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MEETING HUMAN MEETING HUMAN RESOURCE RESOURCE

REQUIREMENTSREQUIREMENTSUNIT-IIUNIT-II

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HUMAN RESOURCE PLANNING

``MPP is the process (including forecasting, developing, implementing & controlling) by which a firm ensures that it has the right persons at the right time doing things for which they are economically most useful.’’

-Edwin B. Geisler

In the opinion of Coleman, MPP is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization.

Long & continuous process

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Aggressive domestic and global competition, have made strategic planning virtually mandatory.

2 phases of HRP:a. Projection of future manpower requirements.

b. Developing manpower plans for the implementation of projections.

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RECORDS FOR HRP

How many employees does the company currently employ?

What is the age profile by department?Which are the biggest departments in the

organization?How many employees leave the

organization every year? In which areas of business do we tend to

lose the maximum number of employees?

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NEED FOR HRP1. Shortage of certain categories of employees.

2. Rapid changes in technology, marketing, management etc. & the consequent need for new skills & new category of employees.

3. The demographic changes like changing profile of the workforce in terms of age, sex, education etc.

4.Government policies w.r.t reservation, child labor.

5. Demand for and supply of labor.

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Factors Affecting HRP (Internal)

Type & strategy of organization

Organizational growth cycle & planning

Nature of jobs being filled

Outsourcing

Demographic factors

Management philosophy

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Environmental ScanningExternal Environmenta. Economic factors, including general, regional & global

conditions.

b. Industry & competitive trends , including new processes, services.

c. Technological changes, including IT, innovations & automation.

d. Government & legislative issues.

e. Social concerns, including child care, elder care, the environment & educational priorities.

f. Demographic & labor market trends including age, composition, and literacy.

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HRP ProcessEnvironmental Scanning

Strategic Planning

HRP

Demand Forecasting

Comparing requirements & availability

Supply Forecasting

Surplus of workers Demand = Supply

Restricted hiring, Reduced hours, VRS, Layoffs, Restructuring, Retrenchment

Shortage of Workers

R&S, Overtime, Outsource activities, BPR, Rehire retired employees, temporary employees, Retraining

No Action

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Strategic planning involves a set of procedures for making decisions about the organization’s long term goals and strategies.

Human Resource Planning is the process of anticipating & making provision for the movement of people into, within, and out of an organization.

Strategic Human Resource Management combines strategic planning & HR planning. It can be considered as the pattern of human resource deployments and activities that enable an organization to achieve its strategic goals.

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James Walker, noted HRP expert, put it, ``Today, virtually all business issues have people implications; all human resource issues have business implications.’’

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Linking Strategic Planning & Human Resources

Mission, Vision & Values

Strategy Implementation

Evaluation

Strategy Formulation

Internal Analysis

External Analysis

Structure & People

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Mission The basic purpose of the organization by determining what

business the organization will be in and the scope of operations.A part of Home Depot’s mission statement: to be the world’s

largest home improvement retailer.

Strategic vision Moves beyond the mission statement to provide a perspective on

where the company is headed and what the organization can become in future.

ValuesStrong enduring beliefs & principles that a company uses as a

foundation for its decisions.

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External Analysis

Analysis of external opportunities & threats. Environmental scanning is the systematic monitoring of

the major external forces influencing the organization. External factors:a. Economic factors, including general, regional & global

conditions.b. Industry & competitive trends , including new processes,

services, & innovations.c. Technological changes, including IT, innovations &

automation.d. Government & legislative issues.e. Social concerns, including child care, elder care, the

environment & educational priorities.f. Demographic & labor market trends including age,

composition, and literacy.

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Competitive Intelligence/Environment

Five Forces Framework (Michael Porter)

Bargaining power of Suppliers

Rivalry within an industry

Threat of New Entrants

Threat of Substitute Products

Bargaining Power of Customers

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Competitive Intelligence

CI is the fastest growing area of SWOT analysis.

Seeks basic information about competitors: who are they? What are they doing? What affect will it have on us?

Michael Porter provides a framework that models an industry as being influenced by five forces.

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INTERNAL ANALYSIS

Assessing Current Human Resources

Internal analysis includes information about the employees and skills they currently posses.

Staffing Tables Markov Analysis Inventory Report (skills inventories and management

inventories)HRIS/HRMSReplacements Charts & Succession Planning

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Staffing TablesThese are graphic representations of all organizational jobs,

along with number of employees currently occupying those jobs.

Future employment requirements derived from demand forecasts may also form a part of staffing tables.

Markov Analysis It shows the percentage (and actual number ) of employees who

remain in each job from one year to the next, as well as the proportions of those who are promoted, demoted, or transferred, or exit the organization.

It can be used to track the pattern of employee movements through various jobs and to develop a transition matrix for forecasting labor supply.

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Inventory ReportThe audits of non-managers is called skills inventories &

those of managers are called management inventories.

Tool to assess the current supply of employees in an organization.

Purpose: to note what kind of skills, abilities, experiences & training the employees currently have,

Useful in career planning, management development & related activities.

Two principal methods of collecting data: interviews and questionnaires.

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Personal Data Skills, education, experience, training Special qualifications Salary & job history Company data Capacity of individuals-scores on psychological tests, health

information Special preference of individual : geographic location, type

of job, work timings. Promotion potential Number & types of employees supervised Total budget managed Previous management duties

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HRIS Key to successful HR planning is information.

HRIS (HRMS) is a database system that keeps important information about employees in a central and accessible location, even information on the global workforce.

HRIS is an integrated approach to acquiring, storing, analyzing, and controlling the flow of information throughout an organization.

Useful in nearly all HRM functions.

The system might contain a program for tracking applicants, a skill inventory, a career planning program, and employee service programs such as an electronic bulletin board.

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An HRIS should be designed to provide information that is:

Timely: access to up to date information .Accurate: reliability on the accuracy of the information

provided.

Concise: A manager can absorb limited information at one time.

Relevant: receive only the information needed in a particular situation.

Complete: complete not partial information.

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MCI Telecommunications uses SmartSearch2, an automated resume tracking system, to identify qualified applicants quickly & accurately.

Apple Computer’s system allows employees to enroll in benefit programs directly from their personal computers.

Ford (B2E)

Telecommuting: work from home

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Succession PlanningThe process of identifying, developing, & tracking key

individuals so that they may eventually assume top-level positions.

Research suggests that in organizations where S.P efforts occur, employee morale is increased by 25%.

Replacement chartCovers individuals from middle to upper level management

positions. In an effort to facilitate succession planning, replacement chart

highlights those positions that may become vacant in the near future due to retirements, promotions, transfers, resignations, or death of the incumbent. (job holder)

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Acceleration PoolsSuccession planning is a lost art-a casualty of mergers,

downsizing, and reengineering.

Management succession programs typically focus on placement rather than skill development.

Acceleration pools is management succession planning system that develops a group of high potential candidates for undefined executive jobs and focus on increasing their skills and knowledge rather than targeting one or two people for each senior management position.

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Predicting the future labor supply

Increase in internal supply of HRsNew hiresContingent workersTransfer-in Promotions-in Demotion-in Individuals returning from leaves

External sources of recruitment

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Decrease in internal supply

RetirementsDismissalsTransfer-outPromotion –outLayoffsVoluntary quitsSabbaticalsProlonged illnessDeaths

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External supply of laborU.S. Census Bureau facts about American workers:

By 2012, labor force is expected to grow at a rate of 12%, the growth rate for college graduate-level jobs is expected to grow by more than double that.

By 2012, the average ages of workforce will be 41, up from 34.7 in 1979.

While the group of workers ages 45 to 54 will have increased by 52%, the group between ages 35 and 44 will have shrunk by more than 10%.

By 2012, nearly one in five American workers will be age 55 or older.

Women will make up approx. 48% of the workforce in 2012.

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Demand ForecastingA forecast of labor demand is derived from a projection of

how business needs will affect HR.

Demand forecasting is the process of estimating the future quality and quantity of people required.

Basis would be the annual budget, long term strategic plan, translated into activity levels for each function and department.

Qualitative methodsQuantitative methods

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Qualitative MethodsManagerial JudgmentBottom –up or top down approach.Considerations-work load, abilities of employees, future

workload, future capabilities of employees.Depending on the above no. and type of employees required

are decided.

Unit Demand ForecastingUnit-department, project team etc. Bottom up approach Analysis-person by person & job by job, present & future

needs. By analyzing present & future requirements of the job & skills,

method focuses on quality of people.

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Expert EstimateLeast mathematically sophisticated approach. Involves expert

forecasting-experience, intuition & guesswork In larger & more volatile companies – reliable consensus of

opinion of a group of experts.

Delphi TechniqueOriginally developed by the Rand Corporation, this technique

elicits expert estimates from a no. of individuals. The HRP experts act as intermediaries, summarize the various

responses & report the findings back to the experts. The distinguishing feature of Delphi technique is the absence of

interaction between the experts.

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Basically, the Delphi method has five major characteristics:

1. The sample consists of a “panel” of carefully selected experts representing a broad spectrum of opinion on the topic or issue being examined.

2. Participants are usually anonymous. 3. The “moderator” constructs a series of structured

questionnaires and feedback reports for the panel over the course of the Delphi.

4. It is an iterative process often involving three to four iterations or “rounds” of questionnaires and feedback reports.

5. There is an output typically in form of a research report with the Delphi results, the forecasts, policy and program options with their strengths and weaknesses, recommendations to senior management and, possibly, action plans for developing and implementing the policies and programs.

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Nominal Group Technique

Individual estimates are followed by group brainstorming sessions

It can also help to offset domination by a single person in group decision making by providing an equal opportunity to provide opinions.

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Quantitative Techniques

Ratio Trend Analysis

Forecast is developed based on a past relationship between a factor related to employment & employment itself.

E.g., Sales levels, production level, activity/workload level to employment needs.

Trend projections relate a single factor to employment.

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Present level of production (01/01/08) - 1500 units

No. of foremen required – 3

Ratio – 3:1500 = 1:500

Estimated level of production (01/01/09) – 2500 units

Estimated number of foremen – 1:500

Ratio – 5:2500

No. of foremen required as on 01/01/09 - 5

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Work Study Technique

Can be used where it is possible to apply work measurement to calculate the length of operations and the amount of labor required

Work load is converted into man hours required.

(Work Load Analysis) WLA is used to determine how many employees of various types are required to achieve total production targets.

Work Force Analysis

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Planned operation for the year 2009 – 1,60,000 units

Planned man-hour required for one unit in 2009 – 0.25

Total man-hours required = 40000 hours

Working ability of a person = 2000 hours/year

Total number of employees required = 20 (40000/2000)

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Taking Action: Reconciling Supply and Demand

Surplus of workforceOrganizational downsizing & restructuring

Motorola, HPMaking layoff decisions*RetrenchmentVoluntary Retirement SchemeRestrict HiringReduce work hoursUse slack time for employees training or equipment

maintenanceTransfer out, promotion out, demotion out

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Deficit

Hire new full time employeesOvertime Outsource activities to other companies/consultants Business Process Reengineering to reduce the needsAttempts to reduce labor turnoverRehire retired employees on a part time basisOffer incentives for postponing retirementHire temporary employeesTraining & DevelopmentTransfer in, promotion in, demotion inRetraining & Redeployment(to assign people to new positions or

tasks).

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Rightsizing Process of monitoring and adjusting the composition of the

organization’s workforce to its optimal size. May involve lay offs or early retirement to reduce the size of

the workforce or may involve retention programs to maintain the size of the workforce.

Almost 1.5 million workers were laid off in 2002. These lay offs came on top of 1.96 million terminations in

2001. Computer maker Dell laid off 6000 of its 40000 workers in

2001, allowing the firm to cut PC prices and increase sales and profits.

Ghost work

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OBJECTIVES OF HRPOptimum use of HR

Avoid imbalances in the distribution and allocation of HR

To assess or forecast future skill requirement

Ensure availability of resources.

Control Cost aspect of HR

Formulate policies

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SCOPE OF ELEMENTSListing of current manpower or HR in org.

Assessing the extend to which the current manpower is utilized.

Phasing out the surplus manpower if any

Analyzing the requirements of manpower in future.

Make manpower procurement plans

Designing Training programs

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BENEFITS OF HRPHRP results in reduced labor Costs.

Better basis for planning employee development

Identification of the gaps of the existing manpower.

Improvement in the overall Business Planning Systems.

Formulating succession plan

Tool for evaluation

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THANK YOUTHANK YOU