Unit 1 hrp

21 de Jul de 2016

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Unit 1 hrp

  1. Prepared by M. Umrez & N. Ramanjaneyulu Page 1 UNIT –I INTRODUCTION Macro and micro level manpower planning, significance, process, factors influencing. INTRODUCTION: The success of an organization largely depends upon the quantity and quality of Human Resources that it is able to attract & retain. Human resources are one of the most vital assets of an organization. It is the people who make other resources moving. The placement of right kind of people in right numbers, at the right place and right time is the basic function of Human Resources management. Human Resource Planning (H RP) is a step in Human Resource Management. The process of identifying how many people to select, at what job and at what time is called Human Resource planning. Human Resource Planning is to get the right number of employees with the right skills, experience, and competencies in the right jobs at the right time and at the minimum cost. This Human Resource part of an organization ensures that the business production requirements are met in an efficient and effective manner. Having too many employees is challenging due to the risk of high labour expenses, downsizing, or layoffs. Having too few employees is also difficult due to high overtime costs, the risk of unmet production requirements. Human Resource Planning is also called as Manpower planning. DEFINITIONS OF HUMAN RESOURCE PLANNING According to Beach: “Human Resource Planning is the process of determining & assuming that the organization will have an adequate number of qualified persons available at the proper lines, performing jobs which meet the needs of the enterprise & which provide satisfaction for the individuals involved. According to Stainer: “Human Resource Planning is the strategy for the acquisition movement & preservation of an organiation’s Human Resource. Coleman defines Human Resource Planning as ―the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization. E.W. Vetter has visualized resources planning as "a process
  2. Prepared by M. Umrez & N. Ramanjaneyulu Page 2 by which an organisation should move from its current manpower position to its desired manpower position. Through planning, management strive to have the right number and right kind of people at the right places, at the right time, doing things which result in both the organization and the individuals receiving maximum long- run benefit." OBJECTIVES OF HUMAN RESOURCE PLANNING The following are the major objectives of Human Resource Planning in an organization are as follows: (i) To recruit and maintain the HR of required quantity and quality. (ii) To predict the employee turnover and make the arrangements for minimizing turnover and filling up of consequent vacancies. (iii) To meet the requirements of the programmes of expansion, diversification etc. (iv) To anticipate the impact of technology on work, existing employees and future human resources requirements. (v) To ensure optimum use of Human Resources currently employed; (vi) To avoid imbalances in the distribution and allocation of Human Resources; (vii) To provide control measure to ensure availability of necessary resources when required; (viii) To control the cost aspect of Human Resources; (ix) To formulate transfer and promotion policies. (x) To estimate the cost of HR. Therefore, the basic idea of the function of Human Resource Planning is to coordinate the requirements for & the availability of different types of employees. ACTIVITIES OF HRP: It consists of a series of activities, listed as following ways. 1. Forecasting future manpower requirements: Forecasting future manpower requirement is the first function of Manpower planning. Future forecasting is based on future requirement of people in the organization. 2. Preparing an inventory of present manpower: The next important task in Human Resource Management is to prepare an inventory of present Human Resources. Such inventory contains data about each employee’s skills, abilities, work preferences and other items of information. 3. Anticipating manpower resources: This can done by projecting present resources into the future and comparing the same with the forecast of manpower requirements.
  3. Prepared by M. Umrez & N. Ramanjaneyulu Page 3 This helps to determine the quantitative and qualitative adequacy of manpower in future. 4. Meeting Manpower requirements: This can be achieved through planning, Recruitment and selection, training & development, introduction and placement Promotion and transfer, motivation and compensation to ensure that future manpower requirements are correctly met. Human Resource P is the process of forecasting an organization’s future demand for and supply of the right type of people in the right number. It is only after this that the Human Resource Management department can initiate a recruitment and selection process. In simple, Human Resource Planning is a sub-system in the total Organizational planning. SIGNIFICANCE OF HUMAN RESOURCE PLANNING Human Resource Planning is considered as the way by which management can overcome problems relating to Human Resource by identifying the future requirements of Human Resource of an organization and the estimates of Human Resource supply. Organization can ensure the smooth functioning through placing the right individual at the right time at the right job. Human Resource Planning is important as it helps to determine future personal needs. Surplus or deficiency in manpower strength is the result of the absence of an effective planning mechanism working in an organization. The following are the significances of Human Resource Management: i. Forecast future personnel needs: To avoid the situations of surplus or deficiency of manpower in future, it is important to plan manpower in advance. For this purpose a proper forecasting of future business needs helps to ascertain future manpower needs. Thus, HRP plays an important role to predict the right size of manpower in the organization. ii. Recruitment Of Talented Personnel Another purpose of HR planning is to recruit and select the most capable personnel to fill job vacancies. It determines human resource needs, assesses the available HR inventory level and finally recruits the personnel needed to perform the job. iii. Coping with Change Human Resource Planning enables an enterprise to cope with changes in competitive Human Resource market place, technology and government regulations. Such Changes generate changes in job content, skill demands and number and type of personnel. iv. Providing base for developing talents Jobs are becoming highly intellectual all over the world and individuals are getting vastly professionalized. The Human Resource manager must use skill to attract and retain qualified
  4. Prepared by M. Umrez & N. Ramanjaneyulu Page 4 personnel within the organization. v. Protection of weaker section of society In employment sector sufficient representation need to be given to SC/ST candidates, physically handicap and backward class citizen. A well conceived personnel planning Programme would protect the interests of such groups. vi. Proper Utilization Of Human Resources Human resource planning measures that the organization acquires and utilizes the manpower effectively to achieve objectives. Human resource planning helps in assessing and recruiting skilled human resource. It focuses on the optimum utilization of human resource to minimize the overall cost of production. vii. To Meet expansion and diversification needs of the organization: Through the HRP the managers ensure that they have right number and right kind of employees available for the organization expansion, diversification and modernization viii. Fulfill individual needs of the employees: It helps the individual employees to satisfy their needs like promotions, transfer, salary encashment, better benefits etc. ix. Helps to formulate the budget: It supports the HR to estimate the cost of human resources like salary, and other benefits for various departments of an organization. x. To check joblessness: In the process of right-sizing of employees by the organization, some of the employees may become surplus. It tries to foresee the need for redundancy. It plans to check job loss or to provide for alternative employment in consultation with various concerned parties and authorities. xi. Resistance to change There is chance of increasing resistance among employees to change. There is also a growing emphasis on self – evolution of loyalty and dedication to the Organisation. A sound Human Resource management can predict the possible resistance from employees and to develop suitable strategies for Human Resource development. CHARACTERISTICS OF HRP: i. Future Oriented Human resource planning is prepared to assess the future requirement of manpower in the organization. It helps identify the size and composition of resources for future purpose. ii. Continuous Process
  5. Prepared by M. Umrez & N. Ramanjaneyulu Page 5 Human resource planning is a continuous process. The human resource planning prepared today may not be applicable for future due to ever changing external forces of the environment. Hence, to address such changing factors, the human resource planning needs to be revised and updated continuously. iii. Optimum Utilization Of Human Resources Human resource planning focuses on optimum utilization of resources in the organization. It checks how the employees are utilized in a productive manner. iv. Right Kinds And Numbers Human resource planning determines the right number and kind of people at the right time and right place who are capable of performing the required jobs. It also assesses the future requirement of manpower for organizational objective. v. Determination Of Demand And Supply Human resource planning is a process of determining demand for and supply of human resources in the organization. Then a match between demand and supply estimates the optimum level of manpower. vi. Environmental Influence Human resource planning is influenced by environmental changes, hence, it is to be updated as per the change occupied in the external environment. vii. A Part Of Human Resource Management System As a part of total human resource management system, human resource planning is regarded as a component or element of HRM which is concerned with acquisition anD assessment of manpower. It serves as a foundation for the management of human resource in an effective and efficient manner. LEVELS OF HRP: Human Resource planning is required at different levels. Such as:  National level  Sectoral level  Industry level  Unit level  Department level.  Job level National Level: It anticipates the demand and supply of human resources at national level, generally done by central government. Sectoral level: Central and state governments also plan human resource requirements at sectoral level. It tries to satisfy needs of
  6. Prepared by M. Umrez & N. Ramanjaneyulu Page 6 different sectors like agriculture sector, Industrial sector and service sector. Industry Level: This level of planning is done to suit manpower needs of a particular industry such as Engineering, Heavy Industries, paper industry, consumer goods industries, public utility industries, cement industry, chemical industry etc. Unit Level: It estimates the need of human resources of an organization or company. Departmental Level: It represents the needs of a particular department in a company. Ex: production department, marketing department, Finance department, HR department etc. Job Level: This level of planning fulfills the human resource needs of a particular job family within department. For example, the requirements of number of HRs in the HR department. These levels can be broadly classified into two levels. Macro and micro level MICRO LEVEL MANPOWER PLANNING: It is the process of manpower planning at the organization or department level i.e, at unit level. Develops and implements the tactics needed to help the organization achieve its strategic objectives. Micro HRP tactics ensure that the business has the appropriate number of employees with the appropriate mix of knowledge, skills and abilities in the proper areas or departments. Stages in Micro level HRP: i. Investigation stage ii. Forecasting stage iii. Planning and control of Manpower iv. Utilization i. Investigation: It is the primary stage of HRP in any organization try to develop their awareness about the detailed manpower scenario with a holistic view looking at their current manpower. In investigation SWOT analysis plays a very important role. ii. Forecasting: The next process is forecasting based on manpower analysis of demand and supply. In forecasting Internal and External factors include – In Internal factors is career planning, development, training and succession plan, policies procedure etc. In external factor – Political, Technical, Economic, Social etc. Forecasting means what is to be done. iii. Planning and Control of Manpower: Third stage is very important. HRP related issues like recruitment, training and development. While going for recruitment it is necessary to understand the job description, which proceed job analysis & job
  7. Prepared by M. Umrez & N. Ramanjaneyulu Page 7 role under planning important in skills, knowledge etc. under controlling include Important judgment technique – Delphi, Nominal etc. iv. Utilization: HRP process success is measured in terms of achievement trend, both quantitatively and qualitatively. While quantitative achievement is visible from productivity trend, manpower cost etc. Qualitative achievement is a subjective appraisal on achievement of organizational objectives. MACRO LEVEL MANPOWER PLANNING: It is a manpower planning conducted at the aggregate level like national or state level. Manpower planning at this level is influenced by various uncontrollable factors like demographical changes, legal, political, economical etc. Macro manpower planning is required for the economical development of a country for a long term. Need for HRP at Macro Level: i. Employment-Unemployment Situation: In the present economy the number of educated unemployed is increasing and on the other hand there are acute shortages for a variety of required skills. Therefore an intensive macro level manpower planning can help in this direction in order to bridge the gap between employments –unemployment Scenario. ii. Technological Changes: The rate of change of technologies in production, marketing methods and management techniques has been extensive and rapid in outside world. In order to adopt the change of technology in accordance with global trend, necessitate high degree of extensive Macro level Manpower Planning. iii. Organizational Changes: The turbulent business environment affected by global economic cycle and discontinuities, the nature and pace of changes in organizational environment in terms of its activities and structures affect manpower requirements that require strategic considerations at Macro level. iv. Demographic Changes: The changing profile of the work forces in the economy, in terms of age, sex, literacy level, technical competency and social background have implications for macro level HRP. v. Skill Shortages: There are acute skill shortages in labour market. Unemployment does not mean that the labour market is a buyer’s market. Organizations have generally become more complex and require a wide range of specialist skills that are rare and scarce. These skill gaps can be bridged by proper Macro level Manpower Planning.
  8. Prepared by M. Umrez & N. Ramanjaneyulu Page 8 vi. Government legislation: Macro level manpower planning must go hand in hand in a very systematic way in accordance with Government control and changes in legislation. vii. Lead Time: The long lead time is the gestation period required to provide education and training and deployment of the employees to handle new knowledge and skills successfully can be avoided by Macro level Manpower Planning. The development at this level will takes place through population planning and control, literacy and education, health and medical care and housing etc., A. Population planning and control: To enforce control over population explosion to avert economic imbalances, population planning and control measures have been initiated at macro level. Unless such control is enforced in a planned manner, no amount of institutional support can sustain this resulting in generation of unproductive population which will remain a drain on the national resource. Ex: Government of India has adopted National Population Policy (2000) to stabilize population. B. Literacy and education: The development of human resources will takes place when the illiteracy rate is reduced and the all the individuals should have minimum education. This level of education can be possible with the support of public and private sectors. This can be achieved by right direction i.e, from focusing from primary education (standard V) to secondary education, higher education and university level, technological, vocational education, adult education. The educational development of human resources reflects the development at aggregate level. Ex: Government of India adopted the National policy of education, 1986. C. Health and medical care: The quality of work life of individuals of a society depends on health and medical facilities. The individuals at macro level should get the health related activities such as water supply, sanitation etc. The provision of medical facilities should be increased to avoid the dangerous diseases like malaria, leprosy, blindness, AIDS, cancer etc. D. Housing: The infrastructure of a society will shows the development of human resources. The basic objective of this is to provide sustainable development to the human resources with public and private participation.
  9. Prepared by M. Umrez & N. Ramanjaneyulu Page 9 Ex: Government of India adopted National Housing and Habitat Policy, 1998, Housing and Urban Development Corporation (HUDCO) . Jawahar Gram Samridhi Yojana(JGSY), Nehru Rozgar Yojana (NRY), Prime Minister’s Rozgar Yojana etc. FACTORS INFLUENCING HRP: i. Type and strategy of organization: Based on the type of organization and its strategies the HR planner will decide the take the decision regarding the type of manpower required, timing to conduct HRP, decision about the number of employees etc. Strategy Decision Manufacturing unit complex manpower service oriented unit customer supportive Internal growth Additional employees required External growth Layoff (M& A) Proactive Advance planning Reactive Emergency placement ii. Organizational growth cycles and planning: The effectiveness of manpower planning and its associate decisions will be influenced by the stage of organization. Stage HRP decision Introduction No need to have effective plan Growth More manpower required Maturity Retirements, retrenchment Decline layoffs, VRS, Retirements, retrenchment iii. Environmental uncertainties: Uncertainties due to political, economical, social, cultural , technological factors etc., HR planner can reduces these uncertainties through recruitment, selection, training and development, layoffs, retirement, VRS, succession planning iv. Time Horizons: Manpower planning can be done for different time periods. i.e, short run and long run. HR planner makes short run (6 months or 1 yr) planning when there are more uncertainties in a business. Such as  Many new competitors enter into the market  Rapid changes in social and economical conditions  Changes in demand for the goods/services  Small organizations, poor management Manpower planning can also be made for a long period of time(3-25 yrs) when the business is stable and it has
  10. Prepared by M. Umrez & N. Ramanjaneyulu Page 10  Strong competitive position  Evolutionary social, political and technological changes  Stable demand  Strong management practices v. Type and quality of information: Hr planner collects the information from various sources to know the uncertainties and to forecast the need of manpower according to that. The quality and accurate data gives clarity to the decision maker to understand the strategy (uncertainty) and helps to prepare plans. For example, vacancy for a position by the retirement of an employee. The HR should predict it in advance. The HR may collect this information from the employee records, HRIS, other employees. The information from the other employees may not be reliable always. Thus, the HR should select a reliable source to get the information about internal organization and external market. vi. Nature of job: A job vacancy in different levels of an organization may arises because of promotion, demotion, transfer, separation of an employee. Depending upon the level and nature of the job the planner puts his efforts. If the job is in the higher level then the HR planner should anticipate it in advance and for lower level no need to have any type of planning about the manpower and vacancies. vii. Outsourcing: Outsourcing is process by which an organization will assign or involve a third party to perform some of their business operations. The need of manpower planning depends upon the extend to which the organization outsourcing its operations. PROCESS OF HUMAN RESOURCE PLANNING The following are the major steps involved in Human Resource Planning. 1. Analysis of Organizational Plans and Objectives Human Resource planning is a part of overall plan of a business organisation. Plans relating to technology, production, marketing, finance, expansion and diversification give an idea about the volume of future work activity. Each plan can further be analyzed into sub- plans and detailed programmes. It is also important to decide the time horizon for which Human Resource plans are to be prepared. The future organization structure and job design should be made clear and changes in the organization structure should be examined so as to anticipate its Human Resource requirements in future. 2. Forecasting Demand for Human Resources Demand analysis identifies the future human resource requirements
  11. Prepared by M. Umrez & N. Ramanjaneyulu Page 11 needed to maintain the organization’s mission and goals. The end result of a demand analysis is the identification of the required number of employees in an organization and the necessary functions that the employee must perform to meet organizational objectives. Due to the high number of factors that influence demand, demand is often more difficult to predict than supply. HR demand forecasting techniques: i. Managerial Judgment ii. Ratio Trend Analysis iii. Work load analysis iv. Econometric Models v. Delphi technique i. Managerial Judgment: Managerial judgment technique is very common technique of demand forecasting. This approach is applied by small as well as large scale organisations. This technique involves two types of approaches i.e. 'bottom-up approach' and 'top-down approach'. Bottom-up approach, line mangers send their departmental requirement of human resources to top management. Top management ultimately forecasts the human resource requirement for the overall organisation on the basis of proposals of departmental heads. Top-down approach, top management forecasts the human resource requirement for the entire organisation and various departments. This information is supplied to various departmental heads for their review and approval. However, a combination of both the approaches i.e. 'Participative Approach' should be applied for demand forecasting. Under this approach, top management and departmental heads meet and decide about the future human resource requirement. So, demand of human resources can be forecasted with unanimity under this approach. ii. Ratio Trends Analysis: Under this method the ratios are calculated for the past data related to number of employees of each category i.e. production, sales and marketing levels, work load levels. Future production and sales levels, work load, activity levels are estimated with an allowance of changes in organization, methods and jobs. The future ratios are estimated. Then future human resources requirement is calculated on the basis of established ratios. This method is easy to understand. iii. Workload analysis: Under this method the staff workload and the continuity of operations are determined. Accordingly the labour requirement is determined. The workload becomes the base for workforce analysis for the forthcoming years. Here due consideration is given to
  12. Prepared by M. Umrez & N. Ramanjaneyulu Page 12 absenteeism and labour turnover. This method is also known as work study technique. Here working capacity of each employee is calculated in terms of man-hours. Man-hours required for each unit is calculated and then number of required employees is calculated. The example is given below: Planned annual production = 2, 00,000 units Standard man-hours required for each unit = 2 Hours Planned man-hour needed for the year (a x b) = 4, 00,000 hrs. Planned annual contribution of an employee = 2000 hrs. No. of employees required ————- (c/d) = 4, 00,000/2000 = 200 This method is useful for long term forecasting. iv. Econometric Models: Econometric models are built on the basis of analysis of past statistical data establishing the relationship between variables in a mathematical formula. The variables are those factors such as production, sales, finance and other activities affecting human resource requirement. Econometric model is used to forecast human resource requirements based on various variables. v. Delphi Technique: Delphi technique is also very important technique used for estimating demand of human resources. This technique takes into consideration human resources requirements given by a group of experts i.e. mangers. The human resource experts collect the manpower needs, summarises the various responses and prepare a report. This process is continued until all experts agree on estimated human resources requirement. Factors influencing demand forecasting:  Environmental scanning, including economic, legislative, and competitive pressures.  The organization’s future strategic goals and plans  Expected demand for products or services, including expected sales (across the organization or at the business unit level)  Estimated productivity measures of workforce (can be stable, increase, or decrease)  Organizational design or job design, including technological advancements and administrative changes  Projected budgets or financial resource availability  New products/processes/ventures that the organization will be launching in the future. 3. Forecasting Supply of Human Resources: By reviewing the data in the Human Resource audits, projections can be made for future Human Resource supply. The internal labor force may be affected by temporary absences such as leaves,
  13. Prepared by M. Umrez & N. Ramanjaneyulu Page 13 permanent absences or turnover etc.  Trend Analysis Trend analysis is considered one of the simplest methods of forecasting future Human Resource supply. It assumes that past trends and ratios in employee movement are stable and indicative of future trends and ratios in employee movement. The information collected in the Human Resource audit is used to identify labor patterns—hiring patterns, retirement patterns, productivity patterns, and turnover patterns. By examining the trends of the past, the Human Resource 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.  Skills/Competency Models Competency models focus on matching the right skills or competencies needed for each job with the skills available within the organization. The competency models focus on identifying the skills/competency supply within the organization, and helping focus future recruitment, selection, retention, and training activity in core areas of key competencies needed for the organization to succeed. A competency is a set of behaviours that encompass skills, knowledge, abilities, and personal attributes, that taken together, are critical to successful work accomplishment. The competency model is 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 those competencies.  Replacement Charts A replacement chart is used to estimate vacancies in higher level jobs and identify how potential Human Resource supply can fill these vacancies via internal movements from lower levels jobs. 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.  Staffing Tables A staffing table provides a clear graphical view of all organizational jobs and the current number of employees at each job. It presents a simple visual understanding of an organization’s staffing level within each department and the organization as a whole, in an effort to help understand the combination of employees that make up an organization’s internal workforce. This information is useful in evaluating staffing levels by department, branch, the
  14. Prepared by M. Umrez & N. Ramanjaneyulu Page 14 types of staff at each level and the combination of staff in all categories. 4. Estimating Manpower Gaps Net Human Resource requirements gaps can be identified by comparing demand and supply forecasts. 5. Matching Demand and Supply It is one of the objectives of Human Resource planning to assess the demand for and supply of Human Resources and match both to know shortages and surpluses on both the side in kind and in number. This will enable the Human Resource department to know overstaffing or understaffing. Once the manpower gaps are identified, plans are prepared to bridge these gaps. Plans to meet the surplus manpower may be redeployment in other departments and retrenchment in consultation, with the trade unions. People may be persuaded to quit voluntarily retirement. Deficit can be met through Human Resource planning ,recruitment, selection, transfer, promotion, and training plans. Realistic plans for the procurement and development of manpower should be made after considering the macro and micro environment which affect the manpower objectives of the organization.