| | | | | It provides timely risk visibility and resolution. It |
| INTRODUCTION | | | | incorporates techniques such as milestone tracking, |
| The goal of Risk Management is to identify, assess, | | | | tracking of top risks, and regular risk reassessment. |
| and resolve risk items before they become threats to | | | | Risk Management plans, like human resources |
| a specific project or to the organization as a whole. | | | | initiatives, are living documents that will be updated as |
| Risk Management plans should include short-term and | | | | new risks are identified and addressed. |
| long-term risks to project schedules, costs, and the | | | | |
| functionality, adequacy and quality of project | | | | Risk Assessment and the HR Executive |
| deliverables. Risk Management is an integral part of the | | | | As defined above, risk assessment consists of |
| overall quality assurance effort necessary to minimize | | | | identification, analysis, and prioritization. |
| the major sources of rework, schedule and cost | | | | The HR executive may identify a risk and a specific |
| overruns, and performance and quality degradation. | | | | need that is not being addressed. For example, there is |
| | | | | a deviation between what should be occurring |
| PRINCIPLES OF RISK MANAGEMENT | | | | operationally and what is occurring. This deviation is |
| | | | | causing productivity to drop slowly but steadily. Upper |
| - Risk management should create value. | | | | management is aware of this drop in productivity and |
| - Risk management should be an integral part of | | | | is motivated to rectify the situation. |
| organizational processes. | | | | The HR executive having identified a risk, the drop in |
| - Risk management should be part of decision making. | | | | productivity for example, goes on to define the risk in |
| - Risk management should explicitly address | | | | terms of the human element. This is the underlying |
| uncertainty. | | | | cause of the drop in productivity. Perhaps the line |
| - Risk management should be systematic and | | | | manager is not communicating effectively with staff. |
| structured. | | | | |
| - Risk management should be based on the best | | | | |
| available information. | | | | |
| - Risk management should be tailored. | | | | The HR Executive and Risk Control |
| - Risk management should take into account human | | | | The HR executive has a vital role in controlling risk. A |
| factors. | | | | major component of Risk Management planning is risk |
| - Risk management should be transparent and | | | | avoidance. Many risks can be avoided by controlling |
| inclusive. | | | | and planning the human side of the corporate equation. |
| - Risk management should be dynamic, iterative and | | | | Succession planning, adequate severance and |
| responsive to change. | | | | outplacement, executive coaching and development |
| - Risk management should be capable of continual | | | | will ensure that an organization has the means to deal |
| improvement and enhancement. | | | | with current and future challenges .Risk resolution and |
| | | | | control are important responsibilities for HR executives. |
| CATEGORIES OF RISK MANAGEMENT | | | | Identifying crucial attributes for key executives within |
| | | | | an organization, coaching and developing these |
| Risk Management consists of the following two broad | | | | attributes and monitoring the executives on an ongoing |
| categories of activities i.e… | | | | basis will help to minimize and resolve potential areas |
| | | | | of risk such as employee turnover, low morale, |
| - Risk Assessment | | | | potential litigation from misunderstandings arising |
| - Risk Control | | | | between staff and management and negative publicity |
| | | | | due to any of these or other human issues. |
| - RISK ASSESSMENT | | | | IMPLEMENTATION |
| Risk assessment consists of risk identification, risk | | | | Follow all of the planned methods for mitigating the |
| analysis, and risk prioritization. | | | | effect of the risks. Purchase insurance policies for the |
| | | | | risks that have been decided to be transferred to an |
| | | | | insurer, avoid all risks that can be avoided without |
| | | | | sacrificing the entity's goals, reduce others, and retain |
| - | | | | the rest. |
| - Risk Identification | | | | |
| It involves identifying items or events (such as | | | | LIMITATIONS |
| changes in customer requirements or development | | | | If risks are improperly assessed and prioritized, time |
| technologies) that might have a significant negative | | | | can be wasted in dealing with risk of losses that are |
| impact on the project. These items or events might be | | | | not likely to occur. Spending too much time assessing |
| identified through risk identification checklists, through | | | | and managing unlikely risks can divert resources that |
| reporting by project participants, through comparison | | | | could be used more profitably. Unlikely events do occur |
| with historical data, or through contingency planning to | | | | but if the risk is unlikely enough to occur it may be |
| accommodate "Murphy's Law." | | | | better to simply retain the risk and deal with the result |
| | | | | if the loss does in fact occur. |
| - | | | | Prioritizing too highly the risk management processes |
| - Risk Analysis | | | | could keep an organization from ever completing a |
| It employs decision analysis, cost risk analysis, | | | | project or even getting started. This is especially true if |
| schedule analysis, reliability analysis, and similar | | | | other work is suspended until the risk management |
| techniques and models to analyze identified risks. | | | | process is considered complete. |
| - | | | | |
| - Risk Prioritization | | | | |
| It employs quantifying the risks and risk | | | | CONCLUSION |
| exposure, and using statistically based decision | | | | People and risk are as integral to farming as are |
| mechanisms. | | | | weather, prices and technology. Human resources |
| | | | | must have careful attention if managers are to have a |
| - RISK CONTROL | | | | full understanding of their sources of risks and their |
| Risk control consists of Risk Management planning, risk | | | | alternatives for handling risk .Managers’ paradigms, |
| resolution, and risk monitoring. | | | | understanding of human resource management and |
| - Risk Management Planning | | | | human resource skills determine the success they will |
| It uses information buying, risk avoidance, risk transfer, | | | | have with people. Like the rest of risk management, |
| and risk reduction to achieve its goals. | | | | blaming others for management shortcomings neither |
| - Risk Resolution | | | | solves problems nor provides escape from the |
| It techniques include appropriate staffing decisions, | | | | problems. The good news is that managers can make |
| detailed multisource cost and schedule estimation, | | | | human resource management one of their strengths. |
| monitoring, prototyping, requirements benchmarking, and | | | | The result will be better risk management, more |
| simulation. | | | | effective management and greater satisfaction from |
| - Risk Monitoring | | | | working with people. |