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MAN POWER PLANNING RECRUITMENT AND SELECTION

UNIT -I
BASICS OF HUMAN RESOURCE PLANNING

Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization and determining as to how the existing human resource
capacity of the organization can be utilized to fulfil these requirements.
It, thus, focuses on the basic economic concept of demand and supply in context to the human resource
capacity of the organization.The HRP process which helps the management of the organization in
meeting the future demand of human resource in the organization with the supply of the appropriate
people in appropriate numbers at the appropriate time and place.

Further, it is only after proper analysis of the HR requirements can the process of recruitment and
selection be initiated by the management. Also, HRP is essential in successfully achieving the strategies
and objectives of organization. Human resource planning (HRP) is the continuous process of
systematic planning ahead to achieve optimum use of an organization's most valuable asset—quality
employees.
Human resources planning ensure the best fit between employees and jobs while avoiding manpower
shortages or surpluses.

There are four key steps to the HRP process. They include analyzing present labor
supply, forecasting labor demand, balancing projected labor demand with supply, and supporting
organizational goals. HRP is an important investment for any business as it allows companies to remain
both productive and profitable.

LEVELS OF HRP – 1. MACRO LEVEL

2. MICRO LEVEL

Macro Level Scenario of Human Resources Planning

Macro level planning

Manpower is the primary resource of an economy. Without manpower resources, physical and financial
and all other resources cannot be put into use. HRP are both macro and micro level issues.At the macro
level, it is influenced by the environmental factors like employment, unemployment situation,
demographic changes, legal control and organizational policies where as the factors like technological
changes, trade union pressure, gap in skill and competency and recruitment and selection affect the

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process of manpower planning at the micro level. However, macro level manpower planning is
uncontrollable and micro level manpower planning is controllable.

HRP Need at Macro Level:

HRP at macro level are to address the following factors as follow
1. Employment-Unemployment Situation: on one hand the number of educated unemployed is
increasing in the economy, on the other hand there are acute shortages for a variety of required
skills. Therefore an intensive macro level manpower planning can help in this direction in order to
bridge the gap between employments –unemployment Scenario.
2. Technological Changes:
The rate of change of technologies in production, marketing methods and management techniques has
been extensive and rapid in outside world. In order to adopt the change of technology in accordance
with gobal trend, necessitate high degree of extensive Macrolevel Manpower Planning.
3. Organizational Changes: The turbulent business environment affected by global economic cycle and
discontinuities, the nature and pace of organisational changes both in terms of its activities and
structures affect manpower requirements necessitating strategic considerations at Macro level.
4. Demographic Changes: The changing profile of the work force demographics in the economy, in
terms of age, sex, literacy level, technical competency and social background have implications on
macro level HRP.
5. Skill Shortages:
There are acute skill shortages in labour market. On one hand there is a widespread unemployment. On
the other hand labour market is not a buyer’s market in spite of large scale unemployment. Again
growing complexity of the organisations requires a wide range of specific specialist skills that are
difficult to get. These skill gaps can be bridged by proper Macro level Manpower Planning.
6. Government legislation: Macro level manpower planning must go hand in hand in a very systematic
way in accordance with Government control and changes in legislation.
7. Lead Time: Lead time is the gestation period required to provide education and training and
deployment of the employees to take care of the required new knowledge and skills successfully.
Long lead time can be avoided by proper Macro level Manpower Planning.
Macro Level Manpower Planning in India
Development of Human Resources is primary objective of any country for long term economic growth.
For a developing economy like India this is more visible from our economic planning as governments

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over the years have been giving increasing priority to population planning and control, education, health,
housing etc.

MICRO-LEVEL HUMAN RESOURCE PLANNING

MICRO-LEVEL HRP
Micro-level HRP, which develops and implements the tactics needed to help the organization achieve
its strategic objectives. Micro HRP tactics ensure that the business has the appropriate number of
employees with the appropriate mix of knowledge, skills and abilities in the proper areas or
departments. Micro-level Basics It involves analyzing the current workforce to identify potential
shortages and surpluses in various job categories. Manpower planning uses this information to set
priorities and develop plans for employee recruitment, retention and development, and workforce
reductions, if necessary.

Micro-level HRP uses three basic tools –

1. Demand forecasting,
2. Manpower supply analysis
3. Manpower planning.
1. Demand forecasting uses historical and current operations data to identify future needs. It
involves analyzing the current workforce to identify potential shortages and surpluses in various job
categories.

2. Manpower supply analysis involves scanning the current labor market to determine the
workforce available and analyzing any gaps between the kind of workforce needed with what is
available.

3. Manpower planning uses this information to set priorities and develop plans for employee
recruitment, retention and development, and workforce reductions, if necessary.

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Factors Effecting HRP

Panning is the most important and primary function of management. It is a process of selecting the
organizational objectives and taking actions to achieve those objectives. Planning must be realistic and
workable. Human resource planning is when organizations determine the staffing support they need to
meet business needs and customer demands.

9 Factors That Affect Human Resource Planning

1. Employment
HRP is affected by the employment situation in a country. In countries with greater unemployment,
there may be more pressure on the government to appoint more people. For example, public sector
enterprises are highly overstaffed in some countries, while few private enterprises are understaffed.
Similarly, some companies may have a shortage of skilled labor and may have to appoint people from
other companies.
2. Technical changes in society
Technology changes quickly, and new people having the required knowledge are required for the
company. In some cases, the company may retain existing employees and teach them new
technology; in some cases, the company has to dismiss existing people and appoint fresh ones.
3. Organizational changes
Changes take place within the organization from time to time.For example, a company may diversify
into new products or close down businesses in some areas. In such cases, a company may hire or
dismiss people according to the situation.
4. Economic factors
The most immediate concern in human resource planning is how much money is available for salaries,
training, and equipment. However, external economics plays an equally critical role. For example, people do
not have much money to spend in an economic recession and tend to be much more selective in what they
buy or the services they use. This means some industries, such as those producing luxury items or non-
essential services, sell less and may even have to lay off some staff.This, in turn, makes the local economy
even more difficult.
5. Social factors
Social factors may influence the organization’s HR planning. There is a clear discrepancy between one
social group. It’s a good idea to build in ways of opening up new opportunities.
6. Technological factors
New technology brings new skill requirements, so companies must always be aware of proficiencies
and training needs when planning human resources. New products and services also may require
recruiting highly skilled employees or training existing employees to meet the need.

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7. Legal factors
Employment law is the most significant sector of the legal system that affects human resource
planning, and it changes all the time.HR managers must keep themselves up to date and have an
employment law specialist available to consult if necessary. Employment law changes must be
reflected in company policy.
8. Environmental factors
Environmental factors might include where the business is located, finding appropriate staff, or changes
to the environment that mean a need for more or fewer employees.A simple example of environmental
factors affecting human resource planning is the consideration of how the employees get to work safely
during extreme weather; the Firm’s plan may need to include the possibility of telecommuting to keep
everything going.
9. Labor market
The labor market comprises people with skills and abilities that can be tapped when needed. Although
in many 3rd countries with surplus labor, there is a shortage of skilled people. We should take
measures to make more skilled workers available in the country.

Concepts of HRP
(Human Resource Planning)
Challenges of Human Resource Planning
The challenges to HRP include forces that are always changing, such as employees getting sick, getting
promoted or going on vacation. HRP ensures there is the best fit between workers and jobs, avoiding
shortages and surpluses in the employee pool. To satisfy their objectives, HR managers have to make
plans to do the following:
10. Find and attract skilled employees.
11. Select, train, and reward the best candidates.
12. Cope with absences and deal with conflicts.
13. Promote employees or let some of them go.
Steps to Human Resource Planning
There are four general, broad steps involved in the human resource planning process. Each step needs
to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the
company to successfully find and retain enough qualified employees to meet the company's needs.
1. Analyzing Labor Supply
The first step of human resource planning is to identify the company's current human resources supply.
In this step, the HR department studies the strength of the organization based on the number of

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employees, their skills, qualifications, positions, benefits, and performance levels.

2. Forecasting Labor Demand

The second step requires the company to outline the future of its workforce. Here, the HR department
can consider certain issues like promotions, retirements, layoffs, and transfers—anything that factors
into the future needs of a company. The HR department can also look at external conditions
impacting labor demand, such as new technology that might increase or decrease the need for workers.

3. Balancing Labor Demand With Supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap
analysis that lays out specific needs to narrow the supply of the company's labor versus future demand.

4. Developing and Implementing a Plan

The answers to questions from the gap analysis help HR determine how to proceed, which is the final
phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the
company. The department needs a budget, the ability to implement the plan, and a collaborative
effort with all departments to execute that plan.

IMPORTANCE OF MANPOWER PLANNING

1. Key to managerial functions-
The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the
manpower. Human resources help in the implementation of all these managerial activities. Therefore,
staffing becomes a key to all managerial functions.
2. Efficient utilization-
Efficient management of personnels becomes an important function in the industrialization world of
today. Seting of large scale enterprises require management of large scale manpower. It can be
effectively done through staffing function.

3. Motivation-
Staffing function not only includes putting right men on right job, but it also comprises of motivational
programmes, i.e., incentive plans to be framed for further participation and employment of employees
in a concern. Therefore, all types of incentive plans becomes an integral part of staffing function.
4. Better human relations- A concern can stabilize itself if human relations develop and are strong.
Human relations become strong trough effective control, clear communication, effective supervision
and leadership in a concern. Staffing function also looks after training and development of the work
force which leads to co-operation and better human relations.

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5. Higher productivity- Productivity level increases when resources are utilized in best possible manner.
higher productivity is a result of minimum wastage of time, money, efforts and energies. This is
possible through the staffing and it's related activities ( Performance appraisal, training and
development, remuneration)

NEED OF MANPOWER PLANNING

1. Manpower Planning is a two-phased process because manpower planning not only analyses the current
human resources but also makes manpower forecasts and thereby draw employment programmes.
Manpower Planning is advantageous to firm in following manner:
2. Shortages and surpluses can be identified so that quick action can be taken wherever required.
3. All the recruitment and selection programmes are based on manpower planning.
4. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing can be
avoided.
5. It also helps to identify the available talents in a concern and accordingly training programmes can be
chalked out to develop those talents.
6. It helps in growth and diversification of business. Through manpower planning, human resources can
be readily available and they can be utilized in best manner.
7. It helps the organization to realize the importance of manpower management which ultimately helps in the
stability of a concern.

HUMAN RESOURCE PLANNING PROCESS

The Human Resource Planning is a process of forecasting the organization’s demand for and
supply of manpower needs in the near future. Human resource planning allows companies to plan
ahead so they can maintain a steady supply of skilled employees. That's why it is also referred to as
workforce planning. The process is used to help companies evaluate their needs and to plan ahead to
meet those needs.

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1. Determining the Objectives

The foremost step in every process is the determination of the objectives for which the process is to be
carried on. The objective for which the manpower planning is to be done should be defined precisely,
so as to ensure that a right number of people for the right kind of job are selected. The objectives can
vary across the several departments in the organization such as the personnel demand may differ in
marketing, finance, production, HR department, based on their roles or functions.
2. Analyzing Current Manpower Inventory:
The next step is to analyze the current manpower supply in the organization through the stored
information about the employees in terms of their experience, proficiency, skills, etc. required to
perform a particular job. Also, the future vacancies can be estimated, so as to plan for the manpower
from both the internal (within the current employees) and the external (hiring candidates from outside)
sources. Thus, it is to be ensured that reservoir of talent is maintained to meet any vacancy arising in
the near future.
3. Forecasting Demand and Supply
Once the inventory of talented manpower is maintained; the next step is to match the demand for the
manpower arising in the future with the supply or available resources with the organization. Here, the
required skills of personnel for a particular job are matched with the job description and specification.

4. Analyzing the Manpower Gaps:

After forecasting the demand and supply, the manpower gaps can be easily evaluated. In case the
demand is more than the supply of human resources, that means there is a deficit, and thus, new
candidates are to be hired. Whereas, if the Demand is less than supply, there arises a surplus in the
human resources, and hence, the employees have to be removed either in the form of termination,
retirement, layoff, transfer, etc.

5. Employment Plan/Action Plan:

Once the manpower gaps are evaluated, the action plan is to be formulated accordingly. In a case of a
deficit, the firm may go either for recruitment, training, interdepartmental transfer plans whereas in the
case of a surplus, the voluntary retirement schemes, redeployment, transfer, layoff, could be followed.

6. Training and Development:

The training is not only for the new joinees but also for the existing employees who are required to
update their skills from time to time.After the employment plan, the training programmes are conducted
to equip the new employees as well as the old ones with the requisite skills to be performed on a

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particular job.

7. Appraisal of Manpower Planning: Finally, the effectiveness of the manpower planning process is to be
evaluated. Here the human resource plan is compared with its actual implementation to ensure the
availability of a number of employees for several jobs. At this stage, the firm has to decide the success of
the plan and control the deficiencies, if any. Thus, human resource planning is a continuous process that
begins with the objectives of Human Resource planning and ends with the appraisal or feedback and
control of the planning process.

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HR demand forecasting methods and techniques

In HR, forecasting demand means predicting the needs of the future workforce when the usual supply
course is influenced and altered by external political, technological, economical, or other forces. When
lags in future workforce skills are forecasted, HR leaders can plan training or hiring to ensure that the
required workforce is available when needed.
5 HR demand forecasting techniques
The HR department plays an essential role in supporting organizations by ensuring a solid talent base
as well as forming and executing a strategic workforce plan. A major element in strategic workforce
planning is forecasting future workforce needs and taking steps to meet them. Many job roles will
become obsolete in the future, while others will require upskilling or reskilling to keep up with new
technology.
Some models HR leaders can use to forecast future demands.
1. The Markov model
The technique is named after Russian mathematician Andrei Andreyevich Markov, The Markov
model is a dynamic forecasting model and has become a fundamental quantitative analysis technology
in human resource forecasting. Using this model, the HR department creates a list of employees’ skills,
education, training, work experience, qualifications, ability levels, etc. They maintain reports in a
timely manner and regularly update the status of the workforce to keep a check on the future talent and
skill demands.

2. Workload analysis
Workload analysis is only suitable where the estimated workload is easily measurable. In this
forecasting method, the total estimated production of services/goods for a predetermined period is
forecasted. The HR team then estimates the number of employees that will be hired to fulfill the
forecasted production capacity based on past data. Thus, demand for human resources is forecasted
based on estimated total production and the contribution of each employee in producing each unit.
3. Managerial analysis
Under this technique, managers of the respective teams assess future workforce needs in different
categories in their respective establishments. To forecast future workforce demand by skill category,
managers will need to aggregate all data related to employees, retirement, upskilling or reskilling
needs, and so on.The managerial analysis method is used for forecasting highly professional skills,
succession planning, and making short-term workforce forecasts.

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4.Nominal group technique

The nominal group technique (NGT) is a demand forecasting method utilizing expert assessments.
Using this technique, the HR department identifies employees in key positions and creates an expert
panel. They are presented with a set of questions related to HR demands. The solutions and ideas given
by this panel are based on the panel members’ background knowledge and personal experience. The
ideas received are collected anonymously and the panel votes on each idea, until one is finalized
unanimously.
5. Delphi technique
The Delphi technique is similar to the nominal group technique but differs in one manner. The nominal
group technique entails minimal action from experts — only providing the solution. The Delphi
technique calls for a facilitator to solicit and collect expert opinions on labor forecasts.An HR leader
provides the expert panel, which comprises internal employees in key positions as well as external
experts on the HR demand forecasting with consecutive questionnaires wherein they must define the
forecasts they have made and provide supporting rationale.
After collecting the responses to the questionnaire, the facilitator creates a summary of all responses
and sends it to the selected panel of experts to review. This is repeated until the experts reach a clear
majority decision.

Forecasting the Supply of Human Resources

Human Resource supply forecasting is the process of estimating availability of human resource
followed after demand for testing of human resource. Supply forecasting means to make an estimation
of supply of human resources taking into consideration the analysis of current human resources
inventory and future availability. For forecasting supply of human resource we need to consider
internal and external supply.

Methods and techniques of supply forecasting

1. Internal supply of human resource

Internal supply of human resource available by way of transfers, promotions, retired employees &
recall of laidoff employees, etc.
2. External supply of human resource
Source of external supply of human resource is availability of Labour force in the market and new
recruitment.

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1. INTERNAL FACTORS AFFECTING HR SUPPLY FORECASTING –

Internal supply of human resource depends on some factors mentioned below.
1. Organizational features (e.g., staffing capabilities).
2. Productivity - rates of productivity, productivity changes.
3. Rates of promotion, demotion, transfer and Turnover.
EXTERNAL FACTORS AFFECTING HR SUPPLY FORECASTING –
External supply of human resource depends on some factors mentioned below.
4. Supply and demand of jobs.
5. Literacy rate of nation.
6. rate of population
7. industry and expected growth rate and levels
8. Technological development.
9. Compensation system based on education, experience, skill and age.

Supply Forecasting Methods

1. Trend analysis
2. Competency model
3. Replacement Charts
4. Staffing table
5. Succession Planning
6. Flow Modeling/Markov Analysis

1. Trend analysis
Trend analysis involves collecting and evaluating data to identify patterns of information that might
impact the future. By examining the trends of the past, the HR department can predict the effect of the
same activity on the future of the organization, because it is assumed that these patterns will remain stable.
A method of forecasting that assumes past trends and ratios in employee movement are stable and indicative
of future trends and ratios in employee movement.
2. Competency model
Competencies are behaviors that encompass the knowledge, skills, and attitudes(ksa) required for
successful performance. Competency modeling is the activity of determining the specific competencies
that are characteristic of high performance and success in a given job.A future-oriented model that first
reviews competencies that are aligned with an organization’s mission, vision, and strategy, and then
aims to identify an ideal workforce in terms of these competencies . Skills/competency models focus
on matching the right skills or competencies needed for each job with the skills available within the
organization.

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3. Replacement chart

A chart used to estimate vacancies in higher level jobs and identify how potential HR supply can fill
these vacancies via internal movements from lower levels jobs. Replacement charts provide
identification of potential replacements for vacancies within an organization. A comprehensive
replacement chart will include information regarding possible replacements for vertical or horizontal
movement. Generally, a replacement chart includes information about employees’ performance,
readiness to fill the position, and education.

4. Staffing table
A clear graphical view of all organizational jobs and the current number of employees at each job.
Staffing tables are graphic representations of all organizational jobs, along with the numbers of
employees currently occupying those jobs and future (monthly or yearly) employment requirements,
which can be derived from demand forecasts. It presents a simple visual understanding of an
organization’s staffing level within each department and the organization as a whole, in an effort to
help understand the combination of employees that make up an organization’s internal workforce.

5. Succession Planning
Determining the internal Labor supply calls for a detailed analysis of how many people are currently in
various job categories or have specific skills within the organization. The planner then modifies this
analysis to reflect changes expected in the near future as a result of retirements, promotions, transfers,
voluntary turnover, and terminations.
6. Markov analysis
Analysis that helps to predict internal employee movement from one year to another by identifying
percentages of employees who remain in their jobs, get promoted or demoted, transfer, and exit out of
the organization To help predict internal employee movement from one year to another by identifying
percentages of employees who remain in their jobs, get promoted or demoted, transfer, and exit out of
the organization. By tracking and predicting employment movement within an organization, the
Markov analysis allows for the development of a transition matrix to forecast internal Labour supply.
1. Markov Analysis is the statistical technique used in forecasting the future behavior of a variable or
system whose current state or behavior does not depend on its state or behavior at any time in the past
in other words, it is random.
2. The technique is named after Russian mathematician Andrei Andreyevich Markov.
3. A transition matrix, or Markov matrix, can be used to model the internal flow of human resources.

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Unit -II
MANPOWER PLANNING, HUMAN RESOURCE PLANNING AND BUSINESS
ENVIRONMENT
Manpower Planning
Manpower Planning which is also called as Human Resource Planning consists of putting right number
of people, right kind of people at the right place, right time, doing the right things for which they are
suited for the achievement of goals of the organization.
Human Resource Planning
Human Resource Planning has got an important place in the arena of industrialization.
Human Resource Planning has to be a systems approach and is carried out in a set
procedure. The procedure is as follows:
4. Analyzing the current manpower inventory
5. Making future manpower forecasts
6. Developing employment programmes
7. Design training programmes

Steps in Manpower Planning

1. Analysing the current manpower inventory-

Before a manager makes forecast of future manpower, the current manpower status has to be
analysed. For this the following things have to be noted-
a. Type of organization
b. Number of departments
c. Number and quantity of such departments
Employees in these work units
Once these factors are registered by a manager, he goes for the future forecasting.
2. Making future manpower forecasts-
Once the factors affecting the future manpower forecasts are known, planning can be done for the
future manpower requirements in several work units.The Manpower forecasting techniques commonly
employed by the organizations are as follows:
a. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi
technique.
b. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past
trends), indexation (using base year as basis), and statistical analysis (central tendency
measure).
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c. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch
or in a division.
d. Work Force Analysis: Whenever production and time period has to be analysed, due
allowances have to be made for getting net manpower requirements.
Other methods: Several Mathematical models, with the aid of computers are used to forecast
manpower needs, like budget and planning analysis, regression, new venture analysis.
3. Developing employment programmes-
Once the current inventory is compared with future forecasts, the employment programmes can be
framed and developed accordingly, which will include recruitment, selection procedures and
placement plans.
4. Design training programmes-
These will be based upon extent of diversification, expansion plans, development programmes,etc.
Training programmes depend upon the extent of improvement in technology and advancement to take
place. It is also done to improve upon the skills, capabilities, knowledge of the workers.

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BUSINESS ENVIRONMENT
Business Environment is sum or collection of all internal and external factors such as employees,
Customer’s needs and expectations, supply and demand, management, clients, suppliers, owners, activities
by government, innovation in technology, social trends, market trends, economic changes, etc.

These factors affect the function of the company and how a company works directly or indirectly. Sum
of these factors influences the companies or business organisations environment and situation.
Business environment helps in identifying business opportunities, tapping useful resources, assists in
planning, and improves the overall performance, growth, and profitability of the business. There are
various types of Business Environment like Micro Environment and Macro Environment.

STOCKS AND FLOWS

STOCKS - A stock (or "level variable") in this broader sense is some entity that is accumulated over
time by inflows and/or depleted by outflows. Stocks can only be changed via flows. Mathematically a
stock can be seen as an accumulation or integration of flows over time – with outflows subtracting
from the stock. Stocks typically have a certain value at each moment of time – e.g. the number of
population at a certain moment, or the quantity of water in a reservoir.

FLOWS - A flow (or "rate") changes a stock over time. Usually we can clearly distinguish inflows
(adding to the stock) and outflows (subtracting from the stock). Flows typically are measured over a
certain interval of time – e.g., the number of births over a day or month.
HUMAN RESOURCE DISTRIBUTION MAPPING
HR Mapping is the process of identifying, analyzing, and defining the roles and responsibilities of
employees within an organization. The purpose of HR Mapping is to ensure that the organization has
the right people in the right places, and that everyone understands their roles and how they contribute to
the overall success of the company. This process typically includes creating job descriptions,
identifying skill sets and qualifications needed for each role, and determining how each role fits into the
overall organizational structure.

Step 1: Gather the right stakeholders. Start by bringing your stakeholders together: each actor along
the critical path in the workflow, each recipient of some piece of data, and each downstream participant
who has some skin in the game.

Step 2: List each process and its triggers. Begin the conversation and get it all out on the proverbial
table. Or, better yet, into a spreadsheet. Identify the initial trigger(s) and input(s) that make the process
necessary.

Step 3: List all possible steps. Create a list of all the steps people take along the way. Don’t worry
about getting the precise order correct—you can always adjust things later. It’s more important to keep
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the conversation flowing to make sure that no one leaves out an input, output, or step of the process.

Step 4: Put the steps in order. Now, organize everyone’s thoughts by putting the steps in order, using
main “must always happen” steps and secondary “might happen, depending on the condition” steps.
This helps narrow down your critical path and dependencies along the way. But it’s still just a jumble
of thoughts without any context or connection, right?

Step 5: Consider the facts. Once you have the steps down and everyone is aligned, start to collect
some supporting data. Who or what triggers that step? What is the output of the step? Who is
responsible or accountable for, consulted about, or informed by the step? Picture the process in a linear
fashion and treat it like an assembly line. If a person or step is missed, the rest won’t work.

Step 6: Evaluate and refine. Run through the process a few times together and shake out the gaps by
inspiring people to take ownership of their steps. Pieces they take for granted or manage by rote will
surface and you can hone the documentation further until you have a finished output.

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IDENTIFYING SURPLUS

A surplus employee is someone that a business or government agency no longer needs. A company
may reassign surplus employees from one business unit to current or vacant positions elsewhere in an
organization.

The company may also implement temporary or permanent layoffs. Although staff reductions are an
unpleasant experience for everybody, including the remaining employees, they are often necessary for
competitive businesses.

Definition

HR surplus is the situation when the supply of required human resources is greater than the demand
for required human resources by an organization. In other words, skills surplus takes place when the
supply of required human resources surpasses the demand of required human resources in an
organization.

1. An employee may be formally identified as surplus where the Department has a greater number of
employees than is necessary for the operations of the Department. A surplus employee situation
may arise due to technological change, changes to programs or functions of the Department or other
changes in work methods, or changes in the nature, extent or organisation of the functions of the
Department.

2. The placement of surplus employees will be managed by the Department. The Department will
provide individualised case management and support, including counselling, provision of job search
skills, liaison and retraining to assist in achieving placements;The Department’s processes will be
consistent with the application of the principles of fair and reasonable treatment and merit selection;

3. Unplaced surplus Employees to have access to departure packages only after a reasonable
period; Retrenchment and payment of a separation package will be used as an action of last resort
where redeployment within a reasonable period does not appear likely;

4. Where a vacancy exists for which a redeployee is suitable and is the only candidate or the best
candidate among redeployees, a valid offer will be made. Such an offer involves an offer of duties to a
suitably qualified employee (which may be at the same or different level or status or the same or
different general location as the employee’s previous employment);

5. Redeployees will have priority access to vacancies both at the employee’s classification level and
below their classification level and, where appropriate, will be provided with salary maintenance for
6 months where the position is below their classification; The Department will provide support to
redeployed being placed in alternative positions utilising high quality and professional expertise;
Redeployees are expected to actively engage in the redeployment process.

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An organization can deal with this skills surplus in the following ways:

a. Attrition: It is the process of decreasing a skills surplus by naturally, letting the workforce
size to decline.
b. Job sharing: Job sharing takes place when 2 or more employees do the duties of a single full-
time position.
c. Hiring freeze: Hiring freeze is a prohibition on all types of external recruiting functions.

DOWNSIZING STRATEGIES

Downsizing has been a pervasive managerial practice for the past three decades. Over the years, a
firm’s standard response to finding itself in financial difficulty was to reduce its workforce. While there is
ample evidence suggesting that downsizing activities rarely return the widely anticipated benefits, there is
also a sobering understanding that downsized firms are forced to deal with the human, social, and societal
aftereffects of downsizing, also known as secondary consequences.

There are several HR practices that firms can adopt in an effort to engage in preliminary cost reductions.
Some of the more popular approaches that have emerged are:

1. Hiring freeze
A hiring freeze constitutes a mild form of downsizing and reduces labor costs in the short term. Some
firms continue to hire new employees while cutting jobs at the same time. While this practice may
make sense in terms of supplying the firm with key personnel, it also tends to send a confusing message
to the rest of the workforce. In its latest attempt to fight rising jet fuel costs and a weakening U.S.
economy, American Airlines imposed an immediate hiring freeze on management and support staff
(Maxon, 2008).
2. Mandatory vacation
Implementing mandatory vacation involves requiring employees to use their accrued vacation days or
mandating that individuals take a number of unpaid vacation days during a certain time period. While
employees might not want to be told when and how to use their entitlements, they will nonetheless
appreciate the reaffirmed job security.

3. Reduced workweek
Firms sometimes resort to a reduced workweek. This may translate into the reduction from 40 to 35 or
fewer hours and thereby reduce the short-term payroll expenditures. While most employees appreciate
the idea of being able to spend more time with their families, they may not always welcome a reduced
paycheck. Also, employees may find that the same amount of work still needs to be performed while
they spend less time on the job.

4. Cut in overtime pay

Reducing or abolishing overtime pay for employees can be a potent technique for reducing operational
costs in the short term. Firms may decide on an across-the-board (i.e., all employees) abolition or it
may confine the cut to selected categories only (e.g., non-management, blue-collar employees, or
salaried employees, etc.). In 2004, automotive firms, such as Visteon Corporation, General Motors, and
Ford, slashed overtime pay for most employees indefinitely (Dybis & Garsten, 2004).

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6. Salary reduction
Salary reduction has been a standard practice for firms experiencing unexpected financial pressure.
Whereas salary reduction may mitigate financial concerns in the short-run, extended salary reductions
can affect employee morale and loyalty. Also, while companywide salary reductions may prevent
layoffs, there is a clear risk that top performers will be encouraged to leave for competitors that offer
superior compensation

7. Temporary facility shutdown

Temporary facility shutdowns occur when a work site closes for a designated period of time, while
some administrative functions are still performed. A shutdown allows employees to have time off
without using their vacation days. While the overall company production decreases, the firm can
achieve considerable cost savings while avoiding layoffs. In 2008, Aleris International shut down its
rolling mill production in Virginia in order to align production with demand. The production for
customers was phased out and transferred to other facilities within the United States. (Aleris, 2008).

8. Soliciting cost-reduction ideas from employees

Employees appreciate the opportunity to make a positive impact on their workplace and environment.
Firms frequently solicit cost-reduction ideas from employees who are often creative in producing cost-
reduction solutions

LEGAL AND VOLUNTARY FRAMEWORK.

Organizations comply with employment and staffing laws which are highly critical to demonstrate
basic moral and ethical values and also from the legal perspective. Diversity is one characteristic by
which organizations capitalize from getting negative public relations or from getting caught on legal
litigations. Having a diverse workforce helps employees to perform better because the focus is more on
performance and merit. Employment laws and regulations exist in every country because the employer
decides on his company’s structure, the employment relationship and other principles, procedures
related to staffing and employment to achieve business strategy. The description below reflects the
hierarchical order of these legal instruments

Employment Law for HR Professionals – What You Need to Know

There are a number of things a company can do to stay on top of these changes and avoid HR law
complacency:

1. Be proactive and anticipate changes in the law. Keep up to date with upcoming policies going through
the government and be aware of how they could impact internal policies and procedures.
2. Regularly conduct audits. Create checklists and review them periodically to ensure HR regulatory
compliance in all business areas.
3. Assign dedicated policy owners within the HR department to promote ownership and responsibility.
4. Attend regular conferences and webinars to stay up to date with upcoming changes to laws affecting
human resources management.

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5. Provide ongoing employment law training for HR professionals. Train employees on the
importance of complying with internal policies and procedures.
6. Proactively implement policies that align with changes in employment laws human resources
professionals need to be aware of.
7. Avoid cost/benefit analyses relating to the costs associated with compliance. Whatever investment
is required to ensure compliance will be far lower than the potential expense a company incurs by
penalties and lawsuits.

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