HUMAN

RESOURCE

PLANNING

Group members

• Dimple Pansaniya064

• Akshay Shetty 081• Aakash Thakkar 093• Kevin Vora ` 098• Swati Sanap

111

INTRODUCTION

• The basic purpose of having a human resource plan is to have an accurate estimate of the number of employees required, with matching skill requirements to meet organizational objectives.

• It provides information about the manner in which existing personnel are employed, the kind of skills required for different categories of jobs and human resource requirements over a period of time in relation to organizational objectives.

• It would also give an indication of the lead time is available to select and train the required number of additional manpower.

DEFINITION OF HRP:-• Definition 1:- Need, Availability, Supply = Demand “HRP includes estimation of how many qualified people are

necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure personnel supply equals personnel demand at the appropriate point in the future.”

• Definition 2:- Right numbers, Capability, Organization Objectives “HRP is a process, by which an organization ensures that it

has the right number and kind of people at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”

• Definition 3:- Translation of objectives into HR numbers. “HRP is a process of translating organizational objectives

and plans into the number of workers to meet those objectives.”

MEANING / PURPOSE OF HRP

1. In simple words HRP is understood as the process of forecasting an organization’s future demand for and supply of the right type of people in the right numbers.

2. It is only after HRP is done, that the company can initiate and plan the recruitment and selection process.

3. HRP is a sub-system in the total organizational planning.

4. HRP facilitates the realization of the company’s objectives by providing right type and right number of personnel.

5. HRP is important because without a clear-cut manpower planning, estimation of an organization’s human resource need is reduced to mere guesswork.

OBJECTIVES OF HRP• Forecast personnel requirements.

• Cope with changes.

• Use existing manpower productively.

• Promote employees in a systematic manner.

• Creating highly talented personnel.

• Protection of weaker sections.

• International strategies.

• Foundation of personnel functions.

• Optimizing investment in HR.

• Resistance to change & move.

IMPORTANCE OF HRP:

• Resource planning is a highly important and useful activity. If used properly, it offers a number of benefits:

1. Reservoir of talent.

2. Prepare people for future.

3. Expand or contract .

4. Cut costs .

5. Succession planning.

PROCESS OF HRP PLANNING

HR Needs Forecast HR Supply Forecast

HR Programming

HRPImplementation

Control & Evaluation

SHORTAGESURPLUS

ORGANISATIONAL OBJECTIVES

HRP CONSIST FOLLOWING STEP (process)

1. Analyzing organizational plans and deciding objectives.

2. Forecasting the manpower requirements (Demand forecasting.)

3. Preparing manpower inventory. (Supply forecasting).

4. Developing employment plans

5. Developing human resource plan.

1) Analyzing organizational plans and deciding objectives:

• The short term and long term plans of the firm should be analyzed before setting human resource objective.

• The firm objective stated in the economic terms would incorporate expected economic growth , diversification plans, market opportunities, and government policies.

• e.g. short term objective of a company may be to hire 25 employees in direct sales force and long term objective my start operation I new stateor to produce new product.

2) forecasting manpower requirement(demand forecasting)

• It is a process of estimating the future requirements of manpower, by function and by level of skills.

• It consist several factor both external as well as internal. External factors are competition( domestic as well as local), laws & regulation , economic climate, change in technology and social factors.

• Internal factors include budget constraint, production levels, new product & services, organizational structure & employee separation .

• In this their two method are use a) judgemental method b) stastical projection

A) Judgmental forecast

• The forecast based on the judgment of the managers possessing thorough and extensive knowledge of human resource requirement.

• Judgment forecast are two types -:

1.Managerial estimates

In this technique managers across all the levels who are well acquainted with the workload, efficiency and ability of employees, think about the future workload, future capabilities of employee and decide on number and type of human resources required.

2.Delphi method

Delphi process solicits estimates personnel needs from the different experts usually managers.

b) Statistical projection Following methods are based on statistical projection-

Statistical projection

Statistical projection

Regression

analysis

Ratiotrend

analysis

Economic

model

Work load analysis

A) RATIO- TREND ANALYSIS-: Ratio trend is carried out by studying past ratios and forecasting ratios for the

future.e.g. the current ratios of number of workers and sales in an organization and forecasting future ratios.

B) REGRESSION ANLYSIS: It is based on the relationship between a business factor and workforce size. However, this method is more statistically sophisticated. E.g. statistical

software.

C) ECONOMIC METHOD: Under this model, the previous data is analyzed and different variables affecting

manpower requirements are identified. Also, the degree of impact of each variable is estimated.

D) WORK LOAD ANALYSIS: The need for manpower is also determined on the basis of workload analysis,

wherein the company tries to calculate the number of persons required for various job with reference to a plane output after giving weight age to factors such as

absenteeism ,idle time etc.

3)Preparing manpower inventory. (Supply forecasting).

• The basic purpose of preparing manpower inventory is to find out the size and quality of personnel available within the organization to man various positions.

• Every organization have two major sources of supply of manpower: internal and external

A) Internal labour supply A profile of employees in terms of age, sex, education,

training, experience, job level, past performance and future potential should be kept ready for use whenever required.

CURRENT STAFFING

EMPLOYEE IN EMPLOYEE OUT

METHODS TO USE FOR FORECAST INTERNAL LABOUR SUPPLY

• STAFFING TABLE: It shows the number of employees in each job. It tries to

classify employees on the basis of age, sex ,position, category, experience, qualification ,skills etc. A study of table indicates whether current employees are properly utilized or not.

• SKILLS INVENTORY (HUMAN RESOURCE AUDIT): It is an assessment of the knowledge, skills, abilities,

experience and career aspiration of each of the current employees. this record should be updated at least every 2 yr and should include changes such as new skills, additional qualification , changed job duties etc…..

• REPLACEMENT CHART: It shows the profiles of job holders department wise and

offers a snapshot of who will replace whom if there is a job opening.

• TURNOVER RATE: Turnover rate is percentage of employees separeted during one

year and calculated as:

Number of separation during the year ×100 Average number of employees during the year

• CONDITION OF WORK AND ABSENTEESIEM:

Changes in the condition of work such as normal weekly working hours, overtime policies, the length and timing of holidays, retirement policy, the policy of employing part timers and shift system need to be assessed.

• PRODUCTIVITY LEVEL :

Any changes in level of productivity would result in corresponding change in the manpower requirement

ii) EXTERNAL LABOUR SUPPLY: when the organization grows rapidly, diversifies into

newer areas of operation ( merchant banking, capital market operation, mutual funds, etc. in the case of a

bank) when it is not able to find the people internally to fill the vacancies , it has to look into outside sources. at times, the firm has no choice but to actually lay off part of it’s workforce

4. Developing employment plans: The existing number of personnel and their skills

( from human resource inventory) are compared with the forecasted manpower needs( demand forecasting ) to determine the quantitative gaps in the workforce

5.Developing human resource plan: Gap analysis may result I surplus of number of

employees forecasted or shortage of workers forecasted. the human resource requirement need to be translated into a concrete HR plan, backed up by detailed policies, programmed and strategies ( for recruitment , selection , training , promotion , retirement, replacement etc.)

1) Recruitment plan: will indicates the number and type of people required and

when they are needed .

2) Redeployment :will indicates the programmes for transferring or retaining

existing employees for new job.

3) Redundancy plan :

Will indicates who is redundant, when and where; the plans for retraining, where this is possible; and plans for golden handshake ,retrenchment, layoff, etc.

4) Training plan :

will indicate the number of trainees or apprentices required and the programme for recruiting them or retraining: new course to be

developed or changes to be effected in existing courses.

v) Productivity plan :

Will indicates reason for employee turnover and show strategies to avoid wastage through compensation policies; changes in work requirement and improvement in working .

vi) Retention plan: Will indicates reasons for employees turnover and show strategies to avoid wastage through compensation policies; changes in work requirements and improvement in working condition

vii) Control points:

The entire manpower plan is subjected to closemonitoring from time to time. control points be set up to find out defiencies, periodic

updating of manpower inventory, in the light of changing circumstances, beundertaken to remove deficiencies and develop future plans.

viii) Downsizing plans: When a comparison of requirements and availability indicates a worker surplus will result, restricted hiring, reduced hours, early retirements, or layoff may be required to correct the situation. Downsizing plans include identifying who is to be made redundant, steps to be taken to help redundant employees find new jobs, policy for declaring redundancies and informing parties affected including union.

1) Restricted hiring:

When a firm implements a restricted hiring policy,it reduces the workforce by not replacing employees who leave.

2) Reduced hours: Reaction to declining demand can also be made by reducing the total number of hours worked.instead of continuing a 40hours week, management may decide to cut each employee’s time to 30 hours.

3) Early retirement ( VRS):

early retirement of some present employees is another means of reducing the supply of worker through voluntary retirement schemes offering benefits to employees for premature retirement

4) Pinkslip/Termination/Retrenchment/Golden handshake:

at times, the firm has no choice but to actually lay off part of it’s workforce

ix) Outsourcing: sometimes skills required may not be available inside the firm and hiring permanent

workforce with these skills may not work out to be cost effective. In such case ,firm can look for outsourcing the jobs to external agencies

X) Contracting and subcontracting-:

Company may hire employees on contractual basis for handling some jobs. Contractual plans involve number of people to be hiring, pay terms etc. firm may also enter into contract with external agency which in turn will provide contractual workers( subcontracting).

Managerial succession planning

• It includes training programmes and series of job assignments leading to top positions.

• Methods of managerial succession plans may vary. Most successful programs seem to include top managements involvement and commitment.

• High level review of succession plans, formal performance assessment and potential assessment and written development plans for individuals.

• A typical succession planning involves following activities.

• Analysis of demand for managers and professionals by company level, functions and skills.

• Audit of existing executives.

• Projection of future likely supply from internal and external sources.

• Individual career path planning based on objective needs of future estimates, and assessments of potential.

• Career counseling.

• Accelerated promotions, with development targeted against future needs of business.

• Performance related training and development, to prepare individual for future roles.

• Strategic recruitment to provide people for development to meet future needs.

Factors Affecting HRP

The important factors affecting HRP are:-

• Type and strategy of organisation.

• Organizational growth cycles and planning.

• Environmental uncertainties.

• Time horizons.

• Type and quality of information.

• Nature of jobs being filled.

• Outsourcing.

Human resource information system (HRIS)

• Computerized system used to collect, record and store, analyze, and retrieve data concerning an organization’s human resources.

• HRIS information include personal information of employees such as age, experience, training ,status, salary and payroll, promotions and transfers, compensation, leave, accidents, and benefits.

• HRIS also use information regarding organization policy, programmes, procedures and any other information pertaining to human resources.

• Its purpose is to facilitate, or support tactical and operational HR decision making.

• For example, on the operational level HRIS data can be used to identify potential internal applicants for job vacancies, saving external recruitment costs and assuring employees of career opportunities. Strategically, such information may be used to gauge the effectiveness of current recruitment or promotional systems, their costs and/or benefits, and enable subsequent changes of direction in line with proposed organizational strategies.

Benefits of HRIS• HRIS provide following benefits to the organization.

• It helps in legal compliance.

• It helps in evaluating programs; policies or practice and daily operations.

• It improves planning and program development using decision support software.

• It facilitates faster information processing and improved response times..

• It saves administrative and HR costs.

• It improves decision making by providing accurate information.

• It enhances communication at all levels.

HRIS Applications:-

• HRIS software application currently available to business include those for employees information, application tracking, skills inventory, payroll, and benefits administration., training management , risk management turnover analysis, succession planning compliance with legal and government requirements, attendance reporting and analysis, HRP, accident reporting and prevention. Etc

Mainly following functions are performed by the HRIS in different organizations.

• Job analysis information can be placed in the HRIS.

• The program can write job descriptions and job specifications

• Constant monitoring of compliance with government and level requirements.

• Maintain employees attendance, leaves records.

• Forecast supply and demand of labor from both the internal and external labor markets.

• Useful for internal recruiting.

• Can post job opening for employees to access.

• Can search for match between job specifications and applicant qualification.

• Applicant tracking system.

Mainly following functions are performed by the HRIS in different organizations.

• Administering and scoring ability tests.

• Scanning resumes submitted online (web based or email) or in person (or mail).

• Structured interviews.

• Matching qualifications with open positions (finding a right fit).

• Help with registrations, tracking training monitor training costs, and schedule training.

• Used to deliver training.

• Career and managerial succession planning.

• Used to provide assessment tests to help employee’s plan their own career.

• Predict career paths.

• Provide personnel assessment instruments and results.

• Comparisons between employees, groups, or supervisors rating.

Case studies

ORAGANIZATION : JET AIRWAYS (INDIA) LIMITED

INDUSTRY : AVIATION

• In October 2008, Jet Airways (India) Limited (Jet), one of India's leading domestic airlines, decided to lay off more than 1,000 employees to streamline its operations. The retrenchment was the second phase of its trimming operations.

• The first phase, which took place a day earlier, saw the airline showing the door to 850 cabin crew members. The second phase of retrenchment included employees from all operations - cabin crew, pilots, ground staff, airport services staff, and employees from management departments.

• Naresh Goyal (Goyal), chairman of Jet, reinstated the employees a day later amidst great emotional drama. He was quoted as saying he had been appalled by the retrenchments of his employees, which he claimed, he had come to know only through media reports.

Contd…

• He added that he would "not be able to live as long as he lives" with the tough decision his management had taken and clarified that he was taking back the employees as they were "family to him and as head of the family he would take care of them.“

• A month later - in November 2008, Jet announced that it would consider serious salary cuts for its staff to handle the aviation crisis.

• Experts largely felt that Goyal had capitulated under pressure from external parties while others felt that all may not be well with the organizational communication mechanisms at Jet.

• In September 2008, the International Air Transport Association(IATA) had predicted that world over the aviation industry would lose about US$5.2 billion based on an average jet fuel price of US$140 . The rise in fuel prices had pushed the fuel bills of the aviation industry to US$186 billion by the end of the year 2008....

Issues : » Analyze the HR problems faced by Jet Airways in 2008.

» Discuss various concepts related to hiring, firing, and compensation management.

» Understand the rationale behind Jet's decision to lay-off employees and the reason's behind its later decision to take back the sacked employees.

» Understand the importance of communication in an organization and analyze whether there were any loopholes in Jet's organizational communication network.

» Understand the rationale behind the pay cuts initiated at the company.

» Understand how environmental variables could affect a company's HR policies.

HR Issues, Management and Decision Making at Jet

• According to the company, Jet paid the utmost importance to the composition of its senior management and its human resources with emphasis on teamwork as a key success factor. Being in the service-based industry, Jet gave priority to high quality, professional service to its customers...

The Retrenchment Drama Unfolds

• The retrenchment drama unfolded on October 16, 2008, when Jet announced that it would lay off nearly 1,100 of its staff a day after it had already laid off around 800 of its cabin crew members.

The second phase of 1,100 employees included those from departments like management, flight attendants, and the cockpit crew.

The company decided to lay off these employees with no prior notice but offered them a month's remuneration

Reasons for Retrenchment

• The growing challenges in the Indian aviation industry were the main reason for the lay offs at Jet, according to the company and other industry analysts.

Turbulent Times for the Indian Aviation Industry

• The Indian aviation industry was one of the fastest growing aviation industries in the world. The Air Corporations (Transfer of Undertakings and Repeal) Act 1994 opened the Indian skies up to private operators. Apart from government-owned airlines, the aviation industry was flooded with private operators and low cost carriers...

The Debate Leading to the Reinstatement of Employees

• Jet received criticism from several quarters for retrenching its employees. Many of its employees protested against the decision to oust them without prior notice. Most of them had paid substantial amounts to receive training at major Aviation Training institutes...

Massive Salary Cuts Follow

• In the last week of November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staff. The company planned a 5 percent to 10 percent cut in the salary of top officials who drew a salary above Rs. 75,000...