A Report on Role of HR in Resource Planning and Downsizing

You have been tasked with setting up a branch of your organisation in another country. Your CEO has asked you to compare two countries and the labour markets within them. This will help make formulate the strategic plan as to the best location, attracting the best talent and positioning the organisation as employers of choice within the labour market. Your CEO has also asked that you provide a report that he will distribute to the Strategic Management Team which outlines HR’s role in each of the following:
  • developing basic succession planning and career development options
  • contributing to plans for downsizing an organisation
  • contributing to the development of job descriptions, person specifications and competency frameworks.
The report should then also explain some of the main legal requirements in relation to recruitment and selection. It should also identify both good and lawful practice for managing dismissal, retirement and redundancies. It should include a table to assess the strengths and weaknesses of two different methods of recruitment and selection currently used within your organisation.
It should also assess the strengths and weaknesses of two differing approaches your organisation uses to retain talent. You will need to highlight in your report the reasons why people leave or remain with organisations and conclude with a summary of some of the costs associated with dysfunctional employee turnover.

1. Introduction

Gone are the days, when Human Resources activities were restricted to creating personnel related policy formations and dealing with volumes of paperwork. Today, with changes in the business environment, nature of businesses, types of leadership, the function of Human Resources has also undergone tremendous transformation. Today, the role of the HR Department is not only related to personnel management only, it is now strategic in its outlook and advisory in its functions (Batt & Valcour, 2003).
With time, increasingly organizations understand that the success of a company or a specific department is heavily dependent on the most valuable resources the company has – the employees or the human resources. Companies now compete for attracting and retaining the best talent, not merely for professional and economic success but also for creating the most conducive work culture. Employee engagement, job satisfaction, motivation management, competency analysis etc are terms which are all associated with modern organizations and HR has a key role in conducting each and every one of the aspects (Berman, Bowman, West, & Van Wart, 2012). 
For the purpose of this report, the focus would be present on three core activities of strategic human resources functions – talent planning and recruitment activities, strategies and implications associated with maximizing the employee retention, effective management of dismissals, redundancies and retirements by subsequent meeting with all the legal obligations.
Lastly, a brief account would be presented on the summarization of the costs which an organization has to bear on account of dysfunctional high employee turnover. The scope of this report lies in providing its readers a comprehensive idea about the role and importance of human resources in today’s organizations and how its strategies can create a high performing organization.

2. Analysis

2.1 Talent Planning & Recruitment Activities

Hiring the right talented individuals is fundamental for the success of an organization. In order to hire individuals for a specific job role, one must conduct strategic activities of talent planning and recruitment. It is a challenging task, and if not done correctly can hamper the work culture and attraction of the wrong talent in the workplace and result in resource losses for the company. Therefore the importance of correct talent planning and recruitment is significant for successful operations. In this segment focus would be presented on succession planning and career development plans, plans for downsizing, development of the right JDs and competency frameworks, legal requirements of recruitment and finally present a brief table of strengths and advantages of different recruitment strategies.

2.2 Succession & Career Development Plans

Succession planning is the process of identification and development of new leaders in the organization who can, when time arrives, replace the existing old leaders when the latter retire or leave the company (Bal, 2010). The process of succession planning enhances the availability of experienced, competent and capable employees who are trained through management development programs to assume the leadership roles when they become available.
Succession planning helps organizations as it helps in strategic vision achievement and subsequently ensures future manpower and leadership forecast. For employees succession planning is beneficial, as they achieve a career growth in the organization and they feel motivated, empowered and valued by their organizations (Bierly III & Daly, 2002).
Career development on the other hand, is a series of activities which is continuous and is aimed at developing the career of an individual employee. Career development generally refers to the management of one’s career in an intra or inters organizational setting. It is associated with training of new skills, moving to higher hierarchical jobs, making a career change etc (Caldwell, Truong, Linh, & Tuan, 2011). Succession planning is conducted by the organization at large, and aims at meeting their future leadership decisions whereas career development is planned from an individual employee’s point of view.
Though both the processes are developed on the basis on improvement of skills, knowledge and competencies, the difference lies in the focus and on the basis. The aim of both the process remains the same, and hence for present day HR department, career development and succession planning should be aligned and conducted simultaneously (Werner & DeSimone, 2011).

2.3 Plans for downsizing an organization 

When an organization realizes that it is not operating at its peak and is not rightfully using its resources, or that it needs to make itself leaner and productive, it often engages in activities of downsizing (Armstrong M. , 2007). Downsizing is the process of reduction of the organizational size and the associated operating costs and is implemented by the top management and HR team to improve overall organizational efficiency, the productivity and the competitiveness.
This process impacts the work processes of an organization and the end result of it is less number of employees conducting the same work load which existed prior to the downsizing initiatives. Downsizing is a task, however, is not popular and results in creation of two categories of employees – the survivors and the victims. Though the process is not popular, often it becomes essential for the flexibility and survival of the organization and sustenance of its competitive edge (Bowen, 2006). Today, however, rightsizing is the term more popular than downsizing and it depicts the same function.
However, if manpower and talent forecasting be done by HR team effectively regarding the future work projects and the path in which the organization intends to move, the occurrences and instances of downsizing/ rightsizing can be reduced effectively. It is the duty, of the HR, to conduct such manpower forecasts effectively to help the organization escape from this unpleasant task of downsizing (Guest, 2011). 

2.4 Job descriptions, person specifications and competency frameworks

Constructing effective job descriptions, person specifications and competency frameworks are critical job roles of today’s Human Resources department. Job descriptions are creation of exhaustive job responsibilities pertaining to any job role. In an organization, job descriptions are critical for the recruitment and selection of candidates. However, with time, JDs are also getting flexible, as the scope and responsibilities of jobs are gradually evolving and not fixed (Armstrong, Floor, Guthrie, Liu, McCurtain, & Mkamwa, 2010). 
Person specification on the other hand, described the attributes which are desired in a prospective employee. It is more or less similar to a job description but is definitely more specific.
Attributes can include – qualifications, experience, skills, and knowledge and personal specifications as well, which a candidate needs to possess in order to effectively perform his/her duties (Bach, 2009). A sample of Person Specification for a job role of HR is attached at the Appendix 1 section of this paper. 
Competency framework on the other hand, is a structure which defines accurately the individual competencies, namely, people management, analytical mind, strong communication skills etc, required by an individual in order to effectively and efficiently operate in an organization.
Competency frameworks are increasingly being used to recruit and select the right talent who have the perfect fit with the organization, set specific expectations and contributions objectively, focus the employees on what is critical to improve their performance, providing a roadmap for the employees and identify the competency gaps existing in individuals and the organization and thereby taking rectification strategies (Chen & Huang, 2009). 
The legal implications associated with recruitment and selection varies with organizations present in different countries, as the labour laws and laws of the land also vary with countries. For Saudi Arabia, the legal obligations associated with recruitment and selection is different from what exists in United States. The Nitaqat Programme and Immigration Policies of King Fahad Medical City, depicts a host of legal requirements which must be met- namely, ensuring the recruitment of at least 1 Saudi national in every recruitment drive (Clyde & Co LLP, 2016).
Equal employment rights are provided to prospective women employees as well. State Pension Schemes are provided to Saudi nationals (Clyde & Co LLP, 2016) . End of service payment is entitled to Saudi nationals as well as non-nationals on termination of services. Employment contracts post recruitment is of minimum 4 years (Clyde & Co LLP, 2016). 

2.6 Strengths & Weaknesses of Recruitment & Selection

Recruitment and Selection are conducted on a number of bases, and each and every process has its own share of advantages and disadvantages. The following table will first showcase the different strengths and weaknesses of external and internal recruitment and then specifically one would focus on the online and offline recruitment initiatives taken by King Fahad Medical City.

Types     Strengths     Weaknesses
Internal Recruitment & Selection
Cost Effective
No requirement of on-boarding and orientation
Career progression for employees
Limits number of potential candidates
Restricted new ideas
May cause resentment amongst employees
Creates another vacancy subsequently
External Recruitment & Selection
Brings in new ideas
Selection can be done from a larger pool of prospective employees
Wider range of experiences
Longer procedure
More cost expensive process
Often effectiveness is lost
Online Recruitment & Selection
More efficient than the offline procedure
Cost effective procedure
Often difficult in handling the high volume of responses
Often logistical problems were faced
Offline Recruitment & Selection         More effective as face to face interviews help interviewer to access the interviewee
More loyalty can be established
High cost involved per selection and recruitment
Time intensive process

3. Maximising Employee Retention

Employee retention refers to the organization’s ability in retaining its talent and is represented by a simple statistical formula. The rate of retention is given in a percentage, and 90% retention rate means, 90% of the employees remain associated with the organization in a specific given time period. Employee retention also refers to the various initiatives taken by employers to retain their employees in the workplace and hence, retention becomes a strategy rather than the outcome. 

3.1 Reasons for employees to stay/leave the organization

The reasons for employees to remain within an organization can be varied and not only associated with getting highest remuneration. Intrinsic factors and extrinsic factors are both responsible for determining an employee’s decision to stay or leave the organization. Intrinsic factors like – whether employee is motivated to do the job, whether the employee feels empowered, the level of job satisfaction, whether the employee feels valued, whether he feels his talents and competencies are crucial for the organization, whether he feels he has a chance of growing (career-wise) within the organization (Zafar, 2012).
Extrinsic factors also determine the employees decision of staying or leaving the organization – the remuneration and reward system, better job opportunities from the competitors, the fringe benefits associated with the job, the scope of travel – international / domestic etc are factors (Delahaye, 2011). 

3.2 Costs of Dysfunctional Employee turnover

High employee attrition rates and high employee turnover prove to be detrimental for an organization, as the loss of resources pertaining to high employee turnover not only consists of – costs of hiring new talent, costs of orienting such new talent in the workforce and training but also involves costs associated with resigning of employees.
Therefore, it is always the strategy of the HR department and the organization at large to reduce the employee turnover whenever possible. This topic would be further dealt in detail in the last segment of this paper. Strengths & Weaknesses of different approaches of retention of talent  are in the table below:
Employee Retention Strategies. 
Focus may be presented on specific retention strategies like – Focused recruitment, creation of metrics, provision of career growth opportunities, creation of high performing work environment, improvement of employee relationship and engagement strategies etc.     -    Savings of costs ( hiring costs, training costs, orientation costs etc)
-    Relevant experienced employees
-    Beneficial work culture of the organization with higher employee bonding, cohesion and engagement
-    Existence of a loyal employee base
-    Improved quality of work
-    Less of issues pertaining to workflow and problems
- Often non performing employees get retained in the organization
- Creation of groupism and politics in the workplace
- Creation of ineffective and suffocating work environment

4. Management of dismissal, redundancy and retirement effectively

Organizations must be very careful in taking actions following decisions pertaining to dismissal of workers, making a worker redundant and handling the retirement aspects once the employee has reached a specific age. Equality laws are applied on employers, and maybe these laws vary depending on individual countries and legislations, but the uniform purpose of these laws is to protect the employee rights and to give each and every employee fair chance and opportunities.
Hence, it is critically important for every organization and its Human Resource Policies to be aware about the equality laws of their relevant country and legislations and manage the process of dismissal, redundancy and retirement effectively and efficiently so that it benefits both the parties involved – employees as well as employers. 

4.1 Dismissal

Dismissal is the process of terminating the employment of an employee due to a number of reasons. There are a number of reasons, which can lead an employer to dismiss the employment of an employee but the employer has to undergo a series of specific procedures and processes to carry out such a dismissal.  Dismissal occurs when the employer ends the contract without giving any prior notice, or a fixed contract ends and renewal is not done, or the employee leaves without giving prior notice due to employer’s conduct. One of the main reasons for dismissal is misconduct and the inability to do the task properly. 
For United Kingdom, in order for the dismissal to be fair, the employer has to cite the reason from a set of 5 different situations, and depicts that such dismissal has occurred as a result of responsible reaction to one of such five situations. These five reasons are – reasons related to the conduct of the employee; reasons related to the capability of the employee in doing the job; redundancy; statutory restriction making the employment prohibited or due to some substantial reason that justifies the dismissal (ACAS, 2017). In Saudi Arabia, the entire employment legislation is determined by the Labour Law “Royal Decree M/51 23 Sha’ban 1426 / September 27 in 2006” that covers the aspects of dismissal and termination aspects as well (Clyde & Co LLP, 2016). 

4.2 Redundancies

Redundancies occur when the skills, knowledge and the aptitudes of the employee does not remain sufficient for the organization, and the services offered by the employee becomes redundant for the organization. This can be one of the most distressing aspects of an employee experience and must be handled with care and sensitivity to provide fair treatment to the affected employee and to sustain the morale and the productivity of the rest of the employees.
Redundancies are considered as a necessary aspect for the restructuring of organizations and ideally for an organization to conduct redundancy management effectively the following are the stages as per CIPD – identifying the right selection pool, seeking of volunteers, selecting the specific redundancy, consulting thoroughly with the employees, appealing and readying for dismissals, providing alternative solutions of employment and payments for redundancies and finally providing care and support to the employees to help them go through this difficult phase.
In United Kingdom, employees can be fairly dismissed if the following situations are realized – the employer has decided to cease the business or the employee requirements to effectively continue on a specific job has stopped or is anticipated to get diminished in the future. On occasion of real redundancies, the employers then have to provide a – payment for notice period as well as a redundancy payment. The legislation surrounding the redundancies are complex and is covered by both the case and statute law, determining the obligations of the employers and the rights of the employees (CIPD, 2018).
In Saudi Arabia, however, there is not present any specific redundancy procedure or specific redundancy payment. There is no condition also to inform the employees in advance about possible redundancies circumstances except for situations which involve Saudi Arabian nationals (Homoud & Qayum, 2017). 

4.3 Retirement

Retirement is the process of withdrawal from one’s occupation and the active working life due to the employees reaching a specific age. However, due to the radical changes that occurred in the last few years, the concept of making employees automatically retire at the age of 65 has been repealed and stopped. There is no specific retirement age, and employers cannot force an employee to retire.
The employees if have an intention to retire, must inform their employers in advance and serve the required notice period as mentioned in their employment contract. Retirement can be made compulsory, where the employers can effectively justify it. Employers have to stop making the assumption that an employee’s productivity will go down as he advances towards a matured age group. Age based discriminations have to be stopped by the employers (Williams, 2017). 
In Saudi Arabia, the law passed in 2001 provides the social security pension to public sector and private sector workers. The old age benefits are applicable for males above the age of 60 and for females above the age of 55. An old age settlement is generally paid, if the insured party is not applicable for the social security pension. The retirement and pension is governed by the Ministry of Labour of Saudi Arabia and the General Organization for the Social Insurance (Pension Development, 2018). 

5. Recommendation Strategies for dismissal, redundancy and retirement

The recommendation strategies for organizations in order to effectively handle, dismissal, redundancy and retirement policies vary from country to country. For a multinational organization having its presence in a number of countries, need to be aware about individual legislations and based on such the specific strategies should be developed by them (Tatar, 2011). For the purpose of this paper, generic recommendation strategies are mentioned, which can be used by all organizations with minor changes pertaining to their country of operation:
  • Primarily, it is of immense importance that an organization has full legal and otherwise knowledge about protected characteristics of the country. Individual clauses pertaining to age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership, religion, gender, sexual orientation etc which are known as protected characteristics and each of these aspects require specific regulations and laws (Alcazar, Fernandez, & Gardey, 2013). 
  • Organizations must be aware of not practising any unlawful discrimination and should stay away from unintentional or otherwise practice of direct discriminations. It’s a punishable offence by law and employees have the power to sue the organization on the occurrence of such. 
  • Organization must be careful in not taking decisions which can pertain to redundancy. Namely, for an organization on choosing a woman for redundancy just because she is pregnant is discrimination and be avoided (Daley, 2012). 
  • Harassment and not giving the employees’ due during retirement is another aspect which must be taken care of by the employers. 
  • On account of dismissal, the clear reason should be cited ( insufficient performance, repeated warnings etc) and before taking the final call, the supervisor must sit with the employee to explain where the latter is going wrong, and a time period must be served to help the employee. 
  • Clauses pertaining to giving notice period, providing the termination pay, if any, etc must be conducted by the organization (Ulrich, 2013).
  • Overall, the HR department and top management should always be empathetic to the employee and help in maintaining a positive relationship between each other which will only improve the goodwill of the company.

6. Conclusion

The report presented herein, highlighted the main aspects of the present day’s Human Resource Management starting from recruitment and selection to dismissal, redundancy and retirement. Throughout the paper, it has been repeatedly advocated that the organization stays focused on its employees and human resources and adopt means by which the right talent be attracted and retained and the turnover is lowered.
Employee turnover or employee attrition rate proves to be very costly for an organization and thereby it remains the perpetual aim for every organization to reduce such turnover or attrition rate (Dibia & Onuh, 2010). The employee turnover cost is defined as the very cost involved in hiring a replacement employee and train such replacement. The total costs which plague an organization having high employee turnover are – hiring cost, training cost, orientation cost, opportunities cost, bottom line cost, morale costs etc.
Therefore, higher the employee turnover, higher is the cost. Smart organizations strive hard to measure the employee satisfaction and undertake strategies to reduce turnover. Experts opine that it is economically more viable and cheaper for the organization to keep the present employees motivated along with keeping them productive than it is to again hire, orient and train the new employees (Buller & McEvoy, 2012).

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