Unit II Human Resource Planning

Concept of Human Resource Planning (HRP)

HRP is the beginning step of HRM. It includes under acquisition phase. HRP is the process of forecasting a firms future demand for and supply of the right type of people in the right number. It is the process of matching the future demand and supply of HR in term of quality and quantity by choosing the best course of action to satisfy those needs. It moves the organization from current manpower position to desired manpower position.

Human Resource Planning Process

Step 1. Environmental Scanning The systematic monitoring of the external forces influencing a) b) c) d) Technological changes Demographic changes Political and legislative issue Social concern including child care and education the organization

Step 2. Assessing Organizational goal, strategy and current HR HR plan based on organizational goals and strategy. HRP should integrate with the goals and strategy of the firm Organization plan guide formulates HRP. HRP is an integral part of the corporate plan. Current HR position of the firm should be properly analyzed to make sound HRP. Current HR can be analyzed by analyzing of Human resource Inventory: It describes competencies currently available in the organization. Human resource information system: HRIS process the HR information and furnish the useful information. It is computerized database system. Job Analysis: It provides information about job currently being done. The nature of job and qualifications needed for doing job are identified by job analysis. These all analysis assists to know the present position and competencies of manpower

Step 3. Demand forecasting Forecasting HR demand in terms of quantity and quality is and important step of HRP. Factors that affect HR demand forecast are:

External environmental forces: Economic, legal, Social, cultural, political, technological etc Organization objectives, Business plan, Succession plan, Work force factors: Work load norm, separation, turnover, temporary help, promotion and transfer plan. Step 4. Supply forecasting Supply forecasting predicts the future supply of HR. There are different techniques of supply forecasting: Replacement chart, succession planning management Judgment, Statistical technique etc

Step 5.Matching the demand and supply of HR Demand and supply forecast of HR are matched to determine. Additional HR will be needed to meet the shortages .Retrenchment may be needed to tackle Surpluses.

Step 6.Preparation of Action Plan Actions plans should be prepared to deal with shortage and surpluses of HR. following any one plan or some of them should be developed for satisfying the current and future HR need.

Factors Factors That ThatDetermine Determine HR HRPlans Plans

Figure 23
2002 Southwestern College Publishing. All rights reserved. 28

Recruitment plan: no, types, timing Development plan: No, skills, area, methods, duration for training and development. Retention plan: Career development, compensation, levels, incentives Redeployment plan: transfer and retraining Redundancy (jobless) plan: no and types of employees laid off Promotion plan: Ratio and basis of promotion Succession plan: Internal supply relating to future Managers need Motivational plan: Financial and non financial motivation

Step 7. ControlandEvaluation: Monitor & evaluate the HR objectives with achievements .Monitor through HR indicators. Timely feedback

Relationship of HRP to Strategic Planning

A companys plan for how it will match its internal strengths & weaknesses with external opportunities & threats in order to maintain a competitive advantage - Dessler Organizations decision about what it wants to accomplish (its mission) & how it wants to go about accomplishing it - Ivancevich

Essence of Strategic Planning

Where are we now as a business? Where do we want to be? How should we get there? HRP goes hand in hand with the organizations strategic planning.Employment planning must be linked to the organizations overall strategy.HRP must be responsive to the changes both within & outside the organization. To ensure that appropriate personnel are available to meet the requirements set during the strategic planning process, HRM engage in employment planning

Linking

Organizational

Strategy

to

Human

Resource

Planning

Use/Role of HR information system in HRM

HR planning and Analysis Staffing projection Turnover Analysis Restructuring Analysis Job description Tracking Safety training Material data records Recruitment and selection HRP and training and development Training needs Assessments Career Planning Pay structure Organization Chart Skills Inventories Absenteeism Analysis Internal job matching HRP and Health, Safety and Security Accident records HR planning and staffing: Job offer refusal Analysis Employee training Profiles Succession Planning HRP and Compensation & Benefits: Financial and non financial benefits

Wage salary costing

Benefits usages Analysis

Vacation use

Human Resource Information System (HRIS)

Human Resource Information System (HRIS) is a computerized system that assists in the processing of HRM information. It is designed to quickly fulfill the HRM information needs of the organization. HRIS is not just useful in HRP. Its uses extend to the whole gamut (range) of HRM .It is designed to collect, analyze, store, retrieve and disseminate Information about job and employees. A computerized system that assists in the processing of HRM information. It is designed to quickly fulfil the personnel informational needs of the organization with almost no additional expenditure of resources .It is a database system that keeps important information about employees in central & accessible location even information on the global workforce. Its highly technical features permit an organization to track most information about an employee & about jobs & retrieve that information when it is needed. HRIS is useful for storing employment, training & compensation on each employee such information can help an organization gain a competitive advantage. Contents of HRIS: Personal Data: Name, address, date of birth, marital status, children etc Skills Data: Educational qualification, training received, language spoken, capabilities, special skills etc. Position Data: Current position, occupational history, various jobs held in the organization, work location etc. Compensation Data: Current salary, salary history, bonus, over time payment, deduction from salary, tax information, award received etc. Performance Data: Current and past performance appraisal data.

Role of HRIS in HRP Human Resource Inventory Role (Includes information about the workers & the skills they currently possess) Human Resource Forecast Role (Helps in forecasting future HR demand & supply) Human Resource Development Role (Identifying persons for training, development, promotion etc.) Job Analysis Role (Systematic investigation of a jobs content)

Methods of HR Demand and Supply Estimation Determining the Demand for Labor:
Forecasting the future need to manpower; developing a projection of future HR needs Year by year analysis for every significant job level & type Human resource inventory: estimates future HRM needs for every significant job level & type

Forecasts must be made of the need for specific knowledge, skills & abilities to meet the strategic direction of the organization

Forecasting Human Resource Demand

The estimation of future HR needs depends upon the strategic business plan and future organizational activities.

Techniques of Demand Forecasting

1. Managerial Judgment Method a) The Delphi Technique b) Nominal Grouping Technique analysis c) Managerial estimate Technique

2.Statistical Method a) Simple linear regression b) Multiple linear regression c) Time series analysis

1. Managerial Judgment Method a) Delphi Technique Developed by Rand Corporation in the 1940s, Expert estimate the HR demand. Experts work independently without any face to face discussion. An intermediary accumulates their opinion, Forecast is done through expert consensus b) Nominal Group Technique (NGT) Independent ideas are written by experts followed by group brainstorming session, Equal opportunity to provide opinions, Independently vote the ideas, Solution with the most individual votes win Voting or ranking is used to reach the consensus to avoid conflict.

c )Managerial Estimate Technique Used by top managers, can be top-down or bottom-up communication approach 2. Statistical Technique a) Simple Linear regression analysis: Estimation of future HR is obtained by establishing its relations with the past production, sales and business level. The past level of sales and employment is used to predict future sales and HR demand b) Multiple Linear Regression analysis: Extension of simple regression method More than two variables are used eg. Sales, productivity, technical equipment are considered to determined HR need. c) Time Series analysis: Past staffing levels are examined with seasonal movements. Eg. Sales levels are related to employment needs. variation and other

Forecasting HR Supply
Once the number of HR required for future is estimated the next step is to ensure the supply of this HR at right time at right job at right numbers. There are two methods of supply forecasting of HR. 1. Managerial Judgment Methods: A) Skills Inventory & Management Inventory To note what kinds of skills, abilities, experiences, training the employees currently have B) Replacement Planning Names of potential candidates with their present performance level & potentiality for future promotion C) Succession Planning (Management Succession) Develops a pool of qualified managers with a view to management succession. The following figures shows about succession planning.

D) Management Replacement Chart:

Management Replacement Chart

2. Statistical Technique:
A) Markov Analysis

It was used first by US Air Force; early 60s.An analysis of staffing levels from one period to another .It shows the probability of an employees moving from one position to another or leaving the organization. It is based on historical analysis of the movement of personnel estimates human resource supplies. It includes the following steps.

1. Develop effective HR forecasting system. 2. Estimate overall HR need to satisfy business objectives 3. Estimating HR supplies based on Historical analysis of the movement of HR by transfer, promotion, quits 4. Forecasting the total no of HR needed to satisfy the requirement of the firm.
B) Renewal analysis.

It uses the two bases to estimate the future supply of HR. The vacancies created by the organizations growth and expansion, internal movement of HR and personnel losses. The results of decision to fulfill the vacancies. Renewal analysis determines the no of HR to be supplied from internal and external sources.