Unit 2 UNIT 2

HRM Planning
Demand forecasting helps in determining the number and type of
personnel/human resources required in future. The next step in human
resource planning is forecasting supply of human resources. The purpose
of supply forecasting is to determine the size and quality of present and
potential human resources available from within and outside the
organisation to meet the future demand of human resources.
Econometrics is the use of statistical and
mathematical models to develop theories or test
existing hypothesis in economics and
to forecast future trends from historical data. It
subjects real-world data to statistical trials and then
compares the results against the theory being
tested.
Ratio Analysis:
A ratio analysis is a dual-purpose, demand-side
forecasting method used to forecast demand and to
compare forecasting results against industry standards or
business competition.
One big advantage of a ratio analysis is that it can be just
as easily used in businesses that don’t have years of
historic data to rely on for making future staffing
predictions as it can in existing businesses.
Time to Fill Jobs
Cost Per Hire
Turnover Rate
TREND ANALYSIS:
It’s the process of examining past data to predict
future demands. The collecting and evaluating of
data identifies patterns that can affect future needs
– but this is combined with other factors to build a
more comprehensive picture to determine staffing
requirements.

It’s not as simple as saying ‘this is what happened

before so we’ll plan the future accordingly’. Things
change, as do organisations and the market they
operate within, so a trend analysis has to reflect
this.
Trend analysis components
The process often covers certain areas:
Workforce trends – the ‘raw material’ gathered by HR professionals; this
data covers areas such as job classifications, education, skills, gender,
age, turnover rates and more.
Supply – assessing the organisation’s labour supply based on workforce
demographics; is there a ready supply of staffing available to the
organisation now and in the future?
Demand – analysis of demand in the market and whether the
organisation’s staffing can meet them, and if the current staff can
accommodate future workloads.
Gap – going hand in hand with ‘supply’ above, gap analysis identifies
whether existing staff skills and abilities will be able to meet future
needs.
The identified gap could work the other way in that future staffing may
be reduced due to changing demands and tech advances.
 Competency Model

A competency model is a guideline developed by a

Human Resource department that sets out the specific
skills, knowledge and behavioral requirements that
enable an employee to perform their job successfully.
Competency models define what performance success
should look like within the organization for each
individual job. The model is applied to recruitment
practices, talent management, training and
performance assessment.
A job description and a competency model sound almost
alike because they both seem to describe what an
employee is required to do in the job. What is the
difference?
The difference is that a job description is a general
summary of the skills required for a job, whereas a
competency model provides specific behaviors that an
employee must do on the job in order to be successful.
Here are some of the ways that implementing the competency
model benefits organizations:
•Sets a concrete direction for workforce performance that aligns
with organizational goals and strategies.
•Enables HR to have a concrete understanding of all employee
abilities and skills.
•Enables HR and Training to more accurately identify learning &
development (L&D) needs.
•Allows employees to take ownership of the skills and behaviors
required of them in their roles.
•Empowers organizations to keep track of what skills employees
have so that strategy and planning can work towards that future
skills may be needed.
•Provides a consistent and fair system of measurement for
performance evaluation.
•
Competencies that make up the model
There is no standard list of competencies for any given job. The type of
competency that feeds into a competency model depends on the
specific needs of the job. For example, the competencies listed for a
restaurant waiter will differ drastically from the needs of an
accountant.
Competencies can be broken down into helpful categories to better
understand the type of information that might be included, such as:
1. Core competencies
Core competencies include the baseline skills required by the
organization for all employees; these are the basic things that
employees must fulfill. This will vary from company to company, as it
depends on the values, philosophy and goals of each organization, but
can include basic requirements like communication skills or teamwork.
Most jobs require a basic element of being able to work with other
people to some degree.
2. Functional competencies
Functional competencies are job-specific skills and behaviors that are
unique for each role. For example, a competency for a restaurant
waiter may be the ability to effectively handle customer complaints,
where a competency for an accountant may be the ability to analyze a
specific type of financial data in order to prepare reports.

Functional competencies should describe what behaviors or skills need

to be performed in order for the employee to be a top-performer in
their position.

3. Leadership competencies
Leadership competencies are often used for supervisory and
management related roles, although can be applied to any job position
that requires an employee to lead others. They include leadership skills
and behaviors like decision-making abilities.
Job Analysis

Job Analysis is an essential part of human resource

management. It determines the skills, ability, duties,
authority, and accountabilities a job should have.
Job analysis is the process of determining and reporting
pertinent information relating to the nature of a specific
job.
It is the determination of the tasks that comprise the job
and the skills, knowledge, abilities, and responsibilities
required of the holder for successful job performance.
3 purposes of job analysis are;

Job Description
Job Specification
Job Evaluation
Job Description
Job descriptions describe the duties, responsibilities, working conditions,
and activities of a particular job. Job descriptions vary in terms of the level
of detail provided.
However, several components are present in virtually every job
description—for example, the job title, type of summary, and worker
requirements.
Job Specification
Job specifications detail the knowledge, skills, and abilities relevant to a
job, including the education, experience, specialized training, personal
traits, and manual dexterity required. The job specification is important for
several reasons.
First, certain jobs have the qualifications required by law.
For example, airline pilots, attorneys, and medical doctors must be
licensed. Another type of job specification is based on professional
tradition.
For example, university professors must usually hold a Ph.D. or equivalent
degree if they are in a tenure track position.
Job Evaluation
The information gathered during a job analysis can be used as input for the
organization’s job evaluation system. The job evaluation determines the
worth of a particular job to the organization.
This information is primarily used to determine the pay for the job. Thus,
employees should be paid more for working more difficult jobs.
7 Job Analysis Methods
Observation method
In this method, the observer observes a worker or a group of workers
doing a job. He lists all the duties performed by the worker and the
qualities required to perform those duties.
It is a direct method. Direct exposure to jobs can provide a richer and
deeper understanding of job requirements than workers’ descriptions
of what they do.
Observations alone may reveal little useful information if the work in
question is primarily mental.
Job performance
With this approach, an analyst does the job understudy to get
firsthand exposure to what it demands.
With this method, there is exposure to actual job tasks and the jobs’
physical, environmental, and social demands. It is suitable for jobs
that can be learned relatively quickly. Its main limitation is that the
employee becomes conscious when the employee’s work is observed.
This method is inappropriate for jobs that require extensive training
or are hazardous.
Work sampling
Under this method, a manager can determine the content and pace of a
typical workday through a statistical sampling of certain actions rather
than through continuous observation and timing of all actions.
Individual interview
A manager or job analyst visits each job site and talks with employees
performing each job. A standardized interview form is used most often to
record the information.
Frequently, both the employee and the employee’s supervisor must be
interviewed to understand the job completely. In some cases, a group of
experts conducts the interview.
They ask questions about the job, skill levels, and difficulty levels.
They ask questions and collect information, and based on this information,
job analysis is prepared.
This method can provide information about standard and non-standard
activities and physical and mental work.
In short, the worker can provide the analyst with information that might
not be available from any other source. Its main limitation is that workers
may be suspicious of interviewers and their motives.; interviewers may ask
ambiguous questions.
Thus, the distortion of information is a real possibility.
Structured questionnaire
A survey instrument is developed and given to employees and managers to
complete.
The main advantage of this method is that information on many jobs can be
collected inexpensively in a relatively short time. This method is usually
cheaper and quicker to administer than other methods.
Questionnaires can be completed off the job, thus avoiding lost productive
time. Its main limitation is that it is time consuming and expensive to
develop.
The rapport between analyst and respondent is impossible unless the analyst
is present to explain and clarify misunderstandings.
Such an impersonal approach may have adverse effects on respondent
cooperation and motivation.
Critical incident method
In this method, the employee is asked to write one or more critical incident
that has taken place on the job.
The incident will explain the problem, how it is handled, the qualities
required, difficulty levels, etc. The critical incident method gives an idea
about the job and its importance.
A critical means important, and an incident means anything which takes
place on the job. This method focuses directly on what people do in their
jobs, and thus, it provides insight into job dynamics.
But this method takes much time to gather, abstract, and categorize the
incidents.
It may be difficult to develop a profile of average job behavior as this method
describes particularly effective or ineffective behavior.
Diary method
Under this method, companies can ask employees to
maintain log records or daily diaries, and job analysis can
be done based on information collected from the record.
A log record is a book in which employee records /writes
all the activities performed by him on the job.
The records are extensive and exhausted and provide a
fair idea about the duties and responsibilities in any job.
In this method, the worker does the work himself, and the
idea of the skill required, the difficulty level of the job, and
the efforts required can be known easily.
Difference Between Recruitment and Selection

Recruitment is a process of searching out the potential

applicants and inspiring them to apply for the actual or
anticipated vacancy. On the other hand, Selection is a
process of hiring employees among the shortlisted
candidates and providing them a job in the organization.
 BASIS FOR COMPARISON RECRUITMENT SELECTION
Meaning Recruitment is an activity of Selection refers to the process of
searching candidates and selecting the best candidates and
encouraging them apply for it. offering them job.
Approach Positive Negative

Objective Inviting more and more candidates Picking up the most suitable
to apply for the vacant post. candidate and rejecting the rest.

Key Factor Advertising the job Appointment of the candidate

Sequence First Second

Process Vacancies are notified by the firm The firm makes applicant pass
through various sources and through various levels like
application form is made available submitting form, written test,
to the candidate. interview, medical test and so on.

Contractual Relation As recruitment only implies the Selection involves the creation of
communication of vacancies, no contractual relation between the
contractual relation is established. employer and employee.

Method Economical Expensive

Key Differences Between Recruitment and Selection

Recruitment is the process of finding candidates for the

vacant position and stimulating them to apply for it. The
selection means picking up the best candidate from the list of
applicants and offering them the job.
Recruitment is a positive process as it attracts more and more
job seekers to apply for the post. Conversely, Selection is a
negative process as it rejects all the unfit candidates.
Recruitment aims at inviting more and more candidates to
apply for the vacant position. On the contrary, selection aims
at rejecting unsuitable candidates and appointing the right
candidates at the job.
The activity of recruitment is quite simple because in this the
recruiter does not have to pay more attention to scrutinising
the candidate, whereas selection is a complex activity
because in this the employer wants to know every minute
detail about each candidate so that he can choose the perfect
match for the job which requires thorough investigation.
Recruitment consumes less time as it only involves identifying the
needs of the job and stimulating candidates to apply for the same.
Conversely, selection involves a wide range of activities, right from
shortlisting the candidates to appointing them.
In recruitment, the firm notifies the candidates regarding vacancy
through different sources such as the internet, newspaper, magazines,
etc. and distributes the form to the candidates so that they can easily
apply. As against this, in the process of selection, the firm makes sure
that candidate passes through various stages such as form submission,
written exam, interview, medical exam, etc.
In recruitment, no contractual relation is created between the
employer and employee. Unlike selection, where both employer and
employee are bound by the contract of employment.
Recruitment is an economical process while the selection is an
expensive process.
Source Of Recruitment

Source of recruitment is a term in human resources

management that describes the recruitment medium that
allows job candidates and businesses to communicate
and connect to fill vacant work positions.
There are internal and external recruitment sources that
organisations can use to advertise available job positions
and reach out to potential candidates.
Job seekers, too, can benefit from these sources to find
opportunities that suit their qualifications and experience.
They can get relevant information about applying to these
and send in their resumes and cover letters.
Types Of Recruitment Sources
In human resources management, two main areas
comprise the source of recruitment:
Internal recruitment sources
External recruitment sources
Internal recruitment sources

Internal recruitment sources are a company's existing

employees who can perform the available job.
These recruits are less expensive to hire and more
convenient to recruit because they come from the
organisation's qualified workforce.
The human resources (HR) personnel can share
information about the job title, duties, work experience
and educational qualifications with the current employee.
They usually do this internally via phone calls, email,
notice board messages and website postings.
Typically, HR professionals include contact details and
encourage employees to apply so that they can put them
on an interview shortlist.
Some types of internal hiring in organisations include the following:
Promotion: The organisation might offer qualified employees a
higher-ranking role in the same department or a different one with
more duties, responsibilities and a salary increase. Since a promotion
means a better job status and benefits, it motivates employees to be
more diligent and productive.
Transfer: The organisation may move an employee from one
department to work in another. It could also transfer an employee to
a branch office in another city or country.
Freelance and former employees: The organisation might offer a full-
time position to a freelancer already working for it. It could also hire
former or retired employees who want to work part-time or full-time.
Employee referral scheme: The organisation may screen current
employees and refer qualified candidates for available positions.
Existing employees might receive bonuses or other rewards for
making referrals.
External recruitment sources

External recruitment sources refer to a group of candidates from

outside the company who might fit the vacant role.
Organisations develop a recruitment budget to find, screen and
interview candidates from various external sources.
After hiring new talent, an organisation typically offers an
orientation or training programme to help the new employee
understand their role and teach them to manage their work
responsibilities.
Some types of external hiring in organisations include the following:
Advertisements: The organisation advertises available job positions
on its website, social media platforms, professional networking sites,
job sites and newspapers. The job advertisements may look for
freshers, mid-level or senior-level employees.
Employment agencies: Private sector and government employment
agencies often provide in-person and online job search services to
qualified candidates.
In addition to informing candidates of available positions that
match their qualifications and work experience, these agencies may
offer resume and interview tips.
Employment sites: Many online employment sites list available jobs
from companies across industries.
People can create personal profiles on these sites, upload their
resumes, select the types of jobs they want, get job notifications and
send applications.
Campus selections: Organisations conduct campus selection drives at
various educational institutions to recruit final-year students for
available positions.
They may offer the students internships before graduation and jobs
afterwards.
Employee recommendations: Existing employees may recommend
the organisation to qualified family members, friends and
acquaintances by informing them of open positions and encouraging
them to apply.
Labour union recommendations: Organisations from unionised
industries such as hotels, construction, retail, textiles, finance and
insurance may hire recruits from labour union recommendations.
Employment enquiries: Skilled, semi-skilled or unskilled candidates may present
themselves at the organisation to enquire about available work. A manager
might hire them according to their abilities.
Walk-in interviews: Some organisations might have walk-in interview policies
that enable talented candidates to apply without a formal interview
appointment.
Labour contractors: Organisations may pay commissions to labour contractors
when hiring semi-skilled and unskilled employees to ensure they can maintain an
adequate workforce.
Public talks, appearances and posts: An organisation might conduct public
lectures, talk show appearances and social media posts by senior executives and
other employees to inform potential candidates about its business work culture
and available opportunities. These posts encourage people to apply for open
positions.
Trade shows: An organisation might participate in trade shows to inform the
public about its products and services and attract recruits.
Indirect sources: Articles, books and documentaries about an organisation's
achievements can work as indirect recruitment sources by showing interested
candidates that an organisation is successful and a great place for career
advancement.
Files of past applicants: Organisations may maintain files of past applicants and
contact them when they have suitable job openings.
Advantages Of Internal Recruitment Sources

There are many advantages to internal recruitment sources, such as:

Cost-effectiveness: It is more cost-effective for organisations to hire
internally since it is not necessary for them to spend money on advertising,
performing background checks or arranging interviews.
Time efficiency: By hiring internally, HR personnel can save time they may
have spent reading thousands of job applications, short-listing candidates
and emailing and setting up interviews.
Adaptability: When organisations hire internally, employees are already
familiar with the organisational structure, culture and business. This
knowledge reduces the need for induction or training to adapt to the new
position and working conditions.
Improved morale: Employees may feel more valued when they receive
opportunities to move to different or higher-paying positions within an
organisation. The opportunity to progress in their careers may improve
their morale, engagement and productivity.
Increased self-improvement: Employees may increase their participation
in self-development programmes and seek new skills to become more
eligible for promotions.
Advantages Of External Recruitment Sources

The following are some of the advantages of external

recruitment sources:
Access to more talent: By turning to external recruitment
sources, organisations gain access to a wider pool of qualified
candidates with the right skills and experience to suit the
open job position.
Infusion of new ideas: Organisations can improve innovation
when they hire talent from external recruitment sources.
New voices can help the company improve its business
operations and advance in the industry.
Better use of resources: When organisations hire skilled and
experienced candidates from external recruitment sources, it
is unnecessary to spend time, money and other resources on
training them to address the job's responsibilities.
Selection

Selection is the process of putting right men on the right

job. It is a procedure of matching organisational
requirements with the skills and qualifications of people.
Effective selection can be done only when there is
effective matching. By selecting best candidate for the
required job, the organisation will get quality performance
of employees.
Moreover, organisation will face less of absenteeism and
employee turnover problems.
By selecting right candidate for the required job,
organisation will also save time and money.
Proper screening of candidates takes place during
selection procedure. All the potential candidates who
apply for the given job are tested.
Selection is the second step in the staffing process. This
process involves choosing the candidates who best meet
the qualification and have the greatest aptitude for the
job.
The main objective of this process is to match individual
characteristics such as ability, experience and so on with
the requirements of the job.
Thus, a systematic selection should be done in the
organization to avoid wrong candidate’s selection and loss of
time and money incurred on this process. Wrong selection
also leads to absenteeism and retrenchment.
Selection is the process of carefully screening the candidates
who offer themselves for appointment so as choose the most
suitable persons for the jobs that are to be filled. It is the
process of weeding out unsuitable candidates.
According to Thomas H. Stone, ” Selection is the process of
differentiating between applicants in order to identify (and
hire) those with a greater likelihood of success in a job.”
Types of employee selection tests are broadly classified
into five types as under:-
A. Aptitude Tests
B. Achievement Tests
C. Situational Tests
D. Interest Tests
E. Personality Tests.
These are further sub-classified into-
A: Aptitude tests are:-
1. Intelligence Tests
2. Mechanical Aptitude Tests
3. Psychomotor Tests
4. Clerical Aptitude Tests.

B: Achievement tests are:-

1. Job Knowledge Tests
2. Work Sample Tests.
C: Situational tests:-
1. Group Discussion
2. In-Basket
3. Assessment Centres
D: Interest tests
E: Personality tests are:-
1. Objective Tests
2. 2. Projective Tests.
1. Aptitude Tests:

These tests aim at measuring if an individual has the capacity or

latent ability to learn a given job, in case he is given adequate training.
Different aptitude tests are as under:
(i) Intelligence Tests:
These tests, as evident from their name, measure intelligence
quotient of the candidate. In detail, these tests measure capacity for
comprehension reasoning, word fluency, verbal comprehension,
numbers, memory and space.
Intelligence tests comprise of the following sample learning,
ability, the adaptability tests, etc.
(ii) Mechanical Aptitude Tests:
To evaluate the capacities of spatial visualisation, perceptual speed
and knowledge of mechanical matter mechanical aptitude tests are
held. These tests are useful when selection is to be made of
apprentices, skilled, mechanical employees, technicians, etc.
(iii) Psychomotor Tests:
These tests measure abilities like manual dexterity
motor ability and mind and coordination of candidates.
These tests are of great use to select semi-skilled workers
for repetitive operations like packing, watch assembly.
(iv) Clerical Aptitude Tests:
Specific capacities that are involved in office work are
measured through this test. This test includes the items
like spelling, computation, comprehension, copying, word
measuring, etc.
2. Achievement Tests:
These tests are conducted in case, it is claimed by the applicants
that they know something as extraordinary, as such these tests are
concerned with what one has accomplished. These tests are more
useful to measure the value of specific achievement, when an
organisation wishes to employ experienced candidates.
These tests are classified into two phases:
(i) Job Knowledge Tests:
It is the test under which a candidate is put under test in the
knowledge of a particular job. For example, if a junior lecturer applies
for the job of a senior lecturer in commerce, he may be tested in job
knowledge, where he is asked questions about Accountancy
Principles, Banking Law and Business Management etc.
(ii) Work Sample Tests:This is the second phase under which a portion
of the actual work is given to the candidate, as a test and the
candidate is asked to do it. To illustrate, in case a candidate applies for
a post of lecturer in Management, he may be asked to deliver a
lecture on Management Information System as a work sample test.
3. Situational Tests:
This test makes evaluation of a candidate in a similar real life situation. The candidate is asked
either to cope with the situation or solve critical situations of the job.
It can be divided as under:
(i) Group Discussion:
As it is clear from its name that this test is administered through a group discussion approach to
solve a problem under which candidates are observed in the areas of initiating, leading,
proposing valuable ideas, conciliating skills, oral communicating skills, coordinating and
concluding skills.
(ii) In-Basket:
Situational test is administered through in-basket. The candidate, in this test, is supplied with
actual letters, telephone and telegraphic message, reports and requirements by various officers
of the organisation, adequate information about the job and organisation. The candidate is
asked to take decisions on various items based on the in-basket information regarding
requirements in the memoranda.
(iii) Assessment Centres:
Assessment centre provides wide-ranging holistic assessment of each participant as it is a
process that makes evaluation of a candidate’s potential for management on the basis of three
sources viz., multiple assessment technique such as situational tests, standardised methods of
making inferences and pooled judgements for multiple assessors to rate each candidate’s
behaviour.
4. Interest Tests:

Likes and dislikes of candidates in relation to work, job,

occupations, hobbies and recreational activities are
determined through this test.
The objective of this test is to find out whether a
candidate is interested or disinterested in the job for
which he is a candidate and to find out in which area of
the job range/occupation the he is interested in.
This test is based on the assumption that there is a high
correlation between the interest of a candidate in a job
and job success.
5. Personality Tests:

The aim of these tests is to evaluate the whole personality of the

candidate such as his emotional reactions and maturity and
characteristic mood. They are expressed in such traits like self-
confidence, tact, emotional control, optimism, decisiveness,
sociability, conformity, objectivity, patience, fear, distrust, initiative,
judgment, dominance or submission, impulsiveness, sympathy,
integrity, stability and self-confidence.
The personality tests are of two kinds:
(i) Objective Tests – Objective tests are suitable for group testing and
can be scored objectively.
(ii) Projective Tests – Under this, candidates are asked to project their
own interpretation of certain standard stimulus situations, basing on
ambiguous pictures, figures etc., under these tests.