UNIT I : Understanding HR,

Functions of HRM, Human Resource Planning, Job Analysis, People Management

Practices. Recruitment- Design a recruitment advertisement for print/e/visual
media.

Human Capital Index, focusing on how human resource systems influence

customer service, Understanding the economics of effective human-capital
processes, Creating overall dynamic human systems. How to achieve
organizational change through the human dimension.

Understanding HR- Refer book Gary Dessler chapter 1 soft copy shared on group

Notes from Indian Author:

ӹ Nature of HRM
ӹ Definition of HRM
ӹ Development of HRM
ӹ Environment of HRM

learning objectives

After reading this lesson you should be able to

ӹ Understand the nature and scope of the HRM

ӹ Define HRM
ӹ Describe the development of HRM
ӹ Detail the environment of HRM

Introduction
Men and resources are involved in all activities. Men were taken for granted for a long
time. Greater accent was given to resources, production machinery and top managers. But during
the last few decades, with modern large scale production of innumerable products for a wide
market, the importance of human resources and their development has come to the fore. The
importance of human resources to any organization need not be over-emphasized. Human
resource is the wealth of a nation and an organisation. The development process is wide and
varied. In this lesson, let us understand the importance and concept of Human Resources
Management. (HRM).
Human Resources
In the general parlance, human resources are people and their characteristics at work either at the
national level or organisational level. Megginson has defined human resources as follows:

“From the national point of view, human resources are knowledge, skills, creative abilities,
talents and attitudes obtained in the population; whereas from the viewpoint of the individual
enterprise they represent the total of the inherent abilities, acquired knowledge and skills as
exemplified in the talents and aptitudes of its employers”

Sumantra Ghosal considers human resources as human capital. He classifies human capital into
three categories – intellectual capital, social capital and emotional capital. Intellectual capital
consists of specialized knowledge, tacit knowledge and skills, cognitive complexity and learning
capacity. Social capital is made up of network of relationships, sociability, and trustworthiness.
Emotional capital consists of self- confidence, ambition and courage, risk-bearing ability and
resilience”.

In simple words, HRM is a process of making the efficient and effective use of human resources
so that the set goals are achieved.

Definition of HRM
According to Flippo, ‘Personnel Management, or say, human resources management is the
planning, organizing, directing and controlling of the procurement, development,

According to Flippo, ‘Personnel Management, or say, human resources management is the

planning, organizing, directing and controlling of the procurement, development, compensation,
integration, maintenance, and separation of human resources to the end that individual,
organisational and social objectives are accomplished”.

The National Institute of Personal Management (NIPM) of India has defined human
resources – personal management as “that part of management which is concerned with
people at work and with their relationship within an enterprise. Its aim is to bring together and
develop into an effective organization of the men and women who make up enterprise and
have regard for the well-being of the individuals and of working groups, to enable them to
make their best contribution to its success”.
According to Decenzo and Robbins, “HRM is concerned with the people dimension” in
management. Since every organization is made up of people, acquiring their services,
developing their skills, motivating them to higher levels of performance and ensuring that
they continue to maintain their commitment to the organization is essential to achieve
organisational objectives. This is true, regardless of the type of organization – government,
business, education, health or social action”.

HRM can be defined as a process of procuring, developing and maintaining competent

resources in the organization so that goals of an organization are achieved in an effective and
efficient manner. In other words HRM is an art of managing people at work in such a manner that
they give best to the organisation.

Significance of HRM
Human resources are the most precious asset of an organization. They are the activators of
non-human resources, means for developing competitive advantages and sources of creativity.
Ghoshal outlines the role of HRM in managing an organization in the following lines.

“Indian Companies have spruced up their strategic thinking; they have even moved a
generation ahead with their organisations. But they still have managers who have been shaped
by old models. They are essentially a group of first generation managers whose definitions
of roles and tasks, personal skills and competencies, ideas and beliefs about management have
been shaped by an earlier model. You cannot manage third generation strategies with second
generation organizations and first generation managers to meet the needs of second generation
organisations and third generation’s strategic thinking.
The above view indicates the role of HRM in Indian industry. Significance of HRM can be
viewed in three contexts; organizational, social and professional.

Organizational significance

i. Effective utilization of human resources to motivate them and to

change their attitudes to work and the organization.

ii. To develop personnel to meet the demands of the work effectively;

and

iii. To ensure proper recruitment and to retain the personnel in the

organization so that right people are available.
Social significance

This aspect aims in achieving the need satisfaction of personnel in the organisation. It is often said
that a happy worker is not only happy in his work place but also at home and in society also.

Hence HRM seeks to achieve the following

1. Maintaining balance between jobs and job-seekers, taking into consideration job
requirements, job seekers’ abilities and aptitudes

2. Providing most productive employment from which socio- psychological satisfaction can
be derived.

3. Utilizing human capabilities effectively and matching with government rewards.

4. Eliminating wasteful organizational and individual practices.

Professional Significance
This aspect involves developing people and providing appropriate
environment for effective utilization of their capabilities and involves the
following.

1. Developing people on a continuous basis to meet the

challenges of their jobs.

2. Maintaining the dignity of personnel at the work place.

 3. Providing proper physical and social environment at the work
place to create a congenial working atmosphere.

Concept of HRM
Human Resources are considered as a very important asset
of any organisation and the nation as well. Other resources are of no
avail without Human Resources. They can be made more effective and
purposeful. There is no limit in their abilities and their abilities can
be continuously improved with training, skill, attitude and additional
scientific gadgets and machines. Concept of HRM borders on,

1. Men or personnel can do many wonderful things and take up

any challenge.

2. They can be trained to do efficient work.

3. Necessary climate can be created to increase their efficiency.

4. Environment and their liberties can be increased to create a

congenial atmosphere.

Karen Legge has specified three elements of HRM as follows

1. Human resource policies should be integrated with strategic

business planning and used to reinforce appropriate culture.

2. Human resources are valuable and a source of com-petitive

advantage.

3. Human resources can be tapped most effectively by mutually

consistent policies which promote commitment and foster a
willingness in employees to act flexibly in the interest of the
adaptive organsiation’s pursuit of excellence.

John Storey has specified four elements of HRM as follows:

1. A set of beliefs and assumptions.

2. A strategic thrust embodying decisions about people

management.
 3. The central involvement of line management
4. Dependence upon a set of levers to determine the employment
relationships

Development of HRM
Awareness regarding HRM was felt during the industrial revolution around 1850 in
Western Europe and U.S.A. Only during the beginning of 20th century, it was felt in
India. Since then to the present era, the development of HRM may be classified as
follows:

Trade Union Movement Era

The conditions of workers in the aftermath of factory system as an outcome of
industrial revolution, were very pathetic. The first world war worsened the situation.
The Royal Commission of Labour in India in 1911, under the chairmanship of J.H.
Whitely, recommended the abolition of the ‘Jobber’ system and the appointment of
labour officers in industrial enterprise to perform the recruitment function as well as to
settle workers’ grievance. Workers also started forming ‘trade unions’. The Trade Union
Act, 1926 was passed in India. The basic object underlying trade union was to
safeguard the worker’s interest and to sort out their problems such as use of child labour,
long hours of work and poor working conditions. These unions used strikes, slowdowns,
walkouts, picketing, as weapons for the acceptance of their problems. These activities
of trade unions gave rise to personnel practices such as collective bargaining, grievance
handling system, arbitration, disciplinary practices, employee benefit programmes and
sound wage structure.

Social Responsibility Era

In the beginning of 20th century, some factory owners, employers started showing
humanistic approach towards the workers. Robert Owen, a British industrialist,
reformer and humanitarian is considered to be the first to adopt humanistic approach
towards workers. He viewed that the principal social and economic environments
influence the physical, mental and psychological development of workers. Hence he
felt that to improve the productivity, it is necessary to improve conditions of employees
by removing them from the adverse environment to a congenial atmosphere with the
availability of satisfactory living and working conditions.
The philosophy in Owen’s patriatic approach was that workers are just like children and the owner
is just like a father. Therefore the owner should take care of the workers, just like a father looks after
his children. Owen himself implemented this philosophy in his cotton mill in Scotland by introducing
facilities such as shower baths, toilets, rest rooms and increased minimum wages and housing scheme.

Scientific Management Era

The concept of scientific management was introduced by F.W.Taylor in the USA in the early
part of 20th century as an alternative to the prevailing system of management by initiative and
incentive based on his shop floor job experience.

Taylor developed four principles of scientific

management

1. Development and use of scientific methods in setting work

standards, determining a fair work, and best way of doing
work.

2. Scientific selection and placement of workers best suited to

perform the various tasks and provision of their training and
development for maximum efficiency.

3. Clear cut division of work and responsibility between

management and workers.

4. Harmonious relationship and close cooperation with workers to

achieve performance of work in accordance with the planned
jobs and tasks.

In the scientific theory, Taylor viewed men and workers as one driven
by fear of hunger and search for profit. Accordingly, if economic reward is
tied up with the efforts put on the job, the worker will respond with his
maximum physical capability.

Taylor also developed several techniques to introduce his scientific

ideas in management.
 They were

1. Time study – to measure the time taken to each job and each operation and to
standardize the operations of the job.

2. Motion study – to study body movements in workplace and to reduce wasteful

motions.

3. Standardization of tools, equipments, machinery and working condition.

4. Incentives – wage plan with differential piece rate for efficient and inefficient
workers.

Human Relations Era

During the years 1925 to 1935, experts expressed their opinions towards the human
aspects of organisation activities. Hugo Munsterberg in his book, “Psychology and
Industrial Efficiency”, suggested the use of psychology in selection, placement, testing
and training of employees in an organisation. Elton Mayo and his associates conducted
a series of experiments from 1924 to 1932 of the Hawthorne plant of the Western Electric
Company in the USA. The main findings of Hawthorne Experiments were as follows:
1. Physical environments at the work place do not have any material impact on
the efficiency of work.

2. Favourable attitudes of workers and psychological needs had a beneficial

impact on the morale and efficiency of workman.

3. Fulfillment of the worker’s social and psychological needs had a beneficial

impact on the morale and efficiency of workmen.

4. Employee groups based on social interactions and common interests

exercised a strong influence on worker’s performance.

5. Workers cannot be motivated solely by economic rewards. More important

motivators are job security, recognition, right to express their opinion on matters
related to them.

The findings have stated that the relationship between the superiors and subordinates should
relate to social and psychological satisfaction of the employees. Employee satisfaction is the
best means of making the employee productive.
Behavioural Science Era

Important elements of behavioural approach to HRM is as follows:

1. Individual behaviour is linked with the group behaviour. For example, a person
may resist changing his behaviour as an individual. But he or she will readily do
so if the group to which he or she belongs, decides to change its behaviour.

2. Informal leadership rather than the formal leadership of manager is more

effective in influencing people to achieve standards of performance. According
to their view, democratic leadership style of the manager is more acceptable to
the subordinates and hence more effective.

3. By nature, people do not dislike work. Most people enjoy work and one is
motivated by self control and self development. In fact job itself is a source of
motivation and satisfaction to employee.

4. Expanding subordinate influence, self-control and self – direction can improve

operating efficiency.

Systems Approach Era

A system may be defined as a set of interdependent parts forming an organized unit

or entity. The system is defined as “an organized and complex whole: an assemblage or
combination of things or parts forming a complex unitary whole”. The parts, also known as
sub-systems, interact with each other and are subject to change. These sub-systems are inter-
related and inter dependant. Three broad sub-systems are

i) Technical sub-system - The formal relationships among the

members of an organisation

ii) Social sub – system - Social satisfaction to the members

through informal group relations.

iii) Power sub – systems- Exercise of power or influence by

individual or group.
The system approach is characterized by the following
features:

i. A system is a group of inter – related elements which are separate entities/ units.

ii. All the elements are inter– related in an orderly manner.

iii. There is the need for proper and timely communication to facilitate
interaction between the elements.

iv. The interaction between the elements should lead to achieve some common
goal.

At the heart of the systems approach is a Management Information System (MIS) and
communication network for collection, analysis and flow of information to facilitate the
function of planning and control. Modern thinkers consider HRM as a system that integrates
activities with an objective to make the best use of resources which are always scarce.

Contingency Approach Era

Contingency refers to the immediate circumstances. Contingency approach believes that there
is no one way of managing that works best in all situations. According to this approach, the
best way to manage varies with the situation. Hence this approach is called as ‘situational
approach’. There may not be one universal way of managing in all situations. A particular
approach may yield fruitful results in one situation but may drastically fail in another situation.
Therefore managers are to analyse different situations and then use the best approach
suitable in that particular situation.

Development of HRM in India

Like U.K and USA, the evolution and development of HRM in India was not voluntary. After
second world war difficult conditions erupted in India. Malpractices in the recruitment of
workers and payment of wages led to trade union movement. In 1931, on the
recommendations of The Royal Commission of Labour, ‘Jobber’ system was abolished.
After independence, the Factories Act, 1948 laid down provisions for Labour Officers, Labour
welfare, safety and regulation of working hours and working conditions.

Two professional bodies emerged. They are ‘The Indian Institute of Personnel
Management’ (IIPM), Calcutta, now ‘Kolkata’ and the ‘National Institute of labour Management
(NILM), Bombay, now Mumbai. These two institutes are guiding in Human Resource
Management and Labour management.

The massive thrust on basic industries in India during the I Five year plan (1956-
61), which accelerated public sector undertakings, gave thrust to personnel management and
HRD practices. The professionalism in managing organizations became quite discernible
by 1970s. There was a clear shift from welfare approach to efficiency approach. The two
professional bodies IIPM & NILM merged in 1980 to form National Institute of Personnel
Management (NIPM) with Kolkata as headquarters.

Evolving along the years, the approach has shifted to human values and productivity
through people. It is against such a shift in managing people in the 1990s, a new approach has
emerged as human resources management (HRM). This approach focuses more on
development aspects of human resources.

The changing internal environment in organizations calls for better understanding of

human resources management. The culture or climate of an organization is made up of
traditions, values, habits, ways of organizing, and interpersonal relationships at work. Culture
is reflected in organizational structure, strategy, systems, power and reward distribution,
conformity, development process, motivational dynamics, organizational clarity, warmth and
support received by employees, leadership styles, standard of performance and shared
subordinate values. An effective work culture is flexible, integrated, decentralized, performance
– oriented, quality conscious, cooperative, collaborative, and supportive. The major elements
of HRM strategy and functions can be related to organizational culture. Corporate mission,
philosophy and strategic plan give birth to culture in organizations.
Relevance of HRM
HRM is relevant in the modern changed scenario on the following grounds

Change management

The popular terms of the present day world are ‘Learning Organization’, ‘Managing
Organizational Change’, ‘Change Agents’ and the like. It is now accepted that any organization
can survive in today’s socio – economic environment only if it is pro-active to environmental
changes. Advances in information technology too are forcing organizations to change their
very way of thinking.

Competence
In any organization, it may not be feasible to allocate tasks to individuals at which each one
excels. But it is possible to enhance the competence of the individuals to specific tasks through
well designed training programmes. HRD attempts to enhance the competence through well
defined and planned training programmes.

Commitment

The extent to which the employees are committed to their work and organization has a significant
bearing on an organization’s performance. Commitment levels can be assessed using informal
interviews and questionnaires, statistics on absenteeism, grievances and voluntary separations.
Transparency in organizational functioning, employees perception of various HRM policies,
channels of communication and role models played by superiors influence employee
commitment.

Congruence of objective

It is essential that all new comers to the organization are properly socialized into the existing
community and are made aware of the organizational values, work ethos, customs and traditions.
It is important that they know what the organization stands for and what it wants to achieve and
in this process what is expected from each individual. They should understand the meaning
of existence of the organization. This exercise is commonly referred to as socialization.
Motivation

The performance of the workers could be improved and increased by

proper motivation. Most people can exercise far more creativity, self-
direction and self control than their present jobs demand. It is, however,
necessary to create an environment in which all members can contribute
to the limits of their ability. Subordinates must be encouraged to
participate in the process of decision making, continuously broadening
their self-direction and self-control. These would not only lead to direct
improvement in operating efficiency but would also ensure them to groom
for higher responsibilities.

Environment of HRM
Environment comprises all those forces which have their bearing
on the functioning of various activities, including human resource
activities. Environment scanning helps HR manager to become pro- active
to the environment which is characterized by change and intense competition.
There are two types of environment which operates and have bearing on
human resources.

Internal Environment

These are the forces internal to an organization. Internal forces

have profound influence on HR functions. The internal environment of HRM
consists of unions, organizational culture and conflict, professional bodies,
organizational objectives, policies, etc.

Trade Union: Trade Unions are formed to safeguard the interest

of its member workers, HR activities like recruitment, selection, training,
compensation, industrial relations and separation are carried out in
consultation with trade union leaders. Various activities of trade unions have
a bearing on the HRM.
Organizational culture and conflict:
As individuals have personality, organizations have cultures. Each
organization has its own culture, which it cherishes and wants to retain
and follow faithfully. Culture is some core values and beliefs cherished by
the members of the organization. The Reliance Industries Ltd., has “value
for time”, as its core culture. Tatas have the core culture of “get the best
people and set them free”. HR practices that best fit the organization’s
culture need to be implemented. Conflict usually surfaces because of
dualities such as personal goal, vs. organizational goal, discipline vs. duties
etc. Such conflicts have their bearings on HR activities in an organization.

NIPM & HR Professional Bodies

NIPM regulates HR practitioners. As a member of NIPM, the dictums
are:

As personnel Manager declare that I shall

ӹ Subscribe to the aims and objects of the National Institute of

Personnel Management and be bound by its constitution.

ӹ Recognize and accept the dignity of an individual as human being,

irrespective of religion, language, caste or creed.

ӹ Maintain high standard of integrity and behaviour demanded by the

profession.

ӹ Conduct myself as responsible member of the management team

committed to the achievement of the organizational goals.

ӹ Take keen interest in the establishment of healthy personnel practices

and development of the profession.

ӹ Try to win confidence and gain respect of the employees and

make myself available to them, provide formal and informal
intervention to resolve industrial conflicts.

ӹ Endeavour to enhance the good name of my profession in dealing

with other professional bodies, government departments, and
 employer’s and employees’ organizations.

ӹ Cooperate in maximizing the effectiveness of the profession

by exchanging freely information and experience with other
members.

ӹ Not allow any interest other than professional to interfere with

my official work.

ӹ Not to disclose any information of a confidential nature that

I may acquire in the course of my professional work without
obtaining the consent of those concerned and shall not use
confidential information for personal gains.

ӹ Not accept or offer any improper gratification in any form or manner

whatever in connection with or in the course of my professional
work. and

ӹ Not to take acquiesce in such action which may bring the institute
or the profession into disrepute.

External Environment

External environment also exerts considerable influence or HRM.

External environment includes economic, political, technological and
demographic factors.

Economic Factors

Economic forces such as growth rate and strategy, industrial

production, national and per-capita incomes, money and capital markets,
competitions, industrial labour and globalization have impact on HRM
policies. Growing unemployment and reservations in employment also
affect the choice for recruitment and selection of employees in organizations.

Political Factors
The total political environment is composed of legislature, executive and
judiciary and all of them have impact on placement, training retention and
maintenance of employees.
Technical

Technology is a systematic application of organized knowledge

to practical tasks. Technological advances affect the HR functions in
several ways. Technology makes the job more intellectual or upgraded.
Secondly, it renders workers dislocated, if they do not equip
themselves to the job. Thirdly, job becomes challenging for the
employees who cope with the requirements of technology. Further,
technology reduces human interaction at the work place. Finally, job
holders become highly professionalized and knowledge based in the job
they perform.

Demographic

Demographic variables include sex, age, literacy, mobility, etc.,

All these have different dimensions in employment and placement.

People management

Men or personnel should be managed properly and effectively in

any organization and at the macro level, in the national level.
Men have some inherent qualities.

ӹ Want job and work

ӹ Have inherent like for the

work ӹ Are liable to likes

and dislikes

ӹ Require motivation and training

ӹ Given an opportunity everyone would rise up to the

occasion ӹ Their welfare and safety measure is a concern of

the state
 ӹ Every opportunity for advancement and knowledge should
be provided

ӹ They should be guided but their liberties should not be

curbed ӹ They should be chosen to the right job and right

place

ӹ They need adequate salary, perquisites and comforts.

Managing people is an art. A wrong handling may lead to

conflicts. A dis-satisfied worker may absent himself or quit. Labour
absenteeism and labour turnover are costly to the organization.

Organization does not represent assets and money alone. Every

organization is a social institution. They have a responsibility to their
employees, society and the government which gives protection and
infra-structure.

The core of any organization is its people represented by

workers. It has as much responsibility to them as they have to the
shareholders. This art of managing men and women in organization
has led to the birth and development of HRM.

People Management – Indian Scenario

In the 50’s there was a strong belief that employees were recruited
not to question ‘why’ but only ‘to do and die’. In the 60s, terms like
manpower, staff and personnel came to be used and instead of controlling
the employees, it became more and more acceptable to manage
personnel as it was felt that the productivity of the workers could be
improved, if they were organized for the work. While hierarchy, status,
authority, responsibility and accountability are structural concepts, in the
Indian context, emotions, feelings, empathetic perceptions, impressions
influenced people more than anything else.
 The Indian organizations are experiencing some, transitions and
changes. The work force of the 50’s and 60’s has retired. The middle
level is now at the top with the hangover of all middle class values. The
new generations of MBAs are pouring into industrial organizations.
Young executives in their mid 30s are heading HRD/HRM divisions
in big companies. Moreover due to very great strides in information
technology, there is a need to manage this tradition and give a direction
to this change process. The HRM strategies in India in the 21st century
are focusing on individual organization interface and greater emphasis
on organizational effectiveness than on personal success.

What is job analysis?

A job analysis is a systematic process of identifying and determining the responsibilities,

requirements, and nature of a job in detail. It involves breaking the job into smaller units,
collecting data on each unit, and then analyzing the data to determine to establish the skills and
competencies the role requires.

An important concept of job analysis is that you analyze the job, not the person doing the job.
The outcome is a description of the work, not the employees, even though some job analysis
techniques collect data from the workers.

Job analysis is used, for example, to:

 • Guide the recruitment and selection process: The analysis can inform the
development of job postings, interview questions, and selection criteria to ensure
candidates are well-suited for the role.

• Determine where jobs fit within the overall organizational structure: And understand
how they relate to one another.

• Design and redesign jobs: Modifying job roles to improve efficiency, employee
satisfaction, and adaptability to changing organizational needs.

• Support compensation and benefits decisions: Providing a basis for determining

appropriate salary levels, benefits, and incentives based on job complexity and
requirements.

Job analysis is important because it helps organizations:

• Understand the nature of a job • Create a safer work environment

• Create better job descriptions • Plan for a more effective workforce

• Develop effective training and • Manage performance

development programs

Here are some steps to conduct a job analysis:

1. Review the job requirements

2. Research similar job descriptions

3. Identify the outcomes required for the job

4. Examine the job efficiencies

5. Determine the skills and training required

6. Define the compensation

7. Continue to evolve the job

Who does it?

A job analysis is conducted by employees themselves, managers, Organizational Development

(OD) professionals, or HR professionals for various purposes.

Anyone with some work experience has, at some point, done a job analysis. This could be a
manager who decides to combine two vacant roles into one job, a recruiter who tries to create a
job description, or an employee who lists their main tasks to create a professional development
plan. Although these job analyses will have different levels of detail, the process is similar.

Purpose of job analysis in more detail below:

A job analysis should focus on the following aspects to bring out all the critical facts and details
about a job.

• Duties and tasks: The type, frequency, and complexity of performing specific duties
and tasks.
 • Environment: Work environment, such as temperatures, odors, and hostile people.

• Tools and equipment: Tools and equipment used to perform the job successfully.

• Relationships: Relationships with internal and external people.

• Requirements: Knowledge, skills, and capabilities required to perform the job

successfully.

The job analysis process is about breaking down the job into smaller work units, including
duties, tasks, activities, and elements (Morgeson, Brannick & Levine, 2020), as in the job
analysis example in the table below.

Unit Description Example

Job A collection of similar positions. ‘Receptionist’

A set of duties, tasks, activities, and

Melinda, the receptionist who
Position elements to be performed by a single
mostly works night-shifts
worker.

Collections of tasks directed at general job Hospitality activities for

Duty
goals. A typical job has 5 to 12 duties. visitors

Collections of activities with a clear Welcoming guests and

Tasks beginning, middle, and end. A job has 30 to guiding them to the waiting
100 tasks. room

Clusters of elements directed at fulfilling Pushing the intercom button

Activity
work requirements. to open the door

Element Smallest identifiable unit of work. Answering the phone

Then, it’s about identifying the building blocks of the job based on these smaller units of work.
There are multiple different ways to approach this, which we discuss further below.

Types of job analysis data

There are three primary types of job analysis data:

• Work activities: Data on the specific activities that make up a job.

• Worker attributes: Data on the qualities that workers need to do the job.

• Work context: Data on the internal and external environment of the job.
Work activities form the basis for determining the worker attributes and the organizational
culture. We will focus less on the work context, but keep this in mind in your job analysis,
especially when this context is subject to change.

The purpose of a job analysis

Before conducting an analysis for the specific job, you need to specify what you will use the
results of the job analysis for. That way, you can choose the most effective job analysis method,
which we will talk about in more detail below.

In general, organizations can use the information for the following purposes (Morgeson,
Brannick & Levine, 2020):

Job analysis
Description
purpose

HR uses the output of the job analysis as input for a job description. A job
description is an internal document that specifies the requirements for a new
position, including the required skills, role in the team, personality, and
Job description capabilities of a suitable candidate.

Creating a job description using data from a job analysis helps you place the
right people in the right roles.

Job classification is the process of placing one or more jobs into a cluster or
family of similar positions. Data from job analysis is critical in job
Job
classification because it considers the duties, responsibilities, scope, and
classification
complexity of a job. The goal is to set pay rates and use the information
in employee selection.
 Job evaluation is the process of determining the relative rank of different jobs
in an organization. The purpose is to create pay transparency and equity.
Job evaluation
The rank of a job depends on the responsibility and duties assigned. For
example, senior positions have higher performance and capability
requirements. The job analysis helps understand these job characteristics.

Job design is the process of creating a job that adds value to the company and
is motivating to the employee. One of the characteristics of a motivating job
Job design
includes skill variety, i.e., the degree to which a job requires a broad array of
skills. Job analysis helps you determine the skill variety of a job.

Personnel HR can use the job analysis outcome to set the minimum qualifications or
requirements requirements of roles in the organization. This is also helpful in recruitment.

The job analysis provides input for the performance appraisal of the individual
Performance performing the job. To evaluate an employee’s performance, you need to
appraisal understand the role requirements first. Job analysis can determine these
details.

Job analysis forms the basis of the training needs analysis. Once you identify
Worker training the knowledge, skills, abilities, and other characteristics, you can quickly
identify training needs or skill gaps and train your employees.

People and jobs should fit together. Job analysis is useful in identifying the
Worker
knowledge, skills, abilities, and other characteristics required for a role, which
mobility
you can then match with an internal or external hire.

You can use job analysis to improve efficiency at work by analyzing activities
Efficiency
and optimizing how people in the role perform them.

Job analysis can identify hazardous behaviors and working conditions that
Health & safety increase the chance of accidents and injury, leading to a safer working
environment.

Job analysis helps plan for the workforce of the future. It helps identify
Workforce knowledge, skills, abilities, and other characteristics with future work
planning demands. This enables the creation of a strategic workforce plan for a role or
department.
 Federal and national law can apply to working conditions, health, hiring,
Legal
training, pay, promotion, and firing employees. Job analysis can be a tool to
requirements
ensure all activities in a role comply with the regulations.

Why is job analysis important?

Job analysis helps organizations improve employee engagement, efficiency, and productivity,
enabling them to achieve operational and strategic objectives. Organizations can use the
information from the job analysis to:

• Create detailed and accurate job postings that attract the skills and competencies you
need.

• Improve decision-making when recruiting and hiring new employees by easily tracking
candidates with the required qualities and qualifications for the job.

• Develop the job roles in line with evolving organizational needs and stay competitive in
the changing business environment.

• Develop effective employee development plans by identifying the skills the employees
lack to perform a job successfully.

• Plan and conduct more effective performance reviews based on a good understanding
of the duties and nature of the job. It will improve employee performance and
engagement.

• Determine the content of a job and its value to the company to offer fair compensation
packages.

• Assess risks associated with a job and implement safety measures to avoid safety
violations.

Red Clover HR

Jodi Brandstetter, CEO & Lead Facilitator of By Design Brainery, an online learning platform for
HR and Talent professionals, shares a practical example of using job analysis in recruitment.
A business psychologist Ben Schwencke from an online assessment company Test
Partnership used job analysis to help a large multinational engineering firm improve their
recruitment process.

“I conducted a job analysis for the firm’s graduate scheme. I focused on the cognitive and
behavioral requirements of the role, with the aim of improving the screening process. In doing
so, I identified the specific aptitudes and personality traits which underpin both performance
and role-fit, allowing those to be measured directly using psychometric assessments,” says
Schwencke.

“Consequently, the organization was able to halve the number of applicants invited to the final
assessment center, as the earlier stages of the recruitment process had identified twice as
many high potential candidates.”

Job analysis serves as a base for the job description and job specification. HR can use the
obtained information in their activities like recruitment, learning & development, and
performance management.

Job analysis methods

How you conduct your job analysis will depend on the purpose and goal you want to achieve, on
your organization, and the job.

Some methods for conducting a job analysis include:

Interviews, Questionnaires and surveys, Observation, Diary method, Job participation, Task
inventories, Expert panels, and Checklists.
The Critical Incident Technique, Task Inventory, and Functional Job Analysis are the three most
common job analysis methods. Let’s take a closer look at each of them.

Critical Incident Technique (CIT)

The critical incident technique relies on observed critical incidents. Critical incidents are
behaviors that represent either outstanding or unacceptable performance. A typical critical
incident report has the following elements:

1. A description of the context and circumstances leading up to the incident.

2. The behaviors of the employee(s) during the incident.

3. The consequences of the behaviors and their broader impact.

The critical incident technique is most effective for health and safety incidents (e.g., whenever
an accident, injury, or death occurs), performance appraisals, and worker training. In the last
two cases, the critical incident lists examples of exemplary and unacceptable behavior, which
can be used to provide feedback to an employee or as the basis for training what employees
should and shouldn’t do.

Task inventory (TI)

The task inventory, or task analysis, is an inventory of all the tasks that a job consists of. These
tasks are often grouped under their duties. Earlier, we mentioned that a job has between five to
twelve duties and up to 100 tasks. You indicate each task’s frequency, importance, and
associated difficulty when creating a task inventory.

HOSPITALITY DUTY FOR A RECEPTIONIST

Tasks Frequency Importance Difficulty

Answering the intercom when the doorbell rings 300/day Medium Low

Welcoming guests and guiding them to the waiting

120/day Medium Low
room

Providing guests with a drink 80/day Low Low

Answering questions from visitors 30/day High Medium

Managing expectations about waiting times 30/day Medium High

Receiving and handling complaints 6/day High Very high

The table above shows an example of one of the duties of the receptionist at a doctor’s office.
Other duties may include managing appointments, administration, and answering basic
medical questions.
The task inventory is often created based on input from expert panels, the people working in the
job themselves, and their managers. The task inventory is most effective for creating job
descriptions, job classifications, worker training, and checking compliance with legal
requirements.

If you want to make your job analysis process easier, you can use a job analysis template:

DOWNLOAD JOB ANALYSIS TEMPLATE

Functional job analysis (FJA)

Functional job analysis is a method of job analysis that provides specific information about the
work that needs to be performed, and the worker qualifications required to successfully do the
work.

It analyses specific components and work activities that make up the role, the main ones being:

• “Things” – Physical objects and tools involved in the job

• “Data” – Information, facts, and figures the employee works with

• “People” – Interactions and communications with others

Next to Critical Incident Technique, Task Inventory, and Functional Job Analysis, there are
multiple other job analysis techniques. These include:

• Threshold Traits Analysis

• Ability Requirements Scales

• Position Analysis Questionnaire

• Job Elements Method

Job analysis process steps

The job analysis process varies with organization, position, and objective.

For example, if you conduct a simple and quick job analysis by speaking to one or two people on
the job, the process will be much more expedited, which might be at the cost of reliability.
However, this may already provide sufficient information to draft, for example, a job description.

Below, we’ll outline five job analysis steps that every effective analysis involves in one form or
the other. You can use these steps as your job analysis template.

1. The job analysis purpose

The starting point of any job analysis is its purpose. Why do we want to do an analysis? The
purpose of the analysis influences most of the job analysis design choices, including its budget,
project lead, and stakeholders.

The purposes of a job analysis discussed in detail above can include the creation of a robust job
description, a needs analysis for employee training, or workforce planning.

According to Matt Erhard, Managing Partner of the recruiting firm Summit Search Group, one of
the top purposes of job analysis is to prepare your organizations for significant growth or
expansion.

“This usually means a similar expansion of your staff, and conducting a job analysis can make
sure you’re hiring in the right areas and creating a logical team structure for the new size of your
organization. You can then revisit this post-growth and adjust as needed. However, it’s better to
do this before you start so you have time to think strategically and plan, not frantically fill gaps,”
Erhard explains.

For example, a job analysis conducted for such growth purposes will involve more senior
stakeholders, more budget, and take more time compared to a job analysis for creating a simple
job description.
In the former case, the sponsor is most likely a Senior Vice-President or another senior-level
executive who wants to assess what roles and skills the organization will need to grow. In the
latter case, the sponsor is more likely a hiring manager who, after having a bad hire, really wants
to pinpoint the profile of the person they are hiring for.

The purpose will thus influence the further scope, budget, and also the team, team leader, and
the degree to which external parties, like consultancies, are involved.

2. The job analysis method

The most appropriate method for your job analysis depends on the purpose you determined in
step one.

Depending on the method, the data collection will differ.

The table below can help you determine the most effective job analysis technique and use that
to influence future actions.

Effectiveness ratings per job analysis method on a 5-point scale (source)

3. Gathering data

Data gathering and analysis are the two most time-consuming steps in the job analysis process.
The job analysis method chosen determines the data-gathering methods used. Common
methods of collecting data include observing, interviewing, questionnaires, and work logs.

The Critical Incident Technique focuses on structurally collected incident data through
interviews and observational data from the people involved in the incident. The Task Inventory
focuses on listing the different duties and tasks performed in the job, which can be done either
through observational data, interviews, or structured questionnaires. The focus here is the
creation of a list of tasks, time spent on these tasks, and the importance or difficulty of the task.

Here’s an overview of the job analysis data collection techniques:

 Data gathering
Description
method

Observational data is considered the most neutral form of data collection as

it (supposedly) does not interrupt normal performance. The job analyst
observes the person doing the job in real life or on video. Observational data
Observation
can describe activities based on the chosen unit of analysis (see the Table
above). Mere observation can already influence the way individuals conduct
the job, a well-known example being the .

Interviews are a key way to gather data, which can be used in combination
with observational and questionnaire data. Based on the data, the job
Interview analyst asks specific questions. Interviews should be well-prepared and
carefully conducted. Here again, the interviewer can focus on the different
units of analysis to identify duties, tasks, activities, and work elements.

The job analyst can administer a questionnaire with questions about job
duties, responsibilities, equipment, work relationships, and work
Questionnaire environment. The job analysis questionnaire can be self-designed or off-the-
shelf, with the best-known example being the Position Analysis
Questionnaire (PAQ).

The employee records their daily activities, the time spent on each, and the
Work log
urgency of each activity. This log forms the basis for analyzing the job.

4. Analysis

The time spent on analysis depends on the data collected. When you collect large amounts of
quantitative data, it is useful to report mean scores, standard deviations, number of
participants, and the standard error of the mean (SEM). SEM measures the reliability or
precision of the results. For example, a high SEM value for a specific task may require additional
research.

In the example below, we can see that there is consensus among participants about the first
four tasks but there is a low mean score about expectation management for visitor waiting time.
This may indicate that this is not seen as part of the core role. Maybe only more senior
professionals do this, or it is not seen as part of the core job (so it may be qualified as extra-role
behavior).

Task for Receptionist M SD N SEM

1. Answering the intercom 4.3 0.5 49 0.1

 2. Welcoming guests and seating them 4.0 0.6 48 0.1

3. Providing refreshments to guests 3.7 1.2 20 0.3

4. Answering questions from visitors 3.2 1.6 32 0.3

5. Managing expectations about visitor waiting time 2.5 2 12 0.6

Morgeson and colleagues list a number of other more analytical techniques to measure validity,
such as correlation and regression, factor and cluster analysis, and other multivariate
techniques. They also offer several methods to assess reliability, including inter-judge
agreement, interjudge reliability, and internal consistency.

5. Impact

An essential last step is the realization of the intended impact of the job analysis. This is referred
to as consequential validity. It is the degree to which the job analysis impacts the interventions
derived from it.

In other words, does the job analysis lead to a tangible impact on Human Resource
Management? This is hard to assess but crucial when it comes to making job analysis process
choices for the next time around.

If a quick interview with two receptionists yields almost the same quality job description as a
structured study of all thirty, the former approach is much more cost-efficient. Not only
because it saves the job analyst time but also because it saves the receptionists hours and
hours which they can spend focusing on their tasks.

With the ongoing digital transformation and evolving talent landscape, it’s also important to
realize that job analysis isn’t a one-and-done activity.

“The whole point of conducting a job analysis, besides creating a detailed job description, is to
continually streamline and evolve the position with industry changes and organizational growth.
Once you have conducted an in-depth evaluation of the job duties and identified skills gaps,
remember that your efforts will only stay relevant for a couple of years or so,” says Anjela
Mangrum from a manufacturing recruiting agency and executive search firm Mangrum Career
Solutions.

“HR professionals should be prepared to repeat the entire process in three years, max.”

Richard Nolan, Chief People Officer at Epos Now, echoes this. “Job descriptions need to stay
up-to-date with any changes or advancements related to the job’s tasks and duties, as well as
technological advancements relevant to the position. This will ensure that all employees are
clear on what rights and responsibilities come along with taking on that particular role within
the organization,” Nolan explains.

Job analysis questionnaire

A job analysis questionnaire is an important tool for collecting data about the duties,
responsibilities, necessary skills, working conditions, and performance criteria associated with
the job. It includes detailed questions that allow you to gather comprehensive information
about a specific role.

You can use the questionnaire to interview the job holder or their supervisor.

Here’s a sample job analysis questionnaire, which you can also download as PDF:

DOWNLOAD QUESTIONNAIRE

Job purpose:

1. What is the primary purpose of this job? Please describe in a few sentences.

Duties and responsibilities:

2. List the main duties and responsibilities of this job.

3. How do these duties contribute to the overall goals of the department/company?

Skills and qualifications:

4. What specific skills and qualifications are required for this job? (Include educational,
technical skills, certifications, etc.)

5. Are there any preferred skills or qualifications that are not mandatory but beneficial?

Work environment and conditions:

6. Describe the work environment (Office, outdoors, varying locations, etc.).

7. Are there any physical demands or unusual working conditions associated with this job?
(E.g., lifting heavy objects, working at heights, exposure to hazardous materials)

Performance criteria:

8. What are the key performance indicators (KPIs) for this job?

9. How is success measured in this role?

Decision-making and autonomy:

10. What level of decision-making authority does this job have?

11. Can you provide examples of typical decisions made by someone in this role?

Interpersonal and communication skills:

12. What level of interaction does this job have with other departments, customers, or external
parties?

13. Describe the communication skills required for this job.

Challenges and problem-solving:

14. What are the most common challenges faced in this job?

15. Describe a typical problem someone in this role might have to solve.

Training and development:

16. What type of initial training is required for this job?

17. What are the opportunities for professional development or advancement within this role?

Additional information:

18. Is there anything else about this job that has not been covered but should be known?

Job analysis examples

Let’s have a look at two examples of what a completed job analysis could look like in practice.

1. Sales job analysis example

Job title Sales Representative

Classification Full-time employee

Department Sales

Location Mill Creek, Washington

Pay grade Level I

Job
requirements

Ensures current customers have the products and services they need.
Identifies and pursues new markets and customer leads and pitches
Summary of prospective customers. Follows a sales process that involves contacting
position prospects, following up, presenting products and services, and closing
sales. Creates weekly, monthly, and quarterly sales reports and
projections. Meets annual sales goals.

– Generate leads
– Create client lists
– Contact prospects and negotiate with them
Job duties – Follow up with prospects and existing customers
– Close sales
– Maintain client records
– Create and present sales reports

– Desktop office programs proficiency

– Proficiency in CRM
Skills
– Good customer service and interpersonal skills
– Good communication skills
 – Reports directly to the national sales manager
Reporting
– No one reports to this position
structure
– Must attend yearly sales meeting

Employee
requirements

– Bachelor’s degree in business, finance, marketing, economics, or a

Education related field
– At least five years of sales experience

– Adapts to changing customer needs and expectations

– Adapts to market changes
Skills
– Can confidently make hundreds of cold calls a week
– Able to work comfortably in a fast-paced environment

– High-volume office setting

Environment – Sitting at a desk for most of the day
– Travel to meet clients

– Washington state driver’s license

– National Association of Sales Professionals’ Certified Professional Sales
Certifications
Person
and licenses
– American Association of Inside Sales Professionals’ Certified Inside
Sales Professional

Success factors

– Grow referral-based sales by 10% per year

Increase sales
– Grow market channel penetration by 12% in the first year

Grow sales
– Train at least one new junior sales associate
department

2. Entry-level job analysis example

Job title Assistant Editor

Classification Full-time employee

Department Book production

Location Malibu, California

Pay grade Level III

Job
requirements

Assists the Editor-in-Chief and publisher in developing and delivering

manuscripts. Reviews and proofreads manuscripts. Conceptualizes and
Summary of
pitches stories. Supports the Editor-in-Chief and coordinates with other
position
departments, such as production and sales. Writes press releases and
markets new books. Finds new authors.

– Perform editorial duties to support the Editor-in-Chief

– Find and contact new authors
Job duties
– Review and make changes to documents
– Attend signings, readings, and book launches

– Desktop publishing software proficiency

– Good time management
Skills – Ability to multitask
– Good interpersonal skills
– Good communication skills

Reporting – Reports to the Editor-in-Chief and publisher

structure – No one reports to the Assistant Editor

Employee
requirements

Education – Bachelor’s degree in English, literature, journalism, or a related field

– Ability to read fast and identify errors and flow

– Strong writing and reading skills
Skills
– Ability to work on multiple projects simultaneously
– Thriving on deadlines
 – Fast-paced office setting
Environment – Sitting at a desk for most of the time
– Travel to book events 50% of the time

Certifications – California state driver’s license

and licenses – A member of the American Copy Editors Society

Success factors

Improve – Reduce time to complete projects by 15%

efficiency – Identify innovative programs to improve editing

Business – Find at least ten new good authors every year

development – Train interns

Your job analysis output doesn’t have to be exactly as in the sample job analysis above. Tweak it
to make it relevant to your organization and position.

Job description vs job analysis

A job analysis is a systematic process of collecting information related to a specific job, while a
job description is a document that indicates what a job covers.

In job analysis, the analyst collects information such as the knowledge and skills required to
perform a specific job for various purposes, such as strategic workforce planning. The job
description includes all the details, such as tasks, duties, responsibilities, powers, authorities,
etc. A job description is an outcome of a job analysis.

To sum up

Job analysis is a brilliant and well-tested technique that has a clear place in Human Resource
Management. Indeed, a good application of job analysis will impact business outcomes. HR
professionals can use this data to make better hiring decisions and ensure higher on-the-job
performance through targeted training and effective performance management.

However, to succeed, you must take a structured approach to cover all the critical aspects of
the job, as detailed in the process steps discussed.

Job analysis is also a very time-intensive technique. Conducting a detailed job analysis will
involve filling in questionnaires or interviewing up to tens of people, making it a very costly
endeavour. You should always ask the question of to what extent a full job analysis is worth it.
You also need to consider the rapidly changing nature of work – although this may, at the same
time, be a reason to do the job analysis in the first place.

https://www.aihr.com/blog/job-analysis/

What is people management?

People management refers to the practice of recruiting, training, engaging, and retaining people
to optimize their talent and maximize their productivity. A subcategory of human resource
management (HRM), people management includes:

• Training and development

• Recruitment

• Compensation and benefits

• Performance management

• Organization

• Engagement and retention

• Safety and wellness

People management strategies address people’s needs, unique talents, and career objectives
while supporting their alignment with company goals and values.

Why should HR leaders care about people management?

HR leaders and managers have people management skills to communicate, inspire, and direct
talent effectively. Successful people management practices help motivate people to work
productively and passionately, leading to increased engagement and retention.

Tips and best practices for effective people management

Effective people management demands that HR leaders embody several essential work habits.
Here are eight core practices HR leaders can incorporate to promote successful people
management:

Lead by example
By demonstrating a high level of emotional intelligence, HR leaders can set the tone for a
productive and dynamic work environment. Exemplifying essential characteristics such as
empathy and resilience at work shows people how they should aim to behave in the workplace.

Gauge team members’ personalities

Knowing and understanding each person’s unique personality and motivations enables
managers to connect with people on a personal level and strategically maximize their work
potential. HR coach Katherine Giacalone emphasizes the importance of identifying and
mentally categorizing each person’s personality for effective management.

Communicate respectfully

Clear and considerate communication is the foundation of any type of successful relationship.
Encouraging people and managers to practice active listening builds trust and healthy
interpersonal connections, which promote a positive culture and foster productivity.
Furthermore, active listening can help managers acquire valuable, constructive feedback to
improve the employee experience.

Promote proactive conflict resolution

Approaching conflict with respect for the individuals involved allows managers to resolve
challenging situations with integrity. Instead of passively letting a conflict spiral out of control,
managers can empathetically approach people, ultimately strengthening interpersonal
relationships and elevating the work community.

Offer development opportunities for managers

HR leaders can help managers develop their skills by providing development training. They can
also team up with finance team leaders to introduce budgets that enable managers to take
certification and knowledge courses. HR leaders can also offer mentorship programs that
provide a framework for managers to learn one-on-one with internal or external management
coaches.

Create a strong team

Building a high-performing team starts with recruiting diverse people who bring complementary
skills. This diversity allows team members to learn from each other, leverage strengths, and
collaborate effectively to address challenges.

Help your team succeed by aligning them around shared objectives and fostering strong
relationships. Regular team-building activities encourage connection on a personal level while
promoting collaboration toward non-work-related goals. These activities strengthen bonds and
build trust within the organization.

Set clear goals and expectations

Effective managers establish clear goals and communicate them to their teams, showing how
individual efforts contribute to project or organizational success. They ensure alignment by
holding meetings to discuss strategies, assign responsibilities, and gather feedback.

People managers can use the SMART model to set realistic goals that are specific, measurable,
achievable, realistic, and time-bound. Defining goals with clear metrics ensures accountability
and helps break tasks into manageable steps.
Deliver constructive feedback with care

Constructive feedback motivates people. Zippia’s research reveals that 85 percent of people
say they take more initiative to improve their performance when they receive feedback. Great
managers are tactful yet direct and can give team members honest feedback on their
performance without being demoralizing.

People managers identify team members’ strengths and weaknesses and note areas where they
need to improve. You can give constructive feedback by first highlighting your people’s strengths
and achievements and then following up with what they can do better, presenting those as
areas for growth and career advancement rather than failures.
https://www.pmi.org/disciplined-agile/process/people-management/why

https://www.pmi.org/disciplined-agile/process/people-management/the-process

https://www.pmi.org/disciplined-agile/process/people-management/the-people-management-mindset

https://www.hibob.com/hr-glossary/people-
management/#:~:text=People%20management%20refers%20to%20the,Compensation%20and%20bene
fits

https://www.spiceworks.com/hr/performance-management/articles/what-is-people-management/

https://www.aihr.com/blog/people-management-skills/

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is a process used to ensure that businesses have employees with the
right skills, at the right time, and with the appropriate capacity to meet strategic goals.

Some practical examples of HRP workflows for various businesses include:

• An e-commerce business forecasting the need for IT capacity increases according to seasonal
trends and scaling their infrastructure and support team.

• A design agency identifying higher demand for digital media through benchmarking and
developing strategies to upskill and reskill its employee pool.

• A law firm initiating a succession planning strategy for the impending employee retirements by
developing internal leadership candidates and recruiting external talent.

Why Is HRP Important? Top 4 Benefits

According to research by the Work Institute, 78% of the reasons for voluntary turnover could have been
prevented by the employer if identified and addressed on time.

Human resource planning helps businesses increase employee engagement and drive various
improvements by:

1. Maintaining a Qualified Workforce

HRP aligns talent capabilities with organizational goals through talent acquisition, training, and
development initiatives. Ensuring you have a skilled workforce to meet future workforce requirements
reduces the risk of inefficient workflows and supports daily business operations (learn more about the
best operations strategy examples). Investing in employee talent and skills can also help increase
employee engagement and satisfaction.

2. Improving Risk and Change Management

HRP is a proactive approach that focuses on identifying issues before they occur. Analyzing trends and
forecasting future needs helps businesses create contingency plans for various scenarios. This can
include high-impact external changes, such as technological advancements, or internal disruptions, like
leadership transitions.

Optimize Your Human Resource Planning

Productive is the all-in-one software for workload balancing, utilization, and financial management,
tailored to businesses of all shapes and sizes.

3. Ensuring Your Business Is Competitive

HRP keeps businesses competitive by helping them attract the right talent and ensuring that current
employees are skilled and engaged in the workplace. It helps companies adapt to changes quickly and
efficiently, fostering the agility and proactiveness needed to stay ahead of industry trends and
competitors.

4. Optimizing Workforce Costs

HRP optimizes business costs by providing balanced employee utilization so that your agency isn’t
spending excess money on non-productive labor costs. It also ensures that your business can do more
work with adequate supply. Finally, HRP reduces the chance of unexpected resource gaps through
effective forecasting, minimizing the need for last-minute hiring or overtime work.

You can also check our guide to the capacity management process to learn more.

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The Main Steps of Human Resources Planning

The key steps of HRP include:

• Workforce analysis to determine your company’s current human resource capacity.

• Demand forecasting to future resource demand based on industry trends and internal needs.

• Gap analysis includes finding potential roadblocks in your HRP process and developing
strategies to address them.

• Implementation and monitoring of your human resource strategies, usually by tracking key
performance indicators.

Analyzing Current Availability

Workforce analysis involves a comprehensive evaluation of the current workforce’s size, skills, and
capabilities. It assesses aspects such as:

• Employee productivity

• Job satisfaction

• Skill sets, including technical and soft skills

• Seniority

• Turnover rates

These metrics are used to identify your organization’s strengths and weaknesses. This is the foundation
on which you’ll develop actionable steps to improve your HRP processes.

The utilization rate is the key metric for visualizing productivity — use Productive for real-time insights

Projecting Future Demand

Projecting future demand involves estimating the human resource requirements needed for an
organization to meet its future goals. This forecast considers factors such as business growth, market
expansion, technological advancements, and changes in operational processes.

Three tools that are used in this process are:

• Ratio analysis, where historical data on the relationship between business metrics and
workforce size is used to predict future staffing needs.

• Trend analysis, which examines patterns in the organization’s workforce data over time.

• Comparative analysis, whether by comparing internal resource planning practices across

multiple projects or benchmarking your performance against competitors.

Another potential strategy is utilizing real-time data, such as forecasting charts that depict the impact of
resource scheduling on agency analytics.

Productive’s forecasting charts let you predict your company’s revenue and profit margins

Gap Analysis

Gap analysis compares future human resource needs against the current workforce’s capabilities to
identify discrepancies or gaps. A way to conduct gap analysis is to monitor where previous projects went
wrong to pinpoint inefficiencies in your workflows, such as miscommunication or a deficit of specific
skills. You can do this by checking estimated vs real completion times for various tasks — ERP
solutions can deliver these insights with time tracking features.

Then, by examining your upcoming projects or initiatives, you can identify and forecast potential areas
where similar imbalances may occur.

Developing and Implementing Strategies

The final step is developing and implementing HR strategies to cover your company’s specific needs and
requirements.
These strategies may include:

• Creating a resource plan: A resource plan is an in-depth document that contains information on
your employees, their availability, and their scheduled time. It helps businesses follow strategic
objectives and monitor their ongoing processes.

Get an in-depth overview of your business resources and their availability

• Employee engagement and retention strategies: For example, drafting career development
plans, introducing new benefits packages and competitive compensation, and promoting a
healthy organizational mindset.

• Implementing modern software: Resource planning tools can support various steps of the HRP
process, with features such as time off management, billable hours tracking, financial
forecasting, real-time reporting, workflow automations, and more.

Best Practices for Effective HRP

Once you’ve pinpointed potential gaps and developed strategies to drive improvements, what are some
best practices to ensure they stick?

Monitoring Your Progress

Whichever initiatives you decide to implement, monitoring them through capacity management
metrics is necessary to assess their effectiveness. However, keep in mind that while business metrics are
important, some benefits of HRP may be hard to quantify. This includes better work-life balance and
improved working environment.

Regular Review

HRP can take a long time to provide results. Agility and flexibility are needed to make sure that your
strategies can stay aligned with changing business needs and priorities. Regular review helps identify
where your strategies have gone off track to implement timely changes.

Continuous Improvement

HRP is an ongoing process. As such, your strategies will need to evolve alongside your business goals and
circumstances. Incremental improvements are always better than sudden, expansive changes —
consistently seeking feedback and analyzing outcomes is a way to ensure your HRP strategies remain
effective over time.

Types of HR Planning

There are different types or techniques associated with HR planning. Here are some common terms and
how you can differentiate them:

Hard vs Soft HR Planning

• Hard HR Planning focuses on quantitative aspects of human resource management, such as

headcount, costs, and labor allocation. This approach often involves in-depth data and
forecasting for informed decision-making.

• Soft HR Planning considers qualitative factors of workforce management, such as engagement,

development, and well-being. It’s less focused on data and more on fostering a committed and
resilient workforce.
Short-Term vs Strategic HRP

• Short-term HRP is more of a reactive approach that addresses immediate staffing needs and
focuses on resolving urgent issues. It typically spans a timeframe of up to one year.

• Strategic HRP is a long-term approach that aligns workforce planning with the organization’s
future goals and strategies. It involves forecasting workforce requirements, sustainable talent
management, and other proactive strategies for business success.

Employee Reskilling vs Upskilling

• Reskilling involves training employees in new skills and capabilities to help them transition to
different roles within the company.

• Upskilling focuses on enhancing the current skills and competencies to improve performance,
stay competitive, and meet job requirements.

To learn more, check out our article on the topic: what is capacity building and the best strategies for
maintaining a skilled and satisfied workforce.

Future Trends in HR Planning

• Remote work is here to stay. According to survey results, 63% of professionals are willing to take
a pay cut to work remotely (FlexJobs). If possible, consider including it as one of your benefits to
drive a competitive advantage.

• In general, employee well-being initiatives are becoming more and more popular. This can
include more flexible hours, hybrid or remote work, health insurance plans, as well as various
fitness and wellness programs (learn more about workload management).

• 72% of professionals agree that all forms of skill-based hiring are more effective than resumes.
While the resume is still used to filter the pool of applicants, work-related tasks and technical
questions have proven to be the more efficient and cost-effective way of hiring candidates (Test
Gorilla).

• When it comes to daily workflows, 60% of professionals believe that automation helps them
fight burnout and work-related stress. It allows for a more flexible work schedule, helps them be
more organized at work, frees up their tasks for work they enjoy, and more (Zapier). Consider
tools that can provide no-code automations to streamline day-to-day work.

The Challenges of Human Resource Planning

Now that we’ve gone through the main steps of the HRP, it’s time to address some of its main challenges:

• Accurate forecasting: Predicting future needs accurately can be a challenge in itself. Not only
does it require having an in-depth understanding of your business circumstances, but it’s also
sensitive to changes in market demand and economic conditions.

• Maintaining a flexible workforce: Maintaining a versatile and skilled workforce requires careful
management of work hours. This ensures that profitability isn’t compromised, and at the same
time, avoids situations where training is neglected entirely for billable work. This balance
between billable vs non-billable time is crucial for sustainable organizational success.

• Aligning HR Strategy with Business Goals: Keeping track of the overarching business strategy in
HRP can be hard, especially in large or rapidly evolving organizations. It requires transparent
communication, cross-functional collaboration, and a deep understanding of the organization’s
long-term objectives and the role of the workforce in achieving them.

The Solution: Utilizing Software for Enhanced HR Planning

A way to address these potential challenges is using tools with HR and resource management
capabilities. Modern software provides a way to visualize and forecast employee hours, activities, and
their impact on business financials for more informed decision-making. It also helps businesses view
project progress in real time to streamline stakeholder collaboration.

Adapt your project management to your working preferences with Productive

An example of such a tool is Productive, with key HRP features including:

• Time tracking

• Resource scheduling

• Workload balancing

• Time off management

• Financial forecasting

• And more

https://productive.io/blog/human-resource-planning/

https://www.visier.com/hr-strategy/human-resource-planning/

https://www.hrlineup.com/human-resource-planning/