MAN POWER PLANNINGUNIT III

Definition

•Manpower Planning (MPP) now referred to as Human Resource Planning (HRP) is an attempt to meet organization’s need for Human Resources with the available supply of manpower in the local and national labor markets.

• According to Geisler, “HR planning is the process – including forecasting, developing and controlling – by which a firm ensures that it has the right number of people and the right kind of people at the right places at the right time doing work for which they are economically most useful”.

• According to Wendell French, human resource planning may be defined – “as the process of assessing the organization's human resources needs in the light of organizational goals and making plans to ensure that a competent, stable work force is employed”.

• Leon C Megginson is of the opinion that, human resource planning is “an integrated approach to perform the planning aspects of the personnel function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organisational objectives and satisfy the individual needs and goals of organisational members”.

Fundamental Questions….• How many employees does the organization currently

employ?• What is the age profile, by the department, of our

employees?• Where in the organization are these employees to be

found?• Which are the biggest departments in the organization?• What skills do our employees?• How many employees, on average, leave the organization

every year?• In which areas of our business do we tend to ‘lose’ more

employees?

Characteristics of Human Resources Planning

▫ Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique.

▫ Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure).

▫ Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division.

▫ Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have to be made for getting net manpower requirements.

▫ Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis.

The Need for Manpower Planning• Shortages and surpluses can be identified so that quick

action can be taken wherever required. • All the recruitment and selection program are based on

manpower planning. • It also helps to reduce the labor cost as excess staff can be

identified and thereby overstaffing can be avoided. • It also helps to identify the available talents in a concern

and accordingly training programs can be chalked out to develop those talents.

• It helps in growth and diversification of business. Through manpower planning, human resources can be readily available and they can be utilized in best manner.

• It helps the organization to realize the importance of manpower management which ultimately helps in the stability of a concern.

Importance of Manpower planning

• Key to managerial functions- The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the manpower. Human resources help in the implementation of all these managerial activities. Therefore, staffing becomes a key to all managerial functions.

• Efficient utilization- Efficient management of personnels becomes an important function in the industrialization world of today. Setting of large scale enterprises require management of large scale manpower. It can be effectively done through staffing function.

• Motivation- Staffing function not only includes putting right men on right job, but it also comprises of motivational programs i.e., incentive plans to be framed for further participation and employment of employees in a concern. Therefore, all types of incentive plans becomes an integral part of staffing function.

• Better human relations- A concern can stabilize itself if human relations develop and are strong. Human relations become strong trough effective control, clear communication, effective supervision and leadership in a concern. Staffing function also looks after training and development of the work force which leads to co-operation and better human relations.

• Higher productivity- Productivity level increases when resources are utilized in best

possible manner. higher productivity is a result of minimum wastage of time, money, efforts and energies.This is possible through the staffing and it's related activities ( Performance appraisal, training and development, remuneration)

The Creation of a Manpower Plan

•The procedure is as follows:

▫Analyzing the current manpower inventory

▫Making future manpower forecasts ▫Developing employment programs

▫Design training programs

Wastage

•The simplest way of calculating wastage is through a turnover analysis:▫ Number leaving in one year / Average number of

employees x 100 = x%

•Labor Stability Index▫ Number of employees exceeding one year’s

service / Number of employees employed one year ago x 100 = x%

Markov Model

• In probability theory, a Markov model is a stochastic model

Nature of HR Planning

• Manpower planning involves all the activities with regard to human resources.

• Manpower planning includes determination of manpower needs both in quantitative and qualitative terms.

• It includes an inventory of present manpower in order to determine the status of the present supply of manpower so that the labor force can be used to its full capacity.

• To be effective, manpower planning must focus not only on the people involved but also on the working conditions and the relationships in which they work.

• Manpower is an important asset of an organization, which is affected by its social, cultural, economic and psychological backgrounds. Therefore, the manpower must be planned and utilized carefully.

HR Planning at different levels

•HRP at National Level

•HRP at the Sectoral Level

•HRP at the Industry Level

•HRP at the Unit Level

•HRP at the Departmental Level

Process of HR Planning

•Analyzing organizational plans and deciding objectives.

•Analyzing factors for manpower requirements.

•Developing employment plans.

•Developing human resource plans

Analyzing factors for manpower requirements

• Demand Forecasting

• Supply Forecasting

Demand Forecasting• Demand Forecasting is the process of estimating

the future manpower requirements according to the function level of skills of employees that would help the planners to assess the overall demand for operative, supervisory and managerial personnel.

• two forecasting techniques may be used for this purpose.▫ Judgmental Forecasts, and▫Statistical Projections.

Judgmental Forecast• This is a conventional method, which is based on judgment

of managers and executives who have intensive and extensive knowledge of HR requirement. Judgmental forecasts are two types –

• Managerial Estimate: Under this method the managers who have sufficient knowledge about the workload, efficiency and ability of employees think about their future workload, capabilities in future and decide on the number and type of human resources to be require.

• The Delphi Method :- The Delphi technique was developed at RAND Corporation in the 1950s to help capture the knowledge of diverse experts while avoiding the disadvantages of tradition.al group meetings

Statistical Projection

• Ratio-Trend Analysis

• Econometric Model

• Work-Study Techniques

Ratio-Trend Analysis•The ratio-trend analysis is carried out by

studying past ratios and forecasting ratios for the future. The components of internal environmental changes are considered while forecasting future ratios.

•Activity level forecasts are used to determine the direct human resource requirements.

•This method depends on the availability of past records and the internal environmental changes likely to occur in future.

Econometric Model•Under the econometric model, the

previous data is analyzed and the relationship between different variables in a mathematical formula is developed. The different variables affecting the human resource requirements are identified.

•The mathematical formula so developed is

then applied to the forecasts of movements in the identified variables to produce human resource requirements.

Work-Study Techniques

• Work measurement, workload analysis and techniques to increase productivity, study the internal mobility of workers like promotions and transfer, external mobility like, retirement, etc. are studied.

• The forecasting of manpower needs for expansion and modernization may increase the demand for workers but when organizations go for downsizing the demand for workers decreases.

Supply forecasting

• It is concerned with human resource requirement from within and outside the organization.

•Supply Forecasting includes –

▫HR Audit▫Employee Wastage▫Internal Promotions

HUMAN RESOURCE RECRUITMENT

Recruitment Constraints and Challenges• 1. Strategic Human Resource Plans• 2. Affirmative Action Plans• 3. Environmental Conditions• 4. Organizational Policies• 5. Recruiters habits• 6. Job Requirements• 7. Costs• 8. Incentives• 9. Compensation Policy• 10. Employment Status Policies• 11. International Hiring Policies• 12. Promote-from-within Policies

Challenges related to Recruitment

• Internal versus External Recruiting

•Lead-the-Market Pay Strategies

•Employment-at-Will Policies

• Image Advertising

Sources of Recruitment

• Internal versus External Sources•Direct Applicants and Referrals•Advertisements in Newspapers and

Periodicals•Private Employment Agencies•Professional Search Firms•Professional Associations•Colleges and Universities•Electronic Recruiting

SELECTION

Organizational Considerations in Staffing Decisions

Organizational Culture

Validity of Selection Method/Standards

•Reliability•Validity•Criterion-Related Validation•Content Validation•Generalizability•Utility•Legality

Methods of Selection

•Biodata•Group Methods

▫Roles▫Problem Solving▫ In-Trays▫Presentation▫Work simulation exercise▫Repertory Grid Technique▫Personality Assessment▫ Interviews

Repertory Grid Technique

• Kelly (1955) developed the notion of personal construct psychology as a theory of personality, which over the last five years has been developed for use in the selection process

• The technique allows the individual to make sense of his or her world by identifying similarities and differences between sets of events in his or her life and in this way develops personal constructs

Interview

The interview can be:

▫ • One to one▫ • Sequential▫ • Panel

Employment Tests

•Psychological tests•Knowledge tests•Performance tests•Attitude and Honesty tests•Medical tests

Evaluative standards

•Fairness•Cost•User-friendliness•Acceptability (to the candidate and the

organization)•Validity and reliability•Applicability

PERFORMANCE APPRAISALMODULE - II

Uses of Performance Appraisals

• Performance improvement• Compensation adjustments• Placement decisions• Training and development needs• Career planning and development• Staffing process deficiencies• Informational inaccuracies• Equal employment opportunity• External challenges• Feedback to human resources

Role of HR Department in PMS

Problems in Associated with Appraisal System

•Legal Constraints•The halo effect•The error of central tendency•Leniency and strictness bias•Cross –cultural biases•Personal prejudice•The recency effect•Reducing rater bias

Appraisal Methods

Past-Oriented Appraisal Methods

•Rating scales• Checklists•Forced choice method•Critical incident method•Ranking method•Forced distributions•Point allocation method•Paired comparisons

Rating Scales

• The rating scale method offers a high degree of structure for appraisals. Each employee trait or characteristic is rated on a bipolar scale that usually has several points ranging from "poor" to "excellent" (or some similar arrangement )

• The traits assessed on these scales include employee attributes such as cooperation, communications ability, initiative, punctuality and technical (work skills) competence.

Rating Scale

Advantages Disadvantages

• The greatest advantage of rating scales is that they are structured and standardized.

• Each employee is subjected to the

same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraisees and imposes standard measures of performance across all parts of the organization.

• Rating scale methods are easy to use and understand.

• Trait Relevance • Systemic Disadvantage• Perceptual Errors • Perceived Meaning • Rating Errors

Checklist Method• This is the simplest way of evaluation wherein

the rater is given a checklist containing a description of the employee behavior on the job. The duty of the superior is to find out which description best suits the employee.

• The checklist contains many statements which might be appropriate in describing the employees on the job performance.

• The flaw – the checklist might not contain a certain statement which best describes the employee and is not free of the rater’s bias. However, this system is widely used and accepted.

Forced Choice Method•The forced choice method requires the

rater to choose the most descriptive•statement in each pair of statements

about the employee being rated. Often both

•statements in the pair are positive or negative.▫ 1. Learns quickly …………………..Works hard.▫ 2. Work is reliable…………………Performance is a

good example for▫ others.▫ 3. Absent too often…………………Usually tardy.

Critical Incident Method

• The evaluator rates the employee on the basis of critical events and how the employee reacts in such events - essentially their behavioral patterns during those incidents.

• This includes both the positive and the negative traits of the employee.

• This method objectively discusses an employee’s performance during such incidents.

• However, this method has drawn a lot of flak as the superior has to make a note of critical incidents and the resulting employee behavior as and when they happen, which is difficult under the circumstances always.

Ranking Method

• The ranking method requires the rater to place each employee in order, from best to worst. The HR department knows that certain employees are better than others, but it does not know by how much.

• The employee ranked second may be almost as good as the one ranked first or may be considerably worse. This method is subject to the halo and recency effects, although rankings by two or more raters can be averaged to help reduce biases

Paired comparisons

•This is a method of comparison where each employee is first compared with the peers, one at a time, and when all the comparisons are done, the employees are given the final rankings.

Forced Ranking• Forced distributions require raters to sort employees into

different classifications, usually with specified proportions in each category.

• The criterion show overall performance, but this method can be used for other performance criteria, such as reliability and control of costs.

• As with the ranking method, relative differences among employees are not known but this method does overcome the biases of central tendency, leniency, and strictness errors.

Point allocation method

• The point allocation method requires the rater to allocate a fixed number of points among employees in the group. Good performers are given more points than are poor performers.

• The advantage of this method is that the rater can recognize the relative differences between employees, although the halo effect and the recency bias remain.

Future-Oriented Appraisal Methods

Four common approaches to evaluating future performance are:

▫Self-appraisals▫Management by objectives▫Psychological appraisals▫ Assessment centers

Self-Appraisals• Getting employees to conduct a self-appraisal can be a

useful evaluation technique if the goal of evaluation is to further self-development. When employees evaluate themselves, defensive behavior is less likely to occur and self-improvement is thus more likely.

• When self-appraisals are used to determine areas of needed improvement, they can help users set personal goals for the future.

Management by Objectives

• MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have been met.

• Usually the objectives are established jointly by the supervisor and subordinate. An example of an objective for a sales manager might be: Increase the gross monthly sales volume to $250,000 by 30 June.

Psychological Appraisals

• When psychologists are used for evaluations, they assess an individual’s future potential, not that individual’s past performance.

• The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors, and a review of other evaluations.

• The psychologist then writes an evaluation of the employee’s intellectual, emotional, motivational, and other work-related characteristics that involve individual potential and may predict future performance.

Assessment Centers• Assessment centre refers to a method to objectively

observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments.

• Assessment centers simulate the employee’s on the job environment and facilitate the assessment of their on the job performance.

• An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies and on the job behaviour and potential to take higher responsibilities in the future

Requirements of Effective Appraisal Systems

•Relevance

•Sensitivity

•Reliability

•Acceptability

•Practicality

Training and Development

Module III

Purpose of Training

• Knowledge – it helps a trainee to know facts, policies, procedures and rules pertaining to his job.

• Skills – it helps him to increase his technical and manual efficiency necessary to do the job.

• Attitude – It moulds his behavior towards his co-workers and supervisors and creates a sense of responsibility in the trainee

Importance of Training

• Training enables the management to face the pressure of changing environment

• Training usually results in an increase of quantity and quality of output.

• Training leads to job satisfaction and higher morale of the employees.

• Trained workers need lesser supervision.• Trained workers enable the enterprise to face competition from

rival organizations.• Training enables employees to develop and rise within the

organization and increase their earning capacity.• It moulds the employees’ attitudes and helps them to achieve

better cooperation within the organization.• Trained employees make better economic use of materials and

equipment resulting in reduction of wastage and spoilage.• Training instructs the workers towards better job adjustment and

reduces the rate of labor turnover and absenteeism.