1 UNIT 1 BASIC HUMAN RESOURCE PLANNING

Human resource management is the function performed in organizations that facilitate the most effective use of people (employees) to achieve organizational as well as individual goals. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource Planning Is the process (including forecasting, developing and controlling) by which a firm ensures that it has the
right number of people, right kind of people, at the right places, at the right time, doing work for which they are economically most successful. Following are some of the characteristics of HRP:      HRP must incorporate the HR needs in the light of organizational needs. It must be directed towards well-defined objectives. It must ensure optimum utilization of available human resources. It should pave way for effective motivational processes. It should take into account the principle of periodical reconsideration of new developments and extending the plan to cover the changes during long period.  Adequate flexibility must be maintained HRP to suit the changing needs of the organization.

CONCEPT AND PROCESS OF HUMAN RESOURCE PLANNING Human Resource Planning plays a very important role in the success of an organization. Failure in HRP will be a limiting factor in achieving the objectives of the organization. If the number of people in an organization is less than the number of people required, then there will be disruption in work, production will be hampered and employees will be burdened with more work. If on the other hand, there is a surplus manpower in the organization, there will be unnecessary financial burden on the organization. Therefore, it is necessary to have only adequate number of persons to attain the objectives of the organization. Human Resource Planning or Manpower Planning can also be used as an important aid in framing the training and development programme for the employees, because it takes into account the anticipated changes in the HR requirement.

PROCESS OF HUMAN RESOURCE PLANNING With the expansion of business, adoption of complex technology and professional management techniques, the process of HRP has assumed a great significance. It consists of the following stages: a. Analyzing Organizational Plans and Deciding on Objectives Before undertaking HRP of an organization, the short term and long term objectives should be analyzed. The process of HRP should start with analyzing organizational plans and programmes. They help in forecasting the demand for human resources, as it provides the quantum of future work activities. b. Analyzing factors for Manpower Requirements The existing job design and analysis may be reviewed thoroughly keeping in view the future capabilities, knowledge and skills of the present employees. The job design and analysis should reflect the future human resources and organizational plans. The factors for manpower requirements can be analyzed by the two ways: y y Demand Forecasting Forecasting the overall HR requirements in accordance with the HR plans. Supply Forecasting Obtaining data, information about the current inventory of human resources and forecast the future changes in the present human resource inventory.

c. Developing Employment Plans After determining the number of personnel for each job in the organization, the HR department has to spell out job description and job specification.

JOB DESCRIPTION
Job Description - Job descriptions are written statements that describe the:
y y y y y

duties responsibilities most important contributions and outcomes needed from a position required qualifications of candidates, and reporting relationship and coworkers of a particular job

JOB SPECIFICATION
is the delineation of the knowledge, skills, and abilities along with the associated education, training, and experience required to successfully perform within a position. The stipulated
Job Specification -

criterion normally constitutes the minimum recruiting criteria or minimum qualifications for the position.
d. Developing Human Resource Plan After estimating the supply and demand of human resources, the management startrs adjustment when the internal supply of employees is more than the demand, and there is a human surplus: then the external recruitment is stopped . If there is a human resource deficit then the planners have to rely on the external source.

DEMAND FORECASTING
Demand Forecasting is for human resources. Most firms estimate how many employees they require in future. The demand for human talent at various levels is primarily due to the following factors: a) External Challenges : These Challenges arise from three important sources

y y

Economic Developments: Liberalization, globalization, on line trading systems have created a huge demand for manpower in the industry. Political, legal, social and technical changes: The demand for certain categories of employees is also influenced by changes in political, legal and social structure in an economy. Technical changes may cause rise or fall in the demand of the human resources. Competition: The growing competition demands highly skilled and versatile employees.

b) Organizational Decisions: The organization s strategic plan, sales and production forecasts and new ventures must all be taken into account in manpower planning.

c) Workforce Factors: Demand is modified by retirement, termination, resignation, death etc.

METHODS OF DEMAND FORECASTING y y y Expert Forecast: In this method, managers estimate future human resource requirement, using their experience and judgment to good effect. Trend Analysis: HR needs can be estimated by examining past trends, reference to organizational HR history etc. Workforce Analysis: The average loss of manpower due to leave, retirement, death, transfer etc during the last 5 years may be taken into account. The rate of absenteeism and labor turnover should also be taken into account.

Work Load Analysis: The need for manpower is also determined on the basis of work load analysis, wherein the company tries to calculate the number of persons required for various jobs with reference to the planned output.

Planned output for the year Standard hours / piece Planned hours required Productive hours/person/year (incl. absenteeism, idle time etc) No. of workers required

10,000 pieces 3 hours 30,000 hours 1,000 hours

30

If span of control in the unit is 10/officer, then 3 officers are also required. y Delphi Method: The Delphi technique helps to capture the knowledge of diverse experts while avoiding the disadvantages of traditional group meetings. To forecast with Delphi, the administrator should recruit between five and twenty suitable experts and poll them for their forecasts and reasons. The administrator then provides the experts with anonymous summary statistics on the forecasts, and experts reasons for their forecasts. The process is repeated until there is little change in forecasts between rounds two or three rounds are usually sufficient. The Delphi forecast is the median or mode of the experts final forecasts. The forecasts from Delphi groups are substantially more accurate than forecasts from unaided judgment and traditional groups, and are somewhat more accurate than combined forecasts from unaided judgment.

SUPPLY FORECASTING
Once Demand Forecasting is made, the management has to find out the kind and quantity of workforce needed by the organization. Every organization has two major sources of manpower: internal and external. a) Internal Labor Supply- Employee profile which includes age, sex, education, training, and experience should be kept ready for use whenever required. Through replacement or succession plans, the organization can even find out the approximate dates by which important positions may fall vacant. b) External Labor Supply: When the organization grows rapidly, diversifies into new areas of operation or when it is not able to find people internally to fill vacancies, it has to look into outside sources.

5 METHODS OF SUPPLY FORECASTING y STAFFING TABLE: It shows the number of employees in each job. It tries to classify employees on the basis of age, sex. Position, experience, qualifications, skills etc. A study of the table indicates whether current employees are properly utilized or not. The Firm Projected

Sources of Inflows Outflows y y y Transfers Promotions New recruits

Promotion EMPLOYEES IN CURRENT STAFFING LEVEL EMPLOYEES OUT Quits

Termination Retirement Death Current Staffing Level Projected outflows this year + Projected Inflows this year = Firm s internal supply for this time next year.

MARKOV ANALYSIS: This technique uses historical rate of promotion, transfer and turnover to estimate future availabilities in the workforce. Based on past probabilities, one can estimate the number of employees who will be in various positions with the organization in future.

SKILLS INVENTORY: It is the assessment of knowledge, skills, abilities, experience and career aspirations of each current employee. This record should be updated with the changes such as additional qualification, new skills etc. Such record helps an organization to quickly match forthcoming job openings with the employee background.