Human Resource Planning

Definition

• It is the process of getting the right number of qualified people into the right job at time so that an organization can meet its objectives.

• The process of deciding what positions the firm will have to fill and how to fill them.

• HRP is a forward looking process –short term as well as long term

• It tries to assess human resource requirements in advance keeping the production schedules, market fluctuations, demand forecast in the background

• It is subject to revision, in tune to the requirements of an organisation from time to time

• It is an integral part of overall corporate plan.

Objective of HRP

• Optimum use of existing HRM

• Forecast future skill requirement

• Search HR with requisite skills

• Availability of HR as and when required

• Recruitment levels

• Anticipate redundancy

• Levels of Training

• Productivity bargaining ( employ/ subcontract)

Importance / Benefits of HRP

• Efficient utilization of resources/ Expand or Contract

• Reservoir of talent

• Prepare people for future / Motivation

• Succession planning

• Higher productivity / Cut cost

Factors that Effect HRP • Resources refers to the productive power

of natural goods.

• HRP has two dimensions qualitative and quantitative

• External : -

• Quantitative – population policy, population structure, migration and labor force participation (Labour force participation rate: labour force/total population*100 )

•

• Qualitative –Education and training, Health and nutrition and equality of opportunities

• Internal :

• Employee demographics,

• Organizations growth plans and turnover

Approaches to HRP

• Social Demand Approach

• Rate of Return Approach

• Manpower Requirement Approach

• Projections of social demand for education are contingent upon given levels of:

• incomes of educated people,

• tastes and preferences of households for education,

• demographic characteristics such as fertility and mortality,

• direct costs of education

• student grants, and

• existing standards of admissions to various levels of education

• Problems associated • with the data base on demographic aspects.• wastage and stagnation in education,

• intensity of utilisation of existing educational facilities

Rate of Return Approach• Rate of return approach looks upon education as a

contributor to productivity and it is expected to facilitate investment decisions in education.

• Costs of education

• Returns to education

• Discount rate (used in discounting future returns to arrive at present value).

ROI return to education are split into three

Direct monetary , indirect monetary and non monetary

Manpower Requirements Approach

• It definite link between education and economic growth, and that lack of skilled manpower in required numbers which impedes (hinders) growth.

• In this approach an attempt is made to forecast future requirements of educated manpower to fulfill a future target of specific targets of industrial production. Based on the forecasts of educated manpower requirements over a specified period, the planners would then indicate the directions of development of the educational sector over the same specified period.

Types of Forecasting

• Short term

• Medium term

• Long term

• Policy conditional forecasting

• Onlookers

• Macro and Micro

Methods are based on the assumption that future can be extrapolated from the past

• Trend Analysis

• Ratio Analysis

• Scatter Plot

• Delphi Technique

Ratio Analysis• Determine the appropriate business factor

that relates to the size of the workforce.• Identify the historical record of that in

relation to the size of the work force • Calculate the productivity ratio • Make necessary adjustments in the

trends, past and future• Project to the target year

2009-10: Units of Production: 10,000

2009-10: No. of workers: 100

Ratio : 100: 10,000

2012-13 Estimated production 12,000

No. of workers required 12,000* 100 = 120

10,000

5–16

Scatter Plot Determining the

Relationship Between Hospital Size and Number of Nurses

Note: After fitting the line, you can project how many employees you’ll need, given your projected volume.

Size of Hospital (Number of Beds)

Number of Registered

Nurses

200 240

300 260

400 470

500 500

600 620

700 660

800 820

900 860

Delphi

• There is a Mediator.• Individuals give the projection to the

mediator.• The mediator than passes the projection

to the Individuals.• Others get an opportunity to view the

projection of others. • The process is on until consensus is

reached

• Advantages

• Less interpersonal problems

• Experts make revision independently

• Disadvantages

• Time consuming

• At times does not include pass data

Supply Forecasting

a) Internal labour Supply

Skills inventory

Replacement chart

b) External labour supply projections are based on skill levels in the Market. Factors that determine external labour supply are: Education levels

Demographic changes in population.

Technological development

• Population mobility

• Demand for specific skills etc.

3)Gap Analysis : The existing number of personnel and their skills are compared with the forecasted human resource needs to determine the qualitative and quantitative gaps in the workforce.

Supply forecasting techniques Marcov Analysis : A method for tracking the pattern

of employee movements through various jobs.

Skill Inventories -Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.

Replacement Charts -Listings of current jobholders and persons who are potential replacements if an opening occurs.

Succession Planning -The process of identifying, developing, and tracking key individuals for executive positions.

Markov Analysis at Industries

A M F S Exit

Assemblers (A) Probability of .70 .10 .20

Machinists (M) remaining in .05 .80 .10 .05

Foremen (F) position .10 .75 .05 .10

Supervision (S) .05 .90 .05

Staffing

Levels A M F S Exit

Assemblers (A) 250 175 25 50

Machinists (M) 120 6 96 12 6

Foremen (F) 40 4 30 2 4

Supervision(S) 20 1 18 1

Forecast 181 125 43 20 61

Hypothetical Markov Analysis for a Retail Company

An Replacement Chart

Succession Planning

REPLACEMENT CHARTFOR EXECUTIVE POSITIONS

POSITION REPLACEMENT CARDSFOR EACH INDIVIDUAL POSITION

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

POSITION WESTERN DIVISION SALES MANAGER

DANIEL BEALER Western Division Sales Mgr Outstanding Ready Now

PRESENT PROMOTIONPOSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL

SHARON GREEN Western Oregon Sales Manager Outstanding Ready NowGEORGE WEI N. California Sales Manager Outstanding Needs TrainingHARRY SHOW Idaho/Utah Sales Manager Satisfactory Needs TrainingTRAVIS WOOD Seattle Area Sales Manager Satisfactory Questionable

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Implementation Plans

Recruitment and retention plans

Selection and promotion plans

Training plans

Appraisal plans

Redeployment plans

Downsizing plans

Limitations

• Problem of Accuracy

• Emphasis on qualitative aspects- moral, career goals etc are ignored.

• Time consuming

• Resistance from both employer and employee

When company faces shortage of Employee

• Recruit new full time employees• Offer incentives for postponing retirement• Rehire retired employees part time• Attempt to reduce turnover

• Work Present staff overtime

• Subtract work to another firm• Hire temporary hands• Re-engineer to reduces needs• Out source an entire function

• Use technology to improve productivity

• Re-allocate people from elsewhere in the organisation

• Re-allocate work tasks among current employees

When company has surplus employees

• Do not replace employees who leaves

• Offer incentives for early retirement

• Transfer or re-assign excess staff

• Use slack time for employees training or equipment maintenance

• Reduce work hours

• Lay off employees

• Freeze hiring