HRM822 Final Exam Study Notes Exam Breakdown Part I: You are provided with 4 questions and must answer 3 for 10 marks each. Related to: i. Downsizing ii. Forecasting techniques iii. Outsourcing of HR functions iv. HR auditing/measurement mark and explaining will earn 1 mark. 7. If there are less than 5 available answers (for example cultural results from a merger) then name the possible outcomes and provide explanations of them with a brief introduction and conclusion. 8. Providing real life examples will often earn marks and is very useful to demonstrate an understanding. 9. Job Analysis!
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HRM822 Final Exam Study Notes
Exam Breakdown
Part I: You are provided with 4 questions and must answer 3 for 10 marks each. Related to:
i. Downsizing
ii. Forecasting techniques
iii. Outsourcing of HR functions
iv. HR auditing/measurement
Part II: Related to JOB ANALYSIS. Worth 20 marks total. You will be provided with an NOC job
description and will have to:
i. Explain why conducting a job analysis is vital! (5 marks)
ii. The techniques that you would use to conduct a job analysis for this role. (10 marks)
iii. The documents that you would create/construct after completing the job analysis. (5
marks)
Part III. A case study. You will be provided with a case study (taken from your text) related to
both mergers/acquisitions (M & A’s) and international placements/culture. You will then
answer 5 questions worth 10 marks each related to:
i. The risks/benefits and success rates of M & A’s.
ii. The 4 accepted cultural outcomes of an M & A.
iii. Human Resources ‘due diligence’. What would you check?
iv. The scanning of external factors. In this case what external factors should have been
examined and addressed?
v. Stakeholder theory. In this case what stakeholders were involved and how might they
have influenced the success and/or failure of this particular case?
Exam Hints
1. Please use dark blue or black ink. Highlighting may be useful.
2. Do not write out the question, we have a copy of the exam paper.
3. Use bullet points!
4. Yes, neatness is important.
5. Number each book and clearly number each question.
6. If a question is worth 10 marks and asks for, as an example stakeholders, then name 5
stakeholders and then briefly describe their impact or influence. Naming/identifying will earn 1
mark and explaining will earn 1 mark.
7. If there are less than 5 available answers (for example cultural results from a merger) then name
the possible outcomes and provide explanations of them with a brief introduction and
conclusion.
8. Providing real life examples will often earn marks and is very useful to demonstrate an
understanding.
9. Job Analysis!
Downsizing
Downsizing: activities undertaken to improve organizational efficiency, productivity and/or
competitiveness that affects the size of the organization's workforce, its costs and its work
processes
Downsizing often fails as it is not properly planned or carried out in a manner that reflects the
organization's strategies
Why do organizations downsize?
1. Labour costs are perceived as the easiest to adjust quickly
2. Declining profit
3. Increased competition
4. Economic downturn
5. Mergers
6. New technology
7. Reducing operating costs
8. Reduced cash flow
9. Flattening the organization
10. Getting rid of ‘deadwood’
11. New management/ownership
Alternatives to Downsizing
Cutting non-personnel related costs such as business expenses, advertising, etc.
Cutting personnel related costs such as reducing bonuses, wages, benefits.
Reducing the work week.
Providing incentives for voluntary severances such as offering early retirement.
Offering extended leaves of absence, sabbaticals or vacations.
Eliminating overtime.
Implementing worksharing.
Relying on attrition and a hiring freeze.
Outsourcing some functions.
Implementing other cost reduction strategies.
Best Practices in Downsizing
Hands-on involvement prior to the decision.
Selective in its application rather than ‘across the board’.
Long-term in focus. Identify your organizational and competitive strategies and
advantages
Attack specific areas. Identify redundancies, inefficiencies, areas for technological
advancement, outdated/obsolete functions/duties and products.
Address the psychological needs of survivors.
Treat those displaced with dignity and fairness.
Create smaller, autonomous teams (the power of 100).
Be proactive and focus on performance
Negatives of Downsizing
Higher ‘quit’ rate.
Less attractive to new or high potential recruits.
Reduced employee commitment.
Lower performance.
Management may fixate on restructuring rather than customer needs or rebuilding.
Less innovation and risk taking.
Lower morale.
Increased litigation.
Decreased attention to safety.
Decreased organizational reputation
Forecasting Techniques
Quantitative Forecasting Techniques
Quantitative techniques work best when the environment is stable and you have a
long-term statistical history to use. They require the compilation of historical data and
the use of software or someone trained in statistical analysis. Completion may be
lengthy. Requires detailed data on organizational staffing, sales, efficiency, etc.
Ratio Analysis: is an quantitative technique. An example is comparing the relationship
between total sales and the number of employees required.
The 5 steps for conducting a ratio analysis are:
1. Select the appropriate trend
2. Track the trend over time
3. Track the workforce size over the same time
4. Calculate the average ratio of the trend to the workforce size
5. Calculate the forecasted demand for labour
Regression analysis: another quantitative technique. It presupposes that there is a
relationship between one or more independent (causal) variables which then impact
the dependent (target) variable.
For example the more games the Toronto Maple Leafs win (causal variable) the
more beer your restaurant will sell (dependent variable). So you could predict
how many staff to schedule and the amount of beer to stock based on your
prediction about how good the Leafs will be.
Trend Analysis: examines the relationship over time between an operational index
such as sales and the demand for labour. An example would be comparing attendance
in class to marks awarded The trend must be consistent and have been in place for
some time. It is quantitative.
HR Budgets: operational or short term demand forecasting that require the number
and type of personnel required for each role. It results in a ‘staffing table’.
Staffing Table: When staff prepare information on the expected demand for labour in
the short-term based on based on current or expected levels of activity. It is based on
activity levels and represents the total projected HR demand for each role.
A Recommended Supply Forecasting Technique
Markov Model: a series of matrices that detail the various patterns of
movement to and from the jobs in an organization. It requires the use of
historic mobility rates, which leads to a forecast of future movement and finally
those are used to develop programs.
Lists 5 possible options:
1. remain in current job
2. promotion
3. lateral transfer
4. exit from the job/company
5. demotion
The Markov Model is useful for determining:
a. the number of personnel moves each year
b. the number of external hires required
c. movement patterns/career paths in the organization and required
training
d. success rates for hires and promotions
Qualitative Forecasting Techniques
Qualitative Supply Forecasting
Linear Programming: a complex mathematical procedure to determine the
best supply mix.
Movement Analysis: used to analyze the ripple effect of promotions
Vacancy Model: analyzes personnel flow through the organization beginning
at the top and moving down.
Qualitative Demand Forecasting → These work best when the environment is unstable
and or you are introducing new products or techniques. They often require the use of
‘experts’. Requires knowledge of external factors, stakeholders, etc
Expert Forecasting: usually this is conducted by line managers, HR staff, senior
management or consultants. These are qualitative techniques.
Scenario/Envelope Forecasting: Projections set by a group based on a variety
of assumptions. Usually develop ‘best’ and/or ‘worse’ case scenarios, these are
the boundaries of the ‘envelope’.
Impact Analysis: Past trends are analyzed by experts and they predict the
probability of a future outcome.
Qualitative Supply & Demand Forecasting
Delphi Technique The experts do not meet so this reduces the chance of
‘groupthink. Also they do not meet so there is no need for travel and therefore
it is easier to schedule and less costly.
1. Define the issue or question
2. Identify the experts and the timeline
3. Orient the experts
4. Issue the first questionnaire
5. Summarize the answers
6. Issue the first round summary and the second round questionnaire
7. Compile the answers to the second and issue an opinion based on the
majority viewpoint.
8. Continue, summarize and review
Nominal Group: Much like the Delphi Technique only the ‘experts’ meet. This
may cost more for travel, etc and may take longer to get the experts together.
Also one may overpower the others or groupthink may occur.
1. Define the issue or question
2. Identify the experts and the timeline
3. Issue the demand statement to the experts
4. Experts conduct research
5. Experts meet but individual interactions are discouraged
6. Experts brainstorm
7. Vote is taken and outcomes are ranked.
Outsourcing of HR Functions
Outsourcing: a contractual relationship for the provision of business services by an external
provider
Why Outsource?
Reduce cost
Economies of scale
Access to specialized skills/expertise
Harmonize policies/procedures globally
Access to advanced technology
Written/contractual performance standards
Reduce head count/organizational politics
Improved service
Focus on strategic value added functions rather than transactional functions
When should a function be outsourced?
When it is:
Rule based
Repetitive
Frequently undertaken
Predictable
Able to be fully or partially automated
Able to be delivered remotely
Not a ‘core’ function
Does not add to organizational knowledge or capabilities
Why not outsource?
Costs may rise as unexpected events/demands crop up
No control over level of service (outside of contracted stipulations)
No control over contracted staff
System or cultural incompatibilities
Lack of flexibility
Vendor may become or assist competitors
Impact on employee morale
Destruction of internal culture
Privacy risks
Reduced corporate value
Damage to corporate knowledge base (hollowing out)
Functions that are most commonly outsourced
Compensation
Payroll
Benefits administration
Compensation administration
Pension administration and investing
Training
Training delivery
Training design
Training design and development
Development of training policies
Recruitment & Selection
Advertising
Screening of external applicants
Applicant testing
Reference checking
Preliminary interviews
Exit interviews
Other Functions
Temporary staffing
Information technology
Employee assistance programs
Wellness programs
Occupational health & safety
Claims management
HR Auditing
Why do we audit HR performance?
To ensure that HR is accepted s a business function.
HR practitioners must be business people and speak the language of business.
Numbers must be related to outcomes and they must reflect value added activities.
The problem is that unlike other business activities, there is no standard accepted way
of measuring HR activities.
Labour is often the largest controllable cost
To objectively identify and reward good performance
Legal compliance
Determine which HR practices are effective
To support continuous improvements
Bring HR closer to line functions
Provide data for resource allocation
Most Frequent Measures
Turnover
Employment Engagement
Cost Per Employee (training, hiring)
Labour Cost (per unit or sale or service)
Revenue Per Employee
Customer Satisfaction
Units of Output Per Employee
Other Factors Which Maybe Measured
Employee involvement/commitment
Improving organizational human capital (KSAO’s)
Decreasing recruitment costs
Improving selection techniques/processes
Identifying and keeping ‘key’ employees
Succession planning/management
Reducing injuries and absenteeism
Improving recruitment pool by creating a positive organizational identity/culture
Ensuring that compensation is in-line with organizational strategy
Ensuring that labour costs and headcount are aligned with organizational requirements
Legislative compliance
Positive employee relations (no need to unionize or limiting work stoppages and
grievances
The 5C Model
Compliance: with legal requirements
Client Satisfaction (stakeholders as clients): through feedback, surveys, measuring
critical incidents
Culture Management: perceptions and attitudes both internal and external and
employee commitment
Cost of Control (of employee behaviours): such as absenteeism, injuries and turnover.
Also increasing efficiencies based on time/volume/cost
Contribution (of HR): employee involvement, flexible work systems, KSAO’s, internal
culture, employee development
Balanced Scorecard (BSC)
A measurement of framework that helps managers translate strategic goals into
operational objects to answer 4 basic questions
1. How do customers/clients see us (customer perspective)
2. What must we excel at (internal business perspective)
3. Can we continue to improve (innovation perspective)
4. How do we look to shareholders (financial perspective)
Job Analysis
Job Analysis: an examination of the jobs in teh organization with a view to documenting the
tasks , duties and responsibilities of a job and the KSAO's associated with the successful
performance of the job
Elements required for a successful job analysis include:
Working condition
Employee qualifications
Training and skill requirements
Work processes
Why is job analysis so important?
Incorporates recent changes in processes and techniques, keeping job descriptions up
to date
Ensures that HR demand and supply are matched by recruitment & selection methods
Aligns HR programs to corporate strategy & future needs