S R Tulasi Hyderabad srtulasi@hotmail.

com

HUMAN RESOURCES PLANNING

CONTENTS
Introduction

to Human resources planning Integration of Strategic Planning with HR Planning Process and techniques of HR Planning Control and review mechanism Summary

3 CS OF HRD
All 3 Cs are needed for the organization to succeed.
Commitment With low commitment, tasks may not be done at all or done at a slow pace that they lose relevance

Competencies Ensure tasks are completed cost effectively, with optimal efficiency

Culture
This is the sustaining force and spirit for the organization to live

WHAT DO WE UNDERSTAND BY PLANNING !

WHAT IS HUMAN RESOURCE PLANNING !

An Integrated approach to ensure supply of adequately developed and motivated people to perform the duties and tasks required to meet organizational objectives and satisfy individual needs. The activity of planning human resources is usually in connection with the overall strategic planning of the organization. It provides linkage between different HR functions viz. compensation, benefits, staffing etc and the overall strategic goals of the organization.

Objectives of HR Planning
To recruit & retain the human resource of required quantity/quality To foresee the employee turnover and make arrangements for minimising turnover and filling up of consequent vacancies

To meet the needs of expansion, diversification etc

To foresee the impact of technology on work, existing employees and future human resource requirements

To improve the standards,skills,knowledge,ability,discipline etc

To assess the surplus/shortage of human resources & take necessary measures

To maintain congenial industrial relations by maintaining optimum level and structure of human resources

BENEFITS OF HR PLANNING

Better view of the HR dimensions of business decisions Enables placement of right people at right places and in right time Optimises HR costs through better HR management. Better development of managerial talent

Focus on physical facilities before a crisis develops

Helps firm up financial budget

HRP AND ENVIRONMENT

Several environmental factors will need to be scanned while developing Human Resources plans Social/cultural/religious factors Technological developments including automation/ IT etc Economic factors both domestic and global Political factors/ Legal requirements / Statutory provisions Demographic factors / gender/age/literacy Industry growth trends, competition, new products etc

HRP AT DIFFERENT LEVELS

National

level : Central Government develops HR plans at national level & forecasts demand and supply of Human Resources Sectoral level : Agricultural/Industrial/Service etc Government in consultation with relevant Industry associations & NGOs. Industry level : Steel, cement, power, textiles, chemical etc Organization level : Individual managements

FACTORS AFFECTING HUMAN RESOURCES PLAN

External Factors
Govt Policies Level of Economy Business Environment Information technology Level of Technology Natural factors information Outsourcing policies International factors

Internal Factors
Company Strategies HR Policy of the Company Formal & Informal groups Job Analysis Time horizons Type & Quality of Operational policies Trade union related issues

THE PROCESS OF HR PLANNING

Analyze

organizational Strategies Demand Forecast: HR Component-wise Supply Forecast: HR Component-wise Net HR requirement: Surplus? : Plan for Redeployment/Retrenchment Shortage : Plan for recruitment / Training / Internal Mobility

IMPORTANCE OF HRP

HRP matches the organisation and its HR objectives with its people requirements It ensures:

that the available talent is correctly allocated Personnel costs are optimised the numbers are appropriate productivity is maximised talented employees are retained

FACTORS THAT DETERMINE HR PLANS

LINKAGE OF ORGANIZATIONAL AND HR STRATEGIES

TYPICAL DIVISION OF HR RESPONSIBILITIES IN HR PLANNING

HR PLANNING PROCESS

FORECASTING METHODS

HRP - FORECASTS

A forecast of the demand for human resources within the organisation A forecast for the supply of external human resources A forecast of the supply of human resources available within the organisation

APPROACHES TO HR PLANNING

Quantitative methods

Use statistical and mathematical techniques Used by theoreticians and professional HR planners in large organisations.

Qualitative methods

Use expert opinion (usually a line managers) The focus is on evaluations of employee performance and promotability as well as career development.

INTERNAL DEMAND QUALITATIVE

Expert opinion

Expert = usually the line manager

Delphi technique

Individual decision making, followed by collation of results and redistribution of information until consensus is reached

Nominal group technique

Independent idea generation, followed by a group presentation and ranking of options

THE DELPHI TECHNIQUE

Leader identifies judgment issues and develops questionnaire. Prospective participants are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record their judgments and recommendations and return the questionnaire.
Leaders compiles summaries and reproduces participants responses. Leader sends the compiled list of judgment to all participants. Participants comment on each others ideas and propose a final judgment. Leader looks for consensus Leader accepts consensus judgment as groups choice.

THE NOMINAL GROUP TECHNIQUE

A small group of 4-5 people gathers around a table. Leader identifies judgment issue and gives participants procedural instructions.

Participants write down all ideas that occur to them, keeping their lists private at this point. Creativity is encouraged during this phase.
Leader asks each participant to present ideas and writes them on a blackboard or flipchart, continuing until all ideas have been recorded. Participants discuss each others ideas, clarifying, expanding, and evaluating them as a group. Participants rank ideas privately in their own personal order and preference. The idea that ranks highest among the participants is adopted as the groups judgment.

INTERNAL DEMAND QUANTITATIVE

Trend analysis

Or Time Series Analysis, makes predictions by projecting past and present trends into the future

Econometric modelling and multiple predictive techniques

Building complex computer models to simulate future events based on probabilities and multiple assumptions

STATISTICAL TECHNIQUES USED TO PROJECT STAFFING DEMAND NEEDS

Name Regression analysis Description Past levels of various work load indicators, such as sales, production levels, and value added, are examined for statistical relationships with staffing levels. Where sufficiently strong relationships are found, a regression (or multiple regression) model is derived. Forecasted levels of the retained indicator(s) are entered into the resulting model and used to calculate the associated level of human resource requirements.

Productivity ratios

Historical data are used to examine past levels of a productivity index (P): P = Work load / Number of People Where constant, or systematic, relationships are found, human resource requirements can be computed by diving predicted work loads by P.

STATISTICAL TECHNIQUES USED TO PROJECT STAFFING DEMAND NEEDS (CONTD)

Name Personnel ratios Description Past personnel data are examined to determine historical relationships among the employees in various jobs or job categories. Regression analysis or productivity ratios are then used to project either total or key-group human resource requirements, and personnel ratios are used to allocated total requirements to various job categories or to estimate for nonkey groups.

Time series analysis

Past staffing levels (instead of work load indicators) are used to project future human resource requirements. Past staffing levels are examined to isolate and cyclical variation, long-tem terms, and random movement. Long-term trends are then extrapolated or projected using a moving average, exponential smoothing, or regression technique.

INTERNAL SUPPLY QUALITATIVE

Skills inventory

May be simple and manual Detailed and maintained as part of the HR information system
Visual representation of which employee will replace the existing incumbent in a designated position when vacant

Replacement charts

Succession planning

Systematic, long-term career development activity focusing on preparing high potential employees for the future

INTERNAL SUPPLY QUANTITATIVE

Turnover analysis

Examination of why employees leave an organisation. Data: retirement, death, illness or disability, resignation, retrenchment or termination.

Markov analysis

Mathematical technique used to forecast the availability of internal job applicants. Transition Matrix developed to assess probability of moves.

A SAMPLE TRANSITION MATRIX

Part A: Personnel Supply Estimated Personnel Classification in Year T + 1 (%) Classifications in Year T Partner Manager Supervisor Senior Accountant Part B. Staffing Levels Estimated Personnel Availabilities in Year T + 1 (%) Classifications in Year T Partner Manager Supervisor Senior Accountant Beginning Levels P 10 7 30 3 50 100 200 10 M 24 6 S Sr A Exit 3 3 14 25 40 P .70 .10 M .80 .12 S Sr A Exit .30 .10 .28 .25 .20

.60 .20

.55 .15

.65

30 20 50

30

55 30 85

130 130

DEALING WITH SURPLUS RESOURCES

Redeployment
Outplacement

within the organization through career

guidance Skill improvement and redeployment Organizational growth to facilitate redeployment Employment in sister organizations
Redundancy/Retrenchment
Outplacement

in other Organizations through guidance Temporary / leave of absence without pay /permanent layoff Work sharing / reduced working hours VRS / Early retirement / compulsory retirement Attrition / Hiring freeze

What appears in HR Planning ?

Mission or Purpose of the Statement Summary of financial projections SWOT of HR Summary of Performance A job seekers market review People Competency Profile Major Assumptions HR Objectives & strategies for the next years Detailed current year operational Plan, with forecasts and budgets

REVIEW MECHANISM OF HRP

Periodic

reports on manpower / internal and external

mobility Audit manpower utilization / measurement of manpower productivity Survey of job satisfaction, morale, interpersonal relations etc Effectiveness of induction and other developmental activities Break even point/ Pay back period of new employees Exit interviews / areas of concern / redressal mechanism

SUCCESSFUL HRP THE ROLE OF HR

HR personnel to understand the role of HRP processes Top management to be supportive Not to start with an overly complex system Healthy communications between HR personnel and line managers HR plan to be integrated with the organisations strategic plan Balance between qualitative and quantitative approaches

SUMMARY

An efficient HRP is required for an organisation to be effective A complex system is not whats required Measure of success of the system: if the right people are available at the right time HRP needs to be fully integrated to the organisations business plan HR managers must be able to demonstrate the success of HRP processes

GROUP STUDY - 1

Is the process of human resources planning different for a green field factory and an ongoing enterprise !
If so, enumerate the differences and discuss

GROUP STUDY - 2
There is a growing deficiency in soft /employability skills, with the focus on the technical skills India is renowned for. Most graduates have a poor non-technical skill, which impedes their effectiveness as workers and reduces their productivity - From a study report on BRIC countries. Discuss this statement

GROUP STUDY - 3
Human Resources Planning does not deal just with numbers but a whole lot of issues beyond. Is this statement correct ! If so, what are those issues beyond !

GROUP STUDY - 4
Delphi technique and Nominal group technique are used to assess the qualitative aspects on internal demand.
Compare the two techniques and discuss their complimentary roles on demand analysis

GROUP STUDY - 5
Markov analysis also known as Transition matrix is used as a quantitative tool in the assessment of internal supply of human resources. Discuss its salient features and usefulness in a fast changing IT Scenario.