HUMAN RESOURCE MANAGEMENT_Unit 2 HRP.pdf

HUMAN RESOURCE
MANAGEMENT
Unit-2

Topics to be covered
• Human Resource Planning (Objective)
• Requirements of Effective HRP
• HRP Process
• Manpower Demand Forecasting Techniques
• Job Analysis : Concept & Process
• Introduction to Human Resource Information System (HRIS)
• Benefits of HRIS

• After studying this unit, you should be able to-
• Understand the concept of Human Resource Planning.
• Describe the various Objectives of Human Resource Planning.
• Explain in detail the various steps involved in the Human Resource Planning Process.
• Illustrate the various Human Resource Demand Forecasting Techniques. «
• Explain the concept of Job Evaluation.
• Describe the Job Evaluation Process.
• Explain the concept of Human Resource Information System (HRIS) and discuss its
benefits.

Objectives of Human Resource Planning
• To Forecast Future Requirements for HR
HR Planning is essential to project the future manpower needs of an organization. If HR planning is not
done effectively it can lead to overstaffing or understaffing.
• Realizing Organizational Goal
The basic aim of HR planning is to have an accurate and optimum number of employees at any given point
in time. They should have the skills required to accomplish each job to meet the organizational objectives
• Effective Management of Change
An organization faces constant internal and external changes e.g mergers, acquisitions, govt regulations,
technology etc. These changes are to be proactively assessed from time to time so that HR plan would fit in
with the strategic business objectives. HR planning should ensure that even during such times of changes the
organization should not suffer due to non-availability of qualified people.

• Effective Utilization of Human Resources
HR assesses the current human resources capacity based on their competencies , skills,
training , qualification etc. against the capacity needed to achieve the organizational goal.
Keeping the inventory of the existing personnel helps utilize the existing resources more
effectively in relation to the job requirement. HR strategies, plans and programs are then
designed, developed and implemented to close the gaps.
• Promoting Employees
HR planning is required to maintain data and assess the performance of each employee. A
promotion is viewed as desirable by employees as it is a form of recognition for those who
make significant and effective work contribution. HR plan continuously work on ensuring
regular promotions to competent people on a justifiable basis.

Requirements of Effective HRP
• (1) Clear understanding on the Objective HR managers should have a clear understanding
on the objectives behind HR planning, they should very well understand its critical impact
on other function of human resource management and the goal accomplishment.
• (2) Communication Sustained and regular communication and harmonious relationship
between the line mangers and HR managers is absolutely essential.
• (3) Alignment HR plans should be aligned properly with the organization’s mission, vision
and strategic goals. They should fit into the present and future requirements of the
organization.
• (4) Top Management Support Active involvement and proper guidance from the top
management is extremely important. Before starting the human resource planning project,
the support and commitment of the top management must be ensured

Human Resource Information System
It is very important for a organization to have a strong HRIS in place while
starting the Human Resource Planning process. as planning requires objective
and comprehensive data for decision making. It is thus essential for an
organization to maintain up-to-date and accurate HR records. It should
maintain computerized human resource information regarding the employees
demographics, career progression, appraisals, skills, qualifications, experience,
performance and promotion ratings etc.

Human Resource Planning Process

Human Resource Planning Process
(1) Forecasting Manpower Need
HR Planning ensures that a predetermined number of people with correct qualification and
skill sets are available for the future. This needs to be done to guarantee the availability of the
human resources needed by an organization to meet its strategic business objectives. The basis
of forecasting is that the annual budgets and long term projections are divided into activity
levels for each function and department. This further helps in determining the quality and
quantity of personnel required to perform those activities effectively. Demand forecasting is
dependent on several factors both external and internal. External factors include regulatory,
governmental, economic and social changes, technical development and competition etc.
Internal factors include organization’s strategic plan, sales and production budgets, investment
in new products, services and ventures, impending retirements, terminations, resignations etc

(2) Assessing Current Manpower Inventory
The next step in HR Planning is to estimate the quantity and quality of employees available within the
organization to fill the positions. In case of internal labour supply the HRIS (human resource information
system) is referred to, HRIS uses computers for collecting, storing, maintaining and updating data from time to
time of its employees. It tries to capture the number of employees in each job, their age, sex, qualifications, past
experience etc. It also captures the skills, knowledge, abilities and career aspirations of each employee which is
timely updated due to any change because of training, additional qualifications etc. In order to foresee and
estimate the absenteeism, turnover and attrition rate historical trends are recorded and examined. This gives an
idea of an approximate time period when the important positions might fall vacant and the number of
employees who will be present in the various positions within the organization at any given point in time. In case
internal sources are not enough to fill in the expected vacancies, companies might look out for prospective
employees from external sources e.g universities, consultants, competitors etc.

(3) Identifying Manpower Gap
Once the number and type of employees needed is determined and the supply of manpower is
estimated, a reconciliation of the two will determine the quantitative and qualitative gaps in the
organization. It will throw a light on the number of people to be recruited or make the
organization aware whether there has been overstaffing. This forms the foundation of
preparing a HR plan
(4) Formulating Manpower Plan
Once the human resource requirements and necessary changes to be applied are identified, they
need to be translated into a concrete HR plan supported by policies, programs, strategies etc.

• Below are some of the plans and strategies implemented to achieve the goals-
• (a) Recruitment and selection plan : Recruitment and selection is the process of hiring the right number and
type of people at the right place and at the right time. To do this there are plans charted out to recruit the
right people. After recruitment the selection process is also professionally designed.
• (b) Redeployment and training : To keep the employees abreast with the changing technology or product
lines they should be imparted new skills. In case an organization discontinues a business the employees
should be retrained and redeployed to other departments where they can effectively contribute.
• (c) Alternatives to Hiring : There are other alternatives that can be undertaken as an alternative to hiring
additional employees for e.g encouraging employees nearing retirement to extend their years of service by
rewarding late retirements, rehire, launching overtime schemes by paying a higher commission for overtime
etc. All these alternatives are beneficial if the manpower need has gone high for a temporary time period and
there is a likelihood of it returning to a lower level.

• (d) Retention Plans : Various retention plans are implemented to avoid
attrition in an organization. Organizations might increase the wages, provide
better career opportunities, improve the working conditions, avoid hiring
unstable recruits etc.
• (e) Downsizing Plan : Organizations resort to downsizing plans when the
supply of manpower exceeds the demand and there is surplus in the staff. In
such a case staff is underutilized and there is a need of trimming the labour
force. Some of the examples of downsizing plans are offering voluntary
retirement schemes to the employees, laying off the redundant staff etc

Manpower Demand Forecasting Techniques
In order to assess the number of employees required at any given time in
future, organizations apply various manpower demand forecasting techniques.
The basis of forecast is the annual budget and long term corporate plans,
which is then converted into the man hours required to achieve them and
finally the number of employees required to complete those man hours.
Forecasting techniques vary from organization to organization. Organization
may follow more than one technique which can be simple or complex, the most
commonly used techniques are discussed below

Managerial Judgment
In this forecasting method the experience and judgment of the managers is used to forecast the
demand for labour. It can be a bottom-up-forecasting in which the line managers submit their
manpower proposal to top managers who analyze the same and ultimately forecast the human
resource requirement for the overall organization on the basis of proposals of the
departmental needs. The other approach is the top down forecasting method . In this approach
the top managers meet and discuss the current business scenario, the future challenges
expected and how these trends would impact the business and forecasts the human resource
requirements for the entire organization and various departments. This information is supplied
to various departmental heads for their review and approval. A participative approach is the
most preferred approach in which management and departmental heads meet and unanimously
decide about the future human resource requirement

Ratio-Trend Analysis
Under this forecasting technique the demand for human resources/manpower is
estimated on the basis of ration of production level and number of employees
required to achieve that production level in the past. While doing so the provisions are
made for any possible changes expected in the processes, product line, structure of the
organization. A simple example given below-
Estimated production for next year = 140000 units Ratio as per analysis - 1:200 (1
employee produced 200 units in the past in a span of one year) Estimated number of
workers needed on the basis of ratio trend of 1:200 = 700 workers

Regression Analysis
Similar to ratio-trend analysis this model is also based on the relationship
between dependent variable (sales volume) and independent variable (employee
size). However this model is based on mathematical and statistical techniques
for estimating future demand. A regression line is drawn in a diagram which
depicts the relationship between the dependent variable to be predicted (e.g
manpower/human resources) and the independent variable (e.g sales, total
production, work load etc)

Work- Study Technique
This technique is also known as work load analysis . This technique is used where the work load is easily measurable. The
company first considers the production budget prepared in terms of volumes of the saleable product. The budgeted volumes
are then translated into number of man hours required to produce per unit. Thus demand of human resources is forecasted on
the basis of estimated total production and contribution of each employee in producing each unit items. Allowances will have
to be made for absenteeism , labour turnover and idle time.
Let us assume that the estimated production of an organization is 300000 units. The average man-hrs required to produce each
unit are 2 hrs. The past experience shows that the work ability of each employee in man hrs is 1500 hrs per annum. The work
load and demand of human resources can be calculated as below :
• Budgeted total annual production = 300000 units
• Average man hrs needed to produce each unit= 2hrs
• Calculated man hrs needed to meet Budgeted production = 300000*2 = 600000 hrs
• Man hrs that can be invested by each employee per year = 1500 hr
• Approximate numbers of workers needed = 600000/1500= 400

Delphi Technique
Delphi technique is also a very important technique used for estimating demand for
human resources. It takes into consideration the human resources requirements given
by a group of experts i.e managers. A small group or panel of ten or fewer experts is
identified. Each expert is asked to give their individual judgments on the issue , they
are asked to provide answers to a structured questionnaire or even interviewed. After
which the human resource planning expert acts as a intermediary, collects all the
responses, summarizes them and send the report back to the experts. This process is
continued until all the experts agree on estimated human resource requirements. In the
entire process there is no interaction between the experts, they do not meet face to
face but exchange notes through anonymous questionnaires.

Job Analysis : Concept
• Job Analysis acts as a primary tool to gather, analyze and implement the
information regarding the job in concern. Personnel manager undertake job
analysis for an effective recruitment, selection and placement. It helps in
placing the right person at the right job. There are two outcomes of job
analysis. They are as follows :
(1) Job Description
(2) Job Specification

(1) Job Description
• It is a factual statement that describes the content of the job. It states the duties, tasks and responsibilities to
be undertaken to do that job. It gives a clear picture to the job holder of what all tasks need to be done and
the purpose behind why they need to be performed.
• Job description constitutes the below facts :-
• Title/designation of the job.
• Location in concern.
• Job Summary- gives a brief idea of what is the job all about.
• Job Activities –describes the tasks to be undertaken by the jobholder, clearly mentions the responsibility and authority of the
job holder.
• Mentions the provision of working conditions required and provided for performance of that job.
• Describe the relationship of that job with other jobs in concern

(2) Job Specification
• It is the translation of job description into human qualities and qualifications that are required to do the job. Each role, task
and responsibility mentioned for a job in job description needs a set of skills, qualifications and human characteristics for
satisfactory job completion. Job Specification states the minimum acceptable skills , knowledge and abilities (SKAs) which
are required to perform a job. It is beneficial to have a job specification for each job description. It helps the organization to
determine what kind of person is required for a specific job.
• Job Specification constitutes the following.
• Job Title/designation
• Educational qualification Skills, Knowledge and Abilities (SKAs)
• Physical and Mental Health
• Maturity and Dependability
• Relationship of the job with other jobs in concern

Job Analysis : Process
(1) Identifying the Job analysis purpose
(2) Strategic Choices
(A) Level of detail :
(B) Employee involvement
(C) Data Collection
(D) Information Processing

Introduction to Human Resource Information
System (HRIS)
• In today’s world human resource information system is the integral part of
every organization. HRIS refers to the systems and processes at the
intersection between human resource management(HRM) and Information
technology (IT) . It refers to the electronic tools used to access the HR
related information and perform HR related functions. It is used in
acquiring, storing , manipulating and analyzing important information
regarding the human resource of an organization. It helps HR managers to
perform the HR functions in a more effective, systematic and faster manner
using technolog

Benefits of HRIS
There are several benefits of HRIS.
• It has become a backbone for successful running of the organizations in today’s times:- l
Since it leads to automation of work to a great extend the need to maintain files and
manually process payrolls and applications can be avoided. It also helps avoid manual errors.
Hence it saves time and makes work easy. This can let the HR managers focus on other
important strategic decisions.
• It also helps in streamlining the administration of employee attendance, leave records,
employee benefits etc. Employees can mark their attendance electronically, apply for leaves
online, new employees may electronically enroll in benefit plans, current employees can log
onto the system monitor and update their leave records, current benefit coverage and other
important information throughout the year.

• HRIS allows candidates in case of job openings to submit their resumes and contact
information online. the software also allows current employees to electronically
apply for new positions. The system then collects the information and archives it so
it is easily accessible by the hiring manager.
• It acts as a decision support system. HRIS maintains data about employee profiles,
hiring records, tax information, insurance benefits, employee attendance and much
more, while wanting to make a decision it can process out reports on the stored data
with a few mouse clicks. It gives a very accurate information and does fast
processing. Hence it becomes an important tool to strategic planning and its
implementation

HUMAN RESOURCE MANAGEMENT_Unit 2 HRP.pdf

More Related Content

Similar to HUMAN RESOURCE MANAGEMENT_Unit 2 HRP.pdf

Recently uploaded

HUMAN RESOURCE MANAGEMENT_Unit 2 HRP.pdf