Amity Business School

Human Resource
PLANNING
Presented By :-
Aditi Gaur (B-28)
Amrinder Sahni(B-40)
Anjali Paul(B-8)
Anshu Chaudhary (B-25)
Deepti (B-29)
Himani Sharma(B-10)
Surabhi Jain(B-2)
Tuhina Tomar (B-21)
 Amity Business School

HRP has been defined by Geisler (1967),

As a process of forecasting, developing and controlling
human resources in an enterprise. This process helps the
enterprise to ensure that it has right number of people and
the right kind of people at the right place at the right time
performing tasks for which they are most effective.

RIGHT PERSON AT RIGHT PLACE AT RIGHT

TIME
 Amity Business School

CASE SUMMARY
“HUMAN RESOURCE PLANNING? NO, THANKYOU”

Its a case about a reputed South Indian University who

appointed too many people on temporary basis without their
actual need rather the university already had a surplus of
such staff who were already eating away the university's
annual budget. The procedure to appoint such staff was also
a slipshod. Eventually, the authorities realized their mistake
of violating “Equal Remuneration Act” but they could not
dismiss their additional burden as it would not have been
taken lightly. When asked about HRP and its need from an
employee who was getting benefited prompt came the reply
“HRP? NO, THANK YOU.
 Amity Business School

OBJECTIVES
• To ensure optimum use of existing HR
• To forecast future requirement for HR
• To provide control measures to ensure that
necessary HR are available as and when
required.
• To assess the surplus and shortage of HR
(Downsizing)
• To determine the level of Recruitment and
Training
 Amity Business School

IMPORTANCE
• Replacement of persons. (University could have timely
replaced staff as per requirement)
• Labor Turnover. (If university could forecast the
turnover rate it could have made preparations for training
and recruitment and the work would not have suffered)
• Expansion Plans. (There were no such evident plans for
expansion of the university so there was no need to take any
new positions)
• Technological Changes. (there were no need to infuse
fresh blood into the university)
• Assessing Needs. (determine the shortage or surplus of
persons in the organization)
 Amity Business School

FACTORS AFFECTING HRP

•Type and strategy of organization.
•Organizational growth cycle and planning.
•Environmental uncertainties
•Time horizons
•Types and quality of forecasting information
•Nature of jobs being filled
•Outsourcing
Amity Business School
 Amity Business School

Environment

Organizational Objectives
and
Policies

HR NEEDS FORECAST HR SUPPLY FORECAST

HR PROGRAMMING

HRP IMPLEMENTATION

CONTROL & EVALUATION

OF PROGRAM

Surplus Shortage
 Amity Business School

ENVIRONMENT ANALYSIS
• The first step in the human resource planning process is to
understand the context of human resource management.
• Human resource managers should understand both internal
and external environments.
• Data on external environments includes the general status of
the economy, industry, technology and competition; labor
market regulations and trends; unemployment rate; skills
available; and the age and sex distribution of the labor force.
• Internal data required include short- and long-term
organizational plans and strategies and the current status of the
organization's human resources.
 Amity Business School

ORGANIZATION OBJECTIVES AND

POLICIES
• The human resource plan must be linked with the
organization's strategic plan.

• The company strategy and business plan will determine

what work activities are anticipated in the short term and
long term.

• Based on these activities, the company can identify its

human resource requirements.

HR NEEDS FORECAST
• The aim of forecasting is to
determine the number and type of
employees needed in the future.
• Forecasting should consider the
past and the present requirements
as well as future organizational
directions.
• Bottom-up forecasting is one of
the methods used to estimate
future human resource needs by
gathering human resource needs
of various organizational units.
Amity Business School
HR SUPPLY FORECAST
• Organizations can hire personnel
from internal and external sources.
• The skill inventories method is
one of the techniques used to keep
track of internal supply.
• Skill inventories are manual or
computerized systems that keep
records of employee experience,
education and special skills.
• A forecast of the supply of
employees projected to join the
organization from outside sources,
given current recruitment
activities, is also necessary.
 Amity Business School

HRM PROGRAMMING

•HR Programming, the third step in the Human Resource

Planning process assumes greater importance.

•After the organization's personnel demand and supply are

forecast these two must be reconciled or balanced

•So that vacancies can be filled by the right employees at the

right time.
 Amity Business School

HRM IMPLEMENTATION
• Implementation requires converting HR plan into action.
• A series of action programmes are initiated as a part of HR plan
implementation.
• These programmes include
* Recruitment, Selection and Placement.
* Training and Development
* Retaining and Deployment
* The Retention Plan
* The Redundance Plan
 Amity Business School

Recruitment, Selection and Placement

• Job vacancies- Identification of sources and search for
suitable candidates.
• Selection programme should be professionally
designed.
• Business Process Reengineering (BPR)

Training and Development

• Necessary for the existing staff
• Frequency and budget allocation
 Amity Business School

Retraining and Redeployment

• Imparting new skills
• Gainful employment

Retention plan
• Compensation plan
• Performance appraisal
• Employees leaving in search of green pastures
• Employees quitting because of conflict
• The induction crisis
• Shortages and unstable recruits
 Amity Business School

Downsizing plan
• Trimming of labour force is required where there is
surplus workforce
• Voluntary Retirement Scheme (VRS)
• Lay-off

Managerial succession planning

• Need for good managers is perpetual
• Successful programmes include top management’s
involvement, review, formal assessment and
development plans
 Amity Business School
CONTROL AND EVALUATION
• Control and evaluation represents the final stage in the HRP
process.
•The HR Plan should include budgets, targets and standards.
•It should also clarify responsibilities for implementation and
control
•It should establish reporting procedures which will enable
achievements to be monitored against the plan.
•These procedures may simply report on the numbers employed
against establishment and on the numbers recruited under the
recruitment targets .
•But they should also report employment costs against budget ,
and the trends in wastage and employment ratios.
 Amity Business School

STRATEGIES FOR MANAGING STRATEGIES FOR MANAGING

SHORTAGES SURPLUSES

•Recruiting new permanent •Hiring freeze.

employees. •Do not replace those who leave
•Offer incentives to postpone •Offer VR schemes.
retirement.
•Reduces work hours.
•Rehire retirees part time.
•Leave of Absence
•Attempt to reduce Turnover.
•Across the border pay cuts.
•Work current staff overtime
•Layoffs.
•Subcontract work to another
company. •Reduce outsourced work

•Hire temporary employees. •Employee training

•Redesign job process so that fewer •Switch to variable pay plan.

employees are needed. •Expand operations.
 Amity Business School

Human Resource Information

System

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 Amity Business School

• HRIS is a systematic procedure for collecting,

storing, maintaining, retrieving and validating
data needed by an organization about its
human resource.
• An integrated system of hardware, software,
and databases designed to provide information
used in HR decision making.
• HRIS is a part of the organization’s
Management Information System.
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 Amity Business School

Benefits of HRIS
• Administrative and operational efficiency in
compiling HR data.
• Availability of data for effective HR strategic
planning.

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 Amity Business School

Application Of HRIS

• Training management
• Turnover analysis
• Succession planning
• Attendance reporting
• HRP
• Strategy Planning

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 Output Data Uses Amity Business School
Input Data Types Employee Tracking
Job Analysis Diversity Programs
Recruitment Hiring Decisions
Selection/Job Training Organizational
Posting/ Programs/E- Strategic Plans
Employee learning/Manageme
Referral nt Succession
T&D Compensation
HRIS
Performance Programs
Appraisal Benefit Programs
Human
Compensation (e.g., prescription
Resource
drug programs)
Benefits Management
Health Programs Plans
Safety (e.g., Employee
Health Assistance
Programs)
Labor Relations Bargaining
Employee Strategies
Relations Employee Services 23
 Amity Business School

Implementation Steps
• Step 1- Inception of Idea
• Step 2- Feasibility Study
• Step 3- Selecting a Project Team
• Step 4- Defining the requirements
• Step 5- Vendor Analysis
• Step 6- Package Contract Negotiation
• Step 7- Training
• Step 8- Tailoring
• Step 9- Collecting the Data 24
 Amity Business School

• Step 10- Testing the System

• Step 11- Starting Up
• Step 12- Running Parallel
• Step 13- Maintenance
• Step 14- Evaluation

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 Uses Of HRIS
Amity Business School

HR Planning
and Analysis
Employee Equal
and Labour Employment
Relations and Staffing
HRIS

Health, HR
Safety and Development
Security
Compensation
and Benefits
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Human Resource Information System Amity Business School

 A model of a Human Resource information system

Input Work force Output
subsystems planning subsystems
subsystem
Accounting Recruiting
information subsystem
system
Internal sourc Work force
es management
HRIS subsystem
HRs Database
research Compensatio
subsystem n
subsystem
Benefits Users
Environment subsystem
al sources
HRs Environment
intelligence al
subsystem reporting
Data subsystem
Information 27
 Amity Business School

TECHNIQUES OF HRP

HR DEMAND FORECAST
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MANAGERIAL JUDGMENT

This technique is very simple . In this manager sit together, discuss and
arrive at a figure which would be the future demand of labor . The
technique may involve a ‘bottom to up’ or ‘top to bottom’ approach .
This technique is used in smaller organizations or in those companies
where sufficient data isn’t available.
 Amity Business School

RATIO ANALYSIS

Ratio analysis is the quickest forecasting technique

which involves studying past ratios and forecasting
future ratios making some allowances for change in
the organization or its method .
 Amity Business School

REGRESSION ANALYSIS
Regression analysis identifies the movement of two or more
inter-related series. It is used to measure the changes in a
variable as a result of changes in other variables. Regression
analysis determines the relationship between Y variables
such as the number of employees and X variables such as
service delivery by actually measuring the relationship that
existed in the past. Use of the method begins with a series of
observation each costing of a value for the Y variable plus
a value for each X variable.
 The Delphi Technique
Amity Business School
Leader identifies judgment issues and develops questionnaire.

Prospective participants are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record

their judgments and recommendations and return the
questionnaire.

Leaders compiles summaries and reproduces participants’

responses.

Leader sends the compiled list of judgment to all participants.

Participants comment on each other’s ideas and propose a final

judgment.

Leader looks
for consensus

Leader accepts consensus judgment as group’s choice.

 The Nominal Group
Technique Amity Business School
A small group of 4-5 people gathers around a table. Leader
identifies judgment issue and gives participants procedural
instructions.

Participants write down all ideas that occur to them, keeping

their lists private at this point. Creativity is encouraged during
this phase.

Leader asks each participant to present ideas and writes them

on a blackboard or flipchart, continuing until all ideas have been
recorded.

Participants discuss each other’s ideas, clarifying, expanding,

and evaluating them as a group.

Participants rank ideas privately in their own personal order and

preference.

The idea that ranks highest among the participants is adopted

as the group’s judgment.
 Amity Business School

WORK STUDY
Work study is the study of work. It is the analysis of
work dividing it into smaller parts followed by
rearrangement of these parts to give the same
effectiveness at lesser cost. It examines both the method
and duration of the work involved in a process.
It is the systematic examination of the methods of
carrying out activities such as to improve the effective use
of resources and to set up standards of performance for
the activities carried out
 Amity Business School

OBJECTIVES OF WORK STUDY

• To recommend and implement the desired improvements in work
methods by establishing the most economical way of doing work.
• Investigation and analysis of existing situation.
• Examination of weakness if any in the production process.
• Most effective use of the existing or proposed plant.
• Efficient use of human efforts.
• Ensure proper performance of those employed in the production
process.
• Measurement of work values.
• To initiate and maintain incentive bonus schemes.
• Setting standards for labor cost ctrl documentation.
• To standardize the method, material and equipment used in the
production process.
 Amity Business School

COMPONENTS OF WORK STUDY

1.Method Study

2.Work measurement.

3.Ergonomics.
 Amity Business School

FLOW MODELS
• Associated with forecasting personnel needs.
• Simplest one is known as MARKOV MODEL. In this
technique the forecasters will:
– Determine the time that should be covered.
– Establish categories, called states, to which
employees can be assigned.
– Count annual movements, called flows. Among
states for several time periods
 MARKOV MODEL Amity Business School

Determine the time that should be covered

Establish categories, called states to which

employees are assigned

Count annual movements, called flows,

among the states for different time periods

Estimate the probability of transitions from one state to

other based on past trends
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ADVANTAGES
• Easy to understand its underlying assumptions.

• Makes sense to the decision makers

• Likely to accept results

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DISADVANTAGES
• Heavy reliance on past data

• Accuracy in forecasts about the individuals is

sacrificed to achieve accuracy across groups
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HR SUPPLY FORECAST
 Amity Business School

HR SUPPLY FORECAST
After demand forecasting the next logical step for the
management is to determine whether it will be able to
procure the required number of personnel and the sources for
such procurement. This information is provided by supply
forecasting. Supply forecasting measures the number of
people likely to be available after making allowances for
absenteeism , internal movements and promotions, wastage
and other conditions of work .The supply analysis covers:-
1.Existing Human Resources
2.Internal Sources Of Supply, and
3.External Sources Of Supply
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Existing Human Resources

Analysis of present employees is greatly facilitated by HR
audits. The audits of non-managers are called skill inventories
and those of non managers are called management inventories.

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 Amity Business School

Internal Sources Of Supply

After being armed with HR audits planners proceed with
supply of internal supply. The techniques generally used for
this purpose are:-
Inflows and Outflows- The simplest way to forecast internal
supply is the inflow and outflow method. It calculates gains
and losses of personnel for a particular job. Total losses are
subtracted from the current personnel level. Total gains are
added to expected level of personnel at the end of the year.
This figure is then viewed in conjunction with the anticipated
demand in order to determine whether or not adjustments are
necessary and to ensure demand is equal to supply.
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 Amity Business School

Turnover Rate - Stated mathematically , the turnover rate

is:-
Number of separations during one year × 100
Average number of employees during the year

Conditions Of Work And Absenteeism- Changes in

conditions of work such as normal weekly working hours ,
overtime policies, retirement policy, shift system needs to
be assessed. Absenteeism is calculated as :-
Number of Person – Days lost × 100
Average no. of person × No. of days working
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 Amity Business School

Productivity level – Any changes in productivity would

affect the number of person required per unit of the output .
Increase in productivity will reduce the number of person
required and decrease in productivity will have the opposite
effect.
Movement among jobs-Some jobs are sources of personnel
for other jobs. For example, Secretaries may be obtained by
the promotion of typists

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 Amity Business School

External Sources Of Supply

In addition to internal sources of supply the organization needs
to look out for prospective employees from external sources.
External sources are important for specific reasons:
• New blood and new experiences will be ,
• organization needs to replenish lost personnel ,and
•organizational growth and diversification creates the need to
use external sources to obtain additional number and type of
employees.
Sources of external supply vary from industry to industry ,
organization to organization and also from one geographical
location to another. 47
 Amity Business School

REQUISITES OF HRP

• HRP must be recognized as an integral part of corporate

planning.
• Backing of top management for HRP is absolutely
essential.
• Personnel records must be complete, up-to-date and
readily available.
• The time horizon of plan must be long enough to permit
any remedial action.
• Plans should be prepared by skill levels rather than by
aggregates.
 Amity Business School

• HRP responsibilities should be centralized in order to

co-ordinate consultation between different
management levels.
• The techniques of planning should be those best
suited to the data available and the degree of accuracy
required.

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 Amity Business School

BARRIERS TO HRP
• HR practitioners are perceived as experts in handling
personnel matters, but are not experts in managing business.
• HR information often is incompatible with the information
used in strategy formulation.
• Conflicts may exist between short-term and long-term HR
needs.
• There is conflict between quantitative and qualitative
approaches to HRP.
• Non-involvement of operating managers renders HRP
ineffective.

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 Amity Business School

CASE SUMMARY
“PROMOTING THE PROTÉGÉ”
The case opens up where Prem Nath Diwan, executive chairman of
Vertigo decided to take early retirement and in his whole successful
career he had been very successful as a leader and had really
groomed Mr. Ranjan Warrior and thought he would be his obvious
successor but discussion with his trusted solicitor showed him the
entire new side of the story that the senior executives were as it is
not pleased with Mr. Ranjan as he had always played his favorite so
choosing him would obviously bring some revolt si instead he
should play safe and chose Richard Crasta as even he is talented. The
case ended with the question as what should be done.
 Amity Business School

We can conclude the case by suggesting that :

Mr. Divan should take up HR supply forecast techniques
which would provide him the means of estimating the kind
of employees that will be required to fit his post or be his
successor from within the organization (as he wanted).
The emphasis given to the “Management inventory” as a
post like his would require only a manager to fill in. If he
wants to fill his chair with an outsider then he would go
for External Sources. Finally he could have also gone for
MANAGERIAL SUCCESSION PLANNING.
Amity Business School