HUMAN RESOURCE PLANNING

Unit 1
 Issues in SHRM
• Employment
• Development
• Performance Appraisal
• Compensation
• Industrial Relations
• Work Systems
• Organizational Culture
 Issues in SHRM
• Employment: internal or external source or outsourcing.
• Development: in-house training or external, competency
building or ad-hoc training.
• Performance Appraisal: based on behaviour or based on
results, group or individual criteria, developmental or
remedial oriented, results for pay or promotion
• Compensation: high base salaries or low base salaries
with high perks. Fixed or flexible package, equal or
discriminated pay etc.
•
 Issues in SHRM
• Industrial Relations: Individual negotiation or
collective negotiation. Broad employee
participation vs limited employee participation,
partial employee ownership or no employee
ownership, employee compliance or
empowerment.
• Work Systems: Job enrichments or simplified jobs,
implicit or explicit job analysis, specialized jobs or
job rotations.
• Organizational Culture: multi-culture vs single
culture.
 HR & STRATEGIC PLANNING
• Corporate Level Strategies
• Expansion
• Diversification
• Acquisition & Mergers
• Retrenchment
• Unit Level Strategies
• Low Cost Leadership
• Differentiation
 Introduction

– First, types and number of jobs are to be

identified.
– Then number and kind of people required
has to be estimated.
– Strategies and strategic plans serve as the
basis of human resource planning.
 Definition
• Process by which an organization move from its
current manpower position to desired
manpower position. (E.W.Vetter)
• HR Planning is an integrated approach to
perform the planning aspect 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
organizational objectives and satisfy the
individual needs and goals of organizational
members.(Leon.C. Megginson)
 Objectives
• To recruit and retain human resources of required quantity
and quality.
• To foresee the employee turnover.
• To meet the needs of expansion, diversification.
• To foresee the impact of technology on work, existing
employee and future human resource requirements.
• To improve the standards, skill, knowledge, ability, discipline
etc.
• To minimize imbalance caused due to non-availability of
human resources of right kind, right number in right time and
right place.
 Characteristics
• Checks the corporate plan of the organization.
• Offsets uncertainties and changes to the maximum extent possible and
enables the organization to have the right men at right time and in
right place.
• Provides scope of advancement and development of employees
through training, development etc.
• Helps to anticipate the cost of salary enhancement, better benefits etc.
• Helps to anticipate the cost of human resources to facilitate the
formulation of budgets in an organization.
• To plan for physical facilities, working conditions and volume of fringe
benefits like canteen, schools, hospitals, conveyance etc.
• Gives an idea of type of tests to be used and interview techniques in
selection based on the level of skills, qualifications, intelligence, values
etc of future HR
• Helps to improve human contribution in the form of increased
productivity, sales, turnover etc.
 Need for Planning
• The shortage of certain categories or variety of skills.
• The changes in technology, marketing, management
etc and consequent need for new skills.
• The changes in organization design and structure
affecting manpower.
• The changes in government policies
• The labour laws affecting the demand for and supply
of labour.
• Pressure from trade unions, politicians etc
 HRP Process
• 1. Analyzing organizational plans.
• 2. Demand forecasting
• 3. Supply forecasting
• 4. Estimating the net human resource requirements
• 5. Action plan for redeployment, redundancy/retrenchment.
• 6. Forecast future supply from all the sources.
• 7. Action plan for outsourcing, recruitment, development
etc.
• 8. Modify the organizational plan.
• 9. Retention plan
 1. Analyzing the Organizational Plans
• Analyzing and breaking the organizational
plan into production plan, technological plan,
plans for expansion, diversification.
• Helps in forecasting the demand for human
resources as it provides the quantum of future
work activity.
2. Forecasting the overall human resource
requirement
• Jobs should be redesigned and re-analyzed keeping
in view the organizational and unit-wise plans and
programmes, future work quantum, future activity
or task analysis, future skills, values, knowledge and
capabilities of present employees and prospective
employees.
• Important forecasting methods are:
• A) Management judgement
• B) Statistical techniques
• C) Work study techniques
 A. Managerial Judgement
• Managers who are acquainted with workload,
efficiency and ability of employees, think
about future workload, future capabiliites of
employees and decide on the number and
type of human resources to be required.
• It can be done using bottom-up approach and
participative approach.
 B. Statistical Techniques
• Two types
• Ratio Trend Analysis: The ratios are calculated for the past
data and future ratios are estimated when there are changes in
organization
• Econometric Models: These models are built up by analyzing
the past statistical data and by bringing the relationship among variables.
These variables affect manpower requirement directly and indirectly like
investment, production, sales etc.
 C. Work Study Techniques
• These techniques are suitable where the
volume of work is easily measurable.
• Total production in terms of clear units are
estimated in a year. Man hours required to
produce each unit is calculated giving due
weightage to absenteeism, rest etc.
 D. Scatter Plot
• Used to investigate the possible relationship
between two variables that both relate to the
same “event”.
• The data is displayed as a collection of points,
each having the value of one variable
determining the position on the horizontal
axis and the value of the other variable
determining the position on the vertical axis.
This kind of plot is also called a scatter chart,
scatter diagram and scatter graph.
 D. Scatter Plot
• A scatter plot can suggest various kinds of correlations between variables
with a certain confidence interval. Correlations may be positive (rising),
negative (falling), or null (uncorrelated).
• If the pattern of dots slopes from lower left to upper right, it suggests a
positive correlation between the variables.
• If the pattern of dots slopes from upper left to lower right, it suggests a
negative correlation.
• A line of best fit (alternatively called 'trendline') can be drawn in order to
study the correlation between the variables. An equation for the
correlation between the variables can be determined by established best-
fit procedures. For a linear correlation, the best-fit procedure is known as
linear regression. Unfortunately, no universal best-fit procedure is
guaranteed to generate a correct solution for arbitrary relationships.
D. Scatter Plot
 E. Delphi Method
• The Delphi method is a systematic, interactive forecasting method
which relies on a panel of experts.
• After each round, a facilitator provides an anonymous summary of
the experts’ forecasts from the previous round as well as the reasons
they provided for their judgments.
• experts are encouraged to revise their earlier answers in light of the
replies of other members of their panel. It is believed that during this
process the range of the answers will decrease and the group will
converge towards the "correct" answer.
• Finally, the process is stopped after a pre-defined stop criterion (e.g.
number of rounds, achievement of consensus, stability of results)
and final rounds determine the results.
 E. Delphi Method
• The objective of the method was to combine expert
opinions to assess the direction of long-term trends in
science and technology development, topics such as
scientific breakthroughs, population control, automation,
space progress, war prevention, weapon systems etc.
• Governments have widely acknowledged the value of
collective intelligence from civil society, academic and
private sector participants of the Delphi, especially in a field
of rapid change, such as technology policies. In this sense,
the Delphi method can contribute to a general appreciation
of participative policy-making.
 3.Supply Forecasting
• The first step of forecasting the future supply
of human resource is to obtain the data and
information about the present human
resource inventory.
• Dimensions of human resource inventory are:
• Head count regarding total, department-wise, sex-wise, designation-wise,
skill –wise, payroll-wise etc.
• Job Family Inventory: It includes number and category of employees of
each job family. Eg:- clerks, cashiers, typist, stenos etc.
• Age Inventory: Includes age-wise number and category of employees.
 Supply Forecasting
• Potential loss: Second step of supply
forecasting is estimation of future losses of
human resources. Include voluntary quits,
deaths, retirements, dismissals, layoffs etc.
• Potential Additions: are new hires,
promotions in, transfer in.
 Supply Forecasting
• Analysing Sources of Supply:
• Both internal and external factors should be
analysed.
• Internal factors: training facility, salary levels,
benefits, inter-personal relations etc.
4. Estimating the Net HR Requirement
• Net HR requirements in terms of number and
components are to be determined in relation
to the overall HR requirements for a future
date and supply forecast for that date.
• The difference between overall human
requirements and future supply is to be found
out.
 5. Action Plan for Redeployment,
Redundancy / Retrenchment
• Redeployment Programmes:
• Outplacement: intended to provide career
guidance for displaced employees
• Employment in Sister Organization
• Employment in Other Companies
 Action Plan for Redeployment,
Redundancy / Retrenchment
• Redundancy / Retrenchment Programmes:
• Outplacement
• Layoff: due to slackness in business, machinery breakage,
power failure etc.
• Leave of absence without pay
• Work sharing
• Reduced work hours
• Voluntary retirement
• Compulsory retirement
• Creation of Ad-hoc projects
• Attrition
 6. Forecast Future Supply
• From various resources like
• internal sources,
• comparable organizations,
• educational and training institutes,
employment exchanges,
• labour market
 7. Action Plan
• For:
• Outsourcing
• Recruitment and Selection Plan
• Training and Development Plan
• Productivity Plan
 8.Modify the Organizational Plan
• If the future supply of human sources is
estimated to be inadequate or less than the
requirements, the manpower planner has to
suggest the management to modify the
organizational plan.
 9. Retention Plan
• Adjustment of the salary levels with those of comparable industries.
• Providing opportunities for career development, providing training
facilities, adopting the policy of promotion form within, more
systematic promotional procedure, providing opportunities for self-
development, assignment of challenging work etc.
• Introduction of effective consultation and negotiating machinery,
encouragement of grievance redressing and conflict resolution rather
than suppressing.
• Provide more conducive working conditions and extensive fringe
benefits.
• Provide extensive participation of employee in decision-making.
• Provide the facilities and environment for conducive interpersonal
relations.
• Provide the scope for challenging, creative and innovative work.