CHAPTER -2

Human Capital Planning and

Employee Hiring
 What do we learn in this module
• Nature Of Job Analysis,
• Job Design,
• Job Evaluation,
• Human Resource Planning,
• Demand Forecasting,
• HR Supply Forecasting,
• Need For And Factors Influencing HRP,
• Career Planning,
• Promotion,
• Transfer,
• Demotion And Separation;
• Employee Hiring- Nature Of Recruitment,
• Sources Of Recruitment-internal And External,
• Employee Selection,
• Process Of Employee Selection. 2
Human Capital Planning

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Introduction to HUMAN CAPITAL PLANNING

HC planning is a systematic process for identifying the

resource pool and its capabilities to meet organizational
goals and developing the strategies to meet the
requirements to fulfill those goals.
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Introduction to HUMAN CAPITAL PLANNING

Systematic Process that HR PLANNING INVOLVES

is integrated,
methodical, and Determine the number
ongoing of skills of needed
workers and where
and when they will be
needed
Identify the actions to
be taken to attract and
retain the number of
Educating the staff on
types of workers that
the behavior and
the organization needs
attitude towards the
5 customers
 Main drivers of HUMAN CAPITAL PLANNING

1. Demographic trends (Aging Human Capital Shrinking Talent,

Education, health, distracted and worried work force

2. Unpredictable change of market economic and political events

3. Program strategies that effect staffing (expanding merging,

acquisitions)

4. Divisional initiatives, quality improvement initiatives

5. Cyclical workload factors

6. Growth of team-based organizations

7. Pressure from trade unions, politicians, etc.

8. Better, faster, and cheaper delivery of services

9. Enhancing return on investment

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10. Government policy, labor law requirements
Employee hiring

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 Job analysis

Meaning of Job Analysis

• Job analysis is the process of determining

and reporting relevant information relating to
the nature of a specific job.

• It is the determination of the tasks that

comprise the job and the knowledge, skills,
abilities,(KSA’s) and responsibilities required
of the holder for successful job performance.

• Job analysis is studying and collecting

information relating to the operations and
responsibilities of a specific job.
 NATURE OF JOB ANALYSIS
A systematic way of gathering and analyzing information about the content, context, and the human
requirements of jobs.
• Work activities and behaviors
• Interactions with others
• Performance standards
• Financial and budgeting impact
• Machines and equipment used
• Working conditions
• Supervision given and received
• Knowledge, skills, and abilities needed

Job Analysis
• The procedure for determining the duties and skill requirements of a job and the kind of person who
should be hired for it.
Job description
• A list of a job’s duties, responsibilities, reporting relationships, working conditions, and supervisory
responsibilities—one product of a job analysis.
Job specifications
• A list of a job’s “human requirements,” that is, the requisite education, skills, personality, and so on—
another product of a job analysis.
 Why Job Analysis is important
• Performance analysis: It decides the performance standards and evaluation criteria for a particular job.

• Recruitment and selection: It helps determine the selection and recruitment criteria necessary to perform a
particular job.

• Compensation management: Such an analysis help in deciding the pay package, perks and benefits and
fixed and variable incentives of the employees.

• Training and development: An analysis can help determine an employee's training and development
requirement based on the said job.

• Job designing: An analysis helps in enriching, designing, redesigning, evaluating, cutting or adding extra
responsibilities.

• Employee replacement: Often, companies analyze to replace employees with qualified hires. It helps in
hiring skilled and culturally fit candidates.

• Job specification: An analysis can prepare a job specification that helps hire a skilled workforce. It also
provides a deep insight into a job that a recruiter can use to track candidates with desired skill sets.
 Job analysis in perspective
JOB ANALYSIS
METHODS SOURCES OF DATA CONDUCTED BY
Questionnaires Employees Job Analyst (HR)
Interviews Supervisors Outside Consultant
Observation Managers Supervisor/manager
Logs/Diaries Job Analyst HR

Used for

Job description Job Specifications

Used for

-EEO/ADA -Performance Management

-HR Planning -Health, safety and security
-Recruiting -Employees /labor relations
-Selection
-Compensation EEO-Equal Employment ACT
-Training ADA-Age Discriminations ACT
 Stages in job analysis process

1. Planning the job analysis

a. Identify objectives of the job analysis 4. Developing job description and job specifications
b. Obtain top management support a. Draft job descriptions and specifications
b. Review drafts with managers and employees
c. Finalize job descriptions and recommendations
2. Preparing for introducing job analysis
a. Identify jobs and methodology
b. Review existing job documentation
c. Communicate process to managers / 4. Maintaining and updating job descriptions and job
employees specifications
a. Update job descriptions and specifications as
organization changes
b. Periodically review all jobs

3. Conducting the job analysis

a. Gather job analysis data
b. Review and compile data
 Job design

• Job Design is the process of structuring work and assigning specific tasks to
individuals or groups. Job design is regarded as an
• These tasks must be done in such a manner that it contributes towards the effort to organize and structure
achievement of organizational objectives in the most effective and efficient tasks, duties and responsibilities
manner. into a unit of work to achieve
certain objectives.
 Job design
The major role in job design is performed by the line managers as they understand the work process better.
Job design basically involves three major steps which are as follows:

• The specification of individual tasks.

• The specification of the method or procedure for the performance of the task.
• The combination of tasks into specific jobs to be assigned to individual employees.

Elements of Job design

• Task: The set of responsibilities that employees are required to complete within a specific time frame.

• Motivation: Incorporate elements that enhance employee motivation towards job performance.

• Resource Allocation: Effective and efficient allocation of company resources to specific job roles can influence
innovation

• Reward Systems: Incorporating both monetary and non-monetary reward systems into job design can serve
as a motivator for employees to enhance their job performance.
Factors Affecting Job Design

 Organizational Factors
 Automation
 Cross functional integration
 technology
Advantages of Job Design
• Job satisfaction is related to the productivity and efficiency of worker
absenteeism and staff mobility,

• Depends on factors such as the content of the work, and the context in which
Job Satisfaction
work is carried out.

• Additional factors associated with job satisfaction are the reduction of errors in
the workplace, and the intention of employees to leave their jobs.

• The motive is described as a need which is so pressing that stimulates a person

to act.

• A need becomes a motive when it has been increased to a satisfying level of

Motivation of Employees
intension.

• Motivation methods vary, from monetary rewards to the acquisition of higher

levels of responsibility.
 Job evaluation

• Job evaluation is the process of assessing

the value or worth of a particular job within
an organisation.
It involves
• comparing of job’s duties,
• responsibilities, and
• required skills
• with those of other jobs in the company to
determine its appropriate place in the
organization's hierarchy and pay scale.
Benefits of Job Evaluation

Improved Job evaluation provides employees with constructive feedback on

performance their strengths and areas for improvement.

Informed informed decisions about promotions, career development

Decision Making opportunities, & other personnel matters.

Enhanced Employees feel secured with fair compensation and

employee recognition happens for their contributes
engagement

Fair and Evaluation helps ensure that employees are fairly compensated
consistent pay based on the value of their job and individual performance
 Human resource planning

• Human Resource Planning is a process that forecasts the company’s

future manpower demand by analyzing the current supply and the gaps if
any. • The right number of
people,
• The ultimate mission or purpose of Human Resource Planning is to align
the future human resources to future organizational strategies
• The right kind of people,

• At the right places,

• It ensures that an organization is always equipped with the right number
and kind of people, at the right place and time. • At the right time,

• Doing work for which they

• Human Resource planning also ensures that the employees effectively and are economically most
efficiently accomplish their tasks that are required to achieve the goal of useful”.
the organization as a whole.

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7 Critical Strategies to Prepare for the Future of HR
1. Embrace Technology and Analytics
2. Understand How the Company Succeeds
3. Stay Focused on People
4. Be Ready for the New Workforce
5. Market a Modern Benefits Package
6. Stay Abreast of Compliance Issues
7. Stay Abreast of Compliance Issues
 Factors Affect the Process of Human Resource Planning

External factors: The factors that are outside the Internal factors: The factors that are within the control of
control of an organisation are called external an organisation are called internal factors.
factors.
• Objectives and policies of an organisation
• Change in employment-related legislations or
acts • Employee-related policies

• Change in the policies of the government, such • Job analysis

as change in the percentage or number of job
reservations, quotas for (SC), (ST), (OBC), etc. • Management decision and strategies
• Change in labor market conditions and business
• Competencies and skills of the HR department
trends
• Information about budget and human resource
• Change in economic conditions like depression
inventory
and inflation

• Changes in technology
 Scope of Human Resource Planning

• It keeps the record of current manpower with Objectives of Human Resource Planning
the organization.

• Assessing the future requirements of manpower • The main objective of Human Resource Planning is to
for organization objectives. determine its future HR requirements and to plan as to
how the existing HR can be utilized optimally.
• To make the manpower recruitment plans.
• It aims to ensure the best fit between employees and
jobs while avoiding manpower shortages and
• To phase out the surplus employees. surpluses.

• To make a layout of a training programme for • To Forecast Future Requirements for HR

different categories of employees.
• Realizing Organizational Goal

• Effective Management of Change

• Effective Utilization of Human Resources

• Promoting Employees
BRAIN TEASER

What can be seen in a minute,

twice in a moment
and
never in a thousand years?

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 Human Resource Demand Forecasting Techniques
What is Human Resource Demand Forecasting? Forecasting Factors
Factors are in three different sources –
External environmental challenges
• Human resource (HR) demand
forecasting is the process of • Economic developments,
estimating the future quantity and • Political,
quality of people required. • legal,
• The basis of the forecast must be the • social and technical changes, and
annual budget and long-term • the Competition
corporate plan, translated into Organizational decisions
activity levels for each function and
• HR Planning in accordance with Organisational
department.
Strategies
Workforce Factors
The very crucial component of HRP is • retirements,
forecasting the number and type of people • terminations,
needed to meet organisational objectives. • resignations,
• deaths and leaves of absence, etc
 HR Demand Forecasting Techniques
There are Five HR demand forecasting techniques:

• The Markov model

• Workload analysis
• Managerial analysis
• Nominal group technique
• Delphi technique

• Markov Model: in this model, the HR department creates a list of employees’ with specific skills, education,
training needs, work experience, qualifications, ability levels, etc.
• HR maintain reports in a timely manner and regularly update the status of the workforce to keep a check
on the future talent and skill demands.
• This allows HR leaders to fully forecast demand such as internal hires, transfers
• This type of demand forecasting technique is helpful in the field of field of informatics, telecommunications,
electrical engineering, economics, and engineering.

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 HR Demand Forecasting Techniques
• Workload analysis is used to calculate the numbers of persons required for various jobs with reference to
planned output.
• This takes into consideration various factors such as absenteeism, and idle time, etc.
• Both quantitative and qualitative techniques are utilized for accurate results.

• Managerial analysis is the process of formulating

meaning that is relevant to the direction and control
of organizations.
• This includes analysis of strategy, costs, projects,
return on investment, operations, problems,
decisions, competition, markets, customer needs
and user experience are utilized for accurate
results.

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 HR Demand Forecasting Techniques

• The Delphi method, or Delphi technique, is the systematic process of

gathering opinions on a subject matter from a group of experts.

• The method involves forming a panel of experts knowledgeable about a

specific topic to predict the outcome of future scenarios, the likelihood of
an event, or solve an organizational problem.

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Estimating Internal Labor Supply for a Given Unit- A Model

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Factors influencing HRP

EXTERNAL FACTORS INTERNAL FACTORS

• Government policies • Company’s strategies

• Economic development
and supply of HRs • HR policy of the company

• Business environment • Formal and informal groups

• Information technology • Job analysis

• Levels of technology • Time horizons

• Natural factors • Type and quality of information

• International factors • Companies production and production policy

• Trade unions
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 Career planning
WHAT IS CAREER PLANNING
Career planning is the continuous self-evaluation and
SELF
planning process done by a person to have a strong career ASSESSMENT
path which is aligned with one's career goals, aspirations
and skills. REVISE
CAREER RESEARCH
GOALS ON CAREERS

Career planning process in the continuous or repetitive

process of understanding

• oneself, SET CAREER

SEARCH JOBS
OBJECTIVES

• setting career goals,

• revising skills and searching

IMPROVE
for the right career options which may include basic skills, PREPARE CV
SKILLS
specialized education and job options.
 Promotion, transfer, demotion and separation;

• Promotion means the advancement of an employee to a higher job involving more work, greater
responsibility and higher status. It may or may not be associated with the increment in salary.

Promotion – Top 6 Features

• Promotion is a reward for consistently good performance of the employee.

• It enhances employee morale and job satisfaction.

• It involves higher responsibilities, better job status and increase in salary.

• Provides opportunities for career advancement.

• Promotion is beneficial to both employees as well as organisation. It motivates, increases the

involvement and commitment of the employees, leading to increased productivity.

• It helps the organisation to attract and retain good performers.

The main purposes of promotions

(a) To recognize and reward the efficiency of an employee.

(b) To attract and retain the services of qualified and competent people.

(c) To increase the effectiveness of the employee and of the organisation.

(d) To motivate employees to higher productivity.

(e) To fill up higher vacancies from within the organisation.

(f) To impress upon those concerned that opportunities are available to them also in the organisation if
they perform well.

(g) To build, loyalty, morale and sense of belongings in the employees.

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Transfer
• Transfer is a process of placing employees in positions where they are likely to be more effective or
where they are to get more job satisfaction.
• In transfers, there is no change in the responsibility, designation, status or salary. It is a process of
employee’s adjustment with the work, time and place.
Purposes of Transfer of Employees

• To Meet the Organizational Requirements

• To Meet Employees’ Requests
• To Ensure Better Utilization of the Employees
• To Make the Employees More Versatile
• To Adjust the Workforce
• To Provide Relief to the Employee
• To Reduce Conflicts and Incompatibilities
• To Penalize the Employees
• To Maintain a Tenure System
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• To Accommodate Family-Related Issues
 Demotions and Separation
What is Job Demotion?
• Job Demotion is just the opposite of promotion. In demotion, the employee is shifted to a job lower in status,
grade, and responsibilities.
• “Demotion refers to the lowering of the status, salary, and responsibilities of an employee “Demotion is a
shift to a position in which responsibilities are decreased.
 Demotions and Separation
What is Job Separation?
• Separation involves the cessation of services of personnel from an organization. Since the employment
relationship between an organization and its employee is a contractual one.
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