Post on 13-Apr-2018
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Human Resource Planning
(HRP)
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HRP: An Overview
HRP is a process of analyzing &identifying the need for & availability of
human resources (HR) so thatorganization can meet its objectives
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Defining HR PlanningStrate
gy Oriented DEFINITION
A strategy for the acquisition, utilization, improvement & retention of anorganizations human resources
AIMS of HRP:1. to ensure the optimum use of the people currently employed
2. to provide for the future staffing needs of the organization in terms of skills,number, & ages of people
HRP establish control: planner work as a policeman who checks whetherstaffing levels are optimum
Process Oriented DEFINITION
HRP is as a continuous process of analyzing an organizations HR needs underthe changing conditions & developing the activities necessary to satisfy theseneeds like staffing, recruitment, selection, training, etc.
Process aimed at assisting management to determine how the organizationshould move from its current staffing position to its desired staffing position
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Business Strategy & HRP
Business strategyfocus (Porter)
HR strategy HRP activities
Cost leadership
Cost control
Stable businessenvironment
Efficiency & quality
Job & employee
specializationEmployee efficiency
Long HR planning scope
Internal promotions
Emphasis on trainingHiring & training forspecific capabilities
Differentiation
Long term focus
GrowthCreativity in job behaviour
Decentralization
Shorter HR planning scope
Hire HR capabilitiesrequired
Flexible jobs & employees
External staffing
Hire & train for broadcompetencies
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Business Strategy & HRPBusiness strategy
focus (Miles &Snow)
HR strategy HRP activities
Defender
Finds change threatening
Favors strategies whichencourage continuity &security
Bureaucratic approach
Planned & regularlymaintained policies toprovide for lean HR
Build HR
Likely to emphasizetraining programs & internalpromotion
Prospector
Succeed on change
Favors strategies of
product & / or marketdevelopment
Creative & flexiblemanagement style
Have high quality HREmphasize redeployment& flexibility of HR
Little opportunity for long-term HRP
Acquire HR
Likely to emphasize
recruitment, selection &performance basecompensation
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Perspectives of HRP
MACRO HRP
Assessing & forecasting demand for & availability of skills at national /global level Predict the kinds of skills that will be required in future & compare
these with what is / will be available in the country Eg.
Gillette merger with P&G whereby decided to restructure & move frombusiness units based on geographic regions to global business units based
on product lines which resulted in redundancy of some employees(Relocation to Singapore & VRS for others)
MICRO HRP
Process of forecasting demand for & supply of HR for specific
organization Eg.
Wipro (a software giant in India) raising wages / short-listing students intheir 2ndyr. of college for future employment in India
Genpact (an IT solution company in India) launching an associate traineeprogram with Osmania University in India
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JOB ANALYSIS
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Terminology commonly used in JA literature
JOBgroup of positions that have similar duties, tasks,& responsibilities
POSITIONset of duties & responsibilities performedby one person
Ajobis a general term, a positionis more specific.
Eg. as myjob, I am a teacher. But to be specific, my positionisElementary Gifted Specialist.
Eg. someone might work at the grocery store as theirjob, butspecifically, their positionis produce assistant.
JOB FAMILYgroup of 2 / more jobs that have similarduties / characteristics
TASKseparate, distinct & identifiable work activity
DUTYseveral tasks that are performed by an individual
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Terminology commonly used in JA literature RESPONSIBILITIESobligations to perform certain tasks
& duties
DUTY**BEHAVIOR SHOWING A PROPER REGARD / SENSE OFOBLIGATION, JUSTICE MORALITY, OCCUPATION OR POSITION. RESPONSIBILITY**OBLIGATION,TO DO WHAT IS ASK,IF YOU SAY
YOUR GOING TO DO SOMEHTHING DO IT,TRUST,HONEST, TO CAREFOR ANOTHER WHEN ONE
JOB DESIGNprocess to ensure that individuals havemeaningful work & one that fits in effectively with other jobs
JOB DESCRIPTIONwritten summary of the content &context of the job, outlining the tasks, duties, &
responsibilities of a job, as well as performance standards ofeach job
JOB SPECIFICATIONwritten statement of the KSA &other characteristics (human requirements) that arenecessary for performing the job effectively & satisfactorily
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Information obtained from JA
What is to be done? How is to be done?(CONTENT)
Under what conditions is the job to bedone (CONTEXT)
What KSA & other characteristics arerequired to perform the job (HUMANREQUIREMENTS)
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Information obtained from JA
JOB CONTENT Duties & responsibilities Job demands Machines, tools, & equipment Performance standards
JOB CONTEXT Physical, organizational & social context Work conditions, & work schedule
HUMAN REQUIREMENTS KSA, Education, Experience & personal attributes (personality,
interests, etc.)
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Components of a JA
JOB DESCRIPTION Statement of tasks, duties, responsibilities, & context
of the job
JOB SPECIFICATION KSA required to perform the job satisfactorily
JOB EVALUATION Comparison of relative value of jobs in organization
for making compensation decisions
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Methods of collecting information for JA
Number of waysmay be used incombination or in isolation
METHODS:
Interviews
Questionnaires
Observations
Participant diary
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JA Process
Determine purpose of JA
Review organization chart OC shows the division of work in organization, how
the job in question related to other jobs, how the jobfits into the overall organization, who reports towhom, & whom the incumbent reports to
Select representative jobs for analysis
Analyze jobs using data gathering methods
Check information for accuracy
Write JD & JS for use in HR activities
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Writing JDs
Job title & identification
Job summary
Relationships
Responsibilities & duties
Standards of performance & workingconditions
Equipment & tools Working conditions
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HRP Process
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 inorder to pinpoint opportunities & threats
Involves long range analysis of employment
Factors include economic factors, competitivetrends, technological changes, socio-cultural
changes, politico-legal considerations, labourforce composition & supply, & demographictrends
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Environmental Scanning Eg., competitive pressures are likely to increase resulting in
enhanced productivity requirements & HRP objective may be toincrease employee productivity by 5% in 2 yrs. which will requirethe firm to determine current 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 India has been on staff cost (increased by 35% in 2005)
Fast growing sectors like retail, ITeS, telecom are new & do not havehistorical talent to bank on & hence they are hiring from other sectorswith skill sets that are relevant to their industries
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Forecasting HR Demand
FORECASTING makes use of information fromthe past & present to identify expected futureconditions.
Forecasts are not perfectly accurate & as theplanning scope becomes shorter the accuracy offorecasts increases
HR demand forecasts may be internal / external
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 h d f d
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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 i i M h d f D d F i
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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 aredifficult to estimate (Inflation, unemployment, &changing workforce patterns)
Social, political & legal challengeseasier to
predict, but their implications are not very clear(Implication of abolishing mandatory retirement age inUS may not be known until a generation has livedwithout 65 & out tradition)
Technology changesdifficult to predict & assessbut may radically alter strategic & HR plans (PC wouldcause mass unemployment vis--vis IT field as a largeone employing millions 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 to modify the strategic plan,which commits firm to long-range objectivesgrowth rates & new products, markets /services & these objectives dictate number & types of employeesneeded 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 inform of budgets
Sales & production forecastsare less exact than budgets but
may provide even quicker notice of short-run changes in demandfor HR
New venturesmeans changing HR demandswhen a newventure is begun internally from scratch, lead time may allowplanners to develop short-run & long-run employment plansmerging HR group with Corporate 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 TechniqueMarkov Analysis of
Attrition Rates
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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.
h d f d
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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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Methods of Demand EstimationRATIO 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 h d f D d E i i
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Methods of Demand Estimation
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%
M th d f D d E ti ti
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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 thevalues of two variables arecorrelated with oneanother
X
a
b Y
Manpower
Production level
x
x
x
x
x x
x
M th d f D d E ti ti
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Methods of Demand Estimation
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 jobcategory / 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
h d f l l
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Methods of Forecasting External HR SupplyINTERRELATED FACTORS THAT MUST BE CONSIDERED IN PROJECTING
EXTERNAL 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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Methods of Forecasting Internal HR Supply
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
M th d f F ti I t l HR S l
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Methods of Forecasting Internal HR Supply
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 currentjob 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
M th d f F ti I t l HR S l
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Methods of Forecasting Internal HR Supply
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
M th d f F ti I t l HR S l
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Methods of Forecasting Internal HR Supply
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
M th d f F ti I t l HR S l
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Methods of Forecasting Internal HR Supply
ABSENTEEISM RATE
No. of man-days lost due to absence
from work during the periodAR = --------------------------------------- x 100Avg. number of Total number
empls. during this pd. of days
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Thank You