Leveraging Business through effective Human Resources planning

Human Resource Planning Leveraging Business through effective Human Resources planning The PerFact Service Academy By: Adith Abraham Case study dated - 15/4/211 1 P a g e : This white paper is the property of Adith Abraham, the Performance Factory. It s usage without prior permission is illegal.

Introduction to the Company The Performance Factory s PerFact Service Academy is one of the leading retail training institutes in the UAE established in 29 as an arm of a Training firm, a leading training companies in the Middle East. The vision of PerFact Service Academy is to be A significant player in training and supplying high quality sales and service talent to the UAE retail sector and be the brand of choice for developing world-class local talent. The shared organizational values are, a. Shareholder relationship b. Quality c. Performance orientation d. Discipline to closure e. Innovation f. Intrapreneurship Corporate objectives Keeping in view the vision and business factors, the PerFact Service Academy decided to obtain overall market leadership in the coming year. The strategic goal of the company was to make this year the Year of Growth, and the prime focus areas or the corporate objectives were as mentioned below: 1. 4% revenue growth 2. Trainee quality 3. Customer delight All activities and plans in the coming year will be focused towards achievement of the above mentioned corporate objectives. Performance oriented culture was one among them. Specific HR practices of PerFact Service Academy included: Manpower Planning Increasing the investment in training & development To make Performance evaluation system for all the employees in the academy Having a succession planning program in place Thus the overall HR strategy was to integrate these strategies effectively with the business strategy to achieve its corporate objectives such as, Trainee Quality, growth and Customer delight. 2 P a g e

Scenario / PEST Analysis for PerFact Service Academy Ltd. It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's environment is made up of: 1. The internal environment e.g. staff (or internal customers), office technology, wages, etc. 2. The micro-environment e.g. external customers, agents and distributors, suppliers, our competitors, etc. 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors. With reference to the PerFact Service Academy, following is the PEST Analysis. Diagram of PEST Analysis 3 P a g e

HRP Model for the PerFact Service Academy. After reviewing the internal, external factors including the strength & weakness, we will be able to identify or understand the three corporate objectives which have been identified by this institute. Through the Strategic HR planning of forecasting & planning we would be able to identify the strategies & factors that would impact its functional objective to obtain its overall corporate objective. The company has already implemented sound HR practices over the past 2 years, some of which includes: Manpower Planning, Recruitment & Selection, Induction, PMS, Training, & Culture building activities. Changes in the HR plans and its impact on the overall business strategy can also be explained through this model. Understanding how to develop strategy is a motivation to progress to HR strategic planning. A strategic plan consists of a series of actions designed to accomplish defined objectives. And a HR plan is described as strategic since such plan is intended to help organization achieve their business plan. A human resource strategic plan is aligned to the organization's strategic business plan. With the model we tried to: 1. Know the company/organization s business and strategic plan 2. Doing an external scan 3. Forecasting workforce demand 4. Forecasting workforce supply 5. Positioning all the departments in line with the plan with a proper communication channel throughout the departments. 6. Developing HR strategies including programs, policies, practices and activities - such as workforce supply and demand - and linking them to the business strategies 7. Having developed the plan, linking the plans with the four corporate objectives identified. 4 P a g e

Proposed HRP Model 5 P a g e : This white paper is the property of Adith Abraham, the Performance Factory. It s usage without prior permission is illegal.

Demand Forecasting As per the case, for the demand estimation & rest of HRP, we are considering the increase of training capacity from 48 trainees a year to 12 trainees a year. Current Manpower status of training center to train 48 trainees a year (1% of manpower utilization): Permanent Staff Department Staff48 Mgt. Staff Total Ratio Marketing 5 1 2 Operations 3 3 8 : 1 HR & Admin 2 1 3 2 : 1 Secretarial 1 1 - Total 11 2 13 5 : 1 In the current manpower scenario the training academy has a total of 13 permanent employees. In which there are a total of 11 Unionized and 2 Management staff with an average ratio of eight (5:1) staff for every management staff. While we intend to increase the number of both staff and management staff we aim to keep the ratio more or less constant as it is a healthy figure presenting a healthy management or supervision style. Proposed Manpower strength for training 12 trainees a year at 1% manpower utilization Department Staff12 Mgt. Staff Total Ratio Marketing 1 2 1 2 5 : 1 Operations 8 2 1 4 : 1 HR & Admin 7 1 8 7 : 1 Secretarial 2 2 - Total 27 5 32 5 : 1 The Academy wants to raise its production capacity from 48 trainees a year to 12 trainees a year. The staff has been increased however we recommend only a marginal increase in the management staff. This has enabled us to maintain the staff to management staff ratio to an institute average of 5:1. 6 P a g e : This white paper is the property of Adith Abraham, the Performance Factory. It s usage without prior permission is illegal.

Supply Forecasting The supply forecasting has been done considering the overall capacity increase & the keeping in mind the three focus areas of the year. We have considered the: turnover estimation, absenteeism, promotion effect & external sources of supply. Turnover Analysis- The average turnover of 5% is expected among the unionized staff and 12% for the management staff. Type Turnover Proposed Turnover rate Current + Future HC Possibility of Resignation Marketing 4% 3% 1 3 Operations HR & Admin Secretarial Management Total 35% 4% % 3% 3% 18 5 3% 7 2 % 2 25% 5 3 32 14 Absenteeism Analysis: An absenteeism of around 17% on an average is noticed among the staff of 11 workers. However, with the employee engagement initiatives, the current absenteeism levels can be reduced accordingly to the reduced forecast of absenteeism rate from 17% to 1%. Manpower Planning: Given the organizational strategy & objective along with the current HR practices, the manpower planning given below seeks to achieve the manpower requirement for training 12 trainees year with 1% effective manpower utilization. Turnover Rate Type Turnover % Total Estimated Turnover New Turnover % Estimated New Turnover Management Staff 4% 2 1 3% 3 Staff 29% 11 3 21% 1 7 P a g e

Manpower can effectively be utilized if the turnover rate is kept under control. The coming year has targets set with reduced rates of turnover for both the Management staff and staff. Demand Estimate Number Estimates Current Manpower for training 48 trainees a year 13 Estimated Manpower for training 12 trainees 32 Extra Manpower required for targeted productivity 19 Estimated new turnover for the year 13 Total manpower required for the year 32 The manpower forecasted is 32 for both staff and management staff. However after considering the turnover and yearly attrition rate 13 more employees need to be recruited this year to maintaining the optimum workforce to achieve the Company s objectives for the plant in concern. Recruitment Plan PerFact Service Academy believes that right persons at right roles are the key to the delivering quality training to the delegates and ensuring consistency in Customer Satisfaction. And in order to achieve the overall objective capacity target of 12 trainees at the end of the year, the recruitment & selection plan needs to align to the overall strategic plan to achieve optimum competitive advantage & cost effectiveness. Our strategies for recruitment & selection have been focused mainly on the quality & the salary structure: a) Quality: In order to achieve market leadership it is imperative to look at the quality of the human resources carefully especially the new recruits. Screening of any new recruits with the minimum required qualification. To enhance the qualification criteria & competency level of the new recruits at the operations and marketing departments. b) Salary Structure: the salary structure of a management staff category would be AED 15, per month, the salary for operations staff would be AED12, per month and the salary for marketing staff would be at AED 9 per month. The selection process can be scheduled quarterly to have the cost flow in safe manner. So that the overall cost of the manpower will be in control and at the same time, the focus on quality resources can be obtained. In our case, the total required head count of 32 can be hired in the following cycle: 8 P a g e

Period Recruits Prod. Q1 12 16 Trainees Q2 11 16 Trainees Q3 9 16 Trainees 1 Year 32 48 Trainees Suggested schedule for the recruitment & selection process. Area Completion Date Responsibility Remarks Requisition of manpower requirement Forecast of manpower requirement Advertisement / Employee referral notification Receipt of the completed application form Screening of application forms Employment test Comprehensive interviews Employment Offer Before the 1st o every quarterly month i.e. Mar Jun Sep Dec First of every quarter months Fifth of every quarter months 15th of every quarter months 17th of every quarter months 24th morning of every quarter months 24th Afternoon of every quarter months On or before 3th of every quarter months Head of Department HRD Department Recruitment & Selection Committee HRD Department Recruitment & Selection Committee Recruitment & Selection Committee Recruitment & Selection Committee HRD Department Induction Plan- At the PerFact Service Academy, the new employees who are hired will attend induction training programs to socialize and familiarize themselves with the organization, their department and also the people in the organization. The organization believes that during the induction period, the new entrants into the organization shape their attitudes towards work, towards the organization, towards various functions, towards himself and his competencies. Therefore, lots of importance is given to the induction activities at the PerFact Service Academy. Though the HR department facilitates the induction process for the new inductees, the ownership and responsibility of the effectiveness of delivery lies with the line managers who the inductees will report to. 9 P a g e

The objectives of the induction activities are a. To provide the new entrants with comprehensive understanding of the vision, values, mission, structures, people etc b. To provide them with an understanding of what is valued in the organization and accepted behaviors c. To provide a detailed understanding of the nature of tasks performed by people The Induction plan Category Quarter-1 Quarter-2 Quarter-3 TOTAL Management team i. No of inductees 2 2 1 5 ii. Induction dates Unionised work force 7thFeb- 25thFeb 11thApr- 22ndApr 11thJul - 22ndJul 1 working days iii. No of inductees 1 9 8 27 iv. Induction dates 7thFeb-4th Mar 11thApr- 6thMay 11thJul-5thAug 2 working days 1 P a g e

Induction Schedule Week Unionised work force Management team Week-1 (5 working days) - Reporting to the organization - Class room induction to be facilitated by the HR Dept and Heads of Dept focusing on a. History of the Organization b. Management Philosophy c. Organizational Values d. The Vision and Mission e. Company products f. Introduction to Organizational Structure and departments g. HR Policies and procedures - Reporting to the organization - Class room induction to be facilitated by the HR Dept and Heads of Dept focusing on a. History of the Organization b. Management Philosophy c. Organizational Values d. The Vision and Mission e. Company products f. Introduction to Organizational Structure and departments g. HR Policies and procedures Week-2 (5 working days) - Informal discussions with senior members - Department orientation visit - Informal discussions with senior members - Department orientation visits - Placement - Performance Management discussions Week-3 (5 working days) - Placement - Mentoring assignment - Performance Management discussions Week-4 (5 working days) - On the job learning - Conduct induction evaluation a. Level-2 assessment b. Performance assessment c. Behavioural assessment 11 P a g e : This white paper is the property of Adith Abraham, the Performance Factory. It s usage without prior permission is illegal.

Training Plan & Schedule Category Agencies Focus Cost per person (AED) Total No of Emps. Type of trg Mandays /person Total (AED) Remarks Schedule Mgt IIR Leadership: Industry knowledge Winning attitude 45 5 Public 2 22,5 Open workshops Operations Up to plant Retail: Retails Management Operational efficiency Customer Service 1,2 per training 27 Public 6 97,2 Open workshops TOTs Train the trainer 1,5 27 Inhouse Internal capability to train BUDGET 12, TOTAL 119,7 12 P a g e

Training Schedule Since the business focus for the year is the Year of Growth and also a business expansion target of training 12 trainees per year from the earlier 48 trainees, the staff will undergo a series of functional training and all employees in the management team will undergo programs on leadership training to enhance performance of the organization. The focus of training for the organization is as follows: Levels Competence Focus List of programs Mid Management Operations Management Competence - Industry leadership - Winning attitude Staff Functional Competence - Retails Management - Operational efficiency - Customer Service - Train the Trainer The purpose of the training programs are activities carried out to improve individual performance through increase in knowledge, skills and attitudes. Also, the programs are strategically aligned to the business requirement of the year. The training need identification is based on the skills inventories and competency profiling. The competency assessments are conducted against ideal standard prescribed for each job profile. On completion of the training, the first level assessments are completed on the reaction of delegates who attended the training. Some of the programs on Leadership and Management are further assessed to Level-2 to ensure knowledge transfer has occurred. On the job training and coaching are other training methodologies adopted by the organization to ensure improved performance. Performance Management This year s performance management system at PerFact Service Academy will reflect the core performance areas detailed in the vision, mission and strategic objectives articulated in the corporate plan. The corporate objective of the year Year of Growth is achieved by embedding the 3 thrust factors into the PMS such as 4% Revenue Growth, Customer Delight and Trainee Quality. 13 P a g e : This white paper is the property of Adith Abraham, the Performance Factory. It s usage without prior permission is illegal.

All the department goals for the year will reflect the 3 thrust factors and every individual will be appraised on the same. The appraisal sheets will therefore reflect as follows. Priority (1) Team or Ind Goals (2) 1 Productivity Targets 2 Contribution to 4%revenue growth 3 Customer Delight Targets 4 Trainee Feedback 5 Quality Targets Assessment of Performance (3) Self Appraiser Reviewer O G A B O G A B O G A B 2 1 5 1 2 1 5 1 2 1 5 1 Weight age to goal (out of 1) (4) Rating Score (5) 6 Conformity to Org Values TOTAL SCORE 1 Though the above appraisal sheet reflects the core objectives for the year for all employees striving to achieve the organizational goals, the weight age will vary for employees in different departments based on the expected contribution and the nature of work being done. Targets are usually planned and set by the management team along with employees based on key result areas and attributes. The performance review is conducted on a quarterly basis to track the year to date performance results in the organization. The management team assumes the role of coach, mentors or perhaps as a counsellor during the year to ensure employees are equipped, motivated and skilled to deliver their goals. Career & Development Plan- Career Develop consists of organized structure and sequence of patterns in an individual s work life. Career progress begins at the lowest rank and moves upward to the higher ranks taking into consideration the chain of command. Any job opening from Supervisor and above will be filled by internal job posting. Since we expect approximately 3 job vacancies through the year, we plan to make eligibility to promote individuals based on 3 criteria. a. Experience b. Performance c. Potential The 3 criteria will take into account the individuals past performance, his ability to learn new skills, the behaviors, the ability to influence for higher performance and also the number of years he has spent in the organization. Although we propose that individuals who have spent a reasonably long duration of time within the organization should be considered for promotion, the eligibility criteria for career progression will also include consistency of past performance over the past 2 years. 14 P a g e

As a policy, we propose to maintain the ownership of career progression of staff to themselves while tools such as competency framework, IJP announcements for all jobs at all levels will be made available to every employee in the organization. Succession Planning- Succession planning is a process for identifying and developing internal people with the potential to fill key leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. With a detailed PMS system well established in PerFact Service Academy, HR will implement the replacement method of succession planning as a strategy to internally identify, develop and make staff ready to be promoted in the future. Succession/replacement planning programs are implemented to ensure the development of a sufficient number of qualified people to fill future vacancies in key managerial and professional positions. A timeline for a bench strength plan may be an important part of a total plan. Planning for three years out requires a different type of strategy than planning for ten or fifteen years in the future. Key considerations when putting into place a succession planning program, or revising an existing one, include: The Year of Groeth mission and the strategic drive of the organization paves the way for how the plan is designed and how decisions are made towards replacement method Identify those with the potential to assume greater responsibility in the organization Provide critical development experiences to those that can move into key roles Engage the leadership in supporting the development of high-potential leaders The performance of individuals and the gaps of high-potential candidates are assessed on a yearly basis and IDPs are developed towards developing those gaps. The replacement chart will depict the readiness and the performance of each individual in the management team. An example of a replacement chart is as follows: Succession codes Readiness Performance A. Ready Now 1. Outstanding B. Ready in 1 year 2. Above Average C. Ready in 2 years 3. Average/ Good D. Readiness not determined/ review 4. Below Average 5. Unacceptable 15 P a g e

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