Unit-1 Human resource Planing

UNIT – 1

 BASIC HUMAN RESOURCE PLANNING

LEARNING OUTCOMES

        After studying this module, you shall be able to

q   Know the meaning of Human Resource Planning

q    Understand the significance of Human Resource Planning

q   Comprehend the relationship between Human Resource Planning and Strategic Planning

q   To know the factors affecting Human Resource Planning

q    Understand the process of Human Resource Planning

Human Resource Management is the function performed in organizations that facilitate the most effective use of people (employees) to achieve organizational as well as individual goals.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource Planning

Is the process (including forecasting, developing and controlling) by which a firm ensures that it has the right number of people, right kind of people, at the right places, at the right time, doing work for which they are economically most successful.   

Following are some of the characteristics of HRP:

•         HRP must incorporate the HR needs in the light of organizational needs.

•         It must be directed towards well-defined objectives.

•         It must ensure optimum utilization of available human resources.

•         It should pave way for effective motivational processes.

•         It should take into account the principle of periodical reconsideration of new developments and extending the plan to cover the changes during long period.

•         Adequate flexibility must be maintained HRP to suit the changing needs of the organization.

Objectives of Human Resource Planning

1. Optimum utilisation of human resources currently employed in the organisation.

2. To reduce imbalance in distribution and allocation of manpower in organisation for

various activities.

3. To ensure that the organisation is well-equipped with the required Quantity

and Quality of manpower on a sustained basis.

4. To anticipate the impact of technology on jobs and resources.

5. To control cost of Human Resources employed, used and maintained in the

organisation.

6. To provide a basis for management development programmes.

7. To ensure optimum contribution and satisfaction of the personnel with reasonable

expenditure.

8. To recruit and retain human resource of required Quantity and Quality.

Need for Human Resource Planning

1. Shortage of Skills: – These days we find shortage of skills in people. So it is

necessary to plan for such skilled people much in advance than when we actually need

them. Non-availability of skilled people when and where they are needed is an

important factor which prompts sound Human Resource Planning.

2. Frequent Labour Turnover: – Human Resource Planning is essential because of

frequent labour turnover which is unavoidable by all means. Labour turnover arises

because of discharges, marriages, promotion, transfer etc which causes a constant ebb

and flow in the workforce in the organisation.

3. Changing needs of technology: – Due to changes in technology and new techniques

of production, existing employees need to be trained or new blood injected into an

organisation.

4. Identify areas of surplus or shortage of personnel: – Manpower planning is needed

in order to identify areas with a surplus of personnel or areas in which there is a department to provide adequate focus and to coordinate the planning efforts at various levels.

 Human Resource Planning should be balanced with corporate planning: –

Human resource plans should be balanced with the corporate plans of the enterprise.

The methods and techniques used should fit the objectives, strategies and environment

of the particular organisation.

5. Appropriate time horizon: – The period of manpower plans should be appropriate

according to the needs and circumstances of the specific enterprise. The size and

structure of the enterprise as well as the changing aspirations of the people should be taken into consideration.

CONCEPT AND PROCESS OF HUMAN RESOURCE PLANNING

Human Resource Planning plays a very important role in the success of an organization.

Failure in HRP will be a limiting factor in achieving the objectives of the organization.

If the number of people in an organization is less than the number of people required, then there will be disruption in work, production will be hampered and employees will be burdened with more work.

If on the other hand, there is a surplus manpower in the organization, there will be unnecessary financial burden on the organization. Therefore, it is necessary to have only adequate number of persons to attain the objectives of the organization.

Human Resource Planning or Manpower Planning can also be used as an important aid in framing the training and development programme for the employees, because it takes into account the anticipated changes in the HR requirement.

PROCESS OF HUMAN RESOURCE PLANNING

With the expansion of business, adoption of complex technology and professional management techniques, the process of HRP has assumed a great significance.

It consists of the following stages:

•         Analyzing Organizational Plans and Deciding on Objectives

Before undertaking HRP of an organization, the short term and long term objectives should be analyzed. The process of HRP should start with analyzing organizational plans and programmes. They help in forecasting the demand for human resources, as it provides the quantum of future work activities.  

•         Analyzing factors for Manpower Requirements

The existing job design and analysis may be reviewed thoroughly keeping in view the future capabilities, knowledge and skills of the present employees. The job design and analysis should reflect the future human resources and organizational plans. The factors for manpower requirements can be analyzed by the two ways:

•         Demand Forecasting – Forecasting the overall HR requirements in accordance with the HR plans.

•         Supply Forecasting – Obtaining data, information about the current inventory of human resources and forecast the future changes in the present human resource inventory.

•         Developing Employment Plans

After determining the number of personnel for each job in the organization, the HR department has to spell out job description and job specification.

JOB DESCRIPTION

Job Description - Job descriptions are written statements that describe the:

•         duties

•         responsibilities

•         most important contributions and outcomes needed from a position

•         required qualifications of candidates, and

•         reporting relationship and coworkers of a particular job

JOB SPECIFICATION

Job Specification - is the delineation of the knowledge, skills, and abilities along with the associated education, training, and experience required to successfully perform within a position. The stipulated criterion normally constitutes the minimum recruiting criteria or minimum qualifications for the position.

•         Developing Human Resource Plan

After estimating the supply and demand of human resources, the management starts adjustment when the internal supply of employees is more than the demand, and there is a human surplus: then the external recruitment is stopped. If there is a human resource deficit then the planners have to rely on the external source. 

DEMAND FORECASTING

Demand Forecasting is for human resources. Most firms estimate how many employees they require in future. The demand for human talent at various levels is primarily due to the following factors:

•         External Challenges : These Challenges arise from three important sources

•         Economic Developments: Liberalization, globalization, on line trading systems have created a huge demand for manpower in the industry.

•         Political, legal, social and technical changes: The demand for certain categories of employees is also influenced by changes in political, legal and social structure in an economy. Technical changes may cause rise or fall in the demand of the human resources.

•         Competition: The growing competition demands highly skilled and versatile employees.

•         Organizational Decisions: The organization’s strategic plan, sales and production forecasts and new ventures must all be taken into account in manpower planning.

•         Workforce Factors: Demand is modified by retirement, termination, resignation, death etc.  

METHODS OF DEMAND FORECASTING

•         Expert Forecast: In this method, managers estimate future human resource requirement, using their experience and judgment to good effect.

•         Trend Analysis: HR needs can be estimated by examining past trends, reference to organizational HR history etc.

•         Workforce Analysis: The average loss of manpower due to leave, retirement, death, transfer etc during the last 5 years may be taken into account. The rate of absenteeism and labor turnover should also be taken into account.

•         Work Load Analysis: The need for manpower is also determined on the basis of work load analysis, wherein the company tries to calculate the number of persons required for various jobs with reference to the planned output.

Planned output for the year                                                       10,000 pieces Standard hours / piece                                                                     3 hours Planned hours required                                                               30,000 hours Productive hours/person/year                                                    1,000 hours (incl. absenteeism, idle time etc) No. of workers required                                                                     30 If span of control in the unit is 10/officer, then 3 officers are also required.

•         Delphi Method:
The Delphi technique helps to   capture the knowledge of diverse experts while avoiding the disadvantages of traditional group meetings.
To forecast with Delphi, the administrator should recruit between five and twenty suitable experts and poll them for their forecasts and reasons. The administrator then provides the experts with anonymous summary statistics on the forecasts, and experts’ reasons for their forecasts. The process is repeated until there is little change in forecasts between rounds – two or three rounds are usually sufficient. The Delphi forecast is the median or mode of the experts’ final forecasts.
The forecasts from Delphi groups are substantially more accurate than forecasts from unaided judgment and traditional groups, and are somewhat more accurate than combined forecasts from unaided judgment.

SUPPLY FORECASTING

Once Demand Forecasting is made, the management has to find out the kind and quantity of workforce needed by the organization.

Every organization has two major sources of manpower: internal and external.

•         Internal Labor Supply- Employee profile which includes age, sex, education, training, and experience should be kept ready for use whenever required. Through replacement or succession plans, the organization can even find out the approximate dates by which important positions may fall vacant.

•          External Labor Supply: When the organization grows rapidly, diversifies into new areas of operation or when it is not able to find people internally to fill vacancies, it has to look into outside sources.

METHODS OF SUPPLY FORECASTING

•         STAFFING TABLE: It shows the number of employees in each job. It tries to classify employees on the basis of age, sex. Position, experience, qualifications, skills etc. A study of the table indicates whether current employees are properly utilized or not.

Sources of Inflows                                           The Firm                                                              Projected Outflows •         Transfers                                                                                                                                   Promotion •         Promotions          EMPLOYEES IN –CURRENT STAFFING LEVEL – EMPLOYEES OUT   Quits •         New recruits                                                                                                                                                                Termination                                                                                                                                                                Retirement                                                                                                                                                             Death Current Staffing Level – Projected outflows this year + Projected Inflows this year = Firm’s internal supply for this time next year.

•         MARKOV ANALYSIS: This technique uses historical rate of promotion, transfer and turnover to estimate future availabilities in the workforce. Based on past probabilities, one can estimate the number of employees who will be in various positions with the organization in future.

•         SKILLS INVENTORY: It is the assessment of knowledge, skills, abilities, experience and career aspirations of each current employee. This record should be updated with the changes such as additional qualification, new skills etc. Such record helps an organization to quickly match forthcoming job openings with the employee background.   

SUMMARY

q  Human resources planning is a process of identifying the appropriate person for the job at the right time and cost.

q   It is concerned with the flow of people into, through, and out of an organization involving the forecast the need for labor and the supply of labor, then planning the programs necessary to ensure that the organization will have the right mix of employees and skills when and where they are needed.

q   The HR planning is important for several areas of human resource management like assessing future recruitment needs, optimization of available human resources, developing training and retraining programs, formulating policies for compensation, determining programs for management development and gaining competitive advantage; and, shaping future plans and strategies.

q   The human resource executives are now focusing their attention on how human resources can help the organization achieve its strategic goals. Thus, HR must now be highly involved in the strategic planning process. Strategic plan is the process by which top management determines overall organizational purposes and objectives and how they are to be achieved.

q  There are several factors influencing the human resource planning of an organization. These factors include the strategy of the organization, culture of the organization, competitive and financial environment, current organization situation and quality and skills of required human resources.

q   The process of human resource planning follows a process involving certain steps. These steps are assessing human resources, HR demand forecasting, HR supply forecasting, matching demand and supply and the action plan