MARKOV ANALYSIS

HRSB 313/HUMB 313

MARKOV ANALYSIS
Markov analysis is used to predict availabilities on the basis
of historical patterns of job stability and movement among
employees.
Percentage of major movements of employees are taken into
considerations; which are:
Job Stability (remain in the same position)
Promotions (upgrading one level)
Transfer (moving between same levels)
Demotion (degrading one level)
Exit (Resign, terminated, layoffs etc)

Example
Let say PARKSONs director of sales wants to know the HR
availabilities of the sales department in the next year so
that he can plan for his requisitions (if any). Here are the
steps:
Step 1: Determine the types of job within the department
and how they are interconnected.
Let say for the sales department, there are 4 positions
available; sales assistant, sales supervisor, purchasing
assistant and purchasing supervisor

PARKSON
Step 2: Establish the Movements and assumptions; As
follows:
Sales assistant and purchasing assistant are in the same

grade
Sales and purchasing supervisor are in the same grade
Sales and purchasing assistant are one grade lower than
the supervisors.
Sales and purchasing assistant cannot be demoted
(lowest level of grades)
The supervisors can be promoted to Assistant Managers
levels.

Parkson
Step 3: Now that we know the positions involved, we need
to gather past data in order to know the probabilities of
movements among the positions and probabilities of
exiting. The data can be made available from the HR
department.
In order to perform analysis, previous data of these
movements must be analyzed and that probabilities of it
reoccurring in the future must be determined.
Therefore, average of 2-4 years movement data must be
calculated

Parkson
The HR department of PARKSON (M) Sdn Bhd has a set of
movement data for the job in the sales department in all of
its stores all over Malaysia:
Position

Year

Sales
Assistant

2009
2010
2011

Job
Stability
0.5
0.6
0.7

2012

0.4

Promotions

Transfers

Demotions

Exit

0.1
0.1
0.1

0.05
0.1
0.05

0
0
0

0.35
0.20
0.15

0.1

0.1

0.4

Promotions

Transfers

Demotions

Exit

0.1
0.1

0.4
0.2

0.1
0.2

0.1
0.1

Position

Year

Sales

2009
2010

Job
Stability
0.3
0.4

2011

0.5

0.1

0.1

0.1

0.2

2012

0.6

0.1

0.1

0.2

Supervisor

Average
NO STAFF

100

Average
NO STAFF

20

Movements
Position

Year

Job
Stability

Promotions

Transfers

Demotions

Exit

Average
NO
STAFF

Purchasing
Assistant

2009
2010
2011
2012

0.70
0.50
0.50
0.70

0.20
0.30
0.30
0

0
0.20
0
0.20

0
0
0
0

0.10
0
0.20
0.10

200

Position

Year

Purchasing
Supervisor

2009
2010
2011
2012

Job
Stability
0.70
0.70
0.60
0.40

Promotions

Transfers

Demotions

Exit

Average
NO STAFF

0.10
0.20
0.30
0.40

0.05
0.05
0.05
0.05

0.05
0.05
0.05
0.05

0.1
0
0
0.1

20

Parkson
Step 1: Draw up this table

A.

Transition
Probability
Matrix

T+1

Job Category
and Level

B.

SA

SS

PA

PS

Exit

NO STAFF

SA

SS

PA

PS

Forecast of Availabilities
Current

Workforce
SA

NO STAFF

SS

PA

PS

Parkson
Step 2: Calculate Average of the movements

A.

Transition
Probability
Matrix

T+1

Job Category
and Level

T
B.

SA
0.55
0.1
0.1
0

SA
SS
PA
PS
Forecast of Availabilities
Current
Workforce
SA
SS
PA
PS

SS
0.1
0.45
0
0.05

PA
0.075
0
0.6
0.05

PS
0
0.2
0.2
0.6

Exit
0.275
0.15
0.1
0.05

NO STAFF
100
20
200
20

100
20
200
20

NO STAFF

Parkson
Step 3: Calculate the availabilities

A.

Transition
Probability
Matrix

T+1

Job Category
and Level
T

SA
SS
PA
PS

SA
0.55
0.1
0.1
0

SS
0.1
0.45
0
0.05

PA
0.075
0
0.6
0.05

PS
0
0.2
0.2
0.6

Exit
0.275
0.15
0.1
0.05

NO STAFF
100
20
200
20

B.
Forecast of
Availabilities

Current
Workforce
SA
SS
PA
PS

100
20
200
20

55
2
20
0
77

10
9
0
1
20

7.5
0
120
1
128.5

0
4
40
12
56

27.5
3
20
1
51.5

NO STAFF
100
18
200
15
281.5

Parkson

Step 4: Produce this table of availabilities

SalesAssistant
SalesSupervisor
PurchasingAssistant
PurchasingSupervisor

77
20
128.5
56

Try This!!
Position
Sales Apprentice

Year
2011
2012

Job Stability
0.6
0.8

Promotions
0.1
0.1

Transfers
0
0

Demotions
0
0

Exit
0.3
0.1

NO STAFF
200
250

Sales Assistant

2011
2012

0.4
0.5

0.5
0.4

0
0

0.1
0.1

0
0

150
190

Sales Supervisor

2011
2012

0.3
0.5

0.3
0.1

0
0

0.2
0.2

0.2
0.2

50
60

Sales Manager

2011
2012

0.7
0.8

0
0

0
0

0.2
0.2

0.1
0

25
29

The table above showed the movements that happened in Company Ahmads Sales
Department. The lowest rank grade is sales apprentice and the highest grade is the sales
manager. Assume there is no lateral movements, and no promotions for the Sales
manager, calculate the availabilities of each of the positions in the year 2015

Exercise 1: Markov
Position

Sales Assistant

Sales Supervisor

Assistant Managers

Managers

Year

Job Stability

Promotions

Transfers

Demotions

Exit

2012

0.8

0.1

0.1

2013

0.6

0.3

0.1

0.1

2014

0.5

0.3

0.1

0.1

2015

0.6

0.2

0.2

2012

0.8

0.1

0.1

2013

0.7

0.3

2014

0.8

0.1

0.1

2015

0.7

0.1

0.1

0.1

2012

0.8

0.1

0.1

2013

0.7

0.2

0.1

2014

0.6

0.2

0.1

0.1

2015

0.5

0.3

0.1

0.1

2012

0.8

0.1

0.1

2013

0.8

0.2

2014

0.9

0.1

2015

0.9

0.1

Average No of Staff

155

52

27

15