Free Essay Sample: Risk Management Report

Published: 2019-08-30
Free Essay Sample: Risk Management Report
Type of paper:  Essay
Categories:  Risk management
Pages: 7
Wordcount: 1834 words
16 min read

The business world presents dynamic environments where industries are continually faced with risk as they engage in the various activities. To avoid disruptions of operations and chances of incurring significant losses, these industries need to engage in risk management activities as part of their normal operations. Risk management involves the identification and assessment of potential risks and thereafter coordinating and applying the necessary resources to mitigate, monitor and control these potential risks. The following is a risk management report on the human resource employed by a manufacturing company to facilitate its implementation of the corporate social responsibilities. The essay will put into consideration the six categories of risk namely, risk management planning, risk identification, quantitative risk management, qualitative risk management, risk response development as well as risk monitoring and control in designing the report.

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Needs of the Human Resource Industry

Human resource is concerned with the management of all facets regarding an organizations personnel. Functionally, it involves the recruitment of employees, their training and managing the employees satisfaction with their jobs. As such, it is majorly concerned with developing competent personnel as well as maintain their productivity. This task is normally left to the human resource professional employed by the company. As part of an organization, human resources also need to be checked to avoid significant losses by the entire company. Because of this, risk management activities are applied to human resources as part of the organizational planning and decision making.

Risk Management Planning

Scope of the Project

The company wishes to ensure that the corporate social responsibilities that have been recently designed as part of the company policy are implemented. These include the voluntary elimination of harmful effects such as noise pollution and treatment of wastes coming from the company through the construction of denitrification beds. This is a massive project given the size of the company and the amount of wastes it produces. Ensuring a smooth operation and completion of this project requires the company to employ the services of competent and suitable staff through its human resource professionals.

Project Deliverables

The social responsibility projects designed by the company are assumed to have a positive effect on both the company and its external environment. The noise pollution project is aimed at soundproofing the noise produced by the heavy machinery used by the company thereby limiting its exposure to the population. Construction of the denitrification beds is meant for the removal of nitrate from its waste water to reduce its damage to the soil in the nearby areas making it more viable for farming. The project will serve a means through which the company will improve its public image and have a positive impact on the consumers and community. The project is to be undertaken within a span of six months without fail.

Factors Contributing to Risk

The risks in this project are mainly concerned with the human resources employed to oversee this project. This includes the administration staff, supervisory staff as well as the hard labor employees. The fact that the soundproofing activities will be carried out amidst normal operations will pose a huge risk to the hard labor employees. The limited technical expertise within the company also creates a new threat to the construction of the denitrification beds and installation of the soundproofing equipment. In addition, the company is experiencing a shortage of employees, and this may, in effect, influence the human resource allocation activities negatively.

Project Timeline

The completion of this project will take a maximum of six months. Planning for the project will take place within the first two months. During this period, the projects tasks will be identified. The resources necessary to complete these project tasks will also be identified and planned. The following month will be used to outsource the essential human resources as well as other resources like building materials and equipment. The technical demands of this project require a good match of technical experts in the initial stage of planning. Identifying competent human resources to be employed in the construction of the denitrification beds and installation of the soundproofing equipment will also prove difficult. In this case, the project risks related to human resources will be present throughout the project.

Risk Identification

Risk identification is the process of detecting the risks that possess the potential of deterring the company from accomplishing its objectives. In this case, it involves determining the hazards that are anticipated in the course of the project. Further, the process of risk identification will also involve recognizing its characteristics and duration as well as the possible impacts it would have on the project. For this project, the possible risks that have a potential impact on the companys project with regards to human resource have been identified. Each of them has a negative impact on the project as well as the company and are discussed below.

Management Risk

These are risks that are related to the management of complex processes present in development projects (Baydoun, 2011). In this case, the risk emerges when management does not possess the correct and competent skills required to properly plan for the companys proposed project. Planning for this project requires the input of professionals who possess the appropriate knowledge and experience regarding the company and its operations. Therefore, making use of inept technical skills in the planning process could possess detrimental effects on the viability of the project. For instance, improper planning may lead to delays in the completion of the project within the specified time. Inefficient use of resources may also be a possible harm as a result of unskilled human resource in management.

Operational Risk

Generally, operational risks are risks that are concerned with improper functionality in projects (Baydoun, 2011). In this case, the functionality may be linked to the human resources to be employed to undertake the project tasks in different ways. For instance, hiring unsuitable candidates who are not motivated towards the projects may pose serious risks. Inadequate employee supervision may also pose serious risks to the project. This may be in terms of insufficient project orientation and training or the actual supervision of the project activities. The negative outcomes due to operational risks may include projects outcomes that are below expectations. The projects may also take longer than expected to complete due to operational incompetence in human resources.

Technical Risks

These are risks that may emerge due to the technical complexity that certain projects may require (Technical Risk Management, 2012). Every project requires a matching set of skills that are specific to the nature of the project. For this particular production companys project, building the de-nitrification bed and installing the soundproofing equipment both require specific experts with good knowledge of the field. Employing human resources that do not qualify to undertake these tasks may pose certain technical risks. Therefore, it is mandatory for the company to identify the best experts for each of this task. Failure to this may lead to sub-standard results from the project or overall failure of the entire project.

Quantitative and Qualitative Risk Management

Perhaps the most imperative facet of the management of project risks is isolating the most difficult tasks early in order to give it the attention and effort it requires. As such, risk assessment techniques prove helpful in determining what is most uncertain concerning a given project. Assessing the potential problems that may face a project with regards to human resource, therefore, requires opposite risk analysis techniques to be applied. The most effective technique to carry out the assessment provides either qualitative information that put risks into ranges\categories or quantitative estimates as a measure of each risk that may emerge during the project (Kendrick. 2003). Together, the qualitative and quantitative approaches to assessment provide the foundation for managing risk.

Qualitative Risk Management

This approach implies the use of qualitative techniques in an effort to manage potential project risks. This technique is often used to rank-order the potential risks within a project by means of perceived severity (Skybrary, 2016). The main aim is to select the most significant risks to which management techniques may be applied. For this project, a list of human resource risk is developed by assessing the probability and impact of each risk. This type of assessment offers greater insight into the absolute risk severity. A risk assessment table for the project is then developed. This technique is best carried out by a single individual for the best results.

The risk assessment table for the company is provided below. Therein, the risks related to the human resources are listed according to their category assignments such as high (H), low (L), or moderate (M). The overall risk is obtained by combining the information on the impact and probability columns that have been assigned to each of the risks.

Risk Probability H/M/L Impact H/M/L Overall risk

The management is incompetent in planning M H HM

The project staff is too slow L H M

Competent technical consultants are unavailable M L ML

The risks that fall above the absolute level such as moderate may be urgently selected and given the necessary management attention. This makes the qualitative technique most appropriate for managing risk related to human resources. In addition, the human resource risks fall under the known uncontrollable risk category and as such, recovery with a pre-developed contingency plan would be the best tactic for dealing with the effects when the risk occurs.

Quantitative Risk Management

The qualitative technique is a more rigorous approach to risk assessment as it strives for greater precision. They reveal more about the risks compared to the qualitative techniques as they provide data that may be used to assess the overall project risks and also allow for estimation of the schedule. It uses measurable and objective data to determine the probability of losses in a project as well as its associated risks (Kendrick, 2003). As such, numerical ratings are assigned to these risks to come up with probabilistic analysis of a project. In the case of the company project, a sensitivity analysis is the most suitable quantitative technique that can be used to assess the possible risks. This method analyzes the significance of each risk in the human resources by considering their level of damage in terms of cost compared to the float available for countering these risks. The quantitative schedule sensitivity of each risk is, therefore, determined and the necessary management efforts applied.

Risk Response Development

Risk response implies the effort aimed at devising strategic options or plans of actions to either avoid, reduce or counter the threats to the completion of a project (MyMG Team, 2010). In the case of human resources, avoidance and mitigation may be an ineffective strategy given the nature of human resources. Therefore, contingency planning proves to be the best option.

What Will Be Done When the Risk Occurs

In the event that the project is faced with technical risks as a result of limited expertise, consultants may be outsourced externally to oversee the activities of the project. This will include making alterations to the co...

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