planning hr

7/29/2019 Planning HR

1/24

HUMAN RESOURCE PLANNING

Introduction

Steps in HR planning

Forecasting

Manpower wastage i.e., Surplus and shortage and its impact on HRP

Benchmarking

HR Business Pefrormance

Downsizing


2/24

Meaning and definition of HRP

HRP may be viewed as foreseeing the human resourcerequirements of an organization and the future supplyof human resources

HRP is a process by which an organization should movefrom its current manpower position to its desiredmanpower position

Through HR planning the management strives to have

the right number and right kind of people at the rightplaces at the right time

HRP does things which result in both the organizationand the individual receiving maximum long-run benefit


3/24

Need for HRP

Every organization has to plan for human resources due to:

The shortage of certain categories of employees and/or variety of skills despite theproblem of unemployment

The rapid changes in technology, marketing, management etc., and theconsequent need for new skills and new categories of employees

The changes in organization design and structure affecting manpower demand The demographic changes like profile of the workforce in terms of age, sex,

education etc.

The Government policies in respect to reservation, child labour, working conditionsetc.

The labour laws affecting the demand for and supply of labour

Pressure from trade unions, politicians, sons of the soil etc. Introduction of computers, robots etc.

The involvement of lead time in manning the job with most suitable candidate


4/24

Benefits of HRP

It checks the corporate plan of the organization

It offsets uncertainty and change

It provides scope for advancement and

development of employees through training ,development

It helps to anticipate the cost of salaryenhancement, better benefits etc.

It facilitates the control of all functions,operations, contribution and cost of humanresources


5/24

Factors Affecting HRP

EXTERNAL FACTORS

Government policies

Level of Economic Development

Business Environment

Level of Technology

Natural Factors International Factors

INTERNAL FACTORS

Policies and Strategies of the company

Human Resource policy of the company

Formal and Informal Groups Job Analysis

Time Horizons

Companys production policy

Trade Unions


6/24

Steps/Process of HRP

Process of HRP consists of the following steps:

Analyzing organizational plan

Demand Forecasting

Supply Forecasting

Estimating the net human resource requirements In case of future surplus, plan for redeployment, retrenchment and

lay-off

In case of future deficit, forecast the future supply of humanresources from all sources with reference to plans of othercompanies

Plan for recruitment, development and internal mobility if futuresupply is more than or equal to net human requirements

Plan to modify or adjust the organizational plan if future supply willbe inadequate with reference to future requirements


7/24

HUMAN RESOURCE FORECASTING

Forecasting

The use of information from the past and

present to identify expected future conditions.

Forecasting Methods

Managerial Judgment

Estimatesasking managers opinions, top-down or

bottom-up Rules of thumbusing general guidelines

Delphi techniqueasking a group of experts

Nominal groupsreaching a group consensus in

open discussion


8/24

Forecasting contd.,

Forecasting Methods (contd)

Statistical /Mathematical

Statistical regression analysis

Simulation models

Ratio Trend Analysis

Econometric Models

Forecasting Periods Short-termless than one year

Intermediateup to five years

Long-rangemore than five years


9/24

Forecasting HR Supply and Demand

Forecasting the Demand for Human Resources

Organization-wide estimate for total demand

Unit breakdown for specific skill needs by number

and type of employee Develop decision rules (fill rates) for positions to be

filled internally and externally.

Develop additional decision rules for positions impacted

by the chain effects of internal promotions and transfers.

Forecasting the Supply for Human Resources

External Supply

Internal Supply


10/24


Contd., Forecasting External HR Supply

Factors affecting external

Net migration for an area

Individuals entering and leaving the workforce

Individuals graduating from schools and colleges

Changing workforce composition

Economic forecasts

Technological developments and shifts

Actions of competing employers

Government regulations and pressures

Other factors affecting the workforce


11/24


Contd., Forecasting Internal HR Supply

Effects of promotions, lateral moves, andterminations

Succession analysis

Replacement charts

Transition matrix (Markov matrix)

Exit Manager Supervisor Line Worker

Manager .15 .85 .00 .00.

Supervisor .10 .15 .70 .05

Line Worker .20 .00 .15 .65


12/24

HR Performance and Benchmarking

Benchmarking Comparing specific measures of performance

against data on those measures in other bestpractice organizations

Common Benchmarks

Total compensation as a percentage of netincome before taxes

Percent of management positions filledinternally

Dollar/Rupee sales per employee

Benefits as a percentage of payroll cost


13/24

Doing the Benchmark Analysis Contd.,

Return on Investment (ROI) Calculation showing the value of expenditures for

HR activities.

BA

CROI

A = Operating costs for a new or enhanced system for the time period

B = One-time cost of acquisition and implementation

C = Value of gains from productivity improvements for the time period


14/24

Doing the Benchmark Analysis Contd.,

Economic Value Added (EVA)

A firms net operating profit after the cost of

capital (minimum rate of return demanded by

the shareholders) is deducted. Cost of capital is the benchmark for returns for

all HR activities.

Utility analysis

Analysis in which economic or other statistical

models are built to identify the costs and

benefits associated with specific HR activities


15/24

Diagnostic Measures of HR Effectiveness

HR expense per employee

Compensation as a percent of expenses

HR department expense as a percent of totalexpenses

Cost of hires

Turnover rates Absenteeism rates

Workers compensation per employee

Assessing HR Effectiveness


16/24

HR Audit A formal research effort that evaluates the current

state of HR management in an organization

Audit areas:

Legal compliance

Current job specifications and descriptions

Valid recruiting and selection process

Formal wage and salary system Benefits

Employee handbook Absenteeism and turnover control

Grievance resolution process

Orientation program Training and development

Performance management system

Assessing HR Effectiveness Contd.,


17/24

HR Business Performance Calculations


18/24

HR Business Performance Calculations

Contd.,


19/24

Workforce Realignment

Downsizing, Rightsizing, and Reduction in

Force (RIF) all mean reducing the number of

employees in an organization.

Causes

Economicweak product demand, loss of market

share to competitors

Structuraltechnological change, mergers and

acquisitions

Managing Human Resource

Surplus or Shortage


20/24

Workforce Realignment (contd) Positive consequences

Increase competitiveness

Increased productivity

Negative consequences

Cannibalization of HR resources

Loss of specialized skills and experience

Loss of growth and innovation skills

Managing survivors

Provide explanations for actions and the future

Involve survivors in transition/regrouping activities


Surplus or Shortage Contd.,


21/24

Downsizing approaches Attrition and hiring freezes

Not replacing departing employees and not hiring newemployees

Early retirement buyouts

Offering incentives that encourage senior employees toleave the organization early.

Layoffs

Employees are placed on unpaid leave until called backto work when business conditions improve.

Employees are selected for layoff on the basis of theirseniority or performance or a combination of both.




22/24

Downsizing approaches (contd)

Outplacement services provided to displacedemployees to give them support and

assistance: Personal career counseling

Resume preparation and typing services

Interviewing workshops

Referral assistance Severance payments

Continuance of medical benefits

Job retraining




23/24

Investigate alternatives to downsizing

Involve those people necessary for success in the planning

for downsizing Develop comprehensive communications plans

Nurture the survivors

Outplacement pays off

Dealing with Downsizing


24/24

THANK YOU

planning hr

Documents