1. HR Utility Framework and Markov Employee Transition

2. HR Utility Analysis
HR Utility Analysis measures the economic contribution of a training program according to:
- how effective the program was in identifying & modifying the behaviour of employees and
- the future service contribution of employees
Utility is a function of:
the duration of a training program’s effect on employees’ performance
the number of employees trained
the validity of the training program
the value of the job for which training was provided and
the total program cost
The validity is determined by noting the performance difference between trained and untrained employees

3. Advantages of Utility Analysis
Utility Analysis (UA) can provide HR practitioners and other decision-makers with:
- dramatic, quantitative evidence of the bottom-line pay-offs of routine HR practices
UA can serve as a useful aid for HR decision-making
Practitioners can use it to compare the anticipated utility of alternative HR practices

4. Disadvantages of Utility Analysis
UA requires reliance on many untested assumptions, raising doubts about the validity or applicability of the estimates
UA assumes that people participating in HRM decisions can agree about empirical & value issues which may not be true
Reliance on UA as an decision technique can lead managers to overlook important unquantifiable features of HRM
The sophistication of UA techniques may restrict ability of HR practitioners to apply them to a wide range of practices

5. Markov Employee Transition
Markov analysis is a fairly simple method of predicting the internal supply of labour at some future time
Heart of Markov analysis is transition probability matrix
It describes the probabilities of an incumbent:
whether he is staying in his or her present job for the forecast time period (usually one year), or
moving to another job in the organisation, or
leaving the organisation
When this matrix is multiplied by the number of people beginning the year in each job
The results show how many people are expected to be in each job by the end of the year

9. Applications

10. limitations