Module 2
Module 2
HUMAN
RESOURCE
MANAGEMENT
(22 MBA 103)
Instructor
Dr. Amarnath Padhi
[email protected]
2023
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HRP: Meaning, importance and process
Its aim is to identify and address the gaps between the employer’s workforce
today, and its projected workforce needs in order to carry out organisational
activities.
HRP is a process of determining and assuming that the organization will have an
adequate number of qualified persons, available at proper times, performing jobs
which meet the needs of the organisation and which provides satisfaction for the
individuals involved (Beach)
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HRP is a sub system in the total organizational planning, is the process of analyzing
and identifying the availability and the need for human resources so that the
organization can meet its objectives.
HRP is a FOUR phased process:
1. 1st Phase: involves the gathering and analysis of data through manpower
inventories and forecasts;
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Organizational Objectives
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Human Resource
Planning
Forecasting supply of
Forecasting Human
human resources
Needs
Identification of Human
Resource Gap
Shortage of Human
Surplus human
resources
resource
Action Plan for bridging
gap
Objectives of HRP:
To recruit and retain the human resources of required quantity and quality.
To foresee the employee turnover and make the arrangements for minimizing the
same.
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Importance of HRP
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Human resource planning evaluates and even modifies organization's strategic plan.
It provides the clear picture of human resource supply from various sources and enable
the organisation to recruit the prospective employees from the most suitable source.
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The demographic changes like changing profile of workforce, (in terms of age, sex,
education, etc.) and changes in govt.policies (in respect of reservations, child labour,
working conditions, etc.) affect the demand for and supply of human resources.
Similar changes in labour laws, pressure from trade unions, political parties influence the
demand and supply of human resources.
HRP predicts these changes and make necessary arrangements in meeting human
resource requirements.
Thus, human resource plan plays an important role in having right man in right
time in the process of achieving organisational strategies and objectives.
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Process of HRP
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Supply Forecasting: Obtaining the data and information about the present
Plan for recruitment, development and internal mobility if future supply is more
Plan to modify or adjust the organisational plan if future supply will be inadequate
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Adjust or modify strategies 10
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Analyzing corporate, Control and Review
unit and functional Mechanisms
level strategies 1
2 3 4
Reduced Work Leave of absence without pay VRS Golden Hand Shake
hours sharing
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Demand and Supply Forecasting
Forecasts, refer to a prediction of the outcome when normal course of events are
influenced by external forces. Forecasts usually take into account both the
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2. Medium-Term Forecasts
3. Long-Term Forecasts
5. Optimizing Forecasts
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Demand Forecasting:
The process of estimating the future numbers of people required and the likely
skills and competences they will need (right quality and right number).
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and kinds of personnel that an organization will need at some point in the future.
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Ratio Analysis
Benchmarking/Thumb rule:
Scatter Plot
Trend Analysis
Computerized Forecast
Work Study
2. Qualitative methods of demand forecasting
Managerial Judgment
Bottom up approach
Top-down approach
Delphi Technique
Zero based forecasting
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Ratio Analysis:
Ratio analysis is the process of determining future Human Resource demand of
an organisation by calculating an exact ratio between the specific business factor
and the number of employees needed. So, Ratio analysis is a forecasting
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technique that assumes a set relationship between one variable and another, and
that the relationship allows for the prediction of workforce needs.
Example:
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Benchmarking/Thumb rule:
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Scatter Plot:
- Scatter plot is a graphical method used to help identify the relationship between two
variables- such as sales and a firm’s staffing levels. Scatter plots show how much one
variable is affected by another. By using scatter plot organization can forecast the
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needs of human resource against the business activity. For example, a measure of
business activity and business staffing levels - are related, then if company forecast the
measure of business activity, company should be able to forecast their HR requirements
.
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Trend Analysis:
Trend analysis means studying historical organizational employment levels to predict
future employment levels. For example: If, on average, employment levels in the
organization have increase 5% per year, it might be logical to forecast a 5%
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increase for the next planning period. Trend analysis assumes that history will
repeat itself. The trend analysis provides both data describing how trends such as
turnover will affect the workforce and is a key element in the overall planning
process.
Trend data is not limited to turnover data. It also may include the following:
- Hiring and retirement patterns; Years of service; New-hire retention rate;
Transfers; Promotions.
For example- In a manufacturing plant in 2022-23 they were producing 10000
unit of product “X” with the help of 100 workers. Now they planned to expand the
production to 15000 unit of “X” product in 2023 -24 year. We can calculate by
trend that number of workers required would be 150. So they need to hire 50 more
workers.
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Computerized Forecast
large datasets and make predictions more efficiently than traditional manual
For example- the requirements for sales officers would depend on the trend of
sales in different markets; the number of product introduced; the difference in the
products (whether one salesman sell both products?) and customers for the
product.
The computer program enables the manager to enter all these variables to generate
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For example-
The estimated production of an organisation is 3,00,000 units. The standard man-hours required to
produce each unit are 2 hours. The past experiences show that the work ability of each employee in
man-hours is 1500 hours per annum. The work-load and demand of human resources can be
calculated as under:
1. Estimated total annual production = 300000 units
2. Standard man-hours needed to produce each unit = 2 hrs
3. Estimated man-hours needed to meet estimated annual production (i x ii) i.e., 300000*2=600000 hrs
4. Work ability/contribution per employee in terms of man-hour = 1500 units
5. Estimated no. of workers needed (iii / iv) = 600000/1500 = 400 units
The above example clearly shows that 400 workers are needed for the year
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Managerial Judgment
Delphi Technique
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Managerial Judgment
- Managerial judgment is a type of brainstorming that involves a meeting of
managers who gather to diagnose and predict the future job market.
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Determine
- These can generally be either top-down or bottom-up:
- Bottom-up approach: under this approach line mangers sends their departmental
requirement of human resources to top management.
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Delphi Technique
consent
A structured communication method used to reach a consensus or forecast future
developments. It was developed in the 1950s by the RAND Corporation for systematic,
interactive forecasting.
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2. Questionnaire Design:
– Experts independently and anonymously respond to the initial set of questions. They
may provide explanations or justifications for their answers.
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4. Compilation of Responses:
– The facilitator collects and compiles the responses, summarizing the range of
opinions without revealing individual contributors.
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– Experts receive a summary of the group's responses from the previous round.
They are then invited to revise their opinions based on the collective input.
6. Repeat Iterations:
• Conclusion:
– The final results are presented, often showing the range of opinions and
the areas where experts reached consensus's process used to arrive at a
group opinion.
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existed.
- Zero based forecasting requires line managers to justify the need to continue with
the positions or jobs that fall vacant in their department.
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Supply Forecasting:
external supply.
Replacement charts
Staffing Tables
Wastage Analysis
Succession Planning
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Markov Analysis
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The transition probabilities are typically derived from historical data on the
movements of employees between jobs, as well as exit moves from the
organization. A very useful method of analyzing and forecasting internal
movements.
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A
Grades
C
0-5 5-15 15+
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For example: Figure (below) shows hypothetical flow of people in a call center.
- In 2023the number of people in different jobs is given in the first column.
- There are 12 program manager, 36 assistant manager, 96 supervisors, 288
team leaders and 1440 customer service representative (CSRs).
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How these people make a transition in the next year is given in the subsequent
columns.
- The figures in percentage represent the transition i.e., the percentage of
people who will make a transition into that job in the coming year.
- For example, 74 per cent of the total number of CSRs (1440) will stay in their
current job, i.e., 1066 CSRs will continue. About 6 % (of 1,440), i.e., 86 would
get promoted to team leaders and 20 % would exit the system, i.e., 288 will be
separated.
Thus, Markov analysis shows the percentage of employees who remain in each job from
one year to the next as well as the numbers that get promoted, transferred or exit from
the organization.
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Replacement Charts
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Example: Executive Replacement Chart
Key
---------
MANAGER A: Promotable Now
-------------------- B. Needing development
Rahul ( A/1) C. Not fitted to position
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1. Superior Performance
Asst. MANAGER (1) 2. Above average performance
-------------------- 3. Acceptable performance
Aman ( B/2) Dy. MANAGER (2) 4. Poor Performance
--------------------
Dipesh ( A/2)
Ankur (B/3)
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Staffing Tables
utilized or not.
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[Ex. Marketing; Low-high Who is the person Of task to (Rs./year) for this
Office responsible for organization: function.
Management; this function C=Critical to [Note: this should
Fundraising; now? [B=Board mission; include
Outreach; Member; I=Important; salary/wage
communications V=volunteer; OS=Organization benefits (if any),
; etc.] C=Paid al Support office space,
Consultant; operating money,
S=Staff; N=No etc.]
one]
Manager
Executive
Dy. Manager
AVP
VP
Director
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Wastage Analysis
- Labour wastage should be taken into account while making future forecast
and find out the reasons of people leaving the organisation.
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- For measuring permanent total loss due to labour the following labour
turnover formula is used.
Labour Turnover Rate = Number of Employees left specified period (say one year)
X 100
Average Number of Employees during the same period
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Succession Planning
- A successor is an employee with the knowledge, skills, and abilities to fill a vacant
position until a permanent replacement can be identified.
- The matrix below will help you visualize how to identify positions in need of
succession planning.
Inability
No successor position identified for this position
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Factors affecting HRP Determinants of HRP
Job Analysis
Business Environment
Time Horizons
Level of Technology
Type and Quality of
Information
International Factors
Trade Unions
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There are several factors that affect HRP. These factors can be classified into external
factors and internal factors
External Factors:
- Government Policies: Policies of the government like labour policy,
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industrial relations policy, policy towards reserving certain jobs for different
communities and sons-of-the soils, etc. affect the HRP.
- Level of Economic Development: It determines the level of HRD in the country
and thereby the supply of human resources in future in the country.
- Business Environment: External business environmental factors influences
the volume and mix of production and thereby the future demand for human
resources.
- Level of Technology: Level of technology determines the kind of human
resources required.
- International Factors: : International factors like the demand for the resources
and supply of human resources in various countries.
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Internal Factors:
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Selection Process: Screening
Recruitment:
it is a process of searching for and obtaining applicants for jobs so that the right
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Determinants of Selection
Advertisements
Present Employees
Campus Recruitment
Employee Referrals
Deputation
Former Employees
Employment Exchanges
Previous Applicants
Professional Associations
Employment Agencies
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Selection:
The success of any recruitment process depends on the three-way function of personnel
management which consists of screening, interviews and selection
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The success or failure of any organisation therefore depends to a large extent on how
these three-way functions of personnel management are handled.
Screening is the process of picking individuals who have relevant qualifications to fill
jobs in an organization.
It is also opined that screening of candidates requires writing of aptitude test, screening
of academic credentials, computer based test, literacy test, aptitude test, and practical
tests on concern skills.
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Selection
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Applications are screened against the qualification, knowledge, skills, abilities, interest and
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The selection process starts only after the applications have been screened and shortlisted.
To selection
Job Recruitment Searching
Vacancies Applicant Potential
Planning Activation Screening
Hires
Pool
( Numbers “Executive”
and types)
Strategy Evaluation
Applicant and Control
Development
(Where, how, Population
when)
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Sourcing and Recruiting Selecting Onboarding
Identifies Performs
Posts positions
minimally preliminary Job offer
and sources
qualified candidate accepted
recruits
candidates assessment
HR
Department
Conducts job
Identify
analysis if
finalists
needed
Determines
Secures job Interviews Job offer
Hiring need for
requisition finalists made
Manager position
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Job Analysis/Design: Process and Methods
Definitions:
Job analysis is the process of getting information about jobs: specially, what the worker
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does; how he gets it done; why he does it; skill, education and training required;
1. Job Description
2. Job Specification
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JOB ANALYSIS
The procedure for determining the duties and skill requirements of a
job and the kind of person who should be hired for it.
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Methods
1. Interview Method:
interviews with groups of employees who have the same job, and/or supervisor
interviews with one or more supervisors who know the job. This method also
helps to know the feelings of employees towards their job and responsibilities.
2. Observation Method:
In this method an analyst carefully observes the worker doing the job and records
challenges,etc.
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3. Questionnaire:
A good questionnaire must cover all job related aspects and provide
effective and complete information related to the job. (Structured Questions).
Having employees fill out questionnaires to describe their job duties and
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4. Critical Incident:
The analyst ask job holders about their past experience related to the job.
The incident so collected is analyzed and classified according to the job
areas they describe. This method requires high degree of skills to analyze
the content of the description given by the job holder.
5. Checklist Method:
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6. Conference Method:
7. Participant Diary/Logs:
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The process
Step 1:
Decide how you will use the information
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Step 2:
Review relevant background information about the Job
Step 3:
Select representative positions
JOB ANALYSIS
Step 4:
Analyze the job
Step 5:
Verify the job analysis information
(with his /her immediate supervisor)
Step 6:
Develop a job description and job specification
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Tips to writing a good Job Description
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Example: Title
• What are the job specifications?
• Are the physical demands mentioned?
• Is the job description task based or competency based?
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