Manpower Planning or Human Resource Planning

Chapter outline

HR Planning

Environment of HR Planning

Staffing Planning

Legal Issue

Current trends in HR Planning

Forecasting Demand & Supply

Quantitative & Qualitative determination

INTRODUCTION

HUMAN RESOURCE PLANNING

HRP is a process by which the management of an organization determines its future human resource requirement and how the existing human resource can be effectively utilized to fulfill the requirements.

HUMAN RESOURCE PLANNING

1) Employment-Unemployment Situation

2) Technological Change

3) Demographic Change

4) Skill Shortage

5) Governmental Influences

6) Legislative Control

7) Impact of the Pressure Group(unions, politician etc.)

8) Lead Time

WHY IS HUMAN RESOURCE PLANNING IS NEEDED ?

Importance

• Organizational Objectives & Policies (expansion, downsizing, acquisition, merger )

• Forecast HR requirement (Prevent shortage / excess of staff )

• Determine future staff-mix

• Cope-up with the change — in market conditions, technologies, products,

government regulations and policies, etc.

• Helps in succession planning

• Use existing HR productivity.

• Promote employees in a systematic manner.

• Cut cost

HUMAN RESOURCE PLANNING

HRP at Different Planning levels

• Identify the broad policies

• Align HR objective with organization objective

• Determining recruitment

• layoff strategy

• retention strategy,

• selection process

• Planning for T& D

• Employee welfare activities

• Grievance handling

• Employee engagement

activities

Corporate level planning

Business level planning

Operational level planning

Planning short term activities

HUMAN RESOURCE PLANNING PROCESS

HUMAN RESOURCE PLANNING

ENVIRONMENT

ORGANISATION OBJECTIVE AND POLICIES

HR DEMAND FORCASTING HR SUPPLY FORCASTING

HR PROGRAMMING

HR IMPLEMENTATION

CONTROL AND EVALUTION OF PROGRAMMING

HR SURPLUSRestricted Hiring Reduced Hours and

VRS, Lay Off, etc.

HR DEFICIT/ SHORTAGE(Recruitment and Selection)

ANALYSIS OF HR REQUIREMENT

The Basic Elementsof Human Resource Planning

3-9

ENVIRONMENT of HRM

“Our assets walks out of the door each evening .

We have to make sure that they come back next morning”

Human Resource Management

- N. R. NARAYANA MURTHY

EXTERNAL FACTORS

INTERNALFACTORS

ENVIRONMENT

of

HRM

Human Resource Management

• Mission

• Policies

• Organization culture

• Organization structure

• HR system

• Workforce diversity

• Unions

• Employee demands

and expectation

• PESTEL

P - political factors

E – economical factors

S – social factors

T – technical factors

E – environmental factors

L – legal factors

3-12

Examples of ExternalInfluences on Staffing

Demand forecasting techniquesQ

uan

tita

tive

tec

hn

iqu

e

• Estimation

• Ratio Analysis

• Trend analysis & projection

• Computerized Forecast

• Regression Analysis

• H R Budget and Planning Analysis

• Scenario Forecasting

• Work Study Analysis

• Simple averaging

• Markov analysis

• Indexation

• Extrapolation

Qu

alit

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• Managerial Judgment

• Estimation

• Expert Advice

• Delphi technique

• Nominal Group Technique

• Job Analysis

• Group brainstorming

• Simulation models

5-12

Estimated internal labor supply for a given firm

The FirmSources of Inflows

Transfers

Promotions

New Recruits

Recalls

Promotions

Quits

Terminations

Retirements

Deaths

Layoffs

Employees In Employees Out

Current

staffing

level

Projectedoutflows

this year

Projected

inflows

this year

Firm’s internal

supply for this

time next year

– + =

Projected Outflows

Current Staffing

Level

HR SUPPLY FORECASTING techniques

Supply Forecasting Methods

Trend analysis

Competency model

Replacement Charts

Staffing table

Succession Planning

Flow Modeling/Markov Analysis

Trend analysis

Trend analysis involves collecting and evaluating

data to identify patterns of information that might

impact the future.

By examining the trends of the past, the HR

department can predict the effect of the same

activity on the future of the organization,

because it is assumed that these patterns will

remain stable.

Trend analysis

For example, an organization reviewing historical

data may realize that every year, approximately five

percent of their staff retire, six percent resign, and

three percent are dismissed.

Using a simple trend analysis, future HR supply

forecasts can be established by assuming an

average reduction in internal HR supply of 14

percent per year.

Competency model

Competencies are behaviours that encompass

the knowledge, skills, and attitudes(KSA)

required for successful performance.

Competency modelling is the activity of

determining the specific competencies that are

characteristic of high performance and success

in a given job.

Competency model

A future-oriented model that first reviews

competencies that are aligned with an

organization’s mission, vision, and strategy, and

then aims to identify an ideal workforce in terms

of these competencies .

Skills/competency models focus on matching the

right skills or competencies needed for each job

with the skills available within the organization

Co

mp

ete

ncy m

od

el

Replacement chart

A chart used to estimate vacancies in higher

level jobs and identify how potential HR supply

can fill these vacancies via internal movements

from lower levels jobs

Replacement charts provide identification of

potential replacements for vacancies within an

organization

Replacement chart

A comprehensive replacement chart will include

information regarding possible replacements for

vertical or horizontal movement.

Generally, a replacement chart includes

information about employees’ performance,

readiness to fill the position, and education.

Replacement chart

General Manager

V. K. Garg

A/2

Key

Names given are replacement

candidates

A. Promotable now

B. Needing development

C. Not suitable to position

1. Superior performance

2. Above Average performance

3. Acceptable performance

4. Poor performance

P A to

General Manager

L. MathewsB/1

Assistant General Manager

R.K. Arora A/2

B.K. Nehru B/3

Division:

HR Manager

C.P. Thakur A/1

Division:

Accounting &

Taxation Manager

A.T. Roy C/2

Division:

Planning Manager

A.N. Gupta A/1

K.P. Rao B/1

Technical Advisor

N.R. Murthy B/3

Northern Region

Manager

L.C. Srivatsav A/2

A. Thapar C/4

Central Region

Manager

S.P. Kumar A/1

R. Pandey B/3

Southern Region Manager

A. Subramanyam B/2

B.K. Menon B/1

Eastern Region

Manager

R. Krishna B/3

Staffing table

Staffing tables are graphic representations of all

organizational jobs, along with the numbers of

employees currently occupying those jobs and

future (monthly or yearly) employment

requirements, which can be derived from demand

forecasts.

Staffing table

For a line worker, for example, there is a 20% probability of being

gone in 12 months, a 0% probability of promotion to manager, a

15% probability of promotion to supervisor, and a 65% probability

of being a line worker this time next year. Such transition matrices

form the bases for computer simulations of the internal flow of

people through a large organization over time.

Succession Planning

Succession planning is a longer-term process

of grooming a successor (selected from a pool

of candidates on the basis of perceived

competency) for management or critical

positions.

Succession Planning

Determining the internal labour supply calls

for a detailed analysis of how many people

are currently in various job categories or

have specific skills within the organization.

The planner then modifies this analysis to

reflect changes expected in the near future

as a result of retirements, promotions,

transfers, voluntary turnover, and

terminations.

Markov analysis

Analysis that helps to predict internal employee movement from one year to another by identifyingpercentages of employees who remain in their jobs, get promoted or demoted, transfer, and exit out of the organization

By tracking and predicting employment movement within an organization, the Markov analysis allows for the development of a transition matrix to forecast internal labour supply.

Internal Versus External Staffing

3-31

Staffing Alternatives to Deal With Employee Shortages

3-32

Staffing Alternatives to Deal WithEmployee Surpluses

3-33

HR DEFICIT

• Recruitment and selection

• compensation schemes

• Hiring part time employees

• Recalling existing employees

• Poaching

• Placement

• Retention Plan

HR SURPLUS• Job sharing

• Hiring freeze

• Attrition

• Retrenchment

• Outplacement

• Layoffs

• Voluntary retirement

• Downsizing Plan

• Relocation

HUMAN RESOURCE PLANNING

BARRIERS TO HRP

• Time Consuming

• Expensive

• Probability of inaccuracy /Uncertainties

• Financial forecasting takes precedence over HRP

• Non-involvement of operating managers

• Inadequate Information system

• Trade unions

• Employers and employee resistance

Thank You