School of Economics : 17/04/2009 1 School of Economics CASE STUDY
ON HUMAN RESOURCE PLANING SUMMARY : 17/04/2009 2 SUMMARY During the mid- 1990’s, corporates across the world were facing a peculiar phase. As employee turnover rates increased, employee retention became one of the key issues for companies (especially IT sector) & HR officials across among the world.
The boom in the IT industry in the late 1990’s was in a major way responsible for this situation. : 17/04/2009 3 According to an Accenture report, turnover ratio While at the same time, the world’s most popular search engine, the US- based www.google.com (Google), founded in 1998, maintained an extremely good employee retention record – only five employees out of 170 had left the company since 1998. : 17/04/2009 4 While at the same time, the world’s most popular search engine, the US- based www.google.com (Google), founded in 1998, maintained an extremely good employee retention record – only five employees out of 170 had left the company since 1998. Growth rate for Google : Growth rate for Google HOW IS IT SO…? : 17/04/2009 6 HOW IS IT SO…? : 17/04/2009 7 The credit of our success goes to
HRP… Google Chairman & CEO
Eric Schmidt Definition : : Definition : “Human resource planning is the strategy for the acquisition, utilization, improvement and preservation of an enterprises human resources.” 17/04/2009 8 Slide 9: 17/04/2009 9 NET HR REQUIREMENT- Characteristics of HRP : Characteristics of HRP Future Oriented
Current and future human resources
It’s a short term as well as long term
It’s a part of overall planning process. 17/04/2009 10 Significance of HRP – : Significance of HRP – It is helpful in determining manpower needs of the org.
It is essential to face the changes of market and technology.
It is help in selection adequate number of persons in the org.
It creates awareness about effective use of manpower.
It is helpful in creation of employment opportunity 17/04/2009 11 Limitations of HRP - : Limitations of HRP - Inaccuracy
Time consuming and expensive
Lack of top management support 17/04/2009 12 Different Types of Retention Strategies- : Different Types of Retention Strategies- Compensation.
Human Relations Strategies… 17/04/2009 13 Retention Strategies at Employee Level - : 4/17/2009 14 Retention Strategies at Employee Level - ESOPs : 17/04/2009 15 ESOPs ESOPs can be defined as contribution of the employee pay package for investing in the stocks of the employer company. ESOPs enable the employees to buy shares of the company for which they work, at or below the market prices. They can gain from future increase in the stock price. ESOPs are generally used as part of incentive programs. By offering them ownership in the company employees could be motivated to perform more efficiently. Contd… : 17/04/2009 16 Contd… Many companies which were performing exceptionally well on the stock markets with their share prices reaching dizzy heights. Such companies found it a very convenient way of running their businesses and retain their employees. CISCO : CISCO Reserved 222 million shares.
Issued shares to its employees at 85% of its market price.
Offered ESOP’s in 1300 colleges. Merits of ESOPs : 17/04/2009 18 Merits of ESOPs Links performance to compensation package
Helps in retaining best employees
Employees are motivated to perform even better
Inculcates a sense of ownership and responsibility among employees
Establishes importance of team effort among employees. Demerits : Demerits Only profitable companies can use the tool.
Stock prices do not always reflect fundamentals of the company.
Falling share prices could means losses for employees.
The inability to cash quickly can dampen interest. 17/04/2009 19 Other corporates Following ESOPs : 17/04/2009 20 Other corporates Following ESOPs Warner Bros.
BHEL… & many more… SWOT ANALYSIS : SWOT ANALYSIS Strengths…
Threats… STRENGTHS : First Search Engine…
ESOPs helps in reservation of shares…
Improvement of sales figure… STRENGTHS WEAKNESSES : Benefit is for short period
Lock in period
ESOPs is not the best motivational technique. WEAKNESSES OPPORTUNITY : OPPORTUNITY Growth…
Lure best employees from competitors firm… THREATS: : Switching over of employees…
Maintaining the market price… THREATS: Key Benefits : 17/04/2009 26 Key Benefits To establish the best cost balance between plant and manpower utilization.
To determine recruitment, level wise and occupation wise
Ensure that we do not inherit surplus manpower hired on account of an incompetent CEO. Contd… : 17/04/2009 27 Contd… To anticipate redundancies and avoid unnecessary dismissals or aspirations.
To decide optimum training levels.
To decide on worker training courses
To provide a basis for management development programs
To ensure that people do not substitute systems and process. Slide 28: 17/04/2009 28 THANK U!!! Anshul jain