1) What are the challenges facing HRM? / Explain the changing role of HRM?
The 1990s have brought a revolutionary change in our business. Post- liberalisation is
marked by a shift from command economy to market driven economy; from sheltered
market to competitive market; from monopoly to competition; and from domestic trade to
global trade. Such a shift calls for a different approach to HR activities. During the preeconomic liberalization, the HR managers had aopted a reactive strategies to people’s
problems. The need of the hour is proactive approach, a strategy which helps HR
managers foresee events and take appropriate actions before the events occur.
The major challenges are:
 Globalisation
Globalisation is increasingly viewed as a growth strategy by several companies. Growing
internalisation of business has its impact on HRM functions. The HR department is
required to cope with the problems of unfamiliar laws, languages, practices,
competitions, attitudes, management styles, work ethics and more. HR managers are
required to know that international operations have:
More functions, such as taxation and co-ordination of departments.
More heterogenous functions, such as co-ordination of multiple salary currencies
More involvement in the employee’s personal life, such as housing, health, education and
recreation.
HR functions such as planning, staffing, remuneration and the like, therefore, will be
affected by globalisation.
 Corporate Reorganisations
The past three to four years brought us news about corporate mergers, takeovers and
massive reorganizations to fend off hostile take-over bids. It is difficult to imagine
circumstances that pose a greater challenge for HRM than reorganization resulting from
acquisition, merger, divestiture or a take-over threat.
The reorganization will have impact on organizational levels and employees. The
employees of both the ‘taking over’ as well as the ‘taken over’ companies will have
anxious moments because of
1. Fear of loss of jobs
2. Job changes, including new roles and assignments
3. Transfers to new geographic location
4. Changes in remuneration
5. Changes in career possibilities
6. Changes in organisational power, status, an prestige,
7. Staff changes, including new peers, supervisors, and subordinates, and
8. Changes in corporate culture and loss of identity in the company.
There is little indication that the pace of mergers and acquisitions will slacken in the
future. But an important key to the success of almost any merger or acquisition is the
management of HR.
 New organizatioanl forms
The practice of HRM is shaped by the organisational forms in which people are
employed. But the employment potential of these giant corporations is declining. Large
production units have become increasingly a thing of the past, and large companies now
tend to consist of business units managed relatively independently.
The consequence has been a higher profile of medium size and small sized firms as
employers. A majority of the population are employed in units with fewer than 200
employees.
This trend affects HRM in various ways
Smaller firms and establishments means a more personalised style- not necessarily more
progressive, but more fsce-to –face.
Smaller units may require less complex and sophisticated systems of personnel
management, but may also be less able to sustain them in areas like management
development.
Smaller unit are less able to sustain a specialist personnel management function.
On the other hand, the business and human challenges of operating in this kind of
environment are becoming greater. The contribution of HRM will then be in facilitating
the processes, which support the development of the enterprise, rather than, as traditional
personnel management has one, in administering systems for controlling people.
The basic challenge to HRM an enterprise management comes from the changing
character of competition.Competition in many sectors is no longer between individual
firms, large or small, but between constellation of firms.
 Changing demographics of workforce
The major challenge that has resulted from changing workforce demographics concerns
dual career couples, couples where both partners are actively pursuing professional
careers. Organizations have been accustomed to using job moves and physical relocation
as an important means of developing talent. The increasing number of dual career
professionals limits individual flexibility in accepting such assignments.
Another change in the workforce demographics relates to the growing number of
employees who are young. Dormitories, gymnasium, breakfast, these are the kind of
facilities that need to be provided to the workforce which has more of young employees.
 Changed employee expectations
With changes in work-force demographics, employee expectations and attitudes also
have shifted. Traditional allurements such as job security, attractive
remuneration,housing and the like do not attract and motivate today’s workforce.
Employees demand empowerment and expect quality with the management. Previous
notions about managerial authority are giving way to employee influence and
involvement along with mechanisms for upward communication and due process.
Another expectation by the employee is that the electronic and telecommunication
revolution will improve the quality of work life. Innovations in communication and
computer technology will accelerate the pace of change, and as a result, lead to many
innovations in HRM. Also, today’s average worker demands better treatment,
challenging jobs and career advancement.
The HR manager must, therefore, redraw the profile of the worker and discover new
methods of hiring, training, remunerating and motivating employees.
 Proactive industrial relations strategy
There is almost a metamorphosis at the industrial relations front. Strikes, lockouts and
loss of mandays are declining considerably. This transformation is the result of socioeconomic and political reasons.
The challenge to the labour movement comes not so much from any destructive potential
intrinsic in HRM but from its capacity to co-opt and integrate workers into the enterprise
by building a relationship with them.
Not having to compete with the management for worker’s loyalty, trade unions behave
towards their members exactly as any monopolistic organisation would. HRM comes as a
threat to this cosy arrangement, for management is not only seeking to get back to the
neglected employee, but doing so in an environment where there own unions had taken
them for granted.
The need now is to adopt a proactive strategy towards industrial relations, an approach
which should enable HR specialists to look into the challenges unfolding in the future and
to be prepared to convert them into opportunities.
 Contribution to the success of the Organization
The biggest challenge to an HR manager is to make all employees contribute to the
success of the organization in an ethical and socially responsible way. The society’s well
being, to a large extent depends on its organisations, particularly business organisations.
It must be the endeavour of everybody to ensure success and stability of organizations.
Responsibility is more on the HR manager as it is he who co-ordinates people’s activities
and it is the people who make or mar organizations.
 Need for attitudinal change in PSUs
While success of organizations in general is vital for society’s well being, public sector
undertakings tell a different story. It may be asserted that although most PSUs are strong
in manpower, R&D, systems, manuals, principles, and procedures, they fail to use it and
incur losses.
Behind this phenomenon is the role of the personnel. Employees of loss making units
have wrong attitudes towards their work and their organizations. Consequences are low
productivity, absenteeism, militancy and other similar evils.
These issues must be addressed by the HR manager.
 Renewed focus on people
The good news for HR managers is that there is renewed focus on people in
organizations. For too long, managers believed in structures, strategies and systems. But
over the last decade, technological, competitive and market changes have eroded its
effectiveness.
The top management must therefore nurture the ideas of the frontline engineers and sales
representatives, encourage interpersonal relationship and self monitoring and develop
personal communications with key people.
The role of HR manager in the unfolding scenario is clear. He or she must make the focus
on people justifiable and sustainable.
 Managing the mangers
Managing the managers is another challenge before the HR manager. Mangers believe
they are a class apart and expect remuneration which may be unreasonable and highly
expensive.
Managers instead of managing their allotted functions, assume the role of the employer
and fire those whom they feel are too smart.
Yet, managers are the individuals who run the show and an organisation cannot do
without them.
 Protect the interests of weaker sections
Another important challenge for HRM is to protect the interest of weaker sections of the
society. The dramatic increase of women, minorities and other backward communities in
the workforce has resulted in the need for organisations to re-examine their policies,
practices and values.
2) What is the role of Strategic HRM?
The role of HRM in formulating and implementing strategies is crucial. It is the people
who formulate and implement strategies and the people are supplied by HRM.
 Role in Strategy Formulation:
HRM is in a unique position to supply competitive intelligence that may be
useful in strategy formulation. Details regarding advanced incentive plans used by
competitors, opinion survey data from employees that give information about
customer complaints and information about pending legislation like labour laws or
mandatory health insurance are some examples.
The strengths and weaknesses of a company’s human resources can have a
determining effect on the viability of a company’s strategic options. A company may
build its new strategy around a competitive advantage stemming from its human
resource.
 Role in Strategy Implementation:
HRM supplies the company with a competent and willing workforce, which is
responsible for executing strategies. HRM supports strategy implementation in other
ways too. For example, human resource today is heavily involved in the execution of
the company’s downsizing and restructuring strategies, through out placing
employees, instituting performance-linked pay plans, reducing health-care costs and
retraining employees. And, in an increasingly competitive global market place,
instituting HR practices that build employee commitment can help improve an
organisation’s responsiveness.
A well-designed strategy can fail if sufficient attention is not paid to the HR
dimension. HR problems that arise when executing strategies may be traced to one of
the following 3 causes:
a.
Disruption of social and political structures
b. Failure to match individuals’ aptitudes with implementation tasks; and
c.
Inadequate top-management support for implementation activities.
Strategic implementation poses a threat to many managers and employees in an
organisation. Guidelines which help ensure that human relationships facilitate but not
disrupt strategy implementation include open communication, co-opting as many
managers and employees in the strategic management process and matching
managers with strategies through transfers, promotions, job enlargement and job
enrichment.
3) What is job evaluation? What are its objectives?
Job Evaluation
Concept
Job Evaluation is the process of analysis and assessment of jobs to ascertain reliably their
relative worth, using the assessment as a basis for a balanced wage structure. Job
Evaluation is used to establish a wage structure which is acceptable to both Management
and Labour by providing a relative value of every job in a plant or industry.
Definition
Job Evaluation may be defined as “an attempt to determine and compare demands which
the normal performance of a particular job makes on normal workers without taking into
account into the individual abilities or performance of the workers concerned.
Objectives of Job Evaluation
The major objectives of job evaluation are to help management achieve:
1. Equitability of wage structure within the firm, and
2. Consistency of the firm’s overall wage structure with that of the industry in which the
firm operates.
Apart from these primary two objectives, job evaluation serves the following objectives
as well:
1. Establishment of a sound wage foundation for incentive and bonus programmes.
2. Maintenance of a consistent wage policy.
3. Enable the management to gauge and control its payroll cost more accurately.
4. Provide a framework for periodic review of wages and salaries.
5.
Classify functions, authority and responsibility which in turn aids in work
simplification and elimination of duplicate operations.
6. Reduce grievances and labour turnover and, thereby, increase employee morale and
improvement management – employee relationships.
7. Serve as a basis for negotiation with the union or employees.
8. Help in selecting, promoting, transferring and training employees.
Thus, we can say that job evaluation plays a key role in wage and salary
administration and assists managers in meeting day-to-day problems.
4) What are the methods of job evaluation?
Job evaluation methods are of two categories – non analytical and analytical
Non-Analytical Methods: - These methods
make no use of detailed job factors. Each
job is treated as a whole in determining its
relative ranking.
 Ranking Method
 Job – Grading Method
Analytical Methods:  Point Ranking Method
 Factor Comparison Method
Ranking Method:
This is the simplest and the most inexpensive method of evaluation. The evaluation is
done by assessing the worth of each job on the basis of its title or on its contents, if the
latter is available. The job is not broken down into elements or factors. Each job is
compared with others and its place is determined.
Drawbacks – Job evaluation may be subjective, as the jobs are not broken into factors. It
is hard to measure whole jobs.
Job – Grading method:
This method does not call for a detailed or quantitative analysis of job factors. It is based
on the job as a whole. Under this method the number of grades if first decided upon, and
the factors corresponding to these grades are then determined.
Facts about jobs are collected and are matched with the grades, which have been
established. The essential requirements of this method are to frame grade descriptions to
cover discernible differences in degree of skill, responsibility and other job
characteristics. Job grades are arranged in the order of their importance in the form of a
schedule. The lowest grade may cover jobs requiring greater physical work under close
supervision, but carrying little responsibility. Each succeeding grade reflects a higher
level of skill and responsibility, with less and less supervision.
Advantages –
It’s simple and inexpensive.
In organizations where number of jobs is small, this method yields satisfactory results.
Disadvantages –
Job description are vague and are not quantified.
Difficulty in convincing employees about the inclusion of a job in a particular grade
because of vagueness of grade descriptions.
More job classification schedules need to be prepared because the same schedule cannot
be used for all types of jobs.
Point Ranking Method:
this system starts with the selection of job factors, construction of degrees for each
factor, and assignment of points to each degree. Different factors are selected for
different jobs, with accompanying differences in degrees and points. The range of grades
and scores is also predetermined- for example, from 210 to 230 points, the 5th grade; 231
to 251 points the 6th grade and so forth. A given fob is placed on a particular grade,
depending on the number of points it scores.
Advantages –
A job is split into a number of factors. The worth of each job is determined on the basis
of its factors and not by considering the job as a whole.
The procedure adopted is systematic and can easily be explained to the employees.
The method is simple to understand and easy to administer.
Disadvantages –
Employees may disagree with the points allotted and to factors and their degrees
identified.
Serious doubts are expressed about the range of points allotted and matching them with
the job grades, for example- a score range of 238 to 249 is grade seven and the next range
of 250 to 271 is grade six. A variation of one point makes all the difference.
Factor Comparison Method:
Under this method one begins with the selection of factors usually five of them- mental
requirements, skill requirements, physical exertion, responsibility and job conditions.
These factors are assumed to be constant for all the jobs. Each factor is ranked
individually with other jobs. For example – all jobs may be compared first by the factor
‘ mental requirements’. Then the skills factor, physical requirements, responsibility and
working conditions are ranked. Thus a job may rank near the top in skills but low in
physical requirements. The total point values are then assigned to each factor. The worth
of a job is then obtained by adding together all the point values.
AdvantageJobs of unlike nature – for example, manual, clerical, and supervisory may be evaluated
with the same set of factors.
DisadvantageThe method is complicated and expensive.
5)
Describe any method of job evaluation.
Job evaluation methods are of two categories - non analytical and analytical. The non –
analytical methods include methods like ranking method job grading method. Whereas
the analytical methods include methods like point - ranking method and factor –
comparison method.
Job – grading or Job classification
method
1. It is based on the job as a whole and does not call for detailed or quantitative
analysis.
2. Under this method a number of grades is decided upon and the factors
corresponding to this grade are decided upon.
3. Then the facts about the jobs are collected and matched with the grades which
have been established.
4. This classification can be done in the following manner.
GRADE
NATURE
OF
DESCRIPTION
SUPERVISION
TASKS
1
2
3
4
5
6
7
Very simple
Largely physical in nature
Small no. of clearly defined
Simple tasks
rules and short training period
Straight –
More complicated routines,
forward
requiring knowledge &
tasks
alertness on the worker’s part.
Independent Exercise of some initiative &
arrangements detailed familiarity with other
of work
such established procedures.
Involving individual degree of
Routine
responsibility & control over a
work
small group of staff.
Involving co-ordianation of
several lower grade functions,
Non –
recognised individual
routine work
knowledge & control over a
small group of staff.
Inidividual
Specialists knowledge
tasks
Close supervision
Checked & closely
supevised
Subject to occasional
checks
Require little
supervision
Answerable to non –
routine queries.
No follow up
5. The essential requirement of job – grading method is to frame grade descriptions
to cover discernible differences in degree of skill, responsibility and other job
characteristics. Job grades are arranged in the order of their importance in the
form of a schedule.
6. Each suceeding grade reflects a higer level of skill and responsibility with less
and less supervision.
Advantages of Job – grading method
1. Simplicity and inexpressiveness
2. Effective in organizations where number of jobs is small.
Disadvantages of Job – grading method
1. The job grade descriptions are vague and not quatified.
2. Difficulty in convincing the employees about inclusion of a job in a particular
grade because of the vagueness of the grade descriptions.
3. More job classification shcedules need to be prepared because the same
schedule cannot be used for all types of jobs.
6) What is Job Design?
Meaning:
Job Design involves conscious efforts to organise tasks, duties, and responsibilities into a
unit of work to attain certain objectives.
Definition:
Job design integrates work content (tasks,functions,relationships),the rewards (extrinsic
and intrinsic), and the qualifications required (skills,knowledge,abilities)for each job in a
way that meets the needs of employees and the organisations.
Three Steps of Job design:
1. Specification of individual tasks
2. Specification of the method of performing each task
3. Combination of tasks into specific jobs to be assigned to individuals.
Key to successful job design lies in balancing the requirements of the organisation and
the job holder.
Job design results in making the job specialised which could leads to boredom and
degradation of job holder.
Factors affecting Job Design
Organisational Factors
Characteristics of Tasks: Complexity in a job may be a reflection of the number and
variety of tasks to be carried out, or the range and scope of the decisions that have to be
made, or the difficulty of predicting the outcome of decisions.
Work Flow: The flow of work in an organisation is strongly influenced by the nature of
the product or service. The product or service usually suggests the sequence and balance
between jobs if the work is to be done efficiently.
Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical
abilities and characteristics of individuals so that they can perform their jobs effectively.
Ergonomics does not alter the nature of the job tasks, but the location of tools, switches
and other facilities, keeping in view that the handling of the job is the primary
consideration.
Work Practices: Work practices are set ways of performing work. These methods may
arise from tradition or the collective wishes of the employees. Either way, the HR
department’s flexibility to design jobs is limited, especially when such practices are part
of a union – management relationship. Failure to consider work practices can have
undesirable outcomes.
 Environmental Factors
Employees’ Abilities and Availability: Efficiency consideration must be balanced against
the abilities and availability of the people who are to do the work. When Henry Ford
made use of the assembly line, for e.g., he was aware that most potential workers lacked
any automobile – making experience. So, jobs were designed simple and required little
training.
Social and Cultural Expectations: Literacy, knowledge and awareness among workers
have improved considerably, so also their expectations from jobs. Hence, jobs must be
designed to meet the expectations of workers. Also, when designing jobs for international
operations, the organisation should not neglect national and cultural differences like
hours of work, holidays, religious beliefs, management styles, and worker sophistication
and attitudes which can affect the design of jobs across international borders, or it can
lead to dissatisfaction, low motivation and a low quality of work life.
 Behavioural Elements
Higher level human needs are more significant in this context. Individuals inspired by
higher level needs find jobs challenging and satisfying which are high on the following
dimensions:
Feedback: Individuals must receive meaningful feedback about their performance,
preferably by evaluating their own performance and defining the feedback. This implies
that they should ideally work on a complete product or on a significant part of it.
Autonomy: Autonomy is being responsible for what one does. Jobs that give workers
authority to make decisions will provide added responsibilities, which tend to increase
the employee’s sense of recognition and self – esteem.
Use of Abilities: The job must be perceived by individuals as requiring them to use
abilities they value in order to perform the job effectively.
Variety: Lack of variety may cause boredom. Boredom, in turn, leads to fatigue, which
causes mistakes. By injecting variety into jobs, personnel specialists can reduce errors
caused by fatigue.
Techniques of Job Design
1. Work Simplification: In this technique, the job is simplified or specialised. A given
job is broken down into small sub – parts and each part, is assigned to each
individual. Work simplification involves i) mechanical pacing of work, ii) repetitive
work processes, iii) working on only one part of the product, iv) predetermining tools
and techniques, v) restricted interaction among employees and vi) few skill
requirements.
2.
Job Rotation: Job rotation is one answer to boredom which implies movement of
employees from job to job. With job rotation, a given employee performs different
jobs, but more or less, jobs of the same nature.
3. Job Enlargement: Job enlargement involves expanding the number of tasks or duties
assigned to a given job. It is naturally opposite to work simplification. Adding more
tasks or duties to a job does not mean that new skills and abilities are needed to
perform it.
4.
Job Enrichment: Job enrichment seeks to improve both task efficiency and human
satisfaction by building into people’s jobs, quite specifically, greater scope for
personal achievement and recognition, more challenging and responsible work, and
more opportunity for individual advancement and growth. An enriched job will have
more responsibility and autonomy (vertical enrichment), more variety of tasks
(horizontal enrichment), and more growth opportunities.
5.
Autonomous or Self-Directed Team: A self – directed work team is a group of
committed employees who are responsible for a ‘whole’ work process or segment that
delivers a product or service to an internal or external customer.
6.
High-Performance Work Design: It is a means of improving performance in an
environment where positive and demanding goals are set. It starts from the principle
of autonomous group working and develops an approach which enables groups to
work effectively together in situations where the rate of innovation is high.
Employees are needed to gain and apply new skills quickly with minimum
supervision for operational flexibility.
Positive and Negative Outcomes of Job Design Approaches:
Job Design Approach
Positive Outcome
Negative Outcome
1. Work Simplification
Job is highly specialised, so that
less trained and less paid
employee can perform.
Job’s intrinsic reward potential is
likely to increase.
Over simplification results in
boredom with attendant risks of
errors and resignations.
Jobs do not improve. Workers
may feel rootless and alienated.
2. Job Rotation
Organisation too stands to gain
because of the versatility of its
employees. Worker’s self image
will grow. There is enhanced
interdepartmental cooperation.
3. Job Enlargement
Claims to have motivational Mere adding one zero to
impact.
another zero – adding one more
boring task to another. Likely
to be resisted by employees.
4. Job Enrichment
Increased motivation, reduced People may not like to accept
absenteeism,
psychological new responsibilities. Union
needs of employees are met. resistance adds to the problem.
Brings about empowered teams. Job
enrichment,
if
not
accompanied by other job
inputs, will fail in its goal.
5. Autonomous Work There is greater involvement of There is resistance from
Team
employees in decision – making, employees,
unions,
and
which brings in commitment.
managers and supervisors.
6.
High-Performance Works in an environment of high May not work in large
Work Design
rate
of
innovation
and bureaucratic organisation.
operational freedom.
II.
1. What is the meaning and definition of Human Resource Planning?
Meaning:




HRP is the process of forecasting an organisation’s future demand for, and the
supply of, the right type of people in the right number. It is only after this that the
HRM department can initiate a recruitment and selection process.
It is a sub-system in the total organisational planning.
It facilitates the realisation of the company’s objectives by providing the right
type and the right number of personnel.
HRP is variously called manpower planning, personnel planning or employment
planning.
A few definitions of HRP are:

HRP includes the estimation of how many qualified people are necessary to carry
out the assigned activities, how many people will be available, and what, if
anything must be done to ensure that personnel supply equals personnel demand
at the appropriate point in the future.

Human resources planning is the process by which an organisation ensures that it
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
organisation achieve its overall objectives. Human resources planning, then,
translates the organisation’s objectives and plans into the number of workers
needed to meet those objectives. Without a clear-cut planning, estimation of an
organisation’s human resource need is reduced to mere guesswork.
2. What is the importance of HRP?
Importance of Human Resource Planning
Human Resource Planning (HRP) is understood as the process of forecasting an
organization’s future demand for, and supply of, the right type of people in the right
number. It is only after this that the HRM department can initiate the recruitment and
selection process. Human resource planning translates the organization’s objectives and
plans into the number of workers needed to meet those objectives. Without a clear cut
planning, estimation of an organisation’s human resource need is reduced to mere
guesswork. The following points highlight the importance of HRP.
1. Future Personal Needs:- Planning is significant as it helps determine future
personnel needs. Surplus or deficiency in staff strength, is the result of the
absence of or defective planning. All public sector enterprises find themselves
overstaffed now as they never had any planning of their personnel requirements.
They went on a hiring spree upto the late 1980’s. Since then, recruitment and
selection have been banned, but the ban came too late. The private sector is no
exception. As many as 76.5 per cent of Indian organizations have surplus labour.
The problem of excess staff has become so heavy that many units are resorting to
“voluntary retirement schemes” (VRS) to remove the excess staff. Such surplus
labour would not have been there if there were HRP. Moreover, there is lack of
succession planning in most public sector units. Absence of succession planning
has resulted in a situation where many organizations function without chief
executives. Indian Airlines has been headless for a period of 10 months and Gas
Authority of India has been headless for 27 months. The anomaly of surplus
labour, juxtaposed with the lack of top executives stems from the absence of or a
defective HRP.
2. Coping with Change:- HRP enables an enterprise to cope with changes in
competitive forces, markets, technology, products, and government regulations.
Such changes generate changes in job content, skill demands, and number and
type of personnel. Shortage of people maybe noticed in some areas while surplus
in other areas may occur.
3. Creating Highly Talented Personnel:- Jobs are getting highly intellectual and
incumbents are getting vastly professionalized. L&T, an engineering giant, has
MBA’s, engineers and technicians who collectively constitute 70% of the total
employee strength of 20,000. The HR manager must use his ingenuity to attract
and retain qualified and skilled personnel. These people are known for job
4.
5.
6.
7.
8.
9.
hopping, thereby creating frequent shortages in the organization. Manpower
planning helps prevent such shortages.
Protection of Weaker Sections:- In matters of employment and promotion,
sufficient representation needs to be given to SC/ST candidates, physically
handicapped, children of the socially and politically oppressed, and backward
class citizens. These groups enjoy a given percentage of jobs, notwithstanding the
constitutional provision, which guarantees equal opportunities to all. A wellconceived personnel planning programme would protect the interests of such
groups.
International Strategies:- International expansion strategies depend upon HRP.
The departments ability to fill key jobs with foreign nationals and the
reassignment of employees from within or across national borders is a major
challenge facing international businesses. With a growing trend towards global
operation, the need for HRP will grow, as well as the need to integrate HRP more
closely into the organization strategic plans. HRP will grow increasingly
important as the process of meeting staffing needs from foreign countries and the
attendant cultural, language, and developmental considerations grow complex.
Without effective HRP and subsequent attention to employee recruitment,
selection, placement, development and career planning, the growing competition
for foreign executives may lad to expensive and strategically- disruptive turnover
asmong key decision makers.
Foundation for Personnel Functions:- Manpower planning provides essential
information for designing and implementing personnel functions, such as
recruitment, selection, personnel movement (transfers, promotions, layoffs) and
training and development.
Increasing Investment in Human Resource:- Another compelling reason for
HRP is the investment an organization makes in its human resources. Human
assets as opposed to physical assets, can increase it value. An employee who
gradually develops his/her skills and abilities becomes a more valuable resource.
Because an organization makes investments in its personnel either through direct
training or job assignments, it is important that employees are used effectively
throughout their careers. An increasing number of executives are acknowledging
that the quality of the workforce can be responsible for significant differences in
short-run and long-run performances.
Resistance to Change and Move:- There is a growing resistance among
employees to change and move. There is also a growing emphasis on selfevaluation and on evaluation of loyalty and dedication to the organization. All
these changes are making it more difficult for the organisation to assume that it
can move its employees around anywhere and anytime it wants, thus increasing
the importance and necessity of planning ahead.
Other Benefits:- Following are other potential benefits of HRP:
Upper management has a better view of the HR dimensions of business
decision.

Personnel costs may be less because the management can anticipate
imbalances before they become unmanageable and expensive.

More time is provided to locate talent

Better opportunities exist to include women and minority groups in future
growth plans.

Better planning of assignments to develop mamanagers can be done

Major and successful demands on local labour markets can be made.
3. What are the objectives/specific goals of HRP?
HR plans need to be based on organizational objectives. In practice, this implies that the
HR plan must be derived from organizational objectives. Specific requirements in terms
of numbers and characteristics of employee’s should be derived from the organizational
objectives.
Organizational objectives are stated by the top management and the role of HRP is to
subserve the overall objectives by ensuring availability and utilization of human
resources.
For example, if a modernization of the plant is planned by the top management in their
strategic planning for the next five years, the human resources department has to start
from this objective and plan for human resources and for the modernization, premodernization, and post modernization periods. HR planning must take care of
recruitment, selection, training and development to meet the modernisation and post
modernisation as well as for additional recruitment wherever necessary. Separating
redundant labour and training and updating the existing labour must also include the
human resource planning. Modernisation plan is bound to fail unless proper man power is
envisaged to cope with the modernisation.
Once the organizational objectives are specified, communicated and understood by all
concerned, the HR department must specify its objectives with regard to HR utilization in
the organization. They must focus on
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Ensuring optimum use of human resources.
Keeping the organizational workforce to cope with the technological development
and modernisation.
Streamlining uninterrupted supply of workforce to the functional needs of
business from time to time.
Union constraints encountered in HRP and develop policies needed to handle the
constraints.
Automation of production and operations and what can be done of those
displaced.
Cutting down surplus, redundant manpower and retraining and redeploying the
manpower appropriately.
Ensuring a career planning for every employee of the organization and making
succession programs. It means that human resource planning must include
objectives for accomplishing organizational goals and individual aspirations of
the employees.
If the estimated results fall short of the objectives, reasons for failure must be
determined through performance evaluation and the defects rectified. Also, the plan
or the objective must be revised whenever needed. Once the plan is finalized, efforts
must be made to implement it and make periodical evaluation of the results.
4. What are the limitations and challenges of HRP?
Planners face a few challenges while formulating an HRP. The major ones are the
following:
1) People question the importance of making HR practices future oriented and the
role assigned to HR practitioners in formulation of organizational strategies. Their
argument is – there are people when needed. Offer attractive packages of benefits
to them to quit when you find them in surplus. When the task is so simple, why
elaborate time consuming planning for human resources? Surprisingly this
perception about HRP is also held by the top management.
2)
HR practitioner perceived as experts in handling personal matters, but are not
experts in managing business. The personnel plan conceived and formulated by
HR practitioners when enmeshed with the organizational plan, might make the
overall strategic plan itself defective.
3)
HR information often is incompatible with the information used in strategy
formulation. Strategic planning efforts have long been oriented towards financial
forecasting often to the exclusion of other types of information. Financial
forecasting takes precedence over HRP.
4) Conflicts may exist between long term and short term HR needs. For example,
there arises a conflict between the pressure to get the work done on time and long
term needs, such as preparing people for assuming greater responsibilities. Many
managers are of the belief that HR needs can be met immediately because skills
are available in the market as long as wages and salaries are competitive. These
managers fail to realize that by resorting to hiring or promoting depending on
short term needs alone, long term issues are neglected.
5) There is a conflict between quantitative and qualitative approaches to HRP. Some
people view HRP as a numbers game designed to track the flow of people across
departments. These people take a strictly quantitative approach to planning.
Others take a qualitative approach and focus on individual employee concerns
such as promotability and career development. Best results would accrue if there
is a balance between quantitative and qualitative approaches.
6)
Non involvement of operating managers renders HRP ineffective. HRP is not
strictly an HR department function. Successful planning needs a co-ordinated
effort on the part of operating mangers and HR personnel.
5. What are the steps for a successful integrated HRP?
Steps for an integrated HRP
An integrated Human Resources Planning requires a human resource information system.
A human resource information system (HRIS) is a systematic procedure for
collecting, storing, maintaining, retrieving and validating data needed by an organization
about its human resources. The HRIS is usually a part of the organization’s larger
management information system (MIS). The HRIS need not be complex or even
computerized. But computerization has its own advantage of providing more accurate and
timely data for decision making.
The steps in implementing an HRIS
As with any major change, proper planning is an absolute necessity for successful
implementation of an HRIS. The steps outlined below describe the specific procedures
involved in successfully developing and implementing an HRIS.
Step 1. Inception of idea. The idea for having an HRIS must originate somewhere.
The originator of the idea should prepare a preliminary report showing the need for an
HRIS and what it can do for the organizations.
Step 2. Feasibility study. Feasibility study evaluates the present system and details
the benefits of an HRIS. It evaluates the costs and benefits of an HRIS.
Step 3. Selecting a project team .Once the feasibility study has been accepted and
the resources allocated,a project team should be selected. The project team should consist
of an HR representative who is knowledgeable about the organisation’s HR functions
and activities and about the organization itself and representatives from both management
information systems and paytoll. As the project progresses, additional clerical people
from the HR department will be needed to be added.
Step 4. Defining the requirements. A statement of requirements specifies in detail
exactly what the HRIS will do. A large part of the statement of requirements normally
deals with the details of reports that will be produced. Naturally, the statement also
describes other specific requirements. This typically includes written descriptions of how
users collect and prepare data, obtain approvals, complete forms, retrieve data and
perform other non technical tasks associated with HRIS use.
Step 5. Vendor analysis. This step determines what hardware and software are
available that will best meet the organizations needs for the lowest price. This is a
difficult task. The best approach is usually not to ask vendors if a particular package can
meet the organizations requirements but how it will meet those requirements. The results
of this analysis will determine whether to purchase and “off –the-shelf” package or
develop the system internally.
Step 6. Package contract negotiation. After a vendor has been selected, the
contract must be negotiated. The contract stipulates the vendors responsibilities with
regard to software, installation, service maintenance, training and documentation.
Step 7. Training. Training usually begins as soon as possible after the contract has
been signed. First, the members of the project team are trained to use the HRIS. Towards
the end of the implementation, the HR representative will train managers from other
departments in how to submit information to the HRIS and how to request information
from it.
Step 8. Tailoring the system. This step involves making changes to the system to
best fit the needs of the organization. A general rule of thumb is not to modify the
vendor’s package because modifications frequently cause problems an alternative
approach is to develop programs that augment the vendors program rather than altering it.
Step 9. Collecting the data. Prior to start-up of the system data must be collected
and entered into the system.
Step 10. Testing the system. Once the system has been tailored to the organizations
needs and the data entered a period of testing follows. The purpose of the testing phase is
to verify the output of the HRIS and to make sure it is doing what it is supposed to do. Al
reports should be critically analysed for accuracy.
Step 11. Starting up. Start-up begins when all the current actions are put into the
system and reports are produced. It is wise to attend start-up during a lull period so that
maximum possible time can be devoted to the HRIS. Even though the system has been
tested some additional errors often surface during start-up.
Step 12. Running in parallel. Even after the new HRIS is tested it is desirable to
run the new system in parallel with the old system for a period of time. This allows for
the comparison of outputs of both the system and examination of any inaccuracies.
Step 13. Maintainance. It normally takes several weeks or even months of the HR
people to feel comfortable with the new system. During this stabilization period any
remaining errors and adjustments should be handled.
Step14. Evaluation. After the HRIS has been in place for a reasonable lengthy of
time the system should be evaluated. Is the HRIS right for the organization and is it being
properly used?
Following the above steps when implementing an HRIS will not guarantee success
but it will increase the profitability.