Control and review mechanism – human resource structure and system


Once the action plan is implemented regarding redeployment like promotion, transfer, demotion, redundancy and retrenchment, recruitment, selection, training, development and retention, human resources structure and system should be controlled and reviewed with a view to keep them in accordance with the plan. The following steps are identified by HR experts regarding control and review of human resource structure and system. They are:

1. Considering the decisions regarding additions at the highest level.

2. Sending periodic reports to the top management stating the existing manpower system and changes therein due to internal mobility and external mobility.

3. Using the personnel budgets as a basis for control as they are formulated on the basis of manpower plans.

4. Auditing the human resources and studying manpower utilization. Manpower utilization can be measured be relating net man hours actually utilize in work to the standard man hours planned to be utilized in work.

5. Measuring the efficiency of labor periodically in the form of labor productivity, employee-sales ratio, employment-investment ratio; employee-turnover ratio, employee-profit ratio etc. and compare them with standards of the organization and actual of other comparable organization.

6. Conducting the surveys and research studies with a view to find out the level of job satisfaction, morale, employee attitudes, interpersonal relations etc. and review and correct the situation with the help of the findings f the surveys and studies.

7. Conducting the studies with a view to find out the efficiency and validity of recruitment, selection, training, etc.

8. Sending the reports regarding absenteeism, irregularities, overtime etc.

9. The break-even point / pay back period for new employees.

10. Conducting exit interviews; spotting out the area responsible, finding out the causes and correcting the situation.

Problem in Human Resources Planning

Though HRP is beneficial to the organization, employees and trade unions, some problems crop up in the process of HRP. Important among them are:

1. Resistance by Employers and Employees:

Many employers resist HRP as they think that it increases the cost of manpower as trade unions demand for employees based on the plan, more facilities and benefits including training and development. Further, employees feel that HRP is not necessary as candidates are / will be available as and when required due to unemployment or other reasons. Employers’ version may be true about unskilled and clerical staff but it is not true in the case of all other categories as there is shortage for certain categories of human resources.

Trade unions and employees also resist HRP as they view that it increases the workload of employees and prepares programs for securing the human resources mostly from outside. The other reason for their resistance is that HRP aims at controlling the employees through productivity maximization etc.

2. Uncertainties:

Uncertainties can also be the reasons in human resources practices sometimes due to absenteeism, seasonal employment, labor turnover etc. in some geographical locations. Further the uncertainties in industrial scene like technological change, marketing conditions also cause uncertainties in human resource management. The uncertainties make the HRP less reliable.

3. Inadequacies of Information System:

Information system regarding human resources may not be perfect in all industries. Some industries are not giving requisite importance to HR / personnel department and less importance is attached to HRP. Further the reliable data and information about the economy, other industries, labor market, trends in human resources, etc. are not sought in a proper manner by these organizations.

Cost-contribution Analysis in HRP

Cost-contribution analysis of human resources is most important in HRP with a view to plan for more effective human resources system. The human resources components necessary to maximize employee contribution to the job and the organization, and minimize the cost, should be determined in advance with the help of human resource accounting techniques.

The optimum human resources system should be planned and determined as the human resources system is the control system in the organization because it emphasizes the human contribution which critically influences the organizational effectiveness. Planning the human resources system includes determining the type of human resources components like creative and innovative skills and abilities, dynamism, leadership qualities, commitment, identification with the organization etc.

Considering the measures to acquire those human resources through recruitment, training and development and adjusting the components. Similarly, cost of human resources should be streamlined and it should be taken as investment on human resources but not as mere cost. These items include remuneration cost( Pay, allowances, fringe benefits, other indirect cost), recruitment cost (cost of job design, advertising cost, cost for conducting tests, interview, reference checks, medical examination and induction), training costs etc.

We conclude Human Resources Accounting (HRA) envisages capitalization of all expenses like cost of recruitment, training etc. one of the systems of HRA i.e. replacement cost of human asset is an important tool for the formulation of manpower budget and plan for human resources. Regarding various problems outlined above there are always solutions and process to be implemented not once but on regular basis to overcome the same..