MS 23

ASSIGNMENT
Course Code : MS-23

Course Title : Human Resource Planning
Assignment Code : MS-23/TMA/SEM-I/2018
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 30st April, 2018 to
the coordinator of your study centre.
1. Explain the concept of human resource forecasting. Describe various techniques used in
forecasting human resource planning.
2. Discuss the objectives of job evaluation. Explain the various job evaluation methods.
Briefly describe the recent developments in job evaluation system.
3. Discuss the aims and objectives of career planning. Describe the benefits of career
planning. What are the factors which go into the shaping of a career?
4. Explain the significance of information system in Human Resource Management. Describe
the various approaches to managing information at the macro and micro level.
5. Explain the concept, need and scope of HR audit. Describe the essential steps being
involved in the Auditing process.
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Answer
1. Explain the concept of human resource forecasting. Describe various techniques used
in forecasting human resource planning.
Ans.: Human resources forecasting involves projecting labor needs and the effects they’ll
have on a business. An HR department forecasts both short- and long-term staffing needs
based on projected sales, office growth, attrition and other factors that affect a company’s
need for labor. In addition to forecasting the number and type of workers you’ll need, HR
planning includes analyzing the various costs and administrative work that go along with
adding workers or downsizing.
• Organization Chart: One of the most basic forecasting tasks for a human resources
manager is the creation and maintenance of a company’s organization chart. If your
business uses a flat organizational structure consisting of a few key employees who
work directly with you, it’s a good idea to create a chart that shows how your
company will be organized a year or two down the road. You might begin adding
departments, such as accounting, marketing, sales and human resources, each of
which requires a department head and multiple employees. An organization chart
helps you hire proactively and avoid ending up with employees who don’t fit in to
your future organization.
• Production and Scheduling: If you make a product, your labor needs change as sales
rise and fall. Your human resources manager should keep in close touch with your
sales manager to be aware of any spikes or declines in sales that affect your labor
needs. This prevents falling behind on order fulfillment or paying idle workers. A
simple example of labor forecasting is a restaurant that has nights with many
bookings and large parties and other nights when few diners make reservations. The
manager forecasts the restaurant’s wait staff, bar and kitchen needs. At a factory, the
sales, production and human resources managers work together to address seasonal
spikes, large orders or the loss of a major customer or retailer.
• Succession: Human resources forecasting helps you avoid long-term holes in your
staffing needs by keeping on top of which of your employees might be retiring,
leaving or asked to leave. Using this information, your HR manager plans to fill these
holes with internal staff or prepares for a quick recruiting effort. As you receive the
results of your staff forecasting, prepare your coordinators to move up to manager
positions one day and your managers to make the move to directors, if possible.
Lower-level staff can’t fill some positions because they require specific degrees or
certifications, but some positions might best be filled by internal employees. Add
employee training to your human resources efforts to prepare key staff to rise within
the organization as staff members need to be replaced.
• Budgeting: In addition to forecasting labor needs, human resources forecasting helps
you plan budgets based on your future staffing levels. For example, demand
forecasting might show a need for more seasonal workers. An HR review might
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determine the best way to handle this is with part-time workers or paying overtime to
current employees. If your labor needs won’t change next year, you might still have
increased employee costs based on annual raises and benefits increases. Your HR
manager forecasts your personnel costs each year to help with your budgeting.
Human resource planning can improve operational efficiency and increase the profitability of
a business of any size. HR planning doesn’t, however, include making staffing decisions on
the fly. A strategic HR policy can eliminate confusion, streamline the hiring process and save
precious time for a small business owner who never has enough of it. Including forecasting as
an integral part of HR planning fulfills efficiency and profitability objectives by ensuring the
business is not overstaffed or understaffed.
• Forecasting Basics: Forecasting is a systematic process of predicting demand and
supply. Human resources forecasting seeks to secure the necessary number and
quality of employees for a business to achieve strategic goals. Although forecasting
techniques can be complex and full of statistical calculations, a more practical
approach is just as effective and less difficult for a small business to implement.
Demand and supply forecasting techniques use sales or production projections for the
coming year as well as quantitative and qualitative assessments. Quantitative
assessments identify “how many” and “when,” while qualitative assessments identify
desired personal qualities and role-related qualifications.
• Trend Analysis: Trend analysis is more appropriate for an existing business because
it requires historical staffing data to make future staffing predictions. This creates a
relationship between past and future staffing needs by linking the two using a
performance or financial metric called an operational index. A service business, for
example, might base future staffing requirements on the number of customers each
customer service representative effectively handled in the past, while a retail business
might compare sales volume per sales employee.
• Ratio Analysis: A new businesses, or one having less than five years of historical
staffing data, often uses a ratio analysis forecasting technique. Ratio analysis uses
elements called causal factors that can be linked to and help predict future staffing
needs. A business might identify production or sales volume as a causal factor and
estimate, for example, that it needs one customer service representative for every five
clients or one production line worker for every 5,000 widgets. If projections
determine the business will handle 500 clients or produce 500,000 widgets over the
coming year, forecasting sets demand at 100 employees for each.
• Supply Forecasting: Supply forecasting techniques often start internally for human
resources. Replacement charts are a visual tool for identifying internal candidates
available and qualified to fill demand estimations. Replacement charts include both a
hierarchical diagram and information relating to current employee performance,
education and an assessment of how ready the employee is to move into upward or
lateral position. External supply side forecasting typically involves a labor market
analysis that also considers hiring practice legislation to avoid the possibility of facing
a discrimination lawsuit. Market analysis information such as employment and wage
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trends is available on The Society for Human Resource Management website, as well
as national and state labor information websites. Information on these sites can help
businesses document the current strengths and weaknesses of the workforce, define
emerging employment trends and economic opportunities and assist businesses in
finding qualified workers.
Human resource planning involves studying the future staffing needs of an organization.
Employees will leave their positions for many reasons, including better jobs, to retire and to
pursue educational opportunities. Firms also eliminate positions because of economic
conditions and when shifting the focus to new projects. As an HR professional, you can use
forecasting techniques to advise managers on how many and what types of workers they will
need, and the skills workers must possess to help the company reach its goals.
• Job Analysis: A human resources planner must forecast what kinds of jobs the
company will need to fill in the future. This might include replacing employees who
leave and finding employees to fill positions that don't yet exist in the organization.
Job analysis ensures that HR planners know the skills needed to fill positions and,
when employees join the organization, what kinds of qualifications and personal traits
successful workers exhibit.
• Macroeconomic Modeling: Forecasters can also use computer macroeconomic
modeling programs to predict future workforce needs. This type of program uses
various economic indicators to determine how a workforce must grow or shrink in
response to changes in the labor market. A program may or may not include analysis
of past economic trends.
• Employer Survey: Organizations can also understand their own workforce needs by
looking at industry reports. The U.S. Bureau of Labor Statistics and trade associations
are entities that prepare forecasts of workers needed in specific industries.
Organizations can also compare their forecasts to predictions made by other
employers responding to employer surveys. These surveys are available in the U.S.
and in other advanced industrialized nations. A survey asks an employer to predict
how many of each type of worker it will need in the future.
• Other Options: Human resource forecasters also use other techniques to predict the
need for future workers. International comparisons involve comparing the needs of
one labor sector in one nation with the needs of the same labor sector in another
nation. A U.S. entity would compare its workforce needs with companies in other
advanced industrialized nations. Another technique, the labor-output ratio, uses a
formula including data gained from the past, such as number of people employed in
occupational or educational categories, and output. Other options include analyzing
job announcements in major publications and analyzing labor turnover surveys.
2. Discuss the objectives of job evaluation. Explain the various job evaluation methods.
Briefly describe the recent developments in job evaluation system.
Ans.: Job evaluation is the process of analyzing and assessing various jobs systematically to
ascertain their relative worth in an organization. Job evaluation is an assessment of the
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relative worth of various jobs on the basis of a consistent set of job and personal factors, such
as qualifications and skills required.
The objective of job evaluation is to determine which jobs should get more pay than others.
Several methods such as job ranking, job grading, and factor comparison are employed in job
evaluation. Research indicates, however, that each method is nearly as accurate and reliable
as the other in ranking and pricing different jobs. Job evaluation forms the basis for wage and
salary negotiations.
Job evaluation developed out of civil service classification practices and some early employer
job and pay classification systems. Whether formal job evaluation began with the United
States Civil Service Commission in 1871 or with Frederick W. Taylor in 1881, it is now over
120 years old and still of great value. The first point system was developed in the 1920s.
Employer associations have contributed greatly to the adoption of certain plans. The spread
of unionism has influenced the installation of job evaluation in that employers gave more
attention to rationalized wage structures as unionism advanced. During World War II, the
National War Labor Board encouraged the expansion of job evaluation as a method of
reducing wage inequities.
As organizations became larger and larger and more bureaucratized the need for a rational
system of paying employees became evident. Wage structures became more complex and
needed some way to bring order to the chaos perpetuated by supervisors setting pay rates for
their employees on their own. Job evaluation became a major part of the answer. The
techniques and processes of job evaluation were developed and perfected during this time
period of the late 1950s.
With the advent of the Civil Rights movement, job evaluation literally got written into the
law. The Equal Pay Act of 1963 required jobs to be compared on the basis of skill, effort, and
responsibility to determine if they were or were not equal. A 1979 study of job evaluation, as
a potential source of and/or a potential solution to sex discrimination in pay, was made by the
National Research Council under a contract from the Equal Employment Opportunity
Commission. The study suggested that jobs held predominantly by women and minorities
could be undervalued. Such discrimination resulted from the use of different plans for
different employee groups, from the compensable factors employed, from the weights
assigned to factors, and from the stereotypes associated with jobs. Although the preliminary
report failed to take a position on job evaluation, the final report concluded that job
evaluation holds some potential for solving problems of discrimination.
Job Evaluation involves determination of relative worth of each job for the purpose of
establishing wage and salary differentials. Relative worth is determined mainly on the basis
of Job Description and Job Specification only. Job Evaluation helps to determine wages and
salary grades for all jobs. Employees need to be compensated depending on the grades of jobs
they perform. Remuneration must be based on the relative worth of each job. Ignoring this
basic principle results in inequitable compensation and attendant ill effects on employees’
morale. A perception of inequity is a sure way of De-motivating an employee.
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• Job analysis describes a job: Job evaluation develops a plan for comparing jobs in
terms of those things the organization considers important determinants of job worth.
This process involves a number of steps that will be briefly stated here and then
discussed more fully.
• Job Analysis: The first step is a study of the jobs in the organization. Through job
analysis, information on job content is obtained, together with an appreciation of
worker requirements for successful performance of the job. This information is
recorded in the precise, consistent language of a job description.
• Compensable Factors: The next step is deciding what the organization "is paying
for" -- that is, what factor or factors place one job at a higher level in the job hierarchy
than another. These compensable factors are the yardsticks used to determine the
relative position of jobs. In a sense, choosing compensable factors is the heart of job
evaluation. Not only do these factors place jobs in the organization's job hierarchy,
but they also serve to inform job incumbents which contributions are rewarded.
• Developing the Method: The third step in job evaluation is to select a method of
appraising the organization's jobs according to the factor(s) chosen. The method
should permit consistent placement of the organization's jobs containing more of the
factors higher in the job hierarchy, than those jobs lower in the hierarchy.
• Job Structure: The fourth step is comparing jobs to develop a job structure. This
involves choosing and assigning decision makers, reaching and recording decisions,
and setting up the job hierarchy.
Wage Structure: The final step is pricing the job structure to arrive at a wage structure.
3. Discuss the aims and objectives of career planning. Describe the benefits of career
planning. What are the factors which go into the shaping of a career?
Ans.: Effective HRM encompasses career planning, career development and succession
planning. An organization without career planning and career development initiatives is
likely to encounter the highest rate of attrition, causing much harm to their plans and
programmes. Similarly without succession planning managing of vacancies, particularly at
higher levels, become difficult. There are examples of many organizations that had to suffer
for not being able to find a right successor for their key positions. With the increase scope for
job mobility and corporate race for global headhunting of good performers, it is now a well
established fact that normal employment span for key performers remains awfully short.
The term career planning and career developments are used interchangeably in most of the
organizations. It is also correct that but for their subtle difference in the definitional context,
their process remains the same.
Career is a sequence of attitudes and behaviours associated with the series of job and work
related activities over a person’s lifetime.
Yet in another way, it may be defined as a succession of related jobs, arranged in hierarchical
order, through which a person moves in an organization. As the literal definition of career
focuses on an individually perceived sequence, to be more accurate, career may be either
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individual-centred or organizational-centred. Therefore, career is often defined separately as

external career and internal career. External career refers to the objective categories used by
society and organizations to describe the progression of steps through a given occupation,
while internal career refers to the set of steps or stages which make up the individual’s own
concept of career progression within an occupation. For such two different approaches, in
organizational context, career can be identified as an integrated pace of vertical lateral
movement in an occupation of an individual over his employment span.
Career planning generally involves getting to know who you are, what you want, and how to
get there. Keep in mind that career planning is a continuous process that allows you to move
from one stage to another stage as your life changes. You may even find yourself going back
to look at who you are again after exploring how to get there. Learning to negotiate the
career planning process now is essential, considering most people will change careers several
times in a lifetime.
If a career plan is to be effective, it must begin with an objective. When asked about career
objectives, most managers will probably answer by saying that they want to be successful.
What is success? Definition of success depends on personal aspirations, values, self-image,
age, background and other different factors. Success is personally defined concept. In order to
plan your career, you need to have an idea of what constitutes career success.
Career planning is the process by which one selects career goals and the path to these goals.
The major focus of career planning is on assisting the employees achieve a better match
between personal goals and the opportunities that are realistically available in the
organization. Career programmers should not concentrate only on career growth
opportunities. Practically speaking, there may not be enough high level positions to make
upward mobility a reality for a large number of employees. Hence, career-planning efforts
need to pin-point and highlight those areas that offer psychological success instead of vertical
growth.
Career planning is not an event or end in itself, but a continuous process of developing
human resources for achieving optimum results. It must, however, be noted that individual
and organizational careers are not separate and distinct. A person who is not able to translate
his career plan into action within the organization may probably quit the job, if he has a
choice. Organizations, therefore, should help employees in career planning so that both can
satisfy each other’s needs.
Career planning aims at matching indiviual potential for promotion and indiviual aspirations
with organizational needs and opportunities. Career planning is making sure that the
organization has the right people with the right skills at the right time. It opens avenues for
growth to higher levels of responsibilities for each and every employee of the organization
through hierarchy of position, and training and development activities to equip the indiviuals
with the requisites for succession.
The major objectives of career planning are as follows:
• To identify positive characteristics of the employees.
• To develop awareness about each employee’s uniqueness.
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• To respect feelings of other employees.

• To attract talented employees to the organization.
• To train employees towards team-building skills.
• To create healthy ways of dealing with conflicts, emotions, and stress.
4. Explain the significance of information system in Human Resource Management.
Describe the various approaches to managing information at the macro and micro level.
Ans.: Social and organizational changes in the economic environment are numerous and
extensive. According to that, it is important for human resource management (HRM) to be
comprehensive, high in quality, fast, flexible and in line with upcoming trends, because it is
one of the parameters of successful business. Use of information and communication
technology becomes an imperative for HRM, as well as the other activities in the company.
Enterprise Resource Planning (ERP) is very widely applied in HR departments. For instance,
company can track employment’s life cycle or engagement of the new labour. These changes
can be viewed as transactional data, because employment of workers begin and end within
the organizational structure of one company. As a result of that, HRM with its data is ideal
for traditional ERP infrastructure, thus it has found the appropriate support in ERP systems.
However, modern Knowledge economy and labour statistics impose the need for consistent
initiatives in real time, so HRM department must implement these initiatives before the actual
employment of workers. For these reasons, HRIS systems separate from standard ERP
solutions and become stand-alone platforms with wider range of options, such as adjustable
employment statistics for each enterprise.
HR management had undergone radical changes over the last fifty years, while technological
development has enabled the transformation of many business activities. Small and medium
enterprises managed to overcome the HR management tasks without specialized software,
more or less successfully. Large enterprises, with numerous employees and complex
structure, on the other hand are no longer able to do that. The importance of HRIS system is
multifaceted, ranging from operational assistance in collecting, storing and preparing data for
reports, simplifying and accelerating the processes and controlling the available data,
reducing labour costs for HR departments, and providing timely and diverse information to
the management of the company, based on which it is possible to make quality strategic
decisions related to human capital.
Hendrickson made a first step in accepting the employee in the form of human capital. It was
in the period 1945-60. However, that has not led to the substantial changes in the functioning
of the HRIS (at that time information systems have existed and operated without the use of
modern information technology). In the next twenty years HR departments have become an
integral part of the core activities in the company. During this period, computers (mainly
mainframe) provided a new dimension in collecting, storing and processing HR information.
At that time HR departments have become one of the most important users of computer’s
resources in company. Despite that, HRIS were only useful in transactional information
processing. The new period started in the last twenty years of the 20th century when
computers become available to many users (with commercial use of the Internet) and when
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companies started to use HR information for strategic management. Management started to

relay on HRIS systems in the decision making process about human capital, even in small
and medium enterprises. According to that, HRIS become integrated system with the
objective to provide information for decision making on human resources. The base of their
functioning are databases that are used for collecting, storing, searching and manipulating
data on employees and other data related to human resources. Typical HRIS includes
personal information about employees, information on income, information on various types
of training, the most diverse reports etc.
HRIS are developed following needs of HR department or company management. Changes
that have taken place in the role of HR in the company, also reflected in the development of
HRIS. The role of HR had three stages: a) phase of personnel or staff management, b) phase
of HRM and c) phase of strategic HRM. Personnel management was focused on various
forms of services in the HR departments. Those departments had to collect and store personal
data (records) of each employee, handle their salaries, benefits, vacations etc. In the next
phase, when it became clear that the importance of HR is much higher, personal management
becomes HRM. Since then, this function developed and became very important function of
management, while HR became a component of competitive advantages. The last stage
introduces a strategic component in HRM and can be defined as: “development and
implementation of human strategies that are integrated within company’s strategy ensuring
that culture, values and company’s structure together with the quality, motivation and
commitment of employees fully contribute to achievement of company’s objectives”. In this
stage, the level of integration in the processes of HRM is much higher, then in the previous
stages.
An essential step in improving the effectiveness of manpower planning and policy at the
macro level lies in taking decisive measures to raise the quality and reliability of labour
market information. Existing sources of statistical information suffer from serious gaps and
inadequacies, redundancies, etc. So long as these deficiencies continue, meaningful
manpower research required for National Employment Policy would be extremely difficult to
undertake.
Human Resource Planning draws heavily on information. Appropriate and accurate
information is thus essential to planning of human resources as well as to different facets of
the human resource management function as such. There are certain basic requirements up to
which the information must conform. At the macro level, although there do exist institutional
arrangements for providing manpower data, but the need for improving the effectiveness of
human resource planning and policy has been articulated at several fora. At the micro level
the importance of having a well-defined and detailed manpower information system within
the organisation has been emphasised. The point has been made that at the enterprise level,
there is need for a comprehensive human resource information system. In this context, the
deficiencies and shortcomings of manual human resource information systems have been
noted in order to develop a clearer perspective for going in for a computerised personnel
records system. Several advantages and applications of using computerised information
system have been brought in to focus. Those of you who may be interested in the design
8

process of a computerised human resource information system would be well advised to read
further the subject itself being so specialised in nature.
5. Explain the concept, need and scope of HR audit. Describe the essential steps being
involved in the Auditing process.
Ans.: The word “audit” comes from the Latin verb audire, which means, to listen. Listening
implies an attempt to know the state of the affairs as they exist and as they are expected/
promised to exist. Auditing as a formal process is rooted in this feature of listening.
Consequently, it is a diagnostic tool to gauge not only the current status of things but also the
gaps between the current status and the desired status in the area that is being audited.
Auditing has been a routine exercise in the area of finance, especially because it is a statutory
obligation. However, in case of Human Resource, there is no legal binding to adopt auditing.
Some of the companies nevertheless prefer to have Human Resource audits.
Like any audit, the Human Resource Audit is also a systematic formal process, which is
designed to examine the strategies, policies, procedures, documentation, structure, systems
and practices with respect to the organization’s human resource management. It
systematically and scientifically assesses the strengths, limitations, and developmental needs
of the existing human resources from the larger point of view of enhancing organisational
performance.
The human resource audit is based on the premise that human resource processes are dynamic
and must continually be redirected and revitalized to remain responsive to the ever changing
needs. Human Resource Audits are not routine practices aimed at problem solving. Instead of
directly solving problems, HR audits, like financial audits, help in providing insights into
possible causes for current and future problems.
The findings of these audits aid decision making in the organisation and are usually internal
documents that need not necessarily be shared with the public. Moreover, unlike Financial
Audits that are routine, regulated and standardised, Human Resource Audits are non-routine
and may be designed to cater to the unique needs of the organisation at a particular point in
time. These are in fact, studies of an unusual nature. The manner in which the Audit is
conducted could vary from self-directed surveys to interventions by outside consultants.
Human resources are the people in an organization, so a human resources audit is a look at
those people and the processes that put them in place to make sure the system is working
efficiently. An HR audit also goes beyond looking at the hiring process into areas like
employee retention, budgeting, training, employee compensation, management/employee
relations and virtually any process or practice within the company that affects its people.
A periodic Human Resource audit can qualify its effectiveness within an organization.
Human Resource audits may accomplish a variety of objectives, such as ensuring legal
compliance; helping maintain or improve a competitive advantage; establishing efficient
documentation and technology practices; and identifying strengths and weaknesses in
training, communications and other employment practices.
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Human Resource auditing is something that many companies do annually, just as they audit
their financial information. This gives them an accounting of their workforce and the
efficiency with which the organization as an entity deals with its people, from recruiting to
firing. Human Resource auditing can be likened to a person going to the doctor for a general
check-up to stay well. The process allows a company to get a general idea of where it stands
so it can better correct any potential problems and plan for the future.
When it comes to physical health, prevention of problems is far better than waiting until a
problem arises and trying to cure it. The same holds true for human resources auditing.
Preventing problems is much easier than trying to fix them after the fact. Good Human
Resource planning and auditing can help prevent those problems, and save companies money
and difficulties.
Human Resource Accounting benefits the company ascertain how much Investment it has
made on its Employees and how much return it can expect from this Investment.
Human Resource Audit means the systematic verification of job analysis and design,
recruitment and selection, orientation and placement, training and development, performance
appraisal and job evaluation, employee and executive remuneration, motivation and morale,
participative management, communication, welfare and social security, safety and health,
industrial relations, trade unionism, and disputes and their resolution. HR audit is very much
useful to achieve the organizational goal and also is a vital tool which helps to assess the
effectiveness of HR functions of an organization.
A complete Human Resources Checkup, including administration, employee files,
compliance, handbook, orientation, training, performance management, and termination
procedures. The intended outcomes include minimizing your liability exposure and
introduction or enhancement of human resource best practices.
Before beginning an HR audit, the senior management team must decide on the overall
objective of the proposed audit. For example, senior management may have noticed a
turnover trend among employees that is excessively high for the industry in which it does
business. One objective may be to evaluate the human resource function with respect to
employee retention. The senior management team decides the overall objective or purpose for
the audit, which may be singular or multipronged.
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ASSIGNMENT

Course Code : MS-23

individual-centred or organizational-centred. Therefore, career is often defined separately as

• To respect feelings of other employees.

companies started to use HR information for strategic management. Management started to

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