Module 4

Concept of Human Resource Planning

an effort to anticipate future business and environmental demands upon and organization and to provide personnel to fulfil that business and satisfy that demand (Bowey, 1974)

 Human resource planning must be integrated within the organizations

strategic plans
Senior management must emphasize the importance of human

resource planning
Human resource planning must be based on the most accurate

information available
Human resource planning must be assigned or located within a central

unit
A clear plan must be developed with associated time-spans and scope

of activity

Objectives of HRP
Consider Future Workforce An organization must analyze its future employment needs. 2. Analyze Current Workforce With future workforce needs considered, human resource planning must analyze the competency of the present workforce. Comparing future needs with current workforce strengths and abilities will identify gaps or surpluses. 3. Future Preparation Considering workforce surpluses and deficits, human resources must prepare action plans for the workforce. This includes identifying the type and number of employees needed, employee competency, budget considerations, recruiting and retaining measures, and the development and training of employees. 4. Evaluation Process Ensuring objectives are being met by the future workforce requires an evaluation process. This will determine if the workforce is adequate to satisfy strategic goals
1.

Objectives of Human Resource Planning

To recruit and retain the human resource of required quantity

and quality. To fill vacancies created because of employee turnover Part of Strategic Planning-To meet the needs of programs of expansions, diversifications etc. To assess the surplus or shortage of human resources and take measure accordingly To foresee the impact of technology on work , existing employees and future human resource requirement To create highly talented personnel

Need for Human Resource Planning

Shortage of certain categories of employees Rapid changes in technology, marketing, management etc. and the

consequent need for new skills and new category of employees

Changes in organization design and structure affecting manpower

demand
Govt. policies w.r.t. reservation, child labor, working conditions Pressure from trade unions

Factors affecting Human Resource Planning

HRP is influenced by
i) Type and strategy of organization ii) Organizational growth cycles and planning iii) Environmental uncertainties iv) Time Horizon v) Type and Quality of forecasting information vi) Nature of job being filled vii) Outsourcing

Benefits of HRP
HRP offsets uncertainties
Enables the organization to have the right type of people Helps anticipate the cost of salary enhancement Checks for redundancy of manpower To plan for facilities like canteen, conveyance, childcare

centres, quarters,
Facilitates recruitment, selection, training and deveopment

Linking Corporate Planning to Human Resource Planning

Analyzing Organizational plans: Overall organizational strategy, plan, sub-unit and departmental plan
Employment Planning and the Strategic Planning Process

Linking Employers Strategy to Plans

Influence of Strategic Management on Human Resource Planning STRATEGY HUMAN RESOUCE PLAN

Corporate Level Strategy

Expansion

Additional Human Resources of existing categories

Diversification
Mergers and Acquisition

Additional Human resources of different categories

Reduction of human resources of managerial positions Reduction of human resources of almost all categories through VRS and other means 511

Retrenchment

Human Resource Planning Environmental Scanning Business & Economic Forecasting Competitive Advantage Policies, Plans, Procedures Technical Needs

Job Analysis

Forecasting Human Resource Requirements

Forecasting Human resource demands Job descriptions Quantity Location Timing

Forecasting
Internal Supply Skills available Promotability Trainability Key Personnel

Net Human Resource Requirements Job Descriptions Quantity Location Timing Criticality

Recruitment

Training and Development Transfer and Job rotation

Selection

 Organizations need to do human resource planning so

they can meet business objectives and gain a competitive advantage over competitors.
Human resource planning compares the present state of

the organization with its goals for the future Then identifies what changes it must make in its human resources to meet those goals

Overview of the Human Resource Planning Process

Factors affecting HRP

Changing nature of a business e.g. from being product to market orientated Changes in the market e.g. consumers buying more or less of a companys product Technology the introduction of automation Competition e.g. a need to cut costs to compete might mean a reduction in staff

Demographics reduction in school leavers could lead to labour shortage in some areas
Government e.g. the need to be aware of equal opportunities legislation

Human Resource Forecasting

HR Forecasting attempts

to determine the supply and demand for various types of human resources, and to predict areas within the organization where there will be labor shortages or surpluses.

There are three major steps to forecasting:

1. Forecasting the demand

for labor 2. Determining labor supply 3. Determining labor surpluses and shortages

HRP Forecasting
Demand
Supply Net Needs Short, Mid and Long term

HRP- HR Demand forecast

HR Demand forecasting is the process of estimating the

quantity and quality of people required to meet future needs of the organization.

In a manufacturing company, the sales budget would be translated into production plan giving the number and type of products to be produced in each period. From this the number of hours to be worked can be derived and hence the number of people needed can be calculated.
Delphi Technique

Work study techniques

HRP- HR Demand forecast

Trend analysis The study of a firms past employment needs over a period of years to predict future needs. Ratio Trend analysis Ratios are calculated form the past data relating to number of employees of each category and production level, sales level, activity level, direct and indirect employees. This is also done with an allowance for changes in organization, methods and jobs. Present level of production( Jan 10) Present number of supervisor ( Ratio is 4:2000 i.e 1:500) Estimated level of production ( Jan11) Supervisior required 2000 units 4

5000 units 5000/500= 10

Forecasting HR Needs
Scatter plot

A graphical method used to help identify the relationship between two variables.
Size of Hospital (Number of Beds) 200 300 400 500 600 700 800 900 Number of Registered Nurses 240 260 470 500 620 660 820 860

Forecasting HR Needs
Scatter plot
Determining the Relationship Between Hospital Size and Number of Nurses

Forecasting HR Needs
Computerized forecasts
The use of software packages to determine of future staff needs

by projecting sales, volume of production, and personnel required to maintain a volume of output.

Generates figures on average staff levels required to meet product demands, as well as forecasts for direct labor, indirect staff, and exempt staff. Typical metrics: direct labor hours required to produce one unit of product (a measure of productivity), and three sales projectionsminimum, maximum, and probable.

Forecasting HR Needs
Managerial Judgment- In this the managers sit together , discuss and arrive at a figure which would be the future demand of labor. The technique may involve a bottom-up or a top-down approach
Bottom up Line manager prepares report on company and

department forecast
Top-up- Top management prepares company and department forecast

Both have to be done simultaneously if planning has to be successful

Forecasting HR Needs
Work study Techniques- This techniques is more successful where volume of work is easily measurable. One can calculate the length of the operations and amount of labour required. Eg
1.
3.

Planned output for next year

Planned hours for the year

20000 units
5 100000 2000

2. Standard hours per unit 4. Productive hours per man/year

5. Number of direct workers required ( 4/5) 50

Forecasting HR Needs
Delphi Technique- In this method organization solicits estimates of personnel needs from a group of experts, usually managers. The HRP experts act as intermediaries summaries the various responses and report the finding back to the experts. The experts are surveyed again after they receive this feedback. Summaries and surveys are repeated until the experts opinion begin to agree

HR Supply forecast
After demanding forecasting the next step is to identify the supply and source of supply Supply Forecasting -1st step is to obtain the data and information about the present human resource inventory

The principle dimensions here are- Head-count regarding total, department-wise, sex-wise, designation-wise, skill-wise etc
Supply forecasting measures the number of people likely to be available from within and outside an organisation.

Supply analysis cover 1) Existing human resource 2) Internal sources of supply 3) External sources of supply

HR Supply forecast
Turnover rate= Number of separations during one year *100 Average number of employees during the year Eg . If 30 out of 150 skilled employees left then the company need to recruit 90 more employee when it wants to have workforce of 200 next year

Gap Analysis
From demand and supply net human resource requirement is Determined
If surplus1) Retrenchment 2) Redeployment 3) Outplacement 4) VRS( Voluntary retirement scheme) 5) Downsizing 2) If shortage- Recruitment, selection, training and development, promotion
1)

Recent trend in HRP

Outsourcing
Temp staffing Work sharing Succession planning-This includes training programmes and

series of job assignments leading to top positions.. This involves top management involvement and commitment, highlevel review, formal assessment of the performance of potential employees, job assignment to top position

Internal employee supply

Through promotion also motivational Through training/development Affected by staff loss/retirement etc

Increased flexibility shift work, part-time

workers, short term contracts etc

External employee supply

This is affected by many factors

Housing Public transport Competition in the area Unemployment levels local and national Skills availability Availability of flexible workers Government training/subsidies Demographic trends

Problems of HRP
People are unpredictable
External influences e.g. recession Poor industrial relations if carried out badly Needs to be checked and monitored

Scope of HRP
1.
2.

3.
4. 5.

To keeps the record of current manpower with the organization. Assessing the future requirements of manpower for organization objectives. To make the manpower recruitment plans. To phase out the surplus employees. To make a layout of training programme for different categories of employees.

Meaning of Human Resource Information System (HRIS)

Human Resources Information System, is a system that lets you keep track of all your employees and information about them. It is usually done in a database or, more often, in a series of inter-related databases. These systems include the employee name and contact information and all or some of the following: department, job title, grade,

salary,
salary history, position history, supervisor, training completed,

special qualifications,
ethnicity, date of birth, disabilities, visa status,

and more

Human Resource Information Systems (HRIS)

The system used to acquire, store, manipulate, analyze,

retrieve, and distribute pertinent information regarding an organizations human resources. The electronic management of human resources information.

Major HR Functions
Planning, Organizational Design Staffing/Employment Communications & Public Relations Performance Management Reward Systems, Benefits, Compliance Employee & Organizational Training & Development Quality of Work Life

HRIS Sample Modules

Job Analysis HR Planning (supply & Performance Appraisal Employee/Labor

demand forecasting) Recruiting & Selection Training & Development Time & Attendance Payroll Compensation and Benefits

Relations Employee/ Performance Problems Employee Assistance Equity Programs Retirement/Pensions

Applications for the HRIS

Employee lists Attrition Salary/benefits modeling Seniority lists Applicant tracking Grievance tracking and

reporting/monitoring Employment equity (EEO) tracking/ monitoring Salary/benefits budget reporting HR/strategic planning

analysis Workers comp, LTD tracking HRMS reports

HRIS Enhances Productivity

Increases work force quality More appropriate hiring, better T&D, improved retention of desired employees Controls expenses More thorough salary/benefits administration tracking & analysis, training & development, ad hoc reports for queries, more user independence Eases regulatory

compliance

Importance of HRIS
Personnel -- largest part of organizations' operating costs Costs can range upwards of 80% to 90% of total operating budgets Personnel also among most difficult resources to

manage HRIS required to collect info, manage it, and report Access to information increasingly important for decision-making HRIS becoming important strategic tool

HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)

PERSONAL DATA Age, Gender, Dependents, Marital status, etc EDUCATION & SKILLS Degrees earned, Licenses, Certifications Languages spoken, Specialty skills Ability/knowledge to operate specific machines/equipment/software JOB HISTORY Job Titles held, Location in Company, Time in each position, etc. Performance appraisals, Promotions received, Training & Development MEMBERSHIPS & ACHIEVEMENTS Professional Associations, Recognition and Notable accomplishments PREFERENCES & INTERESTS Career goals, Types of positions sought Geographic preferences CAPACITY FOR GROWTH Potential for advancement, upward mobility and growth in the company

HUMAN RESOURCE INFORMATION SYSTEM

Input Data Types Job Analysis Recruitment Selection/Job Posting/ Employee Referral T&D Performance Appraisal Compensation Output Data Uses Employee Tracking Diversity Programs Hiring Decisions Training Programs/Elearning/Management Succession Contribute Toward Achievement of:

Organizational Strategic Plans

Benefits
Safety Health Labor Relations Employee Relations

Human Resource Information System

Compensation Programs

Benefit
Health Programs (e.g., Employee Assistance Programs) Bargaining Strategies Employee Services

Human Resource Management Plans

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