Critique Paper

“A Decision Making Model for Human Resource Management in Organizations using Data Mining and
Predictive Analytics”

I. Citation

Sujeet Narenda Mishra, Dev Raghvendra Lama, A Decision Making Model for Human Resource
Management in Organizations using Data Mining and Predictive Analytics, International Journal
of Computer Science and Information Security, Vol. 14, No. 5, May 2016

Hamidah Jantan, Abdul Razak Hamdan, Zulaiha Ali Othman, Data Mining Classification
Techniques for Human Talent Forecasting

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John M. Kirimi, Christopher A. Moturi, Application of Data Mining Classification in Employee

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Performance Prediction

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Dinesh Bhardwaj, Analysis of Data Mining Trends, Applications, Benefits and Issues, International

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Journal of Computer Science and Information Security, Vol. 5 Issue 1, Feb 2016
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II. Topic
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A. Briefly describe the topic of the journal article.

The HRM generally maintains evaluation practices and systems impelling employee behavior,
commitment, and performance. It is the responsibility of the HRM to dig best talents around the
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world, look after training, evaluate employee performance, give away rewards and ultimately
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keep a right environment in the company.

HR analytics is a multidisciplinary approach to integrate methodology for improving the quality

of people-related decisions in order to improve individual and organizational performance. HR
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analytics plays a role in every aspect of the HR function, including recruiting, training and
development, succession planning, retention, engagement, compensation, and benefits.
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But most organizations lacked a consistent and general view of the workforce and thus needed
HR analytics to perform workforce optimization and hence it became important for HR to
develop IT and finance analytical skills and capabilities to produce better Return on Investment
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(ROI).

Further advancement of technologies when combined with predictive analytics exponentially

enhanced HR purposes in last decade. n recent times Information Technology acting a very
important role in every aspects of the human life. It is very essential to gather data from
different sources. This data can be stored and maintained to generate information and

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 knowledge. Data mining has become an essential factor in various fields including business,
education, health care, finance, scientific etc. Data mining is part of the knowledge discovery
process that offers a new way to look at data.

Human Resource Predictive Analytics (HRPA) generates insights that cannot be achieved through
traditional benchmarking as HR analytics is reactive and an evidence-based decision system
whereas HRPA is proactive and fact-based decision system.

B. Identify and define the important concepts focused on by the author.

Data mining is often called Knowledge Discovery in Data (KDD) which is believed to be a
combination of descriptive and predictive techniques. Data mining is the process of extracting
previously unknown data from large databases and using it to make organizational decisions.
Data mining is a set of activities or tool used to find new, hidden or unexpected patterns in data
or unusual patterns in data.

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Data mining is described as a process of discover or extracting interesting knowledge from large

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amounts of data stored in multiple data sources such as file systems, databases, data warehouse

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etc. This knowledge contributes a lot of benefits to business strategies, scientific, medical

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research, governments and individual.

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Predictive analytics is unlike descriptive analysis which considers external benchmarking data
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and involves tables, reports, ratios, metrics, dashboards or complex math’s; it is about data-
derived insights that drive better decisions. It includes statistical techniques, machine learning
methods, and data mining models that analyze and extract existing and historical facts to make
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predictions. It enables organizations to analyze the past and look forward to spot trends in key
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factors related to voluntary termination, absences and other sources of risk.

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Predictive analytics might be unexplored zone for HR, therefore to fully realize its profits; HR
personnel need to team up with other business units and customer-facing functions to
understand how they pull data and analytics to create value. Human Resource Predictive
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Analytics (HRPA) is an art and a critical skill to bring out the business insights of data analysis.
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III. Main Ideas

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A. Summarize the article’s content. In doing so, what is the author’s major argument?
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A significant transformation in the field of Human Resources (HR) has been drawing the
attention of corporate houses in the last decade. HR has undergone a paradigm shift in its focus
from a qualitative to a quantitative and more effective approach. Business intelligence (BI) on
the other hand helps in bringing people skills and technologies together in order to maximize the
value of a firm.

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 Evidence Based Management (EBM) drives the modern approach in HR. This approach helps in
making the right choice in businesses. It is revealed by the studies that the impact of EBM on
management practices and business performances are significantly rising. Although, the studies
related to HR has been drawing attention of the researchers and there is a felt need to give
sufficient attention to this field in practice, yet very few organizations are capable of measuring
the real value that people bring to their business. Hence there is a need for HR to grow itself
from descriptive measures and metrics to predictive and prescriptive analytics.

No organization is identical in terms of workforce, talent, environment, strategies, and market

type. And hence one successful but fixed model cannot be applied to any function of HR. Only
past data of the particular organization or its identical culture have ability to provide right
decision for HRM. As every strategy of an organization is totally or somewhat related to the
talents present, it becomes essential to provide a framework that accurately predicts talent and
workforce. Thus HRPA becomes essential for industries which desire for bringing unique
decision policies. The HR requires skills of technology and management both where technology
is not limited to analytics. HR should be able to create insights into data and produce predictive

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models that optimize the organizational performance. Advent of advance machine learning
programs and HR expert systems has eased to achieve organizational objectives of human capital

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management, workforce planning, employee management, and performance management etc.

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B. What are the supporting arguments?

The grand promise of predictive analytics – still largely unrealized in most companies – is that it
will become ubiquitous, guiding all decisions, transactions and applications. For the technology
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to rise to that challenge, organizations must move toward a comprehensive advanced analytics
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strategy that integrates data mining, content analytics and in-database analytics. We’ve sketched
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out a vision of “service-oriented analytics,” under which you break down silos among data
mining and content analytics initiatives and leverage these pooled resources across all business
processes.
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The learning curve, complexity and cost of predictive analytics tools are the principal challenges.
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Also, if you’re committed to deploying sophisticated predictive analytics, you’ll need to hire
specialized, expensive talent to handle data preparation and cleansing, build and score
predictive models, and integrate the models and their results into your BI, CRM and other
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application environments. And if you decide to integrate your predictive analytics initiatives with
your data warehouse through in-database analytics, you’ll need to bring the groups who handle
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those functions together and get them speaking a common language.

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IV. Conclusions

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 Data mining and predictive analytics are much-needed techniques for decision making for
human resource management in organizations. The application of modern techniques provided
better solutions to the existing limitations.

It is evident that industries cannot survive in the long run if they do not possess predictive
analytics skills from the human resource management. The usefulness of predictive analytics is
wider and hence application in all related areas of HRM is essential. HRPA helps organizations
contain HR-related costs while optimizing business performance as well as employee
engagement and satisfaction. HRPA is rapidly changing and growing technology which has
potential to achieve 100% accuracy in decision making for HR.

V. Reflection

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A. In your opinion, do the data and findings support the conclusions being made by the author?

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COMPANIES have a lot of data at their disposal but they are not using it. Part of the reason is

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that these companies neither know they have this data nor do they know how to use it to add
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value to the business.
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We have a very few companies that are expertly mining data and using it for decision making.
For example, some insurance companies have improved their accuracy at identifying risk
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through data mining. Some banks have also managed to reduce their loan default rate. However,
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despite all these advancements, a lot of decisions in our companies are being made subjectively
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without any evidence. I am particularly concerned about decision making with regards to human
resources.

I have gone to organizations where questionable human resources decisions were made because
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people chose to use a guesswork approach to decision-making — with absolutely no methodical

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or scientific process involved. Many companies are struggling, for example, at workforce
planning. They neither know how many employees (establishment provision) they need for a
particular period and at what cost. If they do, many of these companies guess these figures and
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usually discover later, for example, that they are over or under staffed. Many of the
retrenchment exercises that we are seeing could have been avoided if companies had done
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proper workforce planning using statistical models.

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B. Are the results thought provoking?

Yes.

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 C. What was the most important thing you learned by reading and critiquing this article?

Let me highlight some areas where I believe companies can get value by using data mining and
predictive analytics.

 Predict employee retention

It takes time and money to hire and train new recruits before they can become sufficiently
competent in their jobs. Statistical analysis (known as predictive analytics) can be used to
identify employees who are likely to leave your company in the next month, three months or
year, for example. This is much better, instead of running around when an employee says
they want to leave your company. Evidence based decisions on how to retain these
employees can be made now rather than later, which may be too late.

 Predict hiring success

In the event that you wish to hire a new employee, there is a risk that despite all the

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screening processes conducted before signing the contract, a new employee may perform
poorly once on the job. However, by analysing historical data your company has amassed all

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these years, the attributes of highly performing employees can be identified. Hiring
employees who possess the identified top performers’ attributes reduces the risk of making

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unsuccessful hires.
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 Workforce planning
The number of employees a company needs in the future should be determined now. Failure
to do this accurately results in overstaffing or understaffing. There are a lot of unnecessary
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retrenchment exercises that are happening that could have been averted had management
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done its manpower planning properly. There are also other companies that are understaffed
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but their management does not realise it. No matter how much pressure you put on
employees you will not achieve those performance targets because of these staffing issues.
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Analyzing your company’s historical data can help you accurately forecast your future business
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and staffing requirements. Workforce planning using your company’s historical data goes beyond
planning employee head count needed now and in the future. The skills you require for each
department or business unit, can also be identified by analyzing your workers’ demographic,
academic and experience profiles. You can also use workforce planning to ascertain the number
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of contract versus permanent employees that you will need now and in the future.
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D. What contributions does the paper make to the advancement of knowledge, theory and
practice? Why?
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The world has undergone far reaching cultural, societal and economical changes based on
the increasing dominance of digital technologies. In sum, these changes have led to the
current period being characterized as the “digital age”. In line with these changes, digital
technologies play an increasingly prominent role in both the lives of employees and human
resource management (HRM), which seems to be affected in multiple ways.

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 Relating to work content the ongoing digitalization implies an increasing automation of
manual and routine work, and a slow but steady change of remaining tasks towards “brain
and information work”. Given that, all information today is either digital, has been digital,
or could be digital”, information work of employees more and more depends on digital
tools and media. In consequence, qualification demands placed on employees have
continuously changed, and in particular “digital literacy” – understood as a broader set of
technical as well as mental skills to systematically acquire, process, produce and use
information – turns out a crucial key qualification for more and more employees.

In order to enable both individual employees as entire organizations to keep up with the
digital change, HRM has thus to systematically prepare, accompany and often also cushion
this enduring change of work content and corresponding qualification demands in its
multifarious facets. Moreover, beyond work content in particular work organization is
affected by digitalization. Digital technologies have enabled new forms of organizing work
that range from single virtual workplaces, to virtual groups, teams or communities, and
even to virtual organizations. While there are diverse varieties of organizing work digitally,

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the overarching principle is to support and connect task-performing humans by means of

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digital information and communication technologies, and to organize work across the

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borders of geography, organization and time in any desired way. As a consequence,

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members of such virtual units are often remote and unknown. Managing such members

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clearly differs from managing conventional employees in a lot of aspects such as leadership,

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performance feedback or development, while still a lot of practical aspects are not
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sufficiently tackled.
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