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HR PLANNING & STAFFINGHR PLANNING & STAFFING

Prof. B D SinghIMT, Ghaziabad

Take away my people, but leave my factories, &soon grass will grow on the factory floors. Takeaway my factories, but leave my people, & soon wewill have a new & better factory

Andrew Carnegie


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StrategicStrategic planningplanning:: thethe systematicsystematic determinationdetermination ofof goalsgoals andand thetheplansplans toto achieveachieve themthem

BusinessBusiness strategystrategy plansplans toto buildbuild aa competitivecompetitive focusfocus inin oneone lineline ofofbusinessbusiness

StrategicStrategic HRMHRM interrelatedinterrelated practices,practices, policies,policies, andand philosophiesphilosophies thatthat

facilitatefacilitate thethe attainmentattainment ofof organizationalorganizational strategystrategy

HumanHuman resourceresource managementmanagement cancan bebe viewedviewed asas anan umbrellaumbrella termtermthatthat encompassesencompasses thethe followingfollowing::

-- Specific HR practices, such as recruitment, selection, and appraisalSpecific HR practices, such as recruitment, selection, and appraisal

-- Formal HR policies that direct and partially constrain the development ofFormal HR policies that direct and partially constrain the development ofspecific practicesspecific practices

-- Overarching HR philosophies, which specify the values that inform anOverarching HR philosophies, which specify the values that inform anorganizations policies and practicesorganizations policies and practices


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TheThe truthtruth isis thatthat HRHR hashas nevernever beenbeen moremore necessarynecessary.. TheThe competitivecompetitive forcesforcesthatthat managersmanagers faceface todaytoday andand willwill continuecontinue toto confrontconfront inin thethe futurefuture demanddemandorganizationalorganizational excellenceexcellence.. TheThe effortsefforts toto achieveachieve suchsuch excellenceexcellence throughthrough aa

focusfocus onon learning,learning, quality,quality, teamworkteamwork andand rere-- engineeringengineering areare drivendriven byby thethewayway organizationsorganizations treattreat theirtheir peoplepeople.. TheseThese areare fundamentalfundamental HRHR issuesissues.. ToTo statestateitit plainlyplainly:: AchievingAchieving organizationalorganizational excellenceexcellence mustmust bebe thethe workwork ofof HRHR..

Human capitalHuman capital---- the sum of employees knowledge, skills, experience, andthe sum of employees knowledge, skills, experience, and

commitment invested in the organizationcommitment invested in the organizationTalent make capital danceTalent make capital dance market movemarket move

Linking HR Processes to StrategyLinking HR Processes to Strategy

1.1. Start with organizational strategy and then create HR strategy.Start with organizational strategy and then create HR strategy.

2.2. Start with HR competencies and then craft corporate strategies based on theseStart with HR competencies and then craft corporate strategies based on thesecompetencies.competencies.

3.3. Do a combination of both in a form of reciprocal relationship.Do a combination of both in a form of reciprocal relationship.


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-- Corporate Strategies leads to HR StrategyCorporate Strategies leads to HR Strategy KPO, BPO, LPO etc.KPO, BPO, LPO etc.-- HR Competencies lead to business strategyHR Competencies lead to business strategy Silicon Valley, Bangalore ITSilicon Valley, Bangalore IT

& ites& ites

-- Corporate Strategy & HR Strategy go togetherCorporate Strategy & HR Strategy go together-- HR becomes business partners.HR becomes business partners.

Why is HR not considered a strategic partner ?Why is HR not considered a strategic partner ?

-- Top management does not consider HR as profession.Top management does not consider HR as profession.-- HR professional are not considered experts in business.HR professional are not considered experts in business.-- HR professional do not involve themselves in main stream business.HR professional do not involve themselves in main stream business.-- HR is considered as advisory role.HR is considered as advisory role.-- It is difficult to qualify the contribution of HR.It is difficult to qualify the contribution of HR.


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TheThe passagepassage ofof thethe employeeemployee throughthrough thethe organization,organization, aptlyaptlytermedtermed thethe EmployeeEmployee LifecycleLifecycle embracesembraces talenttalent acquisitionacquisition andand

asas talenttalent sourcing,sourcing, talenttalent enablingenabling andand developmentdevelopment;; talenttalentassessmentassessment andand rewardreward.. ItIt isis criticalcritical toto havehave practicespractices atat eacheachstagestage ofof thisthis lifecyclelifecycle thatthat areare designeddesigned toto addressaddress notnot justjust thethecurrentcurrent needsneeds ofof thethe organization,organization, butbut alsoalso protectprotect itsits futurefuture..TalentTalent acquisitionacquisition stillstill meansmeans selectingselecting peoplepeople withwith appropriateappropriate

abilitiesabilities forfor eacheach jobjob.. But But withwith organizationsorganizations workingworking hardhard totoreapreap thethe demographicdemographic dividenddividend whilewhile ironicallyironically facingfacing thethe mostmostacuteacute talenttalent shortage,shortage, HRsHRs greatestgreatest contributioncontribution toto talenttalentsourcingsourcing comescomes inin activelyactively developingdeveloping alternatealternate poolspools ofof talenttalentandand redefiningredefining thethe talenttalent universeuniverse toto includeinclude sourcessources downdown thetheeducationaleducational streamstream oror eveneven acrossacross sectorssectors.. HereHere itit isis criticalcritical totothinkthink outout ofof thethe box,box, toto exploreexplore recruitmentrecruitment onon thethe basicbasic tenettenetofof thethe aptitudeaptitude ofof learnabilitylearnability andand thenthen augmentaugment thisthis withwith inin--companycompany knowledgeknowledge andand skillsskills developmentdevelopment..


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AlsoAlso ofof crucialcrucial importanceimportance isis thethe needneed toto closelyclosely alignalign thethe talenttalentdemanddemand andand supplysupply cyclescycles toto optimizeoptimize costscosts andand improveimproveoperationaloperational efficiencyefficiency.. ProactiveProactive HRHR departmentsdepartments marchmarch toto thethe tunetune

ofof constantlyconstantly reviewingreviewing thethe cyclecycle timetime betweenbetween demanddemand andand supplysupplyofof talenttalent soso thatthat thethe rightright personperson atat thethe rightright placeplace atat thethe rightright time,time,isis availableavailable withwith almostalmost JustJust inin TimeTime precisionprecision.. ItIt isis inin thethe areaarea ofofTalentTalent AssessmentAssessment andand TalentTalent RewardReward thatthat HRsHRs contributioncontribution totofuturefuture proofingproofing cancan bebe mostmost visiblyvisibly experiencedexperienced.. TheseThese organizationorganization

clearlyclearly linklink organizationalorganizational performanceperformance.. AndAnd so,so, alignalign individualindividual andandteamteam compensationcompensation quitequite clearlyclearly toto organizationalorganizational revenuerevenue andandmarginsmargins.. ThisThis allowsallows thethe organizationorganization toto rewardreward liberallyliberally inin goodgoodyears,years, butbut alsoalso tightentighten thethe beltbelt inin toughtough timestimes bringingbringing aa muchmuchneededneeded elementelement ofof variabilityvariability inin laborlabor costscosts.. Finally,Finally, inin establishingestablishing

anan unambiguousunambiguous linklink betweenbetween individualindividual careercareer growthgrowth andandorganizationalorganizational growth,growth, HRHR cancan futurefuture proofproof organizationsorganizations fromfromdevelopingdeveloping thethe proverbialproverbial bulgebulge inin thethe middle,middle, soso detrimentaldetrimental totoorganizationalorganizational progressprogress.. JobJob responsibilityresponsibility needsneeds necessarilynecessarily totoprecedeprecede thethe rewardreward ofof promotion,promotion, andand thatthat tootoo onlyonly toto thethe extentextent

thatthat isis requiredrequired byby thethe organizationalorganizational businessbusiness modelmodel..


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AllAll thisthis doesdoes notnot makemake forfor highhigh scoresscores inin thethe popularitypopularity stakesstakes..TheyThey requirerequire painstakingpainstaking commitmentcommitment toto changechange andand thethe

abilityability toto staystay thethe coursecourse.. MoreMore importantly,importantly, theythey requirerequire thethemovementmovement ofof thethe organizationalorganizational mindsetmindset fromfrom thatthat ofof aa best bestemployeremployer forfor allall employeesemployees toto aa betterbetter employeremployer forfor betterbetterperformersperformers andand anan implementationimplementation ofof thethe vitalityvitality curvecurve inin bothbothletterletter andand spiritspirit.. But But inin thethe finalfinal analysis,analysis, theythey createcreate lean,lean,

strongstrong organizationsorganizations withwith aa highhigh performanceperformance workwork ethic,ethic,confidentconfident ofof andand competentcompetent toto taketake onon thethe futurefuture.. AsAs thethefunctionsfunctions famousfamous academicacademic andand authorauthor DaveDave UlrichUlrich statesstates AchievingAchieving organizationalorganizational excellenceexcellence mustmust indeedindeed bebe thethe workwork

ofof HRHR..


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Environmental ScanningEnvironmental Scanning

1.1. Economic climateEconomic climate Huge International marketHuge International market

-- From industrial Revolution to knowledge RevolutionFrom industrial Revolution to knowledge Revolution New industriesNew industries

-- GlobalizationGlobalization Out sourcing from low cost countries,Out sourcing from low cost countries,

-- Need for mergers with international competenciesNeed for mergers with international competencies

2. Labour market2. Labour market-- Global Labour marketGlobal Labour market-- Diverse oneDiverse one

-- Out sourcingOut sourcing-- Flexible work arrangementFlexible work arrangement3. Political And Legislative Factors3. Political And Legislative Factors-- Pay equityPay equity-- Work force rightsWork force rights


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4. Technology4. TechnologyEE CommerceCommerce

-- Convergence of workConvergence of work

5.5. SocialSocial

-- Work place violenceWork place violence

-- Retirement trendsRetirement trends-- Work family issueWork family issue-- DiversityDiversity

6.6. StakeholdersStakeholders-- UnionUnion-- PublicPublic-- CustomerCustomer-- SupplierSupplier

-- Top ManagementTop Management


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EnvironmentalEnvironmental ScanningScanning SourcesSources andand MethodsMethods

EnvironmentalEnvironmental scanningscanning systematicsystematic monitoringmonitoring ofof trendstrends affectingaffecting thethe organizationorganization

TechniquesTechniques forfor ScanningScanning

HRHR professionalsprofessionals cancan useuse severalseveral methodsmethods toto generategenerate predictionspredictions aboutabout thethefuturefuture oror extrapolateextrapolate fromfrom currentcurrent eventsevents toto determinedetermine theirtheir impactimpact onon HRHRpracticespractices.. TheseThese methodsmethods includeinclude trendtrend analysis,analysis, thethe DelphiDelphi technique,technique, andandimpactimpact analysisanalysis..

TrendTrend AnalysisAnalysis

TrendTrend analysisanalysis aa forecastingforecasting methodmethod thatthat extrapolatesextrapolates fromfrom historicalhistoricalorganizationalorganizational indicesindices..

DelphiDelphi TechniqueTechnique

DelphiDelphi techniquetechnique aa forecastingforecasting methodmethod inin whichwhich expertexpert opinionsopinions areare solicitedsolicited andandsummarizedsummarized


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ImpactImpact AnalysisAnalysis

ImpactImpact analysisanalysis aa forecastingforecasting methodmethod onon whichwhich pastpast trendstrends areare analyzedanalyzedbyby aa panelpanel ofof expertsexperts whowho thenthen predictpredict thethe probabilityprobability ofof futurefuture eventsevents..

EnvironmentalEnvironmental FactorsFactors

1.1. EconomicEconomic ClimateClimate

2.2. FromFrom thethe industrialindustrial RevolutionRevolution toto thethe KnowledgeKnowledge RevolutionRevolution3.3. GlobalizationGlobalization4.4. TheThe LabourLabour MarketMarket5.5. PoliticalPolitical andand LegislativeLegislative FactorsFactors6.6. TechnologicalTechnological FactorsFactors7.7. DemographicDemographic FactorsFactors8.8. SocialSocial andand CulturalCultural FactorsFactors9.9. StakeholdersStakeholders


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StakeholdersStakeholders

StakeholderStakeholder groupsgroups of of peoplepeople whowho havehave vestedvested interestsinterests inin ananorganizationsorganizations decisionsdecisions

ShareholdersShareholders :: ShareholdersShareholders thosethose whowho ownown sharesshares ofof aa companycompany

CustomersCustomers

SuppliersSuppliers

GovernmentsGovernments

TheThe PublicPublic

UnionsUnions

EmployeesEmployees

TopTop ManagementManagement


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Environment Scanning =formingEnvironment Scanning =forming missionmission (why we Exist)(why we Exist)

vision (What we want to be) corporate strategy (Our Gamevision (What we want to be) corporate strategy (Our GamePlan)Plan)Corporate strategyCorporate strategy--HR strategyHR strategy HR Strategy is HR PlanningHR Strategy is HR PlanningAll other functions like staffing, training, performanceAll other functions like staffing, training, performance

management, compensation management, labour relation, &management, compensation management, labour relation, &employee separations are derived from it.employee separations are derived from it.

HRP is a proactive functionHRP is a proactive function-- it scans & anticipates variousit scans & anticipates variousfactorsfactors-- internal & external to develop a planinternal & external to develop a plan

It is more important during organizational turbulenceIt is more important during organizational turbulence M&A,M&A,disinvestmentdisinvestment HR Planning always starts with understanding the businessHR Planning always starts with understanding the business

needs of the organizationneeds of the organization


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flexibleflexible workingworking schedule,schedule, childcarechildcare programmeprogramme,,employeeemployee recognitionrecognition programmes,programmes, employeeemployeesuggestionsuggestion programmes,programmes, transporttransport andand ParkingParking facilityfacility

programmeprogramme,, discountdiscount programmeprogramme,, departmentaldepartmental newsnewsletterletter programmeprogramme,, employeeemployee involvementinvolvementprogrammeprogramme..

HRHR PlanningPlanning isis bothboth toptop downdown andand BottomBottom upup..WhileWhile HRHR plansplans shouldshould bebe basedbased onon overalloverall businessbusiness

needsneeds andand strategies,strategies, theythey shouldshould taketake intointo accountaccountthethe needsneeds andand realitiesrealities ofof organisationalorganisational unitsunits.. TheThe HRHRplanningplanning processprocess shouldshould involveinvolve managersmanagers atat allalllevelslevels..

AnAn organization'sorganization's HRHR plansplans areare usuallyusually developeddeveloped atatthethe departmentaldepartmental oror businessbusiness lineline levellevel wherewhere

businessbusiness directionsdirections areare setset andand decisionsdecisions mademade.. ButButHRHR plansplans areare implementedimplemented (and(and adapted)adapted) individualindividualmanagersmanagers inin thethe conductconduct ofof theirtheir ongoingongoing operationsoperations..ItIt isis importantimportant thatthat managersmanagers understandunderstand thethe HRHRplansplans andand prioritiespriorities ofof theirtheir organizationsorganizations soso theythey cancanguideguide theirtheir actionsactions accordinglyaccordingly..


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HRHR PlanningPlanning isis moremore thanthan justjust havinghaving thethe rightright peoplepeopleinin thethe rightright placeplace atat thethe rightright timetime.. ItsIts aboutabout institutinginstitutingthethe peoplepeople relatedrelated practicespractices andand activitiesactivities thatthat willwill helphelpthethe organisationorganisation achieve,achieve, andand improveimprove itsits businessbusiness

resultsresults.. HRHR PlanningPlanning identifiesidentifies thethe needsneeds andand strategiesstrategiesinin thisthis regardregard..

HRHR PlanningPlanning inin itsits simplestsimplest form,form, isis aboutabout answeringanswering 33questionsquestions:: whatwhat areare mymy businessbusiness needs,needs, how/whathow/what dodo IIneedneed toto meetmeet thosethose needsneeds andand whatwhat strategiesstrategies willwill IItaketake toto ensureensure mymy needsneeds areare met?met?

StrategicStrategic ManpowerManpower PlanningPlanning isis aa dynamic,dynamic, proactive,proactive,ongoingongoing processprocess ofof systematicallysystematically attracting,attracting, identifying,identifying,developing,developing, mentoring,mentoring, andand retainingretaining employeesemployees totosupportsupport currentcurrent andand futurefuture organisationalorganisational goalsgoals..StrategicStrategic ManpowerManpower PlanningPlanning focusesfocuses specificallyspecifically onon

proactiveproactive planningplanning toto meetmeet anticipatedanticipated oror unanticipatedunanticipatedvacanciesvacancies duedue toto retirementretirement andand otherother factorsfactors forforclassesclasses thatthat serveserve asas essentialessential elementselements inin meetingmeeting youryourpublicpublic serviceservice mandatemandate..

SomeSome ofof thethe longlong andand shortshort--termterm strategiesstrategies thatthat maymaysupportsupport thethe strategicstrategic ManpowerManpower PlanningPlanning process,process, maymay

bebe retention,retention, inductioninduction ProgrammeProgramme,, employeeemployeeassistanceassistance Pro rammePro ramme,,


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HRPHRP isis aa forwardforward lookinglooking functionfunction andand ananorganisationalorganisational tooltool toto identifyidentify skillskill andand competencycompetencygapsgaps andand subsequentlysubsequently developdevelop plansplans forfordevelopmentdevelopment ofof deficientdeficient skillsskills andand competenciescompetencies inin

humanhuman resourcesresources toto remainremain competitivecompetitive.. HRPHRPensuresensures benefitsbenefits toto thethe organisationsorganisations byby creatingcreating aareservoirreservoir ofof talent,talent, preparingpreparing peoplepeople forfor futurefuture costcostcuttingcutting andand successionsuccession planningplanning besidesbesides creatingcreating aabackback upup inin casecase ofof diversificationdiversification andand expansionexpansion..

OptimumOptimum manpowermanpower planning,planning, therefore,therefore, aimsaims atat:: BalancingBalancing demand,demand, supply,supply, distributiondistribution andand

allocationallocation ofof manpower,manpower, ControllingControlling costcost ofof humanhuman resources,resources, FormulatingFormulating policiespolicies onon transfer,transfer, succession,succession,

relocationrelocation ofof manpowermanpower.. HRPHRP isis aa planningplanning processprocess byby whichwhich anan organizationorganization

cancan movemove fromfrom itsits currentcurrent manpowermanpower positionposition toto itsitsdesireddesired manpowermanpower positionposition..

ManpowerManpower planningplanning maymay bebe defineddefined asas aa strategystrategy forforacquisition,acquisition, utilization,utilization, improvementimprovement andand retentionretention

ofof humanhuman resourcesresources..


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Human resource planning anHuman resource planning an

integral part of business planningintegral part of business planning IdentifyingIdentifying andand acquiringacquiring thethe rightright

numbernumber ofof peoplepeople withwith thethe properproperskillsskills

MotivatingMotivating themthem toto achieveachieve highhighperformanceperformance

CreatingCreating interactiveinteractive linkslinks betweenbetweenbusinessbusiness objectiveobjective andand resourceresourceplanningplanning activitiesactivities


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ConceptConcept ofof HumanHuman ResourceResource PlanningPlanningInIn orderorder toto understandunderstand thethe conceptconcept andand featuresfeatures

ofof HRP,HRP, letlet usus considerconsider thethe followingfollowing statementstatement::AlthoughAlthough humanhuman resourceresource planningplanning meansmeansdifferentdifferent thingsthings toto differentdifferent People,People, generalgeneralagreementagreement existsexists onon itsits ultimateultimate objectivesobjectives thethemostmost effectiveeffective useuse of of scarcescarce talenttalent inin thetheinterestsinterests ofof thethe labourlabour andand thethe organizationorganization..OnOn thethe basisbasis ofof thethe reviewreview ofof variousvarious definitiondefinition ofofHRP,HRP, GeislerGeisler hashas emphasizedemphasized thatthat aa suitablesuitabledefinitiondefinition ofof HRPHRP shouldshould includeinclude fourfour aspectsaspects forecastingforecasting manpowermanpower needs,needs, developingdevelopingappropriateappropriate policiespolicies andand programmesprogrammes forfor

meetingmeeting thosethose needs,needs, implementingimplementing policiespoliciesandand programmes,programmes, andand controllingcontrolling thesetheseprogrammesprogrammes.. BasedBased onon thesethese aspectsaspects hehe hashasdefineddefined HRPHRP asas followsfollows::


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ManpowerManpower planningplanning (HRP)(HRP) isis thethe processprocess--includingincluding forecasting,forecasting, developingdeveloping implementing,implementing,andand controllingcontrolling byby whichwhich aa firmfirm ensuresensures thatthat itithashas thethe rightright numbernumber ofof peoplepeople andand rightright kindkind ofofpeople,people, atat thethe rightright place,place, atat thethe rightright time,time, doingdoingthisthis forfor whichwhich theythey areare economicallyeconomically mostmostsuitablesuitable..ThisThis definitiondefinition ofof HRPHRP servesserves thethe purposepurposeadequatelyadequately andand mostmost ofof thethe definitionsdefinitions areare basedbased

onon thisthis.. ForFor example,example, DecenzoDecenzo andand RobbinsRobbins havehavedefineddefined HRPHRP asas followsfollows::Specifically,Specifically, humanhuman resourceresource planningplanning isis thetheprocessprocess byby whichwhich anan organizationorganization ensuresensures thatthat itithashas thethe rightright numbernumber andand kindkind ofof people,people, atat thethe

rightright place,place, atat thethe rightright time,time, capablecapable of ofeffectivelyeffectively andand efficientlyefficiently completingcompleting thosethose taskstasksthatthat willwill helphelp thethe organizationorganization achieveachieve itsits overalloverallobjectivesobjectives..Similarly,Similarly, LeapLeap andand CrinoCrino havehave defineddefined HRPHRP asasfollowsfollows::


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HumanHuman resourceresource planningplanning includesincludes thethe estimationestimation ofofhowhow manymany qualifiedqualified peoplepeople areare necessarynecessary toto carrycarry outoutthethe assignedassigned activities,activities, howhow manymany peoplepeople willwill bebeavailableavailable andand whatwhat if if anythinganything mustmust bebe donedone totoensureensure thatthat personnelpersonnel supplysupply equalsequals personnelpersonneldemanddemand atat thethe appropriateappropriate pointpoint inin thethe futurefuture..BasedBased onon thethe aboveabove definitions,definitions, followingfollowing featuresfeatures ofofHRPHRP maymay bebe identifiedidentified::

HRPHRP isis aa processprocess whichwhich includesincludes variousvarious aspectsaspectsthroughthrough whichwhich anan organizationalorganizational triestries toto ensuresensures thatthatrightright people,people, atat rightright placed,placed, andand atat rightright timetime areareavailableavailable..

ItIt involvesinvolves determinationdetermination ofof futurefuture needsneeds of ofmanpowermanpower inin thethe lightlight ofof organizationalorganizational planningplanning andand

structurestructure.. Therefore,Therefore, itit dependsdepends heavilyheavily onon thesethesefactorsfactors.. DeterminationDetermination ofof manpowermanpower needsneeds inin advanceadvancefacilitatesfacilitates thesethese factorsfactors managementmanagement toto taketake upupnecessarynecessary actionsactions..

ItIt alsoalso takestakes intointo accountaccount thethe manpowermanpower availabilityavailability atataa futurefuture periodperiod inin thethe organizationorganization.. ThereforeTherefore ititindicatesindicates whatwhat actionsactions cancan bebe takentaken toto makemake existingexisting


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HRP AT DIFFERENT LEVELSHRP AT DIFFERENT LEVELSDifferent institutions make HRP at different levelsDifferent institutions make HRP at different levels

for their own purposes, of which national level,for their own purposes, of which national level,

sectoral level, industry level, unit level,sectoral level, industry level, unit level,departmental level and job level are important.departmental level and job level are important.1.1. National LevelNational Level

Adjust the supply through its population policy,Adjust the supply through its population policy,family planning, educational policy etc. HRP atfamily planning, educational policy etc. HRP atnational level helps to plan for educationalnational level helps to plan for educationalfacilities, hospitals, employment plans,facilities, hospitals, employment plans,agricultural and industrial developments etc.agricultural and industrial developments etc.

2. Sectoral Level2. Sectoral LevelManpower requirements for a particular sectorManpower requirements for a particular sectorlike agricultural sector, industrial sector orlike agricultural sector, industrial sector or

tertiary sectors are projects based on thetertiary sectors are projects based on thegovernment policy, projectedgovernment policy, projectedoutput/operations.output/operations.

3. Manpower needs of a particular industry like3. Manpower needs of a particular industry likecement, textile, chemical are predicted, takingcement, textile, chemical are predicted, taking

into account the output/operational level of thatinto account the output/operational level of thatparticular industry.particular industry.


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4. Unit Level4. Unit LevelThis covers the estimation of human resourceThis covers the estimation of human resourceneeds of an organisation or company based on itsneeds of an organisation or company based on itscorporate/business plans.corporate/business plans.

5. Departmental Level5. Departmental LevelThis covers the manpower needs of a particularThis covers the manpower needs of a particulardepartment in a company.department in a company.

6. Job Level6. Job LevelManpower needs of a particular job withinManpower needs of a particular job withindepartment like mechanical Engineer are forecastdepartment like mechanical Engineer are forecastat this level.at this level.

IMPORTANCE OF HUMAN RESOURCEIMPORTANCE OF HUMAN RESOURCE

PLANNINGPLANNINGHRP is of primacy nature and, therefore, itHRP is of primacy nature and, therefore, itprecedes all other HRM functions. Without HRP,precedes all other HRM functions. Without HRP,no other function can be undertaken in anyno other function can be undertaken in anymeaningful way. HRP contributes in the followingmeaningful way. HRP contributes in the followingways in managing human resources in anways in managing human resources in anorganisation.organisation.


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1.1. Defining future personnel NeedDefining future personnel Need. Planning. Planningdefines future personnel need and this becomesdefines future personnel need and this becomesthe basis of recruiting and developingthe basis of recruiting and developingpersonnel. In its absence, there is likelihood ofpersonnel. In its absence, there is likelihood of

mismatch between personnel needed andmismatch between personnel needed andpersonnel available. Steel Authority of Indiapersonnel available. Steel Authority of IndiaLimited, there are 170000 employees andLimited, there are 170000 employees andMcKinsey & Company, consultancy firm engagedMcKinsey & Company, consultancy firm engagedby SAIL to devise its revival strategy, hasby SAIL to devise its revival strategy, hassuggested pruning of this level to bring it tosuggested pruning of this level to bring it to100,000.100,000.

2.2. Coping with ChangesCoping with Changes. There is growing global. There is growing globalcompetitioncompetition-- competing manpowercompeting manpower

3.3. Providing base for Developing TalentsProviding base for Developing Talents. Jobs. Jobsare becoming more and more knowledgeare becoming more and more knowledge--

oriented. This has resulted into changed profileoriented. This has resulted into changed profileof manpower. For example, in Larsen andof manpower. For example, in Larsen andTurbroTurbro, MBAs, engineers and technicians, MBAs, engineers and techniciansconstitute about 70 per cent of its totalconstitute about 70 per cent of its totalemployee strength of 20,000. there is aemployee strength of 20,000. there is ashortage of certain category of personnel andshortage of certain category of personnel andthere is frequent movement of personnel fromthere is frequent movement of personnel from


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Another. organizations must be ready to face such an eventualityAnother. organizations must be ready to face such an eventualityby taking proper HRP steps.by taking proper HRP steps.

4.4. Increasing Investment in Human ResourcesIncreasing Investment in Human Resources. Every year,. Every year,

cost of acquiring MBAs from reputed institutes is increasing bycost of acquiring MBAs from reputed institutes is increasing bymore than 20more than 20--25 percent per annum. Such a high cost has forced25 percent per annum. Such a high cost has forcedmany companies to have a relook at their HRM functions andmany companies to have a relook at their HRM functions andparticularly HRP and to align these with new situations.particularly HRP and to align these with new situations.

5.5. Forcing to Management to involve in HRMForcing to Management to involve in HRM. Systematic HRP. Systematic HRPforces top management of an organization to participate activelyforces top management of an organization to participate activelyin total HRM functions.in total HRM functions.

6.6. Casualisation of work placeCasualisation of work place nonnon-- core activitiescore activities outsourcingoutsourcingMechanization, automation & cybernation in place of manpower.Mechanization, automation & cybernation in place of manpower.

7. Unite the perspective of Line & staff managers7. Unite the perspective of Line & staff managers8. Helps determine productivity8. Helps determine productivity9. Helps determine training needs9. Helps determine training needs10. Helps capitalizing on HR strength10. Helps capitalizing on HR strength11. Incorporates new patterns of working11. Incorporates new patterns of working-- virtual offices, flexivirtual offices, flexi

timing, etctiming, etc


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According toAccording to MegginsonMegginson, to have an, to have anorganisation that looks forward to the futureorganisation that looks forward to the future

and tries to stay alive and prosper in aand tries to stay alive and prosper in achanging world, there must be active,changing world, there must be active,vigorous, continuous and creative planning.vigorous, continuous and creative planning.

Thus there is a greater need for planning inThus there is a greater need for planning in

order to keep the organisation dynamic in aorder to keep the organisation dynamic in achanging situation of uncertainty.changing situation of uncertainty.

If used properly, it offers a number of benefits:If used properly, it offers a number of benefits:

1.1. Create reservoir of talentCreate reservoir of talent

2.2. Prepares people for futurePrepares people for future

3.3. Expand or contract strengthExpand or contract strength

4.4. Cut CostCut Cost

5.5. Succession planningSuccession planning


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RESPONSIBILITY FOR HUMAN RESOUCE PLANINGRESPONSIBILITY FOR HUMAN RESOUCE PLANING

Formulation of human resource plans is a shared taskFormulation of human resource plans is a shared taskbetween top management line managers and HRbetween top management line managers and HRdepartmentdepartment

Top management is involved in HRP process becauseTop management is involved in HRP process becauseultimately, it approves various plans of the organisationultimately, it approves various plans of the organisationas a whole.as a whole.

Functional managers under whom people work.Functional managers under whom people work.

The responsibilities of HR department in regard to HRPThe responsibilities of HR department in regard to HRPprocess have been described byprocess have been described by GeislerGeisler as follows:as follows: To assists, counsel and pressurize the operating managementTo assists, counsel and pressurize the operating management

to plan and establish objectives;to plan and establish objectives;

To collect and summaries data in total organizational terms andTo collect and summaries data in total organizational terms and

to ensure consistency with tongto ensure consistency with tong--term objectives and otherterm objectives and otherelements of the total elements of the total business plan;elements of the total elements of the total business plan;

To monitor and measure performance against the plan andTo monitor and measure performance against the plan andkeep the top management informed about itkeep the top management informed about it

To provide research necessary for effective manpower andTo provide research necessary for effective manpower andorganisational planningorganisational planning

Responsibility for HRP at Hindustan LeverResponsibility for HRP at Hindustan Lever-- Top Managers, LineTop Managers, Line


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Human resource planning processHuman resource planning processHRP is a process and it proceeds through variousHRP is a process and it proceeds through various

interrelated activities.interrelated activities. Forecasting future manpower requirements,Forecasting future manpower requirements,

either in terms of mathematical projection ofeither in terms of mathematical projection oftrends in the economy and developments in thetrends in the economy and developments in theindustry or of judgmental estimates based uponindustry or of judgmental estimates based uponspecific future plans of the company.specific future plans of the company.

Inventorying present manpower resources andInventorying present manpower resources andanalyzing the degree to which these resourcesanalyzing the degree to which these resourcesare employed optimally;are employed optimally;

Anticipating manpower problems by projectingAnticipating manpower problems by projectingpresent resources into the future and comparingpresent resources into the future and comparing

them with the forecast of the requirements, tothem with the forecast of the requirements, todetermine their adequacy, both quantitativelydetermine their adequacy, both quantitativelyand qualitatively andand qualitatively and

Planning the necessary programmes ofPlanning the necessary programmes ofrecruitment, selection, training deployment,recruitment, selection, training deployment,utilization, transfer, promotion, development.utilization, transfer, promotion, development.Motivation and compensation so that futureMotivation and compensation so that future


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.. Organizational objectivesHuman resourceplanning

Forecasting needs forHuman resources

Identificationof humanresource gap

Forecasting supplyof human resources

Surplus humanresources

Shortage of humanresources

Action plansfor bridging

Human Resource Planning

Monitoring & control

Review Process HR Audit


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Organizational Objectives, Plans and Policies :Organizational Objectives, Plans and Policies :

Objectives generate various plans an policies whichObjectives generate various plans an policies which

provide direction for future course of action. Out ofprovide direction for future course of action. Out ofthis direction, various subsystems of the organizationthis direction, various subsystems of the organizationdevise their own plans and programmes. While goingdevise their own plans and programmes. While goingthrough the process of HRP, organizational policiesthrough the process of HRP, organizational policieswith regard to effective utilization of human resourceswith regard to effective utilization of human resourcesshould be identified and incorporated in planningshould be identified and incorporated in planningprocess. Specifically, following questions areprocess. Specifically, following questions areimportant in this regard:important in this regard:1.1. Are vacancies to be filed by promotions form within or byAre vacancies to be filed by promotions form within or by

hiring form outside?hiring form outside?2.2. How do the training and development objectives interface withHow do the training and development objectives interface with

the HRP objectives?the HRP objectives?

3.3. What union constraints are encountered in HRP and whatWhat union constraints are encountered in HRP and whatpolicies are needed to handled these constraints?policies are needed to handled these constraints?


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4. How to enrich employees job? Should the routine and boring jobs4. How to enrich employees job? Should the routine and boring jobscontinue or be eliminated?continue or be eliminated?

5. How to downsize the organization to make it more competitive?5. How to downsize the organization to make it more competitive?6. To what extent production and operations be automated and what6. To what extent production and operations be automated and what

can be done about those displaced?can be done about those displaced?

7. How to ensure continuous availability of adaptive and flexible7. How to ensure continuous availability of adaptive and flexibleworkforce?workforce?

8. Outsourcing8. Outsourcing-- Contracting?Contracting?

2. Human Resource Planning: The planning process consists of two2. Human Resource Planning: The planning process consists of twomajor activities: forecasting needs of human resources andmajor activities: forecasting needs of human resources andforecasting supply of human resources. Both in terms of qualityforecasting supply of human resources. Both in terms of qualityand quantityand quantity at future date.at future date.

3. Identification of Human Resource Gap: Forecasting needs for3. Identification of Human Resource Gap: Forecasting needs forhuman resources and forecasting supply of human resources, bothhuman resources and forecasting supply of human resources, bothtaken together, helps to identify gap between human resourcestaken together, helps to identify gap between human resourcesneeded and their availabilityneeded and their availability either there may be surplus humaneither there may be surplus human

resources of there may be shortage of human resources.resources of there may be shortage of human resources.


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4. Action Plans : Various action plans are devised to4. Action Plans : Various action plans are devised tobridge the human resource gap. If there isbridge the human resource gap. If there issurplus of human resources either because ofsurplus of human resources either because ofimproper HRP in the past or because of change inimproper HRP in the past or because of change in

organizational plan, such as divestment oforganizational plan, such as divestment ofbusiness or closing down some business becausebusiness or closing down some business becauseof various reasons, action plans may be devisedof various reasons, action plans may be devisedto prune their size through layoff, voluntaryto prune their size through layoff, voluntaryretirement, etc. if there is shortage of humanretirement, etc. if there is shortage of human

resources, action plans may be devised to recruitresources, action plans may be devised to recruitadditional personnel.additional personnel.

5. Review & Audit :5. Review & Audit :


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Human Resource Planning: A WinHuman Resource Planning: A Win-- WinWin

ProcessProcess

Wins for EmployeesWins for Employees1. Competitive pay and1. Competitive pay and

benefits plants.benefits plants.

2.2. Career development andCareer development andopportunities for growthopportunities for growth

3.3. Reduced fear ofReduced fear ofredundancy.redundancy.

Wins for the EnterpriseWins for the Enterprise1.1. Appropriate organizationAppropriate organizationstructure and people tostructure and people toface challenges andface challenges andmeet corporatemeet corporate

objectives, both shortobjectives, both shortand long term.and long term.

2. Development of internal2. Development of internalresources, leading toresources, leading tostability and culturestability and culture

building.building.

3. Improved motivation3. Improved motivationand morale ofand morale ofemployees, leading toemployees, leading to

improved performance.improved performance.


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4.4. Training andTraining anddevelopment, leading todevelopment, leading tocontinued marketability.continued marketability.

5.5. Continuity ofContinuity ofemployment due toemployment due toorganization's ability toorganization's ability to

retain workforce.retain workforce.

6.6. Fuller realization ofFuller realization ofpotential, leading to jobpotential, leading to job

satisfaction.satisfaction.7.7. Conducive work cultureConducive work culture

and management styleand management styleleading to satisfactionleading to satisfaction

4.4. Productivity gains,Productivity gains,leading to cost reductionleading to cost reduction

5.5. Improved customerImproved customersatisfaction, leading tosatisfaction, leading toimprovement inimprovement inbusiness.business.

6.6. Reduction in hiring andReduction in hiring andtraining costs due to thetraining costs due to theimproved ability toimproved ability to

retain employees andretain employees anddevelopment of internaldevelopment of internalresources to fill futureresources to fill futurevacancies.vacancies.


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Barriers to effective human resourceBarriers to effective human resource

planningplanning

Improper linkage between HRP and CorporateImproper linkage between HRP and CorporateStrategy.Strategy.

Inadequate appreciation of HRPInadequate appreciation of HRP Rigidly in AttitudesRigidly in Attitudes

Environment UncertaintyEnvironment Uncertainty Conflict between LongConflict between Long--term and Shortterm and Short--termtermHRP.HRP.

Inappropriate HR Information SystemsInappropriate HR Information Systems

Measure for making HRP EffectiveMeasure for making HRP Effective

1.1. Commitment and involvement of top management in HRP.Commitment and involvement of top management in HRP.2.2. Proactive, rather than reactive, human resourcesProactive, rather than reactive, human resources

management approach.management approach.3.3. Greater participation of line managers at all levels in HRPGreater participation of line managers at all levels in HRP

process.process.


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4. Effective design of HR information4. Effective design of HR informationsystem integrated with thesystem integrated with theorganisations managementorganisations managementinformation system.information system.

5. Linking HRP to corporate strategic5. Linking HRP to corporate strategic

management process.management process.6. Enough flexibility in HR plans to6. Enough flexibility in HR plans to

take care of changing situations.take care of changing situations.


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JOB ANALYSISJOB ANALYSIS

JobJob analysisanalysis cancan bebe defineddefined asas anan examinationexamination ofof thethejobsjobs inin anan organizationorganization withwith aa viewview toto documentingdocumentingthethe knowledge,knowledge, skills,skills, andand abilitiesabilities (KSAs(KSAs ee..gg..,,experience)experience) associatedassociated withwith successfulsuccessful performanceperformance ofofthosethose jobsjobs..

JobJob -- aa groupinggrouping ofof relatedrelated duties,duties, tasks,tasks, andand

behaviorsbehaviors performedperformed byby oneone oror moremore individuals,individuals,namelynamely jobholdersjobholders

PositionsPositions refersrefers toto thethe numbernumber ofof individualsindividuals whowho areareperformingperforming thethe duties,duties, tasks,tasks, andand behaviorsbehaviors requiredrequired

byby aa specificspecific jobjobJobJob analysisanalysis ofof subdividedsubdivided workwork inin thethe organization,organization,bothboth atat thethe levellevel ofof thethe individualindividual jobjob andand forfor thetheentireentire flowflow ofof thethe productionproduction processprocess..


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JobJob descriptiondescription andand jobjob specificationspecification areare thethe writtenwrittenoutcomesoutcomes (documents)(documents) producedproduced byby thethe jobjob analysisanalysisprocessprocess.. TheThe jobjob descriptiondescription emphasizesemphasizes thethe dutiesduties orortaskstasks toto bebe carriedcarried outout onon thethe jobjob.. ForFor jobjob specifications,specifications,thethe emphasisemphasis isis onon identifyingidentifying thethe competenciescompetencies thethejobholderjobholder mustmust possesspossess toto bebe aa successfulsuccessful performerperformer ininthethe specifiedspecified jobjob..

JobJob DescriptionDescription

TheThe datadata collectedcollected forfor jobjob analysisanalysis provideprovide thethe basisbasis forforpreparingpreparing jobjob descriptiondescription forfor eacheach jobjob.. ThisThis functionalfunctionaldescriptiondescription describesdescribes whatwhat thethe jobjob entailsentails.. AlthoughAlthough therethereisis nono standardstandard formatformat forfor aa jobjob description,description, itit usuallyusuallyincludesincludes::

1.1. JobJob titletitle -- aa titletitle ofof thethe jobjob..2.2. JobJob summarysummary aa briefbrief statementstatement ofof whatwhat thethe jobjob entailsentails..


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33.. JobJob activitiesactivities aa descriptiondescription ofof thethe taskstasks performed,performed,materialmaterial usedused andand extentextent of of supervisionsupervision givengiven ororreceivedreceived..

44.. WorkingWorking conditionsconditions andand physicalphysical environmentenvironment heat,heat,lightlight noisenoise level,level, hazardshazards areare describeddescribed..

55.. SocialSocial environmentenvironment InformationInformation onon sizesize ofof workwork groupgroupandand interpersonalinterpersonal interinter--actionsactions requiredrequired toto performperform thethejobjob..

JobJob SpecificationSpecification

(i)(i)EssentialEssential attributesattributes abilities,abilities, skillsskills andand knowledgeknowledge thatthataa personperson mustmust possesspossess..

(ii)(ii) DesirableDesirable attributesattributes thosethose attributesattributes thatthat oneone oughtought totopossesspossess..

(iii)(iii) ContraContra--indicatorsindicators attributesattributes thatthat willwill becomebecome aahandicaphandicap toto successfulsuccessful jobjob performanceperformance..


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TheThe formatformat forfor jobjob specificationspecification shouldshould includeinclude thethefollowingfollowing itemsitems::

1. Position title1. Position title 2. Education/training2. Education/training

3.3. ExperienceExperience 4. Knowledge4. Knowledge5. Abilities5. Abilities 6. Skills6. Skills7. Aptitude7. Aptitude 8. Desirable attributes8. Desirable attributes9. Contra9. Contra--indicators, if anyindicators, if any

Problems Associated with Job AnalysisProblems Associated with Job Analysis

JobJob analysisanalysis thatthat isis neitherneither updatedupdated nornor reviewedreviewedJobJob descriptiondescription oror specificationspecification thatthat isis tootoo vaguevague

ContaminationContamination andand deficiencydeficiency DeficiencyDeficiency anan errorerror ofofomissionomission whenwhen aa jobjob descriptiondescription oror specificationspecification failsfails totoincorporateincorporate importantimportant aspectsaspects ofof thethe jobjob requiredrequired forforsuccesssuccess..ContaminationContamination anan errorerror thatthat occursoccurs whenwhen unimportantunimportant


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oror invalidinvalid behaviorsbehaviors oror attributesattributes areare incorporatedincorporated intointo aa jobjobdescriptiondescription oror specificationspecification..

44 TimeTime andand CostsCosts ofof jobjob analysisanalysis SomeSome organizationsorganizations arearedeterreddeterred toto bebe associatedassociated withwith thethe processprocess..

Specific Job Analysis TechniquesSpecific Job Analysis Techniques

CriticalCritical IncidentsIncidents TechniqueTechnique criticalcritical incidentsincidents techniquetechnique aaqualitativequalitative processprocess of of jobjob analysisanalysis thatthat producesproducesbehaviouralbehavioural statementsstatements alongalong aa rangerange fromfrom superiorsuperior totoineffectiveineffective performanceperformance forfor aa specificspecific jobjob..

22.. BehaviourallyBehaviourally AnchoredAnchored RatingRating ScalesScales behaviourallybehaviourallyanchoredanchored ratingrating scalesscales aa jobjob isis divideddivided intointo aa numbernumber ofofkeykey dimension,dimension, andand eacheach dimensiondimension containscontains aa rangerange ofofstatementsstatements ofof jobjob behaviourbehaviour anchoredanchored toto aa numericalnumericalscalescale..


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33.. PositionPosition AnalysisAnalysis QuestionnaireQuestionnaire AA structuredstructured jobjobanalysisanalysis checklistchecklist thatthat includesincludes 194194 itemsitems oror jobjob elementselementsusedused toto raterate aa jobjob..

44.. FunctionalFunctional JobJob AnalysisAnalysis AnalysesAnalyses anyany jobjob usingusing threethreeessentialessential elementselements:: ((11)) peoplepeople (important(important interpersonalinterpersonalrelationshiprelationship onon thethe job),job), ((22)) datadata (obtaining,(obtaining, using,using, andandtransformingtransforming datadata inin aidaid of of jobjob performance),performance), andand ((33))thingsthings (physical(physical machinery,machinery, resources,resources, andand thetheenvironment)environment).. EachEach ofof thesethese threethree dimensionsdimensions isis thenthen ratedratedbyby levellevel ofof complexitycomplexity andand importanceimportance..

55.. TheThe HayHay SystemSystem TheThe HayHay systemsystem usesuses threethree keykeyfactorsfactors toto analyzeanalyze eacheach jobjob:: ((11)) knowknow--howhow (the(the specificspecificknowledgeknowledge andand skillsskills requiredrequired toto performperform thethe job),job), ((22))problemproblem--solvingsolving (the(the decisionsdecisions andand problemsproblems thatthat mustmust bebesuccessfullysuccessfully handledhandled onon thethe job),job), andand ((33)) accountabilityaccountability(the(the jobholdersjobholders responsibilitiesresponsibilities forfor criticalcritical tasktask completioncompletionandand forfor organizationalorganizational resources,resources, budgets,budgets, supervisionsupervision ofofpeople,people, etcetc..


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CompetencyCompetency-- Based ApproachesBased Approaches

CompetencyCompetency anyany knowledge,knowledge, skill,skill, trait,trait, motive,motive, attitude,attitude,value,value, oror otherother personalpersonal characteristiccharacteristic thatthat isis essentialessential totopersonalpersonal characteristiccharacteristic thatthat isis essentialessential toto performperform thethe jobjobandand thatthat differentiatesdifferentiates superiorsuperior fromfrom solidsolid performanceperformance..

CoreCore competenciescompetencies characteristicscharacteristics thatthat everyevery membermember ofof ananorganization,organization, regardlessregardless ofof position,position, function,function, oror levellevel of ofresponsibilityresponsibility withwith thethe organization,organization, isis expectedexpected toto possesspossess

RoleRole oror specificspecific competenciescompetencies characteristicscharacteristics sharedshared bybydifferentdifferent positionspositions withinwithin anan organizationorganization.. OnlyOnly thosethosemembersmembers ofof anan organizationorganization inin thesethese positionspositions areare expectedexpectedtoto possesspossess thesethese competenciescompetencies..


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Methods & Techniques of DemandMethods & Techniques of Demand

ManagementManagement Forecasting of demand of human resources needs isForecasting of demand of human resources needs is

the first and most important step in any humanthe first and most important step in any humanresource planning process.resource planning process.

Forecasting is not a very accurate exercise over aForecasting is not a very accurate exercise over alonglong--term period. For short range planning of lessterm period. For short range planning of lessthan a year fairly accurate forecast is perhapsthan a year fairly accurate forecast is perhapspossible. No processes or techniques exist that canpossible. No processes or techniques exist that cantake into account all the parameters andtake into account all the parameters andcircumstances required for accurate longcircumstances required for accurate long--termtermestimation of manpower needs.estimation of manpower needs.

Dynamic business circumstances,Dynamic business circumstances, rapidly changing technologies and their impact onrapidly changing technologies and their impact on

products and methods of production,products and methods of production, political and social changes and ever increasingpolitical and social changes and ever increasing

competition keep changing the set of circumstancescompetition keep changing the set of circumstances

assumed at the time to forecast.assumed at the time to forecast.


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HR ForecastingHR Forecasting

What is certain is the uncertainty of the future. As time passes, the workingWhat is certain is the uncertainty of the future. As time passes, the workingenvironment changes internally as well externally. Internal changes in theenvironment changes internally as well externally. Internal changes in theorganizational environment include product mix and capacity utilization,organizational environment include product mix and capacity utilization,acquisition the external environment include government regulations,acquisition the external environment include government regulations,consumerism, and competence levels of employees, among a host of other factors.consumerism, and competence levels of employees, among a host of other factors.

Forecasting The Overall Human Resource RequirementsForecasting The Overall Human Resource Requirements

The existing job design and analysis may thoroughly be reviewed keeping in viewThe existing job design and analysis may thoroughly be reviewed keeping in view

the future capabilities, knowledge and skills of present employees. Further thethe future capabilities, knowledge and skills of present employees. Further thejobs should be redesigned and reanalyzed keeping in view the organisational andjobs should be redesigned and reanalyzed keeping in view the organisational andunit wise plans and programmes, future work quantum, future activity or taskunit wise plans and programmes, future work quantum, future activity or taskanalysis, future human resources and based on future organisational plans, Jobanalysis, future human resources and based on future organisational plans, Jobanalysis and forecasting. One on the important aspects of demand forecasting isanalysis and forecasting. One on the important aspects of demand forecasting isthe forecasting of the quality of human resources (skill, knowledge values,the forecasting of the quality of human resources (skill, knowledge values,capabilities etc.) in addition to quantity of human resources.capabilities etc.) in addition to quantity of human resources.


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Benefits of HR ForecastingBenefits of HR Forecasting1.1.Reduces HR costsReduces HR costs

2.2.Increase Organizational FlexibilityIncrease Organizational Flexibility3.3.EnsuresEnsures aa closeclose linkagelinkage toto thethe MacroMacro BusinessBusiness

forecastingforecasting processprocess4.4.EnsuresEnsures thatthat organizationalorganizational requirementsrequirements taketake

precedenceprecedence overover issuesissues ofof resourceresource constraintconstraint andand

scarcityscarcity

Goal /Stage of HR ForecastingGoal /Stage of HR Forecasting

TheThe goalgoal ofof HRHR forecastingforecasting isis toto obtainobtain sufficientsufficientnumbersnumbers ofof trainedtrained personnelpersonnel whowho willwill bebe ableableperformperform successfullysuccessfully inin jobsjobs whenwhen thosethose jobsjobs needneedtoto bebe filledfilled.. ToTo dodo this,this, thethe forecastingforecasting processprocess hashasfivefive


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1.1. IdentifyIdentify organizationalorganizational goals,goals, objectives,objectives, andand plansplans..2.2. DetermineDetermine overalloverall demanddemand requirementsrequirements forfor personnelpersonnel..3.3. AssessAssess inin--househouse skillsskills andand otherother internalinternal supplysupply

characteristicscharacteristics..4.4. DetermineDetermine thethe netnet demanddemand requirementsrequirements thatthat mustmust bebe

metmet fromfrom external,external, environmentalenvironmental supplysupply sourcessources..5.5. DevelopDevelop HRHR plansplans andand programsprograms toto ensureensure thatthat thethe rightright

peoplepeople areare inin thethe rightright placeplace..

EnvironmentalEnvironmental andand organizationalorganizational factorsfactors affectingaffectingHRHR forecastingforecasting

TheThe HRHR forecastingforecasting processprocess isis extremelyextremely complex,complex,requiringrequiring specificspecific numericalnumerical andand skillskill competencycompetencytargetstargets forfor personnelpersonnel toto bebe metmet despitedespite operatingoperating inincircumstancescircumstances ofof highhigh uncertaintyuncertainty.. ThisThis uncertaintyuncertaintyarisesarises fromfrom bothboth externalexternal environmentalenvironmental factorsfactors andand

fromfrom insideinside thethe organizationorganization itselfitself.. GivenGiven thisthis


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UncertaintyUncertainty andand thethe naturalnatural raterate ofof changechange resultingresulting fromfromoperatingoperating inin aa turbulent,turbulent, globalglobal economy,economy, thethe keykey factorfactorforfor HRHR forecastersforecasters isis toto incorporateincorporate flexibilityflexibility intointo thethe

programprogram responsesresponses associatedassociated withwith demanddemand andand supplysupplyforecastsforecasts..

HRHR ForecastingForecasting timetime HorizonsHorizons

1.1. CurrentCurrent forecastforecast2.2. ShortShort--runrun forecastforecast3.3. MediumMedium--runrun forecastforecast4.4. LongLong--runrun forecastforecast

PredictionPrediction aa singlesingle numericalnumerical estimateestimate of of HRHRrequirementsrequirements associatedassociated withwith aa specificspecific timetime horizonhorizon andandsetset ofof assumptionsassumptions

ProjectionProjection incorporatesincorporates severalseveral HRHR estimatesestimates basedbased onon aa

varietyvariety ofof assumptionsassumptions


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ContingencyContingency plans,plans, plansplans toto bebe implementedimplemented whenwhen severe,severe,unanticipatedunanticipated changeschanges toto organizationalorganizational oror environmentalenvironmentalfactorsfactors completelycompletely negatenegate thethe usefulnessusefulness ofof thethe existingexisting

HRHR forecastingforecasting predictionspredictions oror projectionsprojections

DeterminingDetermining NetNet HRHR RequirementsRequirements

1.1. DetermineDetermine HRHR DemandDemand

2.2. AscertainAscertain HRHR SupplySupplyInternalInternal supplysupply refersrefers toto currentcurrent membersmembers ofof thetheorganizationalorganizational workforceworkforce whowho cancan bebe retrained,retrained, promoted,promoted,transferred,transferred, etcetc.. toto fillfill anticipatedanticipated futurefuture HRHR requirementsrequirements..

ExternalExternal supplysupply potentialpotential employeesemployees whowho areare currentlycurrentlyundergoingundergoing trainingtraining (e(e..gg..,, universityuniversity students)students) oror areareworkingworking forfor competitors,competitors, oror whowho areare membersmembers ofof unionsunions ororprofessionalprofessional associations,associations, oror currentlycurrently areare inin aa transitionaltransitionalstage,stage, betweenbetween jobsjobs unemployedunemployed..


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SkillsSkills inventoryinventory PersonalPersonal databasedatabase recordrecord onon eacheachemployeeemployee..

33.. DetermineDetermine NetNet HRHR RequirementsRequirements

TheThe thirdthird stepstep inin thethe processprocess involvesinvolves thethe determinationdetermination ofofnetnet HRHR requirementsrequirements.. FromFrom stepssteps oneone andand twotwo above,above, thethefollowingfollowing equationsequations areare derivedderived::

HRHR demanddemand == externalexternal supplysupply ++ internalinternal supplysupplyHRHR demanddemand -- internalinternal supplysupply == externalexternal supplysupply

PersonnelPersonnel whowho cancan fillfill organizationalorganizational HRHR demanddemand

requirementsrequirements mustmust bebe foundfound fromfrom eithereither thethe currentcurrent internalinternalworkforceworkforce supplysupply oror fromfrom externalexternal environmentalenvironmental sourcessources.. AsAsexplainedexplained above,above, ifif wewe areare unableunable toto meetmeet thethe numericalnumerical andandKSAKSA demandsdemands forfor personnelpersonnel fromfrom internalinternal source,source, eithereitherbecausebecause ofof thethe qualificationqualification oror performanceperformance deficienciesdeficiencies ofof

currentcurrent workersworkers oror becausebecause ofof anan explicitexplicit organizationalorganizational


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decision to recruit new blood, the residual supply not metdecision to recruit new blood, the residual supply not metthrough current employees must come from outside:through current employees must come from outside:

External supply requirements = replacement + changeExternal supply requirements = replacement + changesupply componentssupply components

replacement supply = hiring to replace all normal lossesreplacement supply = hiring to replace all normal losses

(Normal(Normal losseslosses areare thosethose thatthat resultresult fromfrom retirements,retirements,terminations,terminations, voluntaryvoluntary turnover,turnover, promotions,promotions, transfers,transfers, andandleaves,leaves, andand thesethese losseslosses mustmust bebe replacedreplaced toto keepkeep thetheworkforceworkforce sizesize atat thethe currentcurrent levellevel..))

changechange supplysupply == hiringhiring toto increaseincrease (or(or decrease)decrease) thethe overalloverallstaffingstaffing levellevel

RecallRecall fromfrom ourour earlierearlier discussiondiscussion ofof HRHR demanddemand thatthat futurefuturepersonnelpersonnel requirementsrequirements mustmust notnot onlyonly replacereplace thethe currentcurrent


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WorkforceWorkforce employeesemployees (in(in termsterms of of numbersnumbers andand skillskillcompetencies),competencies), butbut alsoalso reflectreflect desireddesired futurefuture changeschanges totostaffingstaffing levelslevels..

externalexternal supplysupply == currentcurrent workforceworkforce sizesize xx (replacement(replacement %%perper yearyear ++ changechange %% perper year)year)

externalexternal supplysupply == 10001000 ((..1111++..0707)) == 110110++7070 ==180180

AnotherAnother organizationorganization withwith aa workforceworkforce ofof 450450,, whichwhich hashas aahistoricalhistorical annualannual replacement/lossreplacement/loss raterate ofof 88%% andand aa corporatecorporatedownsizingdownsizing policypolicy thatthat willwill reducereduce overalloverall staffingstaffing levelslevels byby99..55%%,, hashas thethe followingfollowing supplysupply requirementrequirement::

externalexternal supplysupply == 450450 ((..0808++ [[--..095095]] == 3636--4343== --77

HRHR surplussurplus occursoccurs whenwhen thethe internalinternal workforceworkforce supplysupplyexceedsexceeds thethe organizationsorganizations requirementrequirement oror demanddemand forfor

personnelpersonnel


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4. Institute HR Programs: HR Deficit and HR Surplus4. Institute HR Programs: HR Deficit and HR Surplus

HR deficit = HR demand > HR internal supplyHR deficit = HR demand > HR internal supply

HRHR deficitdeficit occursoccurs whenwhen demanddemand forfor HRHR exceedsexceeds thethe currentcurrentpersonnelpersonnel resourcesresources availableavailable inin thethe organizationsorganizations workforceworkforce(HR(HR internalinternal supply)supply)

HRHR surplussurplus == HRHR demanddemand


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Factors to be considered before Forecasting demandFactors to be considered before Forecasting demand

for employeesfor employees

Economic factors: as business is an economicEconomic factors: as business is an economicactivity, forecasts must consider economicactivity, forecasts must consider economicaspects like per capita income, employeesaspects like per capita income, employeesexpectations of wages and salaries, cost andexpectations of wages and salaries, cost andprice of raw materials, inflation rate, etc. Fiscalprice of raw materials, inflation rate, etc. Fiscalpolicies and liberalization of trade will alsopolicies and liberalization of trade will alsoinfluence requirements.influence requirements.

Social/ Market Factors: the expectations ofSocial/ Market Factors: the expectations ofexisting and potential employees on wagesexisting and potential employees on wages

Demographic factors: decisively influential uponDemographic factors: decisively influential upon

future requirements, these include availability offuture requirements, these include availability ofyouth, training facilities, women in the activeyouth, training facilities, women in the activelabour force, sex ratio, facilities for professionallabour force, sex ratio, facilities for professionaleducation, income level, education/literacy etc.education, income level, education/literacy etc.


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Competition: Competitors strategies, including advertising,Competition: Competitors strategies, including advertising,quality of product, pricing, and distribution influence futurequality of product, pricing, and distribution influence futurestaffing in a variety of ways.staffing in a variety of ways.Technological Factors: Technology has to be stage of theTechnological Factors: Technology has to be stage of theart if company is to survive the competition. Growth andart if company is to survive the competition. Growth andexpansion of business: growth is possible throughexpansion of business: growth is possible through

Product diversificationProduct diversificationIncreased capacity of production.Increased capacity of production.

Expansion plans are executed through:Expansion plans are executed through:MergerMerger


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AcquisitionAcquisition

Joint venture participationJoint venture participation

Formation of horizontal and vertical integrationFormation of horizontal and vertical integration

Establishment of national and international valueEstablishment of national and international valuechainschains

Management philosophy/ Leadership: TopManagement philosophy/ Leadership: Top

management ultimately decides what levels ofmanagement ultimately decides what levels ofstaffing are required.staffing are required.

Innovative management: As competition increasesInnovative management: As competition increaseswith globalization and liberalization of trade,with globalization and liberalization of trade,management needs to be innovative to staymanagement needs to be innovative to stay

afloat and sustain competitive advantage.afloat and sustain competitive advantage.


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Managerial DilemmaManagerial Dilemma

Assumptions of socialenvironment

DEMANDFORECASTINGEXERCISE

Businessplans

Assumptionsof labour

market

Assumptionsof technologyconditions

Assumptionsof political

environment

Assumptionsof economictrends


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Issues in demand forecastingIssues in demand forecasting Social FactorsSocial Factors Technologies FactorsTechnologies Factors

Political FactorsPolitical Factors Economic factorsEconomic factors Demand GenerationDemand Generation GrowthGrowth Employee TurnoverEmployee TurnoverThere are several good reasons to conduct demandThere are several good reasons to conduct demand

forecasting. It can help:forecasting. It can help:1.1. Quantify of the jobs necessary for producing a givenQuantify of the jobs necessary for producing a given

number of goods, or offering a given amount of servicesnumber of goods, or offering a given amount of services2.2. Determine what staffDetermine what staff--mix is desirable in the futuremix is desirable in the future3.3. Assess appropriate staffing levels in different parts of theAssess appropriate staffing levels in different parts of the

organization so as to avoid unnecessary costsorganization so as to avoid unnecessary costs4.4. Prevent shortages of people where and when they arePrevent shortages of people where and when they are

needed mostneeded most5.5. Monitor compliance with legal requirements with regard toMonitor compliance with legal requirements with regard to

reservation of jobsreservation of jobs


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Forecasting techniquesForecasting techniques

Forecasting techniques vary from simple toForecasting techniques vary from simple tosophisticated ones. Before describingsophisticated ones. Before describingeach technique, it may be stated thateach technique, it may be stated thatorganisation generally follow more thanorganisation generally follow more thanone technique.one technique.

The techniques are:The techniques are:1.1. Managerial judgmentManagerial judgment2.2. RatioRatio--trend analysistrend analysis3.3. Work study techniquesWork study techniques

4.4. Delphi techniqueDelphi technique5.5. Flow modelsFlow models6.6. OthersOthers


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ManagerialManagerial JudgementJudgement:: ThisThis techniquetechnique isis veryvery simplesimple.. InInthis,this, managersmanagers sitsit together,together, discussdiscuss andand arrivearrive atat aa figure,figure,whichwhich wouldwould bebe thethe futurefuture demanddemand forfor labourlabour.. TheThetechniquetechnique maymay involveinvolve aa bottombottom--upup oror aa toptop--downdown

approachapproach.. InIn thethe first,first, lineline managersmanagers submitsubmit theirtheirdepartmentaldepartmental proposalsproposals toto toptop managersmanagers whowho arrivearrive atat thethecompanycompany forecastsforecasts.. InIn thethe toptop downdown approach,approach, toptopmanagersmanagers prepareprepare companycompany andand departmentaldepartmental forecastsforecasts..TheseThese forecastsforecasts areare reviewedreviewed withwith departmentaldepartmental headsheads andandagreedagreed uponupon.. NeitherNeither ofof thesethese approachesapproaches isis accurateaccurate-- aacombinationcombination ofof thethe twotwo couldcould yieldyield positivepositive resultsresults.. InIn thethe

bottombottom--upup andand toptop--downdown approaches,approaches, departmentaldepartmentalheadsheads areare providedprovided withwith broadbroad guidelinesguidelines.. ArmedArmed withwith suchsuchguidelines,guidelines, andand aa consultationconsultation withwith thethe HRPHRP sectionsection inin thetheHRMHRM department,department, departmentaldepartmental managersmanagers cancan prepareprepareforecastsforecasts forfor theirtheir respectiverespective departmentsdepartments.. SimultaneouslySimultaneouslytoptop HRHR managersmanagers prepareprepare companycompany forecastsforecasts.. AA committeecommitteecomprisingcomprising departmentaldepartmental managersmanagers andand HRHR managersmanagers willwill

reviewreview thethe twotwo setssets of of forecasts,forecasts, arrivearrive atat aa unanimity,unanimity,whichwhich isis thenthen presentedpresented toto toptop managersmanagers forfor theirtheir approvalapproval..


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RatioRatio trend Analysistrend Analysis This is the quickest forecasting technique. The technique involvesThis is the quickest forecasting technique. The technique involves

studying past ratiostudying past ratio, say, between the number of workers and sales, say, between the number of workers and salesin an organization and forecasting future ratios, making somein an organization and forecasting future ratios, making some

allowance for changes in the organization or its methods. Exhibit 4allowance for changes in the organization or its methods. Exhibit 4shows how an analysis of actual and forecast ratios, between theshows how an analysis of actual and forecast ratios, between thenumber of routine proposals to be processed by an insurancenumber of routine proposals to be processed by an insurancecompanys writing department and the number of writerscompanys writing department and the number of writersemployed could be used to forecast future requirements.employed could be used to forecast future requirements.

Exhibit 4 : Demand ForecastExhibit 4 : Demand Forecast-- InspectorsInspectors

YearYear Production No. of EmployeesProduction No. of Employees RatioRatioInspector :Inspector :--33 15001500 150150 1:101:10

ActualActual --22 18001800 180180 1:101:10Last YearLast Year 20002000 180180 1:111:11Next YearNext Year 22002200 200200 1:111:11

+2+2 25002500 210210 1:121:12+3+3 27502750 230230 1:121:12

Si l h i l h d


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Simple Mathematical Methods

The productivity ratio is the average number of units producedper direct labor employee per year. Suppose a company produces

sofas and knows from past history that the productivity ratio isabout fifty sofas per furniture assembler per year. If themarketing department expects to sell 10,000 sofas in the comingyear, then the company needs 10,000/50=200 furnitureassemblers.Direct-to-indirect-labor staffing ratios are used to calculate thenumber of individuals required in other jobs. For instance, if thesofa firm generally has one supervisor for every fifteenassemblers, then about thirteen supervisors will be needed fortwo hundred assemblers. Past experience also may show that twoshipping-and-receiving clerks are required for every fiftyassemblers. This means that the company needs a total of eightclerks.

Productivity and staffing ratios based on historical data may bemodified judgmentally if the ratios are expected to change. Forinstance, if the union has negotiated a new contract requiringworkdays that are thirty minutes shorter and more paid holidays,the expected productivity ratio should be adjusted downward. Ifan improved order-processing program will be installed in theclerks computers, the staffing ratio may change, with fewer

clerks needed to service the same number of direct workers.


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Delphi TechniqueDelphi Technique

Delphi technique can be used for forecastingDelphi technique can be used for forecastinghuman resources needshuman resources needs in two formsin two forms.. FirstFirst, it can, it canbe used to know the trends for changing jobbe used to know the trends for changing jobprofile and, consequently, the changing personnelprofile and, consequently, the changing personnelprofile across the country or at internationalprofile across the country or at internationallevel.level. SecondSecond, this, technique can be used to, this, technique can be used tosolicit views of expert in different functional areassolicit views of expert in different functional areasof an organisation about the changing profile ofof an organisation about the changing profile ofpersonnel in their respective departments in thepersonnel in their respective departments in thelight of changing environment. Such views arelight of changing environment. Such views arecollected and summarized by HR department tocollected and summarized by HR department to

arrive at a decision about the types of personnelarrive at a decision about the types of personnelneeded in future. Delphi technique is usedneeded in future. Delphi technique is usedprimarilyprimarily to assess longto assess long--term needs of humanterm needs of humanresources.resources.

W k St d T h iW k St d T h i


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Work Study TechniqueWork Study Technique WorkWork--study technique can bestudy technique can be used when it is possible to applyused when it is possible to apply

work measurement to calculate the length of operations and thework measurement to calculate the length of operations and theamount of labour requiredamount of labour required. The starting point in a manufacturing. The starting point in a manufacturing

company is the production budget, prepared in terms of volumescompany is the production budget, prepared in terms of volumesof salable products for the company as a whole, or volumes ofof salable products for the company as a whole, or volumes ofoutput are then multiplied by the planned volume of units to beoutput are then multiplied by the planned volume of units to beproduced to give the total number of planned hours for theproduced to give the total number of planned hours for theperiod. This is then divided by the number of actual workingperiod. This is then divided by the number of actual workinghours for an individual operator to show the number of operatorshours for an individual operator to show the number of operatorsrequired. Allowance will have to be made for absenteeism andrequired. Allowance will have to be made for absenteeism and

idle time.idle time. The number of operative required to complete specified volume ofThe number of operative required to complete specified volume of

operation is:operation is:.. Planned outputPlanned output ..

Standard output per hour * standard hours per personStandard output per hour * standard hours per person

Standard output per hour is not always a constant factor but,Standard output per hour is not always a constant factor but,generally, it increases over the period of time because ofgenerally, it increases over the period of time because oflearning.learning.


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WorkWork studystudy techniquetechnique isis aa methodmethod of offorecastingforecasting humanhuman resourceresource needsneeds.. ItIt isis aa

decisiondecision MakingMaking tooltool.. ItIt isis beenbeen usedused ininestimatingestimating personnelpersonnel needsneeds fromfrom aa groupgroup ofofexperts,experts, usuallyusually managersmanagers.. TheThe HRHR expertsexperts actactasas intermediaries,intermediaries, summariessummaries thethe variousvariousresponsesresponses andand reportreport thethe findingsfindings backback totoexpertsexperts surveysurvey againagain afterafter theythey getget thisthisfeedbackfeedback.. SummariesSummaries andand surveyssurveys repeatedrepeateduntiluntil thethe expertsexperts opinionsopinions beginbegin toto agreeagree.. ThisThisagreementagreement reachedreached isis thethe forecastingforecasting ofof thethe

humanhuman resourceresource needsneeds..


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Some other MethodsSome other Methods

Regression analysis:Regression analysis:

Past levels of various work load indicators, such as sales,Past levels of various work load indicators, such as sales,production levels, and value added, are examined forproduction levels, and value added, are examined forstatistical relationships with staffing levels. Wherestatistical relationships with staffing levels. Where

sufficiently strong relationships are found, a regression (orsufficiently strong relationships are found, a regression (ormultiple regression) model is derived. Forecasted levels ofmultiple regression) model is derived. Forecasted levels ofthe retained indicators arethe retained indicators are

Entered into the resulting model and used to calculate theEntered into the resulting model and used to calculate the


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Entered into the resulting model and used to calculate theEntered into the resulting model and used to calculate theassociated level of human resource requirements.associated level of human resource requirements.

Productivity ratiosProductivity ratios : Historical data are used to: Historical data are used toexamine past levels of a productivity index (P):examine past levels of a productivity index (P):

P= Work load/Number of PeopleP= Work load/Number of People

Where constant, or systematic, relationships are found,Where constant, or systematic, relationships are found,

human resource requirements can be computed byhuman resource requirements can be computed bydiving predicted work loads by P.diving predicted work loads by P.

Personnel ratios:Personnel ratios: Past personnel data are examinedPast personnel data are examinedto determine historical relationships among theto determine historical relationships among the

employees in various jobs or job categories. Regressionemployees in various jobs or job categories. Regressionanalysis or productivity ratios are used to project eitheranalysis or productivity ratios are used to project eithertotal or keytotal or key--group human resource requirements, andgroup human resource requirements, andpersonnel ratios are used to allocated totalpersonnel ratios are used to allocated totalrequirements to various job categories or to estimaterequirements to various job categories or to estimate

for nonfor non--key groups.key groups.


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Time series analysisTime series analysis: past staffing levels: past staffing levels(instead of work load indicators) are used to project(instead of work load indicators) are used to project

future human resource requirements. Past staffingfuture human resource requirements. Past staffinglevels are examined to isolate and cyclical variation,levels are examined to isolate and cyclical variation,longlong--term terms, and random movement. Long termterm terms, and random movement. Long termtrends are then extrapolated or projected using atrends are then extrapolated or projected using amoving average, exponential smoothing, ormoving average, exponential smoothing, orregression technique.regression technique.

Combination of different methods of forecastingCombination of different methods of forecastinghuman resource needs is followed. Even wherehuman resource needs is followed. Even whereworkwork--study technique is followed to assess thestudy technique is followed to assess thehuman resource needs at the operative level, it ishuman resource needs at the operative level, it is

not undertaken every year, as the standards fixed innot undertaken every year, as the standards fixed ina year serve the purpose for many years. In ordera year serve the purpose for many years. In orderto understand how various methods are applied into understand how various methods are applied inpractice we shall see in the staffing.practice we shall see in the staffing.

Methods & techniques for supply managementMethods & techniques for supply management


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Methods & techniques for supply managementMethods & techniques for supply management

Armstrong has defined forecasting of human resource supply asArmstrong has defined forecasting of human resource supply asfollows:follows:

Documents

6965525 Hr Planning Staffing