humanresourceplanninghrp-13114646679065-phpapp01-110723190304-phpapp01

7/27/2019 humanresourceplanninghrp-13114646679065-phpapp01-110723190304-phpapp01

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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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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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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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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 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



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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 100Avg. number of Total number

empls. during this pd. of days


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