Unit 2 Human Resource Planning
Unit 2 Human Resource Planning
Similarly the organisation must determine the breadth of the plan. Essentially, the
organisation can choose a narrow focus by planning in only one or two HR areas,
such as recruitment or selection, or it can choose a broad focus by planning in all
areas including training, remuneration and so on. ~
The organisation must also decide upon the formality of the plan. It can decide to
have an informal plan that lies mostly in the minds of the managers and personnel
staff. Alternatively, the organisation can have a formalized plan which is clearly
spelt out in writing, backed by documentation and data.
Finally, the organisation must make a decision on flexibility—the ability of the HR
plan to anticipate and deal with contingencies No organisation likes high levels of
uncertainty. Organisations seek to reduce uncertainty by planning, which includes
forecasting and predicting possible future conditions and events. HRP can contain
many contingencies, which reflect different scenarios thereby assuring that the plan
is flexible and adaptable. Figure 4.4 summarizes these five major choices faced by
the organisation in strategic HRP. An organisation will often tend to be, to the left
or to the right, on all continua rather than to the left on some and to the right on
other, although there could be exceptions. A company could be at one end of the
extreme on some plan characteristics and at the other end on other.
3. Environmental Uncertainties:-
HR managers rarely have the privilege of operating in stable and predictable
environmental uncertainties by carefully formulating recruitment, selection, and
training and development policies and programmes. Balancing mechanisms are
built into the HRM programme through succession planning, promotion channels,
layoff’s, and flextime, job sharing, retirement, VRS and other personnel related
arrangements.
4. Time Horizons:-
Yet another major factor affecting personnel planning is the time horizon. On one
hand, there are short-term plans spanning six months to one year. On the other
hand, there are long-term plans which spread over three to twenty years. The exact
time span, however, depends on the degree of uncertainty prevailing in an
organisation’s environment. Plans for companies operating in an unstable
environment, computers for example, must be for a short period. Plans for others
where environment is fairly stable, for example a university plan, may be long-
term. In general, the greater the uncertainty, the shorter the plan’s time horizon and
vice versa.
7. Outsourcing:
Several organizations outsource part of their work to outside parties either in the
form of sub-contracting or ancillarisation. Outsourcing is a regular feature both in
the public sector as well as in the private sector. Most organisations have surplus
labour and they do not want to worsen the problem by hiring more people. Hence,
the need for off-loading. Some organisations are known to carry the concept off-
loading to ridiculous lengths. One of the Bangalore-based public sectors under
taking outsources major part of its work, and in the process, the regular employees
sit idle. Kickback from owners of ancillary units is the cause for ancillarisation.
HRP is rarely required in such circumstances.
2. Demand Forecasting
HR forecasting is the process of estimating demand for and supply of HR in an
organization. Demand forecasting is a process of determining future needs for HR
in terms of quantity and quality. It is done to meet the future personnel
requirements of the organization to achieve the desired level of output. Future
human resource need can be estimated with the help of the organization's current
human resource situation and analysis of organizational plans an procedures. It will
be necessary to perform a year-by-year analysis for every significant level and
type.
3. Supply Forecasting
Supply is another side of human resource assessment. It is concerned with the
estimation of supply of manpower given the analysis of current resource and future
availability of human resource in the organization. It estimates the future sources
of HR that are likely to be available from within an outside the organization.
Internal source includes promotion, transfer, job enlargement and enrichment,
whereas external source includes recruitment of fresh candidates who are capable
of performing well in the organization.
5. Action Plan
It is the last phase of human resource planning which is concerned with surplus
and shortages of human resource. Under it, the HR plan is executed through the
designation of different HR activities. The major activities which are required to
execute the HR plan are recruitment, selection, placement, training and
development, socialization etc. Finally, this step is followed by control and
evaluation of performance of HR to check whether the HR planning matches the
HR objectives and policies. This action plan should be updated according to
change in time and conditions.
1. Delphi technique.
2. Nominal technique.
3. Brainstorming.
4. Ratio Analysis.
5. Trend Analysis.
6. Scatter plot.
1 Delphi technique
Delphi technique is based on the principle that forecasts (or decisions) from a
structured group of individuals are more accurate than those from the unstructured
group.
Experts are chosen based on their knowledge of internal factors that might affect a
business (e.g., projected retirement), their knowledge of the general business plans
of the organization, knowledge of the external factors that might affect demand for
the firm’s product and service, and hence its internal demand for labor.
The cycle is then repeated so that the experts can revise their forecasts and the
reasons behind their revised forecasts.
The following are the key characteristics of the Delphi method: the anonymity of
the participants, the structuring of information flow, regular feedback, and the role
of the facilitator.
The Delphi technique is not without limitations. It must be realized that in an area
such as human resource forecasting, the degree of uncertainty is so great that exact
and always correct predictions are impossible.
Another problem is the inability of the experts to make complex forecasts with
multiple factors.
Nominal technique
A nominal group exists in name only, with members having minimal interaction
before producing a decision. Participants are asked to write their ideas
anonymously. Then the facilitator collects the ideas, and the group votes on each
idea. The group should be prepared and encouraged to embrace the process.
Brainstorming
Good ideas may be combined to form a single better idea, as suggested by the
slogan “1+1=3”. It is believed to stimulate the building of ideas by the process of
association. It is built around four basic guidelines for participants:
The success of this technique depends on: each member’s capacity, willingness to
hear thoughts, use the thoughts as a stimulus, spark new ideas of their own, and
feel free to express them.
Advantages of Brainstorming
Disadvantages of Brainstorming
1. Members typically feel that the final product is a team solution, not an individual,
2. Residual fear among some members,
3. Creative thoughts are looked down upon,
4. Less contribution to group cohesion.
5. Only one person can speak at a time,
Trend Analysis
Trend analysis means studying a firm’s past employment needs over the years
to predict the future. The purpose is to identify trends that might continue. It
provides an initial estimate.
Ratio Analysis
It means making forecasts based on the ratio between any causal factor and the
number of employees required. Ratio analysis assumes that productivity remains
the same.
Scatter plot
A scatter plot is a graphical method used to help identify the relationship between
two variables. If an HR manager can forecast the level of business activity, he
should also estimate personnel requirements.
Human resource planning is a process through which the right candidate for the
right job is ensured. For conducting any process, the foremost essential task is to
develop the organizational objective to be achieved through conducting the said
process.
Six steps in human resource planning are presented in Figure 5.3.