An extended Markov-switching model approach to modelling latent heterogeneity in departmentalized manpower systems

Abstract

In recent works in manpower planning interest has been awakened in modelling manpower systems in departmentalized framework. This, as a form of disaggregation, may solve the problem of observable heterogeneity but not latent heterogeneity; it rather opens up other aspects of latent heterogeneity hitherto unaccounted for in classical (non-departmentalized) manpower models. In this paper a multinomial Markov-switching model is formulated for investigating latent heterogeneity in intra-departmental and interdepartmental transitions in departmentalized manpower systems. The model incorporates the mover-mediocre-stayer principle. The use of EM algorithm for estimation of the model parameters and a validity test for assessing the model performance in comparison to the classical Markov manpower model are presented.