Human
Resource
Planning
Leveraging Business
through effective Human
Resources planning
The PerFact Service Academy
(Individual Project Report)
By: Adith Abraham
Case study dated - 15/04/2011
1|Page:
This white paper is the property of Adith Abraham, the Performance Factory. It’s usage
without prior permission is illegal.
Introduction to the Company
The Performance Factory‟s „PerFact Service Academy‟ is one of the leading retail training
institutes in the UAE established in 2009 as an arm of a Training firm, a leading training
companies in the Middle East.
The vision of „PerFact Service Academy‟ is to be “A significant player in training and
supplying high quality sales and service talent to the UAE retail sector and be the brand of
choice for developing world-class local talent”.
The shared organizational values are,
a.
b.
c.
d.
e.
f.
Shareholder relationship
Quality
Performance orientation
Discipline to closure
Innovation
Intrapreneurship
Corporate objectives
Keeping in view the vision and business factors, the PerFact Service Academy decided to
obtain overall market leadership in the coming year. The strategic goal of the company was
to make this year the “Year of Growth”, and the prime focus areas or the corporate
objectives were as mentioned below:
1. 40% revenue growth
2. Trainee quality
3. Customer delight
All activities and plans in the coming year will be focused towards achievement of the above
mentioned corporate objectives. Performance oriented culture was one among them. Specific
HR practices of PerFact Service Academy included:




Manpower Planning
Increasing the investment in training & development
To make Performance evaluation system for all the employees in the academy
Having a succession planning program in place
Thus the overall HR strategy was to integrate these strategies effectively with the
business strategy to achieve its corporate objectives such as, Trainee Quality, growth
and Customer delight.
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Scenario / PEST Analysis for PerFact Service Academy Ltd.
It is very important that an organization considers its environment before beginning the
marketing process. In fact, environmental analysis should be continuous and feed all aspects
of planning. The organization's environment is made up of:
1. The internal environment e.g. staff (or internal customers), office technology, wages,
etc.
2. The micro-environment e.g. external customers, agents and distributors, suppliers,
our competitors, etc.
3. The macro-environment e.g. Political (and legal) forces, Economic forces,
Sociocultural forces, and Technological forces. These are known as PEST factors.
With reference to the PerFact Service Academy, following is the PEST Analysis.
Diagram of PEST Analysis
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HRP Model for the PerFact Service Academy.
After reviewing the internal, external factors including the strength & weakness, we
will be able to identify or understand the three corporate objectives which have been
identified by this institute. Through the Strategic HR planning of forecasting &
planning we would be able to identify the strategies & factors that would impact its
functional objective to obtain its overall corporate objective. The company has
already implemented sound HR practices over the past 2 years, some of which
includes: Manpower Planning, Recruitment & Selection, Induction, PMS, Training, &
Culture building activities. Changes in the HR plans and its impact on the overall
business strategy can also be explained through this model.
Understanding how to develop strategy is a motivation to progress to HR strategic planning.
A strategic plan consists of a series of actions designed to accomplish defined objectives.
And a HR plan is described as strategic since such plan is intended to help organization
achieve their business plan. A human resource strategic plan is aligned to the
organization's strategic business plan. With the model we tried to:
1.
2.
3.
4.
5.
Know the company/organization‟s business and strategic plan
Doing an external scan
Forecasting workforce demand
Forecasting workforce supply
Positioning all the departments in line with the plan with a proper
communication channel throughout the departments.
6. Developing HR strategies including programs, policies, practices and activities such as workforce supply and demand - and linking them to the business
strategies
7. Having developed the plan, linking the plans with the four corporate objectives
identified.
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Proposed HRP Model
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This white paper is the property of Adith Abraham, the Performance Factory. It’s usage without prior permission is illegal.
Demand Forecasting
As per the case, for the demand estimation & rest of HRP, we are considering the
increase of training capacity from 480 trainees a year to 1200 trainees a year.
Current Manpower status of training center to train 480 trainees a year (100%
of manpower utilization):
Permanent Staff
Department
Staff480
Mgt. Staff
Total
Ratio
Marketing
5
1
2
Operations
3
0
3
8 : 1
HR & Admin
2
1
3
2 : 1
Secretarial
1
0
1
-
Total
11
2
13
5 : 1
In the current manpower scenario the training academy has a total of 13 permanent
employees. In which there are a total of 11 Unionized and 2 Management staff with
an average ratio of eight (5:1) staff for every management staff. While we intend to
increase the number of both staff and management staff we aim to keep the ratio
more or less constant as it is a healthy figure presenting a healthy management or
supervision style.
Proposed Manpower strength for training 1200 trainees a year at 100%
manpower utilization
Department
Marketing
Staff1200
Mgt. Staff
Total
Ratio
10
2
12
5:1
Operations
8
2
10
4 : 1
HR & Admin
7
1
8
7: 1
Secretarial
2
0
2
-
27
5
32
Total
5 : 1
The Academy wants to raise its production capacity from 480 trainees a year to 1200
trainees a year. The staff has been increased however we recommend only a marginal
increase in the management staff. This has enabled us to maintain the staff to management
staff ratio to an institute average of 5:1.
6|Page:
This white paper is the property of Adith Abraham, the Performance Factory. It’s usage
without prior permission is illegal.
Supply Forecasting
The supply forecasting has been done considering the overall capacity increase & the
keeping in mind the three focus areas of the year. We have considered the: turnover
estimation, absenteeism, promotion effect & external sources of supply.
Turnover Analysis- The average turnover of 5% is expected among the unionized
staff and 12% for the management staff.
Turnover
Proposed
Turnover rate
Current +
Future HC
Possibility of
Resignation
Marketing
40%
30%
10
3
Operations
35%
30%
18
5
HR & Admin
40%
30%
7
2
Secretarial
0%
0%
2
0
Management
30%
25%
5
3
32
14
Type
Total
Absenteeism Analysis: An absenteeism of around 17% on an average is
noticed among the staff of 11 workers. However, with the employee engagement
initiatives, the current absenteeism levels can be reduced accordingly to the reduced
forecast of absenteeism rate from 17% to 10%.
Manpower Planning: Given the organizational strategy & objective along with
the current HR practices, the manpower planning given below seeks to achieve the
manpower requirement for training 1200 trainees year with 100% effective
manpower utilization.
Turnover Rate
Type
Turnover %
Total
Estimated
Turnover
New
Turnover %
Estimated
New Turnover
Management Staff
40%
2
1
30%
3
Staff
29%
11
3
21%
10
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Manpower can effectively be utilized if the turnover rate is kept under control. The
coming year has targets set with reduced rates of turnover for both the Management
staff and staff.
Demand Estimate
Number
Estimates
Current Manpower for training 480 trainees a year
13
Estimated Manpower for training 1200 trainees
32
Extra Manpower required for targeted productivity
19
Estimated new turnover for the year
13
Total manpower required for the year
32
The manpower forecasted is 32 for both staff and management staff. However after
considering the turnover and yearly attrition rate 13 more employees need to be
recruited this year to maintaining the optimum workforce to achieve the Company‟s
objectives for the plant in concern.
Recruitment Plan
PerFact Service Academy believes that right persons at right roles are the key to the
delivering quality training to the delegates and ensuring consistency in Customer
Satisfaction. And in order to achieve the overall objective capacity target of 1200 trainees at
the end of the year, the recruitment & selection plan needs to align to the overall strategic
plan to achieve optimum competitive advantage & cost effectiveness.
Our strategies for recruitment & selection have been focused mainly on the quality & the
salary structure:
a) Quality: In order to achieve market leadership it is imperative to look at the quality
of the human resources carefully especially the new recruits. Screening of any new
recruits with the minimum required qualification. To enhance the qualification
criteria & competency level of the new recruits at the operations and marketing
departments.
b) Salary Structure: the salary structure of a management staff category would be
AED 15,000 per month, the salary for operations staff would be AED12,000 per
month and the salary for marketing staff would be at AED 9000 per month.
The selection process can be scheduled quarterly to have the cost flow in safe manner. So
that the overall cost of the manpower will be in control and at the same time, the focus on
quality resources can be obtained. In our case, the total required head count of 32 can be
hired in the following cycle:
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Period
Recruits
Prod. ↑
Q1
Q2
Q3
1 Year
12
11
9
32
160 Trainees
160 Trainees
160 Trainees
480 Trainees
Suggested schedule for the recruitment & selection process.
Area
Completion Date
Responsibility
Requisition of manpower
requirement
Before the 1st o every quarterly
month i.e. Mar Jun Sep Dec
Head of Department
Forecast of manpower
requirement
First of every quarter months
HRD Department
Advertisement / Employee
referral notification
Fifth of every quarter months
Recruitment & Selection
Committee
Receipt of the completed
application form
15th of every quarter months
HRD Department
Screening of application forms
17th of every quarter months
Recruitment & Selection
Committee
Employment test
24th morning of every quarter
months
Recruitment & Selection
Committee
Comprehensive interviews
24th Afternoon of every
quarter months
Recruitment & Selection
Committee
Employment Offer
On or before 30th of every
quarter months
HRD Department
Remarks
Induction Plan- At the PerFact Service Academy, the new employees who are
hired will attend induction training programs to socialize and familiarize themselves
with the organization, their department and also the people in the organization. The
organization believes that during the induction period, the new entrants into the
organization shape their attitudes towards work, towards the organization, towards
various functions, towards himself and his competencies. Therefore, lots of
importance is given to the induction activities at the PerFact Service Academy.
Though the HR department facilitates the induction process for the new inductees,
the ownership and responsibility of the effectiveness of delivery lies with the line
managers who the inductees will report to.
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The objectives of the induction activities are
a. To provide the new entrants with comprehensive understanding of the vision,
values, mission, structures, people etc
b. To provide them with an understanding of what is valued in the organization
and accepted behaviors
c. To provide a detailed understanding of the nature of tasks performed by
people
The Induction plan
Category
Management
team
Quarter-1
Quarter-2
Quarter-3
TOTAL
i. No of inductees
2
2
1
5
ii. Induction dates
7thFeb25thFeb
11thApr22ndApr
11thJul 22ndJul
10 working
days
iii. No of inductees
10
9
8
27
iv. Induction dates
7thFeb-04th
Mar
11thApr06thMay
11thJul-05thAug
20 working
days
Unionised work
force
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Induction Schedule
Week
Unionised work force
Week-1
(5 working days)
-
Reporting to the organization
Class room induction to be facilitated by the HR Dept
and Heads of Dept focusing on
a. History of the Organization
b. Management Philosophy
c. Organizational Values
d. The Vision and Mission
e. Company products
f. Introduction to Organizational Structure and
departments
g. HR Policies and procedures
Week-2
(5 working days)
-
Informal discussions with senior members
Department orientation visit
Week-3
(5 working days)
-
Placement
Mentoring assignment
Performance Management discussions
Week-4
(5 working days)
-
On the job learning
Conduct induction evaluation
a. Level-2 assessment
b. Performance assessment
c. Behavioural assessment
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Management team
-
Reporting to the organization
Class room induction to be facilitated by the HR Dept and
Heads of Dept focusing on
a. History of the Organization
b. Management Philosophy
c. Organizational Values
d. The Vision and Mission
e. Company products
f. Introduction to Organizational Structure and departments
g. HR Policies and procedures
-
Informal discussions with senior members
Department orientation visits
Placement
Performance Management discussions
This white paper is the property of Adith Abraham, the Performance Factory. It’s usage without prior permission is illegal.
Training Plan & Schedule
Category
Mgt
Operations
TOTs
Agencies
IIR
Up to plant
Focus
Leadership:
● Industry knowledge
● Winning attitude
Retail:
● Retails Management
● Operational efficiency
● Customer Service
● Train the trainer
Cost per
person
(AED)
Total
No of
Emps.
Type of
trg
Mandays
/person
4500
5
Public
2
22,500
Open workshops
1,200 per
training
27
Public
6
97,200
Open workshops
1,500
27
Total
(AED)
Inhouse
BUDGET
Remarks
0
120,000
Schedule
Internal capability to
train
TOTAL
119,700
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Training Schedule
Since the business focus for the year is the „Year of Growth ‟ and also a business expansion
target of training „1200 trainees‟ per year from the earlier 480 trainees, the staff will undergo a
series of functional training and all employees in the management team will undergo programs
on leadership training to enhance performance of the organization. The focus of training for the
organization is as follows:
Levels
Competence Focus
Mid Management
Operations
Management
Competence
Functional Competence
Staff
List of programs
-
Industry leadership
Winning attitude
Retails Management
Operational efficiency
Customer Service
Train the Trainer
The purpose of the training programs are activities carried out to improve individual
performance through increase in knowledge, skills and attitudes. Also, the programs are
strategically aligned to the business requirement of the year. The training need identification is
based on the skills inventories and competency profiling. The competency assessments are
conducted against ideal standard prescribed for each job profile. On completion of the training,
the first level assessments are completed on the reaction of delegates who attended the training.
Some of the programs on Leadership and Management are further assessed to Level-2 to ensure
knowledge transfer has occurred. On the job training and coaching are other training
methodologies adopted by the organization to ensure improved performance.
Performance Management
This year‟s performance management system at PerFact Service Academy will reflect the core
performance areas detailed in the vision, mission and strategic objectives articulated in the
corporate plan. The corporate objective of the year “Year of Growth” is achieved by embedding
the 3 thrust factors into the PMS such as 40% Revenue Growth, Customer Delight and Trainee
Quality.
13 | P a g e :
This white paper is the property of Adith Abraham, the Performance Factory. It’s usage
without prior permission is illegal.
All the department goals for the year will reflect the 3 thrust factors and every individual will be
appraised on the same. The appraisal sheets will therefore reflect as follows.
Priority
(1)
Team or
Ind
1
Goals
(2)
Productivity
Targets
Contribution
to
40%revenue
growth
Customer Delight
Targets
Trainee Feedback
2
3
4
5
Weight age
to goal
(out of
100)
(4)
Assessment of Performance
(3)
Self
Appraiser
O G A
2
0
1
5
1
0
B
0
O G A
2
0
1
5
1
0
Rating
Score
(5)
Reviewer
B
0
O G A
2
0
1
5
1
0
B
0
Quality Targets
6
Conformity to Org
Values
TOTAL SCORE
100
Though the above appraisal sheet reflects the core objectives for the year for all employees
striving to achieve the organizational goals, the weight age will vary for employees in different
departments based on the expected contribution and the nature of work being done. Targets are
usually planned and set by the management team along with employees based on key result
areas and attributes. The performance review is conducted on a quarterly basis to track the year
to date performance results in the organization. The management team assumes the role of
coach, mentors or perhaps as a counsellor during the year to ensure employees are equipped,
motivated and skilled to deliver their goals.
Career & Development Plan-
Career Develop consists of organized structure and
sequence of patterns in an individual‟s work life. Career progress begins at the lowest rank and
moves upward to the higher ranks taking into consideration the chain of command. Any job
opening from Supervisor and above will be filled by internal job posting. Since we expect
approximately 3 job vacancies through the year, we plan to make eligibility to promote
individuals based on 3 criteria.
a. Experience
b. Performance
c. Potential
The 3 criteria will take into account the individuals past performance, his ability to learn
new skills, the behaviors, the ability to influence for higher performance and also the
number of years he has spent in the organization. Although we propose that individuals who
have spent a „reasonably‟ long duration of time within the organization should be considered
for promotion, the eligibility criteria for career progression will also include consistency of
past performance over the past 2 years.
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As a policy, we propose to maintain the ownership of career progression of staff to
themselves while tools such as competency framework, IJP announcements for all
jobs at all levels will be made available to every employee in the organization.
Succession Planning-
Succession planning is a process for identifying and
developing internal people with the potential to fill key leadership positions in the company.
Succession planning increases the availability of experienced and capable employees that are
prepared to assume these roles as they become available.
With a detailed PMS system well established in PerFact Service Academy, HR will implement
the replacement method of succession planning as a strategy to internally identify, develop and
make staff ready to be promoted in the future. Succession/replacement planning programs are
implemented to ensure the development of a sufficient number of qualified people to fill future
vacancies in key managerial and professional positions. A timeline for a bench strength plan
may be an important part of a total plan. Planning for three years out requires a different type of
strategy than planning for ten or fifteen years in the future. Key considerations when putting
into place a succession planning program, or revising an existing one, include:





„The Year of Groeth‟ mission and the strategic drive of the organization paves the way for
how the plan is designed and how decisions are made towards replacement method
Identify those with the potential to assume greater responsibility in the organization
Provide critical development experiences to those that can move into key roles
Engage the leadership in supporting the development of high-potential leaders
The performance of individuals and the gaps of high-potential candidates are assessed on a
yearly basis and IDPs are developed towards developing those gaps.
The replacement chart will depict the readiness and the performance of each individual in the
management team. An example of a replacement chart is as follows:
Succession codes
Readiness
A. Ready Now
B. Ready in 1 year
C. Ready in 2 years
D. Readiness not determined/ review
Performance
1. Outstanding
2. Above Average
3. Average/ Good
4. Below Average
5. Unacceptable
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