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Q.3 Due to the recent recession FinPlus , finance company has to downsize the
current employees. In this scenario what are the responsibility of HR professional.
What kind of plan they can prepare
Ans: Manpower costs are important elements of operating costs in many industries.
Companies that are able to control manpower expenses through various steps have
a much needed competitive advantage. Therefore, monitoring and controlling
manpower costs have assumed great importance in the modern era of global
competition. Some of the widely used approaches to analyze and control
manpower costs are as follows
Management by Objectives (MBO): In human resource management, measurement
has been the weakest area due to most of the variables being qualitative.
Ratio Analysis: In this approach, some important performance indicators
concerning the personnel function are used
Personnel Productivity: Analysis and control of human resource costs is not
enough. It is necessary to monitor and improve the productivity of human
resources. If the percentage increase in personnel productivity is higher than
percentage increase in personnel costs, per unit cost of personnel may be reduced.
Human resources have a tremendous potential to improve productivity. Firms can
achieve significant productivity gains and control manpower costs through O and
M studies, work simplification, quality circles, productivity linked rewards and
proper utilization of manpower at various levels
Employee Relations Index: This is a quantitative technique of measuring the
overall effectiveness of the total personnel programme. This composite index
consists of several strategic items such as absenteeism, separations, occupational
health, suggestion, formal grievance, work stoppages etc. Weights are assigned to
each item according to its relative importance.