HRP PROCESS The Model of HRP Process ENVIRONMENT CORPORATE & UNIT LEVEL STRATEGIES ‘HR’ DEMAND FORECAST ‘HR’ SUPPLY FORECAST ‘HR’ PROGRAMMING HRP IMPLEMENTATION SURPLUS OF ‘HR’ SHORTAGE OF ‘HR’ CONTROL & EVALUATION PROGRAM Corporate &Unit Level Strategies •EXPANSION •DIVERSIFICATION •MERGERS •ACQUISITIONN •REDUCTIONS IN OPERATION •LOW COST & DIFFERENTIATION STRATEGIC IMPLEMENT ATION REQUIRS •THE PRODUCTION IMPLEMENTATION •TECHNOLOGICAL IMPLEMENTATION •MARKETING IMPLEMENTATION •HUMAN RESOURCE IMPLEMENTATION Human resource implementation requires possessing the required number and kind of employees that need a human resources plan Human resource plan segregated into two parts .They are :(A)‘HR’ Demand Forecasting and (B) ‘HR’ Supply Forecasting (A) HR Demand Forecasting HR demand forecasting calculates overall ‘HR’ requirements & there are basically four demand forecasting techniques :1) Managerial Judgment 2) Statistical Techniques 3) Work study Techniques 4) Delphi Techniques (1) Managerial Judgment MANAGERIAL JUDGEMENT TOP-DOWN APPROACH TOP LEVEL MANAGERS PREPARE COMPANY & DEPARTMENTAL FORECASTS BOTTOM-UP APPROACH BOTH OF THESE FPRECASTS ARE REVIEWED WITH DEPARTMENTAL HEADS IN CONSULTATION WITH THE ‘HRP’ SECTION TO ARRIVE AT A UNANIMITY,WHICH WILL BE PRESENTAED TO TOP MANAGEMENT FOR APPROVAL LINE MANAGERS SUBMIT THEIR DEPARTMENTAL PROPOSALS TO TOP MANAGERS Staff Forecast Form Category of Staff------------Year------------------------STAFF MEMBERS & MOVEMENTS THEIR NUMBERS 1- No of staff at date-01-01-2010 (excluding known resignation) 2- (A) Expected retirements, transfers out & promotions during the year. (B) Less expected transfers in, promotions, new appointments. 3- (A) Number of staff required on 1st January next year. (B) Less present staff. 4 – Expected staff losses due to normal wastage of existing staff – 15. 75 5 – Expected losses of staff to be recruited in the period. 6 – Total staff to be provided during the period NO OF STAFF TO BE PROVIDED ------- 08 REMARKS Age Groups under-25 25 To 34 35 To 44 45 & over 30 20 15 10 03 05 80 75 05 15 15 05 05 Short service staff turnover at 20 % of 25 (events 2+3+4 above) 30 ‘5’ to be recruited by 1st February – others later on. By age groups Under 25 25- 34 35- 44 45 & over 12 02 01 ---- (2) Statistical Techniques The above include :-Ratio Trend Analysis & Regression Analysis (A)Ratio Trend Analysis :-Ratios are calculated for the past data & are used for estimating future HR requirements. Present Level of production (01-01- 2002) 2000 Units Present number of foreman (01-01-2002) 04 Ratio is 2000/4 500 Estimated production as on (01-01-2005) 5000 Units Foreman required as on (01-01-2005) 5000/500 = 10 (B) Regression Analysis :- is used to forecast the demand of human resources when dependent & independent variables are functionally related to each other. This analysis includes :Simple Linear Regression Analysis :-The demand for human resources depends upon the past relationship between the dependent variable and independent variable (single variable) Multiple Linear Regression Analysis :- involves two or more independent variables forming the basis for estimating the values of a dependent variable. Variables affecting manpower requirement may be identified as sales volume, production volume or investment etc. (3) Work study Techniques This technique is applicable when it is possible to know how long operations continue (in terms of hours) & the amount of labor required (in terms of number).This technique constitutes of :a) Work-load Analysis b) Work-force Analysis a) Work- Load analysis It determines how many employees of various types are required to achieve total production targets. Total production in terms of units are estimated in a year. Man-hours required to produce each unit is calculated. Later, the required number of employees is calculated. For example :- OPERATION UNITS Planned operation during 2003 = 1,60,000 units Standard man-hours needed to perform each unit in 2003 = 04 hours Planned man-hours needed per year in 2003 1,60,000 X 04 = 6,40,000 Productive hours per man/year is 2000 Number of employees required in 2003 6,40,000/2000 =320 b) Work Force Analysis This analysis is done on work-load of each plant during the forth coming years, considering the rate of absenteeism and labor turnover. In work-load analysis (above) we concluded that 320 workers are required to make 1,60,000 units in a year. But the conclusion is illusory because 320 workers will not be available on all working days due to absenteeism, labor turnover and idle time. A margin of 20 % of the manpower i.e. 64 (past experience) needs to be added with the required manpower. So the real required manpower is 320 + 64 =384 (4) Delphi Technique It is a structured approach for reaching a consensus judgment among the experts regarding the number of employees required in the future. Experts presenting their forecasts to other experts, without meeting them physically and the process of sharing and revising goes on till a consensus emerged. (B) HR Supply Forecasting It measures the number of people likely to be available from within and outside an organization. Clarifies likely staff mixes that will exist in future. Assess existing staff levels in different parts of the organization. It prevents shortage of people where and when they are most needed. Monitors expected future compliance with legal requirements of job reservations. The Supply Analysis covers 1. Existing Human Resources 2. Internal Sources of supply 3. External sources of supply 1- Existing Human Resources HR audit summarizes each and every employees skills and abilities and give planners a comprehensive understanding of the capabilities lies with in the workforce. HR Audit NON-MANAGERS MANAGERS Skill Inventories Management Inventories Personal data Skills Special qualifications Salary and job history Company data Capacity of the individual Special preference of individual. Work history Strengths Weaknesses Promotion potential Career goals Personal data Number and type of employees supervise Total budget managed Previous management duties (2) Internal Sources of Supply Internal supply techniques include :- A. B. C. D. E. Inflows and Outflows Method Turnover Rate Conditions of Work and Absenteeism Productivity Level Movement among jobs A. Inflows and Outflows Method SOURCES OF INFLOWS NO OF PEOPLE SOURCES OF OUTFLOWS -Resignations NO OF PEOPLE 13 Transfers in 12 :-Discharges 02 CURRENT Promotions in – 10 :- PERSONNEL -Demotions 04 LEVEL IS 250 OPERATORS --Retirements 10 -Promotions 13 Total Inflows :22 Total Out flows 42 Current Personnel Level + Inflows – Out flows = Internal supply of operators (250 + 22 – 42 =230) B. Turnover Rate It is one of the traditional method of forecasting internal supply of human resources. Number of separations during one year X 100 Average number of employees during the year C. Conditions of work and Absenteeism Absenteeism reduces the number of employees available for work Absenteeism Rate = Number of persons – days lost X100 Average no of persons X number of working days If absenteeism rate is 4 % ,96 out of 100 people are available for work D. Productivity Level Average sales per person in a year is Rs 500,000 Productivity level says that, sales per person is increasing at the rate of 10 % per year. If the next years targeted sales are Rs .500,00,000, there would be no need of for 100 sales persons. Only 91 sales persons are required because we expect an increase of Rs 550,000 in productivity per person. E. Movement Among Jobs Some jobs are sources of personnel for other jobs. If we anticipate a need of ‘5’ area supervisors for coming ‘8’ years from now, more than ‘5’ potential area supervisors should have entered the marketing area this year, assuming that ‘8’ years is the average development time. (3) External Sources of Supply Causes of External Supply New blood and new experience will be available. Organization needs to replenish lost personnel. Growth and diversification needs to use additional number and type of employees from external sources. Sources are colleges, universities, consultants; competitors or unsolicited applications. HR Programming HRP process estimates the net ‘HR’ requirements in terms of number & components by knowing the difference between demand forecast and supply forecast of human resources. The difference may either leads to surplus or shortage of human resources. HRP Implementation DIFFERENCE BETWEEN DEMAND & SUPPLY FORECAST SHORTAGE SURPLUS REDEPLOYMENT PROGRAMS Out Placements Right Sizing etc REDUNDANCY/RETRENCHMENT Reduced Work Hours Work Sharing Leave of Absence without pay VRS/Early Retirement Attrition Compulsory Retirement Creation of Ad -hoc Projects Out sourcing Employment T & D Productivity Plan Retention Plan Internal Mobility etc Control and Evaluation Program The HR plan should include – budgets, targets, and standards. Clarifying responsibility for implementation and control and establish reporting procedures which will enable achievements to be monitored against the plan. Evaluating HRP Effectiveness A survey of HRP practices in 45 companies covering a cross –section of the manufacturing industry has indicated that scant attention is being paid to HRP. HR specialists have pointed out the fact that most Indian organizations do not have adequate records and information on human resources. Proper retrieval systems are not available in most cases. The computerized HRIS unlike their western counterparts do not play an important role in India. Current technologies and knowledge in respect of HR planning is not put to use optimally. Unpredictable external influences like changes in labor market conditions, technology, market conditions, economic cycles, changes in economic and social values, political changes etc further added to the problem. Besides vacancies caused by retirements other factors like resignations, turnover, deaths, and competitive attractions are difficult to forecast. • The above mentioned practices, inevitably, leads to ineffective HR planning. • The above problems could be avoided if certain guide lines are followed. Guidelines to be followed Objectives-The HR plan must fit in with the overall objectives of the organization. Aspects like – people working in the organization, working conditions, human relationship, etc must be kept in mind. Top management Support – The plan must meet the changing needs of the organization and should enjoy consistent support from top management. Employee skills inventory- The organization must have an updated employee skills inventory showing previous jobs held, tenure on current job, educational and training qualifications, specific knowledge and skills, prior work experience, past & current compensation ,mobility factors etc. HRIS- To manage employee skill inventories, organizations should maintain computerized HRIS containing data on – individual demographics, career progression, appraisals, skills ,interests, training, target positions, performance ratings, geographic preferences, promotability ratings etc. Coordination- A separate HR planning division must be created, in case of large organization, to coordinate HR planning exercises at various levels. The various plans for procurement, promotion, and retention of human resources must be integrated properly. The ultimate objective must be to make use of the human resources in an optimal manner by filling future vacancies with the right type of people.
