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Contents

Human Resource Planning: ........................................................................................................................... 2 Process of Human Resource Planning: ......................................................................................................... 3 Assessing the Current HR Capacity: .......................................................................................................... 3 HR Demand Forecasting:........................................................................................................................... 3 Forecasting Techniques: ....................................................................................................................... 4 HR Supply Forecasting: ......................................................................................................................... 6 Reasons for Supply Forecasting are: ..................................................................................................... 6 Area of HR Forecasting: ........................................................................................................................ 6 Gap analysis .............................................................................................................................................. 8 Developing HR strategies to support organizational strategies: .............................................................. 8 HR strategies: ................................................................................................................................................ 9 Restructuring Strategies: .......................................................................................................................... 9 Training and development strategies: ...................................................................................................... 9 Recruitment strategies.............................................................................................................................. 9 Outsourcing strategies ............................................................................................................................ 10 Collaboration strategies: ......................................................................................................................... 10 Factors Affecting HR Planning: .................................................................................................................... 11 Types and strategies of organization: ..................................................................................................... 11 Organizational growth and planning: ..................................................................................................... 12 Environmental uncertainties: ................................................................................................................. 12 Time horizons:......................................................................................................................................... 12 Type and quality of fore-casting information: ........................................................................................ 13 Nature of jobs being filled: ..................................................................................................................... 13 Off-loading the work: .............................................................................................................................. 14

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Human Resource Planning:


Human Resource planning is a process of identifying labor need for present and future job and find out the possible way to make available worker and competent them to accomplish a task. At the same time it is identifying types of people need, qualification of people. Organization sometimes recruits people within the organization and external forces. It helps plan replacement, empower competence in systematic manner. It is helpful to empowerment, extensive training, teamwork and also manufacturing and lean production, emphasis on operational incentives. Such as total quality management, just in time, advanced manufacturing technology, supply chain patterning as determinates of organizational performance. On the other hand productivity is basically surplus of raw material and efficiency of organization. HRP has economically and statistically significant impact on both intermediate outcomes like productivity, short term and long term measurement of corporate financial performance. Productivity is input and output relation. Through HRP, organization can determine what will be its manpower for now and future and the availability of manpower to operate the business operation. If manpower is not available on time it will impact badly on organization productivity. Organization unable to run production level properly, production will decrees, organization cant fulfill need on time, customer will dissatisfied, productivity will be hampered, turnover rate will be increase. HRP motivated, trained up employee time to time, develop them when they need, motivated employee to cope up with new technology and manufacture. It helps to increase effectiveness of manpower at all level. HR Planning is the process- including forecasting, developing and controlling-by which a firm ensures that it has the right number of people and right kind at the right places at the right time doing work for which they are economically most useful HR Planning is defined as the process of assessing the organizations human resources needs in the light of organizational goals and making plans to ensure that a competent, stable work force is employed.

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Process of Human Resource Planning:


With you expansion of business adoption of complex technology and professional management techniques, the process of human resource planning has assumed great significance. H.R.P consists of the following stages. 1. Assessing the current HR capacity 2. HR Demand Forecasting 3. Gap Analysis 4. Developing human resource plans

Assessing the Current HR Capacity:


Based on the organization's strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the organization. The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills inventory for each employee. The skills inventory should go beyond the skills needed for the particular position. List all skills each employee has demonstrated. For example, recreational or volunteer activities may involve special skills that could be relevant to the organization. Education levels and certificates or additional training should also be included. An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee's current development plans.

HR Demand Forecasting:
HR Demand Forecasting is the process of estimating the future quantity and quality of people required. The basis of the forecast must be the annual budget and long term corporate plan, translated into activity levels for each functions and department, In a manufacturing company , the sales budget would be translated into a production plan giving the number and type of products to be produced in each period. From this information, the number of hours to be worked by each skilled category to make the quota for each period would be computed.

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Once the hours are available, determining the quality and quantity of personnel will be the logical step. Demand forecasting must consider several factors- both external as well as internal. Among the external factors are competition (FOREIGN & DOMESTIC), economic climate, laws and regulatory bodies, changes in technology, and social factors. Internal factors include budget constraints production levels, new products and services organizational structure, and employee separation. DF is common among organizations; though they may not do personnel supply forecasting.
Forecasting Techniques:

I.

Managerial Judgment: This technique is very simple. In this, managers sit

together, discuss and arrive at a figure which would be the future demand for labor. The technique may involve a BOTTOM-UP or a TOP-DOWN approach. In the first, line managers submit their departmental proposals to top managers who arrive at the company forecasts. In the TOP-DOWN approach, top managers prepare company and departmental forecasts. The forecasts are reviewed with departmental heads and agreed upon. Neither of these approach is accurate-a combination of the two could yield positive results. In both the approaches managers are provided with broad guidelines. In consultation of HRM department, departmental heads prepare forecasts for their respective departments. Simultaneously top HR managers prepare company forecasts. This technique is used in smaller organizations or in those companies where sufficient data base is not available. II. DELPHI Technique: Named after the ancient GREEK oracle at the city of technique is a method of forecasting personnel needs. It

DELPHI, the Delphi

solicits estimates of personnel needs from a group of experts, usually managers. The HRP experts act as intermediary, summaries the various responses and report the findings back to the experts. The experts are surveyed again after they receive this feedback. Summaries and surveys are repeated until the experts opinions begin to agree. The agreement reached is the forecast of the personnel
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needs. The distinguishing feature of the Delphi technique is the interaction among experts. III. Work Study Technique: It can be used when it is possible to apply work

measurement to calculate the length of operation and the amount of labor required. The starting point in a manufacturing company is the production budget, prepared in terms of volumes of budgets of productive hours for the company as a whole, or volumes of output for individual departments. The budgets of productive hours are then complied using standard hours for direct labor. The standard hours per unit of output are then multiplied by the planned volumes of units to be produced to give the total number of planned hours for the period. This is then divided by the number of actual working hours for an individual operator to show the number of operator required. Allowance will have to be made for absenteeism and idle time. Following is highly simplified example of this procedure. Work Study Technique for direct workers can be combined with ratio analysis to forecast for indirect workers, establishing the ratio between the two categories. The same logic can be extended to any other category of employees. IV. Ratio Trend Analysis: this is the quickest forecasting technique. The

technique involves studying past ratios, say, between the number of workers and sales in an organization and forecasting future ratios, making some allowance for changes in the organization or its methods. The table given below shows how an analysis of actual and forecast ratios, between the number of routine proposals to be processed by an insurance companys underwriting department and the number of underwriters employed could be used to forecast future requirements.

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HR Supply 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 sourced for such procurement. This information is provided by supply forecasting. Supply forecasting measures the number of people likely to be available from within and outside an organization, after making allowance for absenteeism, internal movements and promotions, wastages and changes in hours and other conditions of work.

Reasons for Supply Forecasting are:

1.

Helps in quantify number of people and positions expected to be available in future to help the organization realize its plan and meet its objectives.

2. 3. 4. 5.

Helps clarify likely staff mixes that will exist in the future. Assess existing staffing levels in different parts of the organization. Prevents storage of people where and when they are most needed. Monitors expected future compliance with legal requirements of job reservation.

Area of HR Forecasting:

1. EXISTING HUMAN RESOURCES: analysis of present employees is greatly facilitated by HR audits. HR audits summaries each employees skill and abilities . The audits of non-managers are called skills inventories and those of the management are called management inventories. Whatever name is used, an inventory catalogues each employees skills and abilities. This summary gives planners a comprehensive understanding of the capabilities found in the organizations workforce.

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2. INTERNAL SUPPLY ANALYSIS: armed with HR audits, planners can proceed with the analysis of internal supply. The techniques used for the purpose are: I. II. III. IV. V. Inflow and out flow Turnover rate Conditions of work and absenteeism Productivity level Movement among jobs

3. EXTERNAL SUPPLY ANALYSIS: the organization needs to look out for prospective employees from external sources. External sources are important for specific reasons; I. II. III. New blood and new experience will be available Organization needs to replenish lost personnel Organizational growth and diversification create the needs to use external sources to obtain additional number and type of employees. IV. Sources of external supply vary from industry to industry, organization to organization and also from one geographical location to another. Some organizations while others achieved excellent results from consultants, competitors or unsolicited applications.

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Gap analysis
The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation. You should also look at all your organization's HR management practices to identify practices that could be improved or new practices needed to support the organization's capacity to move forward. Questions to be answered include: What new jobs will we need? What new skills will be required? Do our present employees have the required skills? Are employees currently in positions that use their strengths? Do we have enough managers/supervisors? Are current HR management practices adequate for future needs?

Developing HR strategies to support organizational strategies:


There are five HR strategies for meeting your organization's needs in the future: 1. Restructuring strategies 2. Training and development strategies 3. Recruitment strategies 4. Outsourcing strategies 5. Collaboration strategies

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HR strategies:
Restructuring Strategies:
This strategy includes: i. ii. iii. Reducing staff either by termination or attrition Regrouping tasks to create well designed jobs Reorganizing work units to be more efficient If your assessment indicates that there is an oversupply of skills, there are a variety of options open to assist in the adjustment. Termination of workers gives immediate results. Generally, there will be costs associated with this approach depending on your employment agreements. Notice periods are guaranteed in all provinces.

Training and development strategies:


i. Providing staff with training to take on new roles ii. Providing current staff with development opportunities to prepare them for future jobs in your organization Training and development needs can be met in a variety of ways. One approach is for the employer to pay for employees to upgrade their skills. This may involve sending the employee to take courses or certificates or it may be accomplished through on-the-job training. Many training and development needs can be met through cost effective techniques.

Recruitment strategies
Recruiting new staff with the skill and abilities that your organization will need in the future, considering all the available options for strategically promoting job openings and encouraging suitable candidates to apply For strategic HR planning, each time you recruit you should be looking at the requirements from a strategic perspective. Perhaps your organization has a need for a
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new fundraiser right now to plan special events as part of your fundraising plan. However, if your organization is considering moving from fundraising through special events to planned giving, your recruitment strategy should be to find someone who can do both to align with the change that you plan for the future.

Outsourcing strategies
Using external individuals or organizations to complete some tasks many organizations look outside their own staff pool and contract for certain skills. This is particularly helpful for accomplishing specific, specialized tasks that don't require ongoing full-time work. Some organizations outsource HR activities, project work or bookkeeping. For example, payroll may be done by an external organization rather than a staff person, a short term project may be done using a consultant, or specific expertise such as legal advice may be purchase from an outside source.

Collaboration strategies:
Finally, the strategic HR planning process may lead to indirect strategies that go beyond your organization. By collaborating with other organizations you may have better success at dealing with a shortage of certain skills. Types of collaboration could include: I. Working together to influence the types of courses offered by educational institutions II. Working with other organizations to prepare future leaders by sharing in the development of promising individuals III. IV. Sharing the costs of training for groups of employees Allowing employees to visit other organizations to gain skills and insight

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Factors Affecting HR Planning:


Types and strategies of organization:
The type of organization is an important consideration because it determines the production processes involved, number and type of staff needed, and the supervisory and managerial personnel required. Manufacturing organizations are more complex in this respect than those that render services. The strategic plan of the organization defines the organizations HR needs. For eg, A strategy of internal growth means that additional employees must be hired. Acquisitions or mergers, on the other hand, probably mean that the organization will need to plan for layoffs. Since mergers tend to create, duplicate or overlapping positions that can be handled more efficiently with fewer employees. Primarily, the organization decides either to be proactive or reactive in HRP. It can either decide to carefully anticipate the needs and systematically plan them to fill them far in advance, or it can simply react to needs as they arise ofcourse carefull planning to fill HR needs better helps ensure that the organization obtains the right number of HR people with proper skills and competencies when they are needed. Similarly, the organization must determine the breadth of the plan. Essentially, the organization can choose a narrow focus by planning one or two HR areas such as recruitments o0r selection or it can choose a broad focus by planning in all areas including training, remuneration and so on. The organization must also decide upon the formality of the plan. It can decide to have an informal plan that lies mostly in the minds of the managers and personnel staff. Alternatively, the organization can have a formalized plan which is clearly spelt out in writing, backed by documentation and data. Finally, the organization must make a decision on flexibility- the ability of the HR plan to anticipate and deal with the contingencies. No organization likes high level of uncertainty. Organizations seek to reduce uncertainties by planning, which includes forecasting and predicting possible future conditions and events HRP can contain many

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contingencies, which reflect different scenarios thereby assuring that the plan is flexible and adaptable.

Organizational growth and planning:


The stage of an organizations growth can have considerable influ ence on HRP. Small organizations in the embryonic stage may not have personnel planning. Need for planning is felt when the organization enters the growth stage. HR forecasting becomes essential. Internal development of people also begins to receive attention in order to keep up with the growth. A mature organization experiences less flexibility and variability. Growth slows down .The workforce becomes old as few younger people are hired . Planning becomes more formalized as less flexible and innovative. Issues like and possible retrenchment dominate planning . Finally, in the declining stage ,HRP takes a different focus . Planning is done for layoff, retrenchment and retirement. Since decisions are often made after serious financial and sales shocks are experienced by the organization, planning is often reactive in nature.

Environmental uncertainties:
HR managers rarely have the privilege of operating in a stable and predictable environment, political, social and economic changes affect all organizations. Personnel deal with environmental uncertainties by carefully formulating recruitment, selection and training and development policies and programmes .Balancing mechanisms are built into the HRM programmes through succession planning, promotion channels, layoffs, flexible time, job sharing, retirement, VRS and other personnel related arrangements

Time horizons:
Another major factor is personnel planning in Time horizon. On one hand, there are short-term plans which spread over six months to year. On the other hand there are long term plans which spread over three to twenty years. The exact time span, however

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depends on degree of uncertainty prevailing in the environment .Plans for companies operating in an unstable environment, computers for example, must be for a short period. Plans for others were environment is fairly stable, for example a university plan, may be a long-term. In general, the greater the uncertainty is the shorter the plans time horizon and vice versa.

Type and quality of forecasting information:


The information used to forecast personnel needs originates from multitude of sources. A issue in personnel planning is the type of information which should be used in making forecasts. Closely related to the type of information is the quality of data used. The quality and accuracy listed in table 4.5depend upon the clarity with which the organizational decision makers have defined their strategy, organizational structure, budget. Production schedule and so forth. In addition, the HR department must maintain welldeveloped job analysis information and Hr information systems (HRIS) that provide accurate and timely data. Generally speaking, organizations operating in stable environments are in a better position to obtain comprehensive, timely and accurate information because of longer planning horizons, clearer definition of strategy and objectives, and fewer disruptions.

Nature of jobs being filled:


Personal planners must consider the nature of jobs beings filled in the organization. Job vacancies arise because of separation, promotion and expansion strategies. It is easy to employ shop-floor workers, but a lot sourcing is necessary for hiring managerial personnel. It is, therefore, necessary for the personnel department to anticipate vacancies, as far in advance as possible, to provide sufficient lead time to ensure that suitable candidates are recruited.

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Off-loading the work:


Several organizations outsource part of their work to outside parties either in the form of sub-contracting or ancillarisation. Outsourcing is a regular feature both in the public sector as well as in the private sector . Most organization have surplus labor and they do not want to worsen the problem by hiring more people. Hence the needs for off-loading. Some organizations are known to carry the concept of off-loading to ridiculous lengths. One of the Bangalore-based public sector undertaking outsources major part of its work, and in the process, regular employees sit idle. Kick back from owners of ancillary units are the cause for ancillarisation . HRP is rarely required in such circumstances.

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