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Human Resource Management
Session-3
Human Resource Planning
Staff replacement approach: Vacancies are filled-in on ad hoc
basis. Relevant in stable environments. No change in
knowledge & skills.
Short-term HR Strategy: Long term forecast is obsolete during
change & uncertainty. Short term planning, simpler analysis
and owned by line managers. HR & Line managers collaborate
to determine key HR issues. Speed, flexible response and the
ability to adapt the skills & knowledge of workforce is the key.
Vision-driven HRD: Long-term plan driven by organizational
vision, mission & core values, rather than detailed staffing
forecasts and targets. Applied when major cultural shift is
needed in employee attitudes, skills and behavior.
Long range HRP: Based on long range & detailed forecasts.
Approaches to Human Resource Planning
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Approaches to Human Resource Planning
.
Low need Medium High need
Staff Replacement
Approach
(Vacancy based)
SHORT LONG
SHORT-TERM
HR STRATEGY
(Key issues based) UNCERTAIN CERTAIN
VISION-DRIVEN HRP LONG-RANGE
(Vision Based) & DETAILED HRP
(Forecast based)
Is there a need to change
workforce structure,
knowledge & skills?
What is the time span to
planning
What is the future organizational
environment like?
Forecasting Methods
.
Mathematical Methods
o Ratio Analysis
o Analysis of workload
o Time Series analysis
o Scatter Plot
o Simulation
o Markov Analysis
Judgmental Methods
o Estimates
o Rule of thumb
o Delphi Technique
o Nominal Groups
HR
Demand
and Supply
Forecasts
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Ratio Analysis
HP manufactures 50,000 computers in a year. Each computer is priced at Rs.
25,000/-. HP spends Rs. 5000/- per computer on material and 2,00,000 man-
hours to make the computers. Compute the following productivity ratios:
a) Output / labor ratio; b) Output value / labor ratio; c) Value added / labor ratio
a) Output / labor ratio (in terms of man-hours):
50,000 2,00,000 = 0.25 computers per man-hour
b) Output value / labor ratio:
(50,000 25,000) 2,00,000 = Rs. 6,250 per man-hour
c) Value added / labor ratio:
Value addition = (50,000 25,000) (50,000 5000) = Rs. 100,00,00,000
Value added / labor ratio (in man hours) = 10,00,000,000 2,00,000 = Rs. 5,000 per
man-hour.
Analysis of workload factors
Classification of work (Job content & time)
Forecasting number of jobs in a day (demand projection)
Converting jobs to man-hours per day
Job Category Hours per job Job Category Hours per job
Relating to Electrical meters 0.75 Maintenance 1.50
Relating to Installation 2.50 Emergency calls 1.10
Job Category
YEAR
2007 2008 2009 2010
Meters 15 13 11 8
Installation 85 95 110 125
Maintenance 27 35 41 45
Emergency 10 8 6 4
Job Category
YEAR
2007 2008 2009 2010
Meters 11.25 9.75 8.25 6
Installation 212.50 237.50 275 312.50
Maintenance 40.50 52.50 61.50 67.50
Emergency 11 8.8 6.60 4.40
Total man-hrs 275.25 308.55 351.35 390.40
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Analysis of workload factors Contd
Converting man-hours into manpower requirement per
day.
Skill inter-changeability of maintenance staff for the identified job categories
with 20% fatigue allowance and 20% leave reserve is assumed. Thus in a day
of 8 man hours per employee, net available time for attending to work gets
reduced by 40% per employee only 4.8 man hours per day per employee is
available. Manpower forecasting is done considering 4.8 man-hours per
employee per day.
CALCULATION
No. of maintenance staff required
YEAR
2007 2008 2009 2010
Total No. of Man hours per day 275.25 308.55 351.35 390.40
Available man hours per day per emp. 4.8 4.8 4.8 4.8
Total no. of Employees required per day 57 64 73 81
Demand Forecasting - Scatter Plot
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f

R
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1200
1000
800
600
400
200
0
Hospital Size (No. of Beds)
200 400 600 800 1000 1200
0
o
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Monte Carlo Simulation
A hotel keeps a record of the number of staff requirements of various categories.
Information relating to 200 days requirement is as below:
Develop a simulation model to predict the demand of staff for a 10-day period.
Solution: Derive the probability distribution of demand for the staff expressing the
frequencies in proportions by dividing each of the values by 200 i.e. the total frequency. The
resultant frequency would be as following:
Determine random numbers using random number generator.
The interval of random numbers should correspond to the probability distribution. Since
probabilities are calculated to two decimal places adding up to 1.00, we need 100 random
numbers of two digits to represent each point of probability. Thus we take random
numbers 00 through 99 to represent them. As the probability of 5 staff is .02, we assign two
random numbers 00-01 to this demand level. The probability of 6 staff being .05, the next
five numbers, 02-06 would be assigned to this level. Similarly for each of demand levels.
DEMAND Total
No. of staff 5 6 7 8 9 10 11 12
No. of days 4 10 16 50 62 38 12 8 200
No. of staff 5 6 7 8 9 10 11 12
No. of days .02 .05 .08 .25 .31 .19 .06 .04
Monte Carlo Simulation contd
Assume that the 10 random numbers selected for the 10-day demand period are:
61, 74, 24, 03, 59, 16, 84, 92, 52, 07. The first number 61 lies in the interval 40-70 and the
corresponding demand level is 9. Similarly all random numbers are assigned to the
respective intervals and the corresponding demand level is identified.
Demand (No. of Staff) Probability
Cumulative
Probability
Random number interval
5 .02 .02 00 01
6 .05 .07 02 06
7 .08 .15 07 14
8 .25 .40 15 39
9 .31 .71 40 70
10 .19 .90 71 89
11 .06 .96 90 95
12 .04 1.00 96 99
Day 1 2 3 4 5 6 7 8 9 10
RandomNo. 61 74 24 03 59 16 84 92 52 07
Demand 9 10 8 6 9 8 10 11 9 7
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Supply Forecasting - Markov Analysis
Transition Probability Matrix
(Time-2)
(Time-1) Job-A Job-B Job-C Job-D Exit
Job-A 0.70 0.10 0.05 0 0.15
Job-B 0.15 0.60 0.05 0.10 0.10
Job-C 0 0 0.80 0.05 0.15
Job-D 0 0 0.05 0.85 0.10
Matrix Applied to People
Jobs
Initial
Staffing
Levels Job-A Job-B Job-C Job-D Exit
Job- A 62 44 6 3 0 9
Job-B 75 11 45 4 8 7
Job-C 50 0 0 40 2 8
Job-D 45 0 0 2 38 5
Predicted end-of-year staffing 55 51 49 48 29
Program Planning Options
.
If a SHORTAGE of employees
is expected
If a SURPLUS of employees is
expected
o Recruit new full time employees
o Offer incentives for postponing
retirement
o Rehire retired employees
o Attempt reduce turnover
o Offer overtime work
o Subcontract work
o Hire temporary employees
o Reengineer to reduce needs
o Outsource an entire function
o Use technology to improve
productivity
o Do not replace employees who
leave (termed as Attrition)
o Offer Voluntary retirement
o Transfer or reassign excess
employees
o Use slack time for employee
training or equipment maintenance
o Reduce work hours
o Lay off employees
o Freeze hiring

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