Institute of Management Technology

Hyderabad

Subject:
Human Resource Management

Instructor:
Dr. B. Pavan Kumar
 HUMAN
RESOURCE
PLANNING
 Definitions of HR Planning
“…strategy for the acquisition, utilisation, improvement
and preservation of an organisation’s human
resources”
(Department of Employment 1974)
(cited by Bratton and Gold, 2003, p194)
“…the process for identifying an organisation’s current
and future human resource requirements,
developing and implementing plans to meet these
requirements and monitoring their overall
effectiveness”
(Beardwell and Claydon, 2007, p159)
• HRP ensures that the organization has:
– Right Number
– Right Kind
– Right Place
– Right Time
 Importance of human resource planning

 Create a talent pool

 Prepare people for future

 Cope with organizational changes

 Cut costs

 Help succession planning

HR PLANNING (process)
 The HRP Process
All effective HR planning shares certain features. It is generally agreed that HR
planning involves four distinct phases or stages:

Situation
Situation analysis
analysis or
or environmental
environmental scanning
scanning

Forecasting
Forecasting demand
demand for
for human
human resources
resources

Analysis
Analysis of
of the
the supply
supply of
of human
human resources
resources

Development
Development of
of plans
plans for
for action
action
Situation Analysis & Environmental Scanning

 The first stage of HR planning is the point at which HRM and

strategic planning first interact
 The strategic plan must adapt to environmental
circumstances
 HRM is one of the primary mechanisms an organization
can use during the adaptation process
 Without a plan to support recruitment and selection, it is
impossible to stay competitive
 The problems associated with changing environments are
greater today than ever before
 Success now depends on being a “global scanner”
 HUMAN RESOURCE PLANNING
FORECASTING HR REQUIREMENTS (DEMAND ANALYSIS)
(Trying to predict future staffing needs)
Managerial Estimates/Judgement
Delphi/NGT
Zero-based Forecasting
Sales Projections/Trend Analysis
Simulations
Vacancy Analysis (projected turnover)
 CORRELATIONS/PROJECTIONS

SIZE OF HOSPITAL NUMBER OF NURSES

200 240
300 260
400 470
500 500
600 620
700 660
800 820
900 860
 SIMULATION MODEL/REGRESSION FORECAST

TARGET STORES STAFFING FORECAST

MODEL
Y = 8 + .0011(X1) + .00004(X2) + .02(X3)

Y = Number of employees needed to staff the store

X1 = Square feet of sales space
X2 = Population of metropolitan area
X3 = Projected annual sales volume in millions

Y = 8 + .0011(50,000sq ft) + .00004(250,000popul) + .02(Rs. 150 million)

Y = 8 + 55 + 10 + 3

Y = 76 employees needed at this store

 Regression Analysis
1. Statically identify historical predictor of workforce size
Example: FTEs = a + b1 sales + b2 new customers

2. Only use equations with predictors found to be

statistically significant

3. Predict future HR requirements, using equation

Example: (a) FTEs = 7 + .0004 sales + .02 new
customers
(b) Projected sales = Rs.1,000,000
Projected new customers = 300
(c) HR requirements = 7 + 400 + 6 = 413
 VACANCY ANALYSIS
(HISTORIC DEPARTURES)

LEVEL # EMPL TURN % Expected Vacancies Expected to Remain

TOP MGMT 100 20 % 20 80

MID MGMT 200 24 % 48 152

LOW MGMT 600 22 % 132 468

SKILLED W 600 16% 96 504

ASSY WKRS 2000 12 % 240 1760

TOTALS 3500 536 2964

AVERAGE TURNOVER PERCENTAGE = 536 / 3500 = .1531

 HUMAN RESOURCE PLANNING

FORECASTING HR AVAILABILITY (SUPPLY ANALYSIS)

(Predicting worker flows and availabilities)
Skills Inventories (use of HRIS)/HR Allocation Approach
Labor Market Analysis
Succession or Replacement Charts/ Workstudy
Markov Analysis (Transition Matrix)
Personnel Ratios/Ratio Analysis
 SUCCESSION PLANNING
REPLACEMENT CHART
FOR EXECUTIVE POSITIONS

POSITION REPLACEMENT CARDS

FOR EACH INDIVIDUAL POSITION

------------------------------------------------------------------------
POSITION WESTERN ZONE SALES MANAGER

ATUL Mishra Western Zone Sales Mgr Outstanding Ready Now

PRESENT PROMOTION
POSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL

VARUN Borivali Sales Manager Outstanding Ready Now

UMESH Khandala Sales Manager Outstanding Needs Training

SHARON Dadar Sales Manager Satisfactory Needs Training

BALJEET LT Area Sales Manager Satisfactory Questionable

-------------------------------------------------------------------------
 MARKOV ANALYSIS
(STATISTICAL REPLACEMENT ANALYSIS)

TO:  A TRANSITION MATRIX

FROM:
TOP MID LOW SKILLED ASSY EXIT

TOP .80 .02 .18

MID .10 .76 .04 .10

LOW .06 .78 .01 .15

SKILL .01 .84 .15

ASSY .05 .88 .07

------------------------------------------
 MARKOV ANALYSIS – 2
(Captures effects of internal transfers)

(Start = 3500) A TRANSITION MATRIX

FROM/ TO:  TOP MID LOW SKILLED ASSY EXIT
TOP 100 .80 .02 .18

MID 200 .10 .76 .04 .10

LOW 600 .06 .78 .01 .15

SKILL 600 .01 .84 .15

ASSY 2000 .05 .88 .07

---------------------------------------------------------
END YR WITH: 100 190 482 610 1760 [358 left]
NEED RECRUITS ? 0 10 118 240* 368 tot
NEED LAYOFFS ? (10)* (10) tot
KEEP STABLE 100 200 600 600 2000 = 3500 Tot
 MARKOV ANALYSIS – 3
(Anticipates Changes in Employment Levels)

Employment needs are changing. We need a 10% increase in skilled workers

(660), and a 15% decrease in assembly workers (1700) by year’s end.
-------------------------------------------------------
(Start = 3500) A TRANSITION MATRIX
FROM/ TO:  TOP MID LOW SKILLED ASSY EXIT
TOP 100 .80 .02 .18
MID 200 .10 .76 .04 .10
LOW 600 .06 .78 .01 .15
SKILL 600 .01 .84 .15
ASSY 2000 .05 .88 .07
---------------------------------------------------------
END YR WITH: 100 190 482 610 1760 [358 left]
NEED RECRUITS ? 0 10 118 50*
NEED LAYOFFS ? (60)*
NEW LEVELS 100 200 600 660 1700 = 3260 tot
 PERSONNEL RATIOS
Past experience has developed these ratios for recruiting a Cost Accountant:

FOR EVERY 12 APPLICATIONS RECEIVED, ONLY 1 LOOKS PROMISING ENOUGH

TO INVITE FOR AN INTERVIEW

OF EVERY 5 PERSONS INTERVIEWED, ONLY 1 IS ACTUALLY OFFERED A POSITION

IN THE ORGANIZATION

OF EVERY 3 JOB OFFERS MADE, ONLY 2 ACCEPT THE POSITION

OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING PROGRAM, ONLY 9

SUCCESSFULLY COMPLETE THE PROGRAM

THUS: 100 APPLICATIONS MUST BE RECEIVED, so that

8.33 JOB INTERVIEWS CAN BE HELD, so that
1.67 JOB OFFERS CAN BE MADE, and
1.11 PEOPLE MUST BE TRAINED, so that we get
ONE NEW COST ACCOUNTANT!!!
 Action Decisions in HR Planning
 After the supply of and demand for workers has been
analyzed, the two forecasts must be compared
 Whenever there is a gap between the two estimates, a
course of action must be chosen
 If the supply of workers is less than the demand:
 It can be filled with present employees who are willing to
work overtime
 If there is a shortage of skilled employees:
 Train and/or promote present employees
 Recruit skilled employees
 Recall employees who were previously laid off
Staffing Alternatives to Deal with Employee
Surpluses

Source: Compliments of Dan Ward, GTE Corporation

 Staffing Alternatives to Deal with
Employee Shortages

Source: Compliments of Dan Ward, GTE Corporation