Planning HR
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Transcript of Planning HR
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HUMAN RESOURCE PLANNING
Introduction
Steps in HR planning
Forecasting
Manpower wastage i.e., Surplus and shortage and its impact on HRP
Benchmarking
HR Business Pefrormance
Downsizing
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Meaning and definition of HRP
HRP may be viewed as foreseeing the human resourcerequirements of an organization and the future supplyof human resources
HRP is a process by which an organization should movefrom its current manpower position to its desiredmanpower position
Through HR planning the management strives to have
the right number and right kind of people at the rightplaces at the right time
HRP does things which result in both the organizationand the individual receiving maximum long-run benefit
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Need for HRP
Every organization has to plan for human resources due to:
The shortage of certain categories of employees and/or variety of skills despite theproblem of unemployment
The rapid changes in technology, marketing, management etc., and theconsequent need for new skills and new categories of employees
The changes in organization design and structure affecting manpower demand The demographic changes like profile of the workforce in terms of age, sex,
education etc.
The Government policies in respect to reservation, child labour, working conditionsetc.
The labour laws affecting the demand for and supply of labour
Pressure from trade unions, politicians, sons of the soil etc. Introduction of computers, robots etc.
The involvement of lead time in manning the job with most suitable candidate
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Benefits of HRP
It checks the corporate plan of the organization
It offsets uncertainty and change
It provides scope for advancement and
development of employees through training ,development
It helps to anticipate the cost of salaryenhancement, better benefits etc.
It facilitates the control of all functions,operations, contribution and cost of humanresources
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Factors Affecting HRP
EXTERNAL FACTORS
Government policies
Level of Economic Development
Business Environment
Level of Technology
Natural Factors International Factors
INTERNAL FACTORS
Policies and Strategies of the company
Human Resource policy of the company
Formal and Informal Groups Job Analysis
Time Horizons
Companys production policy
Trade Unions
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Steps/Process of HRP
Process of HRP consists of the following steps:
Analyzing organizational plan
Demand Forecasting
Supply Forecasting
Estimating the net human resource requirements In case of future surplus, plan for redeployment, retrenchment and
lay-off
In case of future deficit, forecast the future supply of humanresources from all sources with reference to plans of othercompanies
Plan for recruitment, development and internal mobility if futuresupply is more than or equal to net human requirements
Plan to modify or adjust the organizational plan if future supply willbe inadequate with reference to future requirements
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HUMAN RESOURCE FORECASTING
Forecasting
The use of information from the past and
present to identify expected future conditions.
Forecasting Methods
Managerial Judgment
Estimatesasking managers opinions, top-down or
bottom-up Rules of thumbusing general guidelines
Delphi techniqueasking a group of experts
Nominal groupsreaching a group consensus in
open discussion
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Forecasting contd.,
Forecasting Methods (contd)
Statistical /Mathematical
Statistical regression analysis
Simulation models
Ratio Trend Analysis
Econometric Models
Forecasting Periods Short-termless than one year
Intermediateup to five years
Long-rangemore than five years
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Forecasting HR Supply and Demand
Forecasting the Demand for Human Resources
Organization-wide estimate for total demand
Unit breakdown for specific skill needs by number
and type of employee Develop decision rules (fill rates) for positions to be
filled internally and externally.
Develop additional decision rules for positions impacted
by the chain effects of internal promotions and transfers.
Forecasting the Supply for Human Resources
External Supply
Internal Supply
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Forecasting HR Supply and Demand
Contd., Forecasting External HR Supply
Factors affecting external
Net migration for an area
Individuals entering and leaving the workforce
Individuals graduating from schools and colleges
Changing workforce composition
Economic forecasts
Technological developments and shifts
Actions of competing employers
Government regulations and pressures
Other factors affecting the workforce
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Forecasting HR Supply and Demand
Contd., Forecasting Internal HR Supply
Effects of promotions, lateral moves, andterminations
Succession analysis
Replacement charts
Transition matrix (Markov matrix)
Exit Manager Supervisor Line Worker
Manager .15 .85 .00 .00.
Supervisor .10 .15 .70 .05
Line Worker .20 .00 .15 .65
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HR Performance and Benchmarking
Benchmarking Comparing specific measures of performance
against data on those measures in other bestpractice organizations
Common Benchmarks
Total compensation as a percentage of netincome before taxes
Percent of management positions filledinternally
Dollar/Rupee sales per employee
Benefits as a percentage of payroll cost
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Doing the Benchmark Analysis Contd.,
Return on Investment (ROI) Calculation showing the value of expenditures for
HR activities.
BA
CROI
A = Operating costs for a new or enhanced system for the time period
B = One-time cost of acquisition and implementation
C = Value of gains from productivity improvements for the time period
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Doing the Benchmark Analysis Contd.,
Economic Value Added (EVA)
A firms net operating profit after the cost of
capital (minimum rate of return demanded by
the shareholders) is deducted. Cost of capital is the benchmark for returns for
all HR activities.
Utility analysis
Analysis in which economic or other statistical
models are built to identify the costs and
benefits associated with specific HR activities
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Diagnostic Measures of HR Effectiveness
HR expense per employee
Compensation as a percent of expenses
HR department expense as a percent of totalexpenses
Cost of hires
Turnover rates Absenteeism rates
Workers compensation per employee
Assessing HR Effectiveness
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HR Audit A formal research effort that evaluates the current
state of HR management in an organization
Audit areas:
Legal compliance
Current job specifications and descriptions
Valid recruiting and selection process
Formal wage and salary system Benefits
Employee handbook Absenteeism and turnover control
Grievance resolution process
Orientation program Training and development
Performance management system
Assessing HR Effectiveness Contd.,
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HR Business Performance Calculations
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HR Business Performance Calculations
Contd.,
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Workforce Realignment
Downsizing, Rightsizing, and Reduction in
Force (RIF) all mean reducing the number of
employees in an organization.
Causes
Economicweak product demand, loss of market
share to competitors
Structuraltechnological change, mergers and
acquisitions
Managing Human Resource
Surplus or Shortage
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Workforce Realignment (contd) Positive consequences
Increase competitiveness
Increased productivity
Negative consequences
Cannibalization of HR resources
Loss of specialized skills and experience
Loss of growth and innovation skills
Managing survivors
Provide explanations for actions and the future
Involve survivors in transition/regrouping activities
Managing Human Resource
Surplus or Shortage Contd.,
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Downsizing approaches Attrition and hiring freezes
Not replacing departing employees and not hiring newemployees
Early retirement buyouts
Offering incentives that encourage senior employees toleave the organization early.
Layoffs
Employees are placed on unpaid leave until called backto work when business conditions improve.
Employees are selected for layoff on the basis of theirseniority or performance or a combination of both.
Managing Human Resource
Surplus or Shortage Contd.,
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Downsizing approaches (contd)
Outplacement services provided to displacedemployees to give them support and
assistance: Personal career counseling
Resume preparation and typing services
Interviewing workshops
Referral assistance Severance payments
Continuance of medical benefits
Job retraining
Managing Human Resource
Surplus or Shortage Contd.,
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Investigate alternatives to downsizing
Involve those people necessary for success in the planning
for downsizing Develop comprehensive communications plans
Nurture the survivors
Outplacement pays off
Dealing with Downsizing
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THANK YOU