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8/3/2019 56046170 6 Human Resource Planning
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HUMAN RESOURCE
PLANNING
Dr.B.S.Hothi
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• Human resource is an important corporateasset, and the overall performance ofcompanies depends upon the way it is put touse.
• In order to realise company objectives, it isessential to have a human resource plan. Human Resource Planning (also calledemployment or personnel planning) isessentially the process of getting the rightnumber of qualified people into the right job atthe right time so that an organisation can meetits objectives
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• It is a system of matching the supply ofpeople (existing employees and those tobe hired or searched for) with openings
the organisation expects over a given timeframe.
• It tries to assess human resourcerequirements in advance keeping theproduction schedules, market fluctuations,demand forecasts, etc., in the background.
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• The human resource plan is subject torevision, of course, and is tuned to therequirements of an organisation from time
to time.• Human resource plans are prepared for
varying time periods, i.e., short term plans covering a time frame of 2 years and longterm plans encompassing a period of 5 ormore years.
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Objectives
Forecast personnel requirements
HR planning is essential to determine thefuture manpower needs in an organisation.In the absence of such a plan, it would bedifficult to have the services of right kind ofpeople at the right time.
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Cope with changes
HR planning is required to cope with changes in
market conditions, technology, products andgovernment regulations in an effective way.These changes may often require the services ofpeople with the requisite technical knowledge
and training. In the absence of an HR plan, wemay not be in a position to enlist their services intime.
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• Use existing manpower productively:
By keeping an inventory of existing personnel in
an enterprise by skill, level, training, educationalqualifications, work experience, it will bepossible to utilise the existing resources moreusefully in relation to the job requirements. Thisalso helps in decreasing wage and salary costsin the long run.
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Promote employees in a systematic manner
HR planning provides useful information on the
basis of which management decides on thepromotion of eligible personnel in theorganisation. In the absence of an HR plan, itmay be difficult to ensure regular promotions tocompetent people on a justifiable basis.
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• Cut costs
• Succession planning
• The 'stars' can be picked up and kept ready for furtherpromotions whenever they arise. All multinationalcompanies for example, have this policy of having a 'hotlist' of promising candidates prepared in advance e.g.,HLL, Proctor & Gamble, Godrej consumer products etc.Such candidates are rolled over various jobs andassessed and assisted continuously. When the timecomes, such people 'switch hats' quickly and replacetheir respective bosses without any problem.
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The Process of Human ResourcePlanning
1. Forecasting the Demand for HumanResources
a. External challenges:
Economic developments:
• Liberalisation, opening up of bankingsector, capital market reforms, the on-line
trading systems have created hugedemand for finance professionals during1990-1995 in India.
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• The late 90s saw the rise ofmanufacturing, FMCG, Pharmaceutical,Auto-components, Healthcare and
Chemical Industries in a steady manner.
• Consequently, the demand forEngineering and Management graduates,
Scientists and Healthcare professionalshas picked Up in recent times.
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Political, legal, social and technical changes
• enhanced the worth of technicians andengineers during the last couple of years.
• double-edged weapon and hence, its impact on
HR plans is difficult to predict• High technology may compel organisaltions to
go lean and downsize workforce suddenly.
•
Employment planning under such situationsbecomes complicated.
Competition
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b.Organisational decisions
If Britannia Industries Ltd expects higher
demand for biscuits and bread? the long-termHR plan must take this into consideration.Likewise, if it tries to venture into otherlucrative fields such as milk based products
and confectionery items, the demand furpeople possessing requisite skills in thoseareas in the next couple of years should belooked into carefully.
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c. Workforce factors:
•
Demand is modified by retirements,terminations, resignations, deaths andleaves of absence. Past experience,however, makes the rate of occurrence ofthese actions by employees fairlypredictable.
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d. Forecasting techniques
• Expert forecasts:
• Trend analysis:
e. Other methods: Several mathematicalmodels, with the aid of computers are alsoused to forecast HR needs, e.g.,regression, optimisation models, budgetand planning analysis.
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• Workforce analysis:
The average loss of manpower due toleave, retirement, death, transfer,discharge, etc., during the last 5 yearsmay be taken into account. The rate ofabsenteeism and labour turnover shouldalso be taken into account.
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• Work load analysis:
The need for manpower is also determinedon the basis of work-load analysis,wherein the company tries to calculate thenumber of persons required for various jobs with reference to a planned output -
after giving weightage to factors such asabsenteeism, idle time, etc.
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Job analysis
• Job analysis helps in finding out the abilities orskills required to do the jobs efficiently
• Job analysis includes two things: Job description
and job specification. Job description is a factualstatement of the duties and responsibilities of aspecific job.
• Job specification provides information on the
human attributes in terms of education, skills,aptitudes and experience necessary to performa job effectively.
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2. Preparing Manpower Inventory (SupplyForecasting)
• (a) Internal labour supply: A profile ofemployees in terms of age, sex, education,training, experience, job level, past performance
and future potential should be kept ready for usewhenever required.
• Requirements in terms of growth/diversification,internal movement of employees (transfer,
promotions, retirement, etc.) must also beassessed in advance.
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• The possibilities of absenteeism and turnovershould be kept in mind while preparing theworkforce analysis.
•
Through replacement charts or successionplans, the organisation can even find out theapproximate date(s) by which importantpositions may fall vacant.
•
Frequent manpower audits may be carried out tofind out the available talent in terms of skills,performance and potential.
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(b) External labour supply;
• When the organisation grows rapidly,diversifies into newer areas of operations(merchant banking, capital marketoperations, mutual funds, etc. in the caseof a bank) or when it is not able to find the
people internally to fill the vacancies, it hasto look into outside sources.
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• To the extent an organisation is able toanticipate its outside recruitment needs and looks into the possible sources of
supply keeping the market trends in mind,its problem in finding the right personnelwith appropriate skills at the required time
would become easier,
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3. Determining Manpower Gaps
• The existing number of personnel and their skills (from human resource inventory) are comparedwith the forecasted manpower needs (demandforecasting) to determine the quantitative andqualitative gaps in the workforce.
• A reconciliation of demand and supply forecasts will give us the number of people to be recruited or made redundant as the case may be (Table).
• This forms the basis for preparing the HR plan.
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4. Formulating HR Plans
• Recruitment plan
• Redeployment plan
•
Redundancy plan: Will indicate who isredundant, when and where; the plans forretraining, where this is possible; andplans for golden handshake,retrenchment, lay-off, etc.
• Training plan
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• Productivity plan
• Retention plan
•
Control points
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Responsibility for HRP
• The plans are usually prepared by theHuman Resource Division in consultationwith other corporate heads
Limitations
• Accuracy
• Support: Planning is generally undertakento improve overall efficiency.
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• In the name of cost cutting, this may ultimatelyhelp management weed out unwanted labour atvarious levels , few efficient ones that survive such frequent onslaughts complain aboutincreased workload.
• Support from management is equally missing onmore than one occasion. They are unwilling tocommit funds for building an appropriate humanresource information system. The time and effortinvolved - with no tangible, immediate gains -often force them to look the 'other way'.
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• Numbers game:
HRP, in the final analysis, may suffer dueto an excessive focus on the quantitativeaspects. The quality side of the coin(consisting of employee motivation,
morale, career prospects, training avenuesetc.) may be discounted thoroughly.
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Effective Human Resource Planning
• A comprehensive survey of humanresource planning practices in 45companies covering a cross-section of the
manufacturing industry has indicated thescant attention that is being paid to humanresource planning.
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• Human resource specialists have pointed outthe fact that most Indian organisations do nothave adequate records and information on
human resources. • Proper retrieval systems also are not available in
most cases.
• The computerised personnel informationsystems unlike their counterparts in the Westernworld, do not play an important role in India..
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• To compound the problem further, there areunpredictable external influences on manpowerplanning such as changes in labour market
conditions, technology, market conditions,economic cycles, changes in social andeconomic values, political changes, etc.
• In such a scenario, it becomes difficult to
forecast the personnel available with anorganisation at a future date.
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• While vacancies caused by retirements can bepredicted accurately, other factors likeresignations, turnover, deaths, and competitiveattractions are difficult to forecast.
• This problem becomes mainly acute in respectof important personnel (especially at the middleand top level) because their replacementscannot be arranged in a short span of time.
• At times, top management support may not beavailable to the HR planning efforts