HUMAN RESOURCES PLANNING

MCDONALDS: A CASE IN POINT. McDonald's Corporation  is the world's largest

chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries.

 McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people

It serves 64 million customers daily.

McDonald's hires around 1 million workers in the US every year

For the next three years, McDonald's is going to open one restaurant every day in China

McDonald's India now has a network of over 250 restaurants across the country which it sets to double in the coming future.

HR PLANNING WILL HELP :Creating training programs for the staff as

the staff for example in the till need to serve customer fast 1 to 3 customers a minute also they need to have a good customer service.

Build up promotion and career development strategies which will benefit both the staff and the organization

Avoid redundancy as this can affect the other workers they will be de-motivated and it will give a bad image to the organization

Build a flexible workforce to meet up with the changing requirement and environment

Controlling the staff wages and salaries while in the mean times guaranteeing the competitiveness of the salaries

Evaluating future necessities from equipments, knowledge, technology and premises

RECRUITMENT AND SELECTION PROCESS

The recruitment process of McDonalds’ for example crew members consist of two steps application.

1.Online application which consist of filling in the information that the candidate is asked to do online which include personal details, previous work experiences, qualifications, and plus a questionnaire that put the candidate in real life situation for example if the customer complain about something what will be the reaction.

2.Is the candidate have successfully passed the first online step, he or she will be invited to the restaurant for an OJE (On Job Evaluation) and a face to face interview.

With the OJE which only last 15 minutes the manager will give the applicants tasks to do so he or she can see how the candidate perform in real life situation and the manager evaluate the candidate customer service and skills and then he or she reflected against what they are looking for in a candidate.

And then after that the candidate will have an interview with the business manager

MEANING OF HR PLANNING

It is the process of deciding what positions the firm will have to fill and how to fill them.

It covers all the firms future positions

Its an integral part of the firm’s strategic process

“HR Planning is the process by which an organization has the right number and kind of people at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”

5 KEY QUESTIONS IN HR PLANNING

How many employees do we need?

What are we looking for in terms of skills , knowledge , experience , abilities etc.

Where do we need the employees- location, division, department

When do we need the employees ?

How long do we need them for?

FEATURES OF HR PLANNING Forward Looking : it tries to asses the requirements

in advance keeping the prod schedules , market fluctuations , dd forecasts in the background.

In sync with organizational needs: the HR Plan is subject of revision and is tuned to the requirements of an organization from time to time.

Proactive :Internal as well as external changes impacting the organization are assessed proactively from time to time so that HR Plan would fit in with the strategic business objectives.

Get qualified people at the right time: HR Plans are prepared for varying time periods i.e. short term plans covering a time frame of 2 years and long term plans encompassing a period of 5 or more years.

OBJECTIVES Forecast personnel requirements: HR Planning is

essentially to determine the future manpower needs in an organization

Cope with changes: changes in market conditions, technology, products and government regulations require services of people with requisite knowledge and training. In the absence of an HR Plan we may not be able to enlist their services

Use existing manpower productively: it helps decrease wage and salary cost in the long run

Promote employees in a systematic manner

IMPORTANCE

Reservoir of talent

Prepare people for future

Expand or Contract

Cut Costs

Succession Planning

HR Planning ProcessDetermine the objectives of HR

Planning

Preparation of Skill Inventory

Demand Forecasting

Supply Forecasting

Gap Analysis

Action plan

Employment Plan

Training and development Program

OBJECTIVES OF HR PLANNING The ultimate purpose of HR Planning is to relate

future human resources to future enterprise needs so as to maximize the future returns on investment in human resources

The purpose of setting specific quantitative goals is to focus attention on the problem and provide a benchmark for determining the relative success of any program aimed at redressing a pending labor shortage or surplus.

Eg: Goal to increase the no. of sales representative job category in the next 3 years

HR Planning must be integrated with the overall plans of the company.

SKILL INVENTORY

Analysis of current skill inventory may be undertaken

.It helps in designing recruitment and development plans to meet the need of certain skills in the future

The search for talented employees in the organization must be continuous

There must be a detailed record of the manpower inventory available in the organization

It will provide a foundation for individual development and reveal scarcity or non availability of certain talents for which outside sources of manpower may be tapped.

DEMAND FORECASTING

It’s the process of determining the requirements of different kinds of personnel in future.

The basis of HR forecasts should be annual budget and long term corporate goals translated into activity levels for each function and department.

Eg:In a manufacturing Co. the sales budget would be translated into a manufacturing plan giving the no. and types of product to be made in each period.

From this information the no. of manhours required for each period is calculated.

The external factors affecting demand forecasting need to be kept in mind such as : Economic influences, political factors, legal factors, competitive moves etc.

The major determinants of future hr demand are: Employment Trends

Replacement Needs Productivity Changes Absenteeism

Growth and Expansion

FORECASTING TECHNIQUES

1) Managerial Judgment: It requires managers to think about their future work loads and decide how many people they need.

There can be two types of approaches : top down and bottoms up

2) Work Study Technique: can be used when it is possible to apply work measurements to know how long operations should take and the amount of labour required :

Work load analysis : the HR needs to find out sales forecasts , work schedules and thus determine the manpower required per unit of the product.

The departmental workload are converted into man hours in terms of different skills required.

Illustration: Annual Production Budget of a Company: 3,60,000units Standard Manhours required per unit: 2hrs Annual Contribution of a worker : 2000hrs

What is the no. of workers required?

Ans: Planned Manhours for the year: 3,60,000 * 2 = 720000hrs

No. of workers required = 720000/2000 = 360

This figure is subject to change due to factors such as breakdown of machine, strike, lockouts etc.

Workforce Analysis : It involves keeping a sufficient margin for absenteeism and labour turnover and idle time on the basis of past experience

Eg: it may me necessary to keep a margin of 20% of the workforce in that case atleast 432 workers need to be on the company’s payroll to meet the production targets

3) Statistical Techniques :

Trend Analysis : study of a firm’s past employment needs over a period of years to predict future

Ratio Analysis: based on ratio between causal factor

( sales volume) and no. of employees required (no. of sales people)

Eg: Estimated production for next year =1,40,000 units Ratio Trend: 1:200 Estimated no. of workers needed will be = 700

Econometrics Model: Under these models relationship is established between the dependent variable to be predicted (e.g. manpower/human resources) and the independent variables (e.g., sales, total production, work-load, etc.).

Using these models, estimated demand of human resources can be predicted

Regression Analysis : Past levels of various work load indicators, such as sales, production levels, and value added, are examined for statistical relationships with staffing levels. Where sufficiently strong relationships are found, a regression (or multiple regression) model is derived

Statically identify historical predictor of workforce size

Example: FTEs = a + b1 sales + b2 new customers

Predict future HR requirements, using equation

Example:

(a) FTEs = 7 + .0004 sales + .02 new customers

(b) Projected sales = $1,000,000

Projected new customers = 300

(c) HR requirements = 7 + 400 + 6 = 413

Bureks-Smith Model: mathematical model for personnel forecasting based on selected key variables that affect the organisation’s overall HR needs

En = [(Lagg + G) 1/X] Y

Where,En = Estimated human resource demand

n = Planning periodLagg = Overall turnover or aggregate level of business activity in RupeesG = Total growth in business activity during period nX = Average improvement in productivityY = Conversion figure that relates the present overall activity to the human resource needed

4) Delphi Technique

A series of questions is individually asked to a jury of experts about their perceptions of future events.

In this technique, the direct interaction among the members is avoided

It involves the use of questionnaires and the results are fed back to the group members so that they can come to a consensus

This method is however, very time consuming

Leader identifies judgment issues and develops questionnaire.

Prospective participants are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record their judgments and recommendations and return the questionnaire.

Leaders compiles summaries and reproduces participants’ responses.

Leader sends the compiled list of judgment to all participants.

Participants comment on each other’s ideas and propose a final judgment.

Leader looksfor consensus

Leader accepts consensus judgment as group’s choice.

SUPPLY FORECASTING

Its concerned with the estimate of supply of manpower given the analysis of current resources and future availability

There are two sources of supply of human resources : internal and external

Internal supply is of greater importance to hr planning

In order to estimate internal supply of personnel its important to conduct HR Audit and prepare Replacement Charts.

HR Audit : it gives a thorough idea of capabilities and potential of person working in the organisation.

It also points out the type of skills that need to be acquired or developed in future

It leads to the preparation of skill inventories

Replacement Charts: its meant for listing each key position and indicating a time when its likely to be vacated.

It also lists the most likely candidates working in the organization suitable to fill vacancies and also the time they would be ready for promotions.

External supply is important for two reasons : organization's growth and diversification and normal separation of employees through retirement , discharge, death etc

The following techniques may be used to anticipate the supply of human resources:

Markov Analysis

Simulation

Renewal Analysis

Goal Programming

Markov Analysis: uses historical information on the movement of personnel that takes place during a typical plan period .

The historical flows of personnel transitions through the organization are represented by probabilities.

The probabilities are arranged in a transitional matrix

TRANSITIONAL MATRIX

Simulation: it considers alternative flows which are examined for effects on future alternative flows which are examined for effects on future manpower supplies.

Alternative flows reflect the anticipated results of policy or program changes concerning voluntary and involuntary turnover , retirement promotions etc

Renewal Analysis : estimated future flows and supplies of manpower by calculating vacancies created by the organization and results of decision rules governing the filling of vacancies

Goal Programming: its an operational research technique under which the planner tends to optimize the goal

FACTORS AFFECTING SUPPLY OF HR

Local Factors Population density within reach of the company Local Unemployment levels The pattern of immigration and emigration

within the area The attractiveness of the company as a place to

work Local housing and transport facilitiesMacro Factors Government employment regulations Trends in growth of working population Economic Factors etc.

ESTIMATE THE NET HR REQUIREMENTS

The HR Planner must compare demand forecasts with projected internal supply of HR before coming to any conclusion .

It should be carried out department and skill wise to know the deficiencies or surplus.

If surplus is estimated in some jobs / departments a plan for redeployment can be made

ACTION PLAN FOR REDEPLOYMENT OR REDUNDANCY

If surplus cannot be readjusted then company must go for retrenchment.

Options Speed Human Suffering

Downsizing Fast High

Pay Reductions Fast High

Demotions Fast High

Transfers Fast Moderate

Work Sharing Fast Moderate

Retirement Slow Low

Retraining Slow Low

Some of the redundancy/Retrenchment Programs are:

VRS

Job Freeze

Layoffs

Leave of Absence without Pay

Compulsory Retirement

CHALKING OUT EMPLOYMENT PLAN

It involves determining how the organization can obtain the quality and quantity of hr required to meet the objectives as reflected by the personnel forecast

In other words there is a need to prepare programs of recruitment , selection , transfer and promotion so that personnel needs of various departments of the organization are met.

DESIGNING TRAINING PROGRAM

Appropriate development programs should be designed for the present and the would be executives so that the required talents could be developed.

TwinTo is a leasing and mortgaging product development company based out of the US and in its 13th year of operation s decided to come to India and set up its offshore product development centre in Pune

On the day it launched the India operations on 1st June 1999 it had already hired its CEO, HR Head, IT Head, and CFO and the core development team of 15 Java developers and 5 quality control engineers , 1 chief architect , 1 systems administrator and 1 facilities administrator.

Six months from the launch date the team was trained and live on to product development and was doing the development for 5 key product features for the next release of the product.

The US based strategy company was very satisifed with the progress and quality of work done in the Indian Unit .They now want the India unit to move from current 20% development work happening in India to 50% model.

They also want to close the quality assurance centre they have in the UK and move the entire quality control work in India In the next six months time

They have hired your team to build the ramp up plan for the next one and a half year s.

What information will you need? How will you identify the HR requirements for

TwinTo India? What is you proposal for HR Team? What external information will you recommend

to the US Team?