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The evolution of manpower Planning Manpower planning is not a new concept.It has a long history The ability to mobalise human resource in a planned way was the success of Roman Empire more than 2,000 years ago They trained every citizen in the discipline of the soldier and making sure that senators were trained in the art of generalship Manpower planning in the Roman Empire was dynamic. Circumstances were reviewed constantly and strategies adapted accordingly The same principles of challenge and response can be applied in HRP
Human Resource Planning
y Learning Objectives y Nature and importance of HR planning y Factors affecting personnel planning y The Process of Human Resource Planning y Forecasting Demand :nature, importance, techniques and approaches y Forecasting Supply: nature, techniques y Determining Manpower Gaps y Barriers to HRP
Organizational Objectives and Strategies
Scan External Environment for Changes Affecting Labor Supply
Analyze Internal Inventory of HR Capabilities
Organizational Need for People HR Strategies and Plans
Survey of People Available
Human Resource Planning
y Who is responsible for this process y Top-level executives are responsible for manpower planning, y -as it is one of the important factors influencing the success of
an organization. y The Human Resource Division in consultation with other corporate heads usually prepares the plans. y The Human Resource Division must offer counsel and advice to various divisional heads and coordinate the various manpower estimates from time to time.
.Human Resource Planning The three key elements of the process are y Forecasting the demand for labor. y Performing a supply analysis. and y Balancing supply and demand considerations.
y Monitor and measure performance against the plan and y keep top management informed about it. y Provide proper research base for effective manpower and organizational planning. .Human Resource Planning Prof.Geisler outlined the responsibilities of Human Resource Department in respect of manpower planning thus: y Assist and counsel operating managers to plan and set objectives y Collect and summarize manpower data keeping long-run objectives and broad organizational interests in mind.
remunerating and maintaining-must be merged with strategic management 3.training.Human Resource Planning Nature of HRP HRP is the process of forecasting a firms future demand for and supply of the right type of people in the right number Importance of HRP 1.Future Personnel Needs-Planning is significant as it helps determine future personnel needs 2. hiring.Creating Highly Talented Personnel-HR managers must know to attract and retain qualified and skilled personnel -job hopping creates shortages-technology changes upgrade some jobs and degrade others -Another facet of the high talent personnel is management succession planning .Part of Strategic Planning-HR management must become an integral part of strategic management process-All activities of HRM planning.
selection.development and career planning the growing competition for foreign executives may lead to expensive and strategically disruptive turnover among key decisions makers -HR department needs to fill key jobs with expatriates .International Strategies-Depend upon HRP -Without effective HRP and subsequent attention to employee recruitment .Increasing Investments in Human Resources-through training or job assignments-use them effectively -Rupee value of a trained .Human Resource Planning 4. placement .Foundation for Personnel functions 6.motivate them and compensate them 5. motivated and productive workforce is difficult to determine -HRA(HR accounting) acknowledged that quality of workforce responsible for significant differences in short and long run performance . flexible.
Other Benefits of HRP -Upper management has better view of the HR dimensions of business decision -Personnel costs may be less because the management can anticipate imbalances before they become unmanageable and expensive -More time is provided to locate talent -Better planning opportunities exist to include women and minority groups in future growth plans .Unite the perspective of line and staff managers -Communication between HR staff and line managers is essential for the success of HR planning initiatives 9.Human Resource Planning 7.Better planning of assignments to develop managers -Major and successful demands on local labour markets can be made .Resistance to Change and Move -Growing emphasis on self evaluation and on evaluation of loyalty and dedication to the organization-difficult to move people 8.
Human Resource Planning Factors affecting HRP Organisational Growth Cycles and Planning Environmental Uncertainties HRP Time Horizons Type and quality of Forecasting Information Out sourcing Types and Strategy of organizatio n Nature of jobs being filled .
programmes & budgets Work force Requirements by occupational categories job skills etc. recruiting & selecting needed people .Human Resource Planning Long Range Objectives & Plans Overall Requirements for human resources Inventory of Present Human Resources Net New Human Resource Requirement Leading to action planning. For Recruiting & Selection Needed personnel Procedure for Evaluating Effectiveness of Human Resources Short terms goals. transferring. Inventory by occupational categories skills. plans. Leading to plans for developing. Demographic characteristics Needed Replacement or additions.
y When each projection is formulated. y The whole purpose behind human resources planning is to close this gap . estimates of demand and supply can be made with the help of certain approaches and methods. y This difference is termed as known as Manpower gap.Human Resource Planning y Once the Corporate strategy and objectives are clear. the difference between them is determined.
Human Resource Planning y One thing. . which you should consider before beginning the process of forecasting: Always decide on y a. Basic factors to be considered. The approach of how the estimation are to be based qualitative or quantitative y b. whether we are projecting wastage or redundancy or labor costs or absenteeism or labor turnover.
Frequency of the forecasting exercise (that is. and then it s a smooth sail to towards demand and supply forecasting . dealing with: rate of changes and matching estimations) d. markov analysis. work study analysis. work load analysis. Specific techniques to be adopted (this depends upon the approach adopted) such as time series analysis. probability techniques. y The moment you have decided upon these parameters.Human Resource Planning c. job analysis etc.
Human Resource Planning Human Resource Planning Model FORECAST DEMAND CONSIDERATIONS * Product/service demand * Economics * Technology *Financial resources *Absenteeism/turnover * Organizational growth Management philosophy TECHNIQUES Ratio trend analysis Regression analysis Managerial estimate Work study techniques Delphi technique BALANCE SUPPLY AND DEMAND RECRUITMENT ( SHORTAGE) · Full time · Part-time · Recalls REDUCTIONS ( SURPLUS) · terminations · Layoffs · Demotions · Retirement FORECAST SUPPLY INTERNAL · Staffing tables · Markov analysis · Skills inventories · Management inventories · Replacement charts · Succession planning EXTERNAL · Demographic changes · Education of workforce · Labor mobility · Government policies · Unemployment rate .
and -productivity can influence the demand for labor. y For example. -including competitive strategy. structure. technology. which can help us forecast demand of human resources in an organization. -Since it s an open system that we exist in. y Let us consider few of the main factors. a variety of organizational factors. utilization of advanced technology is generally accompanied by less demand for low-skilled workers and more demand for knowledge workers. .Human Resource Planning Forecasting demand y A key component of HRP is forecasting the number and type of people needed to meet organizational objectives.
Human Resource Planning Forecasting demand We can easily categories the factors in three different sources External environmental challenges y These challenges arise from three important sources 1. legal. firms employing latest technology in construction. 3. have greatly enhanced the worth of technicians and engineers . the on-line trading systems have created huge demand for finance professionals during 1990-1995 in India. legal and social structure in an economy. Political. y The demand for certain categories of employees and skill is also influenced by changes in political.. y For example. automobiles. social and technical changes. power. software etc. y Likewise. Economic developments. opening up of banking sector. 2. liberalization. And the Competition. capital market reforms.
For example. is a double-edged weapon and hence. y Employment planning under such situations becomes complicated. its impact on HR plans is difficult to predict. y High technology with all its attendant benefits may compel organizations to go lean and downsize workforce suddenly. . y computerization programs in Banks. however. for example) while increasing it in another (such as computer operations).Human Resource Planning y Technology. Railways. Post and Telegraph Departments may reduce demand in one department(book keeping.
y This enables the planning expert to forecast the requisite production schedules and thereby estimate whether any extra workforce is needed in future. estimating changes in product or service demand is a basic forecasting concern. as is anticipating changes in national or regional economics. y For example.Human Resource Planning Organizational decisions: y HR planning needs to take into account the rest of the organization s strategic plans. sales and production forecasts and new ventures to be more accurate. .
Expects higher demand for biscuits and bread. . y Proposed expansion. the effect of the changes must be estimated. y This may be estimated by market research. if it tries to venture into other lucrative fields such as milk-based products. confectionary items the demand for people possessing requisite skills in those areas in the next couple of years should be looked into carefully. trends in technological advances and so on. y Likewise. contraction or diversification of the organization s activities will obviously affect the demand for labor in general or for particular skills.Human Resource Planning y If Britannia Industries Ltd. competitive analysis. the long-term HR plan must take this into consideration. y where plans are changed.
Human Resource Planning y Workforce factors: Demand is also influenced by the internal and out flux of the employees through retirements. resignations. etc. . terminations. deaths and leaves of absence.
Human Resource Planning Organisational objectives and policies y Are vacancies to be filled by promotion from within or hire from outside y How do the training and development objectives interface with HRP objectives y Union constraints are encountered in HRP policies needed to handle y How to enrich employee s job y How to downsize the organisation to make it competitive y To what extent production be automated-what to do with those displaced y How to ensure continuous availability of adaptive and flexible workforce .
y Following several steps typically does trend analysis: First. sales is used as a predictor in trend analysis. y One example is trend analysis. which forecasts employment requirements on the basis of some organizational index and is one of the most commonly used approaches for projecting HR demand. they are the approaches used by theoreticians and professional planners. . This should be the best available predictor of human resources needs. select an appropriate business factor. Frequently.Human Resource Planning There are two approaches to HR demand forecasting: Qualitative and Quantitative Approaches y Quantitative approaches to forecasting involve the use of statistical or mathematical techniques.
y Fourth. y Third.Human Resource Planning y Second. plot a historical trend of the business factor in relation to number of employees. compare the productivity ratio for at least the past five years. . calculate human resources demand by dividing the business factor by the productivity ratio. sales per employee). y Finally. project human resources demand out to the target year. The ratio of employees to the business factor will provide a labor productivity ratio (for example.
product. e. advances in technology and computer software have made rather sophisticated forecasting more affordable to even small businesses. to predict employment levels. y Several mathematical models. .g. disposable income. budget and planning analysis. more sophisticated statistical planning methods include y modeling or multiple predictive techniques. y While the costs of developing these forecasting methods used to be quite high. and sales. with the aid of computers are also used to forecast HR needs. optimization models..Human Resource Planning Other.
an average of 16 skilled men will be required in the department during the following year. absenteeism including leave reserve.000 = 4000 man-days 10 (Components per man/day) Therefore man-days required are: 4. of course. Therefore man years required are : 40.000 = 16 man years 250 (assumed working days in a year) Thus.Work Study Techniques: A department estimates that its production for the following five years will be 40. 4 skilled men to produce 40 components per day.000 components per year. . on an average. to fullfil the plan for the production of 40.000 components. To this figure would. have to be added the necessary adjustment for wastage and possibly. Work measurement has shown that it takes.
managers estimate future human resource requirements. . and aspirations of individual employees with the current and future staffing needs of an organization. HR planners may rely on experts who assist in preparing forecasts to anticipate staffing requirements. qualitative approaches to forecasting are less statistical. department managers. y Management forecasts are the opinions (judgments) of supervisors. attempting to reconcile the interests. abilities. y In both large and small organizations. y For example. Expert forecasts: In this method.Human Resource Planning Qualitative Approaches y In contrast to quantitative approaches. or others knowledgeable about the organization s future employment needs. their experiences and judgments to good effect. experts.
thus providing a more complete forecast by bringing together the contributions of both theoreticians and practitioners. . y In combination. HRP should include the use of both quantitative and qualitative approaches. the two approaches serve to complement each other.Human Resource Planning Delphi Technique y Method of forecasting personnel needs y Group of experts usually managers are involved y Ideally.
how and when y It scans the internal and external environment for the best-fit candidate for the positions in question. there are two source of supply. it then goes on to the next search that is from where can it fulfill its requirements. y It therefore needs to determine if there are sufficient numbers and types of employees and how many are eligible for the plausible positions. y Thus. from where.Human Resource Planning Forecasting Supply y Once an organization has forecast its future requirements for employees. involves planning for procurement: who.internal and external . y Supply analysis thus.
y It is cost saving in many ways to utilize what is already available to the organization. training. education. job level. . y A profile of employee in terms of age. experience. past performance and future potential is continuously maintained for use whenever required.Human Resource Planning y Forecasting Supply y Internal sources: The most popular approach to be followed by all managers is to look within the organization among its cadre first.
the organization needs to maintain replacement charts or succession plans. Regular manpower audits are the best option to keep track of the available talent in terms of skills. etc of the workforce through the workforce analysis. retirement. promotions. performance and potential.Human Resource Planning y Thus. promotion. absenteeism.etc. . internal movements of employees (transfer.) are determined in advance then the data can be very useful. attrition. one must keep an eye on the internal movement. such as. if the requirements in terms of growth/diversification. y In addition to workforce analysis. y But while provisioning for the above corporate movements.
3. thus keeping track of the pattern of employee movements through various jobs. Thus this analysis results in a composite matrix of supply. Skill inventories -that list each employee s education. which are pictorial representations of all organizational jobs. 2. etc. . past work experience.Human Resource Planning y An internal supply analysis is done with 1. which shows the percentage (and actual number) of employees who remain in each job from one year to the next. Staffing tables/manning charts. Markov analysis. along with the numbers of employees currently occupying those jobs and future employment requirements.
Human Resource Planning y Replacement chart -that helps us derive the profile of job Holders. department-wise and reveals those who could be used as replacements whenever the need arises. .
Human Resource Planning y Turnover Rate-Traditional and simple method of forecasting internal supply y Number of separations during one year ___________________________________*100 Average number of employees during the year If 30 out of an average of 150 skilled fitters have left (20 per cent turnover) .
Human Resource Planning y Conditions of work and absenteeism Number of persons days lost _____________________________*100 Average number of persons * number of working days Productivity level-Any change in productivity would affect the number of persons required per unit of output Movement of job .
Organization growth and diversification needs additional people .Human Resource Planning y External supply-From external sources y Important 1.New blood new experience 2.Organisational need to replenish lost personnel 3.
Human Resource Planning Determining Manpower Gaps y The final stage is to balance out the demand and supply gap. y A comparison chart can be developed to find what is available and to what extent it can fulfill the demand forecast. . y This exercise helps us have an idea of the quantitative and qualitative gaps in the workforce. y The closer the gap the better it is for the company when it actually goes into procuring.
promotion. and competitive action are some of the important things that need special attention. backed up by detailed policies. training. replacement. selection. etc. y Changes in product mix. retirement. recruitment. and other human resources instruments and strategies (for example.Human Resource Planning y A reconciliation of demand and supply forecasts will give us the number of people to be recruited or made redundant as the case may be. This forms the basis for preparing the manpower plan. union agreements.). The human resource requirements thus identified are translated into a concrete manpower plan. .
retrenchment. . when and where. etc. y · Redeployment plan to help chart out the future movement in terms of training and transfers. the plans for retraining. lay-off. and plans for golden handshake.Human Resource Planning The manpower plan is further divided into the following resultant operational plans:y Recruitment plan to show how many and what type of people is required and when they are needed. where this is possible. y Redundancy plan will indicate who is redundant.
Human Resource Planning y Training plan to chart out if a training is required. whether it will be done in-house. Productivity plan Will indicate reasons for employee productivity or reducing employees costs through work simplification studies. . done in phases or included as part of a formal induction program. This includes the cost and benefit analysis of all the options available. mechanization. incentives and profit sharing scheme job redesign. If yes. productivity bargaining. when and to which level. etc.
changes in work requirements and improvement in working conditions.Human Resource Planning y · Retention plan -Will indicate reasons for employee turnover and show strategies to avoid wastage through compensation policies. y Check/reviews points -The success of the entire exercise is dependent upon frequent reviews so that none of the factors are left out and changes are constantly taken care of the important thing is to clearly demarcate point .
Their argument is simple-there are people when needed. Offer attractive package of benefits to them to quit when you find them in surplus. HR practitioners are perceived as experts in handling personnel matter. 2. y The major ones are the following: 1. might make the overall strategic plan itself defective.Human Resource Planning Barriers to HRP: y Planners face significant barriers while formulating an HRP. but are not experts in managing business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organisational plan. . People question the importance of making HR practices future oriented and the role assigned to HR practitioners in formulation of organizational strategies.
Conflicting may exist between short-term and long-term HR needs. Many managers are of the belief that HR needs can be met immediately because skills are available on the market as long as wages and salaries are competitive. 4. . long-term issues are neglected. These managers fail to recognize that by resorting to hiring or promoting depending on shortterm needs alone. HR information often is incompatible with the information used in strategy formulation.Human Resource Planning 3. such as preparing people for assuming greater responsibilities. there arises a conflict between the pressure to get work done on time and long-term needs. Strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information. For example.
Human Resource Planning 5. . Others take a qualitative approach and focus on individual employee concerns such as promotabilty and career development. Some people view HRP as a number game designed to track the flow of people across the departments. These people a strictly quantitative approach to planning. Best results would accrue if there is a balance between the quantitative and qualitative approaches. There is conflict between quantitative and qualitative approach to HRP.
. HRP is not strictly an HR department function. Non-involvement of operating managers renders HRP ineffective. Successful planning needs a co-coordinated effort on the part of operating managers and HR personnel.Human Resource Planning 6.
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