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HUMAN RESOURCE MANAGEMENT

PGDM Part Time Program Semester IV

Lal Bahadur Shastri Institute of Management, Dwarka

Human Resource Planning - Todays session

Human Resource Planning: Job Analysis & Methods Job Description & Job Specification Demand forecasting & Supply Forecasting Surplus and Deficit of Employees

Recruiting Yield Pyramid

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Human Resource Management

It is a systematic exploration of the activities within a job. It is the process of studying & collecting information related to the operations & responsibilities of a specific job.

Job Analysis

Job facts are gathered, analyzed, and recorded, as the job exists.

Job Analysis is performed on three occasions:


When an organization is founded & a job analysis program is initiated for the first time. It is formed when new jobs are created. Jobs being significantly changed as a result of new technologies, methods, procedures or systems. Job Description & Job Specification are products of job analysis. Job Analysis in a jobless world - flatter organization, work team, boundary less organization

Lal Bahadur Shastri Institute of Management, Dwarka

Objectives of HRM

Human Resource Planning Job Analysis

Staffing
The goal is to define the ideal individual for a job from the perspective of the company, its strategy, & the employees with whom the new hire will work. Training & Development (role based competencies)

Job Analysis Helps in

Performance Appraisal / Management

Compensation & Benefits


Job design and redesign

Employee safety

Job evaluation

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Human Resource Planning


Job Analysis Methods

Questionnaires*

* Position Analysis Questionnaire

Observation
Interviews Diary method . Critical incidents Panel of experts

Developed by researchers at Purdue University


It is a structured job analysis instrument to measure job characteristics and relate them to human characteristics. It presents a more quantitative and finely tuned description of jobs. It consists of 194 job elements that represent in a comprehensive manner the domain of human behavior involved in work activities.

Lal Bahadur Shastri Institute of Management, Dwarka

Human Resource Planning


Position Analysis Questionnaire

The items fall into six categories:

Information input where and how the worker gets the information he or she uses on the job. Eg., use of written material
Mental processes - What reasoning, decision making, planning are involved in the job Eg., coding / decoding Physical activities - What physical activities does the employee perform and what tools or devices does he/she use? Eg., assembling/disassembling Use of keyboard devices

Lal Bahadur Shastri Institute of Management, Dwarka

Human Resource Planning


Position Analysis Questionnaire

The items fall into six categories:

Job context- In what physical and social context is the work performed? Relationships with other people - What relationships with other people are required in performing the job? Eg., instructing contacts with people, customers Other job characteristics what activities, conditions, or characteristics other than those described above are relevant to the job? Eg., specified work place amount of job structure

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Guidelines for Conducting Job Analysis Interviews


Put the worker at ease; establish rapport. Make the purpose of the interview clear. Help the worker to think and talk according to the logical sequence of the duties performed. Ask the worker only one question at a time. Phrase questions carefully so that the answers will be more than just yes or no. Avoid asking leading questions Secure specified and complete information pertaining to the work performed and the workers traits Consider the relationship of the present job to other jobs in the department. Control the time and subject matter of the interview. Be patient and considerate to the worker. Summarize the information obtained before closing the interview.

Interviews

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Human Resource Planning


Job Analysis

Who should conduct

Process of Job Analysis

Job incumbents themselves


Supervisors External analysts .

Organizational analysis
Selection of representative positions to be analyzed Collection of job analysis data Preparation of job description Preparation of job specification

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Job Analysis

Job Title Job Description Written statement of what the job holder is expected to do, how it is done, under what conditions it is done and why it is done. Job Location/Department Job No./Code Grade/Level
Contents

Job Summary Duties to be performed Reporting Relationship Percentage of time to be devoted to each task if possible Machines, Tools & Materials Relation to other jobs Nature of supervision Working environment & possible hazards

Inputs can be taken from observation of the job being performed, discussion with supervisor & employees, questionnaires filled by the supervisors & employees

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Job Analysis

Job Specification Job Specification is a document which states the minimum acceptable human qualities & qualifications necessary to perform a job properly.

Age Limit Education & Qualifications Previous Experience


Contents

Physique & health Appearance Mental Abilities Special Abilities Professional/Technical skills Personality Traits

Job Specification translates the job descriptions into human qualifications & at times levels of performance. It Serves as guide in hiring & is used in job evaluation.

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Human Resource Planning

Both the Coca-Cola Company and PepsiCo manage their employees in unique ways that match their strategies. Coke hires liberal arts graduates (and rarely MBAs) with no corporate experience and trains them extensively. Employees are committed to the company because they can count on lifetime employment, seniority-based salary increases, and promotion from within. In this family culture, decision making is centralized. The companys human resource management practices produce career managers who have been thoroughly socialized into understanding the company trademark, which is the most recognized in the world, and its value.

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Human Resource Planning

Pepsi is not Coke. Pepsi succeeds by targeting market niche where coke is not dominant and finding new markets through diversification. The human resource management practices have to produce employees who are innovative. Its people management practices have to produce employees who are innovative. Its people-management process consists of hiring experienced employees, many with advanced degrees, and fast tracking those employees who demonstrate early successes. In this individualistic culture, there is almost no job security and no guaranteed promotion from within. What Pepsi achieves is a continuous flow of new ideas (from experienced and intelligent employees) These two succinct examples illustrate the concept of aligning HR practices, policies and philosophies with organizational strategy.

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Human Resource Planning

HRP

In the opinion of Coleman, HRP is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization. HRP is a forward looking function as human resource estimates are made well in advance. It is, of course, subject to revision. Aggressive domestic and global competition, have made strategic planning virtually mandatory. 2 phases of HRP a. Projection of future manpower requirements b. Developing manpower plans for the implementation of projections.

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Objectives of HRM

HRP Forecast personnel requirements The basic purpose of HRP is to decide what positions the organization will have to fill and how to fill them. Cope with changes such as changes in technology, marketing, management Use existing manpower productively

HRP Helps to

Promote employees in a systematic way Organizations use HRP to meet future challenges, cut costs, and achieve greater effectiveness

Prepare people for future thus creating a talent pool


The demographic changes like changing profile of the workforce in terms of age, gender, education etc Government policies w.r.t reservation, child labor.

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Human Resource Planning


Information / Records for HRP

How many employees does the company currently employ?

What is the age profile by department?


.

How many employees leave the organization every year? In which areas of business do we tend to lose the maximum number of employees?

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Human Resource Planning


HRP Process
Environmental Scanning Strategic Planning

HRP

Demand Forecasting .

Comparing requirements & availability

Supply Forecasting

Demand = Supply

Surplus of workers

Shortage of Workers

No Action

Restricted hiring, Reduced hours, VRS, Layoffs, Restructuring, Retrenchment

R&S, Overtime, Outsource activities, BPR, Rehire retired employees, temporary employees, Retraining
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Human Resource Planning


External Environment

Economic factors, including general, regional & global conditions. Industry & competitive trends , including new processes, services Technological changes, including IT, innovations & automation Government & legislative issues. . Social concerns, including child care, elder care, the environment & educational priorities Demographic & labor market trends including age, composition, and literacy

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Human Resource Management

Strategic Planning

Involves a set of procedures for making decisions about the organizations long term goals and strategies.

Human Resource Planning

Process of anticipating & making provision for the movement of people into, within, and out of an organization

Strategic Human Resource Planning

Combines strategic planning & HR planning. It can be considered as the pattern of human resource deployments and activities that enable an organization to achieve its strategic goals

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Human Resource Planning


Linking Strategic Planning & Human Resources

Mission, Vision & Values External Analysis Strategy Formulation Internal Analysis
.

Structure & People Strategy Implementation

Evaluation
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HRP: Strategy Formulation


Corporate Strategy Focuses on domain selection; where will they compete. For example, IBM vis--vis Ford

Growth & diversification ; IBM & GE Mergers & acquisitions; HP & Compaq

Strategic alliances & joint ventures; Sony Ericsson, Renault SA and Mahindra & Mahindra Ltd. Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. Reason was to combine Sonys consumer electronics expertise with Ericssons technological leadership. Renault is Frances largest car maker and Mahindra & Mahindra Ltd. Is Indias largest maker of SUVs. The two companies have come together to make Logan Sedan in India.

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Key HR Activities Associated with Merger or Acquisition Phases

HR Issues

Key HR Activities

Identifying reasons for the M&A Forming M&A team/leader Searching for potential partners Selecting a partner Planning for & learning from managing the process Selecting the integration manager (s) Designing/implementing transition teams Creating the new structure/strategies/leadership Retaining key employees Managing the change process Communicating to and involving stakeholders Developing new policies & practices Solidifying leadership & staffing Assessing the new strategies & structures Assessing the new culture Assessing the concerns of stakeholders Revising & learning

Participate in preselection assessment of target firm Assist in conducting thorough due diligence assessment Participate in planning for combination Assist in developing HR practices that support rapid learning & knowledge transfer Assist in recruiting & selecting Assist with transition team design & staffing Develop retention strategies & communicate to top talent Assist in deciding who goes Facilitate establishment of a new culture Provide assistance to ensure implementation of HR policies & practices Participate in establishing criteria & procedures for assessing staff effectiveness Monitor the new culture & recommend approaches to strenghten it Participate in stakeholder satisfaction
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HRP: Strategy Formulation


Business Strategy Viewed in terms of domain navigation; how the company will compete against rival firms in order to create value for customers. Low cost strategy by competing on productivity & efficiency and outsourcing; Wal-Mart, Southwest Airlines Differentiation strategy by competing on value addition; Fed-ex and Sony

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HRP: Strategy Formulation


Functional Strategy Translate strategic priorities into functional areas of organization. In this regard HR policies & practices need to achieve two types of fit: external & internal. External Fit/Alignment - Focuses on fit between the business objectives and & the major initiatives in HR. Internal Fit/Alignment - HR practices should be aligned with one another internally to establish a configuration that is mutually reinforcing. Job design, staffing, training, PA, compensation, all need to focus on the same workforce objectives Charles Schwab & Co.

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HRP Internal Analysis


Assessing Current Human Resources current labour supply Internal analysis includes information about the employees and skills they currently posses

Staffing tables Markov Analysis Inventory Report HRIS / HRMS Replacement Charts Succession Planning

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HRP Internal Analysis


Assessing Current Human Resources current labour supply Staffing Table These are graphic representations of all organizational jobs, along with number of employees currently occupying those jobs. Future employment requirements derived from demand forecasts may also form a part of staffing tables.

Markov Analysis
It shows the percentage (and actual number ) of employees who remain in each job from one year to the next, as well as the proportions of those who are promoted, demoted, or transferred, or exit the organization It can be used to track the pattern of employee movements through various jobs and to develop a transition matrix for forecasting labor supply.

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HRP Internal Analysis


Markov Analysis for a Hypothetical Retail Company
2003-2004 Store Managers (n = 15) Asst. Store Managers (n = 36) Section Heads (n = 94) Departmental Heads (n = 288) Sales Executives (n = 1440) Forecasted Supply 16 41 92 Store Managers
80% 12 1 1% 4 1 1% 1 1 83% 30 66% 63 8% 8 15% 14 6% 2

Asst. Store Managers

Section Heads

Dept. Heds

Sales Executives

Exit

20% 3

10% 29

72% 207 6% 86

2% 6 74% 1066

16% 46 20% 288

301

1072

353

Figures in circles show the transition percentages

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HRP Internal Analysis


Inventory Report The audits of non-managers is called skills inventories & those of managers are called management inventories Purpose: to note what kind of skills, abilities, experiences & training the employees currently have Useful in career planning, management development & related activities S.Is vary greatly in sophistication
Personal Data Skills, education, experience, training Special qualifications Salary & job history Capacity of individuals-scores on psychological tests, health information Special preference of individual : geographic location, type of job, work timings Promotion potential Number & types of employees supervised Total budget managed Previous management duties

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HRP Internal Analysis


Inventory Report
Name : A.K. Sen Number : 429 Key words Word Accounting Book Keeping Auditing Description Tax Ledger Computer records Education Degree MBA B.Com Computer Literacy

Date printed : 1-4-2004 Department : Work experience From 1998 2000 2002 To 2000 2002 2003 T ax clerk Accountant Officer Special Qualifications Year 1998 1995 Course DBF Risk Management Position preference Accounting Auditing Date 1996 1999 Location choice Kolkata Delhi Bangalore M em be rsh ips 1. AIMA 2. ISTD 3. ICA Hobbies ABC Company XYZ Co. 41

Activity Supervision and analysis Supervision Analysis

Chief Accounts TT Bank

Major Finance Accounts

Languages

T ally Banking Software

French

Chess Football Boating

Employees Signature __________ Date _______________________

HR Department________ Date ________________

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HRP Internal Analysis


HRIS / HRMS HRIS (HRMS) is a database system that keeps important information about employees in a central and accessible location, even information on the global workforce. HRIS is an integrated approach to acquiring, storing, analyzing, and controlling the flow of information throughout an organization. The system might contain a program for tracking applicants, a skill inventory, a career planning program, and employee service programs such as an electronic bulletin board. MCI Telecommunications uses SmartSearch2, an automated resume tracking system, to identify qualified applicants quickly & accurately. Ford (B2E) An effective HRIS also provides online data and forecasts related to business operations: Exception reports: highlight variations in operations that are serious enough to require managements attention. For example, quality exception report. On demand reports: provides information to a specific request. Forecasts: A forecast applies predictive models to specific situations. For example, forecasts and the number and types of employees required to satisfy projected demand for the firms product.
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Succession Planning The process of identifying, developing, & tracking key individuals so that they may eventually assume top-level positions. Research suggests that in organizations where S.P efforts occur, employee morale is increased by 25%.
In 1994, years before he retired from GE, Jack Welch had started the succession planning process. SP is an ongoing, rigorous and challenging process at GE. GE adopted SP right from the mid 1900s. At GE, succession planning was not confined to only the top management, but was applies across all tiers of management. The managers of GEs various businesses were encouraged to identify potential candidates and fulfil their development needs, and transform them into efficient leaders ready to take up top jobs at the company.

Jack Welch

The company mainly used annual performance reviews for identifying potential candidates, until early 1980s. However, after Welch took over as the CEO, the SP process at GE became a more systematic process, with the use of various analytical tools and the involvement of the top management in leadership development and SP. Since early 1980s, the annual Human Resource Reviews had been at the heart of SP at GE. This process was reportedly given as much importance as financial monitoring in GE.
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Succession Planning

CEO Succession Planning During Welchs tenure of two decades as CEO, GE transformed itself from a manufacturer of light bulbs and appliances into an industrial conglomerate, with annual revenues increasing from $27.9 billion to $130 billion. He developed a list of qualities, skills and characteristics a CEO should essentially have. So, GE was ready for its nest CEO, years before it finally had to make the decision in 1999. The SP by Welch for his post had started way back in 1994, when Welch with help of Bill Conaty and Chuck Okosky, both VPs, HR & ED, created a list of essential qualities, skills and characteristics an ``ideal CEO should possess. The list mainly included elements such as integrity and values, vision, leadership, experience, edge stature, fairness, energy, balance, insatiable appetite for enhancing knowledge, courageous advocacy, and most importantly, stomach to play for high stakes and being comfortable operating under a microscope. As part of CEO succession planning, GE shifted its key candidates from one business to another to enable them to gain experience across all its businesses.

Jack Welch

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Succession Planning

The three candidates for the top spot at GE were Jeff Immelt the President and CEO of GE Medical Systems, W.James McNerney CEO of GE Aircraft System, and Robert L. Nardelli President and CEO of GE Power Systems. Jeff Immelt gets Selected In Nov2000, GE announced that Jeff Immelt would be the successor to Jack Welch, the Chairman and CEO of the Company. Welch was to retire in Sep, 2001, after a successful stint at GE. The announcement ended the battle that was viewed on Wall Street as the hottest corporate succession race of the decade.

Jeff Immelt

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Succession Planning

Welch wrote in his autobiography, that choosing between the final trio ``was the most difficult and agonizing decision I ever had to make...all the three exceeded every expectation we set for them. Their performance was off the charts. Any one of the three could have run GE. Acc. To Welch it was his nose and his gut which prompted him to select Immelt. Analysts believed that the fact that Immelt was younger than the other two aspirants at 44 years of age, contributed to his selection. GE is known to favour steady leadership over a long period. Since Immelt was six years younger than his rivals, he would have an opportunity to plan for a further 20 years at GE, like Welch who became the CEO at about the same age, and stayed with the company to implement his plans. Welch too characterised Immelt as ``a natural leader, and ideally suited to lead GE for many years adding weight to this view. The fact that McNerney and Nardelli were taken on as the CEOs of 3M and Home Depot resp., within weeks of their losing out to Immelt, was itself taken by observers as testimony of Corporate Americas confidence in leaders groomed by GE.
Jack Welch

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HRP Internal Analysis


Replacement Chart
Covers individuals from middle to upper level management positions. In an effort to facilitate succession planning, replacement chart highlights those positions that may become vacant in the near future due to retirements, promotions, transfers, resignations, or death of the incumbent.
General Manager V . K. Garg A/2 P A to General Manager L. Mathews B/1 Assistant General Manager R.K. Arora A/2 B.K. Nehru B/3 Key Names given are replacement candidates A. Promotable now B. Needing development C. Not suitable to position 1. Superior performance 2. Above Average performance 3. Acceptable performance 4. Poor performance

Division: HR Manager C.P . Thakur A/1

Division: Accounting & T axation Manager A.T . Roy C/2 Central Region Manager S.P . Kumar A/1 R. Pandey B/3

Division: Planning Manager A.N. Gupta A/1 K.P . Rao B/1

T echnical Advisor N.R. Murthy B/3

Northern Region Manager L.C. Srivatsav A/2 A. Thapar C/4

Southern Region Manager A. Subramanyam B/2 B.K. Menon B/1

Eastern Region Manager R. Krishna B/3

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HRP Internal Analysis


Acceleration Pools
Succession planning is a lost art-a casualty of mergers, downsizing, and reengineering Management succession programs typically focus on placement rather than skill development. Acceleration pools is management succession planning system that develops a group of high potential candidates for undefined executive jobs and focus on increasing their skills and knowledge rather than targeting one or two people for each senior management position.

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HRP Internal Analysis


Predicting Future Labour Supply Increase in Internal Supply of Labor Decrease in Internal Supply

New hires Contingent workers Transfer-in Promotions-in Demotion-in Individuals returning from leaves

Retirements Dismissals Transfer-out Promotion out Layoffs Voluntary quits Sabbaticals Prolonged illness

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HRP Internal Analysis


Estimated Internal Labour Supply for a Given Firm Can be used where it is possible to apply work measurement to calculate the length of operations and the amount of labor required
Sources of Inflows The Firm

Projected Outflows Promotions

Transfers Promotions New Recruits Recalls Employees In

Current Staffing Level Employees Out

Quits T erminations Retirements Deaths Layoffs

Current staffing level

Projected outflows this year

Projected inflows this year

Firms internal supply for this time next year


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HRP Internal Analysis


Demand Forecasting Demand forecasting is the process of estimating the future quality and quantity of people required. A forecast of labor demand is derived from a projection of how business needs will affect HR. Basis would be the annual budget & long term strategic plan, translated into activity levels for each function and department Qualitative and Quantitative methods

Expert Forecasts Delphi Technique Nominal Group Technique RatioTrend Analysis Workload Analysis

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HRP Internal Analysis


Demand Forecasting expert forecasting Bottom up or top down approach; Involves expert forecasting-experience, intuition & guesswork Considerations-work load, abilities of employees, future workload, future capabilities of employees Analysis-person by person & job by job, present & future needs. Demand Forecasting delphi technique Originally developed by the Rand Corporation, this technique elicits expert estimates from a no. of individuals.

The HRP experts act as intermediaries, summarize the various responses & report the findings back to the experts.
The distinguishing feature of Delphi technique is the absence of interaction between the experts.

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HRP Internal Analysis


Demand Forecasting Nominal Group Technique Individual estimates are followed by group brainstorming sessions It can also help to offset domination by a single person in group decision making by providing an equal opportunity to provide opinions. Demand Forecasting Ratio Trend Analysis Forecast is developed based on a past relationship between a factor related to employment & employment itself E.g., Sales levels, production level, activity/workload level to employment needs Trend projections relate a single factor to employment.
2001-02 2002-03 Production of Units 5,000 No. of Workers 100 Ratio 100:5000 2003-04 Estimated Production 8,000 No. of Workers required : : : : : 5000

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HRP Internal Analysis


Demand Forecasting Workload Analysis Can be used where it is possible to apply work measurement to calculate the length of operations and the amount of labor required WLA is used to determine how many employees of various types are required to achieve total production targets.
Planned output for the year Standard hours per piece Planned hours required Productive hours per person per year (allowing for absenteeism, turnover, idle time etc.) No. of workers required 30 10,000 pieces 3 hours 30,000 hours 1,000 hours (estimated on annual basis)

If span of control in the unit is 10 per officer, then 3 officers are also required.

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HRP
Manpower Gap Analysis
This is used to reconcile the forecasts of labor demand and supply. This process identifies potential skill shortages or surpluses of employees, skills and jobs Estimating Manpower Requirements

1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Number required at the beginning of the year Changes to requirements forecast during the year T otal requirements at the end of the year (1+2) Number available at the beginning of the year Additions (transfers, promotions) Separations (retirement, wastage, promotions out and other losses) Total available at the end of year (4+5+6) Deficit or surplus (3-7) Losses of those recruited during the year Additional numbers needed during the year (8+9)

Year 2

DEMAND ------- -----SUPPLY -------------------RECONCILIA TION OF THE ABOVE MANPOWER NEEDED

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HRP
Surplus & Deficit of Workforce

Surplus of Workforce Organizational downsizing & restructuring Making layoff decisions Retrenchment Voluntary Retirement Scheme Restrict Hiring Reduce work hours Use slack time for employees training or equipment maintenance Transfer out, promotion out, demotion out

Deficit of Workforce Hire new full time employees Overtime Outsource activities to other companies/consultants Attempts to reduce labor turnover Business Process Reengineering to reduce the needs Rehire retired employees on a part time basis Hire temporary employees Training & Development Transfer in, promotion in, demotion in Retraining & Redeployment(to assign people to new positions or tasks).

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