Human Resource Planning
Human Resource Planning
Human Resource Planning
Human Resource Planning HRP has been define as the process by which management determines how an organization should move from its current manpower position to its desired manpower position. Through it, management strives to have the right number and kind of people at the right place and right time, doing things which result in both the organization and the individual receiving maximum long range benefits.
Characteristics of HRP
1. 2. 3. 4. Forward looking/ Future Oriented Ongoing/Continuous process Integral part of corporate/strategic planning Includes both quantitative (right number of employees) and qualitative aspects (right talent required in the organization)
5. Primary responsibility of management to ensure effective utilization of the organizations human resources 6. Systems approach 7. Can be long term/short term 8. Two phased (Manpower demand plan and manpower supply plan) 9. Involves study of the manpower environment which influences the demand for manpower and its supply. It involves study of manpower utilization
Objectives of HRP
1. 2. 3. To ensure optimum use of existing HR To forecast the requirement for HR To provide control measures to ensure that necessary human resources are available as and when required 4. To link HRP with organizational planning 5. To assess the surplus and shortage of human resources 6. To anticipate the impact of technology on jobs and HR 7. To determine levels of recruitment and training 8. To estimate cost of HR and housing needs of employees 9. To provide basis for MDP 10. To facilitate productivity bargaining 11. To meet the needs of expansion and diversification of programmes
Process of HRP
1. Analyzing Organizational plans Plans concerning technology, production, finance, marketing, expansion and diversification gives an idea about the volume of future work activity 2. Forecasting demand for Human Resources (Through various methods) 3. Forecasting Supply of Human Resources 4. Estimating Manpower gaps 5. Action Planning 6. Monitoring and Control
Levels of HRP
1. National Level 2. Sectoral Level 3. Industry Level 4. Unit Level
Strategic Planning involves a set of procedures for making decisions about the organizations long term goals and strategies Human Resources Planning (HRP) - The process of anticipating and providing for the movement of people into, within and out of an organization Strategic Human Resource Management It combines strategic planning and HRP. It can be defined as pattern of human resource deployments and activities that enable an organization to achieve its strategic goals.
Strategic Planning
Mission The basic purpose of the organization as well as its scope of operations. It is a statement of organizations existence Strategic Vision It is about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic content. Core Values The beliefs and principles that the company uses as a foundation for its decisions.
Environmental Analysis The systematic monitoring of the major external forces influencing the organization
- Economic factors - Technological changes - Govt. and legislative issues - Social changes
Competitive Environment analysis External Supply of Labor Many factors influence the labor supply, including demographic changes in population, national and regional economics, education level of the workforce, demand for specific employee skills, population mobility and govt. employees.
Culture Cultural Audits are conducted to examine the attitudes and beliefs of the workforce as well as the activities they engage in. By doing this managers are able to learn about the culture of their organization that distinguish it from its competitors and deliver value to customers. Competencies - Any organizations key to success is on establishing its core competencies. In many cases people are the core competency particularly in knowledge based industries. Composition : The Human Capital Architecture Managers need to determine whether people are available, internally or externally, to execute an organizations strategy.
Internal analysis reveals where the organization is today but managers must continually forecast both the needs and the capabilities of the firm for the future in order to do an effective job at strategic planning.
Model of HR Forecasting
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Once the managers have analyzed the internal strengths and weaknesses of the firm, as well as external opportunities and threats, they have information they need to formulate corporate, business and HR strategies for the organization. SWOT Analysis : A comparison of strengths, weaknesses, opportunities and threats is normally referred to as SWOT analysis which can be used for strategy formulation purpose. Strategy Formulation Corporate Strategy - Growth and diversification - Mergers and Acquisitions - Strategic Alliances and Joint Ventures
2. Business Strategy - Low cost strategy(compete on productivity and efficiency) - Differentiation strategy (compete on value added)
3. Functional strategy HR policies and practices need to achieve two types of fit : external and internal.
External fit focuses on the connection between the business objectives and the major initiatives in HR. For e.g. if a companys strategy focuses on achieving low cost, HR policies and practices need to reinforce this idea by reinforcing efficient and reliable behavior, enhanced productivity etc. Internal fit/Alignment : It is done to ensure that HR practices are all aligned with one another internally to establish a configuration that is mutually reinforcing.
Through HRP, organizations strive for a proper balance between demand considerations and supply considerations. According to the strategy being adopted for the year, the company might choose to downsize, outsource, layoff or hire. The process of evaluating the availability of critical talent in the company and comparing it to the firms strategy.
Demand Supply Gap
Many firms evaluate their performance against other firms through. This is done through benchmarking. Benchmarking is the process of identifying best practices in a given area-say productivity, logistics, brand management, training and so on and then comparing your practices and performance with those of other companies.
Measuring strategic alignment : Managers need to assess the extent to which the organization has been able to achieve alignment. This can be done by applying balanced scorecard technique. Measuring Internal fit Ensuring strategic flexibility for the future : HRP helps increase organizational capability the capacity of the organization to continuously act and change in pursuit of sustainable competitive advantage. Flexibility can be achieved in two primary ways coordination flexibility and resource flexibility Coordination flexibility occurs through rapid reallocation of resources to new or changing needs Resource flexibility results from having people who can do many different things in different ways
If the span of control is 10, then the no. of supervisors required would be 50/10=5
2. Trend Analysis : Forecast employment requirements on the basis of some organizational index. Typically, it is done in the following stages i. Select an appropriate business factor (Like sales/value added) ii. Plot a historical trend of the business in relation to the number of employees iii. Compute the productivity ratio for at least past five years iv. Calculate HR demand by multiplying the business factor by the productivity ratio v. Project human resource demand out to the target year
LABOUR PRODUCTIVITY
(SALES/EMPLOYEE)
(SALES IN THOUSANDS)
$2,351 $2,613
14.33 11.12
164 235
2004
2005 2006 2007
$2,935
$3,306 $3,613 $3,748
8.34
10.02 11.12 11.12
352
330 325 337
2008
2009* 2010* 2011*
$3,880
$4,095 $4,283 $4,446
12.52
12.52 12.52 12.52
310
327 342 355
3. Mathematical Models : A mathematical model expresses relationship between independent variables (e.g. investment, production, sales etc.) and dependent variable (e.g. number of employees required). Several types of models like regression, optimization models, probabilistic models can be used. Future demand for human resources depends on employment trend, replacement needs, productivity, absenteeism, expansion and growth Absenteeism=Mandays lost due to absenteeism/ Mandays worked+ mandays lost
4. Workload Analysis : The total workload of each department is estimated on the basis of sales forecasts, work schedules, growth rates, expansion plans etc. On the basis of past experience and work measurement, the total workload is converted into manpower required. It is used to estimated how long a time an operation would take and the manpower required per unit of output.
IllustrationSuppose a factory aims to produce 50,000 tonnes of cement during 2010-11. The standard manhours required to produce one ton are estimated to be 10. On the basis of past experience, the factory estimates that on an average one worker can contribute 2500 hours per year. The total work load and the number of workers required can be estimated as followsi. ii.
Production budget for 2010-11 = 50, 000 tonnes Standard manpower required per unit = 10 hours
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be available for work throughout the year, due to absenteeism and turnover. It is, therefore to make provision for loss of current manpower. On the basis of past experience, the organization can estimate the percentage of staff that would not be available due to leave, resignation, deaths or termination etc. In order to estimate accurately the loss of current manpower, analysis of the present workforce is made involving past behavior, performance and retirement date of every employee. This type of analysis is called as workforce analysis.
For example, suppose in the above case, 5% of the staff will remain absent and another 5% is likely to be lost due to resignations, retirement, termination, deaths etc. Thus the actual no. required would be 200+200/10=220 during the year.
6. Ratio Trend Analysis : Ratios are calculated like (total output/no. of workers, total sales volume/no. of sales persons, direct workers/indirect workers) on the basis of past data. Future ratio are calculated on the basis of time series analysis/extrapolation. Example : Production level in 2004-05 = 50,000 units No. of workers in 2004-05 =50 Ratio 1:1000 Number of supervisors = 5 Ratio 5:50=1:10 Estimated production in 2005-06 = 60,000 units No. of workers required in 2005-06= 60,000/1000=60 No. of supervisors required = 60/10=6
Qualitative Techniques 1. Managerial Judgment Experienced managers estimate the manpower requirements for their respective departments on the basis of their knowledge of expected future workload and employee efficiency. These departmental estimates are then aggregated and approved by top management Very simple and time-saving method, but is quite subjective and is suitable for small firms only.
2. Delphi Technique Forecasts by soliciting and summarizing the judgments of a pre-selected group of individuals. The final forecast thus represents a composite group judgment. This technique requires a great deal of coordination and cooperation in order to ensure satisfactory forecasts. This method works best in organizations in which dynamic technological changes affect staffing levels.
Ideally forecasting should include a combination of the two approaches (qualitative and quantitative)
Staffing tables and Markov Analysis : Staffing tables are graphic representations of all the organizational jobs, along with the number of employees currently occupying those jobs. Markov Analysis shows the percentage (and actual number) of employees who remain in each job from one year to the next, as well as the proportion of those who are promoted, demoted or transferred or exit the organization. Markov Analysis can be used to track the pattern of employee movements through various jobs and to develop transition matrix for forecasting labor supply
2. Skill Inventories and Management Inventories (Talent Inventories) : Skill inventories list each employees education, past work experience, vocational interests, specific abilities and skills, compensation history and job tenure. This well prepared and up-to-date inventories allow an organization to quickly match forthcoming job openings with employee backgrounds. When data are gathered for managers, these inventories are called management inventories. These analysis can be done using HRIS and enterprise systems provided by companies like Oracle-PeopleSoft and SAP
3. Replacement Charts and Succession planning : The above two inventories can be used to develop employee replacement charts, which list current jobholders and identify possible replacements for the openings. The process of identifying, developing and tracking key individuals so that they may eventually assume top level positions is called as
Absenteeism
Absenteeism means the failure of a worker to report for work when he is scheduled to work. The rate of absenteeism is defined as the percentage of mandays lost due to absence to the total number of mandays scheduled in a given time period. Absenteeism = No. of mandays lost due to absence/No. of mandays scheduled to work*100
Absenteeism in India
National Productivity Council reveal the following peculiarities of absenteeism in India
The rate of absenteeism has been more than 10 percent Absenteeism has been greater in night shifts than in day shifts
There has been a seasonal bias in the causes making absenteeism. Like seasonal change leading to sickness
The rate of absenteeism is going to be higher in days before and after a holiday.
Causes of Absenteeism
Nature of work Poor working conditions Sickness Accidents Lack of Interest Absence of Housing and Transport Facilitates Poor Management System Lack of regular leave arrangement Rural Ties
Effects of Absenteeism
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Regular flow of work gets disturbed Orders may not get executed on time due to production delays Increase in overtime bills Quality of work suffers Work pressure on employees present increases Repairs and maintenance cost increases due to frequent breakdown of machinery by inexperienced workers.
Proper hiring Good working conditions Housing and transport facilities Safety Programme Incentives Effective Supervision Disciplinary Action Regular Leave Provision Employee Counselling Proper Record
Labour Turnover refers to the rate of change in the workforce of an enterprise during a given time period It can also be defined as the time to time changes in the composition of the workforce that result from hiring, release and replacement of employees.
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2. Separation Method :
Turnover Rate
= Total Separation during the year/Avg. no. of employees *100 Total separations includes all the employees who have quit the concern due to layout discharge, retirement, death, resignation etc. including transfers to other concerns. 3. Combined Method : Due to cyclical and seasonal fluctuations neither of the above method may give correct measurement. So, to minimize it, following formula may be used Turnover rate = [(Accession + Separations during the year)/2]/Avg. no. of employees *100
4. Replacement Method : Turnover rate = [(Accession - Separations during the year)/Avg. no. of employees *100 It is called net turnover rate or wastage rate.
Improving recruitment policy and practices Proper training and orientation of employees Better pay and good working conditions Promotions and good career opportunities Impartial transfer and promotion policies Employee welfare schemes Retirement benefits Conflict resolution and team building techniques
Job Analysis
Job Analysis can be defined as the process of determining by observation and study, the tasks which comprise the job, the methods and equipment used, and the skills and attitudes required for successful performance of the job.
Job Redesign A job may be analyzed to simplify the process and methods involved in it. Such work simplification helps to improve productivity Work Standards In order to establish job and time standards, a job has to be analyzed in detail. A systematic study of the job reveals the time that should be taken in performing the total task. Once the requirements become known, standards relating to daily performance can be established Miscellaneous Job analysis provides support to other human resource activities such as recruitment, selection, training, performance appraisal, job evaluation, safety etc.
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Organizational Design : Jo Analysis is useful in classifying jobs and interrelationship among them. HRP : It provides information for forecasting manpower requirements in terms of KSAs. Recruitment and selection : Job vacancy is advertised on the basis of job description and job specification Training and Development : Job Analysis provides valuable information required to identify training needs, to design training programmes and to evaluate training effectiveness Performance Appraisal : It helps in determining performance standards in critical parts of a job.
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Career Path Planning : Job Analysis provides a clear understanding of the career paths and opportunities available in the organization Job Design : Improvements in work design and methods can be made to improve productivity and satisfaction Job Evaluation :Job analysis serves as a basis for determining the relative worth of different jobs Health and Safety : Job analysis reveals unhealthy and hazardous environmental and operational conditions in various jobs. On the basis of such information, management can develop measures to ensure health and safety of employees.
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Organizational Analysis : An overview of various jobs in the organization is obtained for analyzing the linkage between jobs. Background information is collected in terms of organizational charts, class specifications and work flow charts. Organizing Job Analysis Programme : Planning and organizing the programme of job analysis. The company must decide the incharge of the programme. A budget and time schedule can be developed. Deciding the Uses of Job Analysis Information : Procurement, Development, Compensation, Integration and Maintenance
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Selecting Representative Jobs for Analysis : Select representative jobs are analyzed and the rest of jobs are categorized under them Understanding Job Design : The job analysis should obtain information concerning the current job design of the representative job. Current JD and job specification can be studied Collection of Data : Data on characteristics of the job, and qualifications and behavior required to do the job effectively is collected. Data may be collected from the employees who are currently doing the job or from their supervisors Developing a Job Description : A written statement that describes in brief the tasks, duties and responsibilities which needs to be discharged for effective job performance. Preparing a Job Specification : A written statement that specifies the personal attributes in terms of education, training, experience and aptitude required to perform a job.
Job Evaluation
The process of ascertaining the relative worth of a job
Job Performance : Job analyst actually performs the job under study to obtain a first hand experience of the actual tasks. Personal Observation : Analyst directly observes the worker or a group engaged in doing the job. The information obtained is recorded in a standard format.
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Interview : The analyst personally interviews the employee, his supervisor and other concerned persons and records answers to relevant questions. Interview guidelines can be prepared.
Questionnaire : In this method, properly drafted questionnaires are sent out to jobholders. After completion, the fully filled and correct ones are submitted to the job analyst.
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Critical Incidents : Jobholders are asked to describe incidents concerning the job on the basis of their past experience. The incidents collected are analyzed and classified according to the job areas they describe. Log Records : The job holder daily records the duties performed and the time at which each of the task was started and completed. This record provides information about the job. Position Analysis Questionnaire : A questionnaire covering 194 different tasks that, by means of a five-point scale, seeks to determine the degree to which different tasks are involved in performing a particular job
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8. Functional Job Analysis : It utilizes inventory of various types of functions that can constitute any job. Three broad worker functions form the base of this system :
i. Data ii. People iii. Things
People 0-Mentoring 1-Negotiating 2-Instructing 3-Supervising 4-Diverting 5-Persuading 6-Speaking 7-Serving 8-Taking instructiions 9-Helping
9. Task Inventory Analysis : An organization specific list of tasks and their descriptions used as a basis to identify components of jobs
10. HRIS and Job Analysis : Various software programs designed specifically to analyze jobs and to write job descriptions and job specifications based on those analysis
Job Description
The data collected through job analysis provides the basis for preparing JD and job specification. Job description is a functional description of what the job entails. It is descriptive in nature and defines the purpose and scope of a job.
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Contents of Job Description Job Identification : Job title, code number of the job, department etc. Job Summary : It describes the contents of a job in terms of the activities or tasks performed Job Duties and responsibilities Working Conditions : The physical environment of the job and the nature of risk hazards (if any)
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Social Environment : Size of the work group and inter personal interactions required to perform the job are given Machines, Tools and Equipments used Supervision : Details of the people to be supervised/ the details of the superiors and subordinates may be given Relation to other jobs : The jobs immediately below and above are mentioned. It provides an idea of vertical work flow and channels of promotion.
Job Specification
Also known as employee specifications, a job specification is a written statement of educational qualifications, specific qualities, level of experience, physical, emotional, technical and communication skills required to perform a job, responsibilities involved in a job and other unusual sensory demands. It also includes general health, mental health, intelligence, aptitude, memory, judgment, leadership skills, emotional ability, adaptability, flexibility, values and ethics, manners and creativity, etc.
Described on the basis of job description, job specification helps candidates analyze whether are eligible to apply for a particular job vacancy or not. It helps recruiting team of an organization understand what level of qualifications, qualities and set of characteristics should be present in a candidate to make him or her eligible for the job opening. Job Specification gives detailed information about any job including job responsibilities, desired technical and physical skills, conversational ability and much more.
It helps in selecting the most appropriate candidate for a particular job. Job description and job specification are two integral parts of job analysis. They define a job fully and guide both employer and employee on how to go about the whole process of recruitment and selection. Both data sets are extremely relevant for creating a right fit between job and talent, evaluate performance and analyze training needs and measuring the worth of a particular job.
JOB DESIGN
Job Design
Job Design which is an outgrowth of job analysis is concerned with structuring jobs in order to improve organizational efficiency and employee job satisfaction. Job design is concerned with changing, modifying, and enriching jobs in order to capture the talents of employees while improving organization performance
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The principles of scientific management forms the basis for designing jobs given by F.W.Taylor Industrial engineering is concerned with analyzing work study methods and establishing time standards. It involves study of work cycles to determine which elements can be modified, combined, rearranged or eliminated to reduce the time needed to complete the cycle.
Behavioral Concerns
Two job designs seek to incorporate the behavioral needs of employees as they perform their individual jobs. Both methods strive to satisfy the intrinsic needs of employees - The Job Enrichment model and the Job characteristics model Employee empowerment is the third factor addressing the behavioral concerns
JOB ENRICHMENT Any effort that makes work more rewarding or satisfying by adding more meaningful tasks to an employees job is called job enrichment. Herzberg discusses five factors for enriching jobs and thereby motivating employees 1. Achievement 2. Recognition 3. Growth 4. Responsibility
Managers can use these five factors to enrich the jobs of employees by
Increasing the level of difficulty and responsibility of the job Allowing employees to retain more authority and control over work outcomes
The Job characteristics model proposes three psychological states of a jobholder determine his motivation, satisfaction and performance on the job. These states are
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Experienced meaningfulness : the degree to which the jobholder experiences work as important and worthwhile Experienced responsibility : the extent to which the jobholder personally feels responsible and accountable for the results of the work performed Knowledge of results : information about how well he is performing his job. When a worker experiences these states are on the job, he feels motivated. He works hard to perform well
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Hackman and Oldham believe that five core job dimensions produce three psychological states. The five job characteristics are as follows 1. Skill variety 2. Task identity 3. Task significance 4. Autonomy 5. Feedback
Hackman and Oldham have also developed a Job Diagnostic Survey (JDS) questionnaire to analyze jobs to give propensity of a job to be intrinsically motivating. MPS=(Skill Variety + Task Significance + Task Identity)*Autonomy*Feedback/3 The formula reveals that the job dimensions of autonomy and feedback are most critical. If score on either of them is 0, the MPS will also be zero which means the job has no motivation potential.
Ergonomic Considerations
Ergonomics attempts to accommodate the human capabilities and limitations of those who are to perform a job. It is concerned with adapting the entire job system the work, the work environment, the machine and equipment ad the other processes to match human characteristics In short, it seeks to fit the job to the person rather than the person to the job Certain Indian organizations use an ergonomics based approach while designing the work environment for their employees. Organizations in India such as Kodak and many software companies have adopted ergonomics to help its employees have a better work environment and more productive hours
Ergonomics improves productivity and morale and yields positive return on investment (ROI). In India, BIS(The Bureau of Indian Standards) is a statutory body that is responsible for laying down policy guidelines. The Indian Society of Ergonomics established in 1983 is the only professional body representing ergonomics/human professionals in India. The society was formed to promote and enhance ergonomics and allied studies, research and training in India, for the benefit of people at work, to improve their welfare and quality of life.
Recruitment and retention of employees Coordinating employee work schedules with production schedules Accommodating the leisure-time activities of employees while facilitating employee personal appointments medical, dental, financial Flexitime or flexible working hours permits employees the option of choosing daily starting and quitting times, provided that they work a certain number of hours per day or week. However, there is core-period during morning and afternoon when all employees are required to be on the job
Flexitime
Job Sharing The arrangement whereby two part time employees perform a job that otherwise would be held by one full time employee is called job sharing
Telecommuting Telecommuting is the use of personal computers, networks and other communications technology to do work in the home that is traditionally done in the workplace
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Job rotation : Shifting of an employee from one job to another without any change in the jobs. Job Enlargement : It is the process of increasing the scope of a job by adding more tasks to it. Job Enrichment : It involves designing a job a in such a ay that it provides the worker greater autonomy for planning and controlling his own performance. Job Simplification