Human Resource Planning

William A. Ward
Four steps to achievement: Plan purposefully. Prepare prayerfully. Proceed positively. Pursue persistently.

Benjamin Franklin By failing to prepare, you are preparing to fail.

Planning

The act or process of drawing up plans or layouts for some project or enterprise traveling.
The cognitive process of thinking about what you will do in the event of something happening; A Plan is a proposed or intended method of getting from one set of circumstances to another. They are often used to move from the present situation, towards the achievement of one or more objectives or goals.

Manpower (Human Resource) Planning..

the total knowledge, skills, creative abilities, talent & aptitude of an organisations work force, as well as the values, attitudes & benefits of an individual involvedIt is the sum total of inherent abilities, acquired knowledge & skills represented by the talents and aptitudes of the employed persons

Manpower (Human Resource) Planning..

the process by which a management determines how an organisation should move from its current manpower position to its desired manpower position.
Through planning, a management strives to have the right number & the right kind of people at the right place, at the right time, to do things which results in both the organisation & the individual receiving the maximum long range benefit.

Relationship to Strategic Planning

Effective Human Resource Planning:
Enables the very survival of an organization Different organizational strategies require varying human resource plans Facilitates proactive response to environmental and legal challenges Needs to be matched to tactical plans

Relationship to Strategic Planning..

Overall Corporate Strategy

Operational & Tactical Plans

Human Resource Objectives

Human Resource Plans

Causes of Demand for Human Resources..

External Organizational Workforce

Economic developments Socialpolitical-legal challenges Technologica l changes

Strategic plan

Retirements

Budgets
Sales & production forecasts New ventures

Resignations
Terminations

Deaths
Leaves of absence

Competitors

Organizational & job design

Forecasting Human Resource Needs

Forecasting Techniques
Expert
Informal and instant decisions Formal expert surveys Delphi technique

Trend Projection

Extrapolation Indexation Statistical analyses

Budget and planning analysis New-venture analysis Computer models

Other

Expert Forecasts
Informal and instant decisions
Manager believes the workload justifies another employee

Formal expert surveys

Planners survey managers Use questionnaires or focused discussion

Delphi technique
Solicit estimates from a group of experts, usually managers, until estimates converge

Trend Projection Forecasts

Extrapolation
Extending past rates of change into the future

Indexation
Matching employment growth with an index eg. ratio of production employee to sales

Statistical analyses

The Supply of Human Resources

Internal Supply Estimates
Skills inventories Management inventories Replacement charts Transition matrices & Markov analysis Labour market analysis

External Supply Estimates

Community attitudes Demographic trends

Matching Supply and Demand

Available supply of human resources exceeds the firms demands

Supply and

demand for
human resources is equal (RARE!)

Available supply of human resources cannot meet the firms needs

Surplus

Equal

Shortage

Other Forecasting Methods

Budget and planning analysis

Organizations that need human resource planning generally have detailed budgets and long-range plans.

New venture analysis

Making comparisons to firms with similar operations.

Computer-based simulation models

Formulas that include multiple variables

Managing Oversupply
Hiring Freeze Early & Phased Retirement Offers Job Sharing Use of Part-time Workers Internal Transfers Layoffs Leave without Pay Loaning Termination/Outplacement

Alternative Arrangements in Staffing

Shorter or compressed workweeks Just-in-time employees

Work Options

Flextime

Virtual organization

Telecommuting

Human Resource Information Systems

A Human Resource Information System (HRIS) is used to collect, record, store, analyze, and retrieve data concerning an organizations human resources HRIS information for a large organization:
Examples: Wage and salary data, benefits, training & development, employee information, grievances, demographics, productivity data etc.

HRIS Factors for Consideration

Relational versus non-relational systems Referential integrity Breadth and size Types of outputs Developing internal software versus buying Access to HRIS information Security

Use of Intranets

Manpower Planning
Human resource planning is the process of forecasting an organizations human resource needs and developing effective action plans to fulfill those needs. Human resource planning is not an isolated activity rather it is tied closely to the overall strategic business planning of a given organization. There are three fundamental reasons for the human resource planning effort.
First, it allows for a more effective and efficient utilization of the firms personnel. The process of keeping an up to date employee inventory will enable companies to better match employee abilities and interests to job requirements. Third and finally, planning allows for more effective equal employment opportunity act compliance.

Activities
A) Forecasting future manpower requirements (mathematical projections, judgmental estimates based on future plans) B) Making an Inventory of present manpower resources & assessing the extent to which these resources are employed optimally.

C) Anticipating manpower problems by projecting present resources into the future & comparing them with the forecast of requirements to determine their adequacy both quantitatively & qualitatively: & D) Planning the necessary programmes of requirements, selection, training, development, utilisation, transfer, promotion, motivation & compensation to ensure that future manpower requirements are properly met.

Need
To carry on its work, each organisation needs personnel with the necessary qualifications, skills, knowledge, work experience and aptitude for work. These are provided through effective manpower planning. Since a large number of persons have to be replaced who have grown old, or who retire, die or become incapacitated because of physical or mental ailments, there is a constant need for replacing such personnel. Otherwise, the work would suffer. Human resource planning is essential because of frequent labors turnover which is unavoidable and even beneficial because it arises from factors which are socially and economically sound such as voluntary quits, discharges, marriage, promotions, or factors such as seasonal and cyclical fluctuations in business which cause a constant ebb and flow in the workforce in many organizations.

Need
In order to meet the needs of expansion programmes human resource planning is unavoidable. It becomes necessary due to increase in the demand for goods and services with growing population, a rising standard of living-larger quantities of the same goods and services are required. The nature of the present workforce in relation to its changing needs also necessitates the recruitment of new labour. To meet the challenge of a new and a changing technology and new techniques of production, existing employees need to be trained or new blood injected in an organization. Manpower planning is also needed in order to identify the areas of surplus personnel or areas in which there is a shortage of personnel. If there is a surplus, it can be redeployed and if there is a shortage, it may be made good.

Advantages
Maximum utilisation of human resources, Reduce excessive labour turnover, Reduce absenteeism, Improve productivity, Achieve goals of the organisation. Upper management has a better view of the human resources dimensions of business decisions. Personnel costs may be less because management can anticipate imbalances, before they become unmanageable and expensive. More time is provided to locate source talent. Major and successful demands on local labour markets can be made.

Human resource planning is practically useful at different levels...

At the national level, it is generally done by the government and covers items like population projection, programme of economic development, educational facilities, occupational distribution, and growth, industrial and geographical mobility of personnel. At the sector level, it may be done by the government- central or state- and may cover manpower needs of agricultural, industrial and service sector. At the industry level, it may cover manpower forecast for specific industries, such as engineering, heavy industries, consumer goods industries, public utility industries, etc. At the level of the individual unit, it may relate to its manpower needs for various departments and for various types of personnel.

Strategies for the manpower planners

They should collect, maintain & interpret relevant information regarding human resources. They should report periodically manpower objectives, requirements & existing employment & allied features of manpower.

They should develop procedures & techniques to determine the requirements of different types of manpower over a period of time from the standpoint of organisations goal.
They should develop measures of manpower utilisation as component of forecasts of manpower requirements along with independent validation. They should employ suitable techniques leading to effective allocation of work with a view to improving manpower utilisation.

Strategies for the manpower planners

They should conduct research to determine factors hampering the contribution of the individuals & group to the organisation with a view to modifying or removing these handicaps. They should develop & employ methods of economic assessments of human resources reflecting its features as income-generators & cost & accordingly improving the quality of decisions affecting the manpower. They should evaluate the procurement, promotion & retention of the effective human resources & They should analyse the dynamic process of recruitment, promotion & loss to the organisation & control these process with a view to maximising individual & group performance without involving high cost.

Process of HR planning
Deciding goals or objectives.
Estimating future organisation structure & manpower requirements. Auditing human resources. Planning job requirements & job descriptions & Developing a human resource plan.

Deciding goals or objectives.

O R G A N I S A T I O N

Long-range objectives & plans

Overall Inventory recruitments of for present human resources human resources

Net new human resources requirements

Action programmes for recruiting & selecting needed personnel

Procedures for evaluating effectiveness of human resources planning

S U B _

U N I T S

Short term goals plans programmes & budgets

Work force Requirement By Occupational Categories job skills demographic characteristics

Inventory by Occupational Categories job skills demographic characteristics

Need replacements or additions

Plans for developing upgrading, transferring in recruiting & selecting needed people.

Estimating future organisation structure & manpower requirements.

To develop future Org. Str. in consonance with the environment. Receive requisition with proper job analysis from various depts. Importance of forecasting:
Contingencies of general business cycle (such as inflation, wages, prices, costs & raw material supplies, etc.) have influence on all plans. Changes if any (tech. Mergers..growth..& requirements thereof can be met. Changes in management philosophies & leadership styles. Competency / skill of employees. Quality & Quantity of product.

Recruitment, Selection, Induction, training cost & attrition cost to be calculated.

Auditing human resources.

Skill Inventory

Planning job requirements & job descriptions

Job Analysis

Job analysis
Job: A job may be defined as a collection or aggregation of tasks, duties and responsibilities which as a whole, are regarded as a regular assignment to individual employees, and which is different from other assignments. In other words, when the total work to be done is divided and grouped into packages, we call it a job. Each job has definite title based upon standardized trade specifications within a job: two or more grades may be identified, where the work assignments may graded according to skill, the difficulty of doing them, or the quality of workmanship. Further, a job may include many positions, for a position is a job performed by, related to, a particular employee. Thus, it may be noted that a position is a collection of tasks and responsibilities regularly assigned to one person; while a job is a group of positions, which involve essentially the same duties, responsibilities, skill and knowledge. A position consists of a particular set of duties assigned to an individual. There may be, say five persons, all of whom are classified under the same job; and yet each may perform a slightly different work. Therefore, each may perform a slightly different work. Therefore, each person would have different position--- position of a secretary, for example. It may be noted that while a job is impersonal the position is personal.

Job analysis
Job Analysis: It is a procedure by which pertinent information is obtained about a job, i.e., it is a detailed and systematic study of information relating to the operations and responsibilities of a specific job. An authority has defined job analysis as the process of determining, by observation and study, and reporting pertinent information relating to the nature of a specific hob. It is the determination of the tasks which comprise the job and of the skills, knowledge, abilities and responsibilities required of the worker for a successful performance and which differentiate one job from all other. Job Description: It is a written record of the duties, responsibilities and requirements of particular job. It is concerned with the job itself and not with the work. It is a statement describing the job in such terms as its title, location, suites, working conditions and hazzads. In other words, it tells us; what is to be done and how it is to be done and why. It is a standard of function, in that it defines the appropriate and authotised contents of a job.

Job analysis
Job Specification: It is a standard of personnel and designates the qualities required for an acceptable performance. It is written record of requirements sought in an individual worker for a given job. In other words, it refers to a summary of the personal characteristics required for a hob. It its s statement of the minimum acceptable human qualities necessary for the proper performance of job. Job Design: It is the division of the total task to be performed into the manageable and efficient units --- positions, departments and divisions---- and to provide for their proper integration. The subdivision of work is both on a horizontal scale --- with different task across the organization being performed by different people and on the vertical scale, in which higher levels of the organization are responsible for the supervision of more people, the co-ordination of sub- groups, more complex planning, etc.

Job analysis
Job Analysis (JA): After a job has been defined, it is analyzed, i.e., each task is described in detail. JA is a procedure and a tool for determining the specified tasks, operations and requirements of each job. It is the process of getting information about jobs: specially, what the worker does; how he gets it done; why de dos it; skill, education and training required; relationship to other jobs; physical demands; environmental conditions. In other words, it refers to the anatomy of the job. It is a complete study of job, embodying every known and determinable factor, including the duties and responsibilities involved in its performance, the conditions under which the performance is carried on, the nature of the task, the qualities required in the worker, and such conditions of employment as pay, hour, opportunities and privileges. It also emphasizes the relation of one hob to others is the organization.

Job Analysis (At Process for Obtaining All Pertinent Job Facts)

Job Description Statement containing items such as:

a) Job Identification (job title, location, occupational code, alternative name in use, name of division, department and unit where it exists. Job Summary (gives a quick capsule explanation of the contents of a job, its hazards and discomforts). Duties performed (says the what, how and why of a job; also describes a workers responsibilities in regard to custody of money, supervision of other workers, training of subordinates, etc.) Relation to other jobs (gives how many persons may be supervised). Supervision given/taken (helps in locating a job in the job hierarchy). Machines, tools, equipment (what type of tools/equipment material is used). Materials and forms used. Conditions of work Location factory/office/inside/outside/overhead/underground/solitary gang; Time-day,night,overtime,peak loads,uniformity of work; Posture standing,sitting,stopping,clinging,walking,reaching,lif ting; Speed quick, moderate, slow;

Job Specification A statement of the human requirements for doing a job.

a) b) Physical Make-up or characteristics. Psychological characteristics.

b) c)

c)
d) e)

Personal characteristics.
Responsibilities. Other factors of a demographic nature ( sex, age, education, language, ability to read, write and speak).

d) e) f) g) h)

DEMAND FOR SERVICES & PRODUCTS

OVERALL FORECASTS
2

SEGMENTED
1

WORKING BUDGET (WORKLOAD OF INDEPENDENT DEPTTS / FUNCTIONS)

MODIFIED BY EFFICIENCY / PRODUCTIVITY

3

FORECAST INTERNAL CHANGES (EXPANSION/ CONTRACTION ) FACILITIES PRODUCTS SERVICES

CHANGE (TECHNOLOGICAL , COMPUTER AND ADMINISTRATIVE)

PRELMINARY HUMAN RESOURCE REQUIREMENTS

JA: Area of application

LABOUR INTERNAL LABOUR MARKET SUPPLY
5

MARKET EXTERNAL LABOUR MARKET SUPPLY

A labour market generally has the following characteristics

It is highly unstructured and unorganized, for a majority of workers are illiterate and ignorant and do not have any information about available job opportunities. The procedures by which companies recruit workers and the methods by which workers go about getting jobs are highly variable. A great range of wage rates for the dame occupation exists in the labour market, depending upon the attitude of the management towards wage levels, the employers ability to pay and the productivity of labour. Labour is mostly not mobile either because it has incomplete or inaccurate knowledge of job opportunities and available wages or because of lack of job security. The supply of labour fluctuates and is influenced by the population in the labour market, the attractiveness of a job (benefits, services, wage rates, the reputation of a company), the extent of unemployment, and the particular skills that are in demand. Manual labour for unskilled jobs has been replaced by activities that require skills scientific knowledge, technical acumen and professional training.

A labour market generally has the following characteristics

At the corporate level other factors operate, viz.,

(i) trends in the growth of the working population; (ii) Government training schemes and systems of technical, vocational, professional, and general education, and their outturn; (iii) impact of social security measures on manpower supply; (iv) mobility of the products of the technical, professional and vocational institutions, (v) cultural factors and customs, social norms, affecting school leaving age, labour force participation of women, children and young persons.

A labour market generally has the following characteristics

Various external factors influence the outflow and inflow of manpower resources. At the local level such factors are: (i) population density at various distances from the factory or work place; (ii) local unemployment level, particularly of the categories which are relevant for the operation of the organisations; (iii) availability of part- time labour, (iv) current competition foe similar categories of manpower from other organisations; (v) output from the educational system (general as well as technical; (vi) pattern of in-migration and out-migration within the area and between it and (vii) transport facilities and communication pattern.

Developing a human resource plan.

Job

Controlling manpower cost

Budget

Manpower Planning (An integral part)

MPP should be continuous and proactive process.

The human resource planning process will be influenced by the parent organizations other resource planning strategies and its human resource policies.
The two external factors that are most likely to affect human resource planning and employment practices are industrial relations legislation Internally, the size, structure, culture and type of organisation affect human resource planning

Macro Approach to Human Resource Planning

Environmental analysis Objectives of the parent Organisation Degree of success in achieving strategic and operational objectives Appropriateness of structure Labour supply and composition Influencing factors from the external environment Influencing factors from the internal environment Likelihood of growth or downsize, amalgamation or rationalization Existing policies relating to human resource management issues Future trends in skills, expertise and knowledge requirements.

Research to gather data

Needs
More/ fewer people Different skills, expertise, knowledge constrains Impact of changes on existing personnel Redundant skills / jobs Accuracy of finding

Feedback, evaluation, redesign

Availability Internal : -Skills inventory -Current staff profile -Levels of growth and attrition -Identification of development needs -Current performance levels External: - status of supply market

Deficit
Recruit, transfer, red ploy Change technology Improve productivity Promote, retain

Match
How effectively are staff managed? -Performance monitoring system -Promotional practices -Rewards systems stimulate productivity Hold

Excess
Transfer, red ploy Retrench, terminate Demote

Feedback, evaluation, redesign

Macro Approach to Human Resource Planning

Environmental Analysis
External Environment Industrial Relations Unions Supply and demand for Labour Internal environment Organization - Size and Structure - Culture - type Human resource management polices Information resources Technology resources Financial resources Future direction of the organization Management Processes Outcomes Staff - motivated - production - low turnover - happy

Inputs
Macro level -needs -resource availability -gap analysis -skills inventory Micro level -job analysis -job description -job specification -recruitment -selection

Induction Training and development Compensation and rewards Industrial relations Communication

Review Counsel Turnover and Separation Exit interview

Performance Monitoring Organization-wide -Performance appraisal - Promotion system - Reward systems

Micro Approach to Human Resource Planning

Job Analysis Collect both quantitative and qualitative information on: -tasks and nature of work activities -Working conditions -Personnel requirements -Key competency requirement -Nature and degree of supervision Job Description Provides a factual statement on duties & responsibilities of a specific position: -job identification -job summary -organizational relationships -activities performed -achievable results -reporting / supervisory relationships -combination tasks / relationships to other jobs -working conditions

Job specification
Describe the desired attributes and key competencies required of the position: -qualifications

-experience
-skills -knowledge -specific

Strategic Mgt Decisions

Technological forecasts, Market forecasts, Organizational forecasts, Investment planning, Annual operating plans.

Human Resource HR Supply

Annual employment requirements. Numbers skills, Occupation categories.

Variances

End

If Surplus

If Shortage

Action Decisions

Decisions: Layoff, retirement, etc.

Decisions: Overtime, retirement, etc.

End

End

Three Ranges of Manpower Forecasting

Short Range (0-2 years) Intermediate Range (2 to 5 years) Long- Range (beyond 5 years)

Demand for

Authorised expansion technological changes; new legislation; Employee turnover; lay- offs, and contractual restrictions.

Operating needs from budgets or plans. Expansion or Contraction or adjustments.

Supply of Labour : Internal Supply of Labour : External

Departmental, divisional Merger or acquisition plans; rosters; promotions. managerial and supervisory Expected losses; quits, death. development programmes. Area employment levels; Number of employees needed.

Geographical capacity; size of the organisation and system;product lines; services offered; load anticipated. Changes in environment and technology essentially judgemental. Labour saving equipment, efficiencies, productivity, etc. Management expectations of changing characteristics of employees and future available manpower.

Labour Market projects, Management expectations of future business development plans, conditions affecting immediate general institutional plans to decisions. hire.

DEMAND FOR SERVICES & PRODUCTS

OVERALL FORECASTS
2

SEGMENTED
1

WORKING BUDGET (WORKLOAD OF INDEPENDENT DEPTTS / FUNCTIONS)

MODIFIED BY EFFICIENCY / PRODUCTIVITY

3

FORECAST INTERNAL CHANGES (EXPANSION/ CONTRACTION ) FACILITIES PRODUCTS SERVICES

CHANGE (TECHNOLOGICAL , COMPUTER AND ADMINISTRATIVE)

PRELMINARY HUMAN RESOURCE REQUIREMENTS

LABOUR INTERNAL LABOUR MARKET SUPPLY

MARKET EXTERNAL LABOUR MARKET SUPPLY

It may be rightly regarded as a multi-step process, including various issues such as :

(A) Deciding goals and objectives

(B) Environmental analysis

(C) Estimating future organizational structure (D) Forecasting Human Resource Demand and Human Resource Supply (E) Auditing human resources

(F)

Planning job requirements and job descriptions

(G) Developing a human resource plan

Environmental Analysis
To remain competitive, modern organizations must be able to detect changes as they are occurring and initiate adaptive responses to these changes on a timely basis. In general, organizations must regularly conduct an environmental analysis to stay abreast of significant changes as they happen. To accomplish this goal, company will typically conduct a three tier analysis. First, the general environment is scanned. The general environment is composed of economic, legal, and political factors, which affect all organizations equally.

Second, the companys operating environment is assessed. The operating environment consists of factors that are unique to a particular firms mission. These include labor availability, customers, suppliers and competitors. Third, the internal environment is surveyed. The internal environment consists of a companys organizational strategy and corporate culture.

Forecasting The Manpower Requirements

The eventualities and contingencies of general economic business cycles (such as inflation, wages, prices, costs and

raw material supplies) have an influence on short-range and

long-range plans of the organisation.

Forecasting Human Resource Demand & Human Resource Supply

Demand Forecasting

Employee Replacement Charts

Supply Forecasting Internal Sources of Supply

Internal Sources of Supply

Employee turnover or wastage:

Analyzing the effect of promotions and

Transfers Assessing changes in conditions of work and

absenteeism.

Auditing Human Resources

Skills Inventory

There are four major elements in the process of executives resource planning that would claim the attention of the companies:
1. Executive Resources Inventory 2. Executive Resources Forecasting 3. Career Development Plans 4. Management Succession Systems

LINK BETWEEN HUMAN RESOURCE PLANNING AND STRATEGIC PLANNING Benefits anticipated from long range human resource planning include the following.
An improved understanding of the human resource implication of business strategies. Recruiting experienced talent well in advance of needs, both from campuses and from the market. Improved planning of assignments and other employee development actions such as lateral movements to permit long range broadening of managerial perspective. Improved analyses and control of personnel related costs, by providing more objective criteria concerning payrolls, turnover, relocation, training and other costs.

Manpower Requirements can be determined:

Qualitative Determination

Quantitative Determination

Qualitative Determination