Sikkim Manipal University - MBA - MU0010 – Manpower Planning and Resourcing

Semester: 3 - Assignment Set: 1

Q.1 What are the obstacles in Manpower Planning

Following are the main obstacles that organizations face in the process of manpower planning:

1. Under Utilization of Manpower: The biggest obstacle in case of manpower planning is the fact
that the industries in general are not making optimum use of their manpower and once manpower
planning begins, it encounters heavy odds in stepping up the utilization.
2. Degree of Absenteeism: Absenteeism is quite high and has been increasing since last few years.
3. Lack of Education and Skilled Labour: The extent of illetracy and the slow pace of development
of the skilled categories account for low productivity in employees. Low productivity has implications
for manpower planning.
4. Manpower Control and Review:
a. Any increase in manpower is considered at the top level of management
b. On the basis of manpower plans, personnel budgets are prepared. These act as control
mechanisms to keep the manpower under certain broadly defined limits.
c. The productivity of any organization is usually calculated using the formula:

Productivity = Output / Input

. But a rough index of employee productivity is calculated as follows:

Employee Productivity = Total Production / Total no. of employees

d. Exit Interviews, the rate of turnover and rate of absenteesim are source of vital
information on the satisfaction level of manpower. For conservation of Human Resources
and better utilization of men studying these condition, manpower control would have to
take into account the data to make meaningful analysis.
e. Extent of Overtime: The amount of overtime paid may be due to real shortage of men,
ineffective management or improper utilization of manpower. Manpower control would
require a careful study of overtime statistics.

Few Organizations do not have sufficient records and information on manpower. Several of those who
have them do not have a proper retrieval system. There are complications in resolving the issues in
design, definition and creation of computerized personnel information system for effective manpower
planning and utilization. Even the existing technologies in this respect is not optimally used. This is a
strategic disadvantage.

Q.2 Explain demand forecasting techniques.

A demand forecast is the prediction of what will happen to your company's existing product sales. It
would be best to determine the demand forecast using a multi-functional approach. The inputs from
sales and marketing, finance, and production should be considered. The final demand forecast is the
consensus of all participating managers. You may also want to put up a Sales and Operations Planning
group composed of representatives from the different departments that will be tasked to prepare the
demand forecast.

Determination of the demand forecasts is done through the following steps:

• Determine the use of the forecast
• Select the items to be forecast
• Determine the time horizon of the forecast
Sikkim Manipal University - MBA - MU0010 – Manpower Planning and Resourcing

Semester: 3 - Assignment Set: 1

• Select the forecasting model(s)

• Gather the data
• Make the forecast
• Validate and implement results

The time horizon of the forecast is classified as follows:

Description Forecast Horizon

Short-range Medium-range Long-range
Duration Usually less than 3 3 months to 3 years More than 3 years
months, maximum of 1
year

Applicability Job scheduling, worker Sales and production New product

assignments planning, budgeting development, facilities
planning

How is demand forecast determined?

There are two approaches to determine demand forecast – (1) the qualitative approach, (2) the
quantitative approach. The comparison of these two approaches is shown below:

Description Qualitative Approach Quantitative Approach

Applicability Used when situation is vague & little Used when situation is stable &
data exist (e.g., new products and historical data exist
technologies)
(e.g. existing products, current
technology)

Considerations Involves intuition and experience Involves mathematical techniques

Techniques Jury of executive opinion Time series models

Sales force composite Causal models

Delphi method

Consumer market survey

Qualitative Forecasting Methods

Your company may wish to try any of the qualitative forecasting methods below if you do not have
historical data on your products' sales.

Qualitative Method Description

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Semester: 3 - Assignment Set: 1

Jury of executive opinion The opinions of a small group of high-level managers are pooled
and together they estimate demand. The group uses their
managerial experience, and in some cases, combines the results of
statistical models.

Sales force composite
Each salesperson (for example for a territorial coverage) is asked to
project their sales. Since the salesperson is the one closest to the
marketplace, he has the capacity to know what the customer
wants. These projections are then combined at the municipal,
provincial and regional levels.

Delphi method A panel of experts is identified where an expert could be a decision

maker, an ordinary employee, or an industry expert. Each of them
will be asked individually for their estimate of the demand. An
iterative process is conducted until the experts have reached a
consensus.

Consumer market survey The customers are asked about their purchasing plans and their
projected buying behavior. A large number of respondents is
needed here to be able to generalize certain results.

Quantitative Forecasting Methods

There are two forecasting models here – (1) the time series model and (2) the causal model. A time
series is a s et of evenly spaced numerical data and is o btained by observing responses at regular time
periods. In the time series model , the forecast is based only on past values and assumes that factors
that influence the past, the present and the future sales of your products will continue.

On the other hand, t he causal model uses a mathematical technique known as the regression
analysis that relates a dependent variable (for example, demand) to an independent variable (for
example, price, advertisement, etc.) in the form of a linear equation. The time series forecasting
methods are described below:

Description

Time Series Forecasting

Method
Naïve Approach Assumes that demand in the next period is the same as demand in
most recent period; demand pattern may not always be that stable

For example:

If July sales were 50, then Augusts sales will also be 50

Description
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Semester: 3 - Assignment Set: 1

Time Series Forecasting

Method
Moving Averages (MA) MA is a series of arithmetic means and is used if little or no trend is
present in the data; provides an overall impression of data over time

A simple moving average uses average demand for a fixed

sequence of periods and is good for stable demand with no
pronounced behavioral patterns.

Equation:

F 4 = [D 1 + D2 + D3] / 4

F – forecast, D – Demand, No. – Period

(see illustrative example – simple moving average)

A weighted moving average adjusts the moving average method

to reflect fluctuations more closely by assigning weights to the most
recent data, meaning, that the older data is usually less important.
The weights are based on intuition and lie between 0 and 1 for a
total of 1.0

Equation:

WMA 4 = (W) (D3) + (W) (D2) + (W) (D1)

WMA – Weighted moving average, W – Weight, D – Demand, No. –

Period

(see illustrative example – weighted moving average)

Exponential Smoothing The exponential smoothing is an averaging method that reacts
more strongly to recent changes in demand by assigning a
smoothing constant to the most recent data more strongly; useful if
recent changes in data are the results of actual change (e.g.,
seasonal pattern) instead of just random fluctuations

F t + 1 = a D t + (1 - a ) F t

Where

F t + 1 = the forecast for the next period

D t = actual demand in the present period

F t = the previously determined forecast for the present period

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• = a weighting factor referred to as the smoothing constant

(see illustrative example – exponential smoothing)

Time Series The time series decomposition adjusts the seasonality by
Decomposition multiplying the normal forecast by a seasonal factor

(see illustrative example – time series decomposition)

Q.3 what are the inputs provided by HR for Manpower planning

Manpower Planning which is also called as Human Resource Planning consists of putting right number of
people, right kind of people at the right place, right time, doing the right things for which they are
suited for the achievement of goals of the organization. Human Resource Planning has got an important
place in the arena of industrialization. Human Resource Planning has to be a systems approach and is
carried out in a set procedure. The procedure is as follows:

1. Analysing the current manpower inventory

2. Making future manpower forecasts
3. Developing employment programmes
4. Design training programmes

Steps in Manpower Planning

1. Analysing the current manpower inventory- Before a manager makes forecast of future
manpower, the current manpower status has to be analysed. For this the following things have
to be noted-
• Type of organization
• Number of departments
• Number and quantity of such departments
• Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting.

2. Making future manpower forecasts- Once the factors affecting the future manpower forecasts
are known, planning can be done for the future manpower requirements in several work units.

The Manpower forecasting techniques commonly employed by the organizations are as follows:

i. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi
technique.
ii. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past
trends), indexation (using base year as basis), and statistical analysis (central tendency
measure).
iii. Work Load Analysis: It is dependent upon the nature of work load in a department, in a
branch or in a division.
iv. Work Force Analysis: Whenever production and time period has to be analysed, due
allowances have to be made for getting net manpower requirements.
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v. Other methods: Several Mathematical models, with the aid of computers are used to
forecast manpower needs, like budget and planning analysis, regression, new venture
analysis.
3. Developing employment programmes- Once the current inventory is compared with future
forecasts, the employment programmes can be framed and developed accordingly, which will
include recruitment, selection procedures and placement plans.
4. Design training programmes- These will be based upon extent of diversification, expansion
plans, development programmes,etc. Training programmes depend upon the extent of
improvement in technology and advancement to take place. It is also done to improve upon the
skills, capabilities, knowledge of the workers.

Importance of Manpower Planning

1. Key to managerial functions- The four managerial functions, i.e., planning, organizing, directing
and controlling are based upon the manpower. Human resources help in the implementation of
all these managerial activities. Therefore, staffing becomes a key to all managerial functions.
2. Efficient utilization- Efficient management of personnels becomes an important function in the
industrialization world of today. Seting of large scale enterprises require management of large
scale manpower. It can be effectively done through staffing function.
3. Motivation- Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmes, i.e., incentive plans to be framed for further
participation and employment of employees in a concern. Therefore, all types of incentive plans
becomes an integral part of staffing function.
4. Better human relations- A concern can stabilize itself if human relations develop and are strong.
Human relations become strong trough effective control, clear communication, effective
supervision and leadership in a concern. Staffing function also looks after training and
development of the work force which leads to co-operation and better human relations.
5. Higher productivity- Productivity level increases when resources are utilized in best possible
manner. higher productivity is a result of minimum wastage of time, money, efforts and
energies.This is possible through the staffing and it's related activities ( Performance appraisal,
training and development, remuneration)

Need of Manpower Planning

Manpower Planning is a two-phased process because manpower planning not only analyses the current
human resources but also makes manpower forecasts and thereby draw employment programmes.
Manpower Planning is advantageous to firm in following manner:

1. Shortages and surpluses can be identified so that quick action can be taken wherever required.
2. All the recruitment and selection programmes are based on manpower planning.
3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing
can be avoided.
4. It also helps to identify the available talents in a concern and accordingly training programmes
can be chalked out to develop those talents.
5. It helps in growth and diversification of business. Through manpower planning, human
resources can be readily available and they can be utilized in best manner.
6. It helps the organization to realize the importance of manpower management which ultimately
helps in the stability of a concern

Q.4 Write a detailed note on competency mapping system and its components.
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Competencies comprise the knowledge, skills, values and attributes demonstrated through behaviour
that results in competent and superior performance. Competency describes what superior performers
actually do on a job that produces superior results. Armed with this information, selection, retention,
training, succession planning and performance management systems can be integrated and designed to
attract, develop and retain top performers.

Classification of Competencies

Competencies can broadly be classified into two categories – Basic and Professional Competencies.
Basic competencies are inherent in all individuals. Only their degree of existence would be differing.
For example, problem solving is a competency that exists in every individual but in varying degrees.
Professional competencies are over and above the basic competencies, and are job related.

For example, handling a sales call effectively is a competency that a sales personnel would be required
to have. Hence, it can be simply said that,

Competencies = Basic Competencies + Professional Competencies

Types of Basic Competencies

The basic competencies encompass the following:

1. Intellectual Competencies : Those which determine the intellectual ability of a person.

2. Motivational Competencies : Those which determine the level of motivation in an individual.
3. Emotional Competencies : Those which determine an individual's emotional quotient.
4. Social Competencies : Those that determine the level of social ability in a person.

It has been proved by various scholars that all individuals have competencies. Only the combination
and degree of these competencies differ from individual to individual. Hence, organizations have to
identify the critical basic competencies required for individual employees to deliver their best in their
organization. The importance of mapping the competencies proves critical for organizational success.

Types of Professional Competencies:

The professional competencies encompass the knowledge, experience and expertise gained by an
individual employee.

Competency Mapping
Competency Mapping is a process of identifying the key competencies for an organization and/or a job
and incorporating those competencies throughout the various processes (i.e. job evaluation, training,
recruitment) of the organization.
Following are the steps included in competency mapping:
Step 1: To classify the competencies under the types of competencies.
Step 2: To determine type of competency that is the most critical for an oranisation.
Step 3: To determine the critical competencies that are required for superior performance at a given
level in the organization (educational institution).

Classification of the Basic Competencies in the Competency Grid

Motivational Competencies:
o Continuous Learning
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o Perseverance
o Achievement Orientation
o Time Management Intellectual Competencies:
o Communication
o Creativity
o Analytical Ability
o Planning and Organising
Social Competencies:
o Team Work
o Inter-personal Skills
o Responsibility
o Customer Satisfaction Emotional Competencies:
o Initiative
o Optimism
o Self Confidence
o Leadership
o Managing Stress
o Managing Change

Mapping the Competencies

A research survey can be conducted to test the level of competency of an employee based on the
above aspects. The researcher has to take into consideration only the well performing employees in an
organization while conducting the research survey. Because, the critical competencies needed for
excellent performance can be identified only from the well performing employees of an organization.
Hence, the researcher has to ignore the non-performing employees and has to conduct the survey only
with well performing employees. The top ten competencies perceived as important or vital by the well
performing employees can be emphasized for others in the organization. The other employees can be
conducted with training and development programmes to acquire the critical competencies.
Conclusion
Competency mapping helps an organization to identify the critical competencies that are essential for
employees to excel in an organization. By identifying the critical competencies existing with well
performing employees, the other employees can also be stressed with the same by conducting training
and development programmes.

Q.5 Discuss External sourcing in detail

A decision to buy goods from third party organizations when it is the best possible option and the
lowest cost for securing items necessary for operations. Some of the factors influencing the decision to
look outside the organization include capability of the company, the necessary skills, scheduling, and
financing requirements

Human Resources outsourcing appears to be increasing more each passing year.

Now this is truly a trend that is near and dear to our heart at Braun Consulting. According to sourcing
advisory firm Technology Partners International human resources is the fastest-growing segment of the
business process-outsourcing sector.

Research by the Yankee Group predicts that the domestic market for HR outsourcing, which involves
outsourcing at least three human resources functions, will reach $42 billion by 2008. You may recall
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Semester: 3 - Assignment Set: 1

that it took a billion minutes for history to advance from the time of Christ to current time. A billion is a
lot of money!

While the number of companies outsourcing their HR functions has increased, so has the number of
those who are actively shopping around.

The advisory firm Everest Group estimates that the average per-employee, per-year price for firms with
less than 25,000 employees fell to an average of $540 in 2004, compared with prices averaging $1082
per employee/year from 1998 through 2003.

Market consolidation is another developing trend in the industry. This consolidation of suppliers of HR
outsourcing has been driven in part by the fact that suppliers often need to buy niche expertise that
they lack and are unable to provide.

For example, last year Hewitt Associates bought Exult and this year Electronic Data Systems paid $420
million for the human resources outsourcing division of Towers Perrin. Affiliated Computer Services
bought Mellon Financial Corp.'s human resources consulting and outsourcing businesses for $405
million as well

Top Reasons Companies Outsource

The prospect of cutting costs and saving money is one of the primary motivators that companies begin
with when considering outsourcing.

Some analysts say that employers often begin to focus on business metrics like productivity,
profitability and employee satisfaction. In the end though savings seems to drive about half of
companies into HR outsourcing, while the other half don't rate savings as the main motivator.

This is born out by Hewitt Associates survey of 129 companies where they found that 45 percent didn't
rate cost savings as a top goal for their human resources outsourcing.

The top three reasons employees gave were:

1) gaining outside expertise,

2) improving service quality, and
3) focusing on their core business.

Bob Crow, a senior consultant for Watson Wyatt Worldwide's strategic sourcing practice puts it this
way, "The benefits of outsourcing to me are around structure, standardization, efficiency, technology,
compliance and risk mitigation. The yet-to-be-proven are radically improved service levels and cost
reduction on an ongoing basis."

The "comprehensive" types of outsourcing deals are not necessarily appropriate for all employers.

Some use a mix of in-house resources and outsourcing. In doing so they often have lower budgets and
fewer HR staff members per full-time employee than firms that either primarily handle human
resources internally or primarily outsource HR functions.

Measuring HR Outsourcing Results

UPS's method of outsourcing demonstrates the "multiple vendors" approach to HR outsourcing.

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ChoicePoint provides background checks. PricewaterhouseCoopers manages UPS' expatriates program.

CitiStreet manages UPS' 401(k) program. Hewitt Associates administers health care. Talx, a business
software and services provider, handles employment verifications. And Mellon Securities manages a
bonus stock program for UPS managers.

Despite large companies like Bank of America, Prudential Financial and Motorola signing comprehensive
human resources outsourcing deals, most companies outsource incrementally, according to a study
released in May by Watson Wyatt Worldwide.

Again, Bob Crow from Watson Wyatt Worldwide says that, "The value of the unbundled approach is that
you're getting the best services from those companies that specialize in those services. I'm pretty much
a fan of the unbundled model because a lot of companies don't like to have all of their eggs in one
basket, and it gives them leverage to negotiate if they keep it broken up."

However, some companies want "a single face" for their vendor or hope to use one human resources
information system. They consider it easier to manage and they too can get a better deal by adding
volume to their supplier relationship.

Even if the vendor contracts out some aspect of the outsourcing agreement the client still has only one
vender to deal with. According to a survey by Hewitt Associates employers seem to feel that this
approach leads to less employee confusion, better integration and easier coordination of services, as
well as less time dedicated to vendor management and more buying power.

In general, it seems that large companies like to go with one vendor and smaller companies will often
piecemeal out their outsourcing to various "unbundled" vendors.

Single Vs Multiple Vendors

When companies do HR outsourcing it is recommended that they link outsourced services to specific
definable objectives.

They may want to improve their technology and efficiency so might include metrics to evaluate actual
results. By doing this they can know if their processes are actually more efficient, if they are they
saving money, and if their technology is really better than it was before.

The HR services should be linked to recognizable an measurable outcomes. "Based on whatever

reasons you decide to outsource, you should mutually develop measures and metrics with your vendor
to ensure that those objectives are being met and achieved on a regular basis," says Bob Crow.

The type of data companies can look for include service levels, cost per person, timeliness, accuracy of
work, and customer satisfaction.

They can also look for the correlation between recruitment sources and recent-hire performance
results, or performance rankings to training investments. Another example might be to tie in employee
exit data with total rewards programs

Q.6 List the strategies for managing redundancy.

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Semester: 3 - Assignment Set: 1

Fault tolerance is sometimes called redundancy management. For our purposes, redundancy is the
provision of functional capabilities that would be unnecessary in a fault-free environment. Redundancy
is necessary, but not sufficient for fault tolerance. For example, a computer system may provide
redundant functions or outputs such that at least one result is correct in the presence of a fault, but if
the user must somehow examine the results and select the correct one, then the only fault tolerance is
being performed by the user. However, if the computer system correctly selects the correct redundant
result for the user, then the computer system is not only redundant, but also fault tolerant.
Redundancy management marshals the non-faulty resources to provide the correct result.

Redundancy management or fault tolerance involves the following actions:

Fault Detection
The process of determining that a fault has occurred.
Fault Diagnosis
The process of determining what caused the fault, or exactly which subsystem or component is
faulty.
Fault Containment
The process that prevents the propagation of faults from their origin at one point in a system to
a point where it can have an effect on the service to the user.
Fault Masking
The process of insuring that only correct values get passed to the system boundary in spite of a
failed component.
Fault Compensation
If a fault occurs and is confined to a subsystem, it may be necessary for the system to provide a
response to compensate for output of the faulty subsystem.
Fault Repair
The process in which faults are removed from a system. In well-designed fault tolerant systems,
faults are contained before they propagate to the extent that the delivery of system service is
affected. This leaves a portion of the system unusable because of residual faults. If subsequent
faults occur, the system may be unable to cope because of this loss of resources, unless these
resources are reclaimed through a recovery process which insures that no faults remain in
system resources or in the system state.

The measure of success of redundancy management or fault tolerance is coverage. Informally,

coverage is the probability of a system failure given that a fault occurs. Simplistic estimates of
coverage merely measure redundancy by accounting for the number of redundant success paths in a
system. More sophisticated estimates of coverage account for the fact that each fault potentially alters
a systems ability to resist further faults. The usual model is a Markov process in which each fault or
repair action transitions the system into a new state, some of which are failure states. Because a
distinct state is generated for each stage in each possible failure and repair process, Markov models for
even simple systems can consist of thousands of states. Sophisticated analysis tools are available to
analyze these models and to create the Markov models from more compact system descriptions such as
Petri Nets.

The implementation of the actions described above depends upon the form of redundancy employed
such as space redundancy or time redundancy.

Space Redundancy

Space redundancy provides separate physical copies of a resource, function, or data item. Since it has
been relatively easy to predict and detect faults in individual hardware units, such as processors,
memories, and communications links, space redundancy is the approach most commonly associated
with fault tolerance. It is effective when dealing with persistent faults, such as permanent component
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failures. Space redundancy is also the approach of choice when fault masking is required, since the
redundant results are available simultaneously. The major concern in managing space redundancy is
the elimination of failures caused by a fault to a function or resource that is common to all of the
space-redundant units.

Time Redundancy

As mentioned before, digital systems have two unique advantages over other types of systems,
including analog electrical systems. First, they can shift functions in time by storing information and
programs for manipulating information. This means that if the expected faults are transient, a function
can be rerun with a stored copy of the input data at a time sufficiently removed from the first execution
of the function that a transient fault would not affect both. Second, since digital systems encode
information as symbols, they can include redundancy in the coding scheme for the symbols. This means
that information shifted in time can be checked for unwanted changes, and in many cases, the
information can be corrected to its original value. Figure illustrates the relationship between time and
space redundancy

Redundancy is never a circumstance that anyone wishes to manage. However, when its unwelcome
face first peers over the horizon it is time to take action and start working on damage limitation for the
people who could be affected, the company, and the remaining staff. The first phase of good
redundancy management begins when those initial warning signs of potential redundancies surface.
Such early attention can sometimes fend off threatened redundancies altogether.

Phase 1 - Change Management

The reasons for threatened redundancies are many and varied: market downturn; company merger;
falling profits; funding or cash flow crisis; outsourcing; loss of a major contract, etc. What each of these
situations has in common is that it will require swift attention and lead to some form of change
management before redundancies are decided. All the procedures and principals of good change
management will apply. Strategies need to be revisited, trends need to be carefully monitored, new
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plans need to be drawn up, and above all people need to be kept informed. Where a collective
redundancy situation (20 or more) is feared, staff representatives must be consulted within the
statutory time frame. However, explaining the situation to staff members early is good practice
regardless of the numbers affected, and has a variety of benefits:

 It gives you control over what, when and, most importantly, how information is put across.
 It avoids damaging rumour and innuendo.
 It rallies support for change and unites staff and senior management in a common fight for survival.
 It provides an opportunity for the 'grass-roots' staff to offer efficiency and cost cutting suggestions.
 It makes any subsequent efficiency and/or cost cutting measures more palatable.
 It lessens the shock and the reaction, if and when redundancies do have to be made.
 It fosters an environment of honesty, trust and respect.

Clearly, dissemination of information to staff needs to be carefully managed and controlled to avoid any
additional damage to the company or panic amongst the staff. However, there are many success
stories from companies who have involved their staff members, including voluntary pay cuts initiated
by staff members. Peer pressure is far more compelling and effective than management ultimatums,
however couched.

Phase 2 - Minimising Redundancies

Having developed an outline plan in consultation with all the pertinent managers and operatives, if
redundancies are required, the next phase is to carefully examine all avenues for minimising
redundancies and the damaging effects of redundancies. Of all changes in the work environment,
redundancy engenders the most negative response. Minimising the job cuts and being seen to be
making every effort to avoid redundancies is crucial. The avenues open to you will of course vary
according to the size, situation, and nature of the business. The following have all been used
successfully by a variety of companies.

 Re-evaluating working hours - leading to greater flexibility, weekly, monthly or annually.

 Re-training - leading to redeployment in other areas of the business.
 Job sharing schemes.
 Moves to part-time working (temporary or permanent). Cost savings here received a boost in the
recent budget.
 Temporary sabbaticals or agreed leave of absence (paid or unpaid).
 Early retirement, natural wastage and voluntary redundancies.
 Recruitment freeze (this needs careful management to ensure key positions are covered).
 Voluntary pay cuts.

Once again an approach which is honest, and as open as possible, not only reduces the sometimes
devastating effect on the staff, but also pays dividends to the management and the success of the
plans for recovery, streamlining or downsizing. Key members of staff are far more likely to stay and
weather the storm if an environment of trust and openness is nurtured. Those in business critical
positions should be reassured, as early as possible in the process, that their positions are not, and will
not be, in jeopardy.

Phase 3 - Selecting the Jobs to be Cut & Notifying the Individuals

Having ascertained that some redundancies are inevitable, informing the workforce first is paramount.
The worst thing that can happen is for your staff to hear that they may face redundancy through
outsiders, rumour, or the media, even when all the redundancies are expected to be voluntary.
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Having worked through phases 1 & 2 above, a lot of care and attention needs to be given to selecting
the positions and people. Check the current legislation on your consultation and notification obligations.
Regardless of legal obligations however, each position deserves to be given individual consideration. A
conscientious approach to this will reap rewards for the Company as well as the individuals concerned.
Consider whether this position will be needed again in the near future, how the work will be dispersed,
what the impact will be on others in a similar position. If you are reducing the number of people in the
same or similar roles, draw up a check sheet with set criteria to determine equitably which positions
should be selected.

On notifying the individuals at risk, care and empathy is essential. Even when generous redundancy
packages are involved this can still be a devastating blow and poses a real threat to the recipient's
livelihood. Look into each individual's personal situation beforehand so that you have some
understanding of the problems they may face. Try to get a good feel for all the pertinent problems and
issues so that you can aim to provide appropriate support, either via an outplacement service or
directly. Explain the process and procedure carefully and follow this up in a letter.

Phase 4 - Managing the People Out

Redundancy can be one of the most stressful life experiences. The affected individuals are likely to be ill
equipped for positioning themselves in the job market and often feel confused, isolated, angry and
afraid. Finding another position is a full time occupation, the complexity of which is rarely fully
appreciated. A good company will endeavour to provide support and assistance to cushion the blow and
help their people to make the transition.

An appropriate outplacement service is a big advantage. Studies show that an external outplacement
service is better received and far more effective than in-house measures. In addition, it provides the
'spoonful of sugar' to help take away the bad taste, and makes the task of imparting bad news less
odious for the managers. A good Outplacement Consultant will work with the Company, through all the
phases above if required, providing suggestions, alternatives and pulling together a programme
appropriate to the needs of the individuals. In selecting an outplacement service consider the following:
 Location: Some companies require the delegates to attend their premises, others will bring the
service to you. The latter can also be housed at a nearby conference centre if desired.
 Price: An outplacement service is generally most needed when the Company feels it can least
afford it. However, price need not be prohibitive. There are wide variations and many companies have a
flexible approach and will suggest viable solutions to fit your budget, but watch for hidden costs.
 Timing: The service needs to be provided at the right time for you and your people. If you have left
it a little late, don't be fobbed off with bogus reasons why it would be in your advantage to delay (to a
time which suits them). Try elsewhere.
 Quality: The service needs to be 'fit for purpose'. When contacting a prospective company ask to
speak with one of the consultants not just the sales staff. He/she should try to understand your
situation and needs rather than push to sell you the service. If possible (and appropriate) ask to see
the manual. This is a valuable tool for the delegates and a good indicator of the content and quality of
the programme. Support normally continues for sometime after your contact has ceased - check this
out too.
 People: Most outplacement consultants are empathetic and experienced, but like everything else
there are good and bad. Try to speak with the consultant(s) who will be assigned to your Company, by
telephone or in person. Prepare a few questions and informally 'interview' them.
 If you cannot provide an outplacement service you may be able to provide some local support
through appropriate agencies and companies such as the local job centre, careers advisers, CAB,
Financial Consultants, and so on. It is also worth contacting local companies in the same business to
see if they have any unadvertised opportunities.

Phase 5 - Managing the People Left

Sikkim Manipal University - MBA - MU0010 – Manpower Planning and Resourcing

Semester: 3 - Assignment Set: 1

Having provided support and assistance to those directly affected, you need to turn your attention to
those indirectly affected. In varying degrees this includes all members of the workforce. By
implementing redundancies you will have inadvertently sown the seeds of doubt about the security of
their position. Once again, good communication is essential. You need to ensure that your rising stars
and major players do not lose face and change their focus of attention to the job market rather than
the task in hand. Those remaining need to feel confident that the crisis is over and the company is
doing all it can to avoid any further redundancies.

As the redundant staff move off the scene, gaping holes are often left. Where a friendly colleague sat,
there is now and empty desk and chair; tasks will be left ownerless; the old manager may be replaced
by an unknown and more distant new one. The empty void and confusion is exacerbated when senior
management are hidden away in meetings at a time when their visibility is most critical.

In your initial planning, make absolutely sure that you have included measures to cover this period.
Managers should spend time at the 'coal-face' to ensure that:

 Remaining staff are not overloaded with work.

 They understand the need for the staff cuts made, and feel that the situation has been managed
fairly.
 The implementation of any time/cost saving measures is going smoothly.
 The most talented &/or critical staff do not feel insecure and leave.
 Any grievances or concerns can be aired and dealt with.
 Your remaining staff feel visible and valued.

Managing redundancy is never easy. Managing to avoid redundancy can be even harder. However the
adverse effects can be substantially reduced through: good communication; timely intervention; careful
analysis and planning; effective consultation with your people; sensitivity in approach; appropriate
support and assistance, and good after care. Over a third of the companies voted into last year's Times
'100 Best Companies To Work For' had needed to effect redundancies during the year. For both
companies and individuals, good redundancy management can turn a crisis into an opportunity.