Human Resource Planning (HRP)

Man is the key to our problems, not money. Competent

people can work miracles even with small resources and
draw wealth out of barren land.
What is HRP?
Human resource planning is a systematic approach to
ensure that the right people will be in the right place at the
right time.
It is a process of deciding what positions the firm will have
to fill, and how to fill them.
It is a process of determining HR needs of the organization
in the context of its strategic planning.
The Need for HRP
To ensure that HR is available: provide the information and
data to an organization on when, where and how many
employees need to be recruited.
To assess the future supplies of and demands for HR:
reduce shocks and disturbances within the employment
patterns of large organizations.
To match supplies and demands, making them compatible
with the achievement of the organizations future goals.
Needs determined by
Assessing current human resources
Analyzing corporate plans
Forecasting staffing level and categories in the light
of corporate objectives
Assessing availability of HR
Determining HR needs
Formulating HR programs to address the needs.
Steps in HRP
1. Assessing Current Human Resources
2. Demand Forecasting
3. Supply Forecasting
4. Matching demand and supply
5. Action Plan
Step 1: Assessing Current HR
HR Inventory (details of workforce: something like CV
or personal history form)
1. Job Analysis (details of jobs, resulting in JD and JS)
Step 2: Demand Forecasting
Estimates the number of people required in future
and their capacity.
To forecast personnel needs:
Project the demand for the product or service
Project sales and revenues
Plan the volume of production or activity level to
meet the planned sales, revenue or activity
requirements
Estimate the size of the staff required to achieve it
How to forecast personnel needs?
Staffing plans also must reflect:
Projected turnover of staff
Quality and skills of employees in relation to the
changing needs of the organization
Strategic decisions (eg. Upgrade quality,
enhance productivity, enter into new markets)
Technological and other changes resulting in
increased productivity
Financial resources
HR Forecasting Methods
Trend analysis
Study the past staffing needs over a period of
years to predict future needs.
Ratio analysis
Use of ratios between one or more business
factors and staffing level as well as between
different staff categories if the current year to
forecast future needs.
Ratio trend analysis
Use of ratios of the past years to predict needs
Managerial judgment
A big role
Trends, ratios and relationships unlikely to continue
unchanged
Judgment needed to modify the forecast based on
the factors that are likely or should be changed
Important modifying factors
Strategic decisions about quality or market
Technological/managerial changes for productivity
increase
Step 3: Supply Forecasting
Internal supply forecasts
2. External supply forecasts
Forecasting Internal Supply
Qualifications inventories
Manual or computerized records listing
employees education, career and development
interests, languages, special skills etc to be used
in selecting inside candidates for promotion
Personnel inventory and development
Information is complied about each
employee manually and recorded.
Forecasting Internal Supply
Personnel replacement charts
Company records showing present
performance and profitability of inside
candidates for the most important positions
Position replacement card
A card prepared for each position in a
company to show possible replacement
candidates and their qualifications
 Forecasting External Supply
Monitoring general economic conditions
Local market conditions
Occupational market conditions
Step 4: Matching demand & supply
To determine future shortages or surpluses
Additional staff will be needed to meet the shortage
Retrenchment will be needed for surplus staff
Step 5: Action Plan
Concerned with the preparation of action plans to deal with
shortages and surpluses of human resource
Recruitment plan
Training and Development plan
Retention plan
Promotion plan
Redeployment plan
Redundancy plan
Transfer plan
Succession plan
 In summary
HR planning is concerned with the demand and supply of labor
and problems arising from the process of reconciling these
factors.
The need for HR planning lies with the long-term and short-
term operational and growth needs of the organization but
also with needs and aspirations of individuals within the
organization.
Issues to be addressed in HR Planning
How many employees does the organization currently
employ?
What is the age profile, by department, of employees?
Where in the organization are these employees to be found?
Which are the biggest departments in the organization?
What skills do the employees possess?
How many employees, on average, leave the organization
every year?
In which areas of expertise do the organization tend to loose
more employees?
HRP in Nepal
Analysis is in its infancy / Fire-fighting tendencies / Kowledge
base (ad-hoc, guess work) / Short term planning /
Overstaffing (govt. & public organizations)/ Nepotism/
favouritism (private org.)
Recruitment- Review
What should we know about HR so that we can make
effective decision? HRIS
2. What should we expect our employees to do?JA:JD/JS
3. How many and what type of staff do we need to achieve our
organizational goals? HRP
4. How are we going to acquire them? RECRUITMENT
5. Whom to acquire and how to select? SELECTION
Recruitment
Process of attracting eligible candidates.
Process of generating a pool of suitable candidates for
available jobs.
The process begins when the new recruits are sought and
ends when applications are received.
Purpose of recruitment
Attract suitable candidates to apply.
Discourage unsuitable ones.
Provide job information.
Project organization image.

Alternatives to recruitment
Reorganization / Employee leasing / Outsourcing / Internal
redeployment / Technology
 Recruitment process

Recruitment Planning Recruitment Philosophy

- Numbers needed - Internal vs external
- JS - Job vs career
- AA goal - Short vs long term
- Other considerations
Recruitment Strategy
Development Screening/ selecting
- Where/whom to recruit employees
- How to recruit
- Choice of recruiters
Recruitment Evaluation
- What information to share
- Number of jobs filled
Recruitment Activities - Timeliness of jobs filled
- Job posting - Cost per job filled
- Advertisements - AA goals met
- Campus visits
- Other methods
-Follow up actions
-Record keeping
 Sources & Methods of Recruitment
Internal source
(within the organization)

Internal method
Job posting
Employee referrals
HR Planning HR inventory
How many?
Job Analysis Where? External source
What? (outside the organization)
Legal consideration

External method
Walk-ins
Advertisement (media)
Campus visits
Agencies
Trade unions
 Internal vs External Recruitment
Internal Recruitment
Advantages Disadvantages
Better selection Limited choice
(foreknowledge of candidates Failed applicants become
strengths and weaknesses) discontented
Increases employee morale Time wasted interviewing
Adaptability (less training & inside candidates who will not
orientation required) be considered
Cost effective In-breeding of status quo
Favoritism/nepotism
External Recruitment
Advantages Disadvantages
Greater choice for selection High cost
Balanced HR mix Adaptability problems
Fairness Wrong selection
Environmental adaptability
Ad Construction - The Media: selection of the best medium
depends on the positions for which the firm is recruiting.
Newspapers
Trade and professional journals
Internet job sites
Marketing programs
Constructing an effective ad
Wording related to job interest factors should evoke the
applicants attention, interest, desire, and action (AIDA) and
create a positive impression of the firm.
Be creative: use of ad agencies might help develop &
promote companys image.
Executive recruiters : Headhunters
Special employment agencies retained by employers to seek
out top-management talent for their clients.
a. Contingent-based recruiters collect a fee for their services
when a successful hire is completed.
b. Retained executive searchers are paid regardless of the
outcome of the recruitment process.
Internet technology and specialization trends are changing
how candidates are attracted and how searches are
conducted.
 Recruiting Yield Pyramid

Recruiting yield pyramid

The historical arithmetic relationships between recruitment
leads and invitees, invitees and interviews, interviews and
offers made, and offers made and offers accepted.
Significance of YP
YR will help to estimate the suitable candidate number
required in future.
Saves time and resource.
 Selection
A process of choosing from a pool of candidates the persons
who are most likely to meet the criteria of the job.
All selection activities, from the initial screening interview
to the physical examination are directed toward making
effective selection decision.
Effective selection involves finding the match between
organizational needs for qualified individuals &
individuals needs jobs in which they are interested.
Selection Decision Outcomes

Accept Reject
Correct Reject
Successful
Decision Error
Accept Correct
Unsuccessful
Error Decision
Importance of Selection
Why careful selection is important?
Evaluate, hire, and place job applicants in the best
interests of both organization & individual
High performance of employees from the beginning
High costs for hiring (selection cost, induction and
training/development cost, labor turnover cost)
Costly legal implications of incompetent hiring (negligent
hiring litigation)
How to avoid litigation
Carefully scrutinize
Ask about gaps in employment
Get written authorization for reference checks
Save records
Reject applicants
Balance privacy right with need to know
Take immediate action
Key Selection Methods
Application blank
References
Psychometric tests (ability, aptitude, achievement,
personality, motivation)
Performance/ work sample test
Interview (structured, unstructured, individual, group,
situational)
Assessment centre
 Choice of Selection Methods
In choosing the right selection methods, several technical
factors need to be considered like predictors and
criteria to use.
Usefulness of methods used depends on their reliability and
validity.
Test Validity
Test validity checks whether or not a test measures what it
is supposed to measure.
Does the test actually measure what we need for it to
measure?
2 main ways to demonstrate tests validity:
Criterion validity: positive correlations between predictor
(test scores) and criterion (performance)
Content: identify task & behaviour critical to performance
and select a sample of the tasks and behaviour to be
tested. If content of test correlates highly with job
content then the test is content valid.
Test Reliability
Test reliability tests consistency or accuracy of scores
obtained by the same person when retested with the
same or equivalent methods.
Are the test results stable over time?
Causes of test unreliability :Focus of test / Errors on testing
 Validation of Selection Methods
Job Analysis

Identification of Predictors Identification of Criteria

Measurement of Predictors
Measurement of Criteria
Correlation of Scores

+VE Correlation Validated : -VE Correlation Invalidated:

Continue, Review Change Predictors
Selection Approaches
Single predictor approach :Using one piece of information
Multiple predictor approach: More than one methods being used
Multiple hurdle/ discrete: Screening of candidates at each step, Useful:
large number and long selection process
Compensatory/ Comprehensive: Selection based on aggregate
performance on selection tests, Useful: small number and few tests
Hybrid: Combination of both
 Effectiveness of Selection Predictors
Predictor Validity Cost Legality Reaction

Application blank Low Low ? Neutral

Weighted application High High High Neutral

Biographical/interest High High High Negative

blanks
Recommendation letters Low Low ? Positive

Cognitive ability tests High Low Low Negative

Job knowledge tests High High High Positive

Work sample tests High High High Positive

Assessment centers High High High Positive

Interviews Low Low Low ?

(unstructured)
Interviews (situational) High High High Positive