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HUMAN RESOURCE PLANNING Definition Objectives Need & importance Process.

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1 HUMAN RESOURCE PLANNING Definition Objectives Need & importance Process

2 Human Resource Planning offers an accurate estimate of the number of employees required with matching skill requirements to meet organizational objectives. HRP is a forward looking function as human resource estimates are made well in advance. It is, of course, subject to revision. HRP is the process by which an organization ensures that it has the rt. no. & kind of people at the rt. places, at the rt. time, capable of

3 effectively & efficiently completing those tasks that will help the organisation achieve its overall objectives. HRP,then translates the organisation’s objectives & places into the no. of workers needed to meet their objectives. The process by which mgmt. determines how an org. should move from its current manpower position to its desired manpower position, thru planning mgmt. strives to have the rt. no. & rt. kind of people at the rt. places, at the rt. time, doing things which result in both the org. & the individual receiving maximum long run benefit.

4 Therefore we can understand HRP as` forward looking \future oriented. not static but an on-going continuous process. an integral part of corporate planning. its basic purpose is to make optimum utilization of an org.’s current & future human resources. has both quantitative & qualitative aspects.

5 is the primary responsibility of mgmt. is a systems approach to mgmt. can be long terms or short terms. Need for HRP future HR needs technological change Organizational changes—the changes in org. design and structure Demographic changes—changing profile of work force.

6 Skill shortages--To meet shortages. Labor laws Govt. policies in respect to reservation, child labor Pressure from trade unions The involvement of lead time in manning the job with most suitable capabilities International strategies Is foundation for HR functions

7 HRP at diff. Levels National level sectoral level eg.agricultural sector, industrial sector industry level eg. Cement, textile, chemical unit level—org. or Co. based on its corporate\ business plan. Departmental level Job level

8 Strategic Planning and Human Resources Strategic Planning  Procedures for making decisions about the organization’s long-term goals and strategies Human Resources Planning (HRP)  Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.

9 Strategic Planning and HR Planning Strategic Human Resources Management (SHRM)  The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals Strategy formulation—providing input as to what is possible given the types and numbers of people available. Strategy implementation—making primary resource allocation decisions about structure, processes, and human resources.

10 Strategic Analysis  What human resources are needed and what are available? Strategic Formulation  What is required and necessary in support of human resources? Strategic Implementation  How will the human resources be allocated? Human Resources Planning Strategic Planning

11 Objective The basic purpose of HRP is to decide what positions the organisation will have to fill and how to fill them. Objectives of human resource planning Forecast future HR requirements Cope with changes Use existing manpower productively Promote employees in a systematic way

12 To provide control measures to ensure that necessary human resources are available as & when required. To link HRP with organizational planning. To assess the surplus & shortage of human resources. To anticipate the impact of technology. To determine levels of recruitment & training. To estimate the cost of HR & housing needs. Basis for mgmt. dev. prgms

13 Facilitate productivity bargaining. To meet the needs of expansion & diversification prgms. Factors affecting HRP Type & strategy of organisation merger etc environmental uncertainties

14 Type & quality of forecasting information nature of jobs being filled off-loading the work Org. growth cycles & planning. time horizon Short plan Long range plan

15 Importance Organisations use HRP to meet future challenges, cut costs, and achieve greater effectiveness Importance of human resource planning Create a talent pool Prepare people for future Cope with organisational changes Cut costs Help succession planning

16 Analysing org.al objectives, plans & prgms. DEMAND FORECAST Resourse requirement skillwise,knowledgewise etc. Present prgms Control & review mechanisms SUPPLY FORECAST Present inventory of Human Resources + additions – losses (skillwise knowledgewise etc.) Net human resources requiremnets for futures (skill, knowledge,values etc) Forecast the future supply human resources in all sources if supply is inadequate Surplus of future of available human resources within the organization Shortage of future available human resource within the Organization Minus Adjust or Modify the Organisational Plan Plan for Redeployment Retrenchment/ Redundancy Plan for Employment Training Development Internal mobility (1) (2) (3)(4) (5) (6) (7) (8) (9)

17 The Process Of HRP 1)Analyzing the organisational plan – into production plan,plans for expansion diversification etc. Each plan can be further analysed into sub units

18 2)Forecasting the overall human resource requirements.

19 Cultural Audits  Audits of the culture and quality of work life in an organization. How do employees spend their time? How do they interact with each other? Are employees empowered? What is the predominant leadership style of managers? How do employees advance within the organization?

20 Composition: The Human Capital Architecture Core knowledge workers  Employees who have firm-specific skills that are directly linked to the company’s strategy. Example: Senior software programmer Traditional job-based employees  Employees with skills to perform a predefined job that are quite valuable to a company, but not unique. Example: Security guard

21 Contract labor  Employees whose skills are of less strategic value and generally available to all firms. Example: General electrician Alliance/partners  Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy. Example: Independent product label designer

22 Forecasting: A Critical Element of Planning Forecasting involves: a. forecasting the demand for labor b. forecasting the supply of labor c. balancing supply and demand considerations.

23 Model of HR Forecasting FORECASTING DEMAND Considerations Product/service demand Product/service demand Technology Technology Financial resources Financial resources Absenteeism/turnover Absenteeism/turnover Organizational growth Organizational growth Management philosophy Management philosophyConsiderations Product/service demand Product/service demand Technology Technology Financial resources Financial resources Absenteeism/turnover Absenteeism/turnover Organizational growth Organizational growth Management philosophy Management philosophyTechniques Expert forecasts Expert forecasts Statistical techniquesStatistical techniques Workforce analysisWorkforce analysis Workload analysisWorkload analysis Historical record of production Existing practices in other organizations Estimation based on various laws Job analysis Delphi technique Delphi techniqueTechniques Expert forecasts Expert forecasts Statistical techniquesStatistical techniques Workforce analysisWorkforce analysis Workload analysisWorkload analysis Historical record of production Existing practices in other organizations Estimation based on various laws Job analysis Delphi technique Delphi technique Techniques Staffing tables Staffing tables Skills inventories Skills inventories Management inventories Management inventories Replacement charts Replacement charts Succession planning Succession planningTechniques Staffing tables Staffing tables Skills inventories Skills inventories Management inventories Management inventories Replacement charts Replacement charts Succession planning Succession planning External Considerations Demographic changes Demographic changes Education of the workforce Education of the workforce Labor mobility Labor mobility Government policies Government policies Unemployment rate Unemployment rate External Considerations Demographic changes Demographic changes Education of the workforce Education of the workforce Labor mobility Labor mobility Government policies Government policies Unemployment rate Unemployment rate FORECASTING SUPPLY BALANCING SUPPLY AND DEMAND (Shortage) Recruitment Full-time Full-time Part-time Part-time Recalls Recalls (Shortage) Recruitment Full-time Full-time Part-time Part-time Recalls Recalls (Surplus) Reductions Layoffs Layoffs Terminations Terminations Demotions Demotions Retirements Retirements (Surplus) Reductions Layoffs Layoffs Terminations Terminations Demotions Demotions Retirements Retirements

24 Forecasting Techniques Forecasting demand Expert Forecasts: These are based on the judgments of those who possess good knowledge of future human resource needs --by supervisors --by top mgmt. Best approach is participative

25 Statistical techniques Trend Analysis: This is based on the assumption that the future is an extrapolation from the past. Human resource needs, as such, can be estimated by examining past trends. Ratios are calculated Eg –decline in physical stamina of employees change in values in extra & social activities are also calculated Econometric model By analyzing the past statistical data & by bringing relationships among variables

26 Workforce Analysis: All relevant factors in planning manpower flows in a firm such as transfers, promotions, new recruitments, retirement, resignation, dismissal etc are taken into account while estimating HR needs Manpower flows in a bank

27 Workload analysis: Based on the planned output, a firm tires to calculate the number of persons required for various jobs. An example of workload analysis Planned output for the year10,000 pieces Standard hours per piece 3 hours Planned hours required30,000 hours Productive hours per person per year 1,000 hours (estimated on annual basis) (allowing for absenteeism, turnover, idle time etc.) No. of workers required 30 If span of control in the unit is 10 per officer, then 3 officers are also required.

28 Delphi Technique  An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.  The final forecast represents a composite group judgment.

29 Forecasting the Supply of Employees: Internal Labor Supply Staffing Tables Skill Inventories Replacement Charts Succession Planning

30 Staffing Tables  Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.

31 Skill Inventories  Files of HR education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds. Replacement Charts  Listings of current jobholders and persons who are potential replacements if an opening occurs. Succession Planning  The process of identifying, developing, and tracking key individuals for executive positions.

32 Existing inventory Heads counts regarding total, deptt. wise,sex wise, designation-wise, skill wise Job family inventory eg clerks, cashiers age inventory—balance of young & old is preferred

33 Inventory of qualifications & training including minute qualifications & training received Inventory of salary grades—pay wise,allowances wise Inventory of past performance & future potentialities local & non--local wise inventory Potential losses Potential additions

34 Permanent total Permanent Partial Temporary total Temporary partial New hires Promotions in Transfer in Demotions in Acquiring new skills,knowledge,val ues aptitude etc.by the existing employees Deputations in Consultancy or advice Deptt. Or Sub unit Present HR Voluntary quits Death Retrenchment Dismissals Retirement Promotions out Demotions out Transfers out Loss of some skills, capabilities etc.due to ill health or accident Loss of values,aptitudes etc.,due to change in the attitude of existing employees towards job,deptt & org Absenteeism (temporary loss) Deputations out Lay off Consultancy or advice Permanent total Permanent partial Temporary total Temporary partial ADDITIONLOSS

35 Analysing sources of supply A)Internal labour supply:

36 Estimated internal labour supply for a given firm

37 B) External Labour supply: Local National HRIS can provide managers with a listing of candidates with required qualifications after scanning the data base. Supply Forecasting

38 Important barometers of labour supply 1. Net migration into and out of the area 2.Education levels of workforce 3. Demographic changes in population 4.Technological developments and shifts 5. Population Mobility 6. Demand for specific skills 7. National, regional unemployment rates 8. Actions of competing employers 9. Government policies, regulations, pressures 10. Economic Forecasts for the next few years 11. The attractiveness of an area 12.The attractiveness of an industry in a particular place

39 4)Estimating the net human resource requirement 5)Action plan for redeployment, redundancy, retrenchment If surplus in job—redeployment in form of transfers. Org. should plan for trg. or re-orientation before re-deployment.

40 Balancing demand and supply considerations Forecasting business activities (trends) Locating applicants  Organizational downsizing Reducing “headcount”  Making layoff decisions Seniority or performance? Labor agreements

41 7) Action plan for recruitment,development etc. 8) Modify the org. plan If future supply of HR from all external sources is estimated to be inadequate or less than the requirement, the manpower planner has to suggest the mgmt. to alter or modify the org.al plan. 9) Retention plan For retention of the existing employees by improving QWL. 10) Control & review mechanism 6)Forecast future supply from all the sources if supply is inadequate

42 Evaluation and Assessment Issues  Benchmarking: The process of comparing the organization’s processes and practices with those of other companies  Human capital metrics Assess aspects of the workforce  HR metrics Assess the performance of the HR function itself

43 Responsibility For Human Resource Planning HRP is a top management job. HR plans are usually made by the HR division in consultation with other corporate heads.

44 Limitations \Barriers Of Human Resource Planning Uncertainties People question the importance of HRP.They say offer attractive packages & u get or can quit people. No need This view is also held by top mgmt. ie. lack of top mgmt. Support HR plan may not adjust with org.al plan

45 HR information not readily available. Conflict between short term & long term HR needs. Time & expense. Conflict between quantitative & qualitative approaches to HRP. Non-involvement of other mgrs.eg.mkting, production mgr. not concerned much about it.

46 Effective Human Resource Planning HR plans must fit in with overall objectives of a firm. They must get consistent support from top management. Computerized human resource information systems must be used for applicant tracking, succession planning, building skills inventories etc..

47 The whole exercise must be carried out in coordination with operating managers Appropriate time horizon.

48 The Top Ten Measures Of Human Capital 1.Your most important issues 2.Human capital value added 3.Human capital ROI 4.Separation cost 5.Voluntary separation rate 6.Total labor-cost/revenue percentage 7.Total compensation/revenue percentage 8.Training investment factor 9.Time to start 10.Revenue factor

49 Measuring Strategic Alignment Strategy Mapping and the Balanced Scorecard  Balanced Scorecard (BSC) A measurement framework that helps managers translate strategic goals into operational objectives  financial  customer  processes  learning

50 Ensuring Strategic Flexibility for the Future Organizational Capability  Capacity of the organization to act and change in pursuit of sustainable competitive advantage.  Coordination flexibility The ability to rapidly reallocate resources to new or changing needs.  Resource flexibility Having human resources who can do many different things in different ways.


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