps in determining wage and salary for all jobs.
• Performance Appraisal: Performance appraisal, assessments, rewards, promotions,
is facilitated by job analysis by way of fixing standards of job performance.

 Personnel Information: Job analysis is vital for building personnel information


systems and processes for improving administrative efficiency and providing
decision support.
• Safety & Health: Job Analysis helps to uncover hazardous conditions and unhealthy
environmental factors so that corrective measures can be taken to minimize and avoid
possibility of human injury.
PROCESS OF JOB ANALYSIS
Process 1: Strategic Choices
Process 2: Collecting Information
Process 3: Processing Information
Process 4: Job Description
Process 5: Job Specification
Strategic Choices: -
Extent of involvement of employees: Extent of employee involvement is a debatable
point. Too much involvement may result in bias in favor of a job in terms of inflating
duties and responsibilities. Too less involvement leads to suspicion about the motives
behind the job. Besides it may also lead to inaccurate information. Hence extent of
involvement depends on the needs of the organization and employee.
Level of details of job analysis: The nature of jobs being analyzed determines the
level of details in job analysis. If the purpose were for training programs or assessing
the worth of job, levels of details required would be great. If the purpose is just
clarification the details required would be less.
Timing and frequency of Job Analysis: When do you do Job Analysis?
• Initial stage, for new organization

New Job is created


• Changes in Job, Technology and Processes
• Deficiencies and Disparities in Job
• New compensation plan is introduced
• Updating and upgrading is required.
Past-oriented and future-oriented Job Analysis: For rapidly changing organization
more future oriented approach would be desired. For traditional organizations past
oriented analysis would be required. However more future oriented analysis may be
derived based on past data.
JOB DESCRIPTION
“Job Description implies objective listing of the job title, tasks, and responsibilities
involved in a job.”
Job description is a word picture in writing of the duties, responsibilities and
organizational relationships that constitutes a given job or position. It defines continuing
work assignment and a scope of responsibility that are sufficiently different from those
of the other jobs to warrant a specific title. Job description is a broad statement of
purpose, scope, duties and responsibilities of a particular job.
Contents of Job Description
1. Job Identification
2. Job Summary
3. Job Duties and Responsibilities
4. Supervision specification
5. Machines, tools and materials
6. Work conditions
7. Work hazards
8. Definition of unusual terms

Format of Job Description

Job Title
• Region/Location
• Department
• Reporting to (Operational and Managerial)
• Objective
• Principal duties and responsibilities
Features of Good Job Description
1. Up to date
2. Proper Job Title
3. Comprehensive Job Summary
4. Clear duties and responsibilities
5. Easily understandable
6. State job requirements
7. Specify reporting relationships
8. Showcase degrees of difficulties
9. Indicates opportunities for career development
10. Offer bird’s-eye-view of primary responsibilities
JOB SPECIFICATIONS
“Job Specification involves listing of employee qualifications, skills and abilities required
to meet the job description. These specifications are needed to do job satisfactorily.”
In other words it is a statement of minimum and acceptable human qualities necessary
to perform job properly. Job specifications seeks to indicate what kind of persons may
be expected to most closely approximate the role requirements and thus it is basically
concerned with matters of selection, screening and placement and is intended to serve
as a guide in hiring.
Contents of Job Specifications
1. Physical Characteristics
2. Psychological characteristics
3. Personal characteristics
4. Responsibilities
5. Demographic features
Further the job specifications can be divided into three broad categories
Essential Attributes
Desirable Attributes
Contra-Indicators – indicators hampering the success of job

RESOURCING PLANS

•internal resourcing -analyse the availability of suitable people from within


the organization, by reference to assessments of potential and a skills
database
• the numbers and types of employees required to make up any deficits,
when they are needed;
• the likely sources of candidates – schools, colleges of further education,
universities, advertising, the internet etc;
• plans for tapping alternative sources, such as part-timers, or widening the
recruitment net to include, for example, more women re-entering the labour
market;
• how the recruitment programme will be conducted
FLEXIBILITY PLAN
• provide for greater operational flexibility;
• improve the utilization of employees’ skills and capacities;
• reduce employment costs;
• help to achieve downsizing smoothly and in a way which avoids the need
for compulsory redundancies;
• increase productivity
Use of part-time workers
• The advantages of using part-time workers are as follows:
• more scope for flexing hours worked;
• better utilization of plant and equipment by, for example, the introduction of
a ‘twilight shift’;
• lower unit labour costs because overtime levels for full-time workers are
reduced;
• higher productivity on repetitive work because part-time workers can give
more attention to their work during their shorter working day
The disadvantages are:
• part-timers are generally less willing to undertake afternoon or evening
work, may find it more difficult to vary their hours of work, and may be less
mobile;
• rates of labour turnover may be higher among part-timers;
• Part-timers may be less committed than full-time employees.

Recruitment
Recruitment is defined by Pilbeam and Corbridge (2010) as a process which aims to
attract appropriately qualified candidates for a particular position from which it is
possible and practical to select and appoint a competent person or persons. Thus,
recruitment becomes a process of discovering and procuring individuals to fill in
vacancies that arise in an organization from within and outside the
organization.Recruitmentis the process of generating a pool of capable people to
apply for employment in an organization (Bratton and Gold 2007: 239). This view is
supported by Mahapatro (2010) who defines it as a process of discovering the sources
of manpower to meet the requirements of the staffing schedule and to employ effective
measures for attracting that manpower in adequate numbers to facilitate effective
selection of an efficient workforce. Thus, one can safely assert that the main purpose of
recruitment is to attract or replenish suitable candidates to apply for positions available
in the organization.
Mahapatro, (2010) identified the objectives of recruitment as:
 To attract people with multi-dimensional skills and experiences that suits the
present and future organizational strategies.
 To induct outsiders with a new perspective to lead the company.
 To infuse fresh blood at all levels of the organization.
 To develop an organizational culture that attracts competent people to the
company.
 To search or head hunt people whose skills fit the company’s values.
 To devise methodologies for assessing psychological traits.
 To seek out non-conventional development grounds of talent.
 To search for talent globally and not just within the company.
 To design entry salary that competes on quality but not on quantum.
 To anticipate and find people for positions that does not exist yet.

Sources of Recruitment

Mudashiru, Ilesanmi and Aremu (2013:637) listed some of the factors considered by
organisations on whether to recruit internally or externally and include the following;

 The quality and number of staff and positions to be filled.


 The financial position of company. Well-to-do companies can afford to travel
overseas, advertise in all new media, and even employ the services of
professional agencies.
 Availability of required staff within the country.
 Peculiar circumstances of the staff required. Some quality staff required are often
bonded, have children at school or other commitments that would make the
assumption of duty in the company not feasible in the immediate present.
 Organizational policy regarding recruitment.
 The availability of the required staff within the organisation and its effect on the
overall organizational efforts.
 The level of position to be filled.
 The number of job positions to be filled.

Factors Affecting Recruitment


The recruitment function of the organisations is affected and governed by a mix of
various internal and external forces. The internal forces or factors are the factors that
can be controlled by the organisation. And the external factors are those factors which
cannot be controlled by the organisation. The internal and external forces affecting
recruitment function of an organisation are:
Internal Factors Affecting Recruitment
The internal forces i.e. the factors which can be controlled by the organisation are:
1. RECRUITMENT POLICY
The recruitment policy of an organisation specifies the objectives of recruitment and
provides a framework for implementation of recruitment programmes. It may involve
organizational system to be developed for implementing recruitment programmes and
procedures by filling up vacancies with bestqualified people.
Factors Affecting Recruitment Policy
• Organizational objectives
• Personnel policies of the organization and its competitors.
• Government policies on reservations.
• Preferred sources of recruitment.
• Need of the organization.
• Recruitment costs and financial implications.
2. HUMAN RESOURCE PLANNING
Effective human resource planning helps in determining the gaps present in the existing
manpower of the organization. It also helps in determining the number of employees to
be recruited and what qualification they must possess.
3. SIZE OF THE FIRM
The size of the firm is an important factor in recruitment process. If the organization is
planning to increase its operations and expand its business, it will think of hiring more
personnel, which will handle its operations.
4. COST
Recruitment incur cost to the employer, therefore, organizations try to employ that
source of recruitment which will bear a lower cost of recruitment to the organization for
each candidate.
5. GROWTH AND EXPANSION
Organization will employ or think of employing more personnel if it is expanding its
operations.
External Factors Affecting Recruitment
The external forces are the forces which cannot be controlled by the organisation. The
major external forces are:
1. SUPPLY AND DEMAND
The availability of manpower both within and outside the organization is an important
determinant in therecruitment process. If the company has a demand for more
professionals and there is limited supply in the market for the professionals demanded
by the company, then the company will have to depend upon internal sources by
providing them special training and development programs.
2. LABOUR MARKET
Employment conditions in the community where the organization is located will
influence the recruitingefforts of the organization. If there is surplus of manpower at the
time of recruitment, even informal attempts at the time of recruiting like notice boards
display of the requisition or announcement in the meeting etc will attract more than
enough applicants
3. IMAGE / GOODWILL
Image of the employer can work as a potential constraint for recruitment. An
organization with positive image and goodwill as an employer finds it easier to attract
and retain employees than an organization with negative image. Image of a company is
based on what organization does and affected by industry.
4. POLITICAL-SOCIAL- LEGAL ENVIRONMENT
Various government regulations prohibiting discrimination in hiring and employment
have direct impact on recruitment practices. For example, Government of India has
introduced legislation for reservation in employment for scheduled castes, scheduled
tribes, physically handicapped etc. Also, trade unions play important role in recruitment.
This restricts management freedom to select those individuals who it believes would be
the best performers. If the candidate can’t meet criteria stipulated by the union but union
regulations can restrict recruitment sources.
5. UNEMPLOYMENT RATE
One of the factors that influence the availability of applicants is the growth of the
economy (whether economy is growing or not and its rate). When the company is not
creating new jobs, there is often oversupply of qualified labour which in turn leads to
unemployment.
6. COMPETITORS
The recruitment policies of the competitors also effect the recruitment function of the
organisations. To face the competition, many a times the organisations have to change
their recruitment policies according to the policies being followed by the competitors.
Mahapatro, (2010:70) summarised the reasons why organisations prefer internal
sources for recruitment which are:

 Internal recruitment can be used as a technique of motivation.


 Morale of the employees can be improved.
 Suitability of the internal candidates can be judged better than the external
candidates as “known devils are better than unknown angels.”
 Loyalty, commitment, a sense of belongingness, and security of the present
employees can be enhanced.
 Employees’ psychological needs can be met by providing an opportunity for
advancement.
 Employees’ economic needs for promotion, higher income can be satisfied.
 Cost of selection can be minimized.
 Cost of training, induction, orientation, period of adaptability to the organization
can be reduced.
 Trade unions can be satisfied.
 Social responsibility towards employees may be discharged.
 Stability of employment can be ensured.
The drawback of internal recruitment is that it prevents new blood with
innovative ideas and dynamism from entering the organization and this
promotes inbreeding. Furthermore, Chidi (2013:363) asserts that it is not clear
whether internal sources are very effective because good performance in a
certain post does not translate into good performance in the new job and this is
known as the Peter Principle which means employees are always promoted one
step above their competence. Normally when the organization is enjoying
phenomenal growth, managerial deficiencies are masked and only become
apparent when organizational growth slows down and by then it would be too
late to undo the damage caused. Thus, an organization may be forced to settle
for a mediocre employee lacking needed competencies. Furthermore, internal
recruitment will affect organisational flexibility due to lack of heterogeneity and
the problem of inbreeding (Mathis and Jackson 2010:199). People who stay for
a long time in one organization may resist change as they would be comfortable
in maintaining the status quo and this may have negative implications for the
organization in this turbulent macro-economic environment. Also the position of
the individual who is promoted will need to be filled also as it becomes vacant.
The internal sources of recruitment are promotions, transfers, internal advertisements
and referrals.

External Recruitment

An organization can source new recruits from outside the organization and this occurs
when they cannot recruit from within. External recruitment allows the organization to
draw upon a wider range of talent, new experience culminating in more creativity.
Furthermore, there is no inbreeding and organizational flexibility is promoted as a result
of heterogeneity. It also reduces complacency among senior employees who would
assume that because of having stayed long with same organization they deserve to get
first preference in promotion. Recruiting from outside the organization has got its own
challenges.External recruitment has major drawbacks such as high costs of recruitment
and training, lack of knowledge about the inner workings of the organization, and
uncertainty about the performance of the potential employees (Briggs 2007:144).There
are many ways of recruiting applicants outside the organization and some can be used
exclusively or in combination. Some of the external sources of recruitment include:

Campus recruitment
Sinha and Thaly (2013:147) define campus recruitment as a process of approaching
schools, colleges and universities as to attract and hire the best student. This is done by
those organisations that have direct access to schools and colleges. Campus
recruitment is cost effective as compared to advertising in the mass media and is also
convenient as many candidates can be interviewed at the same location and in a short
time. However, campus recruitment has the disadvantage of attracting individuals who
lack experience and it will be a cost to the organisation to train them before they start
adding value. Small businesses especially restaurants can utilize the strategy of
campus recruitment to attract interns. The programme of internship enables them to
have access to quality employees at low or no cost at all who will be looking for work
experience. The small business may give golden handcuffs to those interns who excel
so that they would join the organisation after completing their studies.

Employment Agencies and recruitment consultants

Employment agencies represented a "physical" service for matching the open positions
with a pool of applicants, who were initially interviewed and referred to potential
employers (depending on the existence of a possible match) (Sinha and Thaly
2013:147).Employment agencies normally charge a fee to employers and assist them in
recruiting and selecting new staff.

Social Media

Some organisations make use of websites such as Facebook, Whatsapp, Twitter,


LinkedIn to advertise vacant positions. According to Sinha and Thaly (2013:148) social
media enables people to exchange and work together on digital content in virtual
communities (networks).
Newspaper advertising

The advertisement should give a detailed job description and job specification clearly
spelling out the main responsibilities of the job applicant. It is the most common strategy
used by organisations to reach out to a wider pool of job applicants. A study carried out
by Louw (2013) to explore recruitment and selection trends in the Eastern Cape
revealed that newspaper advertising was the most popular method of filling vacant
posts. However, Zinyemba2014:300 asserts that many small businesses cannot afford
costs of advertising in the print media or television and radio and thus it remains the
preserve of big businesses.

Online Recruitment

Today’s organisations are utilizing their websites to procure suitable labour force. Online
recruitment is gaining popularity as it reduces costs, time and can be accessed by a
large pool of prospective employees. However, according to Louw (2013:3) online
recruitment has got some shortcomings such as prospective employees who do not
have access to the internet due to their low socio-economic background will lose out
and this is common in many developing countries. In support of the above mentioned
view, Zinyemba (2014:30) asserts that recruitment efforts may become ineffective when
the advertising does not reach the intended destination.

Walk ins

Prospective candidates visit a firm and inquire about vacancies. They may be asked to
leave their curriculum vitae and if and when there are job openings they would be
invited for interviews.

Recent Trends in Recruitment


The following trends are being seen in recruitment:
OUTSOURCING
A company may draw required personnel from outsourcing firms. The outsourcing firms
help the organisation by the initial screening of the candidates according to the needs of
the organisation and creating a suitable pool of talent for the final selection by the
organisation. Outsourcing firms develop their human resource pool by employing people
for them and make available personnel to various companies as per their needs. In
turn,the outsourcing firms or the intermediaries charge the organisations for their
services.
Advantages of outsourcing are:
 Company need not plan for human resources much in advance.
 Value creation, operational flexibility and competitive advantage
 turning the management's focus to strategic level processes of HRM
 Company is free from salary negotiations, weeding the unsuitable
resumes/candidates.
 Company can save a lot of its resources and time
POACHING/RAIDING
“Buying talent” (rather than developing it) is the latest mantra being followed by the
organisations today.Poaching means employing a competent and experienced person
already working with another reputed company in the same or different industry; the
organisation might be a competitor in the industry. A company can attract talent from
another firm by offering attractive pay packages and other terms and conditions, better
than the current employer of the candidate. But it is seen as an unethical practice and
not openly talked about. Zimbabwean software and the retail sector are the sectors
facing the most severe brunt of poaching today. It has become a challenge for human
resource managers to face and tackle poaching, as it weakens the competitive strength
of the firm.
E-RECRUITMENT
Many big organizations use Internet as a source of recruitment. E- recruitment is the
use of technology to assist the recruitment process. They advertise job vacancies
through worldwide web. The job seekers send their applications or curriculum vitae i.e.
CV through e mail using the Internet. Alternatively job seekers place their CV’s in
worldwide web, which can be drawn by prospective employees depending upon their
requirements.
Advantages of recruitment are:
 Low cost.
 No intermediaries
 Reduction in time for recruitment.

SELECTION

Mathis and Jackson 2010:214 define selection as the process of choosing individuals
with the correct qualifications needed to fill jobs in an organization.The recruitment
process should be able to attract a number of applicants for the vacancy then the
selection process to fill the vacancy will commence.Pilbeam and Corbridge, (2010:166)
define selection as a process which involves the application of appropriate techniques
and methods with the aim of selecting, appointing and inducting a competent person or
persons. It involves the selection and appointment of the best and most suitable
candidates from those who would have submitted their profiles for a particular post. For
Rees and French (2010) selection involves a choice of the methods by which an
employer reduces a shortlisted group following the recruitment stage, leading to an
employment decision. Thus, there is deselection in selection as unsuitable candidates
are eliminated and the best candidate gets the job. The attributes of the candidates are
matched with the requirements of the job. The main purpose for selection is to
determine whether compatibility exists between the firm and the individual.
Recruitment Vs Selection
Both recruitment and selection are the two phases of the employment process. The
differences between the two are:
 Recruitment is the process of searching the candidates for employment and
stimulating them to apply for jobs in the organisation WHEREAS selection
involves the series of steps by which the candidates are screened for choosing
the most suitable persons for vacant posts.
 The basic purpose of recruitment is to create a talented pool of candidates to
enable the selection of best candidates for the organisation, by attracting more
and more employees to apply in the organisation WHEREAS the basic purpose
of selection process is to choose the right candidate to fill the various positions in
the organisation.
 Recruitment is a positive process i.e. encouraging more and more employees to
apply WHEREAS selection is a negative process as it involves rejection of the
unsuitable candidates.
 Recruitment is concerned with tapping the sources of human resources
WHEREAS selection is concerned with selecting the most suitable candidate
through various interviews and tests.
 There is no contract of recruitment established in recruitment WHEREAS
selection results in a contract of service between the employer and the selected
employee.

The Changing Nature of the Employment Contract


(a) The Full-time Contract
The traditional view of employment involves people employed under a contract of
employment on a full-time, permanent basis. In fact, the traditional view went one stage
further and represented men employed on a full-time permanent basis. However, we
have already noted that this pattern of employment is no longer sustainable and full-
time permanent employment is rapidly declining. A variety of alternative working
arrangements are now common.
In the nineteenth century, a working week consisting of ten hours a day, six days a
week, was common. Since then, there has been a consistent shift towards a shorter
working week with an average official full-time working week now of 38 - 44 hours.
(b) Shift Working
Shift working can be traced back for as long as there are records. In industry, split shifts
were operated as early as 1694. One of the effects of increased competition in a range
of industry sectors is that, in an effort to attract customers, particularly in organisations
supplying the end consumer, there has been a move towards offering a 24 hour, 7 day
a week service (or as close to this as legislation permits). Even where this service is
offered by using IT technology, this round-the-clock opening requires some staff. As a
result, shift working is more common today than it ever was.
(c) Part-time Working
At one time, part-time working was relatively unusual. This was partly because it was
uneconomic for the employer as national insurance costs for the part-time
employeewere disproportionately higher than those for the full-time employee. A part-
time contract was seen as an unattractive alternative to those for whom full-time work
was not available as rates of pay and benefits were proportionately lower than for full-
time employees. However, the need for flexibility, labour and skills shortages and
changes in national insurance rates have all led to a huge rise in the number of people
now employed under part-time contracts. Defining part-time work is difficult. Virtually
any job which requires an employee to work less than the standard number of full-time
hours per week for a particular organisation is classified as part-time, so 'part-time' can
mean anything from a couple of hours a week to 35 hours per week or even more. In
the past, some employers tried to use part-time contracts as a means of reducing
employment costs by requiring part-timeworkers to work close to a full working week but
on a reduced pay rate and by restricting benefits such as paid holidays, sick pay,
pensions and training opportunities to full-time contract staff. Recognizing that part-time
contracts offered the organization greater flexibility, enlightened employers treated part-
time employees equally to fulltime employees and more recently, the Part time Workers
Regulations in UK have required this equal treatment by law; at least in theory!The rise
in part-time contracts in recent years has been almost exclusively female, withover 90%
of new part-time positions being filled by women. Recent research by theCIPD suggests
that employers are finding other benefits from offering part-timecontracts. Part-timers
are said to:
 Have lower levels of absenteeism than full-time employees
 Be better motivated
 Be more productive.
However, part-time work is not without its problems.
Employers are finding that:
 They may need to adopt different communication methods where there are
anumber of part-time workers as, at any one time, many employees may
beabsent from the workplace.
 There can be difficulties co-ordinating tasks, so traditional approaches to
jobdesign and work allocation may no longer be appropriate.
 Some full-time workers can resent the flexibility offered to part-time staff,
whichcan cause difficulties with work groups.
 Where there are a large number of part-time employees, costs for training can
bedisproportionately high.
 It can be more difficult generating involvement and commitment with part-
timestaff, who may be working so few hours that it is difficult to ensure that they
arekept up to date with the objectives and values of the organisation.Perhaps it is
not surprising that many employers view part-time workers as a problemto be
solved, rather than an opportunity for greater flexibility.
(d) Flexible Working Hours
Flexible working hours were seen, originally, as a means of overcoming travel to work
problems. The most common approach to flexible working is where the employer has no
fixed start or finish times but allows the employee to start work within a fixed timeframe
(say between 8am – 10am) and finish between a fixed time-frame (say 4pm – 6pm).
Employees are free to choose when to start and finish work provided they are in
attendance during the 'core' period and provided that, at the end of the period (week,
month or some other arbitrary period), they have completed the minimum number of
hours required. Although such arrangements have been around for over 30 years, they
did not prove particularly popular with either employers or employees. There are a
number of reasons for this.
 Employers found that if the 'core period' was too short, tasks requiring
staffinteraction were hindered.
 There were increased costs from the increased monitoring required to
ensurethat staff completed the minimum number of hours.
 The greater the flexibility offered to employees (for example by offering
theopportunity for time worked over the minimum to be taken as time off in lieu
ofpayment), the greater the disruption to work.
Even so, there were benefits to employers, mainly from reduced overtime costs and
supporting an increased working day. Employees were, at least initially, suspicious of
the flexible working time as they saw it as a way of restricting paid overtime
opportunities and they resented the way in which their attendance was registered, often
by the re-introduction of the mechanical time clock. Interest in flexible working hours has
been increasing again recently, partly in response to the debate of the work-life balance.
(e) Annual Hours
One variation on the flexible working hours is that of the annual hours contract. This
approach was developed in response to the difficulties sometimes faced by businesses
with seasonal or fluctuating demand periods, either predictable or unpredictable. The
main basis for an annual hours contract is that the period of time within which full-time
employees must work their contractual hours is defined over a whole year. Such
arrangements are becoming more common in manufacturing environments, where
annualised hours enables the organisation to separate employee working hours from
operating hours and use expensive plant and equipment over a longer period by
operating a "five crew system", particularly in continuous process production, which
enables the plant to be operated for 50 or more weeks in the year without the need for
overtime. Annualised hours are also becoming more common in fields such as further
education, where the move towards modularised courses means that teaching staff can
be required to undertake more 'contact hours' at certain times of the year to meet the
demands of student numbers.Flexibility is one of the main advantages to the employer
but on the downside, the system places some distance between the employer and
employee, to the extent that the employee becomes more like a subcontractor, working
as and when required.
(f) Temporary Contracts
Although no contract is, in reality, permanent, the traditional approach to contracts of
employment is that they were indefinite. Temporary or fixed-term contracts have a
definite start and finish date so are for a defined period. The main use of fixed-term or
temporary contracts is to cover periods of high labour demand, for example, the pre-
Christmas period in the retail trade. Fixed-term contracts offer employers the flexibility to
hire and eventually dispense with the services of members of staff. This can also be
valuable in periods of unpredictability and uncertainty, or where there is a short-term
need for a particular skill or expertise that will not be required later. Until recently, some
employers saw temporary contracts purely as a method of cutting costs. Temporary
staff, for example, didn't have to be offered paid holidays, sick pay or pensions.
Furthermore, temporary staff could be got rid of without the need for redundancy
payments. Some organisations exploited this 'loophole' in employment protection
legislation by issuing a series of temporary contracts so that the same employee could
be employed for many years but on a series of one-year temporary contracts. Case law
and legislation have combined to ensure that employees in this situation now have
some employment protection in such circumstances but temporary contracts are still
seen by many organisations as a route to cheaper labour costs. It would be easy to
think that lack of job security would make temporary workers less committed to the
organisation and less productive, but research tends to support the opposite view.
Temporary workers are often more motivated and keen to put a lot of effort into their
work, are rarely absent and often keen to work overtime if required, perhaps in the hope
that they might become permanent.
(g) Distance Working
Distance working, or teleworking as it is sometimes known, is one form of flexibility that
has been made possible by the advances in information and communications
technology. There are two main forms of distance working:
 The individualised form of teleworking where an employee works away from
theemployer's premises, such as home-based teleworking or multi-location
working
 A form of collective teleworking where work is completed on non-
domesticpremises and managed by the employer or third party. This includes call
centresand tele-cottages.
The number of people engaged in teleworking is difficult to estimate, as the nature and
range of jobs that can fall into this category is vast. Sales representatives, for example,
have always worked this way but now it is possible for a wide range of types of
employment to be undertaken by distance working. Some teleworkers may spend some
of their working week at the employer's premises, whilst others never, or only rarely,
work 'at the office'.
Managing teleworkers presents new challenges for managers. Particular care must be
taken when selecting candidates for teleworking, as workers who are separated from
the main activities of the organisation can feel isolated and lack motivation. Very clear
parameters must be laid down to establish the criteria for decision making and issues
that need reference back. New employees need an induction to the organisation in the
same way as 'office-based' employees and indeed, may need more because the social
aspects of work will be absent. Building relationships and team working present
particular difficulties for those who are physically separate from the organisation. A
great many organisations offer some form of teleworking now and most if not all point to
reduction in office and support costs as one of the main advantages.
(h) Outsourcing
Outsourcing is another way of working that is increasing in popularity. Many large
companies used to carry out various tasks in-house that they now contract out to
external organisations that specialize in the field in question. In some cases, whole
departments have disappeared and all the work is carried out by outside
contractors.This has meant that numbers employed by the larger organisations have
fallen but those employed by the smaller specialist organisations have increased.
Outsourcing has a number of advantages:
 Outsourcing can be used in the same way as temporary contracts to
reducecosts, particularly where the work is seasonal or of a temporary nature.
Ratherthan set up a department or part of the organisation to handle a particular
task orrange of tasks, outside contractors may be employed. A typical example
mightbe to outsource (use contractors) to handle a new product launch or
theinstallation of a new computer system. The contract would be for a limited
periodand when the period has expired, or the task has been completed, the
contractends.
 Similarly, outsourcing can be used where the organisation lacks the expertise
orequipment for a particular peripheral task. A manufacturing company,
forexample, might outsource its insurance portfolio to an insurance broker.
Thebroker, working to guidelines laid down by the company, would
assumeresponsibility for arranging insurance cover for the company, handling
any claimsand dealing with any associated paperwork.
Outsourcing is not suitable for all functions, although in theory any function can
beoutsourced. Where work is of a 'core' nature, that is vital to the organisation, most
companies prefer to keep these functions in-house. Similarly, work of a particularly
confidential or secret nature is usually kept in-house.

STAFF DEPLOYMENT
As we have seen, a significant feature of the modern organisation environment is
relentless change. This suggests that the patterns of employment will change but so
too, will the ways in which work is done. For the organisation, alternatives to the
traditional "nine to five" pattern of full-time, permanent working offer the opportunity to
provide themselves with moreflexibility at lower cost. For the individual worker,
different working patterns offer the opportunity to fit work in with other responsibilities
and interests (domestic and social), as well as gaining more personal control over their
working lives. There are a great many new patterns of work evolving; some based on
computer technologies but many simply based on building greater flexibility into
traditional types of job.
What forms of employment are there?
(a) Part-time Workers
Part-timers are often cheaper and can be more flexible. Furthermore, the organization
can lay off part-time workers more easily during slack periods and part-timers have
fewer rights to statutory redundancy payments. Technology has made it easier for
organisations to bring in new working methods. For example, using a PC and a modem
a person who used to come to the office every day can work from home, making use of
e-mail as well as "lower tech" devices such as fax machines.
(b) Fixed/short-term Contract Workers
Here, workers are taken on for a specified period, to ensure that when the needs of the
organization change, the complexion of the labour force can be altered to reflect new
needs.
Fixed-term contracts are quite common in positions such as overseas appointments and
domestic senior level/executive jobs. For the former, it means that the person entering
the job knows that the work will last a specific time and enable both them and the
employer to plan accordingly for the next time period. For the latter, this reduces the
damage that can be done by having the wrong person to do the job for any longer than
necessary.
Fixed-term contracts can provide useful flexibility but they do require careful planning to:
 Avoid getting the period of employment wrong, otherwise the person may staytoo
long as an unproductive resource, or alternatively have to have the
contract"rolled over" for a new period
 Avoid losing valuable people who might otherwise stay
 Reduce or eliminate the likelihood of the fixed-term employee going off to
acompetitor with valuable intelligence
 Gain the full commitment of the person, who after all will only be with
theemployer for a while and cannot be expected to foster the same loyalty as a
"fulltimer".
(c) Outside Contractors/Sub-contractors
There are several advantages of outsourcing work to independent contractors:
 The organisation only has to pay for what it gets
 The contractor may be negotiable on rates of pay or fees, especially if
theorganisation is competing with others for the same contracts
 Contracts can be written precisely to reflect needs and can include clauses
toinvoke time or quality penalties
 Often the outsourcing permits both the buyer and seller of the service to
specialize
 Long-term relationships can be built up between buyer and contractor.
Many functions that were traditionally the domain of internal labour are now outsourced.
These include:
 Catering services
 Information technology services
 Printing and stationery
 Specialist advisory units.
(d) Self-employed Labour
Many organisations now have people working for them who work on a self-employed
basis, even if all the work is provided by one source. This is common in life assurance
sales functions, where self-employed persons operate as direct sales personnel earning
mainly commission.
The "employer" has to take great care to ensure that quality standards are maintained
and that the self-employed person does not have any conflicts of interest. Decisions
also have to be taken on methods of pay and who provides any equipment or
machinery.
(e) Agencies
An organisation can give itself more flexibility by using agency labour. There are many
employment agencies, some of which specializein certain fields of expertise. There are
obvious dangers with quality control, especially when the relationship with the agency is
not well established. The turnover of agency personnel is also high, which can result in
continuity problems.
(f) Get the Customer to do the Work
Technology now enables companies to deliver services on a DIY basis, e.g.
 Scanning your own goods at supermarkets
 Filling up the car with petrol and paying at the pump by debit or credit card
 Internet shopping.
What time-based methods are there?
(a) Shift Working
Shift working allows the production process to be ongoing so that the factory
environment never really shuts down (apart from during holiday periods). It also enables
the effective utilization of employees and machinery.
Different types of shift working systems include:
 The Continental System
Organisations are increasingly moving over to a continental pattern of shift working. It
involves employees working a rota such as two mornings followed by two nights
followed by two or three rest days. In some companies it means 12hour shifts on each
occasion worked, but it means that employees have "rest days" to catch up on lost
sleep, etc. It is a popular option with some companies as it gives employees variety,
and also means that staff have more time to spend with their families and on leisure
activities.
 Three Shift System
Here employees work a pattern of three shifts: mornings (7 am to 2 pm), afternoons (2
pm to 10 pm) and nights (10 pm to 7 am). When employees work the night shift they
usually work four nights (Monday to Thursday inclusive) and go home on Friday
morning. Friday nights are left free. As you can imagine the night shift (as well as shift
working per se) puts enormous psychological and physical stress on individuals.
(b) Flexi-time
Flexi-time gives employees the opportunity to determine when they come in to work and
when they go home (within certain parameters). "Core time" is the time when
employees are required to be at work (usually between 10.00 am and 4.00 pm). For
example, if their normal working week is 37 hours individuals can determine the hours
they work during each working day, around the core time, as long as the hours at the
end of the week add up to 37. Companies usually have a recording mechanism to
ensure that employees do not abuse the flexi-system.
(c) Job Share
One full-time job is shared between two employees working on a part-time basis,
usually, but not necessarily, dividing the time (and the pay) equally between them. The
earnings are also shared. Tasks are also shared equally between jobholders, thus
increasing personal flexibility for workers. This is ideal for individuals who only want to
work for a proportion of the normal working week. There is, clearly, a limiting factor in
the reaction of many staff who are dependent on income from full-time employment.
There may be practical difficulties of liaison between the two part-time staff members in
some cases but these can be overcome. Job-sharing is most likely to appeal to staff
who have domestic commitments and so prefer part-time work to full-time work, or to
older employees who may regard part-time work as a compromise between full-time
work and retirement. Job sharing has become popular partly because of equal
opportunities awareness. It provides a format, particularly for women with child care
responsibilities, to carry on with their jobs on a specialised part-time basis. Many
organisations are critical of job sharing and believe that it is more expensive to run and
harder to manage. However, the evidence seems to be that job sharers work harder
and better because they are doing what they want to do and are more motivated. Job
sharing can be an effective tool to keep staff who might leave because they cannot or
will not work full time any more and can work well for both employer and employees
provided both employees are happy with the continuation of the arrangement.
Difficulties can arise if one employee leaves or wishes to work full time.
(d) Annualised Hours
An annual hours contract requires the employee to supply a given number of hours of
labour over a 12 month period. It is usual to have arrangements to review quarterly or
half yearly, to take account of changes in the organisation. Within the agreement the
actual hours worked can vary from week to week and month to month. For example, the
length of the working day can be varied up to, say, 9 hours a day in a period of peak
demand. The extra hours worked in the busy period can be compensated by shorter
days in the quieter period, or by aggregating the hours into blocks of time off. From this
example you can see that annualised hours is a good strategy for organisations that
have a demand for labour that is predictable but not regular. Annualised hours contracts
were first developed in the Pulp and Paper industries in Sweden and Finland. They
allowed people to work more hours in the busy times and less at off-peak periods,
without the organisation having to employ more staff on temporary contracts or pay
large overtime payments. They are also highly relevant when employing parents who
wish to manage their time around school hours and holidays. Annualised hours
contracts are gaining popularity with employees and employers,although there is a
suggestion that administratively they are more complicated to manage. The introduction
of annualised hours can often be part of a change in management strategy where the
objective is to alter working practices to reduce costs,increase flexibility and introduce
new cultures.
The benefits of annualised hours include:
 A reduction in overtime worked
 Lower labour costs
 Reduced absenteeism
 Greater flexibility
 Increased productivity.
The disadvantages include:
 Reluctance to work "pay back" hours
 Difficulties in organising shift cover
 The complexity of planning shift rotas
 Problems in scheduling holidays.
What location-based methods are there?
(a) Teleworking
Teleworking is working at a distance from one's employer, either at home, on the road,
or at a locally based centre. Teleworkers use e-mail, mobile phones and faxes to keep
in contact with their employers or customers. They can be supported, virtually, by video
and audio conferencing and Internet meetings and also by fast delivery services for
other materials. It has been the advance of this modern technology that has made it
feasible for many people to carry out their jobs without working from an office. For
example, a large insurance company in Surrey reorganised its sales structure and
closed many of its regional offices after it found that it was far cheaper to set up
individuals with the technology required to work from home than to run expensive
offices in large cities. Certain types of work lend themselves more easily to teleworking
e.g. data processing,sales reps, and clerical work, whilst other jobs are better carried
out at head office.Equally, teleworking is not right for everybody. Teleworkers have to
be disciplined andorganised to ensure that the work is completed; they must also be
content to workmostly alone at home.It is also important to consider the office staff with
whom the teleworker has to liase.They need to be sensitive to the fact that the
teleworker may only be in the officeoccasionally and that if they need to see them, they
must organise themselves to seethem that day. They, too, need to be organised and
disciplined in the way they work.In some organisations teleworkers are retained as staff,
whilst in others they workfreelance, which means having to run their own organisation,
control budgets, etc.,which does not suit everyone. For the employer it can be a benefit
to employ someoneas a freelance contractor rather than a full member of staff. Staff
benefits (e.g. pensioncontributions) do not have to be paid; the employer does not need
to worry aboutNational Insurance contributions or tax, as the contractor will handle
these.The contractors can be employed on a series of short-term contracts rather
thanearning employment rights as employees. They can be employed just while there
iswork available and then re-employed when there is a further demand, whilst
employees will continue to be employed even through slack periods of work.
The advantages of teleworking include:
 A substantial increase in productivity, generally because of the flexibility
theemployee has to work when and where they want, without being confined to
the9.00 am to 5.00 pm restrictions
 No travelling to work; no time wasted waiting for trains or in traffic jams, and
nomoney spent on commuting
 A considerable reduction in office overheads.
The disadvantages of teleworking include:
 Some organisations are concerned about the security of confidential andsensitive
material
 Technical support has to be organised for the maintenance of complex
equipment
 The training of staff has to be organised at a remote facility, or by recalling staff
tothe head office
 The difficulty that some people have to maintain the self-discipline and
motivationrequired to work on their own
 Lack of face-to-face contact with fellow workers.
(b) Hot Desking
Many organisations have staff whose jobs involve them being out of the office for a
significant amount of their working time, attending site visits, visiting clients/customers,
etc. Alternatively, companies may employ consultants or support staff who only come
into the office occasionally but have their own desk available to them permanently.
system that has been introduced in some companies. No longer does each
employeehave their own desk/workstation, with drawers filled with their personal
belongings; thedesk is "depersonalized" and available to be used by anyone coming
into the office,usually on a pre-booked basis. Hot desking means that a smaller space
produces thesame or better output than before. Savings that result from reduced
accommodationcan be significant for organisations but some staff do feel that they no
longer have thesecurity and stability of their own desk in the office and that they lose
personalinvolvement with their work colleagues. Because of the developments that
have takenplace in communications technology, when they are not hot desking the staff
can workfrom home, the train if they are travelling long distances and even from their
car, ifnecessary.
(c) Home Working
Home working affords individuals the same benefits as teleworking without the network
of support and the same need for communications. It is essentially used by freelance or
self-employed workers who can carry out their entire business from home, or at least
from a home base. Typical home workers are market researchers; graphic artists;
editors; mobile hairdressers; financial consultants etc.

RETENTION
Employee Retention involves taking measures to encourage employees to remain in the
organization for the maximum period of time. Corporate is facing a lot of problems in
employee retention these days. Hiring knowledgeable people for the job is essential for
an employer. But retention is even more important than hiring. There is no dearth of
opportunities for a talented person. There are many organizations which are looking for
such employees. If a person is not satisfied by the job he’s doing, he may switch over to
some other more suitable job. In today’s environment it becomes very important for
organizations to retain their employees.
The top organizations are on the top because they value their employees and they
know how to keep them glued to the organization. Employees stay and leave
organizations for some reasons.
The reason may be personal or professional. These reasons should be understood by
the employer and should be taken care of. The organizations are becoming aware of
these reasons and adopting strategies for employee retention.
What is Employee Retention?
Employee retention is a process in which the employees are encouraged to remain with
the organization for the maximum period of time or until the completion of the project.
Employee retention is beneficial for the organization as well as the employee.
Employees today are different. They are not the ones who don’t have good
opportunities in hand. As soon as they feel dissatisfied with the current employer or the
job, they switch over to the next job. It is the responsibility of the employer to retain their
best employees. If they don’t, they would be left with no good employees. A good
employer should know how to attract and retain its employees. Retention involves five
major things:
 Compensation
 Environment
 Growth
 Relationship
 Support
Employee retentionwould require a lot of efforts, energy, and resources but the results
are worth it.
1. Compensation
Compensation constitutes the largest part of the employee retention process. The
employees always have high expectations regarding their compensation packages.
Compensation packages vary from industry to industry. So an attractive compensation
package plays a critical role in retaining the employees. Compensation includes salary
and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc.
While setting up the packages, the following components should be kept in mind:
 Salary and monthly wage: It is the biggest component of the compensation
package. It is also the most common factor of comparison among employees. It
includes
1. Basic wage
2. House rent allowance
3. Dearness allowance
4. City compensatory allowance
Salary and wages represent the level of skill and experience an individual has. Time to
time increase in the salaries and wages of employees should be done. And this
increase should be based on the employee’s performance and his contribution to the
organization.
 Bonus: Bonuses are usually given to the employees at the end of the year or on
a festival.
 Economic benefits: It includes paid holidays, leave travel concession, etc.
 Long-term incentives: Long term incentives include stock options or stock grants.
These incentives help retain employees in the organization's startup stage.
 Health insurance: Health insurance is a great benefit to the employees. It saves
employees moneyas well as gives them a peace of mind that they have
somebody to take care of them in bad times.
It also shows the employee that the organization cares about the employee and its
family.
 After retirement: It includes payments that an Employee gets after he retires like
EPF (EmployeeProvident Fund) etc.
 Miscellaneous compensation: It may include employee assistance programs (like
psychological counseling, legal assistance etc.), discounts on company products,
use of a company cars, etc.
2. Growth and Career
Growth and development are the integral part of every individual’s career. If an
employee can not foresee his path of career development in his current organization,
there are chances that he’ll leave the organization as soon as he gets an opportunity.
The important factors in employee growth that an employee looks for himself are:
1. Work profile: The work profile on which the employee is working should be
in sync with his capabilities. The profile should not be too low or too high.
2. Personal growth and dreams: Employees responsibilities inthe
organization should help him achieve his personal goals also.
Organizations cannot keep aside the individual goals of employees and
foster organizations goals. Employees’ priority is to work for themselves
and later on comes the organization. If he’s not satisfied with his growth,
he’ll not be able to contribute in organization growth.
3. Training and development: Employees should be trained and given
chance to improve and enhance their skills. Many employers fear that if
the employees are well rained, they’ll leave the organization for better
jobs. Organization should not limit the resources on which organization’s
success depends. These trainings can be given to improve many skills
like:
 Communications skills
 Technical skills
 In-house processes and procedures improvement related skills
 C or customer satisfaction related skills
 Special project related skills
Need for such trainings can be recognized from individual performance reviews,
individual meetings, employee satisfaction surveys and by being in constant touch with
the employees
3. Support
Lack of support from management can sometimes serve as a reason for employee
retention. Supervisor should support his subordinates in a way so that each one of them
is a success. Management should try to focus on its employees and support them not
only in their difficult times at work but also through the times of personal crisis.
Management can support employees by providing them recognition and appreciation.
Employers can also provide valuable feedback to employees and make them feel
valued to the organization. The feedback from supervisor helps the employee to feel
more responsible, confident and empowered. Top management can also support its
employees in their personal crisis by providing personal loans during emergencies,
childcare services, employee assistance programs, counseling services, et al.
Employers can also support their employees by creating an environment of trust and
inculcating the organizational values into employees. Thus employers can support their
employees in a number of ways as follows:
 By providing feedback
 By giving recognition and rewards
 By counseling them
 By providing emotional support

4. Importance of Relationship in Employee Retention Program


Sometimes the relationship with the management and the peers becomes the reason
for an employee to leave the organization. The management is sometimes not able to
provide an employee a supportive work culture and environment in terms of personal or
professional relationships. There are times when an employee starts feeling bitterness
towards the management or peers. This bitterness could be due to many reasons. This
decreases employee’s interest and he becomes de-motivated. It leads to less
satisfaction and eventually attrition. A supportive work culture helps grow employee
professionally and boosts employee satisfaction. To enhance good professional
relationships at work, the management should keep the following points in mind.
 Respect for the individual: Respect for the individual is the must in the
organization.
 Relationship with the immediate manager: A manger plays the role of a mentor
and a coach. He designs and plans work for each employee. It is his duty to
involve the employee in the processes of the organization. So an organization
should hire managers who can make and maintain good relations with their
subordinates.
 Relationship with colleagues: Promote team work, not only among teams but in
different departments as well. This will induce competition as well as improve the
relationships among colleagues.
 Recruit whole heartedly: An employee should be recruited if there is a proper
place and duties for him to perform. Otherwise he’ll feel useless and will be
dissatisfied. Employees should know what the organization expects from them
and what their expectation from the organization is. Deliverwhat is promised.
 Promote an employee based culture: The employee should know that the
organization is there to support him at the time of need. Show them that the
organization cares and he’ll show the same for the organization. An employee
based culture may include decision making authority, availability of resources,
open door policy, etc.
 Individual development: Taking proper care of employees includes
acknowledgement to the employee’s dreams and personal goals. Create
opportunities for their career growth by providing mentorship programs,
certifications, educational courses, etc.
 Induce loyalty: Organizations should be loyal as well as they should promote
loyalty in the employees too. Try to make the current employees stay instead of
recruiting new ones.
5. Organization Environment
It is not about managing retention. It is about managing people. If an organization
manages people well, employee retention will take care of itself. Organizations should
focus on managing the work environment to make better use of the available human
assets.People want to work for an organization which provides
Appreciation for the work done
Ample opportunities to grow
A friendly and cooperative environment
A feeling that the organization is second home to the employee
Organization environment includes:
Culture
Values
Company reputation
Quality of people in the organization
Employee development and career growth
Risk taking
Leading technologies
Trust
Types of environment the employee needs in an organization
 Learning environment: It includes continuous learning and improvement of the
individual, certifications and provision for higher studies, etc.
 Support environment: Organization can provide support in the form of work-life
balance. Work life balance includes:
1. Flexible hours
2. Alternate work schedules
3. Wellness
4. Vacations
5. Telecommuting
6. Dependent care
Work environment: It includes efficient managers, supportive co-workers,
challenging work, involvement in decision-making, clarity of work and
responsibilities, and recognition. Lack or absence of such environment pushes
employees to look for new opportunities. The environment should be such that
the employee feels connected to the organization in every respect.
Importance of Employee Retention
Now that so much is being done by organizations to retain its employees, why is
retention so important?
Is it just to reduce the turnover costs? Well, the answer is a definite no. It’s not only the
cost incurred by a company that emphasizes the need of retaining employees but also
the need to retain talented employees from getting poached.
The process of employee retention will benefit an organization in the following ways:
 The Cost of Turnover: The cost of employee turnover adds hundreds of
thousands of money to a company's expenses. While it is difficult to fully
calculate the cost of turnover (including hiring costs, training costs and
productivity loss), industry experts often quote 25% of the averageemployee
salary as a conservative estimate.
 Loss of Company Knowledge: When an employee leaves, he takes with him
valuable knowledge about the company, customers, current projects and past
history (sometimes to competitors). Often much time and money has been spent
on the employee in expectation of a future return. When the employee leaves,
the investment is not realized.
 Interruption of Customer Service: Customers and clients do business with a
company in part because of the people. Relationships are developed that
encourage continued sponsorship of the business. When an employee leaves,
the relationships that employee built for the company are severed, which could
lead to potential customer loss.
 Turnover leads to more turnovers: When an employee terminates, the effect is
felt throughout theorganization. Co-workers are often required to pick up the
slack. The unspoken negativity often intensifies for the remaining staff.
 Goodwill of the company: The goodwill of a company is maintained when the
attrition rates are low. Higher retention rates motivate potential employees to join
the organization.
 Regaining efficiency: If an employee resigns, then good amount of time is lost in
hiring a new employee and then training him/her and this goes to the loss of the
company directly which many a times goes unnoticed. And even after this you
cannot assure us of the same efficiency from the new employee.
What Makes Employee Leave?
Employees do not leave an organization without any significant reason. There are
certain circumstances that lead to their leaving the organization. The most common
reasons can be:
 Job is not what the employee expected to be: Sometimes the job responsibilities
don’t come out to be same as expected by the candidates. Unexpected job
responsibilities lead to job dissatisfaction.
 Job and person mismatch: A candidate may be fit to do a certain type of job
which matches his personality. If he is given a job which mismatches his
personality, then he won’t be able to perform it well and will try to find out
reasons to leave the job.
 No growth opportunities: No or less learning and growth opportunities in the
current job will make candidate’s job and career stagnant.
 Lack of appreciation: If the work is not appreciated by the supervisor, the
employee feels demotivated and loses interest in job.
 Lack of trust and support in coworkers, seniors and management: Trust is the
most important factor that is required for an individual to stay in the job. Non-
supportive coworkers, seniors and management can make office environment
unfriendly and difficult to work in.
 Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the
organization.
 Compensation: Better compensation packages being offered by other companies
may attract employees towards themselves.
 New job offer: An attractive job offer which an employee thinks is good for him
with respect to job responsibility, compensation, growth and learning etc. can
lead an employee to leave the organization
Employee Retention Strategies
The basic practices which should be kept in mind in the employee retention strategies
are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things done.
3. Make employees realize that they are the most valuable asset of the organization.
4. Have faith in them, trust them and respect them.
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.

The retention plan should address each of the main areas in which dissatisfaction can
arise.
Armstrong identifies the following:
 Pay
Uncompetitive, inequitable or unfair pay systems are frequently cited as causes of
dissatisfaction. Possible actions include:
(i) Reviewing pay levels on the basis of market surveys
(ii) Introducing job evaluation or improving an existing scheme to provide forequitable
grading decisions
(iii) Ensuring that employees understand the link between performance and reward
(iv) Reviewing performance-related pay schemes to ensure that they operate fairly
(v) Adapting payment-by-results systems to ensure that employees are not penalized
when they are engaged on short runs
(vi) Tailoring benefits to individual requirements and preferences
(vii) Involving employees in developing and operating job evaluation and performance-
related pay schemes.
 Job Design
Dissatisfaction may be caused by jobs that are unrewarding in themselves. Jobs should
be designed to maximise skill variety, task significance, autonomy and feedback and
they should provide opportunities for learning and growth.
 Performance
Performance assessments must be fair and the standards against which employees are
to be measured must be clear. The following actions might be taken:
(i) Performance targets must be expressed as specific, measurable, attainable and
realistic
(ii) Targets and goals should be agreed, as should the actions needed to attain them,
rather than imposed from above
(iii) Managers should be trained and encouraged to provide regular feedback, especially
positive feedback, so that problems are not kept just for an annual performance review
(iv) Managers must be trained in performance review techniques such as counselling.
 Training
It is important to ensure that new employees are given adequate induction training.
Research suggests that new recruits go through a period of 'induction crisis' if they are
not given adequate training when they join the organisation and may leave. Similarly, all
employees who are inadequately trained for the demands made upon them (or who feel
they are inadequately trained) may be dissatisfied or leave. Armstrong suggests that
learning programmes and training schemes should be developed and introduced which:
(i) Give employees the competence and confidence to achieve expected performance
standards
(ii) Enhance existing skills and competences
(iii) Help people to acquire new skills and competences so that they can make better
use of their abilities, take on greater responsibilities, undertake a greater variety of tasks
and earn more under skill and competence-based pay schemes
(iv) Ensure that new employees quickly acquire and learn the basic skills and
knowledge needed to make a good start in their jobs
(v) Increase employability inside and outside the organisation.
 Career Development
One of the most commonly expressed reasons for leaving an organisation, certainly by
younger members of staff, is dissatisfaction with career prospects. To a certain extent
this is unavoidable and some organisations view it as healthy, as employees move on to
gain experience and skills elsewhere, allowing new employees to bring new ideas and
skills into the company. Even so, there is still a place within most organisations for a
stable core workforce. It is important that those who do not wish to have advancement
do not feel obliged to seek it but Armstrong notes that career opportunities can be
provided by:
(i) Providing employees with wider experience, perhaps by offering secondments or
experience of projects or project management
(ii) Introducing more systematic procedures for identifying potential, such as
assessment or development centres
(iii) Encouraging promotion from within
(iv) Developing more equitable promotion procedures
(v) Providing advice and guidance on career paths.
 Commitment
Commitment can be increased by:
(i) Operating clear communication systems so that all staff know the
organisation'smission, values and objectives and have an opportunity to discuss them
and put forward their own ideas
(ii) Using open methods of communication, such as briefings and ensuring information
is passed on expediently
(iii) Providing opportunities for employees to take part in the process of managing the
operation through mechanisms such as suggestion schemes, focus groups, etc
(iv) Ensuring employees are consulted about changes that are likely to affect them
(v) A team working or group approach can also help to generate or improve
commitment.
 Dissatisfaction with Supervision
Dissatisfaction with supervision or leadership generally, or specific conflict with
individual leaders/managers can result in employees choosing to leave. Some of these
problems can be avoided by:
(i) Using appropriate recruitment and selection techniques for managers and
supervisors, so that those displaying appropriate behaviours are selected
(ii) Providing training for managers and supervisors in interpersonal skills, conflict
resolution, negotiation, etc
(iii) Designing appropriate discipline and grievance procedures that are fair and fairly
applied and ensuring that all people are properly trained in their application.
 Recruitment and Selection
A high turnover of staff can be an indication of ineffective recruitment and selection
practices. Inappropriate selection criteria or an inability to match a candidate's
capabilities with the requirements of the job can lead to a rapid turnover. Similarly,
creating expectations about a job or promotion that cannot be fulfilled, will lead to
dissatisfaction.
If you have changed jobs in the past, why did you do so? If you were dissatisfied with
the job in some way, what could your employer have done to respond to this
dissatisfaction? Can you identify any initiatives within your current employer that are
aimed at retaining staff?
How effective are these initiatives?

QUESTIONS
Discuss the major components of HR planning and forecasting efforts.
2. Describe your expectations for a job. How well does your employer meet the
expectations you bring to the psychological contract?
3. If you became the new manager at a restaurant with high employee turnover, what
actions would you take to increase retention of employees?