Human Resources Planning

= Resources

Definition :
Process

by which an organisation ensures that it has the right number & kind of people at the right place and at the right time, capable of effectively and efficiently completing those tasks that help the organisation achieve its overall objectives..

Importance
1) Each Organisation needs personnel with
necessary qualifications, skills, knowledge, experience & aptitude .

2) Need for Replacement of Personnel retired or disabled personnel.

Replacing old,

3) Meet manpower shortages due to labour

turnover

4) Meet needs of expansion / downsizing

programmes

 5) Cater to Future Personnel Needs - Avoid

surplus or deficiency of labour.
75% of organisations are overstaffed. Redeployment of staff to other units.

6) Nature of present workforce in relation with Changing Environment - helps to cope

with changes in competitive forces, markets, technology, products and government regulations.

Other uses
i) quantify job for producing product / service ii) quantify people & positions required ii) determine future staff-mix iii) assess staffing levels to avoid unnecessary costs iv) reduce delays in procuring staff v) prevent shortage / excess of staff vi) comply with legal requirements

HRP Process - Determination of Quality of Personnel

Job Analysis

process of collecting and studying information relating to the operations and responsibilities of a specific job. determination of tasks which comprise the job and of skills, knowledge, abilities and responsibilities required of the worker for a successful performance and which differentiates one job from all others.

products of Job Analysis are Job Description & Job Specification

Steps in Job Analysis

Collection of Organisational Structure Information Selection of Representative Position to be Analysed Collection of Job Analysis Data

Developing Job Description

Developing Job Specification

Collection of Data

Who Collects ? - On-the-job Employees, Supervisors, Consultants

What to Collect
- Physical & Mental activity involved - Each task essential to achieve overall result - Skill / Educational factor needed for the job

- Checklist, Interview, Observation, Participation, Technical Conference, Diary Method, Quantitative techniques

How to Collect ?

Areas in which information may be gathered : Job title Alternative title Work performed Equipment, Tools & Materials used Reports & records made Relation of the job to other jobs Education & experience required Physical, Mental& Visual effort required Responsibility (for equipment, reports, performance) & duties Supervision given & received Hazards, Discomfort & Safety

Job Analysis Process of Obtaining all pertinent Job Facts

Job Description
A proper definition & design of work. A statement containing:
Job Title Location Job Summary Duties & Responsibilities Materials, Tools & Equipment used Forms & reports handled Supervision given / received Working conditions Hazards & Safety precautions

Job Specification
A statement of human qualifications necessary to do the job containing:
Education & Qualifications Experience & Training Knowledge & Skills Communication skills Physical requirements - Height, Weight, Age Personality requirements Appearance, Judgement, Initiative, Emotional stability

Purpose / Use Of Job Analysis

Organisation & Manpower planning Recruitment & Selection Job Evaluation & Wage, Salary administration Job Re-engineering Employee Training & Managerial Development Performance Appraisal Health & Safety

HRP Process - Determination of Quantity of Personnel

Organisational Objectives

HR Needs Forecast

HR Supply Forecast

Gap analysis Surplus - Restricted Hiring, Lay Off, VRS, Reduced Hours Shortage - Recruitment & Selection

Organisational Objectives & Policies

Downsizing / Expansion Acquisition / Merger / Sell-out Technology upgradation / Automation New Markets & New Products External Vs Internal hiring Training & Re-training Union Constraints

HR Demand Forecast
process of estimating future quantity and quality of manpower required for an organisation.
External factors - competition, laws &

regulation, economic climate, changes in technology and social factors Internal factors - budget constraints, production levels, new products & services, organisational structure & employee separations

Forecasting Techniques

Managerial Judgement - Managers discuss and arrive at a figure of inflows & outflows which would cater to future labour demand. #

Ratio-Trend Analysis - Studying past ratios, ie No. of Workers Vs Volume of Sales, forecasting future ratios and adjusting for future changes in the organisation.. Work-Study Technique - Used when length of operations and amount of labour required can be calculated. # Delphi Technique - From a group of experts the personnel needs are estimated.

HR Supply Forecast
process of estimating future quantity and quality of manpower available internally & externally to an organisation.

Supply Analysis Existing Human Resources Internal Sources of Supply External Sources of Supply

Existing Human Resources

Capability / Skills Inventory using HR Information System
General Information Name: Present Address: Sex: DOB: Marital Status: Permanent Address: Qualification Degree/Diploma Department: Designation: DOJ: Salary: Grade:

Institution

Class

Year of Pass

Experience/Skills Job Title/ Organisation Brief Skill/ Appointment Responsibilities Specialisation Outstanding Achievement / Additional Information Awards Performance Disciplinary Action Promotions Merit Rating Absenteeism Achievements Career Plans:

Internal Supply

Turnover Rate - refers to rate of employees leaving. = ( No. of separations in a year / Avg no. of employees during the year ) x 100 Absenteeism - unauthorised absence from work. = ( total absentees in a year / Avg no. of employees x No. of working days) x 100 Movement among Jobs - internal source of recruitment, selection and placement

External Supply
External recruitment, selection & placement Advertisements, Manpower Consultants, Campus Recruitment, Unsolicited Applications, Employee Referrals

Yield ratios - are estimated in the process of hiring applications. Hiring Process Ratio Ad generates 2000 applications. 200 are potential 10:1 Out of 200, 40 attend interview 5:1 Out of 40, 30 were offered jobs 4:3 Out of 30, 20 accepted 3:2 Overall Yield Ratio (2000:20) 100:1

Gap Analysis

The gap may be in two forms: either there is surplus human resource or there may be shortage of human resource.

Barriers to effective HRP

Improper

linkage between HRP and corporate strategy Rigidity in attitudes Environment uncertainty Conflict between long term and short term HRP

Human resource information systems (HRIS)

HRIS is an organized method of providing information about human resources, their functioning and external factors related to human resources Computerized system that provides current and accurate data for purposes of control and decision making.

Factors leading to use of more sophisticated HRIS

Development

of increasingly complex and comprehensive IT systems Economic pressures Increasing demands by government for organisations to collect employee data

HRISs are used for three broad functions

Transaction

processing, reporting and

tracking Decision support systems Expert systems

Basic objectives of HRIS are

To

provide accurate information about HR and their functioning and relevant environmental factors. To provide relevant information. To provide information timely.

HRIS: software applications for HRM

HR

planning applications

Succession planning Workforce profile analysis Workforce dynamics analysis

Staffing

applications

Applicant recruiting and tracking Employee database development

HRIS: software applications for HRM (continued)

Performance management applications Learning and career development applications Compensation and benefits applications

Payroll Job evaluation Salary surveys Salary planning International compensation Benefits management

Setting of HRIS
Plan

Design
Implement Evaluate

Benefits:
Store and retrieve of large quantities of data. Combine and reconfigure data to create new information. Institutionalization of organizational knowledge. Easier communications. Lower administrative costs, increase productivity and response times.

Major Uses For HR Information Systems

What is human resource accounting?

HRA procedures are the first step in developing sophisticated measurement and accounting procedures to enable to company to report accurate estimates of the worth of the organizations human assets. HRA shows the investment the organisation makes in his people and how the value of these people changes with time.

Objectives Of HRA

Proper management of human resources Improvement of human resources. Depicting the true value of the organization. Provides quantitative information on human resources which helps the managers and investors in making decisions. HRA communicates the worth of human resources to the organization and to the public.

Characteristics Of HRA

Its a system of accounting in which identification of human resources is made. Investment made in human resources is recorded. Measurement of costs and values are made. Changes occurring in human resources over a period of time are also recorded. Communicates information through financial statements to interested parties.

Characteristics of HRA [Contd]

Helps the management to gain knowledge of the various aspects of employees which is necessary to take vital decisions for the progress of the organization.

HRA is a part of MIS.

Joint efforts of behavioral scientists, accountants and managements are needed for the working and development of HRA.

Methods/Models Of HRA
Historical

Cost Method: Actual cost incurred for recruiting, hiring, training and developing the human resources of the organization are capitalized The amount so capitalized is written off over a period an employee serves the organization.

Methods/Models Of HRA [Contd]

Replacement

Cost Method: This is the measure of the cost to replace a firms existing human resources. It is the cost of replacing a set of services provided by one person with an equivalent set of services provided by another. This method has the advantages of adjusting the human value of price trends in the economy.

Methods/Models Of HRA [Contd]

Opportunity Cost Method: In this method, all employees within an organization will be encouraged to bid for any scarce employee they want and the one who is able to acquire his services puts the bid price as his investment base in respect of that employee. The bid price is arrived at by calculating the actual or expected rate of capitalization of the earnings suppose to be earned by the employee.

Methods/Models Of HRA [Contd]

Economic

value method : Human resources are valued on the basis of contribution they are likely to make to the organization. The payments made to the person are estimated and discounted appropriately to arrive at the present economic value of the individual

Methods/Models Of HRA [Contd]

Present Value Of Future Earnings Method:

It recognizes an individuals expected economic value to the enterprise during his remaining service period. The method involves three steps Employees are classified into groups based on age, experience, nature of job. Earnings of each group are estimated. Present value of earning of each group till retirement is taken as the value of human resources using an appropriate discounted rate.

1. 2. 3.

HR Audit

HR Audit is a comprehensive evaluation of the entire gamut of HR activities .HR Audit covers basically three things:-

Measurement and evaluation of personnel programmes, policies and practices. Identification of gap between objectives and results. Determination of what should or what should not be done of future

Objectives of HR audits :

To review the organization system, human resource sub systems in order to find out the efficiency of the organization in attracting and retaining human resources. To find out the effectiveness of various HR policies and practices. To know how various units are functioning and how have they been able to implement the HR policies To review the HR system in comparison with organization and modify them to meet the challenges of HRM.

Benefits of HR audit

Identifies the contributions of the HR department. Improves the professional image of HR department. Encourages greater responsibility and professionalism among members of HR department. Classifies the HR departments duties and responsibility Stimulates uniformity of personnel policies and practices. Finds critical personnel problems.

Process of HR Audit includes:

Identifying

indicators, statistical ratios and gross numbers in some cases Examination 0f variation in time frame Comparison the variation of different department during different time periods. Drawing trend lines and frequency distribution. Preparing the report to be submitted to the top management.

The Human Resource Management Audit uses this framework to try to answer such questions as
these: Are the mission and strategy of the human resource organization designed to match the business strategy of the organization? Does the design of the human resource organization enhance its ability to accomplish its strategy? Are the kinds of people who run the human resource function good choices for the ongoing tasks?

The primary sources of data are:

Interviews with Senior Management. Focus on strategy and a definition of the current state of the organization and the desired future state. Interviews and Questionnaires with Line Management. Focus on their interactions with the HR function, their human resource problems, and the role for the HR organization. In-Depth Questionnaires from the Human Resource Staff. Diagnose the jobs, activities, conflicts, and internal strengths and weaknesses of the function. Archival Information and Documents. Describe job histories, past evaluations, formal structures, and general background on the organization as a whole and the HR function in particular.

Sample Questions
1. How effective is the selection process in ensuring that people are placed in appropriate positions? Explain. 2. How effective is the appraisal process in accurately assessing performance? Explain. 3. How effective are rewards (financial and nonfinancial) in driving performance? Explain. 4. How effective are the training, development, and career planning activities in driving performance? Explain. 5. How effective is the appraisal process in differentiating performance levels for justifying reward allocation decisions? Explain. 6. How effective is the appraisal process in identifying developmental needs of individuals to guide training, development, and career planning? Explain.

7. How effective are the training, development, and career planning activities in preparing people for selection and placement into new positions in the organization? Explain.
8. Overall, how effectively are the components integrated and mutually supportive? Explain