unit no 1 outmepic33

8/12/2019 Unit No 1 Outmepic33

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Unit No:- 01

Human Resource Planning(HRP)


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Human Resource Planning

HRP is a process of analyzing & identifyingthe need & availability of humanresources (HR) so that organization can

meet its objectives.

A strategy for the acquisition, utilization,improvement & retention of an

organizations human resources

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Definitions HRP

Definition 1: -Need, Availability, Supply=Demand

HRP includes estimation of how many

qualified people are necessary to carry out the

assigned activities, how many people will be

available, and what, if anything, must be done

to ensure personnel supply equals personneldemand at the appropriate point in the future.

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Cont...

Definition 2: -Right numbers, Capability, Organization Objectives

HRP is a Process,by which an organization

ensures that it has the right number and right

kind of people at the right place, at the righttime, capable of effectively and efficiently

completing those tasks that will help the

organization achieve its overall objectives.

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Cont....

Definition 3: - Translation of objectives into HR numbers

HRP is a process of translatingorganizational objectives and plans into

the number of workers needed to meet

those objectives.

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What is it HRP ? According to Geisler, Manpower planning is the process

including forecasting, developing and controlling by which afirm ensures that it has

The right number of people,

The right kind of people, At the right places,

At the right time,

doing work for which they are economically and efficient.

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General meaning of HRP In simple words HRP is understood as the process of

forecasting an organizations future demand andsupply of the right type of people in the right

numbers.

It is only after HRP is done, that the company caninitiate and plan the recruitment and selection

process.

HRP is a sub-system in the total organizational

planning. HRP facilitates the realization of the companys

objectives by providing right type and right number

of personnel.7


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OBJECTIVES:1. Forecast personnel requirement

2. Cope with the changes3. Use existing manpower productivity

4. Promote employee in systemic manner.Other objectives:

1.To recruit and retain the human resources of requiredquantity and quality.

2.To foresee the employee turnover and make the

arrangements for minimizing turnover and filling up of

consequent vacancies

3.To meet the needs of the program of expansion,diversification etc., & 4. To improve the standards skill ,

knowledge, ability, discipline etc.,


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OBJECTIVE:5. To foresee the impact of technology on work, existing

employees and future human resources requirements

6. To assess the surplus or shortage of human resources andtake measures accordingly.

7. To maintain congenial industrial relations by maintaining

optimum level and structure of human resources;

8. To minimize imbalances caused due to non-availability ofhuman resources of right kind, right number in right time and

right place;

9. To make the best use of its human resources; and to

estimate the cost of human resources.


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HRP FUNCTIONSBuilding organizational capability,

HR leadership,

Improving the HR function,HR transformation,

Managing the HR department,

HR audits and benchmarking,HR planning,

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Need Of HRP

Forecast future personnel needs

To avoid the situations of surplus or deficiency of

manpower in future, it is important to plan your

manpower in advance. For this purpose a proper

forecasting of futures business needs helps you to

ascertain our future manpower needs. From thisangle, HRP plays an important role to predict the

right size of manpower in the organization.

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Cope with change

HRP enables an enterprise to cope with

changes in competitive forces, markets,

technology, products and government

regulations. Such changes generate changes in

job content, skills demands and number of

human resources required.

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Reservoir of talent People with requisite skills are readily available

to carry out the assigned tasks.

Expand or contractIf the organization wants to expand its scale of

operations, it can go ahead easily. Advanceplanning ensures a continuous supply of people

with requisite skills who can handle challenging

jobs easily.13


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Cut costs Planning facilitates the preparations of an

appropriate HR budgets for each departments

or division. This, in turn, helps in controlling

manpower costs by avoiding shortages /

excesses in manpower supply.

Succession planningHuman resource planning, as a pointed out

previously, prepares people for future

challenges . the stars can be picked up & kept

ready for future promotions whenever they

arise.14
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Evolution Contributions

Frederick Winslow Taylor (1856-1915)

Mary Parker Follett (1868-1933)

Frank and Lillian Gilbreth (1868-1924 and 1878-1972)

Henry L. Gantt (1861-1919) Max Weber (1864-1920)

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EVOLUTION:The early part of the century saw a concern for

improved efficiency through careful design of work.During the middle part of the century emphasis

shifted to the employee's productivity.

Recent decades have focused on increased

concern for the quality of working life,total quality

management andworker's participation in

management.

These three phases may be termed aswelfare,development and empowerment.
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HRP Process

1) Environmental scanning

2) Forecasting & analyzing demand for HR

3) Forecasting & analyzing supply of HR

4) Developing action plans to match HR demand &

supply
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Environmental Scanning

Systematic process of studying & monitoring theexternal environment of the organization in order to

pinpoint opportunities & threats

Involves long range analysis of employment

Factors include economic factors, competitive trends,technological changes, socio-cultural changes,

politico-legal considerations, labour forcecomposition & supply, & demographic trends


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Environmental Scanning Eg., competitive pressures are likely to increase resulting in enhanced

productivity requirements & HRP objective may be to increase employeeproductivity by 5% in 2 yrs. which will require the firm to determinecurrent employee productivity (output / employees)

Attempts to answer 2 questions:

Which jobs need to be filled (or vacated) during the next 12 months?

How & where will we get people to fill (or vacate) these jobs?

Demand & supply of labour in loose & tight labour market

Major impact of the shortage of skilled workforce (tight labour market) in Indiahas been on staff cost (increased by 35% in 2005)

Fast growing sectors like retail, ITeS, telecom are new & do not have historicaltalent to bank on & hence they are hiring from other sectors with skill sets thatare relevant to their industries


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Forecasting HR Demand

FORECASTING makes use of information from the

past & present to identify expected future conditions.

Forecasts are not perfectly accurate & as the planningscope becomes shorter the accuracy of forecasts

increases

HR demand forecasts may be internal / external

Q l h d f d


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Qualitative Methods of Demand ForecastingMethod Advantages Disadvantages

Estimation People in position estimate the

number of people the firm willrequire in the next yr.

Incorporates knowledge of

corporate plans in makingestimates

May be subjective

Expertopinion

Panel of experts forecast HR requirements for particular future business scenarios.For this method, there may be a single expert, or estimates of several experts may bepooled together

Delphi Experts go through several

rounds of estimates with noface-to-face meeting

Incorporates future plans

& knowledge of expertsrelated to mkt., industry &technical development

Subjective, time

consuming & mayignore data

Groupbrainstorming

Face-to-face discussion basedon multiple assumptions aboutfuture business direction

Generates lot of ideas Does not lead toconclusion

Nominalgrouptechnique

Face-to-face discussion Group exchanges facilitateplans

Subjective which mayignore data

Simpleaveraging

Simple averaging of viewpoints Diverse view points taken Extremes views aremasked whenaveraged

Q i i M h d f D d F i


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Quantitative Methods of Demand Forecasting

Method Advantages Disadvantages

Trendanalysis&projection

Based on past relationship between a business factor related toemployment & employment level itself

Simple

long-runtrendanalysis

Extrapolates past

relationship betweenvolume of business activity& employment levels intothe future

Recognizes linkage

between employment& business activity

Assumes that

volume of businessactivity of firm forforecast period willcontinue at samerate as previous yrs

Ignores multiplicityof factorsinfluencingemployment levels

Regressionanalysis

Regresses employmentneeds onto key variables

Data driven

Uses multiple businessfactors

Difficult to use &apply

Q tit ti M th d f D d F ti


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Quantitative Methods of Demand ForecastingMethod Advantages Disadvantages

Simulationmodels

Uses probabilities of futureevents to estimate futureemployment levels

Makes severalassumptions about thefuture regardingexternal & internalenvironment

Simultaneouslyexamines several

factors

Costly &complicated

Workloadanalysis

Based on actual content ofwork

HR requirements basedon expected output ofthe firm

Productivity changestaken into account

Job analysis maynot be accurate

Difficult to apply

Markovanalysis

Probabilistic

Based on past relationshipbetween business factorrelated to employment &employment level itself

Data driven Assumes thatnature of jobs hasnot changed overtime

Applicable to stable

environment


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Causes of DemandEXTERNAL CHALLENGES:

Economic developmentsnoticeable effect but are difficultto estimate (Inflation, unemployment, & changing workforce

patterns)

Social, poli tical & legal challengeseasier to predict, but

their implications are not very clear (Implication ofabolishing mandatory retirement age in US may not beknown until a generation has lived without 65 & outtradition)

Technology changesdifficult to predict & assess but mayradically alter strategic & HR plans (PC would cause massunemployment vis--vis IT field as a large one employingmillions of people directly / indirectlycomplicates HR,

because it tends to reduce employment in one dept. while

increasing it in another)


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Causes of Demand

ORGANIZATIONAL DECISIONS:

As orgs. respond to changes in their environment, decisions are made tomodify the strategic plan,which commits firm to long-range objectivesgrowth rates & new products, markets / services & these objectivesdictate number & types of employees needed in future

To achieve long-term objectives, HR specialists must develop long-range

HR plans that accommodate strategic plan

In short run, planners find strategic plans become operational in form ofbudgets

Sales & production forecastsare less exact than budgets but may provideeven quicker notice of short-run changes in demand for HR

New ventur esmeans changing HR demandswhen a new venture isbegun internally from scratch, lead time may allow planners to developshort-run & long-run employment plansmerging HR group withCorporate Planning staff


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Causes of Demand

WORKFORCE FACTORS (ATTRITION): Demand is modified by employee actions such as

retirements,

resignations,

terminations,

death, &

leaves of absence

Analysis Technique

Markov Analysis of AttritionRates


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Forecasting Techniques

Trend Projection Forecasts:

Quickest forecasting techniques

Two simplest methods

1. Extrapolation: involves extending past rates of change into future(if an avg of 20 production workers was hired each month for

past 2 yrs, extrapolating that trend into future means that 240production workers will be added during upcoming yr.)

2. Indexation: a method of estimating future employment needs bymatching employment growth with an index, such as ratio ofproduction employees to sales (eg., for each million $ increase insales, production deptt. requires 10 new assemblers)

Both are crude approximations in short run because theyassume that causes of demand remain constant which isseldom the casemaking it very inaccurate for long-range HR projections

h d f d


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Methods of Demand EstimationTREND ANALYSIS & PROJECTION

Study of firms past employment needs over a period of yrs. to predictfuture needs

Appropriate business factor that relates significantly to employment levelsdiffers across industries (Universitystudent enrollment, Sales firmsales volume, Manufacturing firmtotal units produced)

Steps:

1. Determine & identify a business factor that relates to the number & type ofpeople employed

2. Identify historical trend of the relationship between this business factor & thenumber of people employed

3. Determine the ratio of employees to the business factor, that is, the averageoutput per individual employee per yearlabour productivity

4. Determine the labour productivity ratio for the past 5 yrs at least & calculatethe average annual rate of change in productivity

5. Calculate the human resource demand by dividing the business factor by theproductivity ratio

6. Project human resource demand for the target year.

M h d f D d E i i


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Methods of Demand Estimation

SIMPLE LONG-RANGE TREND ANALYSIS

Extrapolates the volume of currentbusiness activity for the years for which

the forecast is being made Since there is a correlation between

volume of business activity &

employment level, linear extrapolationwould also indicate HR demand by job &skill category

M h d f D d E i i


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RATIO ANALYSIS

RATIO between output & manpower deployedto achieve that output is established at a givenpoint of time

Eg., revenue per employee, sales vol. persalesperson, service contract per engineer, unitsproduced per employee, etc.,

Historical ratio between: Some causal factor (sales volume)

No. of employees required (number of salesperson)

M th d f D d E ti ti


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REGRESSION ANALYSIS

Drawing a statistical comparison of pastrelationship among variables

Statistical relationship between no. ofpatients (business factor) & employmentlevel of nurses in a nursing home may beuseful in forecasting the no. of employees

that will be needed if the no. of patientsincreases by say 20%



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Methods of Demand EstimationLINEAR REGRESSION ANALYSIS

Relationship between twovariables which is directly& precisely proportional

Production output &manpower are the twovariables & therelationship betweenthese two is plotted on agraph by drawing a lineof best fit

Analysis aims at providinga measure of the extent towhich changes in the

values of two variables arecorrelated with oneanother

X

a

b Y

Manpower

Production level

x

x

x

x

xx

x



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MARKOV ANALYSIS

Shows the percentage (& actual no.) of employee who remain ineach job from one yr. to the next, as also the proportion of thosewho are promoted or transferred or who exit the organization

Internal mobility among different job classifications can beforecast based upon past movement patternspast patterns of

employee movements (transitions) used to project future patterns Pattern is used to establish transitional probabilities & to develop a

transition matrix

Transitional probabilities:

Indicate what will happen to the initial staffing levels in each job

category / probability that employee from one job category will moveinto another job category

Determine the forecasted employee levels at the end of the yr

F ti & A l i HR S l


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Forecasting & Analyzing HR Supply

Internal supply forecasts relate toconditions inside the org. such as agedistribution of workforce, terminations,retirements, etc.

External supply forecasts relate toexternal labour market conditions &

estimates of supply of labour to beavailable to the firm in the future indifferent categories

M h d f F i E l HR S l


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Methods of Forecasting External HR Supply

INTERRELATED FACTORS THAT MUST BE CONSIDERED IN PROJECTINGEXTERNAL HR SUPPLY

Government estimates of population available for work Net migration into and out of the area

Numbers entering the workplace

Numbers leaving the workplace

Numbers graduating from schools / colleges Changing workforce composition

Technological shifts

Industrial shifts

Trends in the industry (actions of competing employers)

Economic forecasts

Government regulations & pressures such as job reservations for certaingroups

M h d f F i I l HR S l


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Methods of Forecasting Internal HR Supply

HR INVENTORY

Obtains & stores information about each employee of the org. in amanner that is easily accessible because it is necessary for HRP

Employee information stored in the inventory relates to KSA, experience,& career aspirations of the present workforce of the firm

Contents of HR Inventory

Personal identification information

Biographical information

Educational achievements

Employment history

Information about present job

Present skills, abilities, & competencies

Future focused data

Specific actions (like training needed for achieving career goals)

M th d f F ti I t l HR S l


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HR INVENTORY 2 types

Skills inventory: describes the skills &

knowledge of non-managerial employees &is used primarily for making placement &promotion decisions

Management inventory: contains the sameinformation as in skills inventory, but only formanagerial employees which describes thework history, strengths, weaknesses,promotion potential, career goals



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HR INVENTORY

Can be used to develop employee replacementcharts

Replacement chartslists current jobholders &identifies possible replacements should there be avacancy for reasons such as resignations, transfers,promotions, etc.

Replacement charts include the followinginformation on possible replacements like current

job performance, potential for promotion, training

experience required by replacement to be ready forthe key position

Chart also details when a replacement is needed fora job short term forecasts in nature



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SUCCESSION ANALYSIS & PLANNING

A systematic & deliberate process of identifying,developing & tracking key individuals within the firm toprepare them for assuming senior & top-level positionsin future.

Eg., SAIL poaching from global players & preparing adefence system wherein 2nd& 3rdline of command isbeing prepared; IBM, ExxonMobil, GE, etc., havealready hired its CEO for 2010

Eg., Godrej, Marico (fly. owned business) in India havedrop dead succession plan which keeps the wheelmoving where a promoter of the fly-owned firm mayalways be around to guide the company



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LABOUR WASTAGE ANALYSIS

Traditionally LW is measured by the employeeturnover index (% wastage index)

(No. of empls leave in mth / avg. empls) x 100

Turnover classified into:

Avoidable separations (resignations & dismissal)

Unavoidable separations (retirement, death, &marriage)

Turnover rate = [(S-US) / M] x 100



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ABSENTEEISM RATE

No. of man-days lost due to absence

from work during the periodAR = --------------------------------------- x 100

Avg. number of Total numberempls. during this pd. of days


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Thank You


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unit no 1 outmepic33

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