MAN POWER PLANNING Unit-2

Monica Kapuria BBDU

Strategic Manpower planning/Employment planning

The ongoing process of systematic planning to achieve optimum use of an organization's most valuable asset - its human resources. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labor demand, analyzing present labor supply, and balancing projected labor demand and supply. HRP offers an accurate estimate of the number of employees required with matching skill requirements to meet organizational objectives. HRP is a forward looking function as human resource estimates are made well in advance.

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Contd

According to Geisler, Manpower planning is a process-including forecasting, developing and controlling by which a firm ensures that it has:
The right number of people The right kind of people At the right places At the right time, doing work for which they are economically most useful.

Thus it is a process of anticipating and carrying out the movement of people into, within, and out of the organization. HRP is done to achieve the optimum use of human resources and to have a correct number and types of employees needed to meet organizational goals.
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Purpose:
Determining recruitment needs Determining training needs Management development Balancing the cost between the utilization of plant and workforce Industrial relations.

Importance:
Future personnel needs Coping with change Creating highly talented personnel International strategies Foundation of personnel functions Increasing investments in HR Resistance to change and move

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Limiting factors to HRP

HR professionals are basically confronted with three problems while preparing and administering HR plans: accuracy, inadequate top management support, lopsided focus on quantitative aspects. Apart from them: Opposition or scepticism among members of management; all must be convinced of the value of human resource planning if it is to be a success. Resistance to changes expressed in the plan.

The difficult of forecasting social and economic changes accurately, particularly in an era of high unemployment.
The rapid growth of new technologies The plan may indicate recruitment and training programmes which, although desirable may be impossible to put into practice because the money to pay for them may not be available now. Non-involvement of operating managers tends to make HR planning ineffective
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Factors affecting HRP

HRP

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HRP PROCESS

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HRP Process contd..

HR planning goes hand in hand with an organizations strategic planning (refers to an organizations decision about what it wants to accomplish and how it wants to go about accomplishing it ) HR planning is important for developing a strategic plan. HRP essentially involves forecasting personnel needs, assessing personnel supply and matching demand supply factors through personnel-related programmes. The planning process is influenced by overall organizational objectives and the environment of business. The process consists of following steps:-

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Contd..
Environmental Scanning or situational analysis:
Refers to the systematic monitoring of the external forces influencing the org. For eg: rapid technological changes in the environment can force an org. to quickly identify and hire employees with new skills Following forces are pertinent for HRP: - Economic factors - Technological changes - Demographic changes - Political & legislative issues - Social concerns
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Contd..
Organizational objectives and policies:
HR plans need to be based on organizational objectives. Specific requirements in terms of number and skills should be derived from organizational objectives. Once objectives are defined, communicated and understood, the HR department must specify policies to be formulated addressing following key areas: - vacancies to be filled by promotions/hiring - relationship between T&D objectives with HRP objectives - union constraints and policies needed to handle them - enrichment of employees job - make organization more competitive - availability of continuous and flexible workforce

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Contd..
HR Demand forecast:
Is the process of estimating the quantity and quality of people required to meet future needs of organization. Basis of forecast must be the annual budget and long term corporate plan.
Essential Factors:External - competition, economic climate, laws and regulatory bodies, technology, social factors Internal - Budget constraints, production levels, new products and services, organizational structure, employee separations

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 Reasons to conduct demand forecasting: - quantify the jobs necessary for producing a given number of goods , or offering a given amount of services. - determine what staff mix is desirable in the future. - assess appropriate staffing levels in different parts of the organization so as to avoid unnecessary costs. - prevent shortages of people where and when they are needed most. - monitor compliance with legal requirements with regard to reservation of jobs.

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Forecasting Techniques
Managerial Judgment or Expert Forecasts
These are based on the judgments of those who possess good knowledge of future human resource needs. The technique may involve top down or bottom up approach.

Ratio-Trend analysis
Involves studying past ratios and forecasting future ratios making some allowances for changes in the organization or its methods.
An example of trend analysis
2002-03 2002-03 Production of Units 5,000 No. of Workers 100 : :

Ratio : 100:5000 ( 1 worker will handle 50 units) 2003-04

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Estimated Production 8,000

:
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No. of Workers requiredRESOURCE PLANNING : HUMAN 8000 /50 = 160

Techniques contd..

Regression Analysis It is based on the relationship between sales volume and employee size. A firm first draws a diagram depicting the relationship between sales and workforce size. It then calculates regression line- a line that cuts right through the center of the points on the diagram. By observing the line one can find out the number of emp required at each volume of sales.

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Techniques contd

..

Work study Techniques or Work load analysis

Based on the planned output, a firm tires to calculate the number of persons required for various jobs after giving weightage to factors such as absenteeism, idle time etc.

An example of workload analysis

Planned output for the year Standard hours per piece 10,000 pieces 3 hours

Planned hours required

Productive hours per person per year (allowing for absenteeism, turnover, idle time etc.) No. of workers required

30,000 hours
1,000 hours (estimated on annual basis)

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If span of control in the unit is 10 per officer, then 3 officers are also required.

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Techniques contd..

Delphi Techniques
It solicits estimates of personnel needs from a group of experts, usually managers. The HRP experts acts as intermediaries, summarize the various responses and report the findings back to experts. Summaries and surveys are repeated until the experts opinion begin to agree. There is no interaction among experts.

Flow models
Frequently associated with forecasting personnel needs. Simplest one is called the :

Markov model A method for tracking the pattern of employee movements through various jobs.

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Marcov analysis for a hypothetical retail company

2003-2004 Store Managers (n = 15) Asst. Store Managers (n = 36) Section Heads (n = 94) Departmental Heads (n = 288) Sales Executives (n = 1440) Forecasted Supply 16 41 92 Store Managers
80% 12 11% 4 11% 1 1 83% 30 66% 63 8% 8 15% 14 6% 2

Asst. Store Managers

Section Heads

Dept. Heds

Sales Executives

Exit

20% 3

10% 29

72% 207 6% 86

2% 6 74% 1066

16% 46 20% 288

301

1072

353
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Figures in circles show the transition percentages 3/15/2012 HUMAN RESOURCE PLANNING

Supply Forecast
Determines whether the HR department will be able to procure the required number of personnel. Specifically, supply forecast measures the number of people likely to be available from within and outside an organization. Reasons for supply forecast are: - Helps quantify number of people and positions expected to be available in the future to help organization realize its plans and meet objectives. - Helps clarify likely staff mixes that will exist in the future. - Assess existing staffing levels in different parts of organization. - Prevents shortage of people - Monitors expected future compliance with legal requirements of job reservations. It covers : Existing Human resources, Internal sources of supply, external sources of supply.
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A) Internal labour supply:

A manpower inventory in terms of the size and quality of personnel available (their age, sex, education, training, experience, job performance, etc) is usually prepared by HR departments. Several techniques are used while ascertaining the internal supply of manpower (a supply of employees to fill projected vacancies can come from within the firm or from new hires )

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Estimated internal labour supply for a given firm

Sources of Inflows The Firm Projected Outflows Promotions Transfers Promotions New Recruits Recalls Employees In Current Staffing Level Employees Out Quits Terminations Retirements Deaths Layoffs

Current staffing level

Projected outflows this year

Projected inflows this year

Firms internal supply for this time next year

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Skills inventory:
It is a summary of the skills and abilities of non managerial employees used in forecasting supply.

Information from skills inventories is used as input into transfer and promotions decisions, they should contain information about each employees current job. Seven broad categories of information are included in each skills inventory:personal data, skills, special qualifications, salary and job history, company data, capacity of individuals, special preference of individual.

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Skills inventory: an example

Name : A.K. Sen Number : 429 Key words Word Accounting Book Keeping Auditing Description Tax Ledger Computer records Education Degree MBA B.Com Computer Literacy

Date printed : 1-4-2004 Department : Work experience From 1998 2000 2002 To 2000 2002 2003 T clerk ax Accountant Officer Special Qualifications Year 1998 1995 Course DBF Risk Management Position preference Accounting Auditing Date 1996 1999 Location choice Kolkata Delhi Bangalore M em be rsh ips 1. AIMA 2. ISTD 3. ICA Hobbies ABC Company XYZ Co. 41

Activity Supervision and analysis Supervision Analysis

Chief Accounts TT Bank

Major Finance Accounts

Languages

T ally Banking Software

French

Chess Football Boating

Employees Signature __________

HR Department________ Date ________________

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Replacement chart : It is a visual representation of who will replace whom in the event of a job opening
General Manager V. K. Garg A/2 P A to General Manager L. Mathews B/1 Assistant General Manager R.K. Arora A/2 B.K. Nehru B/3 Key Names given are replacement candidates A. Promotable now B. Needing development C. Not suitable to position 1. Superior performance 2. Above Average performance 3. Acceptable performance 4. Poor performance

Division: HR Manager C.P Thakur A/1 .

Division: Accounting & Taxation Manager A.T. Roy C/2 Central Region Manager S.P Kumar A/1 . R. Pandey B/3

Division: Planning Manager A.N. Gupta A/1 K.P Rao . B/1

Technical Advisor N.R. Murthy B/3

Northern Region Manager L.C. Srivatsav A/2 A. Thapar C/4

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Southern Region Manager A. Subramanyam B/2 B.K. Menon B/1

Eastern Region Manager R. Krishna B/3

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B) External Labour supply:

External hires need to be contacted when suitable internal replacements are not available. A growing number of firms are now using computerized human resource information systems to track the qualifications of hundreds or thousands of employees. HRIS can provide managers with a listing of candidates with required qualifications after scanning the data base.

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Important barometers of labour supply

1. Net migration into and out of the area 2. Education levels of workforce 3. Demographic changes in population 4. Technological developments and shifts 5. Population Mobility 6. Demand for specific skills 7. National, regional unemployment rates 8. Actions of competing employers 9. Government policies, regulations, pressures 10. Economic Forecasts for the next few years 11. The attractiveness of an area 12. The attractiveness of an industry in a particular place

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Manpower Gap Analysis

This is used to reconcile the forecasts of labour demand and supply. This process identifies potential skill shortages or surpluses of employees, skills and jobs

Estimating manpower requirements

1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
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Year 2

Number required at the beginning of the year Changes to requirements forecast during the year Total requirements at the end of the year (1+2) Number available at the beginning of the year Additions (transfers, promotions) Separations (retirement, wastage, promotions out and other losses) Total available at the end of year (4+5+6) Deficit or surplus (3-7) Losses of those recruited during the year Additional numbers needed during the year (8+9)
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DEMAND ------- -----SUPPLY -------------------RECONCILIATION OF THE ABOVE MANPOWER NEEDED

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HR Programming
Once an organizations personnel demand and supply are forecast, the two must be reconciled or balanced in order that vacancies can be filled by the right employees at the right time.

HR Plan implementation
Once supply and demand for labour is known adjustments can be made formulating requisite HR plans.

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A variety of HR plans

Recruitment plan Redeployment plan Redundancy plan Training plan Productivity plan

Retention plan

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Responsibility For Human Resource Planning

HRP is a top management job. HR plans are usually made by the HR division in consultation with other corporate heads. Any deviations from the formulated plans and their causes must be looked into, from time to time in order to assess whether the plans require revision or modification.

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Limitations Of Human Resource Planning

HR professionals are basically confronted with three problems while preparing and administering HR plans: 1. accuracy, 2. inadequate top management support, 3. lopsided focus on quantitative aspects.

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Effective Human Resource Planning

HR plans must fit in with overall objectives of a firm. They must get consistent support from top management. Computerized human resource information systems must be used for applicant tracking, succession planning, building skills inventories etc. The whole exercise must be carried out in coordination with operating managers.

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Requisites for successful HRP

HRP must be recognized as an integral part of corporate planning. Backing of top management for HRP is absolutely essential. HRP responsibilities should be centralized in order to coordinate consultation between different management levels. Personnel records must be complete, up to date and readily available. The time horizon of the plan must be long enough to permit any remedial action.

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Barriers to HRP
People question the importance of making hr practices future oriented and the role assigned to hr practitioners in formulation of organizational strategies. HR practitioners are perceived as experts in handling personnel matters, but are not experts in managing business. HR information often is incompatible with the information used in strategy formulation. Conflicts may exist between short term and long term HR needs. Non-involvement of operating managers renders HRP ineffective.
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