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Chapter 4

The document discusses the importance and evolving nature of Human Resource Planning (HRP) in organizations, emphasizing its role in forecasting future HR needs and aligning with strategic planning. It highlights the barriers to effective HRP, the factors influencing it, and the necessity for skill development in India to meet economic demands. Additionally, it outlines the benefits of HRP, including improved decision-making and talent management in a competitive environment.

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Amisha arora
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9 views26 pages

Chapter 4

The document discusses the importance and evolving nature of Human Resource Planning (HRP) in organizations, emphasizing its role in forecasting future HR needs and aligning with strategic planning. It highlights the barriers to effective HRP, the factors influencing it, and the necessity for skill development in India to meet economic demands. Additionally, it outlines the benefits of HRP, including improved decision-making and talent management in a competitive environment.

Uploaded by

Amisha arora
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Pe MRR cree Rename 104.1 Understand the nature of HRP 10.4.2 Assess the importance of HRP 10.4.3 _ Review the factors affecting HRP 04.4 Know the HRP Process LO4.5 Review the essentials of successful HRP 104.6 Discuss the barriers to HRP Knowledge Paper on Skill Development in India: Learner First September 2012 India has gradually evolved as a knowledge-based economy due to the abundance of capable, Gexble and qualified human capital. With the constantly xising influence of globalization, India has immense opportunities to establish its distinctive position in the world. However, there is a need to farther develop and empower the human capital to ensure the nation’s global competiveness Despite the emphatic stress laid on education and training in India, there is still a shortage of skilled manpower to address the mounting needs and demands of the economy. As an immediate necessity that has urgently arisen from the current scenario, the government is dedicatedly striving to initiate and achieve formal/informal skill development of the working population via education vocational education/skill training and other upcoming learning methods. seough thelz pooled endeavour ribed in the f apne, HL a8 saatined 4 words, Hh ' anaging peopl , ; ‘ This does not mean that strategic HHH ys reactive an nature Though, 1 strateg Jeveloped in a proactive manner, wath HE. staff ne Ns to meet the anticipated conditions under wh x . 1 of the top level strategic team, should te Jes, theit formulation and execution HI needs to afer th Alls and capabilities of the firm's emplayees and how they might ampact ste ¢ first part of human resource strategy 1s HRP (The second part of HF strat a calm the next chapter) All other HR activities such a employee hunny. tr are derived from HRP Th nuneration, appraisal and labour relation: influencing HRP. and HEP pr ud discussion of the nature of HRP, factor NATURE OF HRP In simple words. HRP is understood as the process of forecasting 7 organisation's future demand for, and supply of, the right type yy in the right number. It also involves forecasting the num: cople to be phased out in future. It is only after this that the HRM department can initiate the recruitment and selection process. HRP ts MRP sub-system in the total organisational planning. Organisational planning includes Sorecasy ss for the future and deter- .erial activities that set the company's objecti mines the appropriate means for achieving those objectives. As an integrated management, HRP is variously called strategic manpower = strat planning, or employment planning, The expression manpower planning was prevalent during the mid-twer techniques were used to forecasts and plan future employment needs of the large brick-an panies. With time, the scope of manpower planning widened to encompass all types of organisa diverse sectors and sizes. Hence the contemporary term HRP. Besides, HRP is mor gender-neutral. We may assume that HRP, employment planning, and workforce planning cal meanings. Organisations use these terms interchangeably, while the intention remains u Succession planning, also called relacemsy! papi. goes with HRE ticth century, wher: cceptab Evolving Nature of HRP Overtime, the role of HRP has evolved from that of mere projecting HR nee! Farlier, HRP was a routine and isolated activity. But now it is aligned with b ¢ of time. From mere projection of HR needs, H . of HRP has also widened with the pass the base for all other HR activities (See also Fig. 4.1) taken 102 Human Resource Management : , te fcaing on essoseet finda Traditional Scope of HRP Narrow, and reactive Done once in a year Administrative activity carried on in isolation Fie 4.1 Evolving Role of HRP IMPORTANCE OF HRP ih That an organisation’s human resources are its source of competi- tive advantage is a commonly heard phrase. The cost of buman resources for an organisation amounts to anywhere between 40% 10 70% of the overall cost of doing business. This factor alone Justifies the need for a greater attention to the human resources within an organisation Human Resources Needs Taken Care of Pasially, HRP gives the number, the skillvcompetencies and the level at which People are required for the uninterrupted conduct of business, When these numbers are adhered to, organisations will be denly, organisations realised that they had excess headcount than what was decade, there were down sizing, restructuring and re-layering of organis: and private sector. The saga continues even today as organziation: Performance and decide to hire ot fite employees on an on-going basis, HR planning can become part of strategic planning at IRP provides a set of inputs into the strategic formul, types and numbers of people are available to Pursue a Process, HRP is relevant in terms of implementation concerns, On allocation decisions, including i tw Tesources, \ | 1 strategic planning and HRP; the | nt. HR managers | Hunan Resource Planning 103 In most successtul companies there is virtually no distinction betweet planning cyel me and HR issues ate seen as inherent in business manageme re important facilitators of the strategic planning process and are viewed as important contributo’ carve the organisation’ future. are the s Fs to Creating Highly Talented Personnel |As was mentioned earlier, jobs are becoming highly intellectual and incumbents are getting vastly professionalised. L&T, an engineering giant, has MBAs, engineers and technicians who collectively constitute 70 per cent of the total employee strength of more than 20,000. The HR manager must use er ingenuity to attract and retain qualified and skilled personnel. Qualified and competent people are known for job hopping, thereby creating frequent shortages in the organisation. Manpower planning helps prevent such shortages. Furthermore, technology changes will often upgrade some jobs and degrade others. Indian Telephone Industries (ITD had a stronger Technology to start with, which later developed into crossbar telephone system, This was later changed hnologies were in use became to electronic technology. Jobs created and people hired when old tec! extinct, obsolete and redundant. ITI, being a public sector undertaking, could not retrench its workers, and were subsequently retrained and redeployed to supervise the electronic system now 19 use. Jobs became highly technical necessitating hiring of engineers who had majored in electronics. So, ITI had no use of engineers with civil or mechanical engineering as major. Thus, ITI is ina tight spot so far as shop-floor workers are concerned, whose number is more than the demand for them. Even with regard to electronics engineers, the company is not in a comfortable position. With its existing compensation scheme, ITI is not in a position to attract talented people. This situation could have been avoided if ITI had done its HRP.” HRP facilitates succession planning: ment ensures continuity of business. Any and lowering productivity. Replacement p! ‘¢ Who will replace the outgoing CEO? «From which pool of talent will the incumb: details on succession planning are provided finding a replacement for a retiring executive. Quick replace- delay leads to lobbying, speculation, gossiping, confusion Janning generates two questions and HRP answers them: vent be selected and how will he/she be groomed? (More at the end of the chapter.) The HR manager of SSS (Pvt) Ltd., is finding it difficult to retain talent as all the top positions are held by owner's relatives. What can she do? ___ International Strategies International expansion strategies depend upon HRP. The HR department’ ability to fill key jobs wit foreign nationals and the re-assignment of employees from within or across national borders is a ma} -challenve facino international businesses. With global presence now a mandatory way of doing bus sation, No one knows better the needs of a particular unit or department than an individual man= ential for the We area Communteation between HR staff and line managers 1% ¢ responsible for coess OF HR planniny init The very sticeess of the business depends on the right set of HR decisions that are contracted between A decision to hire less nimber of the wrong. skills or at the wrong level anager and HR head Nation CAN significantly impact business restlls e line n in the ony Other Benefits Following are other potential benefits of HRP: 1, Upper management has a better view of the HR di mensions of business decisions; 2, Personnel costs may be less because the management can anticipat talent es before they become unmanageable and expensive; 3. More time is provided to loca ambal 4, Better opportunities exist to include women and minority groups in future growth plans, 5 Bett planning of assignments to develop managers can be done; and 6. Major and successful deman Jocal labour markets can be made. FACTORS AFFECTING HRP 7“ i HRP is influenced by several considerations. The more important ———— of them are: (i) type and strategy of organisation, (ii) organisational growth cycles and planning, (iii) environmental uncertaint (iv) time horizons, (v) type and quality of forecasting information, (vi) nature of jobs being filled, and (vii) off-loading the work (see Fig. 4.2). Review the factors affecting HRP Organisational Growth Cycle and Planning ‘Type and Strategy of Organisation Time Horizons \ Type and Quality of Forecasting Information Fie, 4.2 Factors Affecting HRP Environmental Uncertainties Outsourcing \ Labour Market \ ‘The type of organisation Type and Strategy of Organisation determines the p process involved and ‘oduction the The type of organisation is an important consideration because it determines Process Hvelved nd oe ad the production processes involved, number and type of staff needed, and the a tate are more complex in this respect than those that render services. ec plan supervisory and managerial personnel required. Manufacturing organisations of the organisation defines its HR needs. 106 Human Resource Management Fines the organisation's HR needs For example, 4 stratey, rergers, On the o red. Acquisitions OF METH the oth of organic growth means that additional employees must be hired a Hons pers fond toe hand, probably mean thatthe organisation will need 10 plan MF TOT wer employee: ) HAP Implementation era Croats Fie. 9.4 The HRP Process * Technological changes, including robotics and automation, & Demographic changes, including age, composition and literacy, © Political and legislative issues, including laws and admi * Social concerns, including child care, an The above factors in the environment are decisions to hire the number and skill of the ré that are closely evaluated for short-term invest strative rulings. d educational facilities and priorities. critical in guiding staffing decisions globally also. The sources at each location globally are driven by the factor ment and long-term impact. By scanning the environment lanagers can anticipate their impact and make adjustments Organisational Objectives and Policies HR plans need to be based on o1 the HR plan must be derived fro1 and characteristic rganisational objectives. In practice, this implies that the objectives of ’m organisational objectives. Specific requirements in terms of number cs of employees should be derived from the organisational objectives As was stated in the previous chapter, organisational objectives are defined by the top management and the role of HRP is to subserve the overall objectives by ensuring availability and utilisation of human resources. Once the organisational objectives are the HR department must specify developing these objectives, specii specified, communicated and understood by all concemed, its objectives with regard to HR utilisation in the organisation. In fic policies need to be formulated to address the following questions 110 Human Resource Management 1, Are vacancies to be filled by promotions fi thin or h omotions from within or hiring from outside? 2, How do the ening and development objectives intrtae with the HRP objectives? 3. What on constrains ae encountered in HRP and what policies are needed to handle these How to enrich employee's job? Should the rout rT r cl a? job? Should the routine and boring jobs continue or be eliminate’ © To what extent production and operations be automated and what can be done about those displaced? 7. How to ensure continuous availability of adaptive and flexible workforce? HR Demand Forecast COftate. this is becoming a critical step in the HRP process. The role of the HR department here is critics and can steer the organisation to profitability or result in its ultimate death. With the disruptive I of innovations taking place in the world over, organisations are threatened by the quick and simple in. ovation by a small start-up firm that could drive a mature organisation out of business. Predict the human resources demand is challenged by the inability to clearly predict the future business trends and innovations happening within the industry. A decision to hire today and retrench tomorrow cat severely jeopardize reputation and question the very existence of the organisation. Increasingly organisations tre practising methods to rationally re-train and use existing resources, promoting from within to fill key positions, out-source or use third-party services to reduce risks. FeNicctive demand forecasting is the process of estimating the future quantity and quality of people sequited, and the best way in which to meet this demand. The basis of the forecast must bbe the annual tudget and long-term corporate plan, translated into activity levels for each function and department Ira manufacturing company, the sales budget would be translated into a production plan gives the umber and type of products to be produced in each period, From this information, the number of hours to be worked by each skilled category to make the quota for each period, would be computed. Once the hours are available, determining the quality and quantity of personnel will be the logical step. Demand forecasting must consider several factors—both external as well as intemal, Among the extemal factors are competition (foreign and domestic), economic climate, laws and regulatory bodies. changes in technology, and social factors. Internal factors include budget contrains, production levels, new products and services, organisational structure, and employee separations Demand forecasting is common among organisations though they may not do personnel-supply forecasting There ave several good reasons to conduct demand forecasting, It can help: () Quantify the jobs necessary for producing a given number of goods, or offering a given level of services; (ii) determine nat staff-mix is desirable in the future; (il) assess appropriate staffing levels in different parts of the organisation so as to avoid unnecessary costs; (Iv) prevent shortages of people where and when they are needed most: and (v) monitor compliance with legal requirements with regard to reservation of jobs. Pause AND PONDER ‘Some believe that it is advisable to share HRP contents with individuals. Others oppose it. Which, side do you take? Why? Demand forecasting techniques vary from simple to sophig nations generally follow Forecasting Techniques Refore describing each technique, it may be stated that orga technique. The techniques are 1. Managerial judgement 2. Ratio-trend sis. 3 ticateg MOTE thay R sis 4. Work study techniques S$. Delphi technique 6 Flow models > Others (See Fig. 4.5) Managerial Judgement Work Study Ratio Trend \ Techniques Analysis \ Others Delphi Technique \ x Fi. 4.5 Techniques of HR Demand. Forecasting Managerial Judgement With broad guidelines “up” and top-down’ approaches, depanmenta) Managers can pre, it sented to top managers for " que. The technique is used in Lo catty out “business lent data-base is not available. It is also used W divisions of larger firms. qanie 4.3 Staff Forecant Porm [Galego of Staff... [Batf Members end Movements +, Number of staf at 1.1 {excluding known resignations) 7 2. (a) Expected retirements, transfers 8 ‘out and promotions during year (b) Less expected transfers in, pro- 3 5 motions and new appointments already made 3, (a) Number of staff required on 1 80 January, next year (b) Less present staff 75 5 4. Expected staff losses due to 15 16 normal wastage of existing staff 5. Expected losses of staff to be 5 5 recruited in the period 6. Total staff to be provided 30 during the period Ratio-trend Analysis Th technique involves studying past ratios, say, and sales in an organisation and foreca: allowance for changes in the organisation or i how an analysis of actual and forecast r proposals to be processed by an insurance and the number of underwrit requirement, Regression Analysis between sales volume an‘ A firm first draws a diagram depicting the calculates regression line—a line that cuts righ observing the regression lin (see also Fig. 4.6) ‘No, of Staff to be Provided Remarks is is the quickest forecasting technique. The between the number of workers sting future ratios, making some its methods. Table 4.4 shows atios, between the number of routine company’s underwriting department ‘ers employed could be used to forecast future ‘This is similar to ratio-trend analysis in that for 1d employee size. However, regression analysis i elationship between sales and workforce size. It then ht through the center of the points on the diagram. By , one can find out number of employees requ Human Resource Frat ‘Age groups: Under 25 25-34 35-44 45 and over (dates to be speci Increase in number to be substanti ated by O&M report Estimated by age groups: Under 25 2 25-34 2 36-44 Ai 45 and over - ‘Short service staff tumover at 20% of 25 (events 2 +3 + 4 above) 5 to be recruited by 1 February, oth- ers to be programmed later Ratio trend analysis involves studying past ratios and forecasting future ratios making some allowances for changes in the organisation or its methods. recast is based on the relationship is more statistically sophisticated jired at each volume of sales esUUTCe Management Tape 4.4 and Porecast—Inspectors TN oF Amores tor Inapeo' Bier: Year Production 450 7 1100 490 1900 1n0 - 2000 200t Last yoo ao per Next yoor _ 2 biel 230 Forecast 2 60) ity lvels ‘Catculated by reference to forecast activity | fvily levels Micheet Armstrong. 9 208-208, cast ac "Calculated by applying forecast rato to fore: ractcos bY ne! Management Pr 1 A Handbook of Person ‘Source Tables 43 anc 4 ae based on A a Employee size ' ' ' ' ' 1 ' ' 1 1 1 1 1 1 1 1 Ot Sales (Rs) Fie, 4.6 Regression line Showing Relationship between Sales and Employee Size Work-study Techniques Work-study techniques can be used when it is Possible to apply work z 3 5 z E z > e g 3 & § 3 5 2 a z 5 g 8 s g e S Units to be produced to give the total number of planned hours for the period. This is then divided by the number of actual working hours for individual operator to show the number of operators Tequired. Allowance will have to be made {0 absenteeism and idle time, Following is a highly simplified example of this procedure |. Planned output for next year i Pon adie 2. . Standard hours per unit 20,000 units 3. Planned hours for the year 5 1,00,000 a 4 s Work ratio-trend analysts 10 f0r° c can be ext indirect any other study techniques for direct workers can be combined with jorkers, establishing the ratio between the two categories. The same Toe ategory of employees, atthe city of Delphi, the Delphi technique #1 J needs from a group of €xPEtts, ind report the finding nd surveys | 1, absenteeism and idle time! 2,000 Re a tret wekers required (8) ; sw Delphi Technique _ Named after the ancient Greek Oracle ethos of forecasting personnel needs. It solicits estimates of personne! usual naeers. The HRP experts act as intermediaries, summarise the various resfor"'s 2 tuck to the experts. The experts are surveyed again after the edback, Summaries an tert peated until the experts’ opinions begin to agree. The agreement reached the forecast of the person Trends: The distinguishing feature ofthe Delphi technique isthe absence of interaction among experts “Pow Models Flow models are very frequently associated with forecasting, personnel needs. The plest one is called the Markov model. In this technique, the forecasters will: Determine the time that should be covered. Shorter lengths of time are Bt than longer ones. However, the time horizon depends on the length of the HR plan whi js determined by the strategic plan of the organisation. Establish categories, also called states, to which ‘employees can be assigne’ must not overlap and must take into account every possible category to whic! be assigned. The number of states can neither be too large ner (09 small. 3, Count annual movements (also called ‘flows’) among states for several time periods. These states are defined as absorbing (gains of losses to the company) oF non-absorbing (change in position qevels or employment status). Losses include death or disability, absences, resignations and retire ments. Gains include hiring, rehiring, transfer and movement by position level. 4, Estimate the probability of transitions from one state to another based on past trends. Deman\ a function of replacing those who make a transition ‘There are alternatives to the simple Markov model, One, called the semi-Markoy, takes into account not just the category but also the fenure of individuals in each category. Afterall, likelihood of movement increases with tenure. Another method is called the vacancy model, which predicts probabilities of move soon and number of vacancies. While the semi-Markov ‘model helps estimate movement among those vere situations and tenure are similar, the vacancy model produces the best results for an organisation Markov analysis is advantageous ers. They can easily under- because it makes sense to decision mal stand its underlying assumptions: “The disadvantages include: They are, therefore, likely to accept results. {i heavy reliance on pastoriented data, which may Ho be accurate in periods of turbulent change, and (ii) accuracy in forecasts al ificed to achieve accuracy across groups. er Forecasting Techniques xy receive this fe ally more accurate ‘sim ‘ch, in turn, 4. These categories yh an individual can dis bout individuals is sacr New venture analysis will be useful when new ventures contemplate loyment planning. This technique requires planners to estimate HR needs in line with companies that perform similar operations. For example, a petroleum company that plans to open a coal mine can oe tetinate ite future employment needs by determining employment levels of other coal mines. fr vac in other fields, mathematical models are used in human need forecasting too, One such widely used technique is the one given below: (Lagg +G,)"* 7 J of personnel demand in » planning E, where, E, is the estimated level periods (e.g. years). bl BPMMOKI!, estimates oF ( joc to se the orsamsation’s BpMMences of management, as well seas Makowmere committed han one techniqn # their pe att \ ruclgement and Work study teen ned ca ot maerof every year tee” ae ‘i eee details of production budget supplied ‘ at rmanayers (L&C E has HE plants 9 our coun, eam al heads and will send final ne B hee ; inna with the department It timates are reviewed b tralised HR department is located. t snnel managers WhO initiate steps 4 ose personny ‘asting techniques by organisations (US). As seen trom the able anies use supervisor estimates (another name for manageri ial judgements) ceptance only among three percent of the sample organisation recasting Techniques % of companies using technique 697 65.2 37.9 18.2 12.4 94 3.0 g oF Replacement Charts or Non-statistical Formulas ic Human Reso Management, p, 184) 7 Human Resouree Planning HR Supply Forecast v% — Personnel demand analysis provides the manager with the means of estimat ae ing the number and Kind of employees that will be required. The next logic erent be step for the management is to determine whether it will be able to procure HR department wl ve tN the required number of personnel and the sources for such procurement. This" tiher of personne information is provided by supply forecasting, also called bench forecasting. special. supp toreast measures te nuiber of Supply forecasting measures the number of people likely to be available from re oe vale within and outside an organisation, after making allowance for absenteeism, He ye ti an internal movements and promotions, wastage and changes in hours, and other organisation conditions of work, Just as there are valid reasons why companies make demand forecast, there are enough arguments for supply forecast. In fact, fewer organisations estimate HR supplies than demand. Reasons for supply forecast are that it: (i) helps quantify number of people and positions expected to be available in future to help the organisation realise its plans and meet its objectives; (ii) helps clarify likely staff mixes that will exist in the future; (iii) assess existing staffing levels in different parts of the organisation; (iv) prevents shortage of people where and when they are most needed, and (v) monitors expected future compliance with legal requirements of job reservations. The supply analysis covers: 1. Existing human resources, 2. Internal sources of supply, and 3. External sources of supply. Present Employees Analysis of present employees is greatly facilitated by HR audits. HR audits summarise each employee’s skills and abilities. The audits of non-managers are called skills inventories and those of the management are called management inventories. Whatever name is used, an inven- tory catalogues each employee’s skills and abilities. This summary gives planners a comprehensive understanding of the capabilities found in the organisation’s workforce. Skills Inventories Skills inventories consolidate information about non-managers in the organisation. Because the information from skills inventories is used as input for transfer and promotion decisions, they should contain information about each employee's current job. Seven broad categories of informa- tion are included in each skills inventory. They are: 1. Personal data—age, sex, marital status, Skills—education, job experience, training. Special qualifications—membership in professional bodies, special achievements. Salary and job history—present and past salary, dates of pay raises, various jobs held. Company data—benefit plan data, retirement information, seniority. Capacity of individual—scores on psychological and other tests, health information. Special preference of individual—geographic location, type of job. x ii | Pause ano Ponoer _ Can you make a comprehensive list of skills a successful individual should possess? Can you break them down on occupation/job-wise? aay een eration of computers. Although of skills inventories has increased with the proliferati ouah lual personnel files, st of the desired information was available from individual pet The popularity 1s for collecting, stor. mputers became readily available. Use of computers for co traditionally, mo: Was time consuming before cor ing, maintaining, retrievin “yslem (HRIS) (Read Chapter 22 for details on HRIS), gement to readily identify A 2roperly designed and updated sklls-inventory system permits Potts cone employees with particular skills in order to satisfy the changing needs of the compa Management Inventories These include such data as ‘+ Work history # Strengths © Weaknesses — identifi * Promotion potential * Career goals © Personal data + Number and types of employees supervised Total budget managed Previous management duties Educational background Current job performance Field of specialisation Job preferences Geographic preferences Anticipated retirement date © Personal history Inver an res © generally c 'sed and updated periodically, Updating is s are encouraged to report major changes, fuch as acquisition of new skills, completion of university degrees, changed duties, seminars attended, papers published. and the like. esource information 1g and validating HR data is popularly called the human resourc emove the weaknesses cation of specific training programmes needed to remove the weaknesses © Treat HRP as on-going process in today's economic down turn * Carefully analyse each and every business equest to increase headcount Forecast HR demand based on detailed business Projections @ Once HRP is finalise, it becomes commitment Take another look at details e Management ax Human Resouree M L , e Strategic HR Initiatives 8 for Stratogios for oot ‘Managing Shortages acini ‘Switch to variable pay plan Expand operations Recruit new permanent employees © Hiring freoze + Oterincontves Dosipone relrement © Do not replace those who leave # Rehire retirees part-time © Offer VA schemes Attempt to reduce turnover Reduce work hours # Work current staff overtime © Leave of absence Subcontract work to another company ‘© Across the board paycuts # Hire temporary employees * Layots ‘+ Redesign job process so that fewer ‘* Reduce outsourced work employees are needed © Employee training . Fie. @.8 Strategic HR initiatives Sovse:Jefiey A Melo, Strategie Human Resource Management, p. 140 Employees are hired when there are job vacancies However, employers should consider other alter- natives to hiring additional full-time employees, For instance, employers might encourage employees Retraining and Redeployment New skills are to be imparted to ex’ changes. When a product tne is discon ued, its employees : departments where they could he Bainfully employed, Hurnan ftesource Planing 123 plan Rete! Retention t tention plan covers actions whi employees. Important actions under this head ate: hich would help reduce avoidable separations of | 1, Compensation Plan Wncreasing pay levels to meet eee " }0 meet competition, improving pay structures to remove ponegine anita ictuations, introducing, incentives which would rmance Appraisal To assess f 2 Perfor " Appr employce performance at least once in a year Employees Leaving in Search of Green Pi 3, Emple 'g rch of Green Pastures Providing better career opportunities and ensuring that employees are aware of such schemes Employees Quitting because of Ce + Emp — te 7 een of Conflict To encourage conflict but maintain it at a reasonable level; when conflict exceeds safe limits, to take steps to resolve conflict. 5. The Indien ed Improving recruitment and selection procedures to ensure that job require- ments are speci fied accurately and that the people who are selected fit the specifications; ensuring that candidates are given a realistic picture of the job, pay and working conditions, developing better induction and initial training programmes. 6, Shortages Improving recruitment, selection and training for the people required; introducing better methods of planning and scheduling work to lessen peak loads. 7. Unstable Reeruits Taking more care to avoid recruiting unstable individuals by analysing the characteristics of applicants who are likely to cause instability, and using this analysis to select the right candidates. Downsizing Plan Where there is surplus workforce, trimming of labour forgvll be necessary. The trimming or downsizing plan shall indicate: 1. Who is to be made redundant and where and when; 2. Plans for re-development or re-training, where this has not been covered in the re-development plan; 3, Steps to be taken to help redundant employees find new jobs; 4. Policy for declaring redundancies and making redundancy payments; and 5. Programme for consulting with unions or staff associations and informing those affected ‘Another method of dealing with surplus labour is to retain all employees but reduce the work hour (thus realise payroll savings), perhaps to a four-day, 32-hour work week. In this way, a company can spread a 20 per cent decrease in demand (and in pay) equitably across the whole workforce, rather than keep 80 per cent of the employees full-time and lay-off 20 per cent of them Depending on the nature of the surplus, a firm may be able to transfer or reassign employees to jobs in parts of the organisation that are still experiencing demand. Or af the firm expects the surplus to be short-lived and can afford to keep excess workforce on the payroll, the company can use the slack time to provide cross-training in related jobs to enhance workforce skills and flexibility. Alternatively, ul or engage themselves in other the surplus workers can perform equipment maintenance and overha activities that were postponed when demand was high. Table 4.7 shows downsizing by select firms. 30000 (2016) ran00 (2010) os 12000 (2016) Reliance 4. 2 3 as «700 0 5 ome 6 7 8 8 cieco moe) iow ve oo ex) | 5900 (2019) Wcrson a0 2010) ce — 3456 (2015) mental to both em- detri Laying-off staff, This action is " ying-off is another strategy for dealing with surplus S14" ag for employers | ployees and employers, For employees, lay-off means joble of reputation. Notwithstanding this, several firms are laying off their surplus employ provides more details on these issues) GBB 2euse 00 Ponoen 1 ite sector? For example Can you take inventory of wh¢ 4 whom in the Indian corporal : ny ssh, econ bani, so also Shibu stepped into the shoes of Mukesh and Anil succeeded the late Dhirubai Am Gopala Krishnan. Sikka succeeded Gopala Krishna. Proceed on these lines. it means loss (Chapter 17 Control and Evaluation he HRP process (see Fig. 4.4). In recent Control and evaluation represents the fifth and the final phase in t times this activity has risen in prominence. The senior management is entrusted with the responsibility to constantly review the HRP alongside the achievement of the business plans. Since the HR plan includes budgets, targets and standards it needs to be implemented along side the achievement of the business goals. In the eventuality of non-achievement of the business goals, the HRP programmes need to be reviewed. As also if the business goals are over-achieved the HRP programmes need to be reviewed. REQUISITES FOR SUCCESSFUL HRP ean a There are at least ten pre-requisites for successful HRP: [104.5 ———————| 1. HRP must be recognised as an integral part of corporate planning. The planner of human resources must therefore, Review the essentials of be aware of the corporate objectives. * successful HRP 2. Backing of top management for HRP is absolutely essential. 3. HRP responsibilities should be central 7 management levels. list : ‘ed in order to co-ordinate consultation between differet" Human Resource Panning 428 4, Personnel records must be complet up-to-date and readily available 5. The time horizon of the p st be long Hough to permit any remedial action | 6. The techniques of planning should be those best lable and the degree of accuracy required 7. Plans should be prepared by skill levels rather than by aggregates 8, Data collechon, analysis, techniques of planning and the plans themselves need to be constantly revised and improved in the light of experience. 9, The impact of external forces like technological changes, changes in labour market compositions and the like needs to be considered while developing the human resource plan. 10. HRIS should be used as decision support system and should alert managers to problems and op: portunities. BARRIERS TO HRP hi ae Planners face significant barriers while formulating an HRP. The 7 major ones are the following: 1. People question the importance of making HR practices Discuss the barriers to HRP future oriented and the role assigned to HR practitioners in formulation of organisational strategies. Their argument is simple—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 an elaborate and time-consuming planning for human resources? Thus goes the argument. Surprisingly, this perception about HRP is also held by the top management. HR practitioners are perceived as experts in handling personnel matters, but are not experts in managing business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organisational plan, might make the overall strategic plan itself defective. 3. HR information often is incompatible with the data used in strategy formulation. Strategic plan- ning 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 short-term and long-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 on the market as long as wages and salaries are competitive. These managers fail to recognise that by resorting to hiring or promoting depending on short-term needs alone, long-term issues are neglected. 5. There is conflict between quantitative and qualitative approaches to HRP. Some people view HRP as a number game designed to track the flow of people across the 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 the quantitative and qualitative approaches. 6. Non-involvement of operating managers renders HRP ineffective. HRP is not strietly an HR department function. Successful planning needs a co-ordinated effort on the part of operating managers and HR personnel ve policies regarding access (9 HRIS data, It may be real » Drmanisations need {0 a airequard his o her own privacy. ‘This fundamental righ ae every individual oy igh trol information about one self, and to control situation Where : Jividal’s right fo contre ofan in aned, The US has Privacy Act, 1974 which requires fede formation could be g Agencies | amine, copy, correc, oF Aeess empolyee information inthe persont a nit emoloyers to examine, copy, nthe ona re Act re Tudes provisions for an appeal procedure if there is a dispute over the a The Act also inchides pre vee ofthe information or what isto be included in the files of the information or wha Oo Pause ano Ponoer NO 0 Tle A Ltd sys that HRP isa waste since everything is changing fast. How can the HR “anager convince the MD about the usefulness of HRP? MANAGERIAL SUCCESSION PLANNING aap Sepced eens Notwithstanding the expansion or ce plana ieee ‘reining _Otganisation, the need for good ma: ccinpig MOF organisations are planning for “sana because they have found that take effective managers. Most successful and commitment, high-lev potenti Some believe that it is Linwise fo discuss with peo Greate expectations in them. Others ple what is in the succession Plan as it woulg "ould oppose it Which is the right choice ang why? Human ttesource Planning 127 Mos! mianaxeria succession planning system rely on committees of higher evel managers identify dates, and plan developmental activities for them, Developmental plans include formal traning programmes and a series of job assignments leading, to top positions, The plans are formally presented {0 higher-level managers for review sheets {typical succession plan involves the following 1¢ following activities: 1, Analysis of the demand for managers and professionals by company level, function and skill 2 Ault of existing executives and projection of likely future supply from internal and ext nal Planning of individual career paths based on objective estimates of future needs, and drawing on reliable performance appraisals and assessments of potent ‘areer counselling undertaken in the context of a realistic understanding of the future needs of the firm, as well as those of the individual. Accelerated promotions, with development targeted against the future needs of the business Performance-related training and development, to prepare individuals for future roles as welll as current responsibilities Planned strategic recruitment, not only to fill short-term needs but also to provide people for development to meet future needs. 8. The actual activities by which openings are filled. [Link] succession planning grid as shown in Fig. 4.9 is of great help to HRM. Though CEOs exit is one of the few “known knowns” in buisness, sucession planning is not taken seriously or does not exist at all. Two-thirds of American public and private companies have no suces- sion plans. Same is true with non-American firms too. In most organisations in India family members take over the reins of fall. Monarchies have always understood the importance of avoiding interruptions: 1 Jong live the king is the approach in authoritarian regimes. Why is not replacement plan taken seriously? The incumbent CEOs are partly responsible. Handing over to a wel be the crowning moment of their careers. However, many are egomani tot and cold about proteges. They also have a personal interest in not having a clear replacement: it keeps them in the job longer and gives them more bargaining power with their boards a ‘administration when vacancies he King is dead, 1l-groomed successor ought to jacs who crush rivals and blow - Replacement Plan _ such plan consists of four phases. CEO replacement can become successful if done according to a plan. (1) Prepare for transition (2) Choose a successor (3) Coach the successor, and (4) Pass the baton sition is a tough job. Two CEOs figure primarily: the out- oing and the incoming. First the outgoing. If the outgoing CEO has done a great job of managing, he or she will not easily let go by the employees. There will be tear sheddings, beseeches, pay lures Siock options, and perks, There are soft things which make exit painful. Wealth, perks, power, tats, bonding, happiness and contribution put the exiting CEO in unenviable situation. (1) Prepare for transition: Managing tran: SS 2S eee * Hunan ftesouree Planning 128 More than anything else, itis the power which makes people unwilling, to lose. A lady principal of acollege in Bangalore is reported to have eried loudly while handing over the baton 10 the successor. Keys were to be handed over at 2 PM but the lady refused to do so. Finally, at 5 PM she gave keys '0 the new comer ‘A pwofessor in a university set an example of sort. He was expected t pooks and furniture to the Chairman on the day of superannuation. No, weith himself. His contention was that he would get extension. After six months of cajolin 10 surrender chamber, laptop, Keeps keys of the chamber 1g and force. he finally vacated. ‘Then there is the incoming CEO, People around will be watching and talking about how the new CEO would perform, who would be fired, and what behaviours and what styles will be exhibited For the outgoing CEO, leaving is painful, for the incoming it is time filled with pride, ‘excitement, anxiety, ambition and uncertainty. Both perceptions ~ one opposed to another ~ need to be managed well Reaction of an ousted CEO generally fits into either of three patterns: some quietly leave, others cciously wish their successor luck, others try to nurse hurt pride as best as they can. But Cyrus Mistry tried to fight back legally and other means. He was ousted as Chairman of the Tata Group on Oct. 24, 2016, apparently on non-performance. Whatever may be the justification for the ouster, the legal battle has froughtil-repute to the Tata Group which was well known for corporate govemance and ethical conduct ecessor is the greatest achievement of (2) Choose a successor: As stated above, choosing the right su nutside an outgoing CEO. Choice is to be made between hiring from inside or lateral entry. Hiring from is expensive but is an advantage in as much as the new hire will bring in new blood, new ideas and new systems and policies. Promoting from within is less expensive, the person is in the know of the organisation ~ its culture, its policies and practices. Ttmay not be always possible to hire from within. Often, business environment may eliminate this possibility. For instance, the board may need to send a message to investors and customers to the effect that the organisation is headed in a new direction, and they prefer to do so by choosing an external CEO with credibility unmatched by an in-house person. {@) Coach the successor: Whatever may be the creditability of the new CEO, he or she needs to be trained by an external coach. The new comer is entering a new organisation, new culture, and new expectations, It is advisable that he or she is put under a trainer to coach the incumbent to take on new assignment with hope and confidence. (4) Pass the Baton: The incumbent CEO should make way for the new CEO to take over, The incumbent may be tempted to stay on the board or in some other capacity. Ideal thing is to exit, hanging is not helpful. dl Tips to Make Succession Successful _——~ Acompany in the thick of finding a successor is exposed to at least four risks: (i) vacancy risk—remain- ing top less for a long period, paralysing the administration; (ii) Readiness risk——a person is ready and willing but is short-of credentials; (ii) Transition risk—the incumbent, an external candidate, unable to acclimatise; and (iv) Disruption risk—each of the above, or all together, expose the firm to the state of directionless, Here are a few tips to make replacement effective: # Recognise that CEO succession is a process, not an event. © Understand that CEO succession is a strategic move. © Foster an abundance of candidates. Resource Management © Ensure that the incumbent CEO leads the process. ; $ Create leadership development plans to groom internal aspirants. + Ensure that the board knows personally key contenders. ¢ Have a clear, disciplined, data-driven process e new CEO has enabling * Inaddition to gracefully exiting, the incumbent CEO should ensue thatthe Hew naly about tt chvironment to carry on successfully. It means not talking with the pre jecsan to therndcceiae Ba ssor: By honorably exiting, the incumbent CEO will have taught a less that he or she should do similar thing when time comes ee SUMMARY Human Resource Planning (HRP) refers to the estimation of the number and the type of people needed during the ensuing period. HRP is significant as it helps determine future personnel needs, recstans epiOn to Weaker sections; acts asa basis for other personnel functions; helps overcome resistance to change; and so on FIRP is influenced by several factors, such asthe type and strategy of organisation; environmental uncertainties; time horizons; type and quality of informations and type of jobs being filled, The HIP is a five-step process. The steps are: - Defining organisational objectives and policies, Forecast of personnel needs and supplies, HR programming, HRP implementation, and Control and evaluation of programmes. . Succession plans are a part of HRP. Delphi technique, 115 Management inventorir Downsizing plan, 123 Skills inventories, 117 Flow models, 115 Succession planning, ~ Forecasting techniques, 115 ‘Top-down’ and ‘bot HRP, 101 Demand forecasting, Supply forecasting, 117 ee 1, What do you understand by HRP? What is its i 2. Explain the various steps in the HRP process. 3. How ate personnel needs and personnel suppli 4. Define HRP. Bring out the factors influencing 5. Explain the techniques of employee demand { 6. Explain the barriers to HRP. Bring out the r

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