Human Resource Planning

Human Resource Planning

Meaning, objectives and significance; Steps in manpower planning; Quantitative and qualitative aspects of manpower planning; Recruitment, interviewing, selection, induction and placement.


Meaning of Human Resource Planning

HRP is the process of analyzing an organisation’s need for employees and evaluating how this can be met from the internal and external labour markets. It should be an on going process of monitoring that helps identify the need to attract, allocate, develop, and retain human resources to meet the wider business objective of the organization. It encourages managers in organizations to plan ahead. Good quality HRP will involve analyzing data of existing employees (demographics, competencies, training, etc.) in order to assess the overall balance of the existing resources and to predict possible future issues such as skill shortages, promotion opportunities, and retirement patterns

Human Resource Planning is the process including forecasting, developing, and controlling by which a firm ensures that it has the right number of people and the right kind of people, at the right places at the right time, doing work for which they are economically most useful.
-Geister (1967)

HRP can be described as a series of activities, consisting of the following:
1. Forecasting future work force requirements, either in terms of mathematical projections of economic trends and industrial development or through judgmental estimates based upon specific future plans of the company
2. Making an inventory o the existing manpower resources, and analyzing the degree to which these resources are employed.
3. Anticipating work force problems, by projecting present resources into the future and comparing them with the forecast requirements, to determine their adequacy, both quantitatively and qualitatively
4. Planning the necessary programmes of recruitment, selection, training, deployment, utilization, transfer, promotion, development, motivation, and compensation so that future work force requirements will be met.


Objectives and Significance of Human Resource Planning

Based on a survey of 28 companies in the manufacturing sector, Krishnaswamy (1985) identified the following four objectives of HRP
1. Searching for and recruiting highly skilled and specially qualified employees
2. Getting the best employees and assigning him/her to the right work, so that efficiency and production can be maximized.
3. Anticipating the changed requirements of personnel, and be prepared for it organizationally.
4. A forward looking activity plan that will help the in management identifying organizational needs, in developing people, and in providing them growth opportunities.

One of the fundamental objectives of a human resource plan, for a manager, is its utility as a planning and control technique. A human resource plan, because it is systematically done, enables a manager to predict his human resource requirements and control the number of people deployed; as a result of which, with more precise matching of work force needs to a firm’s business plans, wages and salary costs can be controlled.

Qualitative Aspect of Manpower Planning
Qualitative aspect of MPP includes the following
Business Plan
Workload analysis
Job Analysis
Job Description
Job Specification

Business Plan
A business plan refers to the objectives of the organization. This objective, stated in economic terms, would incorporate the growth rate of the company, diversification plans, and market opportunities.
In making a projection of work force requirements, selecting the right predictor is important. According to Wikstrom (1971), to be useful, the predictor should meet two requirements:
It should be directly related to the essential nature of the business so that the business planning is done terms of terms of this factor.
the changes in the selected factor should be proportional to changes in the work force required in the business.

Workload analysis
Workload analysis helps a human resource planner to get an estimate of the number of employees needed, and the nature and extent of work to be done by them.
Workload analysis is done separately for the blue-collared workers and the white-collared employees.


For blue collared workers:
Since the blue-collared workers use machine paced jobs, it is possible to arrive at precise figures for the time taken in producing a given number of units. The general method is adopted to begin with, by establishing standard conditions under which the job will be performed. Then the job is broken down into its several elements, and the time taken to perform each element is noted. The total time taken for the completion of all the elements in a cycle is computed, so that an overall timing for each cycle of operation is arrived at. These are known as standard times. Another variation is to study the actual situational aspect, by observing the workers perform their jobs, and the timing them with stop watch.

For white- collared employees:
Formulating workload norms for white-collar employees, where the jobs are not machine-paced or not so precise and repetitive, poses some problems. Various techniques like workload measurement, time budgeting studies, and work sampling have been used. All these require either detailed or random studies at fixed time intervals to understand the activities in which an employee spends his time, or in other words, what are the various tasks done by him. Either by direct observations or written records maintained by an employee, it is possible to find out what he is doing. Analysing this data can indicate where efficiency could be brought about for better utilization, and a personnel requirements estimates can be made.

Job Analysis
Job analysis is a process by which data, with regard to each job, is systematically observed and noted. It provides information about the nature of the job and the characteristics or qualifications that are desirable in the job holder. The data from job analysis could be used for a variety of purposes. The job analysis study attempts to provide information in seven basic areas;
Job identification or its title, including the code number if any.
Distinctive or significant characteristics of the job, its location, setting, supervision, union jurisdiction, and hazards and discomforts if any.
What the typical worker does. Specific operations and tasks that make up the assignment, and their relative timing and importance; the simplicity, routine, or complexity of tasks, responsibility for others, for property, or for funds.
What materials and equipment the worker uses. Metals, plastics, grain, yarns, lathes, milling machines, electronic ignition testers, corn huskers, punch presses, and micrometers are illustrative.
How the job is performed. The emphasis here is on the nature of the operations, and may specify such operations as handling, feeding, removing, drilling, driving, setting up, and many more.
Required personnel attributes. Experience, training apprenticeship, physical strength, coordination, physical demands, mental capabilities, aptitude, and social skills are some attributes.

Job Description
Job description refers to the job contents and the expectations tha an organization has from its employees.
It is a document that outlines the purpose of the job, the task involved, the duties and responsibilities, the performance objectives, and the reporting relationships. It provides details of the terms and conditions, including the remuneration package and hours of work.
It is used in the recruitment process and provides the basis for developing a job specification.

Job Specification
Job specification helps in understanding the minimum qualification needed to perform a particular job. These may include
a. academic qualification
b. professional qualification
c. age
d. years of experience
e. relevance and nature of previous experience
f. and other skills and attitudes

Quantitative aspects of manpower planning :
Managerial Judgment
Ratio-trend analysis
Work-study techniques
Delphi technique

Managerial Judgment
In this, managers sit together, discuss and arrive at a figure which would be the future demand for labour. The technique may involve “bottom-up” approach or “top-down” approach.
“Bottom-up” approach
This method of forecasting starts at the lowest level and progresses upwards, through various levels in the organization, till an aggregate projection for the organization as a whole is ready. The basic idea is that the best person to determine the human resource requirements is the manager of the unit or department. Department managers periodically project their work force requirements, while comparing their present and future needs, keeping in mind productivity levels, market demand, sales forecast, and mobility of staff in the department. Since this exercise is done periodically, it gives sufficient lead time to human resource managers to identify available human resources, both internally and externally.
“Top-down” approach
In this method, top managers prepare company and departmental forecasts. These forecasts are reviewed and agreed with departmental heads.

Neither of these is accurate- a combination of the two could yield positive results. In the ‘bottom-up’ and ‘top-down’ approach, departmental heads are provided with broad guidelines. Armed with such guidelines, and in consultation with HRP section in the HRM department, departmental managers can prepare forecasts o their respective departments. Simultaneously, top HR managers prepare company forecasts. A committee comprising departmental managers and HR managers will review the two sets of forecasts, arriving at a balance which is then presented to the top managers for their approval.
This technique is used in smaller organizations or in those companies where sufficient data base is not available.

Ratio –trend Analysis
This method involves comparing the number of employees to workload index.
e.g. if it takes 3 people to do a job, when the work is doubled 6 people would be required to do it.
The level of activity may vary from department to department in the same organization.
This is a highly simplified, and to some extent, a crude way of projecting workforce requirement. It does not take into account
a. the technological development
b. local conditions
c. any other variables
that may be deterimental to productivity.

Work Study Techniques
Work study techniques can be used when it is possible to apply work measurement to calculate how long operations should take and the amount of labour required. The starting point in a manufacturing company is the production budget prepared I terms of volume of saleable products for the company as a whole, or volumes of output for individual departments. The budgets of productive hours are then compiled using standard hours for direct labour. The standard hours per unit of output are then multiplied by the planned volume of units to be produced to give the total planned hours for the period. This is divided by the number o actual working hours for an individual operator to show the number of operators required. Allowances will be have to be made for absenteeism and idle time.
e.g.
i. Planned output for next year 20000 units
ii. Standard hours per unit 5
iii. Planned hours for the year 1,00,000
iv. Productive hours per man/year
(allowing normal overtime, absenteeism
And idle time) 2000
v. Number of direct workers required (iv/v) 50

Work study techniques for direct workers can be combined with ratio-trend analysis to forecast for indirect workers, establishing ratio between the two categories. The same logic can be extended to any other category of employees.

Delphi Technique
The Delphi technique was developed during the late 1940’s at the Rand Corporation’s. Its objective was to predict future developments in a particular area, by integrating the judgments and opinions provided independently by many experts. It is structured approach for reaching a consensus judgment, among the experts, regarding the number of employees, who will be required in the future. These experts are well versed with plans o the organizations, and the internal and external factors that may influence these planned activities, and hence, the demand for work force. These experts can come both from within or outside the organization. The basic procedure consists of experts presenting their forecasts to other experts, without physically meeting them. Once the first forecast is collected and shared, another round of forecasting takes place. This process of sharing and revising goes on till a consensus is emerged.
Delphi technique has been to be good for short duration (1 year) forecasts. However, one of its major problems is in the integration of varied opinions of experts. As a result, it may drag on for a long time because of many reiterations. One of the reasons for this may be the physical absence of experts at one place to provide timely feedback, or make timely adjustments in their forecast.

Recruitment
Recruitment is the process of identifying the prospective employees, stimulating and encouraging them to apply for a particular job or jobs in an organization.
It is a positive action as it involves inviting people to apply.
The purpose is to have an inventory of eligible persons from among whom proper selection of the most suitable person can be made.

There are two categories of sources of manpower:
1. Internal Sources
2. External Sources

Internal Sources: These include personnel already on the pay-roll of the organization as also those who were once on the pay-roll of the company but who plan to return, or whom the company would like to hire. These include those who quit voluntarily or those on production lay-offs.

External Sources: These sources lie outside the organization, like the new entrants to the labour force without experience. These include college students, the unemployed with a wider range of skills and abilities, the retired experienced persons, and others not in the labour force, like married women.

Advantages of preferring people from within the organization:
- improves morale
- Promotes loyalty
- require no induction
-employers are in a better position to evaluate those already in the organization


Disadvantages of preferring people from within the organization:
- leads to inbreeding
- discourages new blood from entering the organization
- Capable hands may be left out if promotion is based on seniority.

Advantages of preferring people from outside the organization:
- provide a wide market
- helps bring new ideas into the organization
- source never ‘dries up’

Disadvantages of preferring people from outside the organization:
- selected person may not be loyal towards the organization
- organization has to make larger investments in their training and induction.

Methods of Recruitment
Direct Methods
Indirect Methods
Third- Party Methods

Direct Methods
This include sending recruits to educational and professional institutions, employee contacts with public, manned exhibits and waiting lists

Indirect Methods
This cover advertising in newspapers, on the radio, in trade and professional journals, technical journals and brochures.

Third- Party Methods
Various agencies are used for recruitment under these methods. This include commercial and private employment agencies, state agencies, placement offices of schools, colleges and professional associations, recruiting firms, management consultation firms, indoctrination seminars for college professors, friends and relatives.

Selection
Selection is the process of examining the applicants with regard to their suitability for the given job or jobs, and choosing the best from the suitable candidate and rejecting the others.
Thus process is negative in nature in the sense that rejection of candidates is involved.
Successive Hurdles in the Selection Process
Preliminary Interview
Application Form
Employment
Interview with Supervisor
Recommendation
Physical Examination
References
Work History
Testing
Second Interview
Initial Screening or Preliminary Interview
- This is a sorting process in which prospective applicants are given the necessary information about the nature of the job and also, necessary information is elicited from the candidates about their education, experience, skill, salary expected ,ect.
- If the candidate is found to be suitable, he is selected for further process and, if not, he is eliminated
- This can be done across the counter of the organisation’s office
- This is done by a junior executive in the personnel department.
- When the candidate is found suitable, an application form is given to him to fill in and submit.

Application Form
- In an application form the applicant is asked to give details about age, marital status, educational qualification, work experience and references.
- The application can be used in two ways:
a. to find out the basis of information contained therein as to the chances of success of the candidate in the job for which he is applying, and
b. to provide a starting point for the interview

- It is often possible to reject candidates on the basis o scrutiny of the application as they are found to be lacking in educational standards, experience or some other relevant eligibility and traits.

Selection Tests
Purpose of test
The basic assumption underlying the use of tests in personnel selection is that individuals are different in their job-related abilities and skills and these skills can be adequately and accurately measured.
Tests seek to eliminate the possibility of prejudice on the part of the interviewer or supervisor. Potential ability will only govern selection decisions.
The other major advantage is that the test may uncover qualifications and talents that would not be detected by interviewers or by listing of education and job.

Types of tests:
Achievement or Intelligence Tests
Aptitude or Potential Ability Tests
Personality Tests, and
Interest Tests.

Achievement or Intelligence Tests
- These are also called ‘proficiency tests.’
- These measure the skill or knowledge which is acquired as a result of training programme and on the job experience
- These measure what the applicant can do.
- These are of two types: (i) Test for measuring job knowledge (ii) Work Sample Tests

(i) Test for measuring job knowledge
These are administered to determine knowledge of typing, shorthand and in operating calculators, adding machines, etc. These are primarily oral test consisting of a series of questions which are believed to be satisfactorily answered by only those who know and thoroughly understand trade or occupation
(ii) Work Sample Tests
These measure the proficiency with which equipment can be handled by the candidate. This is done by giving him a piece of work to judge how efficiently he does it.


Aptitude or Potential Ability Tests
- These tests measure the latent ability of a candidate to learn a new job or skill.
- These are of three types
a. Mental Test: These measure the overall intellectual ability of the intelligence quotient of a person and enables to know whether he has the mental capacity to deal with new problems.
b. Mechanical Aptitude Tests: These measure the capacity of a person to learn a particular type o mechanical work. These are useful when apprentices, machinists, mechanics, maintenance workers, and mechanical technicians are to be selected.
c. Psychomotor or Skill Test: These measure a person’s ability to do a specific job. These are administered to determine motor ability and similar attributes involving muscular movements, control, and coordination. These are primarily used in the selection o workers who have to perform semi-skilled and repetitive jobs.

Personality Tests
These help to know an individual’s
Value system
Emotional reactions
Maturity
Characteristic mood
Motivation
Ability to adjust himself to stresses of everyday life
Capacity to inter-personal relation

Interest Tests
These are designed to discover a person’s area of interest and to identify the kind of work that will satisfy him. The interest tests are used for vocational guidance, and are assessed in the form of answers to a well-prepared questionnaire.

Interview
An interview is a conversation with a purpose between one person on one side and another person or persons on the other.
Purpose:
- Obtaining information
- Giving information
- Motivation

Types of interviews:
Informal interview: This may take place anywhere. The employer or manager in the personnel department may ask the candidate a few general questions like name, place of birth, previous experience, etc. It is not planned and is used widely when the labour market is tight and you need the workers badly.
Formal interview: This is held in a more formal atmosphere in the employment office by the employment officer with the help of well-structured questions. The time and place are stipulated by the employment office of the organization.
Planned interview: This is a formal interview carefully planned. The interviewer has a plan of action worked out in relation to time to be devoted to each candidate, type of information to be sought, information to be given and the modality of the interview. However, the interviewer may use some amount of flexibility.
Patterned interview: This type of interview is conducted with higher degree of planning, accuracy, precision and exactitude. A list of questions and areas are carefully prepared.
Non-directive interview: This is designed to let the interviewee speak his mind freely. The interviewer is a patient listener. The idea is to give the candidate complete freedom to sell himself without any encumbrances.
Depth interview: This is designed to intensively examine the candidate’s background and thinking and to go into considerable detail on a particular subject of special interest to the candidate.
Stress interview: This is designed to test the candidate and his conduct and behavior by putting him under conditions of stress and strain. This is very useful to test the behaviour of individual under disagreeable and trying conditions.
Group interview: this is designed to see how the candidates react to and against each other. All the candidates may be brought together in the office and they may be interviewed. The candidates may, alternately, be given a topic for discussion and be observed as to who will lead the discussion, how they will participate, how each of them will make his/her presentation and how they will react to each other’s views and presentation.
Panel interview: This is done by members of the interview board or a selection committee. This is done of usually for supervisory and managerial positions. It pools the collective judgment and wisdom of members of the panel. The candidate may be asked to meet the panel individually for a fairly lengthy interview.

Placement
Placement is the determination of the job for which a selected candidate is best suited and assigning that job to him. The ideal situation is ‘the right man for the right job’. A proper placement of worker reduces employee turnover, absenteeism, accident rates, etc. and improves morale, motivation and work etc.

Induction
Induction is introducing an employee to the job and to the organization. The primary purpose of induction is to ‘sell’ the company to the new employee so that he may feel proud of his association with the company. This is called orientation or indoctrination.

Purpose and need of Induction
- Facilitate better integration of the new employee with the old ones.
- Inculcate a respect for organizational culture among the new employee.
- Sensitize the new employee about vision and mission of the organization.
- Develop clear understanding of the tasks assigned to new employees.

Three steps in Induction
General orientation by the staff: It provides necessary general information about the history and activities of the firm. The purpose is to help an employee to build some pride and interest in the organization.
Specific orientation by the job supervisor: The employee is shown the department and his place of work, location of facilities and is told about the specific practices and customs of the organization. The purpose is to enable the employee to adjust with his work and environment.
Follow-up orientation by either the personnel department or the supervisor: This is conducted within one week to six months of the initial induction by a foreman or specialist. The purpose is to find out whether the employee is reasonably well satisfied at the workplace. Through personal talks, guidance and counseling, efforts are made to remove any difficulty faced by the newcomer.

Components of Induction Programme
The company history and products, processes and assigned tasks.
The significance of the job with all necessary information about it including job training and job hazards.
Structure of the organization and the function of various departments.
Employee’s own department and job, and how he fits into the organization.
Personnel policy and sources of information.
Company policies, practices, objectives, and regulations.
Terms and conditions of service, amenities, and welfare facilities.
Rules and regulations governing hours of work, over-time, safety and accident prevention, holidays and vacations, methods of reporting.
Grievance procedure and discipline handling.
Social benefits and recreation services.
Opportunities, promotions, transfer, suggestion scheme and job satisfaction.

Steps in manpower planning
Environment
Organisational Objectives and policies
HR needs forecast
HR supply forecast
HR Programming
HRP Implementation
Control and evaluation of programme
Surplus
Restrict hiring
Reduce working hours, VRS, Lay off, etc.
Shortage
Recruitment and selection