Determining Demand - Chapter 5 – Week 9 Flashcards
An organization’s future need for people (human capital) is known as
HR Demand
HR Demand involves looking at the future in terms of both types of types of jobs and ?
Number of positions
To determine demand, we first look at a businesses what?
Strategy and then “value adding activities”
What are some “value adding activities”?
Sales, Manufacturing, Customer Service, Client Retention
Quantitative methods for forecasting demand are generally based on what?
Historical Data
Even if we have a lot of high quality, easily accessible data, what else needs to be considered when forecasting demand?
Environmental Factors (i.e. Black Friday = more retail staff needed)
What is?
- Less statistical
- Estimates based on forecasts by experts
- May be used to when there is a lot of uncertainty and not enough data available.
QUALITATIVE Approaches to HR Demand (mgmt survey, scenario planning, delphi technique, nominal group technique, HR budgets / staffing tables)
What….
- Uses statistical or mathematical techniques; used by theoreticians and professional planners
- and is more useful when forecasting demand in stable markets with high degree of certainty
QUANTITATIVE Approaches to HR Demand (Trend / Ratio Analysis, time series models, big data, regression analysis, structural equation modelling)
A quantitative method of determining HR demand or the need for people in an organization by analyzing the historical relationship between an operational index and the number of employees required
RATIO Analysis
A quantitative method of forecasting HR demand by looking at Historical data to predict future TRENDS
TREND Analysis
True or false? in HRP, the best practice is to use both quantitative and qualitative methods when forecasting demand
True
What is the difference between Ratio Analysis and Trend Analysis?
Ratio analysis looks at a specific operational index (i.e. sales) and establishes a RATIO between that and the number of staff (no ratio in trend analysis)
Ratio analysis is simple to do if you have information available, but what are 3 disadvantages?
1) Past may not be connected to future hence not a rigorous forecasting method
2) Assumes stability
3) Uses a single factor
What are the steps in Ratio Analysis?
- Select the appropriate business/operational index – e.g. sales, cost per hire, turnover, time to fill
- Track the business index over time
- Track the workforce size over time
- Calculate the average ratio of the business index to the workforce size.
- Calculate the forecast demand for labour.
What type of quantitative method uses data from a few previous years
Time Series Models
What is meant by “exponential smoothing” in a Time Series model?
Less and less weight assigned, as the data gets older – Greater weighting than a weighted moving average, i.e. for our 2019 prediction above, 2016 will have less weight
What Quantitative method presupposes that a linear relationship exists between one or more independent (causal, or predictor) variable (e.g. sales), which is predicted to affect the dependent (target) variable (number of employees).
Regression Analysis
What is similar to regression but permits the testing of multiple relationships simultaneously?
Structural Equation Modelling
Projections, or multiple-predictor estimates, of future demand for employees (human capital) predicated on a variety of differing assumptions about how future organizational events will unfold - Known as what type of Qualitative Method
Scenario Planning
Which method encourages participants to develop strongly shared mental models of future organizational states
Scenario Planning
What are the 7 Steps in Scenario Planning
1) State or propose the forecasting question about future state of the firm or environment
2) Generate list of factors that are likely to influence the outcome (i.e., SWOT analysis)
3) Sort factors into naturally occurring groups and rank the groups according to their importance to the change initiative or the main question at 1 above.
4) Select the two groups of factors that are likely to have the strongest and most unpredictable (weakest) impact on the question
5) Name and describe in story form each of the four worlds in the four resulting quadrants
6) Suggest the skills, competencies, and other organizational requirements that would be necessary to operate in each of these four worlds
7) Generate a demand forecast necessary to fulfill the firm’s requirements in each of the four worlds
A process in which the forecasts and judgments of a selected group of experts are solicited and summarized in an attempt to determine the future HR demand.
Delphi Technique
The Delphi technique involves anonymous input - list 4 reason why this is beneficial.
1 Shyness
2 Perceived lower status or authority
3 Perceived communication deficiencies
4 Issues of individual dominance and groupthink
What Technique are these DISADVANTAGES OF?
1- Time and costs
2- Results cannot be validated statistically
3- Selection of experts can skew the results
4- Potentially insufficient attention given to developing criteria due to having too narrow a scope of experts
The Delphi Technique
