PROJECT REPORT ON

HUMAN RESOURCE PLANNING AND FORECASTING

Submitted in partial fulfillment of the requirement of Bachelor of Business Administration Guru Gobind Singh Indraprasth University

UNDER THE GUIDANCE OF: MS.SHIVANI MALIK

SUBMITTED BY: SAHIL WADHWA ROLL NO. 00420501709

SESSION: 2009-2012

BLS INSTITUTE OF TECHNOLOGY AND MANAGEMENT

DELHI ROHTAK ROAD, N.H. 10 JAKHODA, BAHADURGARH

BLS INSTITUTE OF TECHNOLOGY MANAGEMENT Delhi Rohtak Road, NH-10, Jakhoda, Bahadurgarh 124 507

CERTIFICATE

To whom it is ever concerned that it is to certify that the project HUMAN RESOURCE PLANNING AND FORECASTING is a bonafide work of SAHIL WADHWA Roll No. 00420501809 who completed the project under my supervision as minor project. She has done the project with diligence and sincerity and has put his heart and soul in the project.

Signature of Student SAHIL WADHWA

Signature of Guide MS. SHIVANI MALIK

STUDENT DECLARATION

I here by declare that the project report entitled HUMAN RESOURCE PLANNING AND FORECASTING Submitted in partial fulfillment of the requirement for the degree of Bachelor of Business Administration, to Guru Gobind Singh Indraprastha University, India, is my original work and not Submitted for the award of any other degree, diploma, fellowship, or any other similar Title or prizes.

Place :

SAHIL WADHWA

Date

ENROLLMENT NO. 00420501709

ACKNOWLEDGEMENT

The present work is an effort to throw some light on HUMAN RESOURCE PLANNING AND FORECASTING. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledge the encouragement and guidance received by my organizational guide MS.SHIVANI MALIK I convey my heartfelt affection to all those people who helped and supported me during the course, for completion of my Project Report.

DATE:

SIGNATURE:

CONTENTS

ACKNOWLEDGEMENT.04

EXECUTIVE SUMMARY...05

INTRODUCTION.07

HRIS....................40 RESEARCH METHODOLOGY.65 CONCLUSION.67 BIBLIOGRAPHY.69

EXECUTIVE SUMMARY

The objective of the project was to understand the place of planning in HRM, the different approaches to manpower planning and to explain the details of developments in e-HR.

Organizational objectives can be achieved only through the efforts of people. Jobs within the organization must be staffed with personnel who are qualified to perform them. Meeting these staffing needs requires effective planning for human resources. Once the HR planning function is fulfilled, then the staffing of the organization must be completed through the recruitment process. Employment recruiting has acquired a new importance for managers since both manufacturing and service organizations are finding it increasingly difficult to find qualified applicants to fill job openings. Along with it the objective of the undertaken study was to discuss the impact of HRIS on decision making HRIS.HRIS is a solution provider in various organizations & for this purpose the sample included some of the leader organizations of their respective industries. The sample included Eicher Goodearth limited, Hero Honda, Luxor International & lastly, Moser Baer.

HUMAN RESOURCE INFORMATION SYSTEM at Eicher Goodearth limited supports critical HR functions like Performance Appraisal, Training, Personnel Management etc. But, it does not support two important functions like Compensation & Recruitment. But, the firm realizes the need of incorporating other functions like Time & Attendance

system, Succession planning, Career Development & Payroll & its implementation is being considered by the top management.

HUMAN RESOURCE MANAGEMENT INFORMATION SYSTEM which has been implemented at Hero Honda, supports functions like Employee self service, Payroll, Personnel administration, Time management & Organization Management. The SAP team plays an important role in handling all the data & security issues relating to the HRIS package at Hero Honda. Thus, the onus for smooth functioning of HRIS lays on the SAP team members shoulders. Since, this HRIS helps the company in performing all the important HR functions, it has been highly successful in the organization.

HRIS at Moser Baer handles Training, Payroll, Time & attendance system etc. The benefits derived from the performance of these functions through the HRIS package are numerous but the other aspect of the ERP cannot be implemented at Moser Baer because of the nature of business the firm is into. It is a Manufacturing company, which encompasses many temporary workers who may not be even on regular payrolls of the company & thus, areas like Succession Planning, Career Development, and Recruitment etc. hold no meaning here.

INTRODUCTION

At the start of the 2000s there are increasing claims that the route to competitive advantage is achieved through people. A crucial element in this is the degree to which a link exists between HR practices and performance of the business, or the so-called bottom line.

The HR function faces a dilemma in becoming more strategic. A hard version of HRM puts stress on a plan for people that should fit the plan for the business. A soft version emphasizes people as assets who can be developed and through whose commitment and learning an organization might achieve competitive advantage. Manpower planning and HRP represent attempts to reconcile the tension between these versions of HRM.

Objectives of human research planning 1. To ensure optimum use of existing human research

2. To forecast future requirement of human research

3. To provide control measures

4. To link with human resource planning with organizational planning

5. To determine levels of recruitment and tranning

6. To estimate cost of HR and housing needs of employees

7. To provide a basis for MDP

8. To facilitate productivity bargaining

9. To meet the needs of expansion and diversification of programme

10. To asses shortage and surplus of HR

HUMAN RESOURCE PLANNING

Human resources planning (HRP) is the process of anticipating and making provision for the movement of people into, within, and out of an organization. Its purpose is to deploy these resources as effectively as possible, where and when they are needed, in order to accomplish the organization's goals. This study will look at the transition from a traditional manpower planning approach, driven by top-down planning (HRP) based on numeric techniques, towards human resource planning as a feature of HRM. The emphasis on quantities, flows and mathematical modelling, which appeared to be the main concern of manpower planning in the 1960s and 70s, is at least complemented by and integrated with a qualitative view of people whose performance lies at the core of business strategy. Performance lies at the core of the HRM cycle composed of an arrangement of human resource (HR) activities. HRP is therefore concerned with the development and provision of a framework that allows an organization to integrate key HR activities so that it may meet the needs of employees, enhance their potential and meet the performance needs of business strategy. When it concerns human resources, there are the more specific criticisms that it is overquantitative and neglects the qualitative aspects of contribution. The issue has become not how many people should be employed, but ensuring that all members of staff are making an effective contribution. And for the future, the questions are what are the skills that will be required, and how will they be acquired.

Cynics would say this is all very well, but the assertion of corporate control has been tried and rejected. And is it not the talk of the process benefits to be derived self indulgent nonsense? Can we really afford this kind of intellectual dilettantism? Whether these criticisms are fair or not, supporters of human resource planning point to its practical benefits in optimizing the use of resources and identifying ways of making them more flexible. For some organisations, the need to acquire and grow skills which take time to develop is paramount. If they fail to identify the business demand, both numerically and in the skills required, and secure the appropriate supply, then the capacity of the organisation to fulfill its function will be endangered. In both the diagnostic approach and the rationalized approach, manpower plans are established with reference to a predetermined strategy. HRP seeks to make the links between strategy, structure and people more explicit. The report tries to meet the need by illustrating how human resource planning techniques can be applied to four key problems. It then concludes by considering the circumstances in which human resourcing can be used.

1. Determining the numbers to be employed at a new location If organisations overdo the size of their workforce it will carry surplus or underutilised staff. Alternatively, if the opposite misjudgement is made, staff may be overstretched, making it hard or impossible to meet production or service deadlines at the quality level expected. So the questions we ask are:

How can output be improved organization through understanding the interrelation between productivity, work organisation and technological development? What does this mean for staff numbers?

What techniques can be used to establish workforce requirements? Have more flexible work arrangements been considered? How are the staff you need is to be acquired?

The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office.

2. Retaining your highly skilled staff Issues about retention may not have been to the fore in recent years, but all it needs is for organisations to lose key staff to realise that an understanding of the pattern of resignation is needed. Thus organisations should:

Monitor the extent of resignation Discover the reasons for it Establish what it is costing the organisation Compare loss rates with other similar organisations.

Without this understanding, management may be unaware of how many good quality staff is being lost. This will cost the organisation directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability. Having understood the nature and extent of resignation steps can be taken to rectify the situation. These may be relatively cheap and simple solutions once the reasons for the departure of employees have been identified. But it will depend on whether the problem is peculiar to your own organisation, and whether it is concentrated in particular groups (example: by age, gender, grade or skill).

3. Managing an effective downsizing programme This is an all too common issue for managers. How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organisation? A question made all the harder by the time pressures management is under, both because of business necessities and employee anxieties. HRP helps by considering:

the sort of workforce envisaged at the end of the exercise. the pros and cons of the different routes to get there. how the nature and extent of wastage will change during the run-down. the utility of retraining, redeployment and transfers. what the appropriate recruitment levels might be.

Such an analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established. If instead the CEO announces on day one that there will be no compulsory redundancies and voluntary severance is open to all staff, the danger is that an unbalanced workforce will result, reflecting the take-up of the severance offer. It is often difficult and expensive to replace lost quality and experience.

4. Where will the next generation of managers come from? Many senior managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a short-term skills shortage, it has not solved the longer term question of managerial supply: what sort, how many, and where will they come from? To address these questions you need to understand:

The present career system (including patterns of promotion and movement, of recruitment and wastage).

The characteristics of those who currently occupy senior positions. The organisations future supply of talent.

This then can be compared with future requirements, in number and type. These will of course be affected by internal structural changes and external business or political changes. Comparing your current supply to this revised demand will show surpluses and shortages which will allow you to take corrective action such as:

Recruiting to meet a shortage of those with senior management potential. Allowing faster promotion to fill immediate gaps. Developing cross functional transfers for high fliers. Hiring on fixed-term contracts to meet short-term skills/experience deficits. Reducing staff numbers to remove blockages or forthcoming surpluses.

Thus appropriate recruitment, deployment and severance policies can be pursued to meet business needs. Otherwise processes are likely to be haphazard and inconsistent. The wrong sort of staff are engaged at the wrong time on the wrong contract. It is expensive and embarrassing to put such matters right.

Purposes of Human Resource Planning and Forecasting In order to create a successful HR plan, you first need to ask, What are the purposes of human resource planning? There are four tasks that a HR plan will accomplish: 1. Identify the HR needs of the organization based on strategic goals (forecasting demand). 2. Help you understand the talent that you already have and become familiar with the talent you need (forecasting workforce supply). 3. Make sure youre up-to-date on your labor market, e.g. the talent that is available to you now and in the future (forecasting workforce supply).

4. Help you create or modify HR policies, procedures and practices to align the demand and supply of HR talent in the organization. Strategic HR Planning Today In these times of great economic turbulence, the importance of human resource planning is more apparent than ever. A short-sighted lay-off, intended to temporarily reduce overhead, can result in much heavier long-term costs. You may one day regret letting people go when youre spending time and money to hire and train new staff. Plus, you lose profits when you lose experienced, knowledgeable employees. In contrast, a smart human resources plan encourages your organization to keep a longer view of things and retain talent so that, once this economic upheaval has calmed down, youll have a committed team intact.

Looking to the Future There are six key components to successful HR planning that we will cover in greater detail in future posts: 1. Know the company/organizations strategic plan. 2. Do an external scan. 3. Assess the internal workforce.

4. Forecast workforce demand. 5. Forecast workforce supply. 6. Develop programs, policies and practices to align workforce supply and demand.

For now, remember the importance of human resource planning in our current scenario of widespread downsizing and layoffs. Think long-term when it comes to HR planning. Support and retain your best talent. And, that way, youll help your organization prepare for long-term success by aligning the mission of the organization with the talent that you have and the talent that you will need in the future

HRP and Strategic Planning As organizations plan for their future, HR managers must be concerned with meshing HRP with strategic business planning. At the broadest level, strategic planning addresses the question "What business are we in?" HRP, on the other hand, addresses the question "What skills are needed for success in this business?"

Through

strategic planning,

organizations

set major

objectives

and develop

comprehensive plans to achieve those objectives. This involves making primary resource allocation decisions, including those pertaining to structure, key processes, and the interrelationships among human resources. An increasingly vital element of strategic planning is determining if people are available, internally or externally, to carry out the organization's goals. HRP and strategic planning become effective when there is a reciprocal and interdependent relationship between them. In this relationship, the top management team recognizes that strategic-planning decisions affect--and are affected by--HR functions.

The HR department and its activities are then viewed as credible and important along with other management functions such as production, marketing, service, and finance.

IBM has been a forerunner in the integration of HRP and strategic planning. Within IBM's manufacturing and product development businesses the corporation's HR department develops a five-year HR strategic plan and a two-year tactical plan based on tentative business goals. These goals are formulated only after IBM conducts an internal and external analysis of the company's strengths and weaknesses. Major business decisions are not approved until the vice president of HR concurs with the business plan. The outcomes of systematic human resource planning are likely to include:

A Training Plan

A Recruitment Plan

A Redundancy Plan.

The HRM response to these ideas has come from Kane and Stanton (HRP in a Changing Environment) who suggest three alternative approaches.

The Staff Vacancy Approach

A reactive approach which assesses whether a vacancy should be filled and then promotes or recruits someone to fill it. This has the advantage of flexibility, but works best for small organisations in stable environments. At the other end of the scale, firms in very volatile situations may feel that long term projections are a waste of time.

Short Term HR Strategy

Change and uncertainty may make long term forecasting pointless, but for some organisations line mangers and HR managers can work together to identify key issues on an ongoing basis. The key issues are based on an assessment of external pressures and organisational change. This allows for a short term strategy, which is more sophisticated than filling vacancies.

Vision Driven HR Development

This is a long term approach, but is not driven by detailed staffing statistics. Instead it is driven by organisational core values and mission. This approach is often used where a major shift in culture and behaviour is needed.

Elements of Effective HRP

Managers follow a systematic process, or model, when undertaking HRP. The three key elements of the process are forecasting the demand for labor, performing a supply analysis, and balancing supply and demand considerations. Careful attention to each factor will help top managers and supervisors to meet their staffing requirements.

HUMAN RESOURCES PLANNING MODEL

LEADS TO EMPLOYMEN T FORECASTIN G SUPPLY ANALYSIS

RESULTING IN

BALANCING SUPPLY AND DEMAND CONSIDERATIO NS

CONSIDERATIONS Product/service demand Economics Technology Financial resources Absenteeism/turnoer Organizational growth Management philosophy

INTERNAL Staffing tables Markov analysis Skills inventories Management inventories Replacement charts Succession planning

RECRUITMENT (SHORTAGE) Full-time Part-time Recalls

REDUCTIONS (SURPLUS) EXTERNAL Terminations Layoffs Demotions Retirement

TECHNIQUES Trend analysis Managerial estimate Delphi technique

Demographic changes Education of workforce Labor mobility Governmental policies Unemployment rate

Quantitative Approaches

Quantitative approaches to forecasting involve the use of statistical or mathematical techniques; they are the approaches used by theoreticians and professional planners. One example is trend analysis, which forecasts employment requirements based on some organizational index and is one of the most commonly used approaches for projecting HR demand. Trend analysis is typically done by following several steps:

Trend analysis A quantitative approach to forecasting labor demand based on an organizational index such as sales. First, select an appropriate business factor. This should be the best available predictor of human resources needs. Frequently, sales or value added (selling price minus costs of materials and supplies) are used as predictors in trend analysis. Second, plot an historical trend of the business factor in relation to number of employees. The ratio of employees to the business factor will provide a labor productivity ratio (for example, sales per employee). Third, compute the productivity ratio for at least the past five years. Fourth, calculate human resources demand by dividing the business factor by the productivity ratio. Finally, project human resources demand out to the target year.

Number of Employees

Sales

Other, more sophisticated statistical-planning methods include modeling or multiplepredictive techniques. Whereas trend analysis relies on a single factor (e.g., sales) to predict employment needs, the more advanced methods combine several factors, such as interest rates, gross national product, disposable income, and sales, to predict employment levels. Because of the high costs of developing these forecasting methods, they are used only by large organizations in relatively stable industries such as transportation, communications, and utilities.

Quantitative Analogies Method

Experts can identify situations that are analogous to a given situation. These can be used to extrapolate the outcome of a target situation. For example, to assess the loss in sales when the patent protection for a drug is removed, one might examine the historical pattern of sales for analogous drugs. To forecast using quantitative analogies, ask experts to identify situations that are analogous to the target situation and for which data are available. If the analogous data

provides information about the future of the target situation, such as per capita ticket sales for a play that is touring from city to city, forecast by calculating averages. If not, construct one model using target situation data and another using analogous data. Combine the parameters of the models, and forecast with the combined model.

Rule-Based Forecasting Methods

Rule-based forecasting (RBF) is a type of expert system that allows one to integrate managers knowledge about the domain with time-series data in a structured and inexpensive way. For example, in many cases a useful guideline is that trends should be extrapolated only when they agree with managers prior expectations. When the causal forces are contrary to the trend in the historical series, forecast errors tend to be large . Although such problems occur only in a small percentage of cases, their effects are serious. To apply RBF, one must first identify features of the series using statistical analysis, inspection, and domain knowledge (including causal forces). The rules are then used to adjust data, and to estimate short- and long-range models. RBF forecasts are a blend of the short- and long-range model forecasts. RBF is most useful when substantive domain knowledge is available, patterns are discernable in the series, trends are strong, and forecasts are needed for long horizons. Under such conditions, errors for rule-based forecasts are substantially less than those for

combined forecasts . In cases where the conditions were not met, forecast accuracy is not harmed.

Neural Nets Method Neural networks are computer intensive methods that use decision processes analogous to those of the human brain. Like the brain, they have the capability of learning as patterns change and updating their parameter estimates. However, much data is needed in order to estimate neural network models and to reduce the risk of over-fitting the data .There is some evidence that neural network models can produce forecasts that are more accurate than those from other methods . While this is encouraging, our current advice is to avoid neural networks because the method ignores prior knowledge and because the results are difficult to understand.

Data Mining Methods Data mining uses sophisticated statistical analyses to identify relationships. It is a popular approach. Data mining ignores theory and prior knowledge in a search for patterns. Despite ambitious claims and much research effort, we are not aware of evidence that data mining techniques provide benefits for forecasting.

Qualitative Approaches

In contrast to quantitative approaches, qualitative approaches to forecasting are less statistical, attempting to reconcile the interests, abilities, and aspirations of individual employees with the current and future staffing needs of an organization. In both large and small organizations, HR planners may rely on experts who assist in preparing forecasts to anticipate staffing requirements. Management forecasts are the opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs.

Unaided Judgment Method

It is common practice to ask experts what will happen. This is a good procedure to use when experts are unbiased large changes are unlikely relationships are well understood by experts (e.g., demand goes up when prices go down) experts possess privileged information experts receive accurate and well-summarized feedback about their forecasts.

Prediction Markets Method

Prediction markets, also known as betting markets, information markets, and futures markets have a long history.

Some commercial organisations provide internet markets and software that to allow participants to predict. Consultants can also set up betting markets within firms to bet on such things as the sales growth of a new product. Predictions produce accurate sales forecasts when used within companies. However, there are no empirical studies that compare forecasts from prediction markets and with those from traditional groups or from other methods.

Structured Analogies Method The outcomes of similar situations from the past (analogies) may help a marketer to forecast the outcome of a new (target) situation. For example, the introduction of new products in the markets can provide analogies for the outcomes of the subsequent release of similar products in other countries. People often use analogies to make forecasts, but they do not do so in a structured manner. For example, they might search for an analogy that suits their prior beliefs or they might stop searching when they identify one analogy. The structured-analogies method uses a formal process to overcome biased and inefficient use of information from analogous situations.

To use the structured analogies method, an administrator prepares a description of the target situation and selects experts who have knowledge of analogous situations; preferably direct experience. The experts identify and describe analogous situations, rate their similarity to the target situation, and match the outcomes of their analogies with potential outcomes in the target situation. The administrator then derives forecasts from the information the experts provided on their most similar analogies. Structured analogies are more accurate than unaided judgment in forecasting decisions .

Judgmental Decomposition Method

The basic idea behind judgemental decomposition is to divide the forecasting problem into parts that are easier to forecast than the whole. One then forecasts the parts individually, using methods appropriate to each part. Finally, the parts are combined to obtain a forecast. One approach is to break the problem down into multiplicative components. For example, to forecast sales for a brand, one can forecast industry sales volume, market share, and selling price per unit. Then reassemble the problem by multiplying the components together. Empirical results indicate that, in general, forecasts from decomposition are more accurate than those from a global approach. In particular, decomposition is more accurate where there is much uncertainty about the aggregate forecast and where large numbers (over one million) are involved.

Simulated Interaction Method

Simulated interaction is a form of role playing for predicting decisions by people who are interacting with others. It is especially useful when the situation involves conflict. For example, one might wish to forecast how best to secure an exclusive distribution arrangement with a major supplier. To use simulated interaction, an administrator prepares a description of the target situation, describes the main protagonists roles, and provides a list of possible decisions. Role players adopt a role and read about the situation. They then improvise realistic interactions with the other role players until they reach a decision; for example to sign a trial one-year exclusive distribution agreement. The role players decisions are used to make the forecast. Forecasts from simulated interactions were substantially more accurate than can be obtained from unaided judgement. Simulated interaction can also help to maintain secrecy.

Management forecasts The opinions (judgments) of supervisors, department managers or others knowledgeable about the organizations future employment needs.

Ideally, HRP should include the use of both quantitative and qualitative approaches which complement each other. This provides a more complete forecast by bringing together the contributions of both theoreticians and practitioners. General principles

Managers domain knowledge should be incorporated into forecasting methods.

When making forecasts in highly uncertain situations, be conservative. For example, the trend should be dampened over the forecast horizon.

Complex methods have not proven to be more accurate than relatively simple methods. Given their added cost and the reduced understanding among users, highly complex procedures cannot be justified.

When possible, forecasting methods should use data on actual behaviour, rather than judgments or intentions, to predict behaviour.

Methods that integrate judgmental and statistical data and procedures (e.g., rule-based forecasting) can improve forecast accuracy in many situations.

 Overconfidence occurs with quantitative and judgmental methods.

When making forecasts in situations with high uncertainty, use more than one method and combine the forecasts, generally using simple averages.

Methods based on judgment

When using judgment, rely on structured procedures such as Delphi, simulated interaction, structured analogies, and conjoint analysis.

Simulated interaction is useful to predict the decisions in conflict situations, such as in negotiations. In addition to seeking good feedback, forecasters should explicitly list all the things that might be wrong about their forecast. This will produce better calibrated prediction intervals.

Methods based on statistical data

With the proliferation of data, causal models play an increasingly important role in forecasting market size, market share, and sales.

 Methods should be developed primarily on the basis of theory, not data.

Finally, efforts should be made to ensure forecasts are free of political considerations in a firm. To help with this, emphasis should be on gaining agreement about the forecasting methods. Also, for important forecasts, decisions on their use should be made before the forecasts are provided. Scenarios are helpful in guiding this process.

Supply Analysis Once an organization has forecast its future requirements for employees, it must then determine if there are sufficient numbers and types of employees available to staff anticipated openings. Supply analysis will encompass two sources--internal and external. Internal Labor Supply An internal supply analysis may begin with the preparation of staffing tables. Staffing tables are a pictorial representation of all organizational jobs, along with the numbers of employees currently occupying those jobs and future employment requirements.

Staffing tables Pictorial representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements

Another technique, called Markov analysis, 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, transferred, or exit the organization. Markov analysis can be used to track the pattern of employee movements through various jobs and develop a transition matrix for forecasting labor supply.

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.

External Labor Supply When an organization lacks an internal supply of employees for promotions, or when it is staffing entry-level positions, managers must consider the external supply of labor. Many factors influence labor supply including demographic changes in the population, national and regional economics, education level of the workforce, demand for specific employee

skills, population mobility, and governmental policies. National and regional unemployment rates are often considered a general barometer of labor supply. Organizational Downsizing In recent years a host of organizations have undertaken the extremely painful task of downsizing and restructuring. Because of either economic or competitive pressures, organizations have found themselves with too many employees or with employees that have the wrong kinds of skills. In an effort to reconcile supply and demand considerations, companies such as Sara Lee, Digital, and America West Airlines have eliminated literally thousands of jobs. In fact, since 1979, Fortune 500 companies have cut nearly 5 million jobs--more than one out of four they once provided. These cuts are not simply restricted to hourly workers. Technical, professional, and managerial positions are being eliminated at an unprecedented rate. Furthermore, the layoffs are not simply a result of a stagnant economy. In many cases, downsizing is part of a longer-term process of restructuring to take advantage of new technology, corporate partnerships, and cost minimization.

Barriers to HRP: Planners face significant barriers while formulating an HRP. The major ones are the following: 1. People question the importance of making HR practices future oriented and the role assigned to HR practitioners in formulation of organizational strategies. Their argument

is simple-there are people when needed. Offer attractive package of benefits to them to quit when you find them in surplus. 2. HR practitioners are perceived as experts in handling personnel matter, but are not experts in managing business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organizational plan, might make the overall strategic plan itself defective. 3. HR information often is incompatible with the information used in strategy formulation. Strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information. 4. Conflicting may exist between short-term and long-term HR needs. For example, there arises a conflict between the pressure to get work done on time and long-term needs, such as preparing people for assuming greater responsibilities. Many managers are of the belief that HR needs can be met immediately because skills are available on the market as long as wages and salaries are competitive. These managers fail to recognize that by resorting to hiring or promoting depending on short-term needs alone, long-term issues are neglected. 5. There is conflict between quantitative and qualitative approach to HRP. Some people view HRP as a number game designed to track the flow of people across the departments. These people a strictly quantitative approach to planning. Others take a qualitative approach and focus on individual employee concerns such as promotabilty and career development. Best results would accrue if there is a balance between the quantitative and qualitative approaches.

6. Non-involvement of operating managers renders HRP ineffective. HRP is not strictly an Hr department function. Successful planning needs a co-ordinated effort on the part of operating managers and HR personnel.

Change and difficulties in the 2000s Many organizations respond to difficulties by cutting costs and making staff redundant. With a pressure to sustain or increase profits, employees are more likely to be treated as a number in the quest to reduce costs. It is also realized that losing staff could have negative consequences: There is the loss of skill, knowledge and wisdom which employees accumulate over years of practice at work The result of downsizing may be a loss of productivity Those employees who remain at work after a period of downsizing may experience the survivor syndrome - effects of guilt, lower motivation and commitment, mistrust and insecurity where they respond sympathetically towards those made redundant Redundancy is stressful for those made unemployed, possibly through the process of being made redundant itself and then through the experience of unemployment.

Human resource accounting (HRA) Human resource accounting (HRA) is defined as the process of identifying, quantifying, accounting and forecasting the value of human resources in order to facilitate effective HRM. People in organizations differ from other assets unlike capital items and materials they cannot be owned by an organization.

Value-adding The value-added by people can increase over time through the knowledge and skills that they develop from the performance of work and specific activities such as training and development.

There have been attempts to account for the value of people in organizations and include this value in the balance sheet. Peoples knowledge and understanding has a value that is greater than the cost of their employment and forms part of an organizations intangible assets or intellectual capital.

Towards E-HR

Information and communication technology (ICT) has been developed to support HRP activities via human resource information systems (HRISs). There are three types of ICT application in HRM: Transaction processing/reporting/tracking applications covering operational activities, for example payroll, record-keeping and performance monitoring Expert systems to improve decision-making based on an analysis of decisions concerning such issues as sources of new recruits, salaries and training needs Decision support systems to improve decision-making through the use of scenario modelling in areas where there are no clear answers, for example teams formation and management development programmes.

In the 2000s, many HR departments are using the Internet and related technologies to support their activities - a process referred to as e-HR.

HRIS For years, Human resources were dependent upon paper documentation & administrative record keeping. Human resource retained their traditional duties with little significant change in how these duties were performed.

Today's dynamic HR management solutions rely on a combination of knowledgeable, effective employees and powerful HR management tools.

Human Resource Information System (HRIS) is a system of software & supporting computer hardware specifically designed to store & process all HR information. Also known as HRMS, Human Resource Management System or less commonly, HRIMS, these systems are mainstay of modern HR departments. These are Management information systems designed specifically to provide timely and accurate information necessary to improve HR decisions. E.g., legal reporting, dealing with problems such as turnover, locating qualified people, reducing data duplication and inconsistencies, employees wanting information on job openings etc

It is the sum total of all systems that store data, classify data and make it easily available to the decision maker in so far as the human resource is concerned. It could range from establishment records kept in personal files, to cardex cabinets to simple data base management and finally to highly developed mathematical packages that are computerized. WHY DO YOU NEED AN HRIS? Single point of data entry: Enter and update employee data in only one database reducing errors, eliminating duplicate records and saving both time and money. When the HR department applies a premium change to benefits or a salary adjustment, that information is instantly available to the payroll department. This

change is automatically reflected in payroll deductions without any transmitting, transferring or exporting of files. Reduction of labor costs: When you stop having the HR department track employee information in one program and the payroll department in another, you eliminate duplication of both clerical effort and errors, lightening the clerical load and increase your bottom line. Superior services for employees: Easily produce employee reports on family and personal benefits, amount of premium paid by employer and amount withheld from the employees paycheck. There is no rummaging around in several file cabinets or computer databases to assemble the answers. Enhanced reporting capabilities: Having access to pre-formatted reports on such topics as employee turnover by reason, workers compensation statistics, and salary and wage compensation by department makes understanding the strategic big picture much easier. Payroll and HR data can easily be combined into one report to meet custom management needs. Thus, a Human Resource Information System is a systematic procedure for collecting, storing, maintaining, retrieving and validating data needed by an organization about its human resources, personnel activities and organization unit characteristics.

In order to have an ethical leadership that is efficient and effective, a corporate culture that is both value based and value driven and a symbiotic man-technology relationship that rewards merit and eschews mediocrity, one thing is absolutely necessary-that is to

have a HRIS. HRIS, then becomes an indispensable enabler for developing corporate character through strategic HR intervention.

In order to do so he must make decisions on a regular basis and the reward for taking correct decision decides the remuneration he gets. It is not the number of decisions he makes that matter. What matters is the long-term financial impact of his decisions on the organizations working.. To reduce the level of uncertainty, the HRM specialist requires information and data regarding the human resources in the particular environment in which he has to function. This information and data is provided to him by the HRIS function. For all this HRIS becomes fundamentally important.

Traditionally, Human Resource departments relied on multiple programs for each department. An HRIS integrates all of these programs through a common database & single user interface. An HRIS combines separate HR systems into a centralized database that performs the majority of HR transactions.

HRIS are increasingly considered a necessary component of HR because of the increasingly global perspective of businesses. The combination of new technology & the subsequent loss of physical boundaries requires comprehensive HR systems that can maintain one database while incorporating a diversity of additional systems & capabilities.

It has three main functions that in general it is meant to perform: Store data and information of each individual employee and keep it updated. Make the data available to the administrative decision maker so that leave, promotion, PF, increments and incentives are granted in a systematic manner. Permit the company to file returns to government bodies as required by various labour laws.

More specifically HRIS provides the following facilities to the three main Sub-functions of HRM:

HRIS for HRP Inventory of manpower demand (needs) Inventory of manpower supply (available resources) Location, allocation and utilization details of the human resource Matching the right man for the right job at the right time Providing measures for proper recruitment and selection of manpower Assess the costs involved in employing manpower (wages)

HRIS for HRD Measurement of performance and potential of employees Matching training needs on the job and individual skills and aspirations Matching organizational goals and individual needs Calculating cost and benefits of training

Career planning and succession planning Analyzing various diagnostic indicators of organizational health

HRIS for HRA Providing linkages between productivity, profits and wages (payroll and wages) Determining the impact of monetary benefit on morale and performance (incentive)

Analyzing the costs of turnover and the frequency of separations (VRS) Deriving effective value added (EVA) by each employee through productive input Diagnosing the work climate of the organization Preparing for ISO 9000 series certification.

HRIS for IR Wage and salary structure as well as personal positioning Fitment chart and records Incentive scheme and production data Productivity norms and benchmarks set Details of the last negotiated settlement and its activation Targets set and achieved Small group activity, formation, targets and results.

Steps in implementing an HRIS:

As with any major change, proper planning is an absolute necessity for successful implementation of an HRIS. The steps outlined below describe the specific procedures involved in successfully developing and implementing an HRIS. Step 1: Inception of idea: The idea having an HRIS must originate somewhere. The originator of the idea should prepare a preliminary report showing the need for an HRIS and what it can do for the organizations. Step 2: Feasibility study: Feasibility study evaluates the present system and details the benefits of an HRIS. It evaluates the cost and benefits of an HRIS. Step 3: Selecting a project team: Once the feasibility study has been accepted and the resources allocated project team should be selected. The project team should consist of HR representatives from both management information systems and payroll.

Step 4:
Defining the requirements: A statement of requirements specifies in detail exactly what the HRIS will do. A large part of the statement of requirements normally deals with the details of the reports that will be produced. Naturally, the statement also describes other specific requirements. This typically includes written descriptions of how users collect and prepare data, obtain approvals, complete forms, retrieve data, and perform other non-

technical tasks associated with HRIS use. The key is here is to make sure that the mission of the HRIS truly matches managements needs for an HRIS.

Step 5:
Vendor analysis: This step determines what hardware and software are available that will best meet the organisations needs for the lowest price. This is a difficult task. The best approach is usually not to ask vendors if a particular package can meet the organizations requirements but how it will meet the organisations requirements but how it will meet those requirements.

Step 6:
Package contract negotiation: After a vendor has been selected, the contract must be negotiated, the contract stipulates the vendors responsibilities with regards to software installation, service, maintenance, training, and documentation.

Step7:
Training: Training usually begins as soon as possible after the contract has been signed. First the HR members of the project team are trained to use the HRIS. Towards the end of the implementation, the HR representative will train managers from other For useful Documents like this and Lots of more Educational and Technological Stuff Visit...www.thecodexpert.comdepartments in how to submit information to the HRIS and how to request information from it.

Step 8:
Tailoring the system: This step involves making changes to the system to best fit the needs of the organization. A general rule of thumb is not to modify the vendors package,

because modifications frequently cause problems. An alternative approach is to develop programs that augment the vendors program rather altering it.

Step 9:
Collecting the data: Prior to start-up of the system, data must be collected and entered into the system.

Step10:
Testing the system: Once the system has been tailored to the organizations needs and the data entered, a period of testing follows. The purpose of the testing phase is to verify the output of the HRIS and to make sure it is doing what it is supposed to do.

FACTORS THAT SPURRED THE GROWTH OF HRIS

The need to provide high quality real-time & accurate information

demanded by line managers, employees for basic information about their benefits & conditions of employment such as sick days & annual leave & lastly from the govt.

The need for more efficiency since, HR professionals have been under the

whip to save money, be more efficient, automates much as possible, & to still make time for strategic planning. In response, HRIS products have had to become more affordable & easier to use.

The emergence of partnership role between line management & HR

professionals. The challenge for HR will be to have a policy & paperwork framework & system in place that makes it easy for line to take on many of the administrative tasks previously handled by HR.

A sophisticated HRIS provides following advantages:

Simplifies transactions Automates administrative tasks Minimizes paperwork Provides a consolidated database to coordinate self-service technologies. Employee self services such as kiosks, voice response units, intranets etc. are dependent upon HRIS to be effective. Through systems integration, an HRIS will reduce duplication of work & error while improving access to employee information.

There are several issues to be kept in mind about the HRIS implementation & successful functioning:

The Selection Process for an efficient HRIS

Selecting HRIS software can appear to be a relatively ambiguous process to decisionmakers as the information is always favorably skewed from software vendors. There are several areas which organization should question before selecting an HRIS system.

Benefits

How will the organization benefit from a new HRIS system? What are the risks associated with implementing new HRIS software? What are the risks associated with deciding to continue to operate as before?

Financial aspects

How much value will this software add to the organization and what are potential savings?

How do the newly gained benefits compare to the overall investment? What are the risks associated with deciding to continue to operate as before? How much money is being wasted on opportunity costs associated with the current HR software?

Track Record

Which and how many other companies within the respective industry use this software? What is their satisfaction level?

How experienced are the consulting firms in the industry?

Internal Resources

How resistant are users to change? How can a dedicated project team be formed How long will it take for users to be self-sufficient?

The Future

Which and how many other companies within the industry use this software? What is their satisfaction level?

How much value will this software add to the organization and what are potential savings?

How do the newly gained benefits compare to the overall investment?

There is always some degree of uncertainty when it comes to selecting a provider for your HRIS system, but there are ways to reduce this uncertainty. By identifying specific needs of a new system, understanding the barriers to making the best decision and taking measures overcome these barriers, a company can better understand the process and reduce this uncertainty.

Organizational problems that may arise in implementing HRIS:

HR needs not fully clarified HR people unsophisticated and therefore focus on familiar, routine (maintenance) types of information Increased complexity in organizations has lead to the dispersion of HR responsibility among many different units No time to record data

Design considerations to be taken into account for assembling an appropriate HRIS system:
Assumptions regarding information quality, timing and quantity.

Performance criteria (e.g., turn-around time, ease of making modifications, changes, and corrections)

Input data specifications form, frequency, and quality also person responsible Timeliness, and responsibility for ensuring its protection against misuse Lists of high potential people may pose increasing difficulties Performance appraisals have to be fully disclosed to individuals

Adaptability, future requirement how will the system meet future org. need? (Should be 5 8 years)

Quality control Research capability Costs (e.g., training)

Privacy issues that are to be taken into consideration while implementing & using HRIS in the organization. Regular notification of the existence and content of information records related to the person Records accessibility with opportunity for correction Notification of non-routine record usage

Transparency for effective HRIS

Information is power in many organizations and managers are motivated to hoard information rather than to share it widely. For example, managers may hide information about their own organizational performance but are keen to have the performance details

of their peers. A properly designed HRIS promotes transparency in information sharing throughout the organization. Peers have access to information about each others domain; subordinates have information about how their performance contributes to overall organizational performance. An organization that is comfortable with such transparency.

Building organizational character

HRIS develops a set of good manners for dealing with this broad access of information sharing, thereby strengthening organizational character.

Teamwork for effective HRIS

Effective HRIS is prevalent in organizations that are familiar with work teams, matrix managed projects and other forms of interaction outside the chain of command. Senior managers in such organizations have learned when micromanagement is appropriate and when it is not. Middle managers have learned that most interactions between their superiors and their subordinates are not threatening to their position. Workers are at ease with senior managers when working in teams and know the expectations of their supervisors from such interactions.

HR competencies required for effective HRIS

In addition to the afore-mentioned components of a strong organizational character, an effective and successful HRIS requires the following competencies of an HR practitioner: Knowledge of the business, which implies how markets function, how finances are managed and how products are sold.

Delivery of HR Practices, which implies the ability to design and implement strategies for staffing, compensation, training, organizational design and industrial relations.

Management of change, which means the ability to make change happen, to manage data, lead and influence change.

Fostering a climate for the learning organization to flourish and a vibrant value based corporate culture to blossom.

Acting as the guardian of core beliefs and values, promotes core competencies and ensures compliance through good governance.

Record ability for effective HRIS

Information should be specifically tailored to meet the information needs of the management. Ideally, it should have a navigable format that is specifically designed to suit individuals with limited time.

Reliability for effective HRIS

Technical problems are frequently reported as a significant barrier to HRIS success. The most difficult problem lies in integration of data from a wide range of sources both inside and outside the organization. Therefore, reliability of the data collected is very important for the success of HRIS. Moreover, managers should be aware of the dangers of statistical data and should be skilled at interpreting and using data in an effective manner.

Leadership-ability to use appropriate interpersonal styles and methods to guide and inspire individuals or groups towards tasks and goal accomplishment

Persistence- ability to make repeated efforts to overcome obstacles Presentation knowledge of effective presentation of information in Diverse circumstances

Group processes- understanding of group dynamics and ability to facilitate group processes.

Thus, a well formulated and client friendly HRIS is of paramount importance in helping to build a learning organization. Timely access to information influences learning. When a manager obtains the answer to a question, that answer typically sparks other related questions in the managers mind. If those questions can be posed immediately, and the next answer retrieved, the learning cycle continues unbroken. Such a learning culture enables the manager to learn more about system behaviour and how various system inputs and actions interrelate. This in turn strengthens the overall character of the organization because it helps management to make more proactive changes to create long-term improvement. A severe limitation of separate systems for HR operations is the difficulty of administering corporate change. When there are several different HR systems comprising your companys HRIS landscape, it is difficult to roll out new policy consistently across the entire organization. For example, a company decides to create a new training curriculum for its exempt employees.

The Eight HR Processes that use this consolidated database are:

ORGANIZATION & JOB DESIGN (HR PLANNING)

Organization & Job design sets organizational structures & the nature of the work in these structures HR planning addresses present & projected staffing of the organization. The following modules support these planning activities: -

Organization Charting Workforce Planning Job Description Job Competency Requirements Analysis

STAFFING / DESTAFFING

Staffing applications address recruitment, selection & placement functions & can include the following modules: Job Posting Hiring Advisor Applicant Tracking Selection Advisor Job / Person Matching Succession Planning

PERFORMANCE MANAGEMENT
Performance management applications help managers direct & motivate employees to achieve organizational goals, & to develop their competencies. Performance management modules generate performance appraisal forms based on the goals, standards & competencies required by a job, & record appraisal ratings for employees on goal accomplishment & competency assessment. This includes following modules:

Results against Accountability Goals & Objectives Competency Reassessment

TRAINING & DEVELOPMENT

Training & Development applications support the effective implementation of Training & Development activities, & can include following modules: Training & Development Record keeping Career Planning & Pathing Development Needs Analysis Development Advisor

COMPENSATION
Reward management applications support compensation & benefits administration, ensuring that internal & external pay equity is maintained & that pay effectively

motivates employees towards appropriate goals. This includes following modules: Job Evaluation Compensation Administration Employee Assistance

ORGANIZATION DEVELOPMENT (CULTURE MANAGEMENT)

Employee attitude, culture, & climate surveys can be conducted by IVR or on line on kiosks or PC screens with data analyzed almost instantly, enabling managers to get continuously updated, JIT readings of employee morale. Organization Development applications support the effective implementation of management practices & can include following modules: Managerial Style Analysis Organization Culture/ Climate Analysis

EMPLOYEE ASSISTANCE

EMPLOYEE & LABOR RELATIONS

Thus, as we can infer the advantages & benefits of IHRMIS are numerous and are enumerated below: Timely information & expert advice on HR decisions can be provided to line managers on line & inexpensively, reducing dependence on HR staff & minimizing administrative paperwork. Wired together HR programs & processes share information in a common language, send a consistent message to employees, & reinforce one another to help managers achieve organizational objectives.

Every coin has two sides to it & so does IHRMIS. The disadvantages/ obstacles to the implementation of IHRMIS are enlisted below:

Considerable investment in data collection is required to make IHRMIS work. Users may lack access to computers or need to be trained to use decision support information.

HR specialists may resist giving up their single functional systems or their professional power to a machine or a line manager & employee customers.

Data security for certain types of confidential information may be difficult to maintain.

The use of HRIS

Three perspectives on the use of HRIS are identified: 1. It may provide an objective view of an organization where information used is comprehensive and accurate, allowing the best decisions to be made 2. The design of an HRIS, including the categories and classifications, which determine the information that should be collected, plays a vital role in constructing the reality of an organization. 3. The way people relate to information provided will depend on the maps they hold about the organization, that is the store of existing knowledge held by each person to make sense of what happens.

Flexibility

Many organizations invoke the idea of flexibility, a term subject to a variety of different meanings with a variety of implications for HRP.

Drawing on the idea of labour market segmentation, a classification of employment based on:

a. The degree to which workers have flexible skills which are specific to an organization b. The degree to which work contains discretionary elements that provide stable earnings helps to explain how and why some organizations will adopt different approaches to the management and planning of the employment relationship for different groups of employees.

The model of a flexible firm identifies four types of flexibility:

a. Functional b. Numerical c. Distancing strategies d. Financial

Within the flexible firm, the workforce can be divided into a `core' group surrounded by `peripheral' groups.

CASE STUDY OBJECTIVES:

a) To study the place of planning in Human Resource Management. b) To Study the different approaches to manpower planning. c) To explain the details of development in E-HR.

CONCLUSION

In todays turbulent competitive scenario, information & knowledge have come to be one of the major sources of competitive advantage. Since data empowers & enables the management to arrive at rational goal & objectives, sound policies, well-communicated strategies, effective decisions & well coordinated programs, information & knowledge flow within & around the organization becomes more vital. Information edge can be acquired & enhanced by adopting latest technological innovations.

Thus, in the business environment, technology by way of computer softwares, networking etc. have become a successful enabler in all organization functional areas like marketing, human resource, finance, production, operations etc. Technology has become a critical tool for collecting data, monitoring, analyzing & reporting of the collected data.

An organizations biggest & most valued asset is its people power, which is greatly harnessed by the HRM to meet the individual & organizational objectives & aligning both. Technology can be effectively used to reengineer HR operations to improve their functionality.

Reengineering involves concepts like:

No Work:- (Enable Do-it-yourself customer self service) No Workers:- Automation, least expensive most competent workers) No Paper

No Travel:- (Substitute communication for transportation & commuting) No Office:- (Virtual organizations, telecommuting, fax, e-mail, video camera) No Controls:- (Eliminate controls that dont control anything or that cost more than the thing controlled, error trapping & exception control information systems, delegating quality control & approval decisions to the person who performs the task, control by sample, control as a by product of some other task.)

No Wait :- (Parallel versus sequential processing, parallel processing customer orders)

The tools that are needed in reengineering HR to sustain the organizations competitive edge include the Hardware (phones, PC, PDA, Networks) and the Software (E-mail, Forms flow/flow software, white-boarding software, document database teleconferencing software, IHRMIS). HR Software is powerful management software for streamlining and coordinating an organization's human resources department. Human resource software is typically webbased, scalable, user-friendly, and is intended to be easy for current HR staff members to master. Enterprise and mid-size business solutions include functionality in the areas of employee demographics, applicant tracking, open enrollment, government compliance, as well as salary processing and performance reviews. HR software is designed so that each member of the organization who touches the human resource process can access the information they need. Additionally, enterprise solutions typically automate many aspects of the HR process, yielding vast gains in efficiency.

An effective human resource system allows the organization to produce effective reports analyze data & determines trends regarding affirmative action policies, employee status reviews, applicant tracking & payroll audits. It also assists in analyzing the retention, the turnover rates, processing benefit premium, tracking recruitment costs & tracking skills of employees. It also helps in transforming human resource data into information sources that are invaluable for decision-making. By utilizing the latest technology, the company saves money & time & can be more responsive when asked for data about the workforce. Human Resource Information systems can play a significant role in all aspects of the Human Resource functions. An effective system will help us turn the Human Resource data into strategic information sources. Comparing to the past, the present arena reveals an emergence of a symbiotic relationship between Human Resource & technology. Hence, learning about such a symbiotic relationship will be challenging and equally insightful.

BIBLIOGRAPHY

Books & Newspapers The Times of India The Week Robert L. Mathis, et.al, (2000), Human Resource Management, Ninth Edition, South Western College Publishing. Zwass. V, Foundations Of Information Systems, (1998), Irwin McGraw Hill. Lyle M. Spencer, Jr, PhD, (1995), Reengineering HR, John Willy & sons, Inc. HR Magzines

Internet Website Links

www.hr.com

www.citehr.com
www.hradvice.com www.google.com

www.hrvillage.com