Career Development Plan Part I - Job Analysis and Selection

1. How can operating managers use job analysis information?

2. How can workforce planning be integrated most effectively with general business planning?

3. What should be the components of a fair information practice policy with regard to information about employees?

4. How can workforce forecasts be most useful?

5. What control mechanisms might be most appropriate to ensure that action plans match targeted needs?

Situation

You are Pat Evans, chief engineer at Western Water Company. Western Water is a small, investor-owned utility company that provides water treatment, water distribution, and water use planning for a small, but growing, area. Each year, Western hires about six junior civil engineers to work in any of the following areas: water service planning, wastewater treatment, facilities planning, design engineering, or construction engineering. However, the number of new hires among civil engineers is expected to grow larger in the coming years as the population density (and thus the demand for water service) increases in the area served by Western Water.

As chief engineer, you are responsible for all hiring of new engineers. You are concerned that past hiring procedures have been pretty slack—basically a cursory review of courses taken in the engineering curriculum plus an unstructured interview. As a result, Western really doesn't know what its new junior civil engineers can do, what they are looking for in a company, and what particular assignments they are best suited for. To make matters worse, an average of 50 percent of the newly hired junior civil engineers leave the company within three years. You are determined to change current practices. As a start, you have asked your HR Department to analyze each of the possible job assignments for junior civil engineers and to report back to you with a list of “common denominators” that seem to cut across all the assignments. That study was begun in July, it is now November 1, and you have just received the results. Western will begin recruiting in earnest next February, and most hiring decisions will be made in March and April, primarily among engineering students who will graduate in May and June. Thus, you have several months to develop new hiring procedures to be put into place before the screening and selection of the next group of candidates actually begin.

In response to your request, here is a summary of the broad job dimensions of junior civil engineers that you just received from HR, along with a statement of the personal characteristics necessary to do each of them:

1. Modeling and calculations. Applications of professional engineering knowledge in order to develop and test mathematical models of civil engineering activities (e.g., water distribution, quality, and treatment; hydraulic; structural). Knowledge required: civil engineering principles, including mathematics through advanced calculus; statistics; dynamics; basic water and wastewater chemistry; engineering economics; structural systems; surveying principles; and construction methods.

3. Project planning and management. Identification of project objectives, scope, feasibility, milestones, and completion schedules, together with preparation of supporting documentation. Monitor and coordinate project activities in order to meet time and cost parameters. Knowledge and abilities required: engineering standard practices, technical report formats, water distribution systems, and methods of effective presentations (oral or written). Must be able to develop cost analyses for projects, set priorities, and schedule activities in a logical, organized manner. Must be able to coordinate activities and work among other engineering sections, vendors, consultants, and contractors.

4. Written communications. Preparation of memos, letters, and engineering reports designed to address a variety of audiences, including other engineers; staff members working in maintenance, operations, or clerical positions; public agencies; government bodies; and members of the general public. Knowledge and abilities required: proper English grammar, spelling, punctuation, and sentence structure; ability to organize and compile relevant information to be used in reports; and ability to communicate effectively in English in a clear, concise, organized manner, taking into account the abilities and needs of the audience.

5. Individual and group interactions. Provision of technical expertise, either by telephone or face to face, to contractors, other engineers, members of the board of directors, government agencies, and applicants for water service. Knowledge and abilities required: engineering terminology; ability to establish and maintain effective working relationships in a variety of contexts (one-on-one or group) and with people from a variety of backgrounds (technical as well as nontechnical); and ability to communicate orally in English in a clear, understandable, concise manner, taking into account the needs and abilities of the audience.

6. Data summary and synthesis. Integration of information from a variety of sources (e.g., maps, calculations, environmental reports, feasibility studies) in order to provide a basis for technical recommendations or project planning. Abilities required: ability to organize data to assemble a written memo, ability to modify existing maps to help visualize a site and surrounding conditions, and ability to summarize assumptions used in project design in order to recommend a course of action to superiors.

7. Problem resolution. Through technical and interpersonal skills to achieve workable solutions to civil engineering, economic, or people-related problems. Abilities required: ability to negotiate effectively with a variety of constituencies; ability to listen actively to clarify issues and to ask for appropriate information; and ability to express one's own position—verbally as well as in writing—including supporting logic and arguments, in order to communicate one's position to other parties.

Just as you finish reading the report, Tracy Garcia, a senior civil engineer at Western, knocks on your door. “Have you read that job analysis report on junior civils yet, Pat?” You reply, “I sure have, and boy, has it given me ideas about new ways of selecting, training, and assessing the performance of our new hires.”

1. How might the information presented in the job analysis help Western do a better job of recruiting new junior civil engineers?

2. As Pat Evans, what specific selection procedures would you like to see put into place?

3. How might the information in the job analysis report be useful in assessing the performance of new hires?

To make intelligent decisions about the people-related needs of a business, two types of information are essential: (1) a description of the work to be done, the skills needed, and the training and experience required for various jobs, and (2) a description of the future direction of a business. Once these are known, it makes sense to forecast the numbers and skills mix of people required at some future time period. We consider the first of these needs, job analysis, in the sections to follow, and the second, workforce planning, in the latter part of the chapter.

Just over a decade ago books and magazines proclaimed “The End of the Job.”1 Post-job workers, so the reasoning went, will likely be self-employed contract workers, hired to work on projects or teams. Just look at Intel or Microsoft, firms that organize work around projects. People will work on 6 to 10 projects, perhaps for different employers at the same time. That may come to pass some day, but not yet.

A funny thing happened along the way—the Internet revolution. Go to any company's Web site, and discover that it invites applications—for jobs! True, employees may work on 6 to 10 projects at once, but only for one employer. This is not to imply that the concept of work is not changing. Sometimes the changes occur at a dizzying pace as fluid organizations fighting to stay competitive require their people to adapt constantly. Consider just two changes in “traditional” jobs:

1. Librarians who used to recommend and shelve books and provide guidance for research projects now demonstrate how to run computerized searches to sort through an Internet world bursting with information.

2. Automobile assembly plants are replacing retiring workers who were hired right out of high school with people trained to operate computer-based machinery who can work well in teams.

Yet for all the changes, using a job as a way to organize and group tasks and responsibilities has not yet disappeared. A recent survey of more than 200 organizations sponsored by WorldatWork found that more than 80 percent still use conventional job analysis programs.2

Jobs are important to individuals: They help determine standards of living, places of residence, status (value ascribed to individuals because of their position), and even a personal sense of self-worth. Jobs are important to organizations because they are the vehicles through which work (and thus organizational objectives) are accomplished. The way to manage people to work efficiently is through answers to such questions as

· Who specifies the content of each job?

· Who decides how many jobs are necessary?

· How are the interrelationships among jobs determined and communicated?

· Has anyone looked at the number, design, and content of jobs from the perspective of the entire organization, the “big picture”?

· What are the minimum qualifications for each job?

· What should training programs stress?

· How should performance on each job be measured?

· How much is each job worth?

The term job analysis describes the process of obtaining information about jobs. As the chapter-opening vignette illustrates, this information is useful for a number of business purposes. Regardless of how it is collected, it usually includes information about the tasks to be done on the job, as well as the personal characteristics (education, experience, specialized training, personality) necessary to do the tasks.

An overall written summary of task requirements is called a job description, and an overall written summary of worker requirements is called a job specification. The result of the process of job analysis is a job description and a job specification. In the past, such job definitions often tended to be quite narrow in scope. Today, however, some organizations are beginning to develop behavioral job descriptions. They tend to be more stable, even as technologies and customer needs change.3

For example, instead of focusing on communication skills, such as writing, speaking, and making presentations, behavioral job descriptions incorporate broader behavioral statements, such as “actively listens, builds trust, and adapts his or her style and tactics to fit the audience.” These behaviors will not change, even as the means of executing them evolve with technology. Instead of being responsible for simple procedures and predictable tasks, workers are now expected to draw inferences and render diagnoses, judgments, and decisions, often under severe time constraints.4

[Source: R. C. Page and D. M. Van De Voort, Human resource planning and job analysis. In W. F. Cascio (ed.), Planning, employment, and placement, vol. 2 of the ASPA/BNA Human resource management series. Washington, DC: Bureau of National Affairs, 1989.]

Organizational Structure and Design.

By clarifying job requirements and the interrelationships among jobs, responsibilities at all levels can be specified, promoting efficiency and minimizing overlap or duplication.

Human Resource (or Workforce) Planning.

Job analysis is the foundation for forecasting the need for human resources as well as for plans for such activities as training, transfer, or promotion. Frequently, job analysis information is incorporated into a human resource information system (HRIS).

Job Evaluation and Compensation.

Recruitment.

The most important information an executive recruiter (“head-hunter”) or company recruiter needs is full knowledge of the job(s) in question and the personal characteristics necessary to perform it.

Selection.

Any method used to select or promote applicants must be based on a keen, meaningful forecast of job performance. An understanding of just what a worker is expected to do on the job, as reflected in job-related interviews or test questions, is necessary for such a meaningful forecast.

Placement.

In many cases, applicants are first selected and then placed in one of many possible jobs. When there is a clear picture of the needs of a job and the abilities of workers to fulfill those needs, selection decisions will be accurate and workers will be placed in jobs where they will be the most productive. That is, selection and placement tend to go hand in hand. On the other side of the selection-placement coin, when there is a blurred picture of the needs of a job, selection decisions will not be accurate, and placement will probably be worse.

Orientation, Training, and Development.

Training a worker can be very costly, as we shall see later. Up-to-date job descriptions and specifications help ensure that training programs reflect actual job requirements. In other words, “What you learn in training today you'll use on the job tomorrow.”

Performance Management.

If employees are to be judged in terms of how well they do those parts of their jobs that really matter, the parts that distinguish effective from ineffective performers, it is important to specify critical and noncritical job requirements. Job analysis does this by identifying performance standards.

Career Path Planning.

If the organization (as well as the individual) does not have a thorough understanding of the requirements of available jobs and how jobs at succeeding levels relate to one another, effective career path planning is impossible.

Labor Relations.

The information provided by job analysis is helpful to both management and unions for contract negotiations, as well as for resolving grievances and jurisdictional disputes.

Engineering Design and Methods Improvement.

To design equipment to perform a specific task reliably and efficiently, engineers must understand exactly the capabilities of the operator and what he or she is expected to do. Job analysis answers the latter question. Similarly, any improvements or proposed new working methods must be evaluated relative to their impact on overall job objectives.

Job Design.

As with methods improvement, changes in the way work is accomplished must be evaluated through a job analysis, focusing on the tasks to be done and on the behaviors required of the people doing the tasks.

Safety.

New developments in computer technology permit persons with disabilities to perform many different kinds of work.

Vocational Guidance and Rehabilitation Counseling.

Comprehensive job descriptions and specifications enable men and women to make informed decisions regarding career choices.

Job Classification Systems.

Selection, training, and pay systems are often keyed to job classification systems, also referred to as “job families.” Without job analysis information, it is impossible to determine reliably the structure of the relationships among jobs in an organization.

There are two basic things to keep in mind when thinking about what job analysis is and what it should accomplish. First, as time goes on, everything changes, and so do jobs. This has been recognized only recently; the popular view of a job was that what it required did not change; a job was a static thing, designed to be consistent although the workers who passed through it were different. Now we know that for a job to produce efficient output, it must change according to the workers who do it. In fact, the nature of jobs might change for three reasons:

· Time. For example, lifeguards, ski instructors, and accountants do different things at different times of the year.

· Environment and context. Technology changes jobs—for example, consider how the Internet has changed the jobs of purchasing agents or how personal computers have changed the jobs of clerk/typists. Research has shown, for example, that for the same job performed in different locations, ratings of what people do and the time they spend on various tasks may differ depending on the context in which the work is performed.6 Context includes, among other things, the extent of use of technology, the extent to which rules and procedures govern work activities, and the overall organizational culture. Job analyses should reflect the context in which work is done, and they should be updated any time that there are significant changes in jobs.

Second, job analysis comprises job specifications and people requirements that should reflect minimally acceptable qualifications for job holders. Frequently they do not, reflecting instead a profile of the ideal job holder.

How, are job specifications set? Typically, they are set by consensus among experts—immediate supervisors, job incumbents, and job analysts.7 Such a procedure is professionally acceptable, but care must be taken to distinguish between required and desirable qualifications. The term required denotes inflexibility; that is, it is assumed that without this qualification, an individual absolutely would be unable to do the job. Desirable implies flexibility; it is “nice to have” this ability, but it is not a “need to have” (see job dimension 2 in the chapter-opening vignette). To be sure, required qualifications will exist in almost all jobs, but care must be exercised in establishing them, for such requirements must meet a higher standard.

LEGALITIES: JOB ANALYSIS AND THE AMERICANS WITH DISABILITIES ACT (ADA) OF 1990

Job analyses are not legally required under the ADA, but sound professional practice suggests that they be done for three reasons:

1. The law makes it clear that job applicants must be able to understand what the essential functions of a job are before they can respond to the question “Can you perform the essential functions of the job for which you are applying?” Essential functions are those that require relatively more time and have serious consequences of error or nonperformance associated with them. A function may be essential because the reason the position exists at all is to perform that function (e.g., a baggage handler at an airport must be able to lift bags weighing up to 70 pounds repeatedly throughout an eight-hour shift). Alternatively, the function may be so highly specialized that it cannot be shifted to others (e.g., in a nuclear power plant, a nuclear engineer must perform inspections, often by crawling through tight spaces). Job analysis is a systematic procedure that can help to identify essential job functions.

3. Once job analyses are updated as described, a summary of the results is normally prepared in writing in the form of a job description. What may work even better under the ADA, however, is a video job description, that provides concrete evidence to applicants of the physical, environmental (e.g., temperatures, noise level, working space), or mental (e.g., irate customers calling with complaints) demands of jobs. Candidates who are unable to perform a job because of a physical or mental disability may self-select out, thereby minimizing the likelihood of a legal challenge.

· Restructuring a job so that someone else does the nonessential tasks a person with a disability cannot do.

· Modifying work hours or work schedules so that a person with a disability can commute during off-peak periods.

· Reassigning a worker who becomes disabled to a vacant position.

· Acquiring or modifying equipment or devices (e.g., a telecommunications device for the deaf).

· Adjusting or modifying examinations, training materials, or HR policies.

· Providing qualified readers or interpreters.

Competency models attempt to identify variables related to overall organizational fit and to identify personality characteristics consistent with the organization's vision (e.g., drive for results, persistence, innovation, flexibility).10 As such they are written in terms that operating managers can relate to.

Competency models are a form of job analysis that focuses on broader characteristics of individuals and on using these characteristics to inform HR practices. They focus on the full range of knowledge, abilities, skills, and other characteristics (e.g., motives, traits, attitudes, personality characteristics), so-called KSAOs, that are needed for effective performance on the job, and that characterize exceptional performers. Ideally, such a model consists of a set of competencies that have been identified as necessary for successful performance, with behavioral indicators associated with high performance on each competency specified.11

How does competency modeling differ from job analysis? A rigorous comparison concluded that competency approaches typically include a fairly substantial effort to understand an organization's business context and competitive strategy and to establish some direct line-of-sight between individual competency requirements and the broader goals of an organization. Job analyses, on the other hand, typically do not make this connection, but their level of rigor and documentation are more likely to enable them to withstand the close scrutiny of a legal challenge. As currently practiced, therefore, competency modeling is not a substitute or replacement for job analysis.

Neither job analysis nor competency modeling is a singular approach to studying work, and there is much variability in the ways they are implemented in actual practice. Moreover, no single type of description of work content (competencies, KSAOs, work activities, performance standards) is appropriate for all purposes, and purpose is a key consideration in choosing any particular approach to the study of work.

A number of methods are available to study jobs. At the outset it is important to note that none of them alone is sufficient. Rather, it is important to use a combination of them to obtain a total picture of the task and the physical, mental, social, and environmental demands of a job. Here are five common methods of job analysis:

1. Job performance. With this approach, an analyst actually performs the job under study to get firsthand exposure to what it demands.

2. Observation. The analyst simply observes a worker or group of workers doing a job. Without interfering, the analyst records the what, why, and how of the various parts of the job. Usually this information is recorded in a standard format.

3. Interview. In many jobs in which it is not possible for the analyst actually to perform the job (e.g., airline pilot) or where observation is impractical (e.g., architect), it is necessary to rely on workers' own descriptions of what they do, why, and how. As with recordings of observations, use a standard format to collect input from all workers sampled to interview. In this way all questions and responses can be restricted to job-related topics. More importantly, standardization makes it possible to compare what different people are saying about the job in question.

4. Critical incidents. These are vignettes comprising brief actual reports that illustrate particularly effective or ineffective worker behaviors. For example:

On January 14, Mr. Vin, the restaurant's wine steward, was asked about an obscure bottle of wine. Without hesitation, he described the place of vintage and bottling, the meaning of the symbols on the label, and the characteristics of the grapes in the year of vintage.

After collecting many of these little incidents from knowledgeable individuals, it is possible to abstract and categorize them according to the general job area they describe. The end result is a fairly clear picture of actual job requirements.

5. Structured questionnaires. These questionnaires list tasks, behaviors (e.g., negotiating, coordinating, using both hands), or both. Tasks focus on what gets done. This is a job-oriented approach. Behaviors, on the other hand, focus on how a job is done. This is a worker-oriented, or ability-requirements, approach. Workers rate each task or behavior in terms of whether or not it is performed, and, if it is, they rate characteristics such as frequency, importance, level of difficulty, and relationship to overall performance. The ratings provide a basis for scoring the questionnaires and for developing a profile of actual job requirements.13 The ability to represent job content in terms of numbers allows relatively precise comparisons across different jobs.14 One of the most popular structured questionnaires is the position analysis questionnaire (PAQ).

· Information input: where and how the worker gets the information to do her or his job.

· Mental processes: the reasoning, planning, and decision making involved in a job.

· Work output: physical activities as well as the tools or devices used.

· Relationships with other persons.

· Job context: physical and social.

· Other job characteristics: for example, apparel, work continuity, licensing, hours, and responsibility.

The items provide either for checking a job element if it applies or rating it on a scale, such as in terms of importance, time, or difficulty. An example of some PAQ items is shown in Figure 5-3. Cumulative research indicates that the ratings are quite stable over time.16

While structured job analysis questionnaires are growing in popularity, the newest applications are Web-based, and use company intranets and computer-generated graphics to help illustrate similarities and differences across jobs and organizational units. An additional benefit is that the products of the job analysis are available anytime, anywhere, to anyone who has access to the company's intranet.17

The preceding five methods of job analysis represent the popular ones in use today. Table 5-1 considers the pros and cons of each method. Regardless of the method used, the workers providing job information to the analyst must be experienced and knowledgeable about the jobs in question.18 Trained analysts tend to provide the highest levels of agreement about the components of jobs,19 although there seem to be no differences in the quality of information provided by members of different gender or race/ethnic subgroups,20 or by high as opposed to low performers.21 Incumbents, however, tend to provide higher ratings of abilities required in a job than do supervisors or trained job analysts.22 In terms of the types of data actually collected, the most popular methods today are observation, interviews, and structured questionnaires.

The management position description questionnaire (MPDQ) is a 197-item, behaviorally based instrument for describing, comparing, classifying, and evaluating executive positions in terms of their content.23 An example of one portion of the MPDQ is shown in Figure 5-4.

Given such a wide choice among available job analysis methods, the combination of methods to use is the one that best fits the purpose of the job analysis research (e.g., staffing, training design, performance appraisal). It is simply not true that a single type of job analysis can support any HR activity. Table 5-2 is a matrix that suggests some possible match-ups between job analysis methods and various purposes. For example, the job performance method of job analysis is most appropriate for the development of tests and interviews, training design, and the design of performance appraisal systems.

These are necessary to allow people to work with the kinds of descriptors that are most useful for the questions they are asking. These descriptors include tasks, abilities, skills, areas of knowledge, and work context. Such organization allows one to ask how specific skills are related to different types of work activities.

Because job-specific information can change rapidly, the O*Net uses general descriptors that are more stable. O*Net permits job-specific information but does so within the organizing structure of broader descriptors, such as generalized work activities (as in the PAQ) like “selling or influencing others,” “assisting or caring for others.”

This approach to occupational classification allows information to be summarized and assigned to fewer categories. Because O*Net is concerned both with positions and occupations, a broad range of descriptors was developed. For example, some focus on key skills needed to perform specific jobs, while others are concerned with broader organizational and contextual factors, such as organizational climate. Descriptors within each content domain were then arranged in a hierarchy.

(Source: N. G. Peterson, M. D. Mumford, W. C. Borman, P. R. Jeanneret, E. A. Fleishman, K. Y. Levin, M. A. Campion, M. S. Mayfield, F. P. Morgeson, K. Pearlman, M. K. Gowing, A. R. Lancaster, M. B. Silver, & D. M. Dye. Understanding work using the Occupational Information Network (O*Net): Implications for practice and research. Personnel Psychology, 54, 2001, p. 458.)

In the past, WP tended to be a reactive process because business needs usually defined human resource needs. For example, in the past a bank might decide to acquire a rival because it made good economic sense. Only after that decision was made would the bank worry about deploying talent in the two firms and integrating the two workforces. Today, major changes in business, economic, and social environments are forcing organizations to integrate business planning with WP and to adopt a longer-term, proactive perspective.28 For example, according to the vice president of human resources at Liz Claiborne Inc.:

Human resources is part of the strategic [business] planning process. It's part of policy development, line extension planning, and merger and acquisition processes. Little is done in the company that doesn't involve us in the planning, policy, or finalization stages of any deal.29

Change, as well as the pace of change, is accelerating. Thus at Cisco Systems, executives think not in terms of calendar years, but rather in terms of Internet years, where each calendar year is equivalent to seven Internet years. Based on this reality, Chief Executive John Chambers says, “Instead of looking at a one-year plan, we began looking at every quarter and adjusting our plan up or down.30 To address human resource concerns systematically, firms now recognize that they need short-term as well as long-term solutions. As usually practiced, job analysis identifies qualities that employees need to perform existing jobs. Yet rapid changes in technology mean that the jobs of the future will differ radically from those of the present.31 Ideally, technology will help workers make decisions in organizations that encourage them to do so.32 Methods are available now for identifying skill and ability requirements for jobs that do not yet exist. These are known as future-oriented, or “strategic” job analyses.33 They can provide additional, relevant information to general business plans. General business plans, in turn, may be strategic or tactical in nature. Let's consider them further in the following section.

Defining philosophy. Why does the organization exist? What unique contribution does it make?

Formulating statements of identity, purpose, and objectives. What is the overall mission of the organization? What are its goals? Are the missions and goals of strategic business units consistent with the mission of the organization?

Evaluating strengths, weaknesses, and competitive dynamics. What factors, internal or external, may enhance or inhibit the ability of the organization to achieve its objectives?

Determining design. What are the components of the organization, what should they do, and how should they relate to one another to achieve the objectives and fulfill the mission of the organization?

Developing strategies. How will the objectives, at every level, be achieved? How will they be measured, not only in quantitative terms of what is to be achieved, but also in terms of time?

Devising programs. What will be the components of each program, and how will the effectiveness of each program be measured?

The biggest benefit of strategic planning is its emphasis on growth, for it encourages managers to look for new opportunities rather than simply cutting more workers. But the danger of strategic planning is that it may lock companies into a particular vision of the future—one that may not come to pass. This poses a dilemma: how to plan for the future when the future changes so quickly. The answer is to make the planning process more democratic. Instead of relegating strategic planning to a separate staff—as in the past—it needs to include a wide range of people, from line managers to customers to suppliers. Top managers must listen and be prepared to shift plans in midstream, if conditions demand it. This is exactly the approach that Cisco Systems takes. It is not wedded to any particular technology, because it recognizes that customers are the arbiters of choice. It listens carefully to its customers and then offers solutions that customers want. Sometimes this means acquiring other companies to provide the technology that will satisfy customer demands. Indeed, Cisco has acquired more than 85 companies in the last decade. This mindset enables Cisco to move in whatever directions that markets and customers dictate.35

Strategic planning differs considerably from short-range tactical (or operational) planning. It involves fundamental decisions about the very nature of the business. Strategic planning may result in new business acquisitions, divestitures of current (profitable or unprofitable) product lines, new capital investments, or new management approaches.36 It provides direction and scope to tactical planning.

Workforce planning parallels the plans for the business as a whole. WP focuses on questions such as these: What do the proposed business strategies imply with respect to human resources? What kinds of internal and external constraints will (or do) we face? For example, restrictive work rules in a collective bargaining contract are an internal constraint, while a projected shortfall in the supply of college graduate electrical engineers (relative to the demand for them by employers) is an external constraint. What are the implications for staffing, compensation practices, training and development, and management succession? What can be done in the short run (tactically) to prepare for long-term (strategic) needs? Work-force plans must be consistent with the broader HR strategy of an organization. HR strategy, in turn, must be consistent with the overall strategy of the business. We examine this relationship further in the next section.

Human resource (HR) strategy parallels and facilitates implementation of the strategic business plan. HR strategy is the set of priorities a firm uses to align its resources, policies, and programs with its strategic business plan. It requires a focus on planned major changes in the business and on critical issues such as the following: What are the HR implications of the proposed business strategies? What are the possible external constraints and requirements? What are the implications for management practices, management development, and management succession? What can be done in the short term to prepare for longer-term needs? In this approach to the strategic management of human resources, a firm's business strategy and its HR strategy are interdependent.37

Figure 5-6 is a model that shows the relationship of HR strategy to the broader business strategy.38 Briefly, the model shows that planning proceeds top-down, while execution proceeds bottom-up. There are four links in the model, beginning with the fundamental question “How do we compete?” As we noted earlier, firms may compete on a number of nonindependent dimensions, such as innovation, quality, cost leadership, or speed. From that, it becomes possible to identify business or organizational processes that the firm must execute well in order to compete (e.g., speedy order fulfillment). When processes are executed well, the organization delights its internal and external customers through high performance. This may occur, for example, when an employee presents a timely, cost-effective solution to a customer's problem.

· Decentralizing decision making to autonomous units and employees.

· Linking performance measures for employees to financial performance indicators.

HR metrics serve as a kind of overlay to the model itself. HR metrics should reflect the key drivers of individual, team, and organizational performance. When they do, the organization is measuring what really matters.

Workforce plans must flow from, and be consistent with, the overall business and HR strategies. Figure 5-7 shows the relationship between business planning—long range, mid range, and annual—and parallel processes that occur in work-force planning.

Realistically, HR concerns become business concerns and are dealt with only when they affect the line manager's ability to function effectively.41 Such concerns may result from an immediate issue, such as downsizing or a labor shortage or from a longer-term issue that can be felt as if it were an immediate issue, such as management development and succession planning. On the other hand, people-related business issues such as workforce diversity, changing requirements for managerial skills, no-growth assumptions, mergers, retraining needs, and health and safety are issues that relate directly to the competitiveness of an organization and threaten its ability to survive. In short, progressive firms recognize that people-related business issues will have powerful impacts on their strategic business and workforce planning for the foreseeable future.

· A talent inventory to assess current human resources (skills, abilities, and potential) and to analyze how they are currently being used.

· A workforce forecast to predict future people requirements (the number of workers needed, the number expected to be available based on labor market characteristics, the skills mix required, internal versus external labor supply).

· Action plans to enlarge the pool of people qualified to fill the projected vacancies through such actions as recruitment, selection, training, placement, transfer, promotion, development, and compensation.

· Control and evaluation to provide feedback on the overall effectiveness of the human resource planning system by monitoring the degree of attainment of HR objectives.

A talent inventory is a fundamental requirement of an effective WP system. It is an organized database of the existing skills, abilities, career interests, and experience of the current workforce. Prior to actual data collection, however, certain strategic questions must be addressed:

1. Who should be included in the inventory?

2. What specific information must be included for each individual?

3. How can this information best be obtained?

4. What is the most effective way to record such information?

5. How can inventory results be reported to top management?

6. How often must this information be updated?

7. How can the security of this information be protected?

Answers to these kinds of questions will provide both direction and scope for subsequent efforts. For example, in answering question 1, some firms have decided to include only management, technical, and professional employees. They focus on staffing, training, assignment, and succession planning at all levels of these employees. At low levels, large numbers of managerial, technical, and professional employees may exist, and the need to identify potential is great. At high levels, major concern is with the breadth of each person's experience so as to facilitate future assignments.

Other organizations (e.g., high-technology firms) have chosen to include all employees in the talent inventory, because assignments may change frequently, and temporary task forces often are assembled for short-term projects. In almost all organizations, talent inventories are stored electronically. When they are linked to other databases, such information can be used to form a complete human resource information system (HRIS) that is useful in a variety of situations.43

Information such as the following is typically included in a profile developed for each manager or nonmanager:

· Current position information.

· Previous positions in the company.

· Other significant work experience (e.g., other companies, military).

· Education (including degrees, licenses, certifications).

· Language skills and relevant international experience.

· Training and development programs attended.

· Community or industry leadership responsibilities.

· Current and past performance appraisal data.

· Disciplinary actions.

· Awards received.

Although secondary uses of the talent inventory data may emerge, it is important to specify the primary uses at the concept development stage. Doing so provides direction and scope regarding who and what kinds of data should be included. Some common uses of a talent inventory include identification of candidates for promotion, management succession planning, assignment to special projects, transfer, training, workforce diversity planning and reporting, compensation planning, career planning, and organizational analysis.

Talent inventories and workforce forecasts must complement each other; an inventory of present talent is not particularly useful for planning purposes unless it can be analyzed in terms of future workforce requirements. On the other hand, a forecast of workforce requirements is useless unless it can be evaluated relative to the current and projected future supply of workers available internally. Only at that time, when we have a clear understanding of the projected surpluses or deficits of employees in terms of their numbers, their skills, and their experience, does it make sense to initiate action plans to rectify projected problems.

The purpose of workforce forecasting is to estimate labor requirements at some future time period. Such forecasts are of two types: (1) the external and internal supply of labor and (2) the aggregate external and internal demand for labor. We consider each type separately because each rests on a different set of assumptions and depends on a different set of variables.45

Internal supply forecasts relate to conditions inside the organization, such as the age distribution of the workforce, terminations, retirements, and new hires within job classes. Both internal and external demand forecasts, on the other hand, depend primarily on the behavior of some business factor (e.g., student enrollments, projected sales, product volume) to which human resource needs can be related. Unlike internal and external supply forecasts, demand forecasts are subject to many uncertainties—in domestic or worldwide economic conditions, in technology, and in consumer behavior, to name just a few. The Occupational Outlook Handbook, published by the U.S. Department of Labor, focuses on macro forecasts of aggregate demand for various occupations. Figure 5-9 shows an excerpt of one such forecast for the fastest growing occupations from 2002 to 2012. In the following sections we will consider several micro-or firm-level workforce forecasting techniques that have proven to be practical and useful.

(Source: Occupational Outlook Handbook, 2004-05 edition. Washington, DC: U.S. Department of Labor.)

The recruiting and hiring of new employees are essential activities for virtually all firms, at least over the long run. Whether due to projected expansion of operations or normal workforce attrition, forays into the labor market are necessary.

This is the one activity that is pervasive, well accepted, and integrated with strategic business planning among firms that do WP.49 In fact, succession planning is considered by many firms to be the sum and substance of WP. Here is an overview of how several companies do it.

Both GE and IBM have had similar processes in place for decades, and many other firms have modeled theirs on these two approaches. The stated objective of both programs is “to assure top quality and ready talent for all executive positions in the corporation worldwide.” Responsibility for carrying out this process rests with line executives from division presidents up to the chief executive officer (CEO). Staff support is provided by an executive resource staff located within the corporate HR function. Each responsible executive makes a formal presentation to a corporate policy committee consisting of the chairman, the vice chairman, and the president. The presentation usually consists of an overall assessment of the strengths and weaknesses of the unit's executive resources, the present performance and potential of key executives and potential replacements (supplemented with pictures of the individuals involved), and rankings of all incumbents of key positions in terms of present performance and expected potential. At Home Depot, for example, the CEO participates in the reviews of each of the company's 130 officers, keeps detailed notes, and scrutinizes every promotion.50Figure 5-10 is an abbreviated example of a succession planning chart for an individual manager.

The policy committee reviews and critiques this information and often provides additional insights to line management on the strengths and weaknesses both of incumbents and their replacements. Sometimes the committee will even direct specific career-development actions to be accomplished before the next review.51

ETHICAL DILEMMA Should Succession Plans Be Secret?

This is a thorny issue. If firms keep HR planning information about specific candidates secret, planning may have limited value. Thus, at a software company, a senior executive on her way out the door for a president's job at a competitor was told that the firm had expected her to be its next president. Her response? “If I'd known, I would have stayed.”

A somewhat different course of events transpired at another firm whose policy was to talk openly about prospective candidates. There, employees learned what the company had in mind for them over the next three to five years. Subsequently, when they did not get the jobs they thought they were entitled to, employees felt betrayed. Some sued, others left. In your view, is it unethical to share planning information with employees and then not follow the plan? Conversely, do employees have a right to see such information?

As an example, consider Hong Kong's richest man, 75-year-old Li Ka-shing, who is still at the helm of two of Asia's biggest companies, with businesses that range from telecommunications operations in Asia and Europe to the world's largest network of shipping ports. Mr. Li has never publicly announced his succession plans, which are the source of constant speculation in Hong Kong financial circles. Without a succession plan in place, the company risks a crisis of confidence.54

In contrast, consider the CEO succession process at Teterboro (N.J.)-based Quest Diagnostics, a $4.7 billion medical testing company. It provides four key lessons for other firms:55

· Start early. The current CEO started thinking about succession five years before his departure, giving him plenty of time to groom his successor. He got the board involved from the start.

· Choose wisely. The current CEO put 200 executives from Quest and a recently acquired rival through day-long assessment center exercises (see Chapter 7), that is, decision-making assignments, that allowed him to see their leadership skills in action.

· Fix the big stuff. The current CEO worked on improving the speaking skills of the heir apparent, making him less of a micromanager and speeding up his decision making.

· Keep at it 24/7. In addition to daily training session with a coach, and unannounced tests, the current CEO and his likely successor spoke every Sunday about the successor's evolving management style.

One study of 228 CEO successions found that it is not the event of CEO succession per se, but rather the succession context that affects the subsequent performance of the firm. Successors may be outsiders or insiders. Insider successors may be followers who were promoted to CEO positions following the ordinary retirements of their predecessors. Alternatively, they may be contenders who were promoted to CEO positions following the dismissals of their predecessors. Focusing on the CEO's successor alone, however, without considering other changes within top management, provides an incomplete picture of the subsequent effect on the financial performance of the firm.56

The researchers showed that turnover among senior executives has a positive effect on a firm's profitability in contender succession but a negative impact in outsider succession. That is, outsider successors may benefit a firm's operations, but a subsequent loss of senior executives may outweigh any gains that come from the outsider successors themselves.

Furthermore, the tenure of the prior CEO also seems to extend to the early years of the successor's tenure. Specifically, lengthy tenure of the prior CEO leads to inertia, making it difficult for the successor to initiate strategic change. Conversely, if a departing CEO's tenure is too short, the firm may not have recovered sufficiently from the disruption of the previous succession. In other words, there is an inverted U-shaped relationship between departing CEO tenure and post-succession firm performance.57

Thus far we have been discussing succession planning in large firms. But what about small firms, such as family-owned businesses? Only about 30 percent of family businesses outlive their founders, usually for lack of planning. Because many founders of small companies started in the post—World War II boom are now retiring, the question of succession is becoming more pressing. Here are some of the ways families are trying to solve the problem:

· 25 percent plan to let the children compete and choose one or more successors with help from the board of directors.

· 35 percent plan to groom one child from an early age to take over.

· 15 percent plan to let the children compete and choose one or more successors, without input from a third party.

· 15 percent plan to form an “executive committee” of two or more children.

· 10 percent plan to let the children choose their own leader, or leaders.

Suppose the CEO dies suddenly? Plan ahead to establish a committee that would assume immediate control of the company while it searches for a permanent successor. Experts say that naming a successor too quickly can anger employees still coping with the loss of their boss.

In contrast to supply forecasting, demand forecasting is beset with multiple uncertainties—changes in technology; consumer attitudes and patterns of buying behavior; local, national, and international economies; number, size, and types of contracts won or lost; and government regulations that might open new markets or close off old ones, just to name a few. Consequently, forecasts of workforce demand are often more subjective than quantitative, although in practice a combination of the two is often used. One popular approach to demand forecasting is the Delphi technique.

The Delphi technique is a structured approach for reaching a consensus judgment among experts about future developments in any area that might affect a business (e.g., the level of a firm's future demand for labor). Originally developed as a method to facilitate group decision making, it has also been used in work-force forecasting. Experts are chosen on the basis of their knowledge of internal factors that might affect a business (e.g., projected retirements), their knowledge of the general business plans of the organization, or their knowledge of external factors that might affect demand for the firm's product or service and hence its internal demand for labor. Experts may range from first-line supervisors to top-level managers. Sometimes experts internal to the firm are used, but if the required expertise is not available internally, then one or more outside experts may be brought in to contribute their opinions. To estimate the level of future demand for labor, an organization might select as experts, for example, managers from corporate planning, human resources, marketing, production, and sales.

In one application, Delphi did provide an accurate one-year demand forecast for the number of buyers needed for a retailing firm.60 Here's a set of guidelines to make the Delphi process most useful:

· Give the expert enough information to make an informed judgment. That is, give him or her the historical data that have been collected as well as the results of any relevant statistical analysis that has been conducted, such as staffing patterns and productivity trends.

· Ask the kinds of questions a unit manager can answer. For example, instead of asking for total staffing requirements, ask by what percentage staffing is likely to increase or ask only about anticipated increases in key employee groups, such as marketing managers or engineers.

· Do not require precision. Allow the experts to round off figures, and give them the opportunity to indicate how sure they are of the forecasted figures.

· Keep the exercise as simple as possible, and especially avoid questions that are not absolutely necessary.

· Be sure that all experts have a common understanding of classifications of employees and other definitions.

· Enlist top management's and experts' support for the Delphi process by showing how good forecasts will benefit the organization and small-unit operations and how they will affect profitability and workforce productivity.61

Accuracy in forecasting the demand for labor varies considerably by firm and by industry type (e.g., utilities versus women's fashions): roughly from a 2 to 20 percent error factor. Certainly factors such as the duration of the planning period, the quality of the data on which forecasts are based (e.g., expected changes in the business factor and labor productivity), and the degree of integration of WP with strategic business planning all affect accuracy. How accurate a labor demand forecast should be depends on the degree of flexibility in staffing the workforce. That is, to the extent that people are geographically mobile, multiskilled, and easily hired, there is no need for precise forecasts.62

IMPACT OF JOB ANALYSIS AND WORKFORCE PLANNING ON PRODUCTIVITY, QUALITY OF WORK LIFE, AND THE BOTTOM LINE

As noted earlier, jobs are dynamic, not static, in their requirements. This is especially true of jobs at the bottom and at the top of today's organizations. Entry-level jobs now demand workers with new and different kinds of skills. Even simple clerical work now requires computer knowledge, bank tellers need more knowledge of financial transactions and sales techniques, and foreign competition means that assembly line workers need more sophisticated understanding of mathematics and better reading and reasoning skills to cut costs and improve quality.64

Current information on the behavioral requirements of jobs is critically important if firms are to develop meaningful specifications for selecting, training, and appraising the performance of employees in them and if employees are to perform their jobs successfully. Workforce planning information is no less important so that firms can institute action plans now to cope with projected HR needs in the future.

What are firms actually doing? A recent survey of 2,100 firms by the Hay Group found that workforce planning was formal and well developed at only 21 percent of the firms. It was undeveloped or rudimentary at another 30 percent. Most firms said that finding and keeping key people is a top priority.65 However, without solid planning they may miss seeing the need for new talent and the need to develop new ways of selecting and training that talent.

The purpose of control and evaluation is to guide WP activities, identifying deviations from the plan and their causes. For this reason, we need yardsticks to measure performance. Qualitative and quantitative objectives can both play useful roles in WP. Quantitative objectives make the control and evaluation process more objective and measure deviations from desired performance more precisely. Nevertheless, the nature of evaluation and control should always match the degree of development of the rest of the WP process. In newly instituted WP systems, for example, evaluation is likely to be more qualitative than quantitative, with little emphasis placed on control. This is because supply-and-demand forecasts are likely to be based more on “hunches” and subjective opinions than on hard data. Under these circumstances, workforce planners should attempt to assess the following:66

· The extent to which they are tuned in to workforce problems and opportunities and the extent to which their priorities are sound.

· The extent to which decision makers, from line managers who hire employees to top managers who develop long-term business strategy, are making use of WP forecasts, action plans, and recommendations.

· The perceived value of WP among decision makers (do they view the information provided by human resource planners as useful to them in their own jobs?).

In more established WP systems, in which objectives and action plans are both underpinned by measured performance standards, key comparisons might include the following:67

· Actual staffing levels against forecast staffing requirements.

· Actual levels of labor productivity against anticipated levels of labor productivity.

· Actual employee flow rates against desired rates.

· Action programs implemented against action programs planned (were there more or fewer? why?).

· The actual results of the action programs implemented against the expected results (e.g., improved applicant flows, lower quit rates, improved replacement ratios).

· Labor and action program costs against budgets.

· Ratios of action program benefits to action program costs.

The advantage of quantitative information is that it highlights potential problem areas and can provide the basis for constructive discussion of the issues.

IMPLICATIONS FOR MANAGEMENT PRACTICE

More and more, workforce issues are seen as people-related business issues. This suggests that as a manager you should do the following:

· Keep a management view, not an HR staff department view, of critical issues and opportunities. Consider a comment by the director of HR at Merck & Co.:

Line managers are starting to address the needs of individual and organizational performance—for example, they know why every job exists in the organization, who the people in these jobs are, and how competent they are; and they know it is important to keep their skills updated. There is a saying at Merck: “Human resources are too important to be left to the HR department.” Fully one-third of the performance evaluation of line managers is related to people management.68

· Plan within the context of managing the business strategically.

· Execute business and HR strategies—doing so requires effective management consensus, communications designed to educate, and involvement of all parties. Tight linkage, as at Sysco Corporation, Northwestern Mutual Life Insurance, Mary Kay Cosmetics, and Tandy Corporation, can lead to consistent levels of high performance. As one CEO noted: “We don't make financial, marketing, technical, or human resources decisions—we make business decisions [and] we routinely involve all the functions.”69

One of the new ideas that you, as Pat Evans, had for recruiting junior civil engineers was to develop a video that illustrated each of the seven essential functions of the job: modeling and calculations, computer software applications, project planning and management, written communications, individual and group interactions, summary and synthesis of data, and problem resolution. Using a narrator, a script, and actual engineers at Western, the video would, in your opinion, ensure that job applicants developed a realistic picture of what it's like to work at Western. Because the company always seemed to have many more applicants than positions, you thought that perhaps the video might help to reduce turnover among new hires, especially if they could get a good idea ahead of time of what they'd be getting into. Just as the company was selective about whom it chose to hire, the video would provide job applicants with information that would help them make informed decisions about their future employer.

Another application of the job dimensions and the video was in selection. You could visualize a “technical oral interview” in which candidates would be asked to describe their experiences in dealing with each of the seven major areas revealed by the job analysis. Interviewers would then ask follow-up questions in a systematic manner to elicit relevant information, and, based on the recruiting video job applicants had seen, they too could ask meaningful questions of the interviewers. Finally, it occurred to you that the very same job dimensions identified by the job analysis could, with a little elaboration, also be used as bases for judging the performance of junior civil engineers. You thought: “I love to mine information from a report, and that job analysis report has really been a gold mine for me and for engineering at Western.”

We are witnessing vast changes in the very nature of work itself, as well as in the types and numbers of jobs available. To reduce uncertainty and increase efficiency, careful attention needs to be paid to a thorough understanding of the behavioral requirements of jobs and to workforce planning.

A written summary of the task requirements for a particular job is called a job description, and a written summary of people requirements is called a job specification. Together they comprise a job analysis. This information is useful for a variety of organizational purposes ranging from workforce planning to career counseling.

Some combination of available job analysis methods (job performance, observation, interviews, critical incidents, structured questionnaires) should be used, and all have both advantages and disadvantages. Key considerations in the choice of methods are the method-purpose fit, cost, practicality, and an overall judgment of the appropriateness of the methods for the situation in question.

Job analysis provides one input to the workforce planning process. Strategic and operational planning provide others. Strategic business planning is the long-range process of setting organizational objectives and deciding on action programs to achieve those objectives. Operational, or tactical, planning deals with the normal, ongoing growth of current operations or with specific problems that temporarily disrupt the pace of normal growth. Annual budgeting decisions provide specific timetables, allocations of resources, and implementation standards. The shorter the planning time frame, the more specific the planning details must be.

Human resource (HR) strategy parallels and facilitates implementation of the strategic business plan. HR strategy is the set of priorities a firm uses to align its resources, policies, and programs with its strategic business plan. Workforce plans flow from, and are consistent with, the overall business and HR strategies. Broadly speaking, WP is an effort to anticipate future business and environmental demands on an organization and to meet the people requirements dictated by those conditions. This general view suggests several interrelated activities that together comprise an integrated WP system. These include (1) an inventory of talent currently on hand, (2) forecasts of labor supply and demand over short-and long-term periods, (3) action plans such as training or job transfer to meet forecasted HR needs, and (4) control and evaluation procedures.

· job analysis

· job description

· job specification

· competency models

· competencies

· O*Net

· workforce planning

· strategic planning

· tactical planning

· HR strategy

· workforce forecasting

· succession plan

· Delphi technique

First Bank is a large, federally chartered bank located in a rapidly growing area in the southwestern United States. Over the past several years, First Bank experienced a significant expansion in size and operations, and a rapid influx of new employees at all organizational levels. As it expanded and matured, the bank began to recognize its pressing need for talented, knowledgeable managers. Much talent had been hired from outside the bank over the past several years, but top management had become convinced that the long-run health of the bank depended on being able to develop managerial talent internally.

Linda Bishop had recently been hired to develop and install a new workforce planning (WP) system at First Bank. She had previous experience both in banking and in workforce planning, so she seemed like a logical choice for the job. On the basis of her prior experience, Linda knew that many banking functions cross divisional lines and require managers with broad exposure to important areas within the bank. Further, she knew that division heads operate with a high degree of autonomy and that divisional and corporate objectives are not always directly aligned. Therefore, Linda knew that the new WP process would have to be corporatewide in scope. Only from that perspective could a planner assess bankwide, long-run workforce needs.

When Linda arrived at her new job, her boss had informed her that the focus of the WP system was to be on management development and succession planning. To emphasize that focus, she was given the title of Director of Management Development and Workforce Planning. The position had corporatewide staff authority over all presently existing activities that related to management development and workforce planning. Today, Linda is thinking about a briefing that she is to give the executive officers of the bank next week. They have asked her to provide them with a statement of the objectives of the new WP system as she sees it, an outline of the potential benefits that might accrue to the bank, and a list of suggested steps in the implementation of the WP system.

Questions

If you were Linda Bishop, what would you be prepared to say to the executive officers in terms of:

1. The objectives of WP?

2. The potential benefits of WP?

3. Important steps in the implementation of the WP system?

1Bridges, W. (1994a, September 19). The end of the job. Fortune, pp. 62-64, 68, 72, 74. See also Bridges, W. (1994b). Job shift: How to prosper in a world without jobs. Reading, MA: Addison-Wesley.

2Milkovich, G. T., & Newman, J. M. (2005). Compensation management (8th ed.). New York: McGraw-Hill.

3Joinson, C. (2001). Refocusing job descriptions. HRMagazine, 46 (1), 66-72.

4Pearlman, K., & Barney, M. F. (2000). Selection for a changing workplace. In J. F. Kehoe (ed.), Managing selection in changing organizations. San Francisco: Jossey-Bass, pp. 3-72.

5Sackett, P. R., & Laczo, R. M. (2003). Job and work analysis. In W. C. Borman, D. R. Ilgen, & R.J. Klimoski (eds.), Handbook of psychology (vol. 12). Industrial and organizational psychology. Hoboken, NJ: Wiley, pp. 21-37.

6Lindell, M. K., Clause, C. S., Brandt, C. J., & Landis, R. S. (1998). Relationship between organizational context and job analysis task ratings. Journal of Applied Psychology, 83, 769-776.

7A systematic procedure for developing minimal qualifications was presented by Levine, E. L., May, D. M., Ulm, R. A., & Gordon, T. R. (1997). A methodology for developing and validating minimum qualifications (MQs). Personnel Psychology, 50, 1009-1023.