Human Resource Planning Notes 2 PDF

Human Resource Planning
This book is a part of the course by Jaipur National University, Jaipur.

This book contains the course content for Human Resource Planning.
JNU, Jaipur
First Edition 2013
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content whenever the need arises, and to vary it at any time without prior notice.
Index
I. Content....................................................................... II
II. List of Figures.......................................................VIII
III. List of Tables..........................................................IX
IV. Abbreviations.......................................................... X
V. Case Study.............................................................. 109
VI. Bibliography......................................................... 112
VII. Self Assessment Answers................................... 115
Book at a Glance
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Contents
Chapter I........................................................................................................................................................ 1
Introduction to Human Resource Planning System: The Emerging Context......................................... 1
Aim................................................................................................................................................................. 1
Objectives....................................................................................................................................................... 1
Learning outcome........................................................................................................................................... 1
1.1 Introduction............................................................................................................................................... 2
1.2 The Importance of HRP............................................................................................................................ 2
1.3 Meaning and definition of HRP................................................................................................................ 3
1.4 Need for Planning..................................................................................................................................... 3
1.5 Types of Plans........................................................................................................................................... 4
1.5.1 Philosophy ............................................................................................................................... 4
1.5.2 Purpose .................................................................................................................................... 4
1.5.3 Objectives ................................................................................................................................ 4
1.5.4 Strategies................................................................................................................................... 4
1.5.5 Policies . ................................................................................................................................... 4
1.5.6 Procedure and Rules ................................................................................................................ 4
1.5.7 Programmes ............................................................................................................................. 4
1.5.8 Budget . .................................................................................................................................... 4
1.6 The Process of Planning............................................................................................................................ 4
1.6.1 Organisational Objectives and Policies.................................................................................... 5
1.7 Forecasting Techniques............................................................................................................................. 5
1.7.1 HR Demand Forecast................................................................................................................ 5
1.7.2 HR Supply Forecast.................................................................................................................. 6
1.7.3 New Venture Analysis............................................................................................................... 6
1.7.4 Other Forecasting Methods....................................................................................................... 6
1.8 Examining the External and Internal Issues.............................................................................................. 6
1.8.1 Work Force Demographics ...................................................................................................... 6
1.8.2 Technology................................................................................................................................ 6
1.8.3 Organisational Structure........................................................................................................... 7
1.8.4 Business Strategy...................................................................................................................... 7
1.9 Determining Future Organisational Capabilities...................................................................................... 7
1.10 Determining Future Organisational Needs............................................................................................. 7
1.11 Implementing HR Programme to address Anticipated Problems........................................................... 8
1.11.1 Communicate Need for the Programme................................................................................. 8
1.11.2 Explain the Programme........................................................................................................... 8
1.11.3 Explain what is Expected of the Employees........................................................................... 8
1.11.4 Establish Feedback Mechanisms............................................................................................ 8
1.12 The role of HRP professionals................................................................................................................ 8
1.12.1 Impact of HRP........................................................................................................................ 9
1.12.2 Impact of Technology on HRP................................................................................................ 9
1.12.3 HR Programming.................................................................................................................. 10
1.12.4 HR Plan Implementation...................................................................................................... 10
1.12.5 Control and Evaluation......................................................................................................... 10
1.13 Barriers to HRP..................................................................................................................................... 10
Summary...................................................................................................................................................... 12
References.................................................................................................................................................... 12
Recommended Reading.............................................................................................................................. 13
Self Assessment............................................................................................................................................ 14
Chapter II.................................................................................................................................................... 16
Process and Functions of Human Resource Planning............................................................................. 16
Aim............................................................................................................................................................... 16
Objectives..................................................................................................................................................... 16
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Learning outcome......................................................................................................................................... 16
2.1 Introduction (The concept and process of HRP)..................................................................................... 17
2.2 Preliminaries to Review.......................................................................................................................... 19
2.3 Manning Standards and Utilisation......................................................................................................... 19
2.4 HR Information Systems......................................................................................................................... 20
2.5 HR Inventory and Analysis..................................................................................................................... 20
2.5.1 Flows....................................................................................................................................... 20
2.6 HR Supply Planning............................................................................................................................... 20
2.7 HR Control and Audit............................................................................................................................. 21
2.8 Management HR Planning...................................................................................................................... 21
2.8.1 Corporate Culture................................................................................................................... 21
2.8.2 Periodic Full Reviews............................................................................................................. 21
2.8.3 Frequency................................................................................................................................ 22
2.9 Application to Individual Decisions........................................................................................................ 22
Summary...................................................................................................................................................... 24
References.................................................................................................................................................... 24
Self Assessment............................................................................................................................................ 25
Chapter III................................................................................................................................................... 27
Methods and Techniques of Demand Management................................................................................. 27
Aim............................................................................................................................................................... 27
Objectives..................................................................................................................................................... 27
3.1 Introduction............................................................................................................................................. 28
3.2 Human Resource Forecasting................................................................................................................. 28
3.3 Forecasting Demand for Employees....................................................................................................... 29
3.3.1 Economic Factors .................................................................................................................. 29
3.3.2 Social Factors.......................................................................................................................... 29
3.3.3 Demographic Factors.............................................................................................................. 29
3.3.4 Competition............................................................................................................................ 29
3.3.5 Technological Factors............................................................................................................. 29
3.3.6 Growth and Expansion of Business........................................................................................ 29
3.3.7 Management Philosophy/Leadership...................................................................................... 29
3.3.8 Innovative Management......................................................................................................... 30
3.4 Managerial Dilemma.............................................................................................................................. 30
3.5 Issues in Demand Forecasting................................................................................................................ 31
3.5.1 Social Factors.......................................................................................................................... 31
3.5.2 Technological Factors............................................................................................................. 31
3.5.3 Political Factors...................................................................................................................... 31
3.5.4 Economic Factors................................................................................................................... 32
3.5.5 Demand Generation................................................................................................................ 32
3.5.6 Growth.................................................................................................................................... 32
3.5.7 Employee Turnover................................................................................................................. 32
3.5.8 Technological Shifts................................................................................................................ 32
3.6 Forecasting Techniques........................................................................................................................... 33
3.6.1 Managerial Judgement............................................................................................................ 33
3.6.2 Ratio-trend Analysis............................................................................................................... 33
3.6.3 Work-study Technique............................................................................................................ 33
3.6.4 Delphi Technique.................................................................................................................... 34
3.6.5 Flow Models........................................................................................................................... 34
3.7 Creation of an HR/Staffing Plan............................................................................................................. 34
3.7.1 Internal Considerations........................................................................................................... 34
3.7.2 Wastage Analysis.................................................................................................................... 34
3.8 Conclusion.............................................................................................................................................. 35
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Summary...................................................................................................................................................... 36
References.................................................................................................................................................... 36
Self Assessment............................................................................................................................................ 38
Chapter IV................................................................................................................................................... 40
Methods and Techniques for Supply Management.................................................................................. 40
Aim............................................................................................................................................................... 40
Objectives..................................................................................................................................................... 40
4.1 Introduction............................................................................................................................................. 41
4.2 Human Resource Inventory.................................................................................................................... 41
4.2.1 Age Distribution...................................................................................................................... 42
4.2.2 Skills Inventory....................................................................................................................... 42
4.2.3 Length of Service.................................................................................................................... 42
4.3 Factors Affecting Internal Levels............................................................................................................ 43
4.3.1 Reasons for Increase in Employee Groups............................................................................. 43
4.3.2 Reasons for Decrease in Employment Groups Promotions Out............................................. 45
4.4 Employee Turnover Analysis.................................................................................................................. 46
4.5 The Cohort Method................................................................................................................................. 47
4.6 The Census Method................................................................................................................................ 48
4.7 Markov Chain......................................................................................................................................... 48
4.8 Renewal Models...................................................................................................................................... 49
Summary...................................................................................................................................................... 50
References.................................................................................................................................................... 50
Self Assessment............................................................................................................................................ 52
Chapter V..................................................................................................................................................... 54
Contemporary Trends in Managing Demand and Supply...................................................................... 54
Aim............................................................................................................................................................... 54
Objectives..................................................................................................................................................... 54
5.1 Introduction............................................................................................................................................. 55
5.2 Emerging Organisation Structures.......................................................................................................... 55
5.3 Transformations at the Workplace.......................................................................................................... 56
5.4 Flexible Workplace................................................................................................................................. 56
5.5 Building a Culture................................................................................................................................... 57
5.6 Performance Appraisals.......................................................................................................................... 58
5.7 Staffing.................................................................................................................................................... 58
5.8 Compensation and Benefits.................................................................................................................... 59
5.9 Dealing with Relocations and Redundancies.......................................................................................... 59
5.10 Human Resource Measures and Audit.................................................................................................. 60
5.10.1 Personnel Measures.............................................................................................................. 61
5.11 Trends in the Labour Supply................................................................................................................. 62
5.11.1 Changes in the Composition of the Population..................................................................... 62
5.11.2 Subgroup Participation Changes........................................................................................... 62
5.11.3 Labour Force Quality............................................................................................................ 62
5.11.4 Level of Education................................................................................................................ 62
5.11.5 Women in the Labour Force.................................................................................................. 63
5.11.6 The Older Employee............................................................................................................. 63
5.11.7 Handicapped Workers in the Labour Force.......................................................................... 63
5.11.8 Part-time and Full-time Time Work...................................................................................... 63
5.12 Trends in Labour Demand.................................................................................................................... 64
5.12.1 Implications for Personnel/HR Activities............................................................................. 64
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5.12.2 Succession Planning............................................................................................................. 64
5.12.3 Assessment Centres............................................................................................................... 65
5.12.4 Employee Replacement Chart.............................................................................................. 65
Summary...................................................................................................................................................... 67
References.................................................................................................................................................... 67
Self Assessment............................................................................................................................................ 69
Chapter VI................................................................................................................................................... 71
Job Analysis................................................................................................................................................. 71
Aim............................................................................................................................................................... 71
Objectives..................................................................................................................................................... 71
6.1 Introduction............................................................................................................................................. 72
6.2 Job Analysis............................................................................................................................................ 72
6.3 Some Considerations.............................................................................................................................. 73
6.4 Method of Collecting Information.......................................................................................................... 73
6.4.1 Job Questionnaire................................................................................................................... 73
6.4.2 Interview................................................................................................................................. 74
6.4.3 Observation............................................................................................................................. 74
6.4.4 Independent Observers........................................................................................................... 75
6.5 Job Analysis: Process.............................................................................................................................. 76
6.5.1 Technological Change............................................................................................................. 76
6.5.2 Union- Management Agreements........................................................................................... 76
6.5.3 People...................................................................................................................................... 76
6.6 Steps in the Job Analysis Process........................................................................................................... 76
6.6.1 Organisation Analysis............................................................................................................. 76
6.6.2 Uses of Job Analysis Information........................................................................................... 76
6.6.3 Selection of Jobs for Analysis................................................................................................. 77
6.6.4 Collection of Data................................................................................................................... 77
6.6.5 Preparation of Job Description............................................................................................... 77
6.6.6 Preparation of Job Specification............................................................................................. 77
6.7 Job Description....................................................................................................................................... 77
6.8 Design of Job Description....................................................................................................................... 78
6.9 Uses of Job Description.......................................................................................................................... 78
6.9.1 Supervisor- Employee Communication.................................................................................. 78
6.9.2 Recruitment, Selection, Promotion, and Transfer................................................................... 79
6.9.3 Work Performance Appraisal.................................................................................................. 79
6.9.4 Manpower Planning, Training and Development................................................................... 79
6.9.5 Industrial Relations................................................................................................................. 79
6.9.6 Organisation and Procedure Analysis..................................................................................... 79
6.10 Job Specification................................................................................................................................... 80
6.10.1 From Job Analysis to Jobless World..................................................................................... 80
Summary...................................................................................................................................................... 81
References.................................................................................................................................................... 81
Self Assessment............................................................................................................................................ 83
Chapter VII................................................................................................................................................. 85
Changing Nature of Roles.......................................................................................................................... 85
Aim............................................................................................................................................................... 85
Objectives..................................................................................................................................................... 85
7.1 Introduction............................................................................................................................................. 86
7.1.1 Role and Role Dynamics........................................................................................................ 86
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7.2 Role Description..................................................................................................................................... 86
7.3 Kinds of Roles........................................................................................................................................ 87
7.3.1 Interpersonal .......................................................................................................................... 87
7.3.2 Informational.......................................................................................................................... 87
7.3.3 Decisional............................................................................................................................... 87
7.4 Need for Role Descriptions..................................................................................................................... 88
7.5 Uses of Role Descriptions....................................................................................................................... 88
7.6 Changing Roles: Approaches.................................................................................................................. 89
7.6.1 Skill Behaviour Matrix........................................................................................................... 89
7.6.2 Configuration Matrix.............................................................................................................. 89
7.6.3 Other Approaches................................................................................................................... 89
7.7 The Changing World of Work................................................................................................................. 90
7.8 Factors Contributing to Role Changes.................................................................................................... 90
7.8.1 Technology Upgradation......................................................................................................... 90
7.8.2 Information Technology.......................................................................................................... 91
7.8.3 Competition............................................................................................................................ 91
7.8.4 Women in Work...................................................................................................................... 91
7.9 Role Expectations................................................................................................................................... 91
Summary...................................................................................................................................................... 93
References.................................................................................................................................................... 93
Self Assessment............................................................................................................................................ 95
Chapter VIII................................................................................................................................................ 97
Human Resource Information Systems.................................................................................................... 97
Aim............................................................................................................................................................... 97
Objectives..................................................................................................................................................... 97
8.1 Introduction............................................................................................................................................. 98
8.2 Concepts of HRIS................................................................................................................................... 98
8.3 Need for HRIS........................................................................................................................................ 98
8.4 Technology Shifts and HRIS................................................................................................................... 99
8.5 Effectiveness of HRIS............................................................................................................................. 99
8.5.1 Adequacy of Information........................................................................................................ 99
8.5.2 Specificity............................................................................................................................... 99
8.5.3 Relevance................................................................................................................................ 99
8.5.4 Comprehensiveness.............................................................................................................. 100
8.5.5 Reliability.............................................................................................................................. 100
8.6 IT supported HRIS................................................................................................................................ 100
8.6.1 Deficiencies of the Manual System ..................................................................................... 100
8.6.2 Advantages of Computerisation............................................................................................ 100
8.7 Designing and Implementing HRIS...................................................................................................... 101
8.7.1 Formation of a Project Team ............................................................................................... 101
8.7.2 Training of those who will be Managing and using HRIS................................................... 101
8.7.3 Ensuring Security and Privacy.............................................................................................. 101
8.8 HRIS as a Tool...................................................................................................................................... 101
8.9 Prerequisites for Introducing “Informating” HRIS............................................................................... 102
8.9.1 The Corporate Climate.......................................................................................................... 102
8.9.2 An Enlightened Human Resource Function.......................................................................... 102
8.9.3 The Technology Platform...................................................................................................... 102
8.10 HRIS Leadership................................................................................................................................. 103
8.10.1 Vision.................................................................................................................................. 103
8.10.2 Technical Skills................................................................................................................... 103
8.10.3 Business Acumen................................................................................................................ 103
8.10.4 Ability to Influence and Negotiate...................................................................................... 103
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8.10.5 Team Leadership................................................................................................................. 103
8.10.6 Project Management........................................................................................................... 103
8.11 Conclusion.......................................................................................................................................... 104
Summary.................................................................................................................................................... 105
References.................................................................................................................................................. 105
Recommended Reading............................................................................................................................ 106
Self Assessment.......................................................................................................................................... 107
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List of Figures
Fig. 1.1 The HRP process............................................................................................................................... 5
Fig. 2.1 The HRP process............................................................................................................................. 18
Fig. 3.1 Assumptions at the time of demand forecasting.............................................................................. 30
Fig. 4.1 Influences on HR inventory levels.................................................................................................. 44
Fig. 4.2 Promotion channels (Inwards)......................................................................................................... 44
Fig. 4.3 Promotion channels......................................................................................................................... 45
Fig. 4.4 Feeder and receiving group for promotions.................................................................................... 45
Fig. 4.5 Cohort survivors function applied over three years......................................................................... 47
Fig. 4.6 Markov chain................................................................................................................................... 48
Fig. 5.1 Organisation structures.................................................................................................................... 55
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List of Table
Table 1.1 Human resource planning- a win-win process.............................................................................. 23
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Abbreviations
AICTE - All India Council for Technical Education
ATM - Automatic Teller Machines
C&B - Compensation and Benefits
CAD - Computer Aided Design
CAM - Computer Aided Manufacturing
HR - Human Resource
HRIS - Human Resource Information Systems
HRM - Human Resource Management
HRP - Human Resource Planning
IIT - Indian Institute of Technology
ILO - International Labour Organisation
IT - Information Technology
L&T - Larsen and Toubro
MIT - Massachusetts Institute of Technology
R&D - Research and Development
T&D - Training and Development
USSR - Union of Soviet Socialist Republic
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Chapter I
Introduction to Human Resource Planning System: The Emerging Context
Aim
The aim of this chapter is to:
• introduce the concept of human resource planning
• explain the importance of human resource planning
• explore the need for human resource planning
Objectives
The objectives of this chapter are to:
• explicate the techniques of forecasting
• enlist the types of plans
• elucidate the planning process
Learning outcome
At the end of this chapter, you will be able to:
• analyse the various forecasting techniques
• identify the barriers human resource planning
• understand the importance of human resource planning
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1.1 Introduction
Planning the right man for right job and developing him into an efficient team member is a vital task of every manager.
HR is a significant corporate asset and performance of organisations depends upon the way it is put in use. HRP is a
purposeful strategy for acquisition, improvement and preservation of enterprise’s human resources. It is a managerial
function that aims at coordinating the requirements for and availability of diverse types of employees. This involves
ensuring that the organisation has the right kind of people at right time and also fine-tune the requirements to the
available supply.
HRP is a forward looking function and an organisational tool to recognise skill and competency gaps and then
develop plans for development of lacking skills and competencies in human resources to stay competitive. HRP is
influenced by technological changes and other global business pressures. HRP ensures benefits to the organisations
by creating a pool of talent, preparing people for future cost cutting and succession planning besides creating a
back-up plan in case of diversification and growth.
Human resource planning should be an essential part of business planning. The planning process defines projected
changes in the types of activities carried out by the organisation and the degree of those activities. It identifies
the core competencies required by the organisation to achieve its goals. Human resource planning infers people
requirements in terms of stalls and competencies. As Quinn Mills indicates, human resource planning is a decision
making process that combines three important activities
• identifying and acquiring the right number of people with the proper skills,
• motivating them to achieve high performance, and
• creating interactive links between business objectives and resource planning activities.
Human resource planning is certainly concerned with broader issues about the employment of people than the
conventional quantitative model approach of manpower planning. But it specifically focuses on those aspects of
human resource management that are mainly concerned with the organisation’s requirements for people from the point
of view of numbers, skills and how they are organised. However, it must be recognised that even though the view
of human resource planning is well established in the HRM vocabulary, it is not established as a key HR action.
1.2 The Importance of HRP

Human resource planning is imperative for helping both organisations and employees to plan for the future but it is
often thought that situations are dynamic and they keep changing like for instance, there was a time when the legal
profession was considered to be a good profession but lately it is highly overcrowded. So in such situations the
very purpose of planning is somewhat doubted. However, the answer is that even an imperfect forecast of the future
can be quite helpful. Consider weather forecasts. You can probably think of times when it snowed, even though
the television weather forecaster forecasted there would be no snow. On the other hand, you can probably think of
times when it did not snow, even though the weather forecaster predicted a foot of snow by the next morning. It
may be surprising to know that as imprecise as weather forecasts sometimes seem to be many organisations, that
pay a forecasting service for regular weather updates. The reason for this is quite simple. Even a production that is
sometimes erroneous is better than no forecast or production at all. Maybe the ideal example is the stock market.
If someone had even a moderately accurate way to foresee which stocks would go up and which stocks would go
down, that person could make a great deal of money investing in the stock market, even though there would be
some errors. The answer is whether ones production tool improves the chances of making the right decisions. Even
though the projecting tool may not be always accurate, as long as it is more accurate than arbitrary and random
guessing it will result in better decisions.
The same aspect is applicable to human resource planning. Even though neither organisations nor employees can
look into the future, making predictions can be quite useful, even if they are not always accurate. The crucial goal
of human resource planning, then, is to forecast the future and, based on these predictions, employ programmes
to evade anticipated or expected problems. In brief, humans resource planning is the process of examining an
organisations or individuals future human resource needs (for instance, what types of skills will be needed for jobs
of the future) compared to future human resource capabilities (such as the types of skills employees or you already
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have) and developing human resource policies and practices to address potential problems for example, executing
training programmes to prevent skill deficiencies.
1.3 Meaning and definition of HRP

Simply put, HRP is understood as the process of forecasting an organisation’s future human resource demand for,
and supply to meet the objectives such as the apt type of people in the right number. Only after this process can the
HRM departments commence the recruitment and selection process. HRP is a sub-system in the total organisational
planning. Organisational planning involves managerial activities that lay down the company’s objectives for the
future and defines suitable means for achieving those objectives. HRP facilitates the realisation of the company’s
objectives for the future and determines appropriate means for achieving those objectives.
HRP also aids in the realisation of the company’s objectives by providing the right type and the right number of
personnel. HRP is given several names- manpower planning, personnel planning or employment planning. Human
resource planning is the method by which an organisation ensures that it has the right number and kind of people, at
the right place, at the right time, capable of effectively and efficiently completing tasks that will help the organisation
achieve its overall objective. Human resource planning, then converts the organisation’s objectives and plans into
the number of workers needed to meet those objectives. With no a clear cut planning, assessment of human resource
need is reduced to sheer guesswork.
1.4 Need for Planning

The need for planning occurs mainly due to the fact that modern organisations have to survive, operate and grow
in highly competitive market economics where change is the prevailing principle. The change may be either
revolutionary (sudden) or evolutionary (slow). The diverse areas of change include: change in technology, change
in population, change in economic structures and systems, change in policies of government, change in employee
attitudes behaviour. etc. These changes create obstacles for the management through threats and challenges. Managers
have to tolerate the problems caused due to the changes and act upon them delicately in order to avoid or reduce the
effects of these problems on the survival, operation and growth of the organisation. Efficient managers can predict
the problems that are probable to occur and try to check them. As pointed by Terry, successful managers deal with
foreseen problems and unproductive managers struggle with unforeseen problems. The difference lies in planning.
Managers have to foresee to make the future favourable to the organisation in order to achieve the goals effectively.
They introduce action, conquer current problems, avert future uncertainties, adjust the goals with the unforeseen
environmental conditions and apply all their resources to achieve their goals. According to Megginson, et al “to
have an organisation that looks forward to the future and tries to stay alive and prosper in a changing world, there
must be active, vigorous, continuous and creative planning”. Thus, there is a superior need for planning in order to
keep the organisation dynamic in a changing situation of uncertainty.
More specifically, HRP is required to meet following objectives:

• Forecast HR requirement.
• Cope-up with the change — in market conditions, technologies, products, government regulations and policies,
etc.
• Use existing HR productivity.
• Promote employees in a systematic manner. If used properly, it offers a number of benefits:
Create reservoir of talent.
Prepares people for future.
Expand or contract.
Cut cost.
Succession planning.
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1.5 Types of Plans

There are nine types of plans such as, philosophy, purpose, objectives, strategies, policies, procedures and rules,
programmes and budgets. They have been discussed below:
1.5.1 Philosophy
Every organisation aims at formulating its own philosophy. The philosophy of the company should have lucidity
and clarity of thought and action in the achievement of economic objectives of a country. The philosophy connects
the space/gap between society and the company.
1.5.2 Purpose
Every kind of organised group activities or operations has a rationale. For example, the purpose of a
bank is to accept deposits and grant loans and advances.
1.5.3 Objectives
Objectives are the ends towards which organisational activity is aimed. Every department has its own objectives
which may not be totally similar to the other departments or organisations.
1.5.4 Strategies
Strategy is determination of the fundamental long term objectives of an enterprise and the implementation of courses
of action and allocation of resources needed to achieve these goals.
1.5.5 Policies
Policies are general statements or understandings which direct or express thinking and action in decision making.
However, all policies are not statements.
1.5.6 Procedure and Rules

Procedures are plans that launch a desired method of managing future activities. They detail the accurate manner
in which a certain activity must be achieved.
1.5.7 Programmes
These are complexes of goals, policies, procedures, task assignment rules, steps to be taken, or sources to be employed
and other elements essential to carry out a given course of action.
1.5.8 Budget
A budget is a statement of predictable results in terms of members. It may be referred to as a numerical programme.
Cash budget, sales budget, capital expenditure budget are some of the examples of budget.
1.6 The Process of Planning

The planning process is affected by overall organisational objectives and the situation of business. HRP is primarily
involved in forecasting human resource requirements, assessing human resource supply and harmonising demand
supply factors through human resource related programmes.
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Environment
Organisational
Objectives and Policies
HR Needs Forecast HR Supply Forecast
HR Programming
HRP
Implementation
Control and
Evaluation of Programme
Surplus Shortage
Restricted Hiring Recruitment
Reduced Hours and Selection
VRS, Lay Off, etc.
Fig. 1.1 The HRP process
1.6.1 Organisational Objectives and Policies

HR plans to be made based on organisational objectives means that the objectives of the HR plan must be consequent
from organisational objectives. Specific requirements in terms of number and characteristics of employees should be
derived from the organisational objectives. Organisational objectives are defined by the top management and the role
of HRP is to sub serve the entire set of objectives by ensuring the availability and utilisation of human resources.
1.7 Forecasting Techniques

Forecasting techniques differ from simple to sophisticated ones. It may be stated that organisations generally follow
more than one technique. The techniques are:
• Managerial Judgement
• Ratio Trend Analysis
• Work Study Techniques
• Delphi Technique
• Flow Models
• Others
1.7.1 HR Demand Forecast

Demand forecast is the procedure of approximating the future quantity and quality of people required. The foundation
of the forecast must be the annual budget and long term corporate plan, translated into activity levels for each
function and department. Demand forecasting must consider factors which are both external and internal. The
external factors include competition, economic climate, laws and regulatory bodies, changes in technology and social
factors. Internal factors include budget constraints, production levels, new products and services, organisational
structure and employee separations.
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1.7.2 HR Supply Forecast

Personnel Demand analysis provides the manager with the means of estimating the number and kind of employees
that will be needed. The next step for the management is to decide whether it will be able to obtain the required
number of personnel and the sources for such procurement. This information is provided by supply forecasting.
Supply forecasting ascertains the number of people likely to be available from within and outside an organisation,
after making allowance for absenteeism, internal movements and promotions, wastage and changes in hours and
other circumstances of work.
1.7.3 New Venture Analysis

New venture analysis will be valuable when new ventures consider employment planning. This technique requires
planners to estimate HR needs in line with companies that perform similar operations. For example, a petroleum
company that plans to open a coal mine can estimate its future employment by deciding employment levels of other
coal mines.
1.7.4 Other Forecasting Methods

The organisations pursue more than one technique for forecasting their peoples’ needs. L&T, for example, follows
‘bottom-up’ of management judgment and work study procedures for demand forecasting.
Example: The forecasting process in L&T begins during November of every year. The department heads arrange
their personnel estimates (based on details of production budget supplied to them) and present the estimates to the
particular personnel managers. The personnel heads will assess the estimates with the departmental heads and will
send final reports to the Bombay office where the centralised HR department is located. Estimates are reviewed
by the HR department and final figures are declared to those personnel managers who commence steps to appoint
the required number of people in the following year. The forecast is made once in five years, but is broken down
to yearly requirements. We turn now to approaches to human resource planning and discuss some important trends
that will affect organisation, employees, and job applicants alike. Each of these steps is discussed below in detail.
1.8 Examining the External and Internal Issues

External and internal issues are the factors that impel human resource planning. An issue is any event or trend that
has the potential to affect human resource conclusions, such as employee motivation, turnover, absenteeism, the
number and types of employees needed etc. External issues are events or trends outside of the organisation, such
as work force demographics and technology. Internal issues refer to events or trends within the organisation, such
as business strategy, organisations structure and company profitability.
1.8.1 Work Force Demographics

Potentially vital external issue is the composition of the national workforce. Particularly, there are likely to be
changes in the social, gender and age composition of the workforce. Asians will comprise a large percentage of the
workforce in the future. Women are also expected to include a large segment of the workforce than what was earlier.
The number of married women who are employed has doubled since 1970. The enhanced involvement of women
will have a strain on organisations to provide pro-family policies, such as flexible timings and child care to support
working mothers. Higher representation of minorities will result in greater stress on diversity programmes to make
sure harmonious relations between workers from different racial and ethnic backgrounds.
1.8.2 Technology
Organisations had invested high amounts on information technology during the 1980s. Given the size of the
investment, a range of changes in the human resource area have occurred. Human resource requirements have
decreased drastically because of technological changes.
There are many organisations that have declared plans to decrease its workforce to around 50 per cent employees
as an outcome of technological changes.
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1.8.3 Organisational Structure
Many businesses nowadays are varying their organisational structure. Organisational structure refers to how work
tasks are assigned, who reports to whom, how communications and decisions are made etc. As a part of their
reorganisation/restructuring a few companies are creating teams to carry out the work.
1.8.4 Business Strategy

The approach that a company assumes in carrying out business is referred to as its business strategy/policy. For
example, a particular company may adopt strategy on quality improvement, cost reduction etc. It is imperative for
organisations to supervise both the internal and external environment to foresee and understand the issues that will
affect human resources in the future.
1.9 Determining Future Organisational Capabilities

The second step of the human resource planning process involves a study of future organisational or personal
capabilities. Capabilities involve the skill level of employees, productivity rates and number of employees, etc.
Earlier, greater emphasis was on predicting the number of employees of human resource supply the company was
likely to have in the future. Organisations may use a variety of procedures to estimate the supply. These procedures
are generally categorised as either quantitative which use mathematical or statistical procedures or qualitative which
use subjective judgment approaches. The quantitative procedure generally makes use of past information about
job categories and the number of people retiring, being terminated, leaving the organisation voluntarily or being
promoted. One of the most popular quantitative procedures is the Markov analysis. This technique uses historical rates
of promotion, transfer and turnover to assess future availabilities in the workforce. On the basis of the past abilities,
one can guess the number of employees who will be in various positions within the organisation in the future.
Qualitative or judgmental approaches are way more popular in forecasting human resource supplies. Among the
most commonly used methods are- replacement planning, succession planning and vacancy analysis. Replacement
planning involves an assessment of potential candidates to substitute existing executives and other top level managers
as they retire or leave for other organisations. Succession planning is akin to replacement planning, except that it
is more long term and developmentally oriented. Finally, vacancy analysis is quite similar to the Markov analysis,
except that it is based on managerial judgments of the probabilities. If conversant experts present estimates, vacancy
analysis can be quite precise and accurate.
In recent years, organisations have become concerned with a wider choice of issues of future capabilities. For
example, organisations have started estimating their future productivity levels. Towards this end, bench marking
is a technique that has become widely accepted and widely incorporated. Bench marking involves comprising an
organisation’s human resource practices and programmes to other organisations.
Although benchmarking frequently focuses on an organisation’s competitors, best practices benchmarking focuses
on the programmes and policies used by exceptional organisations. For example, Federal express, leadership
evaluation system, employee survey programme and total quality management efforts are frequently studied by
other organisations because of their standing and reputation.
1.10 Determining Future Organisational Needs

In this step, the organisation must decide what is human resource needs will be in the future. This includes the
number of employees that will be required, the types of skills that will be needed. Productivity rates are needed to
compete successfully. There are methods for investigating the future number of employees and also there are several
procedures for predicting the number of employees needed in the future. This is referred to as the human resource
demand. Two basic approaches for estimating human resource demand are qualitative and quantitative methods.
Two quantitative techniques for estimating human resource demand are ratio analysis and regression analysis.
Ratio analysis involves comparing the number of employees to some index of work load. If your organisation was
planning its future training and development (T&D) staffing demand in five years, you could estimate the number
of employees likely to be employed by the company in five years. And then use this ratio o determine the number
of T&D employees needed in given years.
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Regression analysis depends on factors or predictors that influence the demand for employees, such as revenues, degree
of automation etc. Information on these predictors from past years, as well as the number of workers employees in
each of these years is used to create an equation or formula. The organisation can then enter expected figures for the
predictors, such as revenues and degree of automation into the formula to attain an estimated number of employees
needed in future years. Regression analysis is more refined than ratio analysis and ideally leads to more precise
predictions of employee demand. Although both procedures are extensively used, they have their weaknesses. A major
weakness is that the factors that are related to workforce size may not be appropriate factors in future years.
The most common qualitative tool for estimating the demand for employees is the bottom-up forecast where
department managers make estimates of future human resource demands based on issues, such as new positions
needed, positions to be eliminated or not filled, expected overtime hours to be worked by temporary, part-time or
independent contractor employees and expected changes in workload by department. Just like other techniques,
bottom-up forecasting has its disadvantages. For example, line managers may overrate the demand in order to ensure
that they don’t find themselves understaffed/short-staffed.
1.11 Implementing HR Programme to address Anticipated Problems

In this step the organisation ought to determine the gaps between future capabilities and future needs and then utilise
the crucial human resource programmes to evade the problems arising from these gaps.
In employing a new human resource programme, following basic steps are suggested to attain employee
acceptance.
1.11.1 Communicate Need for the Programme

Employees must be informed about the necessary changes to be brought about and they must also be explained why
a certain programme is required. It is imperative to explain exactly why the change is needed.
1.11.2 Explain the Programme

Management must explain accurately and clearly what the programme is, how it will be implemented and what its
subsequent effects that it will have on other practices and programmes.
1.11.3 Explain what is Expected of the Employees

The management must clarify to the employees as to what is exactly expected out of them and how the behaviours
of employees are expected to change as a result of the new programme system. For example, implementation of a
new pay for performance system may also redirect employee activities.
1.11.4 Establish Feedback Mechanisms

No matter how carefully planned and implemented virtually any new policy or practice is likely to pose questions
and problems. It is crucial, therefore, for mechanisms to be established to resolve and clear out problems and
answer doubts and concerns that crop up. Such mechanisms may comprise of a telephone hotline, ongoing survey
programme as well as a dispute resolution policy.
Finally, utility analysis is a comparatively current approach to choosing which (if any) human resource programmes
should be implemented. Utility analysis and related approaches such as human resource accounting, take into
consideration the financial benefits versus the costs of any human resource programme and attempt to base choice
of a programme on its rupee value of the organisation. Using such techniques organisations can establish the best
way to invest money in employees.
1.12 The role of HRP professionals

HRP professionals have to carry out the following roles that may be divided into three categories:
• Administrative role
Managing the organisational resources
Employees’ welfare activities.
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• Strategic role
Formulating HR strategies
Managing relationships with managers.
• Specialised role
Collecting and analysing data
Designing and applying forecasting systems
Managing career development.
These roles are neither inevitably found in every HRP work nor they are evenly considered in time allocation. Many
combinations of roles are probable with different focuses based on situations of the organisation. The first two roles
managing relationships with managers and for altering strategies are weighed evenly. The activities in these areas
are equally significant to HRP because of the implied purposes of anticipating and implementing change in the
organisation. The strategic roles are critical to the HR professionals’ efficiency. These skills are very complex to
develop when compared to administrative skills.
The administrative aspects of the work are represented in managing the staff function of HRP and in managing
employee welfare activities. These aspects are often seen as additional to other aspects and demand a lot of
consideration. The residual three roles symbolise specialised functions performed. Primary attention is given to a
arrangement of three categories of activities – collecting and analysing data, designing and applying forecasting
systems and managing career development. These activities are latest to the HR function in many organisations,
and are strongly linked with the mission of anticipating and managing change. Consequently, they are viewed as
fundamental roles of HRP professionals.
1.12.1 Impact of HRP

HRP itself is the practice of determining human resources needs in the future and of examining responses to these
needs. HRP links a company’s business plans and broad objectives with the definite programmes and other HRM
activities. Organisations need to learn to forecast HR needs more efficiently. More logical/analytical techniques,
determined by strategic planning are important. Organisations must learn to handle employee performance more
effectively. Although performance measurement is intricate and ill-defined, yet it is significant to effective management
for this very reason. Organisations must also learn to manage careers of their employees with greater efficiency.
1.12.2 Impact of Technology on HRP

In order to manage the prevailing competition, organisations have to ensure on:
• Producing goods and services more efficiently and economically.
• Innovating product and processes so as to enhance competitive advantages.
Progress in computer technology has offered organisations new opportunities to improve and reorganise/restructure
their processes. Computer aided design (CAD), and computer aided manufacturing (CAM) reduce human resource
involvement and contract the cycle time. Advancement in information technology has reduced efforts necessary
in impacting, retrieval, processing, and sharing of data. Accurate and timely information can be made available to
different levels of management for decision making. All these changes in technology result in a change in occupational
and skill profile/summary of manpower. Different manufacturing technologies have different skills required to design,
work/operate and maintain the machines and equipment. Also, the same technology can have a different impact on
different categories of workers and industries. The actual skill implications of technology change will depend on:
• Management policy for deployment of manpower
• Attitudes bargaining strength of the union
• Ability of manpower to adjust and adopt to the new technology
According to the ILO, introduction of new technology can affect other aspects of working like workers responsibilities,
skill requirements, job-content, physical and mental work load, career prospects and communication and social
relationships at workplace. Skills and knowledge are needed for operating and maintaining new technology and
participating in pioneering/innovative processes. The manual content of skill tends to reduce for skilled workers
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and office staff but requirements for mathematical skills and ability to plan and anticipate future situations tend
to increase. The methods, systems and style of management also need changes in line with high skill demands
on personnel. A more democratic and decentralised management style is essential to motivate and inspire highly
educated and knowledgeable employees.
The current education system of our country is not enough to match the technological needs. The syllabus is outmoded,
teachers are not fully familiar with the new technology and there is a shortage of infrastructure amenities. Therefore,
companies will have to supply suitable training to add to these skills. Manpower planners should keep in mind
this requirement and also the requirement of retraining. There may also be a need for rationalisation of the trade
structure because of multi-skilling. For example, traditional and relatively conceived metal trades which date back to
1930s have been replaced by six broadly defined occupations. Lathe, mulling, grinding could be clubbed as cutting
mechanics, production engineering, machine and systems. Engineering, precision engineering and light engineering
could be put as industrial mechanics. In the office framework, we now require persons who are computer trained
and also operate other office equipment such as fax, and xeroxing machines – this will also require restructuring of
employees. Changes in work and work design are to be created.
1.12.3 HR Programming
Once an organisation’s personnel and supply have been forecasted, the two must be merged so that vacancies can
be filled by the suitable employees at the appropriate time. HR programming assumes greater weightage in the
planning process.
1.12.4 HR Plan Implementation

Implementation refers to converting an HR plan into action. A sequence of action programmes are initiated as a part
of HR plan execution. Some such programmes are recruitment, selection and placement, training and development,
retraining and redeployment, the retention plan and the redundancies plan.
1.12.5 Control and Evaluation

The HR plan should entail budgets, targets and standards. It should also elucidate responsibilities for implementation
and control, and ascertain reporting procedures which will enable achievements to be monitored alongside the plan.
These may simply report on the numbers employed against establishment and on the numbers recruited against the
recruitment targets. They should also report employment costs against budget, and trends in wastage and employment
ratios.
1.13 Barriers to HRP

Planners face major barriers while formulating an HRP. Some of the significant ones are as follows:
• HR practitioners are considered to be experts in handling and managing personnel matters, but are not experts
in managing business.
• People question the importance of making HR practices futuristic and the role assigned to HR practitioners in
formulation of organisational strategies.
• HR information often is unsuited with other information used in strategy formulation. Strategic planning efforts
have long been oriented towards financial forecasting, often to the elimination of other types of information.
Financial forecasting takes priority over HRP.
• Conflict may exist between short term and long term HR needs. For example, there arises a conflict between
the pressure to get the work done on time and long term needs, such as preparing people for assuming greater
responsibilities. Many managers are of the faith that HR needs can be met instantly because skills are available
in the market as long as wages and salaries are competitive. Therefore, long term plans are not required, short
term plans are only needed.
• There is variance between quantitative and qualitative approaches to HRP. Some people view HRP as a number
game designed to track the stream of people across the department.
• Non-involvement of operating managers proves HRP ineffective. HRP is not firmly an HR department function.
Successful planning needs a coordinated attempt on the part of operating managers and HR personnel.
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Today, human resource planning is taken as the way management comes to seize the ill-defined and tough-to-solve
human resource problems facing an organisation. Human resource planning as a process of determining the human
resources is required by the organisation to accomplish its goals. Human resource planning also looks at broader
concerns relating to the ways in which people are employed and developed in order to improve organisational
effectiveness. HRP is a decision making process that unite activities such as identifying and acquiring the right
number of people with the proper skills, motivating them to achieve high performance and creating interactive
relations amid business objectives are resource planning activities. HRP sets out requirements in both quantitative
and qualitative terms. Accurate manpower plan is a vision. A common mistake of many managers is to focus on
the organisation’s short term substitution needs. Any human resource plan, if it is to be effective, must be derived
from the long term plans and strategies of the organisation. The various approaches to human resource planning
under which a number of major issues and trends in today’s work plan that will affect organisation and employees
are as follows:
• Examine external and internal issues,
• Determining future organisations capabilities,
• Determining future organisational needs, and
• Implementing human resources programmes to address anticipated problems.
Even though change is occurring very quickly in the work world it is important for both organisations and employees
to supervise issues and events constantly and judge their possible effects.
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Summary
• HRP is a purposeful strategy for acquisition, improvement and preservation of enterprise’s human resources.
• HRP is influenced by technological changes and other global business pressures.
• Human resource planning should be an essential part of business planning.
• Human resource planning infers people requirements in terms of stalls and competencies.
• Even though neither organisations nor employees can look into the future, making predictions can be quite
useful, even if they are not always accurate.
• HRP is a sub-system in the total organisational planning.
• HRP facilitates the realisation of the company’s objectives for the future and determines appropriate means for
achieving those objectives.
• HRP is given several names- manpower planning, personnel planning or employment planning.
• The need for planning occurs mainly due to the fact that modern organisations have to survive, operate and
grow in highly competitive market economics where change is the prevailing principle.
• Efficient managers can predict the problems that are probable to occur and try to check them.
• Managers have to foresee to make the future favourable to the organisation in order to achieve the goals
effectively.
• Procedures are plans that launch a desired method of managing future activities.
• A budget is a statement of predictable results in terms of members.
• The planning process is affected by overall organisational objectives and the situation of business.
• Demand forecast is the procedure of approximating the future quantity and quality of people required.
• Personnel Demand analysis provides the manager with the means of estimating the number and kind of employees
that will be needed.
• New venture analysis will be valuable when new ventures consider employment planning.
• External and internal issues are the factors that impel human resource planning.
• Organisational structure refers to how work tasks are assigned, who reports to whom, how communications
and decisions are made etc.
• Capabilities involve the skill level of employees, productivity rates and number of employees, etc.
• Succession planning is akin to replacement planning, except that it is more long term and developmentally
oriented.
• Ratio analysis involves comparing the number of employees to some index of work load.
• Regression analysis depends on factors or predictors that influence the demand for employees, such as revenues,
degree of automation etc.
• The administrative aspects of the work are represented in managing the staff function of HRP and in managing
employee welfare activities.
• Advancement in information technology has reduced efforts necessary in impacting, retrieval, processing, and
sharing of data.
References
• Chapter 4 Human Resource Planning. [Online] Available at: <http://www.oocities.org/hrm4uoft/Chap04.ppt>
[Accessed 22 July 2013].
• Human Resource Planning: Process, Methods, and Techniques. [Pdf] Available at: <http://www.psnacet.edu.
in/courses/MBA/HRM/3.pdf> [Accessed 22 July 2013].
• nptelhrd, 2010. Lec-4 Human Resource Planning-I. [Video online] Available at: <https://www.youtube.com/
watch?v=wcP976S8DsM> [Accessed 22 July 2013].
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• mattalanis, 2012. Human Resource Planning. [Video online] Available at: https://www.youtube.com/watch?v=L_
aiqSRL-j8> [Accessed 22 July 2013].
• Bhattacharyya, D. K., 2009. Human Resource Planning. 2nd ed., Excel Books India.
• Bramham, J., 1994. Human Resource Planning. 2nd ed., Universities Press.
Recommended Reading
• Reddy, S. M., 2005. Human Resource Planning. Discovery Publishing House.
• Sims, H., Human Resource Planning. Select Knowledge Limited.
• Turner, P., 2002. HR Forecasting and Planning. CIPD Publishing.
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Self Assessment
1. ______________is a significant corporate asset and performance of organisations depends upon the way it is
put in use.
a. Planning
b. HRM
c. HRP
d. HR
2. Human resource planning should be an essential part of ___________planning.

a. growth
b. skill
c. business
d. activity
3. HRP is a ___________in the total organisational planning.

a. venture
b. sub-system
c. technology
d. demand
4. Which of the following statements is false?

a. A common mistake of many managers is to focus on the organisation’s short term substitution needs.
b. Organisations need to learn to forecast HR needs more efficiently.
c. Ratio analysis is more refined than regression analysis and ideally leads to more precise predictions of
employee demand.
d. Conflict may exist between short term and long term HR needs.
5. ___________have to foresee to make the future favourable to the organisation in order to achieve the goals
effectively.
a. Managers
b. Employees
c. Subordinates
d. People
6. The __________process is affected by overall organisational objectives and the situation of business.
a. management
b. demand
c. growth
d. planning
7. ___________forecast is the procedure of approximating the future quantity and quality of people required.
a. Plan
b. Demand
c. Budget
d. Skill
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8. Which of the following statements is true?
a. HR planning assumes greater weightage in the planning process.
b. HR programming assumes lesser weightage in the planning process.
c. HR planning assumes greater weightage in the programming process.
d. HR programming assumes greater weightage in the planning process.
9. Different ___________technologies have different skills required to design, work/operate and maintain the
machines and equipment.
a. HR
b. planning
c. manufacturing
d. programming
10. Match the following

A. These are the ends towards which organisational
1. Procedures
activity is aimed.
B. This connects the space/gap between society and the
2. Budget
company.
C. These are plans that launch a desired method of
3. Objectives
managing future activities.
4. Philosophy D. It may be referred to as a numerical programme.
a. 1-C ,2-D ,3-A ,4-B
b. 1-C ,2-B ,3-A ,4-D
c. 1-A ,2-B ,3-D ,4-C
d. 1-C ,2-D ,3-B ,4-A
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Chapter II
Process and Functions of Human Resource Planning
Aim
• introduce the concept of HRP
• explain preliminaries to review
• explore HR information systems
Objectives
• explicate the process of HRP
• explain manning standards and utilisation
• elucidate HR inventory and analysis
Learning outcome
• analyse the determination of the manpower required and the means of supplying the same
• describe management HR planning
• understand the rationale of HRP
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2.1 Introduction (The concept and process of HRP)
The purpose of human resource planning is to present continuity of efficient manning for the total business
and optimum use of manpower resources, although that optimum utilisation of people is greatly influenced by
organisation and corporate culture. A manpower planning is concerned with manning in the business, it cannot be a
detached activity, but must exist as a part of the planning process for the business itself. The shortage of appropriate
manpower can place severe restrictions on the ability of a business to attain its objectives, which underscores both
the importance of realistic manpower planning and the need for it to be completely integrated with the overall
business planning process.
Human resource planning is a fundamental element of corporate plan and serves the organisational purposes in more
ways than one. For instance, it helps organisations to:
• capitalise on the strengths of their human resources;
• determine recruitment levels;
• anticipate redundancies;
• determine optimum training levels;
• serve as a basis for management development programmes;
• cost manpower for new projects;
• assist productivity bargaining;
• assess future requirements;
• study the cost of overheads and value of service functions; and
• decide whether certain activities need to be subcontracted.
Human resource planning influences corporate strategy and is in turn influenced by it. The HRP practice may
incorporate all the stages shown in Figure 2.1 below. The planning process may not always give exact forecasts,
and to be effective it should be a continuous process with provision for control and review.
The manpower plan itself falls into two parts – the determination of the manpower needed to run the business at a
series of points in time into the future, and the means of supplying those requirements. This not limited to central or
specialist activities but should involve all the managers entirely in the assessment of options. The review process,
which brings needs and supply together, is often given inadequate time and attention. This may be because, once all
data are brought together, the result can seem difficult and hard to grasp, but any reduction in complexity if achieved
only by ignoring some of the data and taking a partial view, which could decrease the potential for achieving the
most efficient resourcing. The use of the comprehensive periodic review is to consider all of the needs across the
business and to match these with the career preferences and development of the people so that a complete pattern of
decisions can be formulated for the resourcing actions projected over the months ahead. This review provides a base
for preliminary decisions for all following actions regarding people. There may be sound reasons for a consequent
change of decision, but then the options and alternatives, which were considered in the review, provide a starting
point for the fresh assessment. If some new requirement appears, the considerations noted in the original assessment
should help define the updated and restructured options promptly, and the implications of alternative actions
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The HRP Process

Company Objectives & Strategic Plans
P
Market Forecast Production Objectives/process Capital/financial plans H
A I
S
Time horizon (Short/long term) E
Human Resource Estimating Human Human Resource

Demand Forecast Resource Inventory P
N Number Requirements based on H
O Objectives & top A II
s
s
s
R Category management approval S
M Human Resource Supply E
S Skills Forecast
Action Plans
l R ecruitment
l R etraining
l Redundancy
l Productivity
l Retention P
H
s A III
S
M onitoring and Control E
Fig. 2.1 The HRP process

(Source: Personnel Management and Human Resource by C.S. Venkat Ratnam and B.K. Srivastava, Tata
McGraw Hill Publishing Co. Ltd. New Delhi, p. 57)
In the review process itself, the management task is to balance the many competing and sometimes contradictory
elements. Some examples might be:
• conflicting demands for available research and development resources at peaks of activity, with an excess
supply available;
• imbalance of skills emerging as technology alters the product range; and
• uncertain timing of developments, which affects the timing of deployments.
These reviews cannot anticipate situations which develop at short notice, but should take into account the call
for flexibility to tackle the manpower implications of events such as intended future acquisitions, new business
opportunities not allowed for, in plans or retention actions needed to evade the loss of key individuals which
might spoil establishment plans. The review process may be viewed as the master programme which amalgamates
resourcing activities with business planning at an operational level to make certain that organisation structures and
the preparation of manpower resources are coordinated with the manpower requirements essential to attain business
objectives and respond to a changing and perhaps an unfriendly setting. In parallel, the process should optimise
the utilisation and growth of the human resources available. The stress in most reviews may be on the short-term
(one to two year) actions, but there must be a longer term (three to five or five to ten year) viewpoint – mainly for
management continuity, which is a unique section of the same process – as the lead time for supply can need this
notice.
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Meaningful manpower plans are possible only if the evaluation process brings together all of the applicable information
at regular time gaps and uses these data to re-examine, at every level, the significance and relevance of present and
planned future organisations and the competencies which will be required against those which are available. Outputs
from each review should comprise of detailed decisions on future organisation changes and projected manpower
deployments for a period through two to three months after the next scheduled review; outline decisions on longer
term organisation changes, deployments and culture change plans; plus confirmation that business requirements
can be sufficiently resourced (or not).
All manpower supply plans and actions should branch from this process and should include provision for continuous
re-evaluation to discover newer problems, to respond to new or changed needs, and then to execute actions or
examine progress towards action. This is basically the means of driving the process of effective resourcing within
the business and involves management at every level in a system of associated decisions and action.
2.2 Preliminaries to Review

Reviews need sound foundation and preparatory work and all-inclusive personnel records, which give precise and
objective data on all employees. We can’t make judgments on the supply of particular skills unless we have adequate
data on the skills possessed by present employees. Building up full records requires both a useful system and
determination to ensure the data are complete, up-to-date and correct. Also, the information must be in a structure
that facilitates uncomplicated access during a review.
Personnel records can be seen plainly as raw data and their contribution to reviews may come more from analysis
of the overall inventory of personnel. Any errors in that inventory, identified before the review begins, present part
of the review plan. For example, heavy loss rates for a key employee group can be analysed cautiously in advance,
so that part of the action agreed in the review, addresses the identified problem. Or, an increasingly worsening
distortion of the age profile of a category may need to be tackled.
Analyses of the manpower inventory and of flows can ascertain whether problems are developing which are likely
to affect required manning levels, and should play key part in preparing the agendas for reviews. Equally, as other
agenda items appear, analyses may present prospective solutions.
2.3 Manning Standards and Utilisation

The whole manpower planning process depends a great deal on the base of manning standards. This will begin with
what exists and what should be, and take in all of those factors which will change existing standards, including by
how much and when. Without some measures of this kind, meaningful planning is very complex. Many organisations
begin with what exists now and filter the position as they recognise the separate forecast-able categories, the bases
for evaluating standards and the rates of change.
Manager, supervisor and employee association and interest is needed to establish standards of all sorts; the first-
hand measures they have of the utilisation of people are basic factors in planning forward needs and consequent
implementation and control. Preferably, manning standards should be developed from analysis of indispensable
work requirements, with some form of productivity measurement wherever likely.
Measurement is by no means limited to direct manufacturing operations – it can also be applied to many offices or
support tasks. The place where local attitudes or management style make clear-cut measurement difficult, existing
data in the hands of supervisors and managers can provide useful standards which will encourage supervisors to
improve their own human resources utilisation, thereby improving manpower productivity.
Wherever this type of analysis is carried out, opportunities should be sought to streamline, restructure and enhance
jobs and to match people’s abilities to job demand, thereby raising the degree of job satisfaction. With this comes,
lesser manpower loss rates, lower absenteeism and tighter manning standards generally.
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For all this, existing standards have an inactivity which we must try to conquer. If we aspire to improve the use of
people in partnership with subordinate supervisors and managers, we may find the secret of drastic improvement in
overall manning quality as well as numbers. This is an area for experimentation to determine what works in your
environment.
Manpower requirement planning follows on from the establishment of the main assumptions in the business
plan. Once we know the level of sales volumes and mix, the manufacturing schedules required, the research and
development programmes, etc., we are well on the way to establishing the matching manpower requirements. The
plans should include built-in assumptions about the organisation structures to be used, and their effects on the levels
of manpower required.
Plans should be set out with schedules of associated manpower requirements, giving specific categories, skills and
levels for every task. This feature will be required as a preliminary point when the questions of supply planning are
tackled. Where appropriate, requirement plans should be based on manning standards connected with work demand
factors to aid adjustment as volumes or systems change.
2.4 HR Information Systems

Modern management depends on having wide-ranging data for making decisions. For any system, specification
of required inputs and outputs is vital. In building up the manpower database, full coverage of conventional
personnel records is required, and it is increasingly feasible to cover sophisticated and complicated elements, such
as competencies required for effectual performance of a job, and the competencies possessed by individuals. Data
on absenteeism and overtime are also a part of the system.
2.5 HR Inventory and Analysis

Information about employees, their skills and their respective efficiencies are just some of the many aspects which
we need to know about. A great deal of the analysis should come from the information system, but the existing
inventory is varying all the time with recruitment and losses, promotions and transfers. Assessing the rate and form
of change in the inventory is important to questions of manpower supply because, what we cannot supply from
within, we must seek out from other sources.
Data of appraisal of performance, estimation of upcoming potential and the use of psychological tests are all part
of the information we use to get the answers we need.
2.5.1 Flows
Analyses of the patterns or flows of people through parts of the organisation are valuable to the manpower planner;
flows give the major part of our supplies data and identifying changes in flow patterns can point to likely difficulties,
such as when an existing flow pattern becomes inadequate to meet a varying demand.
Flows tell us about the availability of people who are prepared to move on to their next career stages and also
provide information such as the average rates at which individual’s progress through job, and how those rates vary
for different types of people in different functions.
2.6 HR Supply Planning

This is the crux point where we gather all the data we have on our future requirements, and on our present manpower
supply and the ways we expect it to change. From this analysis, we observe the future manpower supply set against
the developing inventory, detailed by function, category and skill level. These explain our future staffing needs,
highlight needs to amplify the promotion rates of some categories by concentrated training and development, show
retraining and redevelopment needs and discover surplus staff that is likely to become unnecessary. In all these
areas, we need action programmes to make sure that we meet our recognised needs. We must be sure that the actions
required are taken and are successful. Else, fundamental assumptions on the provision of human resources within
the business plan may be adversely affected so that business of objectives are endangered.
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2.7 HR Control and Audit
The philosophy is one of planning in advance, but this calls for basic controls and audits. The logic of controls
on all aspects of manning should be clear and apparent. We are dealing with an expensive resource that can be
easily misused or underutilised. Controls should be low key, yet silently ensure that we recurrently try to use those
resources in the best ways possible, and do not carelessly add additional and non-essential resources. Controls are
exercised on current actions and decisions. Consequently, we review results to be sure that objectives and targets
have been achieved and that decisions have not been disregarded or ignored. This happens far more than we expect
where there is little or no audit. In the whole area of management development in particular, and across the field
of planning following the review process, ensuring that plans are followed through, is indispensable. If this is not
done, there is little benefit from the considerable use of precious time involved.
2.8 Management HR Planning

Above a certain level, manpower planning ceases to be a matter of numbers by category, and becomes connected
to individual positions and individual incumbents. For the top slice of the company, we are dealing with a mixture
of business development, organisation development and individual career development. It must be handled with
considerable heed, by impartial and imaginative executives; it must also take into account the employees’ viewpoints
and preferences and involve them entirely if it is to be a feasible plan.
2.8.1 Corporate Culture

How a company is managed, its organisation structure, its manning standards and thinking on ‘how we do things
around here’ are also determined within a corporate culture. Any important change in efficiency is almost definitely
going to be culture connected, but culture is both difficult and slow to change.
If the business demands a change of speed or efficiency, or a different way of doing things, it is not going to come
about exclusively from planning changes in manpower standards or utilisation. There will be a requirement for
some major action to change what people accept as norms for many aspects of their work behaviour, which may
well result in a severe interruption in current manpower and organisation.
2.8.2 Periodic Full Reviews

The way reviews are carried out is probable to differ a lot from one enterprise to the next, but the principles should
be more consistent. The most critical is involvement. All of management should participate, with the lowest levels
contributing their parts first and progressive reviews forming a reverse flow up through the organisation structure,
concluding with a review of the overall manpower plan and the management continuity point at the top. At the
bottom end, every manager should discuss requirements of and deployments with his direct subordinates. Then he
can arrange for the review with his boss. A rational target time per level might be three weeks, if planned early into
business diaries. As reviews progress up the arrangement, they should concentrate on the continuous two or three
levels in the organisation, progressively dropping off the lower levels as the review progress upwards. However,
issues thought to be of concern at higher levels will be carried ahead, such as skills’ shortages which may have an
influence on the business.
The supporting paper work will differ, with much being prepared as operational notes by the participating managers,
but it is reasonable to accumulate and maintain some basic record of the discussions and agreements to facilitate
progress to be monitored afterward, or as the starting point for fresh consideration if an unanticipated development
occurs. There might be sections in the notes for:
• business and environmental changes;
• organisation and manning reviews; and
• human resource action plans.
The first section should record the business situation and assumptions on which the review was based. The notes
might comprise of a concise appraisal of actual business progress against the business plan, and changes in the
environment which vary from the assumptions in the related environmental scenario, followed by updated views
and an evaluation of the implications for human resource management.
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The organisation and manning plans section should focus on: the immediate organisation structure, including any
fresh thinking on its evolution; the filling of all senior positions at each review level, both currently and in the
future, including elementary development; and reviews of manning specifications, standards and levels, and how
they may change. It will be useful if all the main assumptions made in the plan are recorded, so that any need has
a solid base on which to build. The third section, covering human resource action plans will involve orientation to
major human resource strategies associated with the achievability of business objectives. There should be notes on
development against the milestones in existing action plans, plus details any new plans triggered by new business
or environmental developments, and the associated human resource implications.
2.8.3 Frequency
The frequency of this process should be determined by necessity. One company in a swiftly changing high-technology
sector runs through it at quarterly intervals with strong line management support for what they see as rational
discipline which keeps their organisation and manpower utilisation finely tuned. In less dynamic industries, a major
yearly review plus a less formal, but ongoing, midyear update may be enough.
The force to carry through the review process must come from the top and from the line, which must recognise its
value to themselves and to the business or they will not spend the time doing it. The human resource function may
need to present some of the drive plus some strong supporting back up. Reviews contend for management time
and must exhibit their contribution to business development and profitability. Local management is usually helpful
if the process is working properly and they can see value for their efforts but, even then, resistance to allocating
sufficient time may occur as a result of operational demands. Necessary actions triggered by these reviews, such as
manpower movement between divisions, may be complex to organise without the association of higher management.
Usually, these moves need to capitalise on knowledge of the immediate business and be local to those business areas
the individuals concerned know well. Movement should normally be within functional disciplines, so that the fast
learning is confined to the new business area.
2.9 Application to Individual Decisions

The periodic in-depth manpower review creates a situation or framework of preliminary decisions. Following
this, there will be many day-to-day actions to take before gaining a final summary and employing the decisions.
For example, a chain of individual moves and appointments may be planned to follow a retirement. These should
be under inspection as the implementation time approaches and they would normally be implemented in a simple
fashion. However, one of the links in a chain may be unsuccessful. Someone may resign, performance may waver,
or other events may change the situation, causing the plan to be reshaped. If conditions change, the apparent starting
point for fresh consideration should be the notes from the preceding review supporting the original intent, which
may record the options and contingencies considered. It is reasonable to go over this ground in detail, starting from
the original review. It should not be satisfactory to take a fresh ad hoc decision, which is quite unconnected to the
careful and wider ranging considerations, which took place in the review process. Actions involving changes from
plans should necessitate the discipline of reference back to the comprehensive discussion.
For example, a decision to send someone on a training course should fit into his longer term development plans;
secondments to meet an emergency are doubtful to have been planned far ahead, but should match a need to expand
experience; a change to a career plan may have been projected on the basis of one event, but should be viewed
against the full consideration and track record; and so on. Perhaps the gravest unscheduled actions take place when
a key person resigns, or hen an unplanned business opportunity requires an urgent appointment. (The review process
may have covered these possibilities and noted contingency actions but, more often, the necessary response will
upset the plan). One such appointment was followed by a chain of seven other changes down the line, severely:
disturbing an entire plan. If that happens, a fresh examination of that sector of the business becomes a prerequisite.
Indeed, any event which prompts a significant volume of unscheduled deployment changes should be followed
by a full review to assess the extent of its weakness caused and the actions which can be taken to strengthen the
reserves of management.
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Wins for Employees Wins for Enterprise
1. Appropriate organisation structure and people to
1. Competitive pay and benefits plans. face challenges and meet corporate objectives,
both short and long term.
2. Career development and opportunities for 2. Development of internal resources, leading to

growth. stability and culture building.
3. Improved motivation and morale of employees,

3. Reduced fear of redundancy.
leading to improved performance.
4. Training and development, leading to

4. Productivity gains, leading to cost reduction.
continued marketability.
5. Continuity of employment due to 5. Improved customer satisfaction, leading to

organisation’s ability to retain workforce. improvement in business.
6. Reduction in hiring and training costs due to

6. Fuller realisation of potential, leading to job the improved ability to retain employees and
satisfaction. development of internal resources to fill future
vacancies.
7. Conducive work culture and management

style leading to satisfaction.
Table 1.1 Human resource planning- a win-win process
Human resource planning is a process of human resource development. The intention of human resource planning is
to provide continuity of efficient manning for the total business and optimum use of manpower resources, although
that optimum utilisation of people is greatly influenced by organisation and corporate culture.
Human resource planning constitutes an essential element of corporate plan and serves the organisational purposes
in several ways. Human resource planning influences corporate strategy and is in turn influenced by it. The planning
process may not always give precise forecasts and to be effective it should be a continuous process with provision
for control and review. The review process, which brings needs and supply together, is frequently given inadequate
time and attention. The function of the comprehensive periodic review is to consider all of the needs across the
business and to match these with the career preferences and development of the people. The suitable requirement
plans should be based on manning standards associated with work demand factors to facilitate modification as
volumes or systems change. Modern management depends on HR information system, HR inventory and flow of
people through parts of the organisation. Flows tell us about the availability of people who are ready to advance to
their next career stages and also provide information such as the average rates at which individuals’ progress through
jobs, and how those rates differ for diverse types of people in different functions.
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Summary
• A manpower planning is concerned with manning in the business, it cannot be a detached activity, but must
exist as a part of the planning process for the business itself.
• Human resource planning is a fundamental element of corporate plan and serves the organisational purposes
in more ways than one.
• Human resource planning influences corporate strategy and is in turn influenced by it.
• The manpower plan itself falls into two parts – the determination of the manpower needed to run the business
at a series of points in time into the future, and the means of supplying those requirements.
• The review process, which brings needs and supply together, is often given inadequate time and attention.
• Meaningful manpower plans are possible only if the evaluation process brings together all of the applicable
information at regular time gaps and uses these data to re-examine, at every level, the significance and relevance
of present and planned future organisations and the competencies which will be required against those which
are available.
• Reviews need sound foundation and preparatory work and all-inclusive personnel records, which give precise
and objective data on all employees.
• The whole manpower planning process depends a great deal on the base of manning standards.
• Plans should be set out with schedules of associated manpower requirements, giving specific categories, skills
and levels for every task.
• Flows tell us about the availability of people who are prepared to move on to their next career stages and also
provide information such as the average rates at which individual’s progress through job, and how those rates
vary for different types of people in different functions.
• Actions involving changes from plans should necessitate the discipline of reference back to the comprehensive
discussion.
• The periodic in-depth manpower review creates a situation or framework of preliminary decisions.
References
• Talent Management, Talent Identification, Succession Planning and Talent Management. [Video online]
Available at: <https://www.youtube.com/watch?v=_m7tRotajdo&list=PLBAA758348D9DE2A9> [Accessed
22 July 2013].
• B2Bwhiteboard, 2012. Human resource planning - defined. [Video online] Available at: <https://www.youtube.
com/watch?v=tXLk8Q1OklA> [Accessed 22 July 2013].
• Walker, J.W. 1980. Human Resource Planning. McGraw-Hill, New York.
• Human Resource Planning. [Online] Available at: <https://www.boundless.com/management/human-resource-
management--2/purpose-of-human-resource-management/human-resource-planning/> [Accessed 22 July
2013].
• Human Resource Planning Process. [Online] Available at: <http://smallbusiness.chron.com/human-resource-
planning-process-4932.html> [Accessed 22 July 2013].
• Reilly, P., 1996. Human resource planning: an introduction. Institute for Employment Studies.
Recommended Reading
• Stainer, Gereth, 1971. Manpower Planning: The Management of Human Resource. Heinemann, London.
• Suri, G.K., 1988. Human Resource Development and Productivity: New Perspectives. National Productivity
Council.
• Bramham, J. 1990. Practical Staffing Planning. IPM, London.
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Self Assessment
1. __________ records can be seen plainly as raw data and their contribution to reviews may come more from
analysis of the overall inventory of personnel.
a. Information
b. Competency
c. Individual
d. Personnel
2. The whole _________planning process depends a great deal on the base of manning standards.
a. organisational
b. human
c. manpower
d. career
3. Human resource planning influences ___________strategy and is in turn influenced by it.

a. corporate
b. skill
c. inventory
d. industrial
4. _________involving changes from plans should necessitate the discipline of reference back to the comprehensive
discussion.
a. Skills
b. Actions
c. Managers
d. Cultures
5. __________are exercised on current actions and decisions.

a. Inventories
b. Actions
c. Plans
d. Controls
6. Manpower requirement planning follows on from the establishment of the main assumptions in the ___________
plan.
a. business
b. control
c. review
d. data

a. Measurement is by no means limited to direct manufacturing operations.
b. Modern management depends on having wide-ranging data for making decisions.
c. The planning process always gives exact forecasts.
d. Building up full records requires both a useful system and determination to ensure the data are complete,
up-to-date and correct.
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8. ________of appraisal of performance, estimation of upcoming potential and the use of psychological tests are
all part of the information we use to get the answers we need.
a. Record
b. Data
c. Options
d. Projects

a. In less dynamic industries, a major yearly review plus a more formal, but ongoing, midyear update may be
enough.
b. In more dynamic industries, a major yearly review plus a less formal, but ongoing, midyear update may be
enough.
c. In less dynamic industries, a minor yearly review plus a less formal, but ongoing, midyear update may be
enough.
d. In less dynamic industries, a major yearly review plus a less formal, but ongoing, midyear update may be
enough.
1. Reviews A. Wins for Employees.
2. Productivity gains, leading to cost B. Tell us about the availability of people who are ready to
reduction advance to their next career stages.
C. These need sound foundation and preparatory work and
3. Flows
all-inclusive personnel records.
4. Reduced fear of redundancy D. Wins for Enterprise.
a. 1-A ,2-D ,3-B ,4-C

b. 1-D ,2-B ,3-C ,4-A
c. 1-C ,2-D ,3-B ,4-A
d. 1-C ,2-A ,3-B ,4-D
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Chapter III
Methods and Techniques of Demand Management
Aim
• introduce the concept of HR forecasting
• explain the factors determining the demand for employees
• explore managerial dilemma
Objectives
• explicate the issues in demand forecasting
• enlist the ways in which expansion plans are executed
• elucidate the creation of a staffing plan
Learning outcome
• analyse the HR forecasting techniques
• identify factors contributing to demand forecasting
• understand the importance of HR forecasting
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3.1 Introduction
In this unit, the focus is on understanding the business shifts in a dynamic environment and on the basis of such shifts,
preparation of estimates of human resource needs. An understanding of the trends and an estimation of the needs of
an enterprise present probable clues to planners about the future, and thereby enables them to take necessary steps
to bridge the gap between demand and supply. In the deficiency of any systematic work in this area, an organisation
may face surprises and therefore be incapable of facing challenges. The absence of the right resources at the right
time may exclude the success of corporate plans, and also lead to losses because of the organisations’ incapability
to cash in on opportunities.
Forecasting of demand of human resource needs is the first and foremost central step in any human resource planning
process. This step results in an assessment of staffing requirement of an organisation, for both the short and long
term and is, therefore, the basis for the planning activity. Here, both the quantitative as well as qualitative aspects
of human resource needs are dealt with. It is important to note at this point that demand forecasting is not a very
accurate exercise over a long-time period. For short range planning of less than a year, a moderately precise forecast
is maybe possible. No processes or techniques exist that can take into account all the parameters and circumstances
required for accurate long-term evaluation of manpower needs. Dynamic business circumstances, quickly changing
technologies and their influence on products and methods of production, political and social changes and ever
increasing competition keep varying the set of circumstances assumed at the time to forecast. Fig. 3.1 illustrates the
set of assumptions that a human resource planner has to make at the time of demand estimation.
In the 1980s, because of international economic competition, staffing planning had to reorient its contribution to
organisations, focusing more on decreasing staffing levels and building in a capability for flexibility and change. The
1987 report of the Staffing Services Commission (UK) emphasized ‘competence, commitment and the capacity to
change’ and drew little on the traditions of staffing planning. More practically, thus, the state of contemporary staffing
planning will have restructured itself and reorient its own values and approach to the regulation of employment. In
a 1990 study, it has been reported that organisations ‘prefer neither to use the term “staffing” nor to return to the
large and detailed planning documents produced by head offices a decade ago’. Many organisations are placing the
accountability for staffing planning with production line managers while maintaining strategic hold and direction at
corporate level as against the earlier practice of centralised and specialised staffing planning. You will appreciate,
no doubt, that this is consistent with some of the hypothetical moves towards human resource management in
general.
Now let us look at the categorisation, HR Planning. Conventional practices are giving way to flexible staffing use,
novel forms and contracts of employment, together with innovative approaches and succession planning. Does the
term “HR Planning” capture the essence of contemporary and HR Planning? Bennison and Casson (1984) do not seem
to think so. According to them, planning ‘belongs to the world of calculation, computers and big bureaucracies’.
3.2 Human Resource Forecasting

What is definite is the uncertainty of the future. As time passes, the working environment changes internally as well
externally. Internal changes in the organisational environment involve product mix and capacity utilisation, acquisition
and mergers, and union-management relations amid many other areas. Changes in the external environment include
government regulations, consumerism, and competence levels of employees, among a multitude of other factors. HR
plans rely greatly on forecasts, expectations, and anticipation of future events, to which the requirements of staffing
in terms of quality and quantity are directly connected. Uncertainty adds complication of forecasting. However,
change does not prevent the need for staffing planning, though this is the disagreement raised by those who resist the
concept. Where the futures are certain, there would be no need to plan. Justifications for planning are threefold:
• Planning involves developing alternatives and contingency plans.
• As long as survival and success are the main objectives of any enterprise, the uncertainty future is no pretext
for not trying.
• Science has developed a lot of knowledge for the use of mankind. Scientific management has developed operations
research techniques and statistical methods to forecast the future with precision and consistency.
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3.3 Forecasting Demand for Employees
The factors that forecast the demand for employees are explained as under.
3.3.1 Economic Factors

Business being an economic activity, forecasts must regard economic aspects like per capita income, employees’
expectations of wages and salaries, cost and price of raw materials, inflation rate, etc. Fiscal policies and liberalisation
of trade will also influence requirements.
3.3.2 Social Factors

Here, we consider the expectations of existing and potential employees on wages, working condition and government
regulations and future trends in political influences and public opinions.
3.3.3 Demographic Factors

Decisively influential upon future requirements, these include availability of youth, training facilities, women in the
active labour force, sex ratio, facilities for professional education, income level, education/literacy, etc.
3.3.4 Competition
Competitors’ strategies, including advertising, quality of product, pricing, and distribution influence future staffing
in diverse ways. For example, if we can only maintain our market share by improving the value of our product, we
may have to employ proficient R & D engineers to tackle the product design.
3.3.5 Technological Factors

Technology has to be stage of the art if company is to survive the competition. Technology, both in terms of quality
and extent, to which it is used, will establish the capital and labour force requirements. Given that our future staffing
needs clearly depend on anticipated trends in technology, ‘technology forecasting’ has become a specialist field in
contemporary management.
3.3.6 Growth and Expansion of Business

Future growth and expansion plans will influence future staffing requirements. Growth is possible through:
• Product diversification
• Increased production capacity
Expansion plans are executed through the following:

• Merger
• Acquisition
• Joint venture participation
• Formation of horizontal and vertical integration
• Establishment of national and international value chains.
All these activities necessitate additional staffing with right qualities in the right numbers at the right times.
3.3.7 Management Philosophy/Leadership

Top management eventually decides what levels of staffing are essential. The philosophy of the top management will
mostly determine the policies that inform decisions on future staffing needs. In many developing countries, there are
‘public-sector enterprises’ and ‘private-sector enterprises’. The public-sector enterprises owned by the government
frequently assume a liberal philosophy of employing labour, leading to enterprises that are overstaffed. Managers
in the private sector, whose philosophies are more determined by economic and entrepreneurial considerations than
by social policy, attempt to employ the optimum number of employees.
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3.3.8 Innovative Management

As competition increases with globalisation and liberalisation of trade, management needs to be innovative to stay
afloat and support competitive advantage. Emotionally intelligent workplaces, continuous improvement, relationship
management, customer, loyalty, economics of variety, etc., are the innovations in management that need to be
adopted. Future staffing needs will be influenced by these innovative practices.
3.4 Managerial Dilemma

Questions that constantly confront the managers are: why should I worry about future needs when the future is
uncertain? Why should I spend my time in human resource planning when I know for sure that the forecast made
today will not survive over the long term? Examples of giants like IBM and Digital which had to lay off or retrench
several thousand employees appear large in the minds of planners.
Fig. 3.1 Assumptions at the time of demand forecasting
The answer to these and such other questions will, however, depend on what one is looking for in human resource
forecasting? Are we looking for an accurate number or for some trends that will enable us to take proactive steps?
If one is looking for precise numbers in the long term, no existing human resource-planning model will help. One
can, nevertheless, look at the trends which do present important data and can help to prepare an organisation face
probable changes in a practical manner. Another issue, which often confronts managers, is the segregation between
the annual budgeting exercise and human resource planning. In the annual budgeting exercise, managers are likely
to largely specify the number of employees required during the year. Such input facilitates the finance group to
approximate employee costs for inclusion in the budget. In the larger, long term background of the business of such
an exercise is not only insufficient but is also inaccurate and impractical. The managers generally have a tendency
to overrate their departmental needs during such an exercise. The reasons for such a tendency could be credited to
the following factors either singularly or collectively:
• Many managers believe that their superiors will cut down the budgets in any case. Such a reduction is assumed to
be a normal feature in order to establish the locus of power. It is, therefore, considered prudent to over-estimate,
so that after the axe falls on the estimates, the final budget will hopefully be near realistic.
• Absence of forecasting skills may also lead to managers playing safe games. Excess forecasting, if approved
(in case of expenses and manpower deployment) cannot cause any harm to individual performance, and in fact,
could be very helpful. Managing expenses and deploying staff at levels lower than those indicated in the budget,
while producing desired results, may lead to a pat on the back of the manager.
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• In those organisations where job evaluation has some connection to the span of control and the number of
people in the department, the tendency to overstaff does exist. If a greater number of people are budgeted and
approved, the chances of the managerial job getting reviewed for higher level of scoping is tremendous. This
leads not only to over-staffing, but also to harsh battles and debates on staffing with unknown agendas in the
minds of the warring section.
• The human tendency to manage a large number of people in order to satisfy the “power need” can lead to over-
budgeting and surplus staffing in an enterprise.
An annual budgeting exercise which is the only form of human resource planning in many organisations sometimes
fails to regard the qualitative aspects of manpower requirements and overlooks the long-term needs of the enterprise.
Annual budgeting programmes get focused on annual revenue, costs, cash flows and annual profitability. This annual
number crunching activity or the activity of counting heads, popularly known as “headcounts” is intended at projecting
and controlling employee costs rather than at the advanced aspects of the quality of workforce, its deployment, long
term utility, long-term adequacy, ability to retain and hire etc. In most enterprises, managers spend a lot of their
valuable time in negotiating, demanding and worrying about numbers rather than the finer, long-term objectives.
Enterprises are often seen approving 0.5 headcount for certain departments and in some cases, they go to unreasonable
levels of approving 0.25 headcount for a given work, with a promise to review in future. In this numbers game,
the issue of productivity improvement opportunities, employee development issues, training etc., get side-tracked.
The enterprise’s inability or refusal to focus beyond the short term in turn leads to non-recognition of the long term
demands of the business, shortage of the right resources, finally resulting in compromises “by re-deployment or by
hiring of talents which do necessarily meet requirements”. One can notice several instances of wrong per holding
important positions in various enterprises. A conventional estimate that at least 8 to 10 per cent of the positions in
any organisation are staffed by the wrong persons makes them a drag on the organisation. One of the reasons for
such a disparity is lack of planning.
3.5 Issues in Demand Forecasting

Before discussing probable techniques of human resource demand estimation, it is worth examining the related
factors that influence the process. In this section, some such factors are discussed, with a view to prompt readers to
consider other similar issues that may influence their own enterprises.
3.5.1 Social Factors

It is a familiar experience that a number of well-conceived projects either do not take off or get delayed due to
social pressures. For example, a large-scale petrochemical project might get delayed or even cancelled due to the
pressures created by environmental and other reasons. In such an event, the human resource demand forecasts
made by the planners will experience significant changes. Delays result in cost appreciation, changes in technology
to contain the needs/sentiments of society, changes in the location of the project etc. If cautious and conservative
hiring is not done by the enterprise, when such major changes occur, there is a possibility that the enterprise will
be burdened with excess staff right at the start of the project. A change of location or of technology may result in
the non-availability of planned resources and therefore further postpone the activities. More examples can be seen
in the form of product formulations, which are undesirable because of religious or cultural reasons, such as the
unacceptability in the Indian market of food products using fat extracted from beef.
3.5.2 Technological Factors

Swift changes in technology many at times unfavorably affect human resources forecasts. From the time a project
is visualised to the time it is implemented, sizeable time lag may occur during which, changes in technology may
make the entire project unviable. Businesses then have to quickly catch up with new technology in order that the
losses are minimised. Several examples of this can be found in the electronic industry.
3.5.3 Political Factors

Unanticipated political factors might make considerable impact on the business plans of enterprises. This is true
particularly for those organisations which depend typically only on international markets either for the sourcing
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of their raw materials or for selling of their products and services. Several examples can be seen in the recent past.
Indian enterprises were reliant on the export market to the former USSR. With the changed political situation, the
market suddenly vanished, compelling some enterprises to either close or restructure their business. The Gulf War
likewise, made a major impact on some enterprises, which were dependent on the construction business in that part
of the world.
3.5.4 Economic Factors

Economic factors frequently result in several planned activities being forced to experience considerable change.
Recent examples are found in India, with economic reforms being introduced in the early nineties. The traditional
concept of manufacturing everything indigenously, even if it meant just assemble at the component level had to
undergo substantial change and several organisations that had set up or were in the process of setting up manufacturing
activities unexpectedly found local manufacturing an unviable proposal. This resulted in major changes in business
strategies and for some enterprises, even the warning of closure.
3.5.5 Demand Generation

Before dwelling on demand forecasting techniques, it is necessary to scrutinise the reasons for the formation of
employee demands. This will help us focusing only on those factors that create demands.
3.5.6 Growth
Growth, in traditional business, may lead to demand for greater levels of production, sales volumes and services.
If all possible productivity techniques are already applied and there is no additional possibility of improvement at
that appropriate time, straightforward statistical models discussed in the later part of this chapter can be applied to
forecast future manpower needs of an enterprise.
3.5.7 Employee Turnover

Employee turnover or attrition is another reason for generation of manpower demands in an organisation. While
it is essential to look at the trends of employee attrition, it might not be appropriate to simply make an estimate
based on the trends. Changing business scenario and environment have to be considered before any assumptions
on future turnover of employees can be made. To illustrate this point, in India, till the end of the eighties and before
the opening of the Indian economy, a turnover of not more than 5-6 per cent amongst the profession and managerial
personnel is steady, well managed organisations could be carefully assumed. This picture, however, changed with the
economic reforms, which brought several new multinationals into the country and woke up traditionally managed
Indian business houses. Past trends of low turnover have now changed to moderate and might go up still further.
Such changes in employee turnover trends vary from profession to profession and skill to skill depending on the
demand and supply position.
3.5.8 Technological Shifts

Changes in technology make an impact on an enterprise in more than one ways. This may alter the methods of
manufacturing, processes and techniques, selling strategies could also become different and in the office, automation
could bring about a major change in the nature of work. Such changes may result in a disused and surplus workforce
and might also bring about shortages in the new skills required to manage the technology. A technological change
in an enterprise does not happen immediately but is always forewarned, over a short or long period of time. Hence,
whenever any shift is planned, either on the basis of previous experience with similar technology or on the basis of
the experience of other enterprises, a demand forecast can be made of the skills that might soon be in short supply
internally. There are several good reasons to conduct demand forecasting. It can help:
• Quantify the jobs necessary for producing a given number of goods, or offering a given amount of services;
• Determine what staff-mix is desirable in the future;
• Assess suitable staffing levels in different parts of the organisation so as to avoid needless costs;
• Prevent shortages of people where and when they are needed most; and
• Monitor conformity with legal requirements with regard to reservation of jobs.
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3.6 Forecasting Techniques
Forecasting techniques vary from simple to refined ones. Before describing each technique, it may be stated that
organisations generally follow more than one technique. The techniques are:
• Managerial judgment
• Ratio-trend analysis
• Work study techniques
• Delphi technique
• Flow models
• Others
3.6.1 Managerial Judgement

This technique is very straightforward. In this, managers sit together, discuss and arrive at a figure, which would
be the future demand for labour. The technique may involve a ‘bottom-up’ or a ‘top-down’ approach. In the first,
line managers present their departmental proposals to top managers who arrive at the company forecasts. In the
‘top-down’ approach, top managers prepare company and departmental forecasts. These forecasts are reviewed with
departmental heads and agreed upon. Neither of these approaches is precise – a combination of the two could yield
positive results. In the ‘bottom-up’ and ‘top-down’ approaches, departmental heads are provided with extensive
guidelines. Armed with such guidelines, and a discussion with the HRP section in the HRM department, departmental
managers can arrange forecasts for their respective departments. Simultaneously, top HR managers prepare company
forecasts. A committee comprising departmental managers and HR managers will evaluate the two sets of forecasts;
arrive at an agreement, which is then presented to top managers for their approval. Needless to say, this technique
is used in smaller organisations or in those companies where sufficient database is not available.
3.6.2 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 organisation and forecasting future ratios, making some allowance for changes in the
organisation or its methods.
3.6.3 Work-study Technique

Work-study techniques can be used when it is possible to relate work measurement to compute the length of
operations and the amount of labour required. The starting point in a manufacturing company is the production
budget, arranged in terms of volumes of saleable products for the company as a whole, or volumes of output for
individual departments. The budgets of productive hours per unit of output are then multiplied by the planned volume
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 operators required. Allowance will have
to be made for absenteeism and idle time. Following is a highly simplified example of this procedure:
1. Planned output for next year 20000 units

2. Standard hours per unit 5
3. Planned hours for the year 100000
4. Productive hours per man/year (allowing 2000
normal overtime, absenteeism and idle
time)
5. Number of direct workers required (4/5) 50
Work-study techniques for direct workers can be combined with ratio-trend 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.
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3.6.4 Delphi Technique

The Delphi technique is a method of forecasting human resource needs. It is a decision making instrument. It has been
used in estimating personnel needs from a group of experts, typically managers. The HR experts act as intermediaries,
summarises the assorted responses and reports the findings back to experts. The experts survey again after they get
this feedback. Summaries and surveys are repeated until the experts opinions start to agree. This agreement reached
is the forecasting of the human resource needs.
3.6.5 Flow Models

Flow models are very often linked with forecasting personnel needs. The simplest one is called the Markov model.
In this method, the forecasters will:
• Determine the time that should be covered. Shorter lengths of time are generally correct than longer ones.
However, the time horizon depends on the length of the HR plan which, in turn, is determined by the strategic
plan of the organisation.
• Establish categories, also called states, to which employees can be assigned. These categories must not overlap
and must take into account each possible category to which an individual can be assigned. The number of states
can neither be too large nor too small.
• Count annual movements (also called ‘flows’) among states for several time periods. These states are defined as
absorbing (gains or losses to the company) or non-absorbing (change in position levels or employment status).
Losses include death or disability, absences, resignations and retirements. Gains include hiring, rehiring, transfer
and movement by position level.
• Estimate the probability of transitions from one state to another based on earlier trends. Demand is a function
of replacing those who make a transition. There are alternatives to the simple Markov model. One, called the
semi-Markov, takes into account not just the category but also the term of individuals in each category. After
all, possibility of movements rises with tenure. Another method is called the Vacancy Model, which predicts
probabilities of movement and number of vacancies. While the semi-Markov model helps estimate movement
among those whose situations and tenure are similar, the vacancy model produces the best results for an
organisation.
Markov analysis is helpful because it makes sense to decision makers. They can easily understand its fundamental
assumptions. They are, therefore, likely to accept results. The disadvantages include:
• Heavy reliance on past-oriented data, which may not be precise in periods of chaotic change, and
• Accuracy in forecasts about individuals is sacrificed to accomplish accuracy across groups.
3.7 Creation of an HR/Staffing Plan

After going through the techniques employed in HR planning let’s look more closely at those factors – both internal
and external – which contribute to or influence the final outcome of the staffing plan.
3.7.1 Internal Considerations

As people are leaving the organisation, we often will have to replace them. In small organisations, a person’s
departure will be more obvious than in a large organisation. Staffing planners will be concerned with the average
number of employees who leave and therefore, need replacing just in order to uphold a constant number of employee
resources in the organisation.
3.7.2 Wastage Analysis

In large organisations, it requires a far more rigorous calculation of ‘wastage’ than the rule of thumb and management-
owner judgment in smaller firms. The simplest way of calculating wastage is through turnover analysis that reviews
features such as the positions being vacated, the average ages of the people who are leaving, the type of skills that
are being lost, etc. Such an analysis gives only a wide image of the current state of employees and it is common
to consider a 25% turnover rate as satisfactory/acceptable in modern large organisations. If the turnover analysis
approaches 30-35%, then the situation necessitates deeper analysis. There are features that the turnover analysis
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will not disclose, so an alternative calculation called the Labour Stability Index is preferred. This index is calculated
using the following formula:
3.8 Conclusion
The best business plans are subject to change in today’s dynamic world and no matter how well a planner considers
the various contributing factors, there always exists a certain amount of uncertainty and chance. This requires that
instead of attempting to forecast the precise number of people required by an organisation, the trends be studied, in
order to appreciate the possible changes in the business and develop a strategy to cope with an evolving situation.
It may be practical to make two different forecasts:
• A forecast of manpower requirements as per the business plan. Here the supposition is that the plans will go
through, without any major changes.
• A forecast needs, which is traditional. Here, the impact of various negative factors on the business can be
considered.
When it comes to real advance hiring, it is prudent to hire people against only the key positions of the first forecast
and the balance staff based on the second forecast. Such a strategy will facilitate an enterprise to sail through without
any major problems. Here, key jobs are defined as those where skills are limited and therefore require a longer lead
time to hire, or those jobs where skills are not available in the market, therefore requiring the organisations to invest
training where once again the lead time is substantial.
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Summary
• Forecasting of demand of human resource needs is the first and foremost central step in any human resource
planning process.
• The absence of the right resources at the right time may exclude the success of corporate plans, and also lead
to losses because of the organisation’s incapability to cash in on opportunities.
• Internal changes in the organisational environment involve product mix and capacity utilisation, acquisition
and mergers, and union-management relations amid many other areas.
• Changes in the external environment include government regulations, consumerism, and competence levels of
employees, among a multitude of other factors.
• Planning involves developing alternatives and contingency plans.
• Competitors’ strategies, including advertising, quality of product, pricing, and distribution influence future
staffing in diverse ways.
• Future growth and expansion plans will influence future staffing requirements.
• The philosophy of the top management will mostly determine the policies that inform decisions on future
staffing needs.
• An annual budgeting exercise which is the only form of human resource planning in many organisations
sometimes fails to regard the qualitative aspects of manpower requirements and overlooks the long-term needs
of the enterprise.
• A change of location or of technology may result in the non-availability of planned resources and therefore
further postpone the activities.
• Economic factors frequently result in several planned activities being forced to experience considerable
change.
• Changing business scenario and environment have to be considered before any assumptions on future turnover
of employees can be made.
• A technological change in an enterprise does not happen immediately but is always forewarned, over a short
or long period of time.
• Work-study techniques can be used when it is possible to relate work measurement to compute the length of
operations and the amount of labour required.
• Flow models are very often linked with forecasting personnel needs.
References
• Lunenburg, F. C., Human Resource Planning: Forecasting Demand and Supply. [Online] Available at: <http://
www.nationalforum.com/Electronic%20Journal%20Volumes/Lunenburg,%20Fred%20C.%20Human%20
Resource%20%20Planning-%20Forecasting%20Demand%20%20Supply%20IJMBA%20V15%20N1%20
2012.pdf> [Accessed 22 July 2013].
• FORECASTING DEMAND AND SUPPLY. [Pdf] Available at: <http://highered.mcgraw-hill.com/sites/dl/
free/0070951772/846002/Bulmash_SampleChapter2.pdf> [Accessed 22 July 2013].
• IUSoutheast, 2009. HR Management: Planning & Forecasting. Available at: <https://www.youtube.com/
watch?v=sP7Q51zHp4I> [Accessed 22 July 2013].
• Christopher Hunt, 2012. Human Resource Planning Lecture. Available at: <https://www.youtube.com/
watch?v=pQfZxgsR40U> [Accessed 22 July 2013].
• Bramham, J., 1994. Human Resource Planning. 2nd ed., Universities Press
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Recommended Reading
• Gautam, V. 1988. Comparative Manpower Practices. National Publishing House, New Delhi.
• Mozina, S. 1984. Guide to Planning for Manpower Development. ICPE: Ljublijana.
• Armstrong, M., 1988. A Handbook of Human Resource Management. Kogan Page, London.
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Self Assessment
1. ___________ of demand of human resource needs is the first and foremost central step in any human resource
planning process.
a. Philosophy
b. Forecasting
c. Technology
d. Factors
2. ___________, both in terms of quality and extent, to which it is used, will establish the capital and labour force
requirements.
a. Budgeting
b. Forecasts
c. Accountability
d. Technology
3. _________has developed a lot of knowledge for the use of mankind.

a. Science
b. Demography
c. Staffing
d. Planning
4. Flow models are very often linked with forecasting __________needs.

a. managerial
b. budgetary
c. personnel
d. technology

a. Management involves developing alternatives and contingency plans.
b. Planning involves developing alternatives and contingency plans.
c. Forecasting involves developing alternatives and contingency plans.
d. Budgeting involves developing alternatives and contingency plans.
6. ____________ planners will be concerned with the average number of employees who leave.
a. Staffing
b. Forecast
c. Demand
d. Political
7. Managers in the __________sector, whose philosophies are more determined by economic and entrepreneurial
considerations than by social policy, attempt to employ the optimum number of employees.
a. political
b. government
c. private
d. public
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8. _____________, in traditional business, may lead to demand for greater levels of production, sales volumes
and services.
a. Competition
b. Managerial judgment
c. Innovation
d. Growth
9. Which of the statements is false?

a. An understanding of the trends and an estimation of the needs of an enterprise present probable clues to
planners about the future
b. A technological change in an enterprise happens immediately and is always forewarned.
c. Future growth and expansion plans will influence future staffing requirements.
d. For short range planning of less than a year, a moderately precise forecast is maybe possible.

A. Involve product mix and capacity utilisation, acquisition and mergers,
1. The Delphi technique
and union-management relations amid many other areas.
2. Internal changes in the
B. Adds complication of forecasting.
organisational environment
3. Ratio-trend analysis C. This is the quickest forecasting technique.
4. Uncertainty D. A method of forecasting human resource needs.
a. 1-C, 2-A, 3-D, 4-B

b. 1-D, 2-A, 3-B, 4-C
c. 1-B, 2-C, 3-A, 4-D
d. 1-D, 2-A, 3-C, 4-B
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Chapter IV
Methods and Techniques for Supply Management
Aim
• introduce the concept of supply forecasting
• explain Cohort and Census methods
• explore Markov Chain and Renewal models
Objectives
• explicate the factors affecting Internal levels
• enlist the categories under human resource inventory
• elucidate employee turnover analysis
Learning outcome
• analyse the techniques of supplying HR in an organisation
• identify the techniques of manpower supply in an organisation
• understand the concept and dimension of manpower supply
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4.1 Introduction
HR demand analysis provides the manager with the means of estimating the number of kinds of employees that will
be necessary. The next rational step is to decide whether it will be able to obtain the required number of personnel.
This information is supplied by supply forecasting.
Supply forecasting measures the number of people probable to be available from within and outside an organisation;
after making allowance for absenteeism; internal movement and promotion, wastage and change in hours and
environment of work. Reasons for supply forecast are the following:
• Helps enumerate number of people and positions likely to be available in future to achieve objectives;
• Helps elucidate the staff mixes that will be present in future;
• Evaluate staff level in different parts of organisation;
• Prevent shortage of people where they are needed most; and
• Monitor future conditions with legal requirement for job reservations.
Forecasting the internal supply human resources is an imperative activity in manpower planning. Human resource
planners need to look at the sources of supply and estimate them through in- depth studies to ensure that apt strategies
are evolved to meet business demands. For the purposes of discussion, the supply source will be divided into two
categories, which are as follows:
• Internal supply
• External supply
In this chapter, the salient features of internal supply are discussed along with the techniques used to evaluate and
study the same. One of the apparent sources of manpower supply is the internal group of employees. It is crucial to
comprehend and evaluate this internal group in order to judge its possibilities in meeting future business demand.
Studies on this source of supply are therefore focused on evaluating internal circumstances, probable changes in its
character and complexion, and the impact on their availability in future.
4.2 Human Resource Inventory

As a first step, it is necessary to categorise the existing employees into various groups. The extent to which such
segmentation is done will rely on how the planners intend to actually utilise the data. It needs to be kept in mind
that a lot of data that may get generated could be of “like to know” type rather than “need to know” type. It is,
thus, vital to decide what type of studies the planners wish to assume with relevance to their realistic usage in the
planning process. The stratification of the existing population can be done in several manners, some of which are
as follows:
• Categorisation by age. One can study average age, average distribution, minimum and maximum age etc., by
job categories, functions, skills, qualifications etc.
• Segmentation of employees by functions, job groups, departments, skills, location etc.
• Categorisation by gender i.e. male and female, ethnic groups, religion, language etc.
• Segmentation by performance levels.
• Segmentation by organisational hierarchy, i.e. staff, junior management, middle management, senior management,
etc.
• Segmentation by salary groups.
It will therefore, be seen that the same work group can be broken up in several different types of segments, depending
on the rationale for which such segmentation is done. In this section, a few important categorisations are discussed,
along with their direct application to the planning process.
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4.2.1 Age Distribution

Segmentation of existing employees by age is a functional technique to comprehend the characteristics of the internal
supply. It presents substantial information about future levels of supplies and their quality, apart from being a good
analytical tool in problem analysis. A study of the age distribution can be done for either the whole organisation or
for each task independently, or for various skills depending on the application of the study. Some of the applications
of this exercise are in:
• Understanding the precise wastage due to normal retirement. This will point to the level of contraction in each
work group that is likely to take place during the plan period.
• Learning potential and the adaptability of the work group. The younger the work group, the higher the likelihood
of their adapting to new methods. Though such a supposition cannot always be hundred per cent correct and
therefore cannot be applied to all situations and segments, but all the same it has a good likelihood of being
right, if it is tested over a period of time.
• Comparing the average age of fresh workforce with the average age of the organisation, one can possibly,
draw some deductions on the rate of growth of the employees thus reflecting on the promotion policies of the
enterprise.
• Comparing various work groups will show the comparative growth rates, levels of fresh intake, stagnation,
frustrations, etc.
It should be understood that data on age distribution only is of very little worth, unless it is supplemented with
employee turnover, performance levels, salary groups, etc. Nevertheless, mapping age distribution amongst various
other applications has great use in decisions related to voluntary separation plans, in the devising of education
roadmaps, review of promotion policies, working out pension and other retirement benefits, etc.
4.2.2 Skills Inventory

Taking an inventory of skills and knowledge is another technique of evaluating the stock of human resources in an
organisation. This provides information on the qualitative features of human resources and provides an insight into
redeployment possibilities, promotions, transfers, the gap between future needs and the level of current skills, etc.
Such an inventory becomes an indispensable input for the assessment of the training needs and recruitment
strategies of an organisation. In order to acquire a greater understanding of manpower characteristics, the skills and
knowledge inventory has to be superimposed with data on employee turnover and performance evaluations to get
an absolute understanding of the characteristics of manpower. When such an exercise is carried out, useful analysis
and conclusions are obtained, some of which are:
• Turnover analysis along with skills inventory may give indications of the likelihood of the scarcity of certain
skills in the future and also provides likely indications of the supply situation in the market.
• Performance ratings and skills inventory can together give tremendous insight into the validity/soundness of
managerial perceptions on the “whys” and “hows” of performance trends. It facilitates the enterprise to draw
suitable training strategies and decide the quality of personnel to be hired in future, since desired qualifications
can be determined on the foundation of performance of the current recruits.
• Matching the skills and knowledge inventory of employees with their job descriptions can show where over-
qualified or under-qualified personnel are employed in the organisation, thereby helping planners to evolve
redeployment strategies and review hiring practices and policies.
4.2.3 Length of Service

Another method of mapping a human resource inventory is by the length of service of the employees. This can be
done in a format similar to Fig. 4.1 – instead of age, the breakdown of the workforce would then be by length of
service. It could also be done by job category, department, location, etc., for the complete workforce, depending on
the use to which the data is to be put.
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If supplemented with other information, such data can underline an organisation’s capability to retain employees by
job categories, department, skills, etc. This also provides a good insight into recruitment methods and procedures,
the organisation’s ability to retain employees etc. During growth in a particular year an enterprise may hire a sizeable
number of employees leading to a reduction in the average length of service in that year. Similarly, restriction of the
workforce might lead to a large number of older employees go for voluntary retirement, thus dipping the average
length of service.
4.3 Factors Affecting Internal Levels

A human resource planner must take into account the various factors that affect the levels of human resource inventory
of an enterprise. In order to understand these factors clearly, a model is shown in Fig. 4.1. As a sample case, take a
small section of an organisation, say a small job group and consider two broad factors:
• Why or how this job group will increase in size?
• Why or how this job group will decrease in size?
These two factors are discussed here to develop a basic understanding of the question.
4.3.1 Reasons for Increase in Employee Groups

The reasons for increase in employee groups are as follows:
Promotions
One of the noticeable methods for increasing the level of the existing work group is through promotion of employees
from within the organisation. Planners consider this aspect to assess the number of probable entrants into a particular
job level and it is therefore important to study the trends of past promotions and assess the feeder stock to assess its
potential for promotion, training needs, etc. Other aspects of employee feeder groups, such as their retention analyses,
age and performance profiles, skills and knowledge profiles should also be studied. It is always advantageous to fill
positions from within through internal promotions. Depending on the needs, one can plan strategies to work on the
feeder groups to aid in promotions.
Some organisations pursue a strategy of promotion by time-scale irrespective of the needs of the organisation.
This is an undesirable technique of promotions. If such a system exists in an enterprise, planners should, during
the planning cycle itself, review the number of employees that will be promoted due to the lapse of time and put in
special efforts to make sure that employees are sufficiently trained before they move up.
Redeployment
Redeployment is another method of filling in positions in a group. Redeployment strategies can be adopted by an
enterprise to utilise excess employees of one job group to fill in the gaps of another. Such redeployment strategies
have to be cautiously chalked out, considering the actual redeployability of employees, the investments that will have
to be made in order to provide training to make these employees effective in the new job, etc. One will also have to
consider issues related to implications on industrial relations, salary, benefits structure and other such factors.
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Promotions Redeployment External Mergers and

In In Hiring Acquisitions
s
s
s
s
HUMAN
RESOURCE
INVENTORY
s
s
s
s
s s
Promotions Redeployment Voluntary Retire- Involun- Sabbaticals,

out out Separations ment tary Long
Separa- Illnesses,
tions Deaths etc.
Fig. 4.1 Influences on HR inventory levels
Job Group Under

Consideration
s
Promotions
in
s s s
Feeder Feeder Feeder

Group Group Group
‘A’ ‘B ’ ‘C ’
Fig. 4.2 Promotion channels (Inwards)
External hiring
Planners suggesting external hiring have to consider matters of the supply position, lead time to hire, lead time to
introduce/induct, time to provide core training, the ability of the enterprise to retain new employees, the wastage
rate for at least the first twenty four months, the skill of the enterprise to draw true talents, etc. It is, however, always
preferable to seal the gap between demand and supply through internal promotions and redeployments as far as
possible, before taking to external hiring.
Mergers and acquisitions

Mergers and acquisitions also influence the human resource supply and may raise the stock levels.
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4.3.2 Reasons for Decrease in Employment Groups Promotions Out
A promotion out to other job levels is a reason for reduction in a particular work group. Planners must consider the
tendency of “promotions out” in the past, and possibilities future losses. Fig. 4.3 demonstrates that for a particular
job group, there could be more than one group of jobs serving as a receiving group. Planners, therefore, have to
first assess the demands of the receiving group and the promotability from the feeder group and therefore arrive at
an analysis of what is possible to be the loss due to out-bound promotions.
Receiving Receiving Receiving

Group Group Group
‘A’ ‘B’ ‘C’
s s s
s Promotions
out
Job Group Under
Consideration
Fig. 4.3 Promotion channels
Fig. 4.3 illustrates an instance of feeder and receiving groups in relation to a collection of jobs that exists in a typical
sales and marketing environment. The surplus employees of a particular job group can be decreased through conscious
execution of the redeployment strategy. Such a strategy must always be implemented with caution and care and after
consideration of the various issues specified earlier in the “redeployment in” section in this unit.
Voluntary separations
Voluntary separations are mainly a result of employees resigning from the services of a company for various reasons.
In this unit a detailed discussion on employee turnover is available, which will give a rather good insight on the
handling of reduction of employee turnover. Voluntary separations may also crop up due to employees opting for
early retirement or because of voluntary separation plans declared by the enterprise. While announcing such plans
the organisation must make an assessment of their expected fall-out. Depending on how the scheme is designed,
the percentage of loss from a particular group can be assessed and the enterprise must therefore design schemes
taking into account the age and service outlines of the target groups, that is, those groups from where the enterprise
anticipates utmost separations to take place.
Sales Regional
Executives Sales
Managers
s
Marketing Group of Product

s
Executives Area Sales Managers Managers

ss
s
Distribution
Marcom Channel
Executives Managers
Feeder Group Receiving Group
Fig. 4.4 Feeder and receiving group for promotions
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A planner is thus expected to study the trends of normal attrition and the impact of early retirement plans, if any, so as
to assess the degree to which the stock of a particular job group is likely to be exhausted during the plan period.
Retirement
In most countries, organisations state the age of retirement or superannuation. Once a person reaches the specified
age, he/she automatically retires from employment and thus planners can easily compute the number of retirees for
a particular year. In those countries/enterprises where the age of retirement is not specified, an assessment can be
made on what percentage of employees are likely to be lost due to retirements based on the trends of the past and
the existing age profile.
Other rseasons
In organisations where there are excesses all over, and redeployment strategies are either not possible or are not
enough, and where the organisation is unable to offer “golden handshakes” in the form of voluntary separation plans,
involuntary separations in the form of retrenchment can be used to lessen the workforce to an optimum point. This
strategy, however, should be the last alternative. Depending on the legal structure, diverse methods will have to be
used. Such strategies will differ from country to country and enterprise to enterprise. Involuntary separations could
also be due to disciplinary or performance related factors where the management of an enterprise commences the
separation of the employees. The proportion of such separations could be minimal, though the planners must be aware
of this factor. Prolonged illness, deaths and incapacities due to accidents are some more reasons for exhaustion in the
human resource inventory. However, these numbers are generally inconsequential in most of the organisations.
4.4 Employee Turnover Analysis

Although discussion on employee turnover analysis appears in the previous chapter under the section on demand
generation, its significance to the forecasting of supply renders is important enough to deserve further discussion
here. Annual employee turnover is a way of measuring the attrition or wastage of employees. It is also known as
the index of turnover or percentage of wastage, being the percentage of employees who suspend/quit employment.
Generally this analysis is done for those employees who voluntarily break up from the services of an enterprise. To
calculate the turnover, the following formula is generally used:
For example, if in an organisation the average number of employees during 1996 were 5,000, and sixty out of these
left during the year, the yearly rate of employee turnover is calculated as follows:
60/5000 × 100/1 = 1.2 per cent
This means that 1.2 per cent of the employees left this organisation during 1996. Employee turnover analysis can
be done in various ways for the complete organisation, department or location wise, by reasons for turnover, and
by performance rating.
In addition to internal supply, the organisations need to look out for potential employees from external sources.
External sources are essential for specific reasons.
• Availability of new blood and new experience;
• Replenishment/Replacement of lost personnel; and
• To meet expansion/diversification needs.
Sources of external supply differ from organisation to organisation, industry to industry, geographical locations to
locations.
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4.5 The Cohort Method
Prior to understanding the ‘Cohort Method’, a little about the concept of survivor analysis is to be understood. This is
the corollary of employee turnover analysis. Here, the percentage of employees who carry on in the employment of
an enterprise is measured as opposite to the percentage who quit employment. In the Cohort Method, an analysis is
done of a homogeneous group, i.e. a group of same or similar employees or those with same or similar characteristics.
Such a group is called Cohort. At the end of each year the number of employees from the cohort who survive is
calculated and expressed as a percentage of the total number of employees hired when the cohort was formulated.
This technique is generally applied to a group of employees whose survival in an enterprise is short. Fig. 4.5 shows
a study of the survivor function over a period of three years, by means of the cohort function. In this figure, the
pattern of retention by an enterprise over a period time noticeably shows the changing retention outline. Such a
change could be due to the influence of diverse factors such as personnel policies, product and marketing strategies,
leadership styles, etc.
% of
Survivors
Year III
Year II
Year I
20
10
0
1 2 3 4 5 6 7
Time in years
Fig. 4.5 Cohort survivors function applied over three years
An analysis of this type enables the planner to estimate the likelihood of a particular group of employees, with
a defined length of service, leaving the organisation. A cohort analysis can also be done on the basis of age. The
graphical representation of this analysis is known as “Log-normal wastage curve” the reverse of which is a survival
curve. The theory behind this method was developed by K.F. Lane and J.E. Andrew.
While there are several advantages of this method, there are also practical difficulties in managing this exercise.
Some of the problems are:
• Each leaver of an enterprise should be historically connected to his/her cohort and the size of the cohort should
be identified.
• If there exists a low rate of wastage, the relative time taken to plan the cohorts could be ordinarily long.
• Planners always start forecasting the wastage of groups who have not even joined the organisation.
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4.6 The Census Method

The Census Method conquers some of the problems of the Cohort Method by taking a bird’s eye view of the diverse
cohorts at one point of time. These views are then pooled to make an estimation of the survival, either by age or
by length of service. In Fig. 4.5, using the Census Method, the survivor function is calculated based on the length
of service. This is a very simple method of tabulating the data. In the first column, we have the length of service
in years and in the second column we have the number of employees against each of the service length groups: at
the beginning of the year. In the third column the number of employees who left employment is tabulated against
each of the service groups and in the next column the wastage rate is calculated. In the last column the survivor rate
is computed. To get the survivor function for the second year, the survival rate of the first year is multiplied with
the second year. For the third year, the survivor function of the second year is multiplied with the survival rate of
the third year and so on. Here, the survivor function depends on the assumption that people in their second year of
employment will have experienced the same pattern of survival in their first year, as do the people who are now in
their first year. In calculating the central rates survivor function we use average stock in the calculations as against
the stock at the beginning of the year. When the survivor function falls, it indicates a low rate of survivals and high
rate of wastage. While interpreting this function, it is important to note that it is a cumulative curve.
Once the survivor function is established for a group of employees, it is possible to predict the probability of
separation that exists in various service length groups of employees.
4.7 Markov Chain

In most organisations, employees are divided into several grades and they move up the organisational ladder from
one grade to another. This may be considered as the hierarchical form of a manpower system. By and large, the
routes that employees follow through the system are well defined. Fig. 4.6 illustrates an example of this nature.
In a simple form of growth and hierarchy, an employee may grow from level I to level II, and then to level III and
so on. It is, therefore, assumed that for level II the feeder group is level I, for level III it is level II and so on. From
each group natural wastage can be expected due to the exits of employees.
Leavers Level
s
VI
s
Leavers Level
s
s
V
s
Leavers Level accelerated
s
IV entry/promotion
s
Leavers Level
s
III
s
Leavers Level accelerated

s
II entry
s
Leavers Level
s
Fig. 4.6 Markov chain
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4.8 Renewal Models
In the Markov model, the assumptions are varying grade size and fixed movement possibilities due to the push factor.
In the renewal theory, the assumption is again that of fixed grade size but upward movements are linked to vacancies
at higher levels. Such vacancies are caused either due to natural wastage or due to upward movements. This model,
therefore, works on the probability of employees leaving an organisation at some point or another. Such exits are
at a sequence of intervals, depending on either the age profile or the profile of length of service. The fraction of
leavers is likely to follow normal distribution. As and when a position is created, the assumption is that it will get
occupied through internal promotions. Promotions could fall into either of two possibilities, viz.: promotion based
on seniority, which will set off chain reaction and cause recruitment at the lowest level of hierarchy, or promotion
due to merit where the promotability of individuals will be taken into account. Prof. Bartholomew has developed
models based on these assumptions.
Institute of Manpower Studies (1972) in its report has compared the Markov Chain model and the renewal theory
model as follows:
“The Markov or ‘Push’ type models assume that promotions are not reliant on vacancies occurring, but instead are
the result of management ‘pushing’ individuals along career paths at fixed rates ——.”
“At the other extreme the renewal or ‘Pull’ type models assume that all promotions are the results of vacancies to
fill gaps as they arise.”
It should be noted that in real life, a combination of Push and Pull is seen. At times both are seen independently. It
is, as a result, crucial to consider historical trends and arrive at well-studied assumptions on future patterns.
Most mathematical models can be applied to large organisations only, where the population is large enough for
the projections to be correct. It should also be kept in mind that these models work only in steady socio-economic
and political scenarios, with stable markets. In circumstances where there are changing variables that are likely to
make a sizeable impact on the enterprise, these models may not work, as the future may not essentially follow the
trends of the past. At senior levels of the hierarchy, the possibilities of mathematical model working are likely to be
low, not only due to small numbers but also due to the fact that numerous internal as well as external factors always
work on this group in a deep manner.
Human resource planners need to look at the sources of supply and review them through in-depth studies to make
sure that appropriate strategies are evolved to bring together business demands. The supply source will be divided
into two categories viz., Internal supply and External supply. External supply is determined by factors unconnected
to the company or enterprise level. Internal supply over which a company or enterprise has control is governed
by the wastage rate (i.e. the rate of leavers from the company) and the internal flows caused by transfers and
promotions.
Methods of analysis and forecasting are, however, a well defined MIS based on personnel history records of each
individual employee. Annual employee turnover is a method of gauging the attrition or wastage of employees.
There are several methods to be used to calculate various aspects related to employee service, age, employee exit,
etc. In turnover analysis, this analysis is known as “Long-normal wastage curve”. Most mathematical models can
be applied to big organisations only, where the population is huge enough for the projection to be accurate.
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Summary
• HR demand analysis provides the manager with the means of estimating the number of kinds of employees
that will be necessary.
• Forecasting the internal supply human resources is an imperative activity in manpower planning.
• Human resource planners need to look at the sources of supply and estimate them through in- depth studies to
ensure that apt strategies are evolved to meet business demands.
• One of the apparent sources of manpower supply is the internal group of employees.
• It is vital to decide what type of studies the planners wish to assume with relevance to their realistic usage in
the planning process.
• Segmentation of existing employees by age is a functional technique to comprehend the characteristics of the
internal supply.
• Taking an inventory of skills and knowledge is another technique of evaluating the stock of human resources
in an organisation.
• During growth in a particular year an enterprise may hire a sizeable number of employees leading to a reduction
in the average length of service in that year.
• A human resource planner must take into account the various factors that affect the levels of human resource
inventory of an enterprise.
• Some organisations pursue a strategy of promotion by time-scale irrespective of the needs of the
organisation.
• Redeployment strategies can be adopted by an enterprise to utilise excess employees of one job group to fill in
the gaps of another.
• Voluntary separations are mainly a result of employees resigning from the services of a company for various
reasons.
• Annual employee turnover is a way of measuring the attrition or wastage of employees.
• In the Markov model, the assumptions are varying grade size and fixed movement possibilities due to the push
factor.
• Most mathematical models can be applied to large organisations only, where the population is large enough for
the projections to be correct.
• Human resource planners need to look at the sources of supply and review them through in-depth studies to
make sure that appropriate strategies are evolved to bring together business demands.
• At senior levels of the hierarchy, the possibilities of mathematical model working are likely to be low, not only
due to small numbers but also due to the fact that numerous internal as well as external factors always work on
this group in a deep manner.
References
• HUMAN RESOURCE PLANNING (HRP). [Online] Available at: <http://www.mbaskool.com/business-concepts/
human-resources-hr-terms/3907-human-resource-planning-hrp.html> [Accessed 22 July 2013].
• nptelhrd, 2010. Human Resource Planning-II. [Video online] Available at: <https://www.youtube.com/
watch?v=FLRtMw8dD3E> [Accessed 22 July 2013].
• edu wala, 2012. Human Resource Planning. [Video online] Available at: <https://www.youtube.com/
watch?v=vSkGQ8tGx3I> [Accessed 22 July 2013].
• Rowland, K.M. & Summers, S. L. 1981. Human Resource Planning: A Second Look. Personnel
Administrator.
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Recommended Reading
• Dessler, G., 2001. Human Resource Management. 7th ed., Prentice-Hall of India Private Ltd., New Delhi.
• Flamholtz, E. & Lacey, J., 1981. Personnel Management: Human Capital Theory and Human Resource
Accounting. UCLA Press, Los Angeles.
• Agrawal, Satya Prakash, 1970. Manpower Demand: Concepts and Methodology. Meenakshi Prakashan,
Meerut.
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Self Assessment
1. _________forecasting measures the number of people probable to be available from within and outside an
organisation.
a. Human
b. Inventory
c. Demand
d. Supply
2. Forecasting the __________supply human resources is an imperative activity in manpower planning.

a. external
b. internal
c. future
d. skill
3. A human resource planner must take into account the various factors that affect the levels of human resource
____________of an enterprise.
a. knowledge
b. inventory
c. grade
d. skills
4. ____________ of existing employees by age is a functional technique to comprehend the characteristics of the
internal supply.
a. Segmentation
b. Forecast
c. Turnover
d. Renewal
5. Annual employee turnover is a way of measuring the _________of employees.

a. inventory
b. growth
c. wastage
d. skills

a. No mathematical models can be applied to large organisations only.
b. Most mathematical models can be applied to medium organisations only.
c. Most mathematical models can be applied to small organisations only.
d. Most mathematical models can be applied to large organisations only.
7. A __________out to other job levels is a reason for reduction in a particular work group.
a. renewal
b. promotion
c. turnover
d. separation
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8. Planners suggesting ___________hiring have to consider matters of the supply position, lead time to hire, lead
time to introduce/induct etc.
a. external
b. internal
c. employee
d. HR
9. ____________strategies can be adopted by an enterprise to utilise excess employees of one job group to fill in
the gaps of another.
a. Staffing
b. Mathematical
c. Redeployment
d. Planning

A. The assumptions are varying grade size and fixed movement
1. Voluntary separations
possibilities due to the push factor.
B. Also influence the human resource supply and may raise the
2. Mergers and acquisitions
stock levels.
C. Mainly results of employees resigning from the services of a

3. The Census Method
company for various reasons.
D. Conquers some of the problems of the Cohort Method by taking

4. In the Markov model
a bird’s eye view of the diverse cohorts at one point of time.
a. 1-D ,2-A ,3-B ,4-C
b. 1-C ,2-B ,3-D ,4-A
c. 1-D ,2-B ,3-C ,4-A
d. 1-A ,2-B ,3-C ,4-D
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Chapter V
Contemporary Trends in Managing Demand and Supply
Aim
• introduce the aspect of compensation and benefits
• explain the emerging organisational structures
• explore the features of good performance appraisal systems
Objectives
• explicate the aspects to be considered while staffing
• enlist the trends which lead to transformations in workplace
• elucidate the trends in labour supply
Learning outcome
• analyse the importance of building the right organisation culture
• enumerate the trends in labour demand and supply
• understand human resource measures and audit
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5.1 Introduction
“The new organisation equation for success is that profit and productivity are best created by half of the workforce,
paid twice as well as producing three times as much” - Charles Hardy. In fast changing world, there have been
qualitative shifts in pattern of employment, yet the significance of arranging the right human resource at precise times
has not weakened. In the modern world, due to incessant altering technology and dynamic character of business,
there is a growing demand for skilled, multi-skilled knowledge workers and professionals who are complex to find
and retain. Increasing demands of consumers to get “value for money” and global competition, keep enterprises on
their toes, ensuing in increased demand for people with suitable talents along with the right values and beliefs. Shifts
in demographics, globalisation of markets, fast changing technologies, increasing consumer demands, curtailment
of product life cycles, surplus or shortage of workforce, constantly shifting political and economic alliances and
several other environmental factors have caused several challenges for industries and, in turn, for human resource
management.
5.2 Emerging Organisation Structures

Today’s dynamic and fast changing environment has given rise to flatter organisational structures. Some organisations
like to exhibit flat and reversed pyramids, with the customer at the top level and the first line staff at the second level
and so on as shown in figure below.
Customer
New Pyramid (Reversed)
Customer
Traditional Pyramid
Fig. 5.1 Organisation structures
In actuality, however, and for long-term survival, the organisational structure should be like a flexible ring, with the
customer and the market place at the centre. The ring has to be organic with the fluid organisation changing its features
to go with the demands of the market place. These are the days of neo-conglomerates, where multiple organisations
get together to manage specific demands of the market. At the same time, two organisations might be competing for
one product line in a market and working as partners for a second product line, acting as distributors for each other
for a third and for a fourth might be indifferent to each other. In this ever changing, dynamic corporate world, new
definitions of hierarchy, chains of authority and reporting relationships continuously appear. Self-managed work
groups, which focus on providing superior services and products that provide specific customer demands are the
realities of today.
There is an obvious move from function centered to process centered organisation structures, where each process
that the organisation evolves is with a definite reason to satisfy some customer need. Performance measures are
established to assess and constantly improve processes with inappropriate processes being abolished and new ones
being evolved continuously. This type of an organisation is organic, relevant and stands the test of time. Long-term
survival, however, depends on the organisation culture and customs. Values and beliefs evolved by the enterprise
would have their spotlight on people and the market in order to sustain over a long period. If values and beliefs do
not focus on these fundamental factors (customers and employees) the probability of the enterprise surviving for a
long-term will be bleak. This is certainly a challenging period for the human resource planner who has to plan for
a dynamic flexible work force which can’t be accurately defined.
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5.3 Transformations at the Workplace

Social, economic, organisational and technological changes have an impact on the work-related/occupational
structures at the workplace. Traditional trends have given way to new occupations, and new definitions of work are
materialising. Some of these trends are discussed here.
Trend 1
A progressive shift from blue-collar jobs is taking place both from the service as well as manufacturing sectors to
white collar jobs mainly in the service sector. Shift of this nature is evidently resulting in inter-sectoral movement
of people, with the bulk of this shift being from the manufacturing sector to the service sector.
Trend 2
There is a shift from the agricultural to the service sector. The previous tendency of rural to urban movement still
continues and even within a rural situation there is rapid expansion in the service industry.
Trend 3
There is a visible growth in the educated, skilled work force as against the semi- and unskilled employees of the past.
This varying pattern of the work force has its own behavioural and attitudinal repercussions in this work place.
Trend 4
There has been a decline of conventional/traditional occupational groups. New classifications, based on broad skill
sets, are surfacing in today’s industry primarily due to multi-skilling and multitasking. We can, in today’s context,
observe teams of production workers and teams of maintenance engineers with barely any distinction within them
in terms of grades/skills.
Trend 5
With the greater focus on productivity upgradation, employment in the higher occupational grades is rising and
the number of jobs in the lower grades is declining. This is due to the knowledge and skills needed to manage
and control new technologies and work processes that are of higher levels than those in the past. Enterprises are,
consequently, constantly demanding advanced and superior skills. General workers are using lesser manual skills
because advanced machines at their disposal make greater demands on their mental skills. Thus, in the modern
production environment, requirements of the mental, mathematical and abstract skills are higher than that of manual
skills. Employees seem to just about establish intellectual relationships with their machines.
Trend 6
In the service sector, technical skill requirements are gradually reducing and being replaced by social skills including
interpersonal, communication skills and so on. Soft skills to improve customer interfaces are of immense value,
since service is more at a modular than at a component level.
Trend 7
The formal, centralised management practices of the past are bit by bit giving way to looser, more independent and
informal methods of management. This change is essential because of the changing profile of people and of the work
itself. Employees at all levels need to attain broader skills and capabilities in order to adjust to new technology and
work organisations. Since organisations or educational institutions cannot teach every skill or technology, today’s
workers need to be intelligent and sharp, with wide conceptual skills so that they can obtain the right knowledge at
the right time in an ever dynamic world.
5.4 Flexible Workplace

In the current dynamic business environment, the conventional idea of a specialised workforce trained to do one
job well is fast fading. The traditional workforce came to an organisation with a skill set or learned a skill set and
performed the same tasks over a long period, possibly even for a lifetime. Restricted, narrow skills and specific job
design was traditionally the most acknowledged for job structure. Employees were proud of the skills they possessed
and unions resisted and change in job descriptions. These inflexible occupational demarcations of the past gave a
remarkable sense of security to employees but put limits on the progress of their careers. Time bound promotions,
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chiefly aimed at giving remuneration and social status, were the norm. Such promotions did not essentially change
the character of the work and nor did they signify the achievement of higher skills or good performance.
They did, however, indicate seniority. Under such conditions, any effort of the management to introduce changes
or stimulate flexibility in job design met with strong resistance and conflict. In today’s world of ever changing
technologies and dynamic market conditions, a need for manifold tasking and several careers in one’s lifetime is
the differentiating feature between a successful and an unsuccessful enterprise. It is, therefore, very important that
planners endeavour to generate a culture that enables smooth technological and process transitions and makes an
organisation flexible and adjustable. The need for uninterrupted reorganisation in order to meet varying business
needs requires a flatter and less hierarchical structure. All these are achievable only if the workforce is qualified,
skilled, flexible and in a nonstop learning mode. (These are pre-requisites not only for the organisation’s but even
for the individual’s survival).
For human resource planners this new environment creates new challenges. Instead of planning for specific jobs,
they have to plan for wide-ranging job groups. Strategies for hiring, training and re-training the workforce should
revolve around the broad-based skills required for a particular job group, rather than around specific occupations.
Job descriptions and performance measures have to be reviewed and revised on a customary basis. In addition,
the planner has to craft a flexible, adaptive work culture that will present opportunities and encourage continuous
learning.
5.5 Building a Culture

Building the true organisation culture is the key concern of a human resource planner. Some of the cultural imperatives
in today’s environment are:
• Flexibility and adaptability of both the enterprise as well as the individuals working for it
• Global outlook
• Obsession with quality
• Customer orientation
• People orientation, and
• Creation of a low cost, profitable operation
Culture is really a way of life for an organisation. It is the summation of the beliefs, values and objectives of an
enterprise which are manifested through its behaviour. In today’s unstable environment, the anchors that an enterprise
has are:
• Corporate vision/idea
• Basic beliefs and values
• Continuous training and development
• Respect for people
• Customer centric orientation
A strong culture, which is well internalised by employees and reflected through the processes and systems, leads
to the formation of a strictly flexible workforce because the need to have detailed rules and regulations diminishes.
A handful of guiding values provide clearness to employees and helps them know what they are supposed to do
in nearly all situations. In the deficiency of a strong culture, employees stay on with an enterprise for the positions
that they hold, the remuneration that they receive and the status that they enjoy. Any effort to change this meets
with tremendous resistance because the employee is working for only these reasons. This decreases the flexibility
of the enterprise.
Highly culture-driven organisations have employees who work for the enterprise because of the association of values,
beliefs and objectives and an acceptance of all the related processes and systems. This makes the organisation flexible.
Long-term sustenance of a culture is achievable only if it is aligned to the market place and is customer oriented.
Coupled with this, a culture that respects individuals, and encourages creativeness and teamwork is the one likely
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to stand the test of time. One cannot attract and retain people only through the attractiveness of the Compensation
and Benefits Plans. Attractive compensation plans coupled with demanding work and is satisfying work culture is
a formula for attraction and retention. It is here that the human resource planner has a key role to play, by inducing
management to develop a culture that supports all the human resource systems and leads the company to a competitive
situation in the marketplace.
5.6 Performance Appraisals

For the human resource planning process to be successful in any enterprise, it is critical that an effective performance
appraisal system be in place to maintain the various human resource systems. A good performance appraisal system
should focus on the developmental facet of an individual, rather than the evaluation facet. To this extent, delinking
rewards with the appraisals is essential. A good appraisal system should achieve the following:
• Provide periodic productive feedback to the employee on his/her areas of strengths and areas where improvement
is achievable.
• Enable the manager and employee to together evolve and periodically review the development plans.
• Should enable the drawing up of objectives in association with the company’s policy, for forthcoming years.
• Enable an employee to comfortably communicate his/her aspirations/expectations/limitations to management
and understand the company’s plans and management’s expectations of him/her.
One of the foremost reasons for the malfunction of appraisal systems is the connection that exists between them
and annual salary increases and other rewards. Such a linkage vitiates the strong developmental climate that must
be created during appraisal meetings and counseling sessions.
Another reason for the restricted success of appraisals is because of the tendencies of managers to evaluate the
potential of an employee rather than performance. In a large number of enterprises appraisals are a yearly feature
with all employees evaluated in the course of a month. This radically brings down the quality of appraisals. Imagine
a manager having a span of control of 10 employees doing 10 appraisals in one month while doing his/her other
duties also. Let us look at the reviewing manager who may have to not only do appraisals of his/her 8/10 direct
reports but also to review appraisals of 50 to 100 employees who may report to his/her direct reports. Further, the
quality of inputs that the Personnel Department can offer when confronted with a large number of appraisals almost
simultaneously unsurprisingly deteriorates. To improve the quality of appraisals it is highly advantageous to spread
them throughout the year.
The appraisal system should necessarily be appraisable centered with feedback from:
• Immediate supervisor,
• Customers to whom appraisee caters,
• Peers with whom the appraisee has to team up, and
• Subordinates, who are led by the appraisee.
The dearth of systematic feedback from any quarter will render the system unproductive, since appraisal systems
are an important vehicle for career development, productivity improvement, rationalisation of work, etc. which,
are all central parts of the human resource planning activities. Human resource planners have to always examine
the health of this crucial system.
5.7 Staffing
Staffing is another key area of focus for a human resource planner. Traditional focus, while staffing or hiring employees,
used to be hiring the best possible people, based on their qualifications, experience and general backgrounds. In
today’s dynamic business climate, however, the focus should be on the following qualities:
• The candidates must possess the knowledge and skills needed to execute the job for which they are being
hired.
• Values and beliefs of the candidates should be in agreement with that of the organisation.
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• The candidate should have an open mind and should be adjustable.
• Conceptual skills of a high level are imperative so that the employee is able to seize and learn new processes
and technologies with ease and simplicity.
• The employee should be in the learning mode. The notion of lifelong learning is enormously important in order
to succeed in the competitive environment of modern days.
• Aspirations and objectives of the employee should be such that they will not conflict with the organisation.
• In transient organisations, creativity is an aspect that the candidates should ideally possess.
Employment of people who meet the requirements not only of today’s job but also that of evolving jobs is very
important. In order that the enterprise is able to employ the right people, preparation of job descriptions and
performance measures should be tied with a listing of knowledge and competencies required for effectual performance.
The selectors should work out appropriate tests and direct the interviews in order to recognise the qualities listed.
The success of any HR planning process lies in giving sufficient lead time to recruiters in selecting the right persons
who will perform well.
5.8 Compensation and Benefits

With the enhanced mobility of labour and crossing of national borders, the need for a competitive compensation and
benefits system is supreme. C&B plans should be oriented both to attracting as well as retaining key professionals
and must be planned so as to provide substantial flexibility in organisational streamlining. Multiple grades, catering
to various professions, occupations or trades, create hindrances and reduce the ease of organisational restructuring.
C&B plans, in today’s scenario, have to be uncomplicated, with minimal classifications to meet broad skills levels.
There should be sufficient schemes and processes to facilitate the corporation to relocate people from one location
to another and one job to another with ease. Incentives for easy mobility have to be built in. Rewards should provide
one-time achievements and be short-term in nature rather than long-term salary increases. Since employees in a fast-
changing scenario might not have the capacity to uphold good performance over long durations, recognition should
be in the form of enhanced assignments, jobs and higher visibility. C&B professional should design schemes that
enable managers to present rewards and recognition to good performers at the right time. Empowering managers
by decentralising the decision-making process is the ‘key’ in today’s aggressive and competitive situation.
Concern over the retention of employees was never as immense in the past as it is today. Rising labour mobility,
a highly competitive labour market and virtual war between corporations to attract the right talents is compelling
managements to propose “Golden Handcuff” plans. These plans should not be of a very long-term duration again
because of the question of the employee’s capability to maintain his performance. A plan to retain an employee
for four to five years, with the right vesting period is adequate. Through annual administration of the schemes the
handcuff can always be extended.
Another dispute that today’s enterprises face is in the selling of C&B plans to employees. The perception of total
compensation, benefits tailor made to meet the individual’s needs and visibility of the total structure are the keys to
success. The importance of fair play, equity and merit-linked rewards continue to be the foundations of any flourishing
C&B plan. In the outlook of a human resource planner the C&B plans become particularly critical as they have to
cater to retention, attraction and flexibility that a human resource planner is always looking for.
5.9 Dealing with Relocations and Redundancies

Some of the most important problems that a human resource planner is faced with are the issues related to the
repositioning of staff and dealing with redundancy in the work force. Redundancies occur due to either of the
following:
• Job getting abolished because of restructuring. These create additional manpower that is redundant in the revised
context of the business.
• The changing profile of many jobs is as a result of technology changes, ultimately causing idleness of employees,
although the jobs themselves may not get abolished as such.
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Relocation is not rare in the new competitive background, where business necessities often require an enterprise
to relocate employees from one city to another. A large number of employees find it hard to migrate due to diverse
personal reasons. Employees, unions and society at large have always opposed these critical factors in human
resource planning. Governments have protected jobs or have made it complicated for employers to retrench/layoff
through legislations. This situation is true of most under-developed/developing countries, wherein unemployment
rates are high. As a result, the implementations of modern technologies and processes that result in a reduction of
the workforce have always met with great opposition. In this intricate situation, employers have to resort to various
strategies to manage the problems of redundancies and relocations. Some strategies adopted by Indian businesses
are listed as follows:
• Employers have resigned to the fact that they cannot downsize. Surplus workforce is carried over by the
business.
• Wide scale downsizing or even closure of operations, by offering attractive voluntary separation or voluntary
retirement plans.
• Outplacement programmes.
• Investing in retraining the redundant work force, either with a view to absorbing them in the revised organisation
structure or to outplace them.
• Offering incentives and support to the redundant workforce to start their own enterprises, thus overcoming
the problem of surplus labour. Such programmes include offering of financial assistance. In most such cases,
employees take up distributorship of products or become suppliers of spare parts, stationery etc. to the original
enterprise. The extent of success in handling redundancies and relocation issues depends on the degree and
quality of planning and the point of communication that the management has established with the employees and
unions. As soon as managements are seen to be genuine in their efforts to re-establish the redundant workforce,
unions and employees typically provide cooperation. The important factors here are:
Communication.
Sincerity of efforts to rehabilitate.
Taking employees and unions into confidence on the reasons for such action.
Creating a win-win situation for all the parties.
Being open minded to negotiate/discuss.
Providing valid reasons for the downsizing.
5.10 Human Resource Measures and Audit

In order to ensure that the human resource planning process is efficient and applicable to the organisation, a system
of periodic review in the form of an audit and the tracking of business fundamentals, in the form of measures of
valuable performance of critical systems and processes, is essential. Prior to identification of the measures and
system of audit, it is vital to settle on the scope and role of the human resource function. The basic management
philosophies set the expectations from the human resource function in an enterprise. For periodic reviews and audits
the following points are important:
• Association of the personnel department’s objectives with the organisation’s objectives, critical business issues
and key success factors.
• Existence of well acknowledged key processes that cater to the needs of the organisation, particularly the key
issues. Such processes must have performance measures and improvement plans.
The auditors/reviewers may look at the following areas during the periodic audits/reviews:
• Does the department have vision, mission and value propositions and are these in alignment with the organisation’s
objectives and values?
• What are the success factors for achieving the departmental objectives and what are the action plans for
these?
• Are the elements of the strategic focus, i.e. the mission, vision and value propositions oriented to meet customer
needs?
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• Are the key processes in the department identified? Are the process owners identified with the process performance
measures?
• How is the department structured? Is the structure supportive of the key processes of the entity and the objectives
of the departments?
• What strategies and practices are in place to determine the needs of the customers? What actions are taken to
seek feedback, give feedback and to take corrective actions?
• How are future needs determined? What actions are taken to cater to the emerging needs?
• What strategies are in place to collect market information, competitive data, best practices from the environment,
etc.? How are corrective actions initiated on the basis of such data?
• How does the department go about determining the short-term and long-term plans? How often is the progress
reviewed? What are the course corrective strategies and contingency plans?
• Is the department effective in its communication processes across the organisation? Do customers of the
department feel involved in the department’s activities and plans? Does the entity management provide resources
and commitment to the human resource department’s activities?
5.10.1 Personnel Measures

This aspect exemplifies some for the measures that can be used to evaluate the performance of the human resource
department. Some examples of measures and business fundamentals that can be used to assess the performance of
the personnel function are given as follows:
• Selection and recruitment
Acceptance rates of professional hires
Recruitment cost
Lead time to hire
Percentage of hires from the internal data bank
Performance levels of new hires
Retention rate of new hires
• Succession and career planning
Number of qualified backups for each key job
Ratio of internal placements to external hires
Internal relocation cost
• Training and development
Training days per employee
Cost of training per employee
Training effectiveness – Relevance
- Relevance
- Timeliness
- Application/applicability
• General
Employee satisfaction survey rating
Compliances with performance appraisal process
Achievements in affirmative action goals
Span of control
Employee turnover analysis
Ratios of revenue to employees, ratios of profits to employees, ratios of output to employees
Availability of well defined job descriptions
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From among the various issues that need to be reviewed, critical ones will be the following:
• Effectiveness and cost of C&B plans, its competitiveness, packaging and employee acceptance. System of
periodic reviews and revisions. Question of equity and fair play.
• Training and development activities, their relevance, timeliness and usefulness.
• Employee attitude review, remedial action plans, periodicity of the surveys, their significance, etc.
• Hiring processes, their cost, quality of hires, etc.
• Frequency, effectiveness and relevance of the two-way communication processes.
• Grievance handling systems, etc.
An effective audit and performance measure tracking system will guarantee not only the success of the human
resource plans implemented but also their relevance.
5.11 Trends in the Labour Supply

Within the population of a country, people above a certain age are considered to be in the labour force. Of these,
a definite number are in employment, the balance being unemployed. The age at which people are considered to
be active in the labour force differs from country to country. The percentage of the number of people in the labour
force to the total number that are eligible to be in the labour force also therefore varies from country to country. A
range of factors influence the labour force participation of the people. Some of these are demographic factors while
the others relate to economic and social conditions which vary ever so often in many countries.
5.11.1 Changes in the Composition of the Population

Is it alright to be comfortable with the fact that labour supply of a country can significantly vary with demographic
changes taking place over a period of time? For instance, a decline in the birth rate of a population means that, as
these age cohorts reach the age of being considered part of the labour force, the number of young entrants into the
labour market will decline. Therefore, the labour force participation rate depends to some degree on the demographic
composition of the population at any given point of time. When HR planners look at these data, the past labour
force data too are essential as the behaviour of the labour force discloses certain trends that allow planners and
policy makers to make projections. For most countries, participation rate for men is higher than for women and
people between the ages of 25 and 54 participate at higher rates than those younger and older. As mentioned above,
considerable changes in population policies may lead to rise or fall in the birth rate and that will have an impact on
the participation rates.
5.11.2 Subgroup Participation Changes

With greater levels of literacy and policies ensuring equal employment opportunities, more women are coming into
the labour market therefore signaling a marked change in the participation rates. There have also been changes in
participation rates of a variety of age cohorts. In many developing countries a large number of young people look
for employment and this number has been on the increase.
Likewise, in many countries where there was a decline in birth rates during the 70s and early 80s, their labour force
will be ageing (e.g., Japan and the Peoples Republic of China).
5.11.3 Labour Force Quality

By examining the labour statistics of one’s country one can notice that over a period of twenty years, participation
rates of different age groups in the labour market have changed significantly.
5.11.4 Level of Education

With greater educational opportunities, there have been great strides in the educational accomplishment of those
entering the labour market. More high school and university graduates are coming into the labour market. This
has an impact on those who are holding certain jobs. As the educational attainments of those who enter the labour
market increase, those having lower levels of education and previously holding jobs in the labour market will be
susceptible.
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5.11.5 Women in the Labour Force
In current years, there has been a considerable rise in the participation rates of women in the labour market. If you
examine your country’s labour force statistics for the past two decades (1980s and 90s) this will be apparent. In
general, the number of married women in the labour force also has increased. Equal employment opportunities
and greater access to education have been two reasons adduced for increased contribution of women in the labour
force.
5.11.6 The Older Employee

In order to guard the older worker, countries like the United States have adopted age discrimination legislation that
defines an older employee as one between the ages of 40 and 65. In the US, roughly about 23 per cent of the labour
force presently is in this category. The section of the labour force is protected because some employers hold negative
stereotypes about older workers. Therefore, employers may find it hard to accommodate older employees, firstly
because of such negative stereotyping but also because more qualified younger persons are obtainable in the labour
market. Another reason for employers’ negative attitudes towards older employees is the supposition that because
the employee is older he is less qualified and less capable to adjust.
5.11.7 Handicapped Workers in the Labour Force

There are increasing numbers of employees entering the labour market with different physical disabilities. It is
observed that employers nowadays are more accommodating than they were a decade or two ago, in employing
handicapped persons. This is partially due to the legislation mooted by UN and allied agencies to provide some relief
to the handicapped in the labour market. Many governments have passed legislation providing a specific percentage
of employment opportunities to the disabled and handicapped. The entry of handicapped persons into the labour
market has seen substantial changes in the facilities that the employers have had to provide to their work forces.
Even with legislation providing for such employment, many handicapped persons have had immense difficulty
finding employment of any kind because employers and fellow workers believe that they could not do the job or
would cause an extreme number of accidents. Also, as mentioned earlier, employers fear that it will be costly to
employ handicapped workers because infrastructure requirements, such as layout changes, special work-stations,
ramps to replace or in addition to stairs, provision of special toilets and other such special facilities necessitate high
direct costs, and higher rates of compensation and insurance.
It is important to start perceiving handicapped workers as an asset rather than a liability. It is in the interest of one’s
country’s economy that they should be perceived so because then one transform them from being a nation’s liabilities
to assets. In general, it is also important to the affected individuals to be able to attain employment and thus attain
economic and psychological freedom and independence.
5.11.8 Part-time and Full-time Time Work

Part-time work had increased during the 1980s. Generally, a part-time worker is a person who works less than the
normal rate of 40 hours a week (or whatever the country’s norm is). To understand well the notion of part-time work,
one has to draw a difference between voluntary and involuntary part-time employees. A person who is working
part-time because he/she cannot get full-time employment is willingly a part-time employee for whom the position
means something different than to a coworker who wished for a part-time assignment.
The major groups of part-time workers are:

• Women: Conventionally, with the responsibilities of running homes and child rearing, more women have
preferred to work part-time. Additionally, some experts have found that more husbands would rather have their
wives work part time than full-time.
• Student: In developed countries such as the US and UK, a large number of students between the ages 18–24
enrolled in higher education institutions work part-time. In the US, on the average students work 20 hours a
week.
• Retired and older persons: In order to keep active and to complement any retirement income or social security
payments, a number of older citizens work part-time. Most of these persons are greatly skilled and could serve
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as training resources to new recruits.

• Persons with a physical or mental disability: Part-time work is often more suited for handicapped and disabled
persons. In some particular disabilities, only part-time work enables individuals to work without aggravating
their disabilities.
While most part-time work is in the service industries, there are also numerous opportunities in the retail and
wholesale trades and in manufacturing. In a great number of conditions, there are many benefits in part-time work for
employees, such as flexibility in scheduling, ability to spend more time with their families, additional compensation
and stabilisation of employment. However, for employers, there are also certain disadvantages, such as part-time
work requiring additional training and record keeping expenses, lack of protection from trade unions etc. Trade
unions at times resist the use of part-timers, viewing them as robbing work opportunities from additional full-timers
who would become their members.
5.12 Trends in Labour Demand

It is the consumer that determines the demand for labour in any industry. The labour is employed to produce either
goods or services. From time to time consumers change their preferences, and the volume of demand for particular
products and services also changes, directly affecting the demand for labour.
To understand this phenomenon well, let’s take the case of robots or programmable mechanised systems in
manufacturing. The cost of robots over a period time has become reasonable and some of the manual work in many
industries is now being handled by such equipment, for example, welding, painting and other assembly operations
in automobile manufacturing. This has had an intense effect on the demand for labour in the new plants in certain
industries.
5.12.1 Implications for Personnel/HR Activities

If you are engaged in personnel or HR activities in your organisation you would realise that major trends in the
supply and demand of labour concern you. The reason should be clear to you. When there are changes in the supply
and/or demand, there are opportunities as well as possible problems. In many countries, low birth rates are causing
distress among HR professionals. There will be a death of young persons in the labour market. At the same time, high
levels of education increase the expectations of people. Therefore, certain categories of labour, such as non-skilled
manual workers, would be in short supply. The HR personnel are called upon to find solutions to problems of this
nature. As observed earlier, there are many factors influencing the nature of the labour market and HR personnel
will have to be cautious to address some of the emerging issues.
5.12.2 Succession Planning

It is basically a plan for identifying who is presently in post and who is available and qualified to take over in the
event of retirement, voluntary leaving, dismissal or sickness. A typical succession chart includes details of key
management references to their probable successors.
Succession planning is a planned strategic activity in an organisation. As such it should be managed not as a year
round activity but as a year round guide. It is irrational to expect that when a key position opens, it will be filled
by the chosen successor and things will progress from there. A succession plan, like all other plans, is just a plan.
A plan is a set of intentions based on a set of assumptions at a given time. With time, both the assumptions and
the intentions may vary, given new information. In organisations today, actual succession decisions are made as
the need arises based on the latest information that includes, but is not limited to, the succession plan. Succession
planning should offer a framework in which to make everyday decisions it should not provide the absolute decisions.
With this understanding, managers should redefine their expectations of succession planning and visualise of it as
a strategy.
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5.12.3 Assessment Centres
When job vacancies are projected, several policy decisions must be made. A basic one involves the applicable
candidate pool. Assessment centres provide a means of methodically gathering and processing information concerning
the promotability (as well as the development needs) of employees. Such centres provide a more all-inclusive
approach to selection, incorporating a variety of assessment techniques.
Some of the salient features of assessment centres are as follows:

• Those assessed are usually lower to middle level managers.
• Multiple predictors are used, at least some of which are work samples (for example, in-baskets, leaderless group
discussions).
• The focus of the assessment centre is on behaviour.
• Exercises are used to capture and create the key dimensions of the job. These involve one-to-one role-plays and
group exercises. The assumption here is that performance in these simulations forecasts behaviour on the job.
• Assessments are made off-side to ensure standardised conditions.
• A number of people (raters) are used to assess or rate the candidates. They are carefully trained and their ratings
are made using standardised formats. Using multiple raters enhances the objectivity of assessments.
• Raters must reach agreement on those being assessed wherever possible.
• Final reports may be used to make decisions about both internal selection and employee development, although
assessment centre results are rarely the only input in either area.
• Assessment centres are costly to run, but the benefits have the potential to overshadow these costs by a significant
margin.
Considerable research has been conducted to determine the reliability, validity, and fairness of the assessment
centres (unlike other promotion predictors). Most has been supportive, inter-rater reliability is generally high, as
have been the validity coefficients.
Although the costs of running assessment centre are high, they can provide real benefits, indicating the degree to
which candidates match the culture of the organisation. Assessment centres are most suitable when candidates who
are being considered for jobs with complex competence profiles. A well-operated centre can accomplish a better
forecast of future performance and progress than judgments made by line or even personnel managers in the normal,
unskilled way.
5.12.4 Employee Replacement Chart

In an employee replacement chart, the basic information provided is a hierarchical illustration of the positions within
an organisation and the names of their current holders. Also indicated are those who are candidates for promotion
to each position. Present performance is indicated along with the age of each person and through a coding system
each employee’s promotion potential is also indicated.
In a customary sense, staffing planning attempted to resolve an organisation’s need for human resources with the
available supply of labour in the local and national labour market. In many organisations, specialist units within
personnel departments may be established to focus solely on staffing planning. In the present search of HRM, many
organisations appear to be replacing staffing planning with employment planning, the personnel process that attempts
to provide adequate human resources to achieve future organisational objectives. All organisations perform HR
or employment planning, informally or formally. The major reasons for formal HR planning are to achieve more
satisfied and more developed employees and more effective equal employment opportunity planning.
HRM theory recognises that the HR department should be a fundamental part and member of the business strategy-
making body. As time passes, working environment changes internally as well as externally. HR plans depend
greatly on forecasts, expectations, and expectation of future events. Planning involves developing alternatives and
emergency plans. A number of factors will influence what is required of forecasting to guarantee satisfactory future
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staffing. Planners have a choice of employment forecasting techniques of different levels of sophistication to focus
on both the internal considerations and the external factors that influence the final outcome of the staffing plan.
However, only a few organisations practice the most theoretical and statistically refined techniques for planning,
forecasting and tracking of employees. In staffing planning, the manager is concerned with the numerical elements
of forecasting, supply-demand matching and control.
HR planning is defined as a long-term, strategic planning of human resources concerned more with the development of
skill, quality and culture change than statistical numerical forecasting, succession planning and hierarchical structure.
The term labour market refers to the large number of varying influences and activities involving labour demand and
supply, which, they greatly depend on economic conditions. From the organisation’s perspective, the numbers and
types of employees required during a given period mirror the relative demand for labour. The age at which people
are considered to be active in the labour force varies from country to country. A multiplicity of factors influences
the labour force participation of the people. Part-time work has increased for decades. To appreciate well the notion
of part-time work, we have to draw a distinction between voluntary and involuntary part-time employees.
If you are engaged in personnel or HR activities in your organisation you would realise that major trends in the
supply and demand of labour concern you. Succession planning is a strategic activity in an organisation. A succession
plan, like all other plans, can change as its determinants change. Many companies are now engaged in wide-ranging
career management programmes comprising the three major components: planning, development and counseling.
A typical career planning involves four major steps. Career development is the process through which the action
plans are determined. Career development, therefore, is of consequence for both individual and organisation and
for human resource development.
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Summary
• Today’s dynamic and fast changing environment has given rise to flatter organisational structures.
• Self-managed work groups, which focus on providing superior services and products that provide specific
customer demands are the realities of today.
• Performance measures are established to assess and constantly improve processes with inappropriate processes
being abolished and new ones being evolved continuously.
• Social, economic, organisational and technological changes have an impact on the work-related/occupational
structures at the workplace.
• A progressive shift from blue-collar jobs is taking place both from the service as well as manufacturing sectors
to white collar jobs mainly in the service sector.
• General workers are using lesser manual skills because advanced machines at their disposal make greater
demands on their mental skills.
• Soft skills to improve customer interfaces are of immense value, since service is more at a modular than at a
component level.
• It is very important that planners endeavour to generate a culture that enables smooth technological and process
transitions and makes an organisation flexible and adjustable.
• Strategies for hiring, training and re-training the workforce should revolve around the broad-based skills required
for a particular job group, rather than around specific occupations.
• Highly culture-driven organisations have employees who work for the enterprise because of the association of
values, beliefs and objectives and an acceptance of all the related processes and systems.
• Attractive compensation plans coupled with demanding work and is satisfying work culture is a formula for
attraction and retention.
• A good performance appraisal system should focus on the developmental facet of an individual, rather than the
evaluation facet.
• A reason for the restricted success of appraisals is because of the tendencies of managers to evaluate the potential
of an employee rather than performance.
• The success of any HR planning process lies in giving sufficient lead time to recruiters in selecting the right
persons who will perform well.
• Empowering managers by decentralising the decision-making process is the ‘key’ in today’s aggressive and
competitive situation.
• Relocation is not rare in the new competitive background, where business necessities often require an enterprise
to relocate employees from one city to another.
• With greater levels of literacy and policies ensuring equal employment opportunities, more women are coming
into the labour market therefore signaling a marked change in the participation rates.
• While most part-time work is in the service industries, there are also numerous opportunities in the retail and
wholesale trades and in manufacturing.
• Assessment centres provide a means of methodically gathering and processing information concerning the
promotability (as well as the development needs) of employees.
References
• Bhattacharyya, D., Performance Management Systems and Strategies. Pearson Education India.
• Sahu, R.K., 2009. Performance Management System, Excel Books India.
• 2012. How to boost labor supply and demand. [Video online] Available at: <http://www.youtube.com/
watch?v=YU0NBVuUuaI> [Accessed 22 July 2013].
• 2010. What is Organisational Culture? Why Culture Matters to Your Organisation?. [Video online] Available
at: <http://www.youtube.com/watch?v=Rd0kf3wd120>[Accessed 22 July 2013]
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• Employee Compensation and Benefits. [Pdf] Available at: <http://122.166.126.42:8080/collect/projectr/index/

assoc/HASH01ae/414fe22c.dir/doc.pdf> [Accessed 22 July 2013].
• Organisational Culture. [Pdf] Available at: <http://uir.unisa.ac.za/bitstream/handle/10500/1133/03chapter2.
pdf> [Accessed 22 July 2013].
Recommended Reading
• Bell, D.J., 1974. Planning Corporate Manpower. Longman Group Ltd.
• Peters, T., 1993. Liberation Management: A Fawcett Combined book. Balantine Books.
• Elliot, V. & Orgera, A., 1993. Competing for and with Workforce – 2000. HR Publication.
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Self Assessment
1. Today’s dynamic and fast changing environment has given rise to flatter __________structures.
a. organisational
b. globalised
c. performance
d. compensation
2. __________work groups, which focus on providing superior services and products that provide specific customer
demands are the realities of today.
a. Multiple
b. Performance
c. Organisational
d. Self-managed
3. __________and beliefs evolved by the enterprise would have their spotlight on people and the market in order
to sustain over a long period.
a. Information
b. Performance
c. Values
d. Cultures

a. General workers are using lesser manual skills because advanced machines at their disposal make greater
demands on their mental skills.
b. Performance measures are established to assess and constantly improve processes with inappropriate processes
being abolished and new ones being evolved continuously.
c. A number of factors will influence what is required of forecasting to guarantee satisfactory future staffing.
d. Modern trends have given way to new occupations, and new definitions of work are materialising.
5. Attractive __________plans coupled with demanding work and is satisfying work culture is a formula for
attraction and retention.
a. market
b. compensation
c. money
d. demand
6. Employees at all levels need to attain broader skills and capabilities in order to adjust to new __________and
work organisations.
a. technology
b. work force
c. managers
d. consumers
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7. Which of the following statements if true?

a. Part-time work has decreased for decades.
b. Full-time work has increased for decades.
c. Part-time work has increased for decades.
d. Less work has increased for decades.
8. A good performance appraisal system should focus on the ____________facet of an individual, rather than the
evaluation facet.
a. business
b. dynamic
c. performance
d. developmental
9. ______________centres are most suitable when candidates who are being considered for jobs with complex
competence profiles.
a. Assessment
b. Strategic
c. Employee
d. Development

1. Values and beliefs of the A. The basic information provided is a hierarchical illustration of the
candidates positions within an organisation and the names of their current holders.
2. Rewards B. Should be in agreement with that of the organisation.
C. Should provide one-time achievements and be short-term in nature

3. Culture
rather than long-term salary increases.
4. In an employee
D. This is really a way of life for an organisation.
replacement chart
a. 1-A 2-C ,3-D ,4-B
b. 1-D 2-C ,3-A ,4-B
c. 1-B,2-C ,3-D ,4-A
d. 1-B 2-C ,3-A ,4-D
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Chapter VI
Job Analysis
Aim
• introduce job analysis
• explain the process of job analysis
• explore the uses of job description
Objectives
• explicate job specification
• enlist methods of collecting information
• elucidate the steps in the job analysis process
Learning outcome
• analyse the significance of job analysis to organisations
• identify the methods of collecting information
• understand the relationship of job analysis with job description
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6.1 Introduction
Organisation is expressed as a rational coordination of the activities of employees through division of labour,
responsibility, authority and accountability. Built in this description is the realisation that organisations carry out a
series of activities and that to perform these activities different kinds of skills are required. Each activity carries its
own set of responsibilities and the employees are given suitable right to perform these activities. Not only this, they
are also responsible to the organisation through their immediate supervisors for achieving these activities according
to specifications. Hence, a lucid understanding of what they are supposed to do becomes a prerequisite for efficient
utilisation of organisational resources. Job analysis helps us to reach this objective.
6.2 Job Analysis

There exists a broad range of job evaluation methods. The option of an evaluation method is dependent on the number
and kind of jobs to be evaluated, the cost of the operation, available resources, the scale of accuracy required and
the organisations’ environments- both internal and external. However, whatever be the chosen method, methodical
gathering and analysis of information about jobs is a prerequisite. The job analysis method involves assembly of such
information. Job analysis is the process by which data, with regard to each job, is methodically observed and noted.
It provides information about the nature of the job and the characteristics or qualifications that are sought-after in
the jobholder. The data from job analysis could be used for a range of purposes. The job analysis study endeavours
to present information in seven basic areas:
• Job Identification or its title, including the code number, if any.
• Distinctive or significant characteristics of the job, its location setting, supervision, union jurisdiction, and
hazards and discomforts, if any.
• What the typical worker does: Specific operations and tasks that make up the assignment, and their relative
timing and importance; the simplicity, the routine, or intricacy of tasks, responsibility for others, for property,
or for funds.
• The materials and equipments used by the workers: Metals, plastics, grain, yarns; and lathes, milling machines,
electronic ignition testers, corn huskers, punch presses, and micrometers are descriptive.
• The workers’ job performance must be taken into account. The importance here is on the nature of operations, and
may spell out such operations as handling, feeding, removing, drilling, driving, setting up, and many others.
• Aspects like experience, training apprenticeship, physical strength, coordination or dexterity, physical demands,
mental capabilities, aptitudes, and social skills are some attributes.
• Working conditions and work environments is a major contributing factor in the performance of the job, and
the satisfaction of the employee.
A faintly highlighted, poorly ventilated and crowded place of work hampers efficiency. The workers are forced to
spend more energy to complete tasks, which they can do, in much lesser efforts in otherwise conditions. Poor working
conditions have been found to cause greater fatigue, negligence, absenteeism, indiscipline and insubordination
among the employees. Each of these pieces of information is necessary; it is not enough to simply list a series of
tasks or duties, because each piece of information is used in determining the level of work and responsibility and the
knowledge, skill and abilities needed to perform them to a satisfactory level of expertise. The process of assembling
and recording information on such essential characteristics of jobs is known as job analysis. In other words, jobs are
subject to analysis to discover precisely what the duties, responsibilities, working environment and other requirements
of a job are and to present these in a clear, concise and systematic way. Job analysis should be assumed by trained
job analyst working in close collaboration with managers and jobholders. Before proceeding further, certain terms
used in job analysis and related stages in the job evaluation process need to be elucidated.
Element
This is the smallest unit into which work can be divided.
Task
This refers to a distinctive identifiable work activity, which consists of a logical and necessary step in the performance
of a job.
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Duty
This is a noteworthy segment of the work performed in a job, usually comprising several tasks.
Post (or)
This refers to one or more duties, which require the services or activities of one worker for their performance.
Job
This refers to a group of posts that are alike or involve considerably similar tasks.
Occupation
A group of jobs similar in terms of the knowledge, skills, abilities, training and work experience required by workers
for their successful performance denotes occupation.
6.3 Some Considerations

Job analysis might give the thought that while identifying components of job, we are looking at everything that
concerns the job. However, in analysing the job, following considerations must be kept in mind:
• Job analysis is not a one-time activity. Jobs are changing continuously. What a job was yesterday is not the
same job today and would not remain the same in future. These changes are caused by altering technology,
competition, changing profile of the workforce, changing expectations of end users and a host of other factors.
Hence, analysis must be always done to renew the nature of job.
• The Job and not the person—an important consideration in job analysis is conducted of the job and not of the
person. While job analysis data may be collect from incumbents through interviews or questionnaires, the product
of the analysis is a depiction or specification of the job, not a description of the person doing the job.
• All activities relating to job analysis give us only the minimum requirements of the job. No analysis can recognise
either the final or full and complete requirements. What it does is that it merely highlights what are minimum
activities that are entailed in a job. The reason is simple. No one can predict the final outcome because of changes
taking place in the nature of job.
6.4 Method of Collecting Information

There are numerous ways in which information about a job can be collected. In order to have a total understanding
of the job contents, a number of sources should be looked at. By and large, the following sources are usually used.
In all the following three methods, confirmation of the information collected from the holder of the job is essential.
Very frequently, while collecting information people tend to describe those aspects of the job that they are not doing
or would like to do. Hence, after the information has been collected from the employee, an interview with immediate
supervisor must be conducted to validate the authenticity of the information.
6.4.1 Job Questionnaire

To begin with, a job questionnaire could be administered to all concerned employees asking them about the job,
its various components, time spent on each of them, and so forth. The finished questionnaire could be given to
the supervisors for their comments. In some cases, job-reviewing committees are formed, consisting of union
representatives and specialists from the personnel, work-study, or industrial engineering department. The questionnaire
has the following advantages:
• First of all, it is the most cost effective method, since it can bring out information from a wide number of workers
and their immediate superiors in a moderately short period of time. The main task of the analyst becomes one
of planning the questionnaire well and checking the responses provided.
• Secondly, workers take an active part in completing the questionnaire providing intimate detailed knowledge
of their jobs, which is not available elsewhere.
• Thirdly, the questionnaire has to be structured in advance, and this facilitates the processing of the results.
• In some cases, once the responses to the questionnaire have been verified, they can suitably be used with little
further processing to put in order a job description.
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The questionnaire method however has the following disadvantages:

• To begin with, the people required to complete it must have a certain level of education; and even then, questions
may be understood in diverse ways so that the answers may be beside the point.
• In addition, not everyone is able to express fully and precisely the task that constitute their job. One may, for
example, over-emphasise some features of it and completely ignore others when they are important.
• There is less risk of this with a detailed questionnaire that includes a checklist of points, questionnaire suited to
all jobs is not easily drawn up and may be unduly long. In practice, while a well-structured questionnaire can
get vital information quickly, it is almost impossible to get complete comparable information exclusively by
questionnaire, and this method is generally used in combination with interviews and direct observation.
6.4.2 Interview
In practice, an interview is nearly always necessary in order to get precise, complete and comparable information.
The interview conducted by the analyst is an effective way of checking on the information previously available
on job. The analyst asks the jobholders questions on the duties and main tasks of their job, usually working from a
previously prepared list of questions as with a questionnaire. After the interview, the analyst draws up a report, which
is shown, to the jobholder and his immediate superior for their approval. The analyst generally drafts the report in
the form of a job description, which efficiently speeds up the foundation work of job evaluation.
Following are some of the disadvantages of this method:

• Interviews are time consuming. At least an hour or two may be required for each case, plus the time spent by
the analyst in drawing up his report and by the jobholder and his immediate superior in checking it. In a large
enterprise a team of analysts would be necessary.
• The main difficulty of the interview lies in finding high quality analysts who can win the jobholder’s confidence.
As has been noted, “too many imagine interviewing to be relatively simple whereas nothing could be farther
from the truth.” Obtaining information from a jobholder about his job is tricky.
• Many workers show a natural disbelieve of the analyst who comes to check their work, while others will give
a lot of information, much of it useless. It is accordingly important to have a well trained and experienced team
of analysts if the interview is to be the only method used.
However interview has some advantages:

• Interview does provide in-depth information, which cannot be achieved through any other method.
• It also helps in collecting data about tasks that are not part of the job and yet the jobholder has to do it.
• At the same time it can also help in finding ways and means to simplify some of the operations involved in the
job.
6.4.3 Observation
For jobs of a simple and recurring nature, the observation technique could provide sufficient information on the
job being performed. A lucid picture may be obtained regarding the working conditions, equipment used, and skills
required. Although all jobs could be usefully observed, this technique alone is not enough for more complex jobs,
especially those that have many components or interactions.
Some advantages of this method are:

• It is most appropriate for simple and repetitive jobs.
• Direct observation by the analyst can clear up points left unclear by other methods.
At the same time, some of the disadvantages of this method are:

• The presence of analyst causes stress. The workers may have an aversion to being observed.
• The jobholders may deliberately reduce the pace of activity to validate overtime.
• Observation cannot be a suitable method where the job calls for considerable personal judgment and intellectual
ability.
• It may not take into account all the tasks in a work cycle stretched over a week or a month.
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6.4.4 Independent Observers
In addition to the employees themselves providing information about the jobs they are doing, trained observers
could also be used to complement the employees’ data and to discover inadequate performance in “crucial tasks”,
which would lead to job failure. In addition there are some not so often used methods of job analysis. Some of them
are presented here:
• Diary: One or more incumbents are asked to keep a diary of duties noting the incidence of the tasks performed.
These diaries then become the base for doing job analysis.
• Critical incidents: Ask one or more incumbents to brainstorm (if there is only one person you will have to
participate in the brain storming) about critical incidents that happen routinely and rarely while working.
Separate these into two lists. Generate one list of incidents indicating good or excellent performance and one,
which indicates poor performance. This approach is excellent for determining training and selection strategies.
The results lend themselves to meeting bias complaints concerning selection choices where the person chosen
clearly possesses the skill and awareness to execute the most critical duties demonstrating success on the job.
The analyst will have to extrapolate a list of duties to be performed from the incidents.
• Photo tape recording of job performance: This is a good approach because it can be watched over and over
again to carry out analysis and because it can be pulled out later to re-evaluate. Having such a tape is excellent
source for undertaking job analysis.
• Review of records: Records of work such as maintenance requests is assessed and a list of requested repairs is
made. In this situation it is central to take representative samples so that seasonal variations in work requests
do not misinform. This is a good approach for such jobs as mechanic or electrician. The kinds of repairs being
performed and, thus, the duties being performed most often can be itemised. However, this approach could also
be used for computer programming and computer trouble-shooting jobs in which incumbents have records of
work requests or work competed.
The data to be gathered by all these methods is dependent in large part on the purpose the analysis is to be put to.
Information about training needs requires information about the deal of the work so that the trainer can conclude the
critical skills and knowledge that must be improved. Selection decisions necessitate the same information usually
on a wider scale. A lot of information can be concluded from well-written task statements.
Some of the examples of the kind of data, which can be gathered for job analysis, are given below.
• List of tasks
• List of decisions made
• Indication of results if decisions are not made properly
• Amount of supervision received
• Supervision exercised
• Kind of personnel supervised
• Diversity of functions performed by supervised staff
• Interactions with other staff (description of the staff interacted with)
• Physical conditions
• Physical requirements (For instance how heavy are the objects that are lifted. How much stooping and bending
is conducted and under what conditions)
• Software used
• Programming language used
• Computer platform used
• Interpersonal contacts with outsiders (customers)
• Interpersonal persuasive skills or sales skills
• Amounts of mental or psychical stress
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• Necessity to work as a team member

• Needed contributions to a work group
• Authority or judgment exercised
• Customer service skills
Generally, it is preferable to use a combination of several methods to get information about the job. One method
could well complement the other, where the objective is to achieve as much information as possible about the job,
the critical tasks, and the necessary qualifications required to perform them adequately. An objective data gatherer
would evade introducing his own ideas, and also avoid describing the employees performing the job, rather than
the “job” itself, for many of the employee’s personal traits may have little or no significance to the job.
6.5 Job Analysis: Process

To be meaningful and useful for personnel related decision-making, job analysis must be carried more at regular
intervals. Jobs in the past were considered to be stagnant and were designed on the basis that they would not change.
While people working on these jobs were diverse, the jobs remained unchanged. It is now realised, that for greater
effectiveness and productivity, jobs must change according to the employees who carry them out. Some of the major
reasons leading such change are:
6.5.1 Technological Change

The rate of change in technology necessitates changes in the nature of job as well as the skills required. Word
processing has radically changed the nature of secretarial jobs. Computerisation and mechanisation similarly give
rise to new requirements of certain jobs while older requirements become outmoded.
6.5.2 Union- Management Agreements

The agreements entered between management and the union can bring about change in the nature of job, duties
and responsibilities. For example, under employees’ participation scheme, the workers are encouraged to accept
broader responsibilities.
6.5.3 People
Human beings are not robots; each employee brings with him his own strengths and weaknesses, his own style of
handling a job and his own skills. There is a saying that the job is what the incumbent makes of it.
Therefore, the job analysis process must take into account the changing nature of job on account of the factors listed
above. Often, role analysis techniques are used in dealing with the dynamic nature of job requirements.
6.6 Steps in the Job Analysis Process

The major steps to be followed in carrying out job analysis in an on-going organisation are given below:
6.6.1 Organisation Analysis

The first step is to get an overall view of various jobs in the organisation with a view to examine the linkages between
jobs and the organisational objectives, interrelationships among the jobs, and the contribution of various jobs towards
achieving organisational efficiency and effectiveness. The organisation chart and the work flow or process charts
make up an important source of information for the purpose.
6.6.2 Uses of Job Analysis Information

Depending on organisational priorities and constraints, it is desirable to develop lucidity regarding the probable
uses of the information pertaining to job analysis. In the previous pages it has been already indicated that such
information could be utilised practically for all personnel functions. Nevertheless, it is important to focus on a few
priority activities in which the job analysis information could be used.
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6.6.3 Selection of Jobs for Analysis
Carrying out job-analysis is a time-consuming and expensive process. It is, therefore, desirable to choose a
representative sample of jobs for purposes of analysis.
6.6.4 Collection of Data

Data will have to be collected on the characteristics of job, the required behaviour and personal attributes needed
to do the job efficiently. Several techniques for job analysis are available. Care needs to be taken to use only such
techniques, which are satisfactory and reliable in the existing circumstances within the organisation.
6.6.5 Preparation of Job Description

The information collected in the previous step is used in preparing a job description for the job highlighting major
tasks, duties, and responsibilities for efficient job performance.
6.6.6 Preparation of Job Specification

Similarly, the information gathered in step (4) is also used to arrange the job specification for a job stressing on the
personal attributes required in terms of education, training, aptitude and experience to fulfill the job description.
Job Analysis therefore carried out provides essential inputs to the design of jobs so that it is able to meet the
requirements of both the organisation (in terms of efficiency and productivity) as well as the employees (in terms of
job satisfaction and need fulfillment). Developing apt job design is then the product of the job analysis process.
The most essential use of job analysis is to create a basic job description of what the job is to facilitate basic human
resource problem solving. The second is to provide employees and supervisors with a crucial description of jobs
describing duties and characteristics in common with and different from other positions or jobs. When pay is strongly
associated with levels of difficulty these descriptions will help promote a feeling of organisational fairness related
to pay issues. Other important uses of job analysis are given below:
• Indicate training needs
• Put together work groups or teams
• Provide information to conduct salary surveys
• Provide a basis for determining a selection plan
• Provide a basis for putting together recruitment
• Describe the physical needs of various positions to determine the validity of discrimination complaints
• As part of an organisational analysis
• As part of strategic planning
• As a part of any human relations needs assessment
• As a basis for coordinating safety concerns
Job analysis is in reality an essential part of any modern human resource management system. The kind of information
gathered through job analysis varies significantly depending upon the specific uses to be made of it. Consequently,
job analysis programmes are usually tailor-made for the specific purpose.
6.7 Job Description

Data collected for job analysis presents the basis for preparing job description. It refers to the job contents and
the expectations that an organisation has from its employees. Job descriptions usually sketch out the minimum
requirements of jobs for many reasons:
• First, even with all the attempts, a perfect and fully all-encompassing job description is not feasible. In fact, as
one moves up in the hierarchy of an organisation, a detailed job description becomes very complicated.
• Secondly, most organisations would favour not to describe the job fully, if it is possible, because employees
would then stick to what has been described and would not do anything beyond it.
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• Thirdly, if a job was fully described, regulation would automatically be taken care of by the duties performed,
making some of the duties of the supervisory staff outmoded.
• Fourthly, technology is changing fast and hence the nature of job is also changing. Unless an organisation
continuously updates the job description, it would be difficult to scrutinise the performance of the employees.
6.8 Design of Job Description

A key output or result of job analysis is job description. Information obtained by job analysis is shifted and recorded
in brief, clearly and fully in the job description. The job description must accumulate all the essential elements of a
job, such as vital tasks, responsibilities, qualifications required and the functional relation of the job to other jobs.
There is no commonly accepted standard format for job descriptions for the reason that the form and structure of
the job descriptions must depend on the kind of work being analysed and the job evaluation plan being used. For
example, if the job evaluation form comprises factors such as physical and intellectual effort, knowledge, skills,
and responsibilities and working conditions, it follows that job description should be ordered to reflect these factors
so as to make possible factor by factor comparison and evaluation of the jobs. With non-analytical methods, job
description may be more flexible and simpler but most spell out the title of the job and its position in the organisation
summarises the tasks performed and list the skills and abilities required. It is useful to follow the following guidelines
when writing a job description:
• Always be precise about what is expressed.
• Omit expressions which are aspects— such as uninteresting, distasteful, etc.
• Personal pronouns should be avoided— if it is necessary to refer to the worker, the word “ operator” may be
used.
• Do not describe only one phase of the job and give the notion that all phases are covered.
• Generalised or ambiguous expressions, such as ‘prepare’, ‘assist’, ‘handle’ etc. should be omitted except if
supported by data that will explain them.
• All statements should be clearly defined and simply set down- promiscuous use of adjectives only reflects one’s
own opinion.
• Describe the job as is being done, by the majority of workers holding the designation.
• Write in simple language— explain atypical technical terms.
• Description of a job, which is part of teamwork, should create the team relationship.
• The length of description is irrelevant; it is not expected even with printed forms that all job descriptions should
be of equal length but write briefly.
• When the job analyst finds that the data he has to work with is inadequate, she/he must stop until sufficient data
is obtainable.
• Put the date of completion of each description and revise it as often as changes in jobs and occupation
require.
• Job description should have the agreement of the concerned supervisor.
• Description should include the initials of the persons who accumulate them.
6.9 Uses of Job Description

Apart from being a basis for job evaluation, the job descriptions can be put to many uses. They are as under.
6.9.1 Supervisor- Employee Communication

The information contained in the job description charts out the work, which the incumbent is likely to perform. Hence,
it is an exceptionally useful document for both the supervisor and the subordinate for purposes of communication.
Furthermore, it helps employees to comprehend just what work their associates are expected to perform, thus,
facilitating amalgamation of efforts at the work site by the employees themselves.
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6.9.2 Recruitment, Selection, Promotion, and Transfer
Information relating to the knowledge, skills and abilities required to execute the work to a tolerable standard,
can be used as a sound basis on which to base standards are procedures for recruitment, selection, promotion and
transfer.
6.9.3 Work Performance Appraisal

To be sound and objective, a performance appraisal system must be ingrained in the work performed by the employee;
such work is indicated by the duties in the job description. In such an approach, using each duty as the basis for
discussion, the employee and the supervisor agree on work performance goals for the period to be covered by the
consequent evaluation report; they also agree on the criteria to be used to determine the degree to which the goals
have been attained. The reports resulting from this methodology minimise subjectivity by focusing attention on the
job, as distinctive from the personality traits, habits or practices of the employee. As a result, the results are more
realistic; valid and defensible than is the case in other types of systems.
6.9.4 Manpower Planning, Training and Development

These three processes are strongly interrelated. The job description showing, in specific terms, the knowledge, skill
and ability requirements for effective performance of the duties, is a sound and balanced basis for each of these
processes. Analysis of various types of jobs at increasingly more senior levels will point to logical sources of supply
for more senior posts, as part of manpower planning. It will also show the gap to be bridged in terms of knowledge,
skill and ability, thus providing a sound basis for preparing job- related training and development programmes.
6.9.5 Industrial Relations

Often, problems arise in the industrial relations field, which have their origin in the work to be undertaken. In these
instances the job description may be used to form a factual basis for discussion and problem resolution.
6.9.6 Organisation and Procedure Analysis

The duties and responsibilities outlined in the job description may be used to a huge advantage by management in
analysing organisation and procedures, because they disclose how the work is organised, how the procedure operates
and how authority and responsibility are appointed.
A Job Description should include a:

• Job Title: It represents a summary statement of what the job involves.
• Job Objective or Overall Purpose Statement: This statement is normally a synopsis designed to familiarise the
reader to the general nature, level, purpose and objective of the job. The synopsis should illustrate the broad
function and extent of the position and be no longer than three to four sentences.
• List of Duties or Tasks Performed: The list contains an item-by-item list of principal duties, continuing
responsibilities and responsibility of the occupant of the position. The list should contain each and every crucial
job duty or responsibility that is significant to the successful performance of the job. The list should begin with the
most important functional and relational responsibilities and continue down in order of significance. Each duty
or responsibility that comprises at least five percent of the incumbent’s time should be included in the list.
• Description of the Relationships and Roles: the occupant of the position holds within the company, including
any supervisory positions, subordinating roles and/or other working relationships.
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6.10 Job Specification

Workload analysis aids in identifying the minimum qualification required to execute a particular job. These may
include academic qualifications, professional qualifications, age, years of experience, relevance and nature of
previous experience, and other skills and attitudes. They structure the minimum eligibility requirements, which the
candidate must have, for the appointment to a job. A lucid indication of specifications helps in creating qualified
applications, because of self-selection. The candidates who do not own those qualifications do not apply. On the
other hand, lack of clear- cut specifications may produce a large number of applications, leading to high costs, in
terms of man-hours, in processing them. There is a great deal of disagreement with respect to developing entire and
correct job specification unlike the job description, which provides more objective consideration of job requirements.
The decision to indicate minimum human requirements for a job is a complex one as it involves sizeable degree of
subjectivity and prejudice.
There is a general feeling that organisations usually tend to establish moderately high requirements for formal
education and training, resulting in a situation where highly qualified people end up doing jobs of routine nature.
Predominantly, in India, highly qualified personnel are recruited for jobs where their abilities, skills and knowledge
are underutilised. Even with these problems, however, minimally satisfactory human requirements need to be specified
for various jobs and category of jobs. The format for job specification should include the following items:
• Position Title
• Education/ Training
• Experience
• Knowledge
• Abilities
• Skills
• Aptitude
• Desirable Attributes
• Contra-indicators, if any
6.10.1 From Job Analysis to Jobless World

Job enrichment means redefinition in a way that increases the opportunities for workers to experience building of
responsibility, achievement, growth and recognition by doing job well.
• Analysing together the job
• Establishing client recognition
• Vertical loading
• Job-Sharing
• Flexible job doing pattern etc.
• Open feedback channels.
Whether specialised, enlarged or enriched, workers’ skills generally like to have specific job to do and the jobs
require job descriptions. But in the emerging organisation today jobs are becoming more amorphous and harder to
define. In other words the trend is towards “do-jobbing in many modern organisations.
Job analysis is the process of job-related data. The data collected will be useful for preparing job description and job
specification. Job description lists job title, duties, machines and equipment involved, working conditions surrounding
a job and the like. Job specification lists the human qualifications and qualities necessary to do the job.
Job analysis is valuable for HRP, recruitment and selection, training and development, job evaluation, remuneration,
performance appraisal, personnel information and safety and health programmes. It also aids analysis of the
organisation structures and the work systems/procedures and contribute towards improving the productivity and
efficiency of the organisation. A rational order to job analysis is job design which is nothing but organisation of
tasks, duties and responsibilities into a unit of work.
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Summary
• Organisation is expressed as a rational coordination of the activities of employees through division of labour,
responsibility, authority and accountability.
• The option of an evaluation method is dependent on the number and kind of jobs to be evaluated, the cost of
the operation, available resources, the scale of accuracy required and the organisations’ environments- both
internal and external.
• Job analysis is the process by which data, with regard to each job, is methodically observed and noted.
• A faintly highlighted, poorly ventilated and crowded place of work hampers efficiency.
• Poor working conditions have been found to cause greater fatigue, negligence, absenteeism, indiscipline and
insubordination among the employees.
• Job analysis should be assumed by trained job analyst working in close collaboration with managers and
jobholders.
• Very frequently, while collecting information people tend to describe those aspects of the job that they are not
doing or would like to do.
• The analyst asks the jobholders questions on the duties and main tasks of their job, usually working from a
previously prepared list of questions as with a questionnaire.
• Information about training needs requires information about the deal of the work so that the trainer can conclude
the critical skills and knowledge that must be improved.
• An objective data gatherer would evade introducing his own ideas, and also avoid describing the employees
performing the job, rather than the “job” itself, for many of the employee’s personal traits may have little or
no significance to the job.
• Jobs in the past were considered to be stagnant and were designed on the basis that they would not change.
• Carrying out job-analysis is a time-consuming and expensive process.
• Data collected for job analysis presents the basis for preparing job description. It refers to the job contents and
the expectations that an organisation has from its employees.
• With non-analytical methods, job description may be more flexible and simpler but most spell out the title
of the job and its position in the organisation summarises the tasks performed and list the skills and abilities
required.
• The information contained in the job description charts out the work, which the incumbent is likely to
perform.
• Information relating to the knowledge, skills and abilities required to execute the work to a tolerable standard,
can be used as a sound basis on which to base standards are procedures for recruitment, selection, promotion
and transfer.
• Analysis of various types of jobs at increasingly more senior levels will point to logical sources of supply for
more senior posts, as part of manpower planning.
• A lucid indication of specifications helps in creating qualified applications, because of self-selection.
• Job enrichment means redefinition in a way that increases the opportunities for workers to experience building
of responsibility, achievement, growth and recognition by doing job well.
References
• Franklin, M., 2005. A Guide to Job Analysis. American Society for Training and Development.
• Hartley, D.E., 1999. Job Analysis at the Speed of Reality. Human Resource Development.
• 2012. What is the Difference between a Job Analysis and Job Description? [Video online] Available at: < http://
www.youtube.com/watch?v=uULVOWjfJPQ> [Accessed 22 July 2013].
• 2012. Why a Job Analysis is Necessary. [Video online] Available at: <http://www.youtube.com/
watch?v=SWRaVp1PJf0>[Accessed 22 July 2013]
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• Job Analysis. [Pdf] Available at: <http://www.prenhall.com/desslertour/chapter3.pdf> [Accessed 22 July

2013].
• Job Analysis. [Pdf] Available at: <http://www.ou.edu/faculty/M/Jorge.L.Mendoza-1/job-analysis-criteria-
reliability-validity.pdf> [Accessed 22 July 2013].
Recommended Reading
• Aswathappa, A., 2002. Human Resource and Personnel Management. Tata McGraw.
• Saiyadain, M. S., 2003. Human Resource Management. 3rd ed., Tata McGraw.
• Peterson, T.T., 1972. Job Evaluation: A manual for Peterson Method. Business Books.
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Self Assessment
1. Job ____________ is the process by which data, with regard to each job, is methodically observed and noted.
a. description
b. specification
c. analysis
d. questionnaire
2. In practice, an _________is nearly always necessary in order to get precise, complete and comparable
information.
a. information
b. ability
c. analysis
d. interview
3. ___________analysis aids in identifying the minimum qualification required to execute a particular job.
a. Workload
b. Organisation
c. Job
d. Work
4. The information contained in the job ___________charts out the work, which the incumbent is likely to
perform.
a. data
b. analysis
c. specification
d. description
5. Job ____________lists the human qualifications and qualities necessary to do the job.
a. data
b. specification
c. description
d. analysis
6. Job ___________means redefinition in a way that increases the opportunities for workers to experience building
of responsibility, achievement, growth and recognition by doing job well.
a. standard
b. attributes
c. enrichment
d. aptitude

a. Carrying out job-analysis is a time-consuming and expensive process.
b. Carrying out job-analysis is a time-saving and inexpensive process.
c. Carrying out job-description is a time-consuming and expensive process.
d. Carrying out job-specification is a time-consuming and expensive process.
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8. A lucid indication of specifications helps in creating qualified applications, because of_____________.

a. job enrichment
b. job-analysis
c. records review
d. self-selection

a. Each activity carries its own set of responsibilities and the employees are given suitable right to perform
these activities.
b. In India, highly qualified personnel are recruited for jobs where their abilities, skills and knowledge are
underutilised.
c. A key output or result of job description is job analysis.
d. Data collected for job analysis presents the basis for preparing job description.

1. Word processing A. It represents a summary statement of what the job involves.
2. Interviews B. Has radically changed the nature of secretarial jobs.
3. Job title C. This is a good approach for such jobs as mechanic or electrician.
4. Review of records D. These are time consuming.

a. 1-D ,2-C ,3-A ,4-B
b. 1-B ,2-D ,3-A ,4-C
c. 1-B ,2-D ,3-C ,4-A
d. 1-A ,2-C ,3-B ,4-D
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Chapter VII
Changing Nature of Roles
Aim
• introduce role descriptions
• explain the need for role descriptions
• explore the changing world of work
Objectives
• explicate role expectations
• enlist the kinds of roles
• elucidate the factors leading to role changes
Learning outcome
• analyse the factors leading to changes needed in role description
• enumerate various approaches to role definition
• understand the importance of roles
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7.1 Introduction
The perception of role and changes taking place in roles can best be understood in the framework of the expectations
an organisation has with its employees. An organisation can be described as the balanced organisation of the activities
of a number of people for the attainment of some common objective through division of labour, hierarchy of authority
and accountability. Such a description highlights the following components of organisations:
• Organisations are rational entities. This means that they have evidently defined goals and most economic means
to achieve these goals. Rationality demands maximisation of returns on minimum investment.
• Organisational goals must be evenly understood, shared, and subscribed to by all the employees in the
organisation.
• A single person does not make an organisation. It requires a minimum of two or more persons to fulfill the
requirements of synchronisation coordination.
• One person cannot do all the roles of the organisation; therefore these have to be completed through division
of labour and function. Each individual has a clearly defined responsibility that is non-overlapping. Along with
responsibility comes the authority to complete the role.
• For every person in the organisation there is a direct supervisor. Subordinates are answerable to their immediate
supervisor. This is true for all the levels in the hierarchy apart from the very top-level employee who does not
have a structurally defined supervisor and the very bottom level employee who does not have subordinates. Given
this general description of an organisation, roles that are clearly defined play a significant part in accomplishing
the goals of the organisation. Roles can be seen in a variety of ways.
7.1.1 Role and Role Dynamics

A role is a set of expectations linked with a job or a position. When roles are uncertain or complex performance
problem can occur. Role ambiguity occurs when someone is unsure about what is expected of him or her. To do any
job; the people need know what is expected of them. Role clarity is vital for every member of the group, but that
is more important for new members. Role ambiguity creates problems and the whole effort is either wasted or not
appreciated. Expecting too much or too little may generate problems.
Role burden occurs when too much is expected and individual feels overloaded with work/responsibility. Role under
load occurs when too little is expected and the individual feels underutilised therefore, a balanced and practical
role load is expected. Role–conflict occurs when a person is incapable of meeting the expectations of others. The
individual understands what needs to be done but for some reasons can not conform. The resulting anxiety can
reduce job satisfaction and this affects both work performance and the relationship with other group members. The
common forms of role conflict are:
• Intra sender role-conflicting which takes place when the same person sends incompatible expectations.
• Inter sender role-conflict occurs when different people send conflicting expectations.
• Person–Job–conflict-occurs when one’s personal values & needs come into conflict with role expectations.
• Inter role conflict occurs when the expectations of two or more roles held by the same individual becomes
mismatched–such as conflict between work & family demands.
One way of managing role-dynamics in any group or work setting is the role negotiation. This is the course through
which individual negotiate to elucidate the role expectation each holds for the other.
7.2 Role Description

Well-written role descriptions identify the work of the organisation and its reasons for existence as an employer of
human resources. Furthermore, they define and help quantify the relative importance of work, what each position
contributes to a process and the organisation as a sum total. This definition demonstrates an essential point pertaining
to role descriptions. Used in today’s work environment, they describe not only what the role is all about but also
how it contributes to the work of the organisation. They explain the nature of the work to be done by stating the
rationale and main responsibilities. They may also include information on the type of person who is best suited to
perform the job. Role descriptions are a helpful resource. They have the potential to be a valuable organisational
tool, however, to realise their potential they must be correctly monitored.
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There are two main types of role descriptions, the generic or general and the specific or individual. Generic role
descriptions are written in widely declared general terms without identifying specific responsibilities, requirements,
purpose and relationships. Some organisations use standard role descriptions for the same level within an organisation.
For specific positions an extra duty statement may be developed. Specific role descriptions present information on
all important responsibilities assigned to the person performing the role. They are usually quite detailed and wide-
ranging.
Following are some of the important ingredients of roles:

• A role description must be precise but not a minutely detailed list of an employee’s tasks and duties.
• Role descriptions are meant to be a guide only staff must not deduce them rigidly or role descriptions become
an obstacle to success they are just a ‘map’ that shows direction.
• Roles may show the authority that the employee must be provided to achieve the role expectations.
• Roles may also state the areas of accountability.
• Roles accomplishment or otherwise may become the basis for rewarding or reprimanding the employees.
7.3 Kinds of Roles

In the late 1960s, a graduate student at MIT, Henry Mintzberg, undertook a watchful study of five executives to
conclude what they did in their jobs. Based on his observations of these executives, Mintzberg concluded that they
execute ten highly different but interconnected roles, or sets of behaviours, attributable to their roles. These ten
roles can be grouped as being chiefly concerned with interpersonal relationship, the transfer of information, and
decision-making. The three groups and specific roles within each of the groups are given below:
7.3.1 Interpersonal
Following three roles are included in this group:
• Figurehead: Symbolic head, required to perform a number of routine duties of a legal or social nature;
• Leader: Responsible for the motivation and direction of subordinates, and
• Liaison: Maintains a system of outside contacts who provide favours and information.
7.3.2 Informational
Following three roles are included in this group:
• Monitor: Receives wide range of information; serves as nerve center of internal and external information of
the organisation;
• Disseminator: Transmits information received from outsiders or from other subordinates to members of the
organisation, and
• Spokesperson: Conveys the information to outsiders on organisational plans, policies, actions, and results; serves
as experts on organisation’s industry.
7.3.3 Decisional
Following four roles are included in this group:
• Entrepreneur: Searches organisation and its environment for opportunities and commences projects to bring
about transformation;
• Disturbance handler: Responsible for remedial action when organisation faces significant, unforeseen
disturbances;
• Resource allocator: Making or approving noteworthy organisational decisions, and
• Negotiator: Responsible for representing the organisation at main negotiations.
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7.4 Need for Role Descriptions

An exact and detailed role description is progressively becoming a central factor of the effective use of helpful
human resources in libraries and other organisations. It is needed because of the following reasons:
• The primary function of a role description is as a communication tool. It efficiently communicates a great deal
of information about a role, particularly between the manager and the employee.
• When employees have a road map to success they often execute much better and that translates into continued
business expansion for the organisation.
• They include reporting relationships; skill requirements; major responsibilities; where the role fits into the
organisation and what is necessary of the position. This permits them to use the information in relation to many
human resource functions such as recruitment, induction, training and performance management.
• Well-written role descriptions also provide information to potential employees about organisational expectations
of a specific role. This helps in attracting and retaining employees who know about the customs of the organisation
and what is expected of them.
7.5 Uses of Role Descriptions

Role descriptions have the potential to be used for a number of human resource functions. Some of these are given
below:
• Role descriptions may be used for selection and recruitment like, to advertise roles, screen applicants, develop
questions for the role interview and recognise essential and advantageous criteria.
• Role descriptions aid in induction and orientation and provide a good beginning and outline of the role, which
enables the employee to comprehend what the organisation expects of them.
• Role descriptions allow the employee to see where they fit into the larger picture of the organisation, and how
their role contributes to the organisation.
• Role descriptions may identify preliminary training requirements for a new employee. If they are included in
a performance management system they may be used as a help in identifying training to improve performance
or supplementary training needed as a result of varying responsibilities.
• Role descriptions are the basis for an effectual performance management system and are used in carrying out
performance reviews or role evaluations.
• A study of role descriptions can help employees establish what qualifications, experience and skills are needed to
be relevant for different positions within the organisation. This information can then be used in career planning
or development.
Additionally they can be used for the following purposes:

• Orienting new employees on what their subordinates and superiors do
• Analysing work flows and methods
• Mentoring the employees
• Dealing with industrial relations
• Job restructuring
• Organisational and personal goal setting
• Conducting an organisational audit
• Defining or reviewing organisational structure
• Measuring accurate salary administration
• Quickly preparing substitute workers or temporary help.
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7.6 Changing Roles: Approaches
Of late there has been an attempt to scrutinise role in a special manner. Much of this thinking has been the consequence
of new light being shed on varying management practices: Some of these attempts are presented below:
7.6.1 Skill Behaviour Matrix

British Petroleum replaced role descriptions with a matrix reflecting skills and behaviour. This matrix focuses on skills
and behaviours rather than individual roles. Each skill matrix explains steps in the career ladder, from the lowest to
the highest, along the vertical axis. The horizontal axis describes the skills and competencies that are compulsory
for each step. It is argued that skill matrices vary considerably from role descriptions. They denote roles and levels
of performance rather than roles in a box. Through this system managers know what to expect of their employees
and employees know what the organisation expects of them.
7.6.2 Configuration Matrix

Another approach looks at the role descriptions by defining roles in terms of a ‘contribution matrix’. This matrix
identifies team outputs and contribution made by each member within a team. Decided outputs are written along the
vertical axis and team members names along the horizontal axis. Under each output the processes and contributions
made by each team member are listed. The output is then allocated to the person who has the overall responsibility.
Following are some of the advantages of this approach:
• It focuses on the whole department rather than the individual role,
• It integrates team involvement,
• It can be used to show use of resources, and
• It is a good medium to identify enhancement opportunities.
7.6.3 Other Approaches

Other than these approaches the shifts in some of the usual role responsibilities to more current descriptions are
presented below:
• There is a shift, from description of duties to description of responsibilities. Duties symbolise the methods by
which the responsibility areas are accomplished. Responsibilities are like mini-roles that must be carried out
to get the total role fruitfully completed. In a quick changing work environment, responsibility areas usually
stay constant whereas, duties change frequently with progress in technology and improvements in processes.
Focusing on duties make it complex to keep a role description modern and does not embody the accurate
nature of the role to be performed. When focusing on responsibilities it is central that these relate to meeting
organisational objectives.
• The focus is on what the person is required to do and entails looking at the role from an inside out approach.
Nevertheless, when focusing on the end results it implies looking at the role from an outside-in approach.
Focusing on end results helps employees realise why the work is important. Knowing the results also allows
employees to notice new ways to realise results thereby encouraging initiative and resourcefulness.
• Earlier, the department wrote role descriptions with little or no input from the employee really doing the role.
Today’s role descriptions are typically written by the affected employees and managers. The department now
provides a consulting role in the progress of role descriptions and their role is to show managers how to describe
roles. This approach provides a more precise role description, as it is the employees and managers who have the
best insight into the role and are conscious of the responsibilities and results expected. Employee participation
in describing their roles also creates ownership.
• Role is not meant to list every duty an employee performs. However, in the past many roles included statements
such as and other duties and responsibilities that may be required on either a temporary or permanent basis.
This allowed managers to change duties or add duties without discussing this with employees. In today’s
organisations roles are marketed differently in that they are promoted to staff as a role summary outlining the
key responsibilities, not all the duties that need to be performed. Changes to these responsibilities are discussed
between the manager and employee.
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• If roles are to be used as a career development tool they need to be accessible for all staff contained by an
organisation. Some organisations make them available on-line through their intranet. This often was not the case in
the past where roles were only available to the person doing the role, their manager and senior management.
• Conventional roles were often described in a way that implied complete autonomy from other positions within
the organisation and were very distinctive in nature. It was not quite lucid how a particular role is related to
other positions and processes within the organisation. This type of description supports independent rather than
group action. Today roles need to mirror the interdependence of processes and persons within the organisation.
If the organisation is based on teams and employees are expected to work together to achieve objectives and
goals, this needs to be reflected in the roles.
• Roles were often only evaluated when a role became unoccupied or newer duties were added. In today’s work
environment roles are incorporated into the organisations performance management system in order to make
certain they are reviewed often with the employee. This preserves currency, accuracy, application and usefulness
of the role description.
• It was stated that roles are not a work schedule; nonetheless, in the past many indicated how much time is
spent on different tasks. In today’s work environment time percentages or frequency have been replaced with
performance measures or indicators, which offer a clearer indication of what is expected from the role.
7.7 The Changing World of Work

When taking into account a career action one needs to review the changes happening at the workplace. Most
employment environments are changing from what they have been once. Here are some of the repercussions of
these changes for roles and careers.
• Previously future was fairly predictable. Today there is less certainty and more vagueness in roles.
• Earlier there was a move to a specific job. Now the focus is on matching oneself to work contents based on
one’s values.
• In the past there was an effort to carry prearranged tasks. Today there are repeated changes in the task and better
focus on teams working.
• There was a time of constancy in work situation. Today the needs of the organisations are always changing.
• Traditionally having one job title was the prerequisite. Now there is a variety of roles and a person may execute
many functions.
• In the past employees joined one occupational stream and retired from the same. Nowadays, organisations are
persisting on transferring skills into many work fields.
• Previously change was evaded. Today change is embraced.
• Earlier career success was defined by others. Today the value of the job is realised by individual employee
himself/ herself.
7.8 Factors Contributing to Role Changes

Given the altered situation there is a need to change and / or adjust the roles. Some of the chief factors contributing
to the need for change are technology, information processing, competition, changing gender profile of workforce
and varying culture.
7.8.1 Technology Upgradation

Technology continues to advance rapidly offering wider choices. There are very refined machines that provide brisk
output with zero defects. Manual work has been replaced by mechanisation. Machine upgradation is occurring at
a very quick pace, and hence there is an insistent need to improve the skill level of the employees. They need to
be frequently sent for training programmes to keep them updated. Many persons in accounts still count on fingers,
even though their roles have changed to using computers for accounts purposes.
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7.8.2 Information Technology
Today a great deal of the focus is on Internet and World Wide Web. Information technology has brought a revolution
in access, storage and recovery of information. Electronic mail is making it easier to seek direction and guidance
from specialists around the world. Shift from printed information to electronic exposure has resulted in multimedia
information service. None of these applications of information technology can be achieved without trainers and
users having the fitting skills. It will therefore be critical not only to develop program to develop the skills of users,
but ensure that the information professional has the skills to be able to change roles. With the accessibility of high-
speed networks, new services and applications, training becomes an even more burning issue.
On top of this there is a need for improvement of information and knowledge handling in the “subject content”.
Content is king, without quality data any system is devoid of use.
7.8.3 Competition
With the globalisation and creating a world without border competition has become the force to reckon with. It has
given boost to consumer preferences, better product quality expectations, and trustworthy service. Just about 20
years ago, there were only 2-3 models of cars. Today we have as many as 30-35 models accessible in the easiest
possible way. Business executive cannot afford to live in their own world and sell whatever they produce. It is a
buyers’ market now. They have to get out from the comforts of their offices, identify customers’ preferences and
satisfy them before they lose out in the competition.
7.8.4 Women in Work

Taking care of others is the most important role of women. Usually, women have tended the home. It was their
responsibility, honour, and obligation to dedicate themselves to the young, the sick, and the elderly. Women were
raised to be “good wives and wise mothers,” and still are. Yet there is a silent revolution going on. Women make
up 40 percent of the labour force. More than half of all the married women work. Management positions held by
women in India have doubled as compared to ten years ago. This figure still represents only about 1 percent of all
management positions, as opposed to over 10 percent, as is the case in the United States. Moreover, women are
detaching their traditionally subordinate roles and using the courts to affirm their rights. If one goes by the number of
women students in professional courses, their number in workforce is going to enlarge. Hence some of the traditional
roles have to be customised to suit the requirements of female workforce.
7.9 Role Expectations

Some of the emerging role expectations are presented below:
• Top leaders and managers must serve as learning roles models by sharing their own learning goals and by persuade
others to learn. They should also recognise the need for individual learning for all levels of employees.
• Individual employees have to acknowledge responsibility for their own careers and their own individual learning.
They should not wait to be taught nor expect the organisation to provide career paths.
• Learning and personal growth must be dynamically encouraged and rewarded. There must be incentives for
individuals to broaden their abilities.
• The “not invented here” disorder should not practiced by individuals. There should be regular inspection of the
internal and external environment for new ideas and trends that will bring about improvement and expansion.
• Employees must be held responsible for their performance and fineness must be rewarded.
• Procedures and policies must be in place to ensure continuing and timely reevaluation of changing job skill and
requirements. Roles and job requirements must be scrutinised frequently to precisely reflect the work being
performed or skills required.
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The idea of role can better be understood in the background of the expectations an organisation has with its
employees. A single person does not make an organisation; it requires two or more persons to fulfill the requirements
of coordination. One person cannot do all the roles of the organisation. Each individual has a noticeably defined
responsibility which is entirely unlike the others, along with responsibility comes the power to complete the role.
Each role has its written descriptions defining the work of the organisation and its reasons for being, as an employer
of human resources. There are different kinds of roles; these are interpersonal, informational and decisional. These
roles can be grouped as being mainly concerned with interpersonal relationship. The role of description is needed
as a communication tool; it efficiently communicates a great deal of information about a role, particularly between
the manager and employee. Role descriptions have the potential to be used for selection and recruitment, induction
and orientation, analysing work flows and methods, job structuring, etc.
Roles will be changing from time to time according to existing situation. There is a shift from description of duties
to description of responsibilities; when considering a career action one needs to assess the changes occurring at
the work place. Most employment environments are changing from what they have been once. Some of the major
factors contributing to the need for change are: technology, information processing, and competition, changing
gender profile of workforce and changing culture. Roles and job requirements must be examined often to accurately
reflect the work being performed or skills required.
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Summary
• An organisation can be described as the balanced organisation of the activities of a number of people for the
attainment of some common objective through division of labour, hierarchy of authority and accountability.
• Role clarity is vital for every member of the group, but that is more important for new members.
• Role burden occurs when too much is expected and individual feels overloaded with work/responsibility.
• Role–conflict occurs when a person is incapable of meeting the expectations of others.
• Well-written role descriptions identify the work of the organisation and its reasons for existence as an employer
of human resources.
• Generic role descriptions are written in widely declared general terms without identifying specific responsibilities,
requirements, purpose and relationships. Some organisations use standard role descriptions for the same level
within an organisation.
• An exact and detailed role description is progressively becoming a central factor of the effective use of helpful
human resources in libraries and other organisations.
• Responsibilities are like mini-roles that must be carried out to get the total role fruitfully completed. In a quick
changing work environment, responsibility areas usually stay constant whereas, duties change frequently with
progress in technology and improvements in processes.
• Role descriptions may identify preliminary training requirements for a new employee.
• Role is not meant to list every duty an employee performs.
• Conventional roles were often described in a way that implied complete autonomy from other positions within
the organisation and were very distinctive in nature.
• In today’s work environment roles are incorporated into the organisations performance management system in
order to make certain they are reviewed often with the employee.
• Technology continues to advance rapidly offering wider choices.
• Manual work has been replaced by mechanisation.
• Today a great deal of the focus is on Internet and World Wide Web. Information technology has brought a
revolution in access, storage and recovery of information.
• With the globalisation and creating a world without border competition has become the force to reckon with.
• Management positions held by women in India have doubled as compared to ten years ago.
• Top leaders and managers must serve as learning roles models by sharing their own learning goals and by
persuade others to learn.
• Individual employees have to acknowledge responsibility for their own careers and their own individual
learning.
References
• Pulakos, E.D., 2009. Performance Management: A New Approach for Driving Business Results. John Wiley
& Sons.
• 2011. What is Performance Management. [Video online] Available at: <http://www.youtube.com/
watch?v=8XT6rAJOpcs> [Accessed 22 July 2013].
• 2013. Organisational Performance Management. [Video online] Available at: <http://www.youtube.com/
watch?v=6tTUGzh0X1w>[Accessed 22 July 2013]
• Role expectations, the actual role performance and administrative effectiveness. [Pdf] Available at: <http://
www.ozelacademy.com/ejes_v3n1/EJES_v3n1_19.pdf> [Accessed 22 July 2013].
• Role Dynamics, Locus of Control, and Employee Attitudes and Behavior. [Pdf] Available at: <http://amj.aom.
org/content/19/2/259.short> [Accessed 22 July 2013].
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Recommended Reading
• Aguinis, H., 2008. Performance Management. 2nd ed., Prentice Hall Higher Education.
• Rao, T. V., 2004. Performance Management and Appraisal Systems: HR Tools for Global Competitiveness.
SAGE.
• Varma, A., Budhwar, P.S. & DeNisi, A. S., 2008. Performance Management Systems: A Global Perspective.
Taylor & Francis.
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Self Assessment
1. Organisations are ____________entities.
a. direct
b. generic
c. rational
d. general
2. Role ___________occurs when someone is unsure about what is expected of him or her.
a. conflict
b. restructuring
c. load
d. ambiguity
3. ___________role descriptions present information on all important responsibilities assigned to the person
performing the role.
a. Dynamic
b. Specific
c. Generic
d. Decisional
4. Who is responsible for making or approving noteworthy organisational decisions?

a. Entrepreneur
b. Leader
c. Negotiator
d. Resource allocator

a. Role conflict occurs when too much is expected and individual feels overloaded with work/responsibility.
b. Today roles need to mirror the interdependence of processes and persons within the organisation.
c. Many persons in accounts still count on fingers, even though their roles have changed to using computers
for accounts purposes.
d. Role descriptions are the basis for an effectual performance management system and are used in carrying
out performance reviews or role evaluations.
6. ____________are like mini-roles that must be carried out to get the total role fruitfully completed.
a. Conflicts
b. Flows
c. Responsibilities
d. Behaviours
7. ____________continues to advance rapidly offering wider choices.

a. Responsibility
b. Technology
c. Role
d. Conflict
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a. Role is meant to list every duty a manager does not perform.
b. Role is meant to list every duty an employee does not perform.
c. Role is meant to list every duty an employee performs.
d. Role is not meant to list every duty an employee performs.
9. Role _____________is vital for every member of the group, but that is more important for new members.
a. clarity
b. conflict
c. responsibility
d. analysis

A. This occurs when the expectations of two or more roles held by the same
1. Roles
individual becomes mismatched such as conflict between work & family demands.
2. Intra sender
B. These will be changing from time to time according to existing situation.
role-conflict
3. Liaison C. Maintains a system of outside contacts that provide favours and information.
4. Inter role
D. This takes place when the same person sends incompatible expectations.
conflict
a. 1-B ,2-A ,3-D ,4-C
b. 1-A ,2-B ,3-D ,4-C
c. 1-B ,2-D ,3-C ,4-A
d. 1-B ,2-A ,3-C ,4-D
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Chapter VIII
Human Resource Information Systems
Aim
• introduce the concept of HRIS
• explain HRIS as a tool
• explore effectiveness of HRIS
Objectives
• explicate technology shifts and HRIS
• enlist the advantages of computerisation
• elucidate the need for HRIS
Learning outcome
• analyse the approaches to managing information at micro and macro levels
• enumerate the demerits of manual information systems
• understand the importance of information systems in HR management
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8.1 Introduction
An information system is an inter-related set of procedures and processes to present information for decisions.
Information is data that has been processed so that they are meaningful. It adds to the depiction of an idea or initiative.
It approves and validates earlier information. It tells us something which we did not know. Various organisations
have computer-assisted information systems. An information system particularly developed for human resource
management is referred to as HRIS – human resource information system. Human resource management, when it
doesn’t contain the human resource planning function, entails merely a basic and fundamental HRIS. If this basic
HRIS is computer-supported, it is likely to consist of a transition processing system or management information
system. An information system provides for the buildup by gathering, processing by deleting irrelevant information,
deciding among differing information and putting the information in a coherent array that promotes its understanding.
Finally, the information is stored in a readily available pattern.
Information is maintained by ensuring its security and by revising it. Information is conveyed to the probable users
in an arrangement and at a time most suitable for its use.
8.2 Concepts of HRIS

HRIS is a key management means which collects, maintains, analyses and reports information on people and jobs.
It is a system, since it combines all the significant data, which otherwise might have been lying in a fragmented and
scattered way at several points in the larger system; converts this data into consequential conclusions or information
and makes it available to the persons, who require it for their decisions. This assimilation of data can be at the
macro level at the level of a nation or geographical regional groupings- or at the micro level, that is, at the level of
an organisation or firm.
Macro level HRIS is usually focused towards manpower planning and contains statistical information on population,
technology and economy. Such information can be acquired from several sources like publications of the Planning
Commission, Ministry of Labour, The National Sample Survey Organisation, The National Labour Institute, The
World Economic Forum, International Labour Organisation etc. just to name a few.
At the micro level, the information requirements include sections on recruitment, personal data, skills estimation,
training and development, performance appraisal, rewards and punishment, grievance handling and so on. This
information is used for comprehending the patterns of HR policies, actions, and employee behaviours as well as
for discovering gaps in the HR system and the efficiency of the HR system.
8.3 Need for HRIS

At the macro level, HRIS is vital for successful planning and budgeting of national resources. Based on HRIS, the
Government and other agencies concerned with manpower planning and manpower productivity, such as the central
and the State Governments, AICTE or educational institutions etc, can build up proper strategies to amplify the
numbers as well as the employment of the pool of people accessible for jobs. Efforts can be made to build up the
required skills and competencies amongst the labour pool to assemble the national/regional requirements by allotting
sufficient budgets on the foundation of their expected optimal use. The latest initiatives of the Indian Government
to improve the regional engineering colleges to IIT standards, or to craft centres of excellence, or invest in bio-
technology research etc. are all results of a national level information base concerning the trends in the demand and
the predictable supply of manpower made possible because of an HRIS at the macro level. At the micro or enterprise
level, HRIS has become vital for decision-making and strategy formulation as well as for making certain justice and
impartiality in HR policies and practices. There is a rising realisation that for organisational survival and growth
in a competitive environment, human resource is the most vital resource. This coupled with the raise in the cost of
hiring, retaining, developing and motivating people to execute at their best has pressed organisations to base their HR
decisions on sound reason and thus, on suitable information. HRIS becomes a chief asset from this viewpoint.
The mounting need for lucidity among the employees and the society is an additional factor that is compelling
organisations towards apt management of information in every area, including HR.
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As the economies are becoming further knowledge determined and thus, moving towards more qualified and
educated workforce, it is being progressively more realised that better-information makes employees more concerned,
connected, and productive. A foremost source of connect between the employees and their companies is during the
information that they receive and the feedback that they supply. Information management, in common and HRIS
in particular, thus, has become a critical factor in managing employee performance.
Companies are ever more realising the gain of having systems that capture, examine, and report on the host of
human resource aspects that are significant to running a business and share it with the employees so that they self-
regulate their input. HRIS is a device to accomplish this objective. Finally, in human management, insight of equity
and justice are exceedingly important for managerial integrity and employee satisfaction. As a result, HRIS, which
helps in recognising policy effects as well as the outline of policy implementation at various locations, by different
people at different points of time, aids in detecting infringements of equity.
8.4 Technology Shifts and HRIS

Technological advancements have resulted in a spectacular modification in consumer relations and the methods of
service delivery. Consumers are at present experimenting with new ways of performing business. Take, for instance,
developments as regards the automated teller machines (ATMs). Over the course of their more than 15-year history,
ATMs have developed to supply basic banking services 24 hours a day 7 days a week. Finally, innovative technology
is bringing banking services straight to the customer’s home. In the medical industry, growing costs have amplified
the accessibility of at-home diagnostic equipment and tests.
Software packages let people assemble their own wills, and even design the house of their dreams. Changes, such
as those described above, in the outside environment have grave repercussions for strategic planning within the
organisation, particularly with regard to the human resource planning and service delivery functions. As in other
cases, mentioned above, in the work-related matters to the employees are expecting superior speed, clearness
and empowerment. These in turn, need higher availability and access to the information about their organisation,
their work, themselves and their colleagues. Some changes that have taken place inside organisations to fulfill the
prerequisite of speed and quick response have been well recorded. Organisations have been reorganised through
downsizing, rightsizings, and re-engineering that trim the work force, remove middle management, compress the
organisation, and develop communication and decision making functions. However, proper information management
and communication planning is seen to be the most vital and sustainable move to convince employee expectations
of self-regulation, higher control over their work-life, and greater chance to contribute to the organisational goals.
HRIS is, as a result, frequently seen to be an imperative in a fast changing technological environment.
8.5 Effectiveness of HRIS

According to Tang et al., the key to the effective planning of manpower and improvement of people productivity is
an effective HRIS. However, in order to be effective an information system must take into account the following:
8.5.1 Adequacy of Information

Too much or too little information, both lead to faulty decision-making. Therefore, there must be some understanding
regarding what information and in how much detail and covering what periods should be upheld.
8.5.2 Specificity
Even where it is not likely to quantify the information, the information should be made as definite as possible.
8.5.3 Relevance
Information is to be managed in the light of the requirements of the decision makers. Therefore, HRIS should focus
on the needs of the decision-makers and stakeholders rather than on what is appealing or easily available or palatable
to the people. The system, therefore, must also have the built in potential for deletion and revision of data.
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8.5.4 Comprehensiveness
The information should be complete from the point of view of the decision-maker giving details of who, what, how,
when, where and why.
8.5.5 Reliability
Since the information is going to be the foundation of critical decisions, it must satisfy the requirements of validity
and reliability.
Furthermore, to ensure effectiveness, not only should the information provided be applicable and reliable but the
delivery system should also be the most satisfying and cost efficient. A wealth of information but not accessible
when needed or available at a restraining personal cost in terms of energy and time, is of barely any use. HRIS,
thus, is not just a matter of gathering data but also of ensuring data excellence and understanding and the quality of
delivery of information to the users.
8.6 IT supported HRIS

In today’s enterprises, HRIS are characteristically Information Technology (IT) supported systems. This is not to
say that without IT HRIS cannot be initiated. But information technology permits a great deal of usefulness of HRIS
than a manual system. Some of the deficiencies of the Manual Systems which an IT based HRIS overcomes to a
substantial degree are given below.
8.6.1 Deficiencies of the Manual System

The deficiencies of the Manual System are given as follows:
• High Investment of time: In manual systems, the entry, updating, maintenance, and retrieval of information are
all time consuming.
• Accuracy: The manual transfer of data, and multiple entries of the same data increases the chances of error.
As a result, the accuracy and reliability of the manual system is suspect. Moreover, verification of data, and
corrections in it are time consuming.
• Fragmentation: Manual Information Systems are often fragmented with several pieces of related information
being physically placed in different places. This too makes retrieval difficult.
• Duplication: More often than not, the same data may be held by different personnel but in different forms. If
any changes are to be made then they need to be made at all the points which lead to duplication of effort.
• Difficulty of analysis: The manual analysis of data is time consuming and cumbersome. The difficulty in extracting
information promptly from manual systems considerably reduces both, the efficiency and the effectiveness of
the system.
8.6.2 Advantages of Computerisation

While it is insolent to suppose that computerisation automatically remedies all the problems linked with manual
systems, in the fast changing technological and information processing environment, it does present some potential
benefits.
• Convenience: In IT enabled systems, data entry, update and retrieval are all notably faster. Outmoded data may
be effortlessly replaced.
• Integration: A computerised system can significantly shrink fragmentation and duplication of data. All data can
be accumulated in a single system to facilitate recovery of entire picture of each employee or of each defined
parameter in a desired number of permutation and combinations. Furthermore, depending on the requirement,
reports can be generated in different ways that supply an exact representation. Verification of data and error
refinement are also moderately easy in computerised systems.
• Multi-user benefit: Diverse people can access the data concurrently, which facilitates quick distribution across
geographical and structural boundaries and assists in quicker decision-making. Additionally, on-line data entry
is achievable that leads to automatic up-dating of data resulting into improved informed decisions. Nevertheless,
to achieve these advantages, it is central that the knowledge and know-how is accessible to the organisation,
internally or from outside, to develop and tailor- make the system to go with the organisation’s unique needs.
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8.7 Designing and Implementing HRIS
According to Mathis and Jackson to design and execute an efficient HRIS, the following are required: Details about
the required data, such as:
• What information is available and what needs to be collected?
• To what use this information be put?
• In what format this information be presented?
• Who should have access to what information?
• When and how often this information is needed?
The answers to these questions will help in the choice of both the hardware and the software.
8.7.1 Formation of a Project Team

It is valuable to ascertain a cross functional project team to review user needs, recognise desired potential of the
system, request and scrutinise bids from software and hardware vendors and identify the accomplishment procedure
required to set up the system.
8.7.2 Training of those who will be Managing and using HRIS

Both to ensure proper inputs into the system and valuable outputs from the system, training of users are advantageous.
In some of the firms, where HRIS has been fruitfully executed, a complete team of trainers was established to give
appropriate training to the employees.
8.7.3 Ensuring Security and Privacy

Proper controls must be built into the system to defend the privacy rights of the employees. They are needed both
for getting employee recognition as well as for legal and ethical protection against arbitrary usage of information.
8.8 HRIS as a Tool

HR data are extensive in their diversity, and consist of job history (transfers, promotions, etc.), current and historical
pay details, inventories of skills and competencies, education and training records, performance evaluation details,
absence, lateness, accident, medical and disciplinary records, warning and suspensions, holiday entitlements, pensions
data and termination records. An HRIS usually provides an electronic database for the storage and recovery of this
data which is, at least potentially, obtainable to anyone who may want to access it. The imperative issue however,
is how this IT system is really used in carrying out the HR tasks and for what reason.
This relates to the philosophy behind HRIS. Zuboff distinguishes between the “automating” and “informating”
capacity of IT. The term “automate’’ is related with the design of substitution of human agency by technology to
save physical and mental labour involved in carrying out an activity. From this perspective, an HRIS can be used as a
means to improve effectiveness of HR information management by raising the pace of decisions, communication of
decisions, and also the decline of overhead costs by task mechanisation and process automation, so that the number
of HR specialists needed goes down.
Handled with concern, this can result in an enhanced HR service, by offering a quicker service and better quality
and steadiness of information (Hall and Torrington, 1989). For example, it is possible that an employee obtains a
note from the human resource department requesting feedback on the employee’s manager. The employee goes to an
employee kiosk, identifies him-or herself, uses the one-time-only PIN number enclosed in the note, and completes
the questionnaire. Likewise, an employee uses a phone to request a pension calculation. The automated system asks
for different inputs that are made by pressing the telephone buttons. At the end of the interchange, the employee is
given a time when a personal pension advisor will call and present a detailed report of the calculations. The employee
later on receives the pension calculation at the printer in the employee kiosk, while talking to the counselor.
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While the automating potential of IT can develop competence in a lot of ways, it is still rooted in the “direct control’’
mind-set of the conventional organisations. Since employees’ activities and levels of productivity can become
more “transparent’’ to the line or HR manager, the system facilitates close regulation and monitoring of tasks and
people.
However, to realise the complete potential of the HRIS, it is essential that the system be used as a means for
empowering employees rather than as a means for stricter control. This needs use of, what Zuboff calls, the
“informating” capability of IT. This is the capability of IT to put together large pools of individual data into combined
information regarding trends and patterns, which can be effortlessly shared across the boundaries of departments
and geographical locations. Whether HRIS will be used as an “informating” tool or not, however, depends on the
philosophy of the organisation which decides what information will be made accessible and to whom.
Adopting an “automating” strategy assumes that the system itself is competent of handling many decisions. Its
focal point, therefore, is on reducing the input of human operators and ultimately to restore them altogether, as
far as possible. With respect to HRIS, thus, automating strategy involves computerisation of data management to
restore employees as far as possible with machines and to augment the observation of employees through real time
information. Access to the database in such a case is limited to the HR specialists and they use the data to scrutinise
and implement direct control over employees.
Adopting an “informating” strategy involves providing employees with access to information generated from more
powerful IT tools, so that they can make enhanced decisions based on their distinctive human capacity to deduce
and adjust to the particular situation. IT would be used as an enabler for the managers to put together their objectives
with wider corporate objectives and to permit individual employees to access applicable parts of the HRIS to find
out for themselves information about their job, training and career structures, remuneration, terms of conditions
of employment and organisational plans for employee participation. This way, the employees can become more
“empowered’’, having better control over their work and work-lives. Nevertheless, in order to act as an efficient
motivation towards the introduction and preservation of a culture of empowerment, HRIS system would necessitate
several well-matched information and communication technologies. The HRIS would need to be designed to function
beyond the typical functional HR department boundaries, by extending access to the line management and individual
employees. Sometimes, it may even have to go beyond the organisational boundaries, for example, in those cases
where some of the HR activities have been outsourced.
8.9 Prerequisites for Introducing “Informating” HRIS

Generally three types of conditions must prevail to allow the use of HRIS as a tool for empowerment. These are:
The Corporate Climate, An Enlightened Human Resource Function, and The Technology Platform. All three must
be in place or just around the corner before the new HRIS is practiced.
8.9.1 The Corporate Climate

The corporate culture must be favorable to employee empowerment and, thus, to a flatter organisation arrangement.
Introduction of transformational HRIS in large bureaucratic organisations, therefore, requires some degree of change
towards, downsizing, team work, procedural review and reduction.
8.9.2 An Enlightened Human Resource Function

The human resource function must be enlightened and ready to serve. Where HR functionaries view themselves as
controllers and auditors rather than as service providers and enablers, HRIS cannot be introduced as an empowering
instrument. The fear of marginalisation will set off resistance and conflict from the HR function itself and if thrust
upon, will lead to estrangement among the functionaries.
8.9.3 The Technology Platform

The technology platform obtainable or planned for, must be capable of allowing the necessary connectivity. This
includes the networks to move the data as well as employee PCs and kiosks for data input and access. To be efficient,
the system has to constantly reach every employee through multiple channels.
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8.10 HRIS Leadership
According to Joseph Collette (2001) the traditional reactive staff role of HRIS and HR leaders needs to become
more practical and tactical in nature, if “informating” HRIS is to be flourishing. As a result, those leading the HRIS
proposal must have some key competencies like, strategic vision, hands on technical skills, HR business acumen,
and the aptitude to influence and negotiate, team leadership ability, and project management skills.
8.10.1 Vision
It is fundamental for today’s HRIS leaders to have the vision to see the big picture and be forward thinking. Having
vision means being able to take existing technologies and processes and generate a blue print of how they will fit
together. In creating the blue print, one must strongly believe how the blue print will contribute to achieving business
objectives and goals, thereby making the HR organisation more tactical and building competitive advantage. Vision
is the first prerequisite for implementing technologies that will fit into the overall business plan and be consistent
with long term goals.
8.10.2 Technical Skills

In order to determine and help set up the vision, a meticulous understanding of the technical landscape is required.
It is vital to understand which technologies to apply and which ones not to. Sometimes the best technical decisions
made are the ones in which one chooses not to assume or implement a particular technology. Keeping up and
staying in progress with available technologies to apply to different situations is essential in being able to make
solid recommendations. The better informed an HRIS leader is more choices he/she will be able to provide when
making solutions for the business.
8.10.3 Business Acumen

Understanding the requirements of the business is important for delivering solutions that attach value. In order to
create a vision that supports the goals of the HR organisation, HR must speak the language of the business as well as
speak the technical terminology. The role of HRIS is technical in nature but its major rationale is to provide support
for the business objectives through HR information management.
8.10.4 Ability to Influence and Negotiate

Successful technology implementations require the assurance of resources both financial and human. Securing these
resources requires the support of higher management. Also, with new technology, usually comes a fresh process.
Process change needs to have support from the highest levels of the organisation. In addition to the aptitude to
influence, there is also generally a need to discuss the resources required. HRIS leaders have to be respected within
management circles in order to productively influence and negotiate for required resources.
8.10.5 Team Leadership

The process of organising and implementing technology initiatives should engage cross-functional teams of
professionals with various backgrounds and levels. Managing this team requires ability to inspire and inspire an
assorted group of people. Also, since the HRIS leader can’t do it all, a strong team must be built and fostered in
order to make possible the successful completion of a variety of tasks, both functional and technical in nature. It
is the function of the HRIS leader to encourage the group’s cohesiveness and resolve any personnel conflicts that
may occur.
8.10.6 Project Management

In the end, it’s project management skills that are required to execute and deliver on the vision, ideas and initiatives.
The HRIS leader should be efficient in organising, directing and planning the projects. This includes mobilising the
required resources, setting timelines and milestones, monitoring and reporting progress to senior management and
project stakeholders, and being able to focus on key individual project components as needed. As with any project
lifecycle, the HRIS leader must make effectual use of constant feedback and evaluation methodologies in order to
correctly study and regulate project initiatives to ever changing environments and business requirements.
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8.11 Conclusion
Information is the raw material of planning. A quality planning effort cannot be accomplished without sound and
sufficient information. Information is provided in an organisation by an inter-related set of procedures and processes
known as an information system.
An information system particularly developed for the human resource management function is called an HRIS – a
human resource information system.
There are certain basic requirements upto which the information must match. At the macro level, although there
exists institutional arrangements for providing manpower data, but the need for improving the effectiveness of
human resource planning and policy has been articulated at several forums.
At the micro level the significance of having a well-defined and disconnected manpower information system within
the organisation has been emphasised. The point has been made that at the enterprise level there is need for a wide-
ranging human resource information system. In this situation, the deficiencies and shortcomings of manual human
resource information system have been noted in order to build up a clearer outlook for going in for a computerised
personnel record system. Several benefits and applications manually doing information system and of using
computerised information system have been brought into focus.
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Summary
• Information is data that has been processed so that they are meaningful.
• An information system particularly developed for human resource management is referred to as HRIS – human
resource information system.
• An information system provides for the buildup by gathering, processing by deleting irrelevant information,
deciding among differing information and putting the information in a coherent array that promotes its
understanding.
• HRIS is a key management means which collects, maintains, analyses and reports information on people and
jobs.
• Macro level HRIS is usually focused towards manpower planning and contains statistical information on
population, technology and economy.
• At the micro or enterprise level, HRIS has become vital for decision-making and strategy formulation as well
as for making certain justice and impartiality in HR policies and practices.
• A foremost source of connect between the employees and their companies is during the information that they
receive and the feedback that they supply.
• Technological advancements have resulted in a spectacular modification in consumer relations and the methods
of service delivery.
• Too much or too little information, both lead to faulty decision-making.
• HRIS should focus on the needs of the decision-makers and stakeholders rather than on what is appealing or
easily available or palatable to the people.
• The manual analysis of data is time consuming and cumbersome.
• A computerised system can significantly shrink fragmentation and duplication of data.
• Verification of data and error refinement are also moderately easy in computerised systems.
• An HRIS usually provides an electronic database for the storage and recovery of this data which is, at least
potentially, obtainable to anyone who may want to access it.
• With respect to HRIS, thus, automating strategy involves computerisation of data management to restore
employees as far as possible with machines and to augment the observation of employees through real time
information.
• The corporate culture must be favorable to employee empowerment and, thus, to a flatter organisation
arrangement.
• Where HR functionaries view themselves as controllers and auditors rather than as service providers and enablers,
HRIS cannot be introduced as an empowering instrument.
• Successful technology implementations require the assurance of resources both financial and human.
• The process of organising and implementing technology initiatives should engage cross-functional teams of
professionals with various backgrounds and levels.
• Information is provided in an organisation by an inter-related set of procedures and processes known as an
information system.
References
• Bagdi, S.K., 2012. Practical Human Resource Information Systems. PHI Learning Pvt. Ltd.
• Gupta, A.K., 2005. Developing Human Resource Information System. Daya Publishing House.
• 2012. What Is Typically Included in an HRIS. [Video online] Available at: <http://www.youtube.com/
watch?v=EEYa7Onvvog> [Accessed 22 July 2013].
• 2013. Human Resource Information System. [Video online] Available at: <http://www.youtube.com/
watch?v=ZRjtmnBo9ng>[Accessed 22 July 2013]
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• The importance of using human resources information systems (HRIS) and a research on determining the
success of HRIS. [Pdf] Available at: <http://www.issbs.si/press/ISBN/978-961-6813-10-5/papers/ML12_029.
• Human Resource Information system. [Pdf] Available at: <http://alumni.pondiuni.edu.in/dde/downloads/
hrmiv_hris.pdf> [Accessed 22 July 2013].
Recommended Reading
• Boroughs, A., Palmer, L. & Hunter, I., 2008. HR Transformation Technology: Delivering Systems to Support
the New HR Model. Gower Publishing, Ltd.
• Walker, A. J., 1993. Handbook of human resource information systems: reshaping the human resource function
with technology. McGraw-Hill.
• Broderick, R.F. & Boudreau, J. F., 1991. Human resource information systems for competitive advantage:
interviews with ten leaders. Center for Advanced Human Resource Studies, School of Industrial and Labor
Relations, Cornell University.
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Self Assessment
1. Information is __________that has been processed so that they are meaningful.
a. supply
b. reward
c. technology
d. data
2. ____________level HRIS is usually focused towards manpower planning and contains statistical information
on population, technology and economy.
a. Group
b. Macro
c. Management
d. Micro
3. Information management, in common and HRIS in particular has become a critical factor in managing
employee_____________.
a. behaviour
b. appraisal
c. performance
d. management
4. _____________advancements have resulted in a spectacular modification in consumer relations and the methods
of service delivery.
a. Technological
b. Consumer
c. HR
d. Relevant
5. Which of the following statements if false?

a. The manual transfer of data, and multiple entries of the same data increases the chances of error.
b. Manual Information Systems are often fragmented with several pieces of related information being physically
placed in different places.
c. The manual analysis of data is time consuming and cumbersome.
d. In manual systems, the entry, updating, maintenance, and retrieval of information are all time saving.
6. ___________is not just a matter of gathering data but also of ensuring data excellence and understanding and
the quality of delivery of information to the users.
a. HRIS
b. Information management
c. AICTU
d. Technology platform

a. Information is the raw material of leadership.
b. Information is the raw material of planning.
c. Planning is the raw material of information.
d. Information is the raw material of delivery.
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8. A quality ____________effort cannot be accomplished without sound and sufficient information.

a. planning
b. appraisal
c. data
d. management
9. Successful ____________ implementations require the assurance of resources both financial and human.
a. security
b. HR
c. technology
d. information
1. Proper controls A. Advantage of computerisation.
B. This is maintained by ensuring its security and by

2. Specificity
revising it.
3. Diverse people can access the data C. These must be built into the system to defend the privacy
concurrently rights of the employees.
D. Even where it is not likely to quantify the information,
4. Information
the information should be made as definite as possible.
a. 1-B, 2-D, 3-C, 4-A
b. 1-D, 2-A, 3-C, 4-B
c. 1-C, 2-A, 3-D, 4-B
d. 1-C, 2-D, 3-A, 4-B
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Case Study I
Mr.Bhat, Human Resource Manager of IVS Group of companies approached the CEO on 30th march, 2007 and
apprised him of the absence of Mr.Ajay Vaidhya, Assistant Accountant in the Corporate Finance Department, for
the past one month and requested him to approve the show-cause notice to be saved to Mr. Ajay as per the Labour
Laws in force. The CEO told Mr.Bhat:
“When Mr. Ajay has been absent for the last one month , your duty is to go to Mr.Ajay,s house, find out the reason
and solve the problem of Mr.Ajay, and not just to report the absence to me. Go immediately to Mr.Ajay’s house find
the reason and report it to me before 5.oo P.M. today.
Mr.Bhat immediately left for Mr.Ajay’s house and learnt from Mr.Ajay’s Wife that Mr.Ajay has been in distress as
he has been trying to mobilise Rs.1,00,000 for the surgery of his sick wife in a reputed hospital in Chennai. Mr.Bhat
could meet Mr.Ajay around 3.PM and both of them then met the CEO. Both of them apprised the CEO the reason
for the absence and distress of Mr.Ajay.
The CEO immediately contacted the hospital and informed them that the company will pay Rs.1,00,000 tomorrow
i.e., 31st March 2007 and requested the doctor to conduct the surgery for Ajay’s wife tomorrow itself. The CEO
ordered Mr.Bhat to arrange to issue a cheque for Rs.1,00,000 in favour of the hospital and also pay Rs.10,000 in
cash to Mr.Ajay to meet incidental expenses as a grant. Mr.Ajay as well as Mr.Bhat were surprised at the decision
of the CEO Mr.Ajay became emotional and touched the feet of the CEO. The CEO told Mr.Bhat:”Problems of our
employees are the company’s problems. We treat the employees as human being and members of the company’s
family.” This piece of news spread in the entire company within no time and the employees felt highly secured. The
productivity level increased by 100% in the next quarter itself and sustained over the years to come.
(Source: Human Resource Management HRM Case Studies [Pdf] Available at: < http://www.indiaclass.com/human-
resource-management-case-studies > [Accessed 22 July 2013]).
Questions
1. Why was Mr. Ajay absent for about a month?
Answer
Mr.Ajay was in distress because he was trying to accumulate 1 lakh rupees fo his wife’s medical treatment.
2. Why did the CEO provide Rs. 10,000 as just a grant to Mr.Ajay?
Answer
The CEO provided this sum of money to Mr. Ajay as grant so that he could carry out his wife’s medical treatment
smoothly.
3. What would be the morale of employee’s family members after this incident?
Answer
The family members would feel secured and relieved with such a gesture of the company.
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Case Study II
Mr. A of Alfa community, are a newly appointed manager of a workshop, which has been categorised as an essential
service. This means that the workshop must function on all the days. Rules lay down that, at least, two individuals
must be on duty irrespective of their seniority or specialisation. The workshop is manned by an equal number of
individuals of the two communities, Alfa and Beta. A good tradition has been built, i.e. when one community has
a festival, the workers from the other community man the workshop and vice versa.
Recently, there were labour union election and Mr. B of Beta community has been elected as the leader. The new
leader is reported to be very whimsical (unusual), though very good at heart. Your day of trial dawned when it came
to light that on Friday next, both the communities claim to be their religious day. Both the communities want the
other community to perform the duty on that day. While Alfa community is banking on you; the others are equally
sure of their union leader from beta community winning the day for them. You realise that there have been a lot of
discussions and more negotiations and discussions are making the situation worse. The attitudes of both the parties
are hardening and the last discussions had ended as a war of words. You do not want to damage the good relations
between the two communities built over the years but still have to solve the problem.
(Source: Hr Case Study [Pdf] Available at: < http://www.studymode.com/essays/Hr-Case-Study-1589667.html >

[Accessed 22 July 2013]).
Questions
1. How will you approach Mr. B of Beta community?
2. What will you explain to your team members in order to justify that taking a decision under such circumstances
is a matter of chance?
3. What reasonable explanation as a leader will you give Beta community so that claiming the day is justified?
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Case Study III
Watson Public Ltd Company is well known for its welfare activities and employee oriented schemes in manufacturing
industry from more than ten decade. The company employs more than 800 workers and 150 administrative staff
and 80 management level employees. The Top level management views all the employees at same level. This can
be clearly understood by seeing the uniform of the company which is same for all, starting from the MD to the floor
level workers. The company has two different cafeterias at different places one near the plant for workers and other
near the Administration building. Though the place is different the amenities, infrastructure and the food provided
are of same quality. In short the company stands by the rule Employee Equality.
The company has one registered trade union and the relationship between the union and the management is very
cordial. The company has not lost a single man day due to strike. The company is not a pay master in that industry.
The compensation policy of that company, when compared to other similar companies, is very less still the employees
don’t have many grievances due to the other benefits provided by the company. But the company is facing countable
number of problems in supplying the materials in the recent past. Problems like quality issues, mismatch in packing
materials (placing material A in box of material B) incorrect labeling of material, not dispatching the material on
time etc.
The management views the case as there are loop holes in the system of various departments and hand over the
responsibility to HR department to solve the issue. When the HR manager goes through the issues he realised that
the issues are not relating to system but it relates to the employees. When investigated he come to know that the
reason behind the casual approach by employees in work is:
• The company hired new employees for higher level post without considering the potential internal
candidates.
• The newly hired employees are placed with higher packages than that of existing employees in the same
cadre.
(Source: Human Resource Management HRM Case Studies [Pdf] Available at: <http://www.indiaclass.
com/human-resource-management-case-studies> [Accessed 22 July 2013]).
Questions
1. Elaborate the principle followed by this company as regards the employees.
2. The points rose by the HR manger as reason for the latest issues in the organisation is justifiable or not. Support
your answer with Human resource related concepts.
3. Help the organisation to come out from this critical issue. If you are in the role of HR manager what will be
your immediate step to solve this case.
111/JNU OLE
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• Agrawal, Satya Prakash, 1970. Manpower Demand: Concepts and Methodology. Meenakshi Prakashan,
Meerut.
• Aguinis, H., 2008. Performance Management. 2nd ed., Prentice Hall Higher Education.
• Armstrong, M., 1988. A Handbook of Human Resource Management. Kogan Page, London.
• Bell, D.J., 1974. Planning Corporate Manpower. Longman Group Ltd.
• Boroughs, A., Palmer, L. & Hunter, I., 2008. HR Transformation Technology: Delivering Systems to Support
the New HR Model. Gower Publishing, Ltd.
• Bramham, J. 1990. Practical Staffing Planning. IPM, London.
• Broderick, R.F. & Boudreau, J. F., 1991. Human resource information systems for competitive advantage:
interviews with ten leaders, Center for Advanced Human Resource Studies, School of Industrial and Labor
Relations, Cornell University
• Dessler, G., 2001. Human Resource Management. 7th ed., Prentice-Hall of India
• Elliot, V. & Orgera, A., 1993. Competing for and with Workforce – 2000. HR Publication.
113/JNU OLE
• Flamholtz, E. & Lacey, J., 1981. Personnel Management: Human Capital Theory and Human Resource
Accounting. UCLA Press, Los Angeles.
• Gautam, V. 1988. Comparative Manpower Practices. National Publishing House, New Delhi.
• Mozina, S. 1984. Guide to Planning for Manpower Development. ICPE: Ljublijana.
• Peters, T., 1993. Liberation Management: A Fawcett Combined book, Balantine Books.
• Rao, T. V., 2004. Performance Management and Appraisal Systems: HR Tools for Global Competitiveness.
SAGE.
• Reddy, S. M., 2005. Human Resource Planning. Discovery Publishing House.
• Sims, H., Human Resource Planning. Select Knowledge Limited.
• Stainer, Gereth, 1971. Manpower Planning: The Management of Human Resource. Heinemann, London.
• Suri, G.K., 1988. Human Resource Development and Productivity: New Perspectives. National Productivity
Council.
• Turner, P., 2002. HR Forecasting and Planning. CIPD Publishing
• Varma, A., Budhwar, P. S. & DeNisi, A. S., 2008. Performance Management Systems: A Global Perspective.
Taylor & Francis.
• Walker, A. J., 1993. Handbook of human resource information systems: reshaping the human resource function
with technology. McGraw-Hill.
114/JNU OLE
Self Assessment Answers
Chapter I
1. d
2. c
3. b
4. c
5. a
6. d
7. b
8. d
9. c
10. a
Chapter II
1. d
2. c
3. a
4. b
5. d
6. a
7. c
8. b
9. d
10. c
Chapter III
1. b
2. d
3. a
4. c
5. b
6. a
7. c
8. d
9. b
10. d
Chapter IV
1. d
2. b
3. b
4. a
5. c
6. d
7. b
8. a
9. c
10. b
115/JNU OLE
Chapter V
1. a
2. d
3. c
4. d
5. b
6. a
7. c
8. d
9. a
10. c
Chapter VI
1. c
2. d
3. a
4. d
5. b
6. c
7. a
8. d
9. c
10. b
Chapter VII
1. c
2. d
3. b
4. d
5. a
6. c
7. b
8. d
9. a
10. c
Chapter VIII
1. d
2. b
3. c
4. a
5. d
6. a
7. b
8. a
9. c
10. d
116/JNU OLE

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Human Resource Planning

This book is a part of the course by Jaipur National University, Jaipur.

The content in the book is copyright of JNU. All rights reserved.

II. List of Figures.......................................................VIII

III. List of Tables..........................................................IX

V. Case Study.............................................................. 109

VI. Bibliography......................................................... 112

VII. Self Assessment Answers................................... 115

• introduce the concept of human resource planning

• explain the importance of human resource planning

• explore the need for human resource planning

• explicate the techniques of forecasting

• enlist the types of plans

• elucidate the planning process

• analyse the various forecasting techniques

• identify the barriers human resource planning

• understand the importance of human resource planning

1.2 The Importance of HRP

1.3 Meaning and definition of HRP

1.4 Need for Planning

More specifically, HRP is required to meet following objectives:

1.5 Types of Plans

1.5.6 Procedure and Rules

1.6 The Process of Planning

HR Needs Forecast HR Supply Forecast

Fig. 1.1 The HRP process

1.6.1 Organisational Objectives and Policies

1.7 Forecasting Techniques

1.7.1 HR Demand Forecast

1.7.2 HR Supply Forecast

1.7.3 New Venture Analysis

1.7.4 Other Forecasting Methods

1.8 Examining the External and Internal Issues

1.8.1 Work Force Demographics

1.8.4 Business Strategy

1.9 Determining Future Organisational Capabilities

1.10 Determining Future Organisational Needs

1.11 Implementing HR Programme to address Anticipated Problems

1.11.1 Communicate Need for the Programme

1.11.2 Explain the Programme

1.11.3 Explain what is Expected of the Employees

1.11.4 Establish Feedback Mechanisms

1.12 The role of HRP professionals

1.12.1 Impact of HRP

1.12.2 Impact of Technology on HRP

1.12.4 HR Plan Implementation

1.12.5 Control and Evaluation

1.13 Barriers to HRP

2. Human resource planning should be an essential part of ___________planning.

3. HRP is a ___________in the total organisational planning.

4. Which of the following statements is false?

10. Match the following

• introduce the concept of HRP

• explain preliminaries to review

• explore HR information systems

• explicate the process of HRP

• explain manning standards and utilisation

• elucidate HR inventory and analysis

• describe management HR planning

• understand the rationale of HRP

The HRP Process

Human Resource Estimating Human Human Resource

Fig. 2.1 The HRP process