The Case study Decision Situation

We will explore utility models for employee flows using a case study. It is hoped that HRM decision makers will analyze and present their decisions using cost-benefit and utility concepts; communicate better with supervisors, line managers and top managers; make more effective HRM decisions; and contribute more to organizational productivity and competitiveness. Those who fail to employ these concepts may have no one but themselves to blame when supervisors, line managers and top managers continue to ignore human resource management's contribution.

Consider a large organization employing 4,404 entry-level computer programmers, and 1,000 data system managers one level above them. Table 3 contains a description of the characteristics of the two jobs (adapted from Schmidt, Hunter, McKenzie and Muldrow, 1979 and Boudreau, 1987b).

Currently, 618 programmers leave the entry-level job each year and are replaced by 618 new hires. The organization experiences 100 separations per year in the upper-level data system manager job, and has a promotion from-within policy. Thus, 100 employees are promoted from the entry-level computer programmer job to fill the vacancies. An additional 100 new hires fill the entry-level vacancies in the programmer job created by these promotions, bringing the total number of new hires per year to 718.

Human resource managers in this situation are called upon to make decisions about how employees are selected, how they are recruited, how their turnover should be managed, and how they move between the two jobs.

How can managers determine whether the outcomes of these activities provide sufficient returns to justify organizational investments? How much additional investment could be justified? How should resources be allocated between activities such as recruitment, external selection and internal staffing?

Based on scenario given, illustrate and calculate utility analysis for Human Resource Planning in this company.

Table 3. Situation to be analyzed

Cost-Benefit Information	Entry-Level Computer Programmers	Upper-Level Data System Manager
Current Employment	4,404	1,000
Number Separating	618	100
Number Selected	718	0
Number Promoted	100	100