COLLEGE OF BUSINESS AND

ECONOMICS
DEPATMENT OF MANAGEMENT

HUMANRESOURCE MANAGEMENT/MGMT 1081/

BY: Awel sh

2014 E.C
 Chapter One
Introduction
 Definition of Human Resource Management
 Human resource management (HRM) is the effective
management of people at work.
 HRM check up what can or should be done to make working
people more productive and satisfied.
 Organization resources can be grouped in to four major
categories
 Human resources
 Financial resources
 Physical resources
 Information resources
 CONTD…
 HRM can be defined as the utilization (use)of human
resources to achieve organizational objectives.
 Human resource management is the process of planning,
organizing, leading, and controlling the acquisition,
training, developing, appraising, compensating,
integrating, maintaining, and separating of employees
effectively and efficiently with the end to achieve individual,
group, organizational, and societal goals
CONTD…
 Terms such as personnel, human resource management,
industrial relations, and employee development are used
by different individuals to describe the unit, department,
or group concerned about people.
 The term human resource management is now widely
used, though some people still refer to a personnel
management.
 Activities of HRM
 HRM consists of numerous activities, including
 Equal employment opportunity (EEO) agreement.
 Job analysis. a systematic exploration of the activities
within a job. It defines and documents the duties,
responsibilities and accountabilities of a job and the
conditions under which a job is performed.
 Human resource planning.
 Employee recruitment, selection, motivation, and
orientation.
 Performance evaluation and compensation.
 Training and development.
 Labor relations.
 Safety, health, and wellness
 HRM FUNCTIONS
1. HRP (human resource planning)- The process of systematically
reviewing hr requirements- Demand and Supply of human resource
requirements
2. Recruitment- the process of attracting potential individuals in
sufficient numbers and encouraging them to apply for jobs
3. Selection- the process of choosing from a group of applicants the
individuals best suited for a particular position
4. Orientation- the formal process of familiarizing new employees
with the organization, their jobs, and their work unit, policies etc.
5. Training and development-aim to increase employees ability to
contribute to organizational effectiveness for current and future job
demands
6. Compensation management- refers to the administration of every
type of reward that individuals receive in turn for their services.
 CONTD…
7. Performance evaluation-a formal system of periodic review and
evaluation of an individual’s job Performance
8. Safety and health-
 Safety- involves protecting employees from injuries caused by
work- related accidents.
 Health- refers to the employees’ freedom from illness and their
general physical and mental wellbeing
9. Promotions, transfers, demotions, and separations-These reflect
employee’s value to the organization
10. HR research- a systematic gathering, recording, analyzing, and
interpreting of data for guiding human resource management
decisions.
[Link] areas such as employee relations, collective bargaining ,
employee discipline and retirement are also concerns of human
 Evolution of HRM

HRM before 1900

 Usages of the machinery
 Mass level of production
 To satisfied the human need
 Profit maximization form the
factor of production like land ,
labor, capital, entrepreneur
 CONTD…
 World have been separated in two type of economy one is
capitalization which has a motive of profit maximization
other side labour intensive economy
 Labour class reflected their provouge by strike, slowdown,
pen down, boycott & sabotage of the work for resolution of
the problem where new redressal procedure had been
developed to subside the chaos like collective bargaining,
grievance handling system, arbitration, disciplinary practices
 CONTD…
HRM after 1900
• Development of true science
• Scientific selection & training
• Friendly co-operation between management
• Development of every worker to his fullest aspects.
 Draw back
 Man become machine human factors were completely avoided.
 Human relation movement
( 1971 to 1980)
 As the name implies it is said to stress the human element in the
work place.
 Labor is not a commodity to be bought and sold.
 The human relation movement basically grew from the Hawthorne
experiments conducted by a scholar known as Elton mayo.
 Elton Mayo, a Harvard researcher. He looked at the results of early
motivation experiments and concluded that psychological and
social factors played a larger role in productivity than physical
elements.
 Interaction with the employee increase the productivity.
 Basic facilities are required for the production.
 Empathized view towards works have increased productivity of
worker.
 Communication is the life blood of an organization.
 Importance of Human Resource
Management
 Assessing and interpret costs or benefits of such HRM
issues as productivity, salaries and benefits, recruitment,
training, absenteeism, overseas relocation, layoffs,
meetings, and attitude surveys.
 Using planning models that include realistic, challenging,
specific, and meaningful goals.
 Preparing reports on HRM solutions to problems run into
by the firm.
 Training the HR staff and highlight the strategic
importance of HRM and the importance of contributing to
the firm’s profits
 Objectives of Human Resource Management

 The contributions HRM makes to organizational effectiveness include :-

 organization reach its goals;
 employing the skills and abilities of the workforce efficiently;
 providing the organization with well-trained and well-motivated
employees;
 increasing to the fullest the employee’s job satisfaction and self-
actualization;
 developing and maintaining a quality of work life that makes
employment in the organization desirable;
 communicating HRM policies to all employees;
 helping to maintain ethical policies and socially responsible behavior;
and managing change to the mutual advantage of individuals, groups,
the enterprise, and the public.

*******************//********************
Any Questions?
 Chapter Two
Human Resource Management Environment
 [Link] Environment of HRM
 Any HRM program or activity in an organization is influenced
by the external environment (outside the organization) and
internal environment (inside the organization).
 External environmental influences include government laws
and regulations, union procedures and requirements,
economic conditions, a nation’s competitiveness, composition
and diversity of the labor force, and geographic location of
the organization.
 CONTD…
A. Government Law and Regulations
 A powerful external environment influence is government law
and regulations, which affect organizations directly.
 Government regulations influence HRM activities, policies,
and programs.
 When an organization makes decisions about hiring,
promotion, managing diversity, performance evaluation,
downsizing, and discipline, it must weigh the impact of
government regulations.
 The government regulates and influences some aspects of
HRM more directly than others. Major areas of legislation and
regulation include:
 CONTD…
 Equal employment opportunity (EEO) and human rights
legislation, which directly affects recruiting, selection, evaluation,
and promotion, and indirectly affects employment planning,
orientation, career planning, training, and development.
 Discrimination based on sex, age, and disability.
 Compensation regulation, which affects pay, hours of work,
unemployment, and similar conditions.
 Benefits regulation, which affects pensions and retirement.

Workers’ compensation and safety laws, which affect health and

safety.
 Labor relations laws and regulations, which affect the conduct of
collective bargaining.
 Privacy laws.

 In sum, almost no HRM decisions remain unaffected by

government.
 CONTD…
B. The joining together: The occurrence of a union directly
affects most aspects of HRM, including recruitment, selection,
performance evaluation, promotion, compensation, and
benefits, among others.
A union is an organization that represents the interests of
employees on such issues as working conditions, wages and
salaries, fringe benefits, employees’ rights, grievance
processes, and work hours.
C. Economic Conditions: Two aspects of economic conditions
affect HRM programs: productivity and the work sector of the
organization.
 CONTD…
 Productivity: Productivity of employees is an important part of
a nation’s general economic condition. Managers are
concerned with productivity because they feel it is a
representative indicator of the overall efficiency of an
organization.
 Productivity is defined as output of goods and services per
unit of input of resources used in a production process.
 Inputs, as applied in the measurement of productivity, are
expressions of the physical or dollar/Birr amount of several
elements used in producing a good or a service, including
labor, capital, materials, fuel, and energy. Every HRM activity
can affect productivity.
 Thus, productivity pressure from the external environment
directly and indirectly affects an organization’s HRM
programs.
 CONTD…

. The work sector of the organization: Professional HRM

specialists work in private sector, public sector, or the third
sector.
 The private sector consists of businesses owned by individuals,
families, and stockholders.
 The public sector is that part of the economy owned and
operated by the government.
 Other institutions that are neither governmental nor profit-
oriented constitute the third sector. Examples of these
institutions are museums, private schools and colleges, not-for-
profit hospitals, and voluntary organizations such as churches
and social clubs. HRM in the public sector is fundamentally
different from HRM in the other two sectors because it varies
structurally. (HOW?)-------------------
 CONTD…
D. Competitiveness: At the macroeconomic level, the term
competitiveness is defined as the degree to which a nation can,
under free and fair market conditions, produce goods and
services that meet the test of international markets while
simultaneously maintaining or expanding the real incomes of
its [Link] the organization level, competitiveness is an
important issue.
 How effectively do the workers produce the product?
 How good is the quality of the services or goods provided?
 Can employees handle new technology and produce the
product at lower costs?
 Does the firm have the human resources needed to increase the
size of the manufacturing facility to handle global demand?
 Will the push to work harder and faster raise turnover,
absenteeism, and the number of defects?
CONTD…
 The way organizations implement and modify their HRM
activities can provide them with competitive advantages.

 A competitive advantage is defined as having a superior

marketplace position relative to competitors. Sustainable
competitive advantage requires a firm to deal effectively
with employees, customers, suppliers, and all competitors.
 CONTD…

E. Composition and Diversity of the Labor Force: The

composition of employees in terms of sex, age, ethnicity,
race, and other diversity issues has a direct and an
indirect influence on HRM practices and programs of an
organization
F. Geographic Location of the Organization: The location
of the organization influences the kinds of people it hires
and the HRM activities it conducts. A hospital, plant,
university, or government bureau located in a rural area
confronts different conditions than one located in an
urban area. For example, the workforce in a rural area
might be more willing to accept a bureaucratic
organization style. Recruiting and selection in rural areas
will be different in that there may be fewer applicants.
 2. Internal Environment of HRM
 The internal environmental influences involve characteristics
and factors that are found within the organization, including
strategy, goals, organization culture, nature of task, work
group, and leader’s style and experience.
1. Strategy: A strategy indicates what an organization’s key
executives hope to accomplish in the long run.
 As a plan, a strategy takes the firm into the area of
competition in the environment and into placement with the
resources of the form.
CONTD…
 For example, Apple Computer’s early success was due to
high alignment of its strategy, structure, people, and
management. People were “empowered through Apple
technology.”
 The Apple workforce believed that the company’s
technology and ideas were superior to all others.
 But then competitors and deviation from a high-end
technology strategy resulted in protest, discontent, and
political infighting. Apple did not adapt, and it lost profit
margin and had to lay off large numbers of employees.
 CONTD…

2. Organization Culture: Organization culture refers to a system

of shared meaning held by members that distinguishes the
organization from other organizations.
Organization culture represents the perceptions held by the
organization’s employees.
Is there a sense of shared value?
Is a common value system held by employees?
 These are the kinds of questions asked to arrive at a picture of
the firm’s culture.
 Culture can have an impact on the behavior, productivity, and
expectations of employees.
 It provides a benchmark of the standards of performance among
employees.
 For example, it can provide clear guidelines on attendance,
punctuality, concern about quality, and customer service.
 CONTD…
3. Nature of the Task: Many experts believe that the task to be
performed is one of the most vital factor affecting HRM. They
describe HRM as the effective matching of the nature of the task
(job) with the nature of the employee performing the task.
 There are perhaps unlimited similarities and differences among
jobs that attract or repel workers and influence the meaning of
work for them. Some of the most significant are the following:
 Degree of knowledge and ability to use information technology:
Advantages in informational and computer technology have
resulted in a need for employees with the skill to use these
technologies. Instead of physical lifting and moving as
requirements of a task, the use of “knowledge skills” has become
significant.
“Knowledge workers” are now expected to plan, decide, and solve
problems using databases, computer programs, and other
technology-driven information sources (e.g., Internet and Intranet).
 CONTD…
 Degree of empowerment: Empowering employees to complete
job tasks means that power or authority to make relevant and
meaningful decisions is delegated. In fact, the empowered
worker can complete his or her job task because he or she has
information, knowledge, and power.
 Degree of physical exertion required: Most people prefer work
involving minimal physical exertion. Some companies believe
that working with the mind is better for curing productivity
problems than working with the back.
 Degree of environmental unpleasantness: Contrast the
environment of a coal miner with that of a bank teller. People
generally prefer physically pleasant and safe conditions.
 Physical location of work: Some jobs require outside work;
others, inside work. Some jobs require the employee to stay in
one place. Others permit moving about.
 CONTD…
 Time dimension of work: Some jobs require short periods of
intense effort; others require long hours of less taxing work.
 Human interaction on the job: Some jobs require interaction
with others.
 Degree of variety in the task: The amount of freedom and
responsibility a person has on the job determines the degree of
autonomy provided for in the work.
 Task identity: The degree of wholeness in a job—the feeling of
completing a whole job as opposed to contributing to only a
portion of a job—is its task identity. Contrast the job of an auto
assembler with that of a tax accountant.
 Task differences and job design: Because jobs are not created
by nature engineers and specialists can create jobs with varying
attention to the characteristics described here.
 CONTD…
4. Work Group
 Groups play a major role in the life of an individual. You probably
belong to family, friendship, and student groups. Once a person joins an
organization, his or her experiences are largely influenced by a work
group. Group Think
 A work group consists of two or more people who consider themselves a
group, who are interdependent with one another for the accomplishment
of a purpose, and who communicate and interact with one another on a
more or less continuous basis.
 Work groups are directly related to the success of HRM activities. If a
work group opposes HRM programs, it can ruin them. Examples of
programs that can be successes or failure depending on the support or
resistance they receive from work groups include incentive
compensation, profit sharing, safety, and labor relations.
 Operational and HR managers who desire success in such programs
should at least consider permitting work-group participation in
designing and implementing HRM.
 CONTD…

5. Goals: The goals of organizations differ within and among

departments. All departments probably have goals that include
employee satisfaction, survival, and adaptability to change.
The differences arise in the importance the decision makers place
on the different goals. In some organizations, profit is of such
major importance that other goals, such as increased employee
satisfaction, are not well developed.
In these organizations where profits take precedence, HRM goals
involving the human resources are paid only minimal attention.
 The result of such negligence is typically problems in the form
of high absenteeism, performance decrements, high grievance
rates, and so on.
 CONTD…
6. Leader’s Style and Experience
 The experience and leadership style of the operating manager or
leader directly affect HRM activities because many, if not most,
programs must be implemented at the work-unit level. Thus, the
operating manager or leader is a crucial link in the HRM
function.
 Leaders must orchestrate/coordinate the distinctive skills,
experiences, personalities, and motives of individuals. Leaders
also must facilitate the interactions that occur within work groups.
In his or her role, a leader provides direction, encouragement, and
authority to evoke desired behaviors. In addition, leaders
reinforce desirable behavior so that it is sustained and enhanced.
 The leader is an important source of knowledge about the tasks,
the organization, and the HRM policies, programs, and goals. The
experience and operating style of a leader will influence which
HRM programs are communicated, implemented, and effective.
The human resource management model
The human resource management model includes four
interrelated phases (Milkovich and Boudreau, 1991).
1/Assess human resource conditions
2/Set objectives based on the assessment –planning
3/Choose a course of action from alternatives generated to
achieve objectives: Staffing, development, compensation,
employee/labor relations and
4/Evaluate the results (evaluate the results provides feedback
on the success of the actions)
***************//************
Any Questions?
 Chapter Three
Job Analysis and Human Resource Planning
 Job Analysis (study) is a systematic investigation of
the activities within a job.
 Is systematic process of obtaining information about the skills,
duties, and knowledge required for performing jobs in an
organization.
 It defines and documents the duties, responsibilities
and accountabilities of a job and the conditions
under which a job is performed.

?
 CONTD…
Job analysis provides answers to questions such as these:
 How much time is taken to complete important tasks?
 Which tasks are grouped together and considered a job?
 How can a job be designed or structured so that the
employee’s performance can be enhanced?
 What kinds of behaviors are needed to perform the job?
 What kind of person (in terms of personalities and
experience) is best suited for the job?
 How can the information developed by a job analysis be used
in the development of HRM programs?
Which job is to be analyzed?
 When an organization is established
 When a new job is created
 When a job is changed due to new technology, methods,
procedures, system
 When the organization contemplates on a new
compensation plans
The major purpose of job analysis is to provide
answers to the following six important questions

1. What physical and mental tasks does the worker

accomplish?
2. When is the job to be completed?
3. Where is the job to be accomplished?
4. How does the worker do the job?
5. Why is the job done?
6. What qualifications are needed to perform the job?
 Components of job analysis

 Job Descriptions
 Written statement of what jobholder does, how it is
done, under what conditions and why.
 Common format: title; duties; distinguishing
characteristics; environmental conditions; authority
and responsibilities.
 Used to describe the job to applicants, to guide new
employees, and to evaluate employees.
 Identification of essential job functions is needed to
assure compliance with Americans with Disabilities
Act.
Key Elements of a Job Description
1. Job Title:
 Indicates job duties and organizational level.
2. Job Identification:
 Distinguishes job from all other jobs.
3. Essential Functions (Job Duties):
 Indicate responsibilities entailed and results to be.
accomplished
4. Job Specifications:
 Basic skills required to perform the job and physical demands
of the job.
 CONTD…
 Job Specifications
 States minimum acceptable qualifications.
 Used to select employees who have the essential
qualifications.
 Job Evaluations
 Specify relative value of each job in the organization.
 Used to design equitable compensation program.
-preparation of job description and job
specification
Uses of job evaluation
 It provides information for developing a
compensation package
 It serves as the basis for fixing a fair and
equitable salary and wage structure
CONTD…
 Job performance standards- the statement of attainable as
well as acceptable level of job achievement. Indicate quality
and quantity of job performance

Uses of job standards

 Motivation- serves as targets for employees’ efforts
 Performance evaluation- performance standards facilitate
objective
 Control- actual performance is measured against standards
Sources of information for job analysis

 Employees, Supervisors,
 Independent expert- persons specializing in job analysis
are appointed to watch the employees performing the job.
 Job review committee- such committees consist of
representatives from human resource departments, labor
unions.
 Non- human resources- existing job description and
specializations, equipment maintenance records, training
manuals etc.
The Steps in Job Analysis
Step 1: Examine the total organization and the fit of
each job
Step 2: Determine how job analysis information will be
used
Step 3: Select jobs to be analyzed
Step 4: Actually analyze the job-by Collecting data by
using acceptable job analysis techniques
Step 5: Prepare job description
Step 6: Prepare job specification
Uses of Job Analysis Information
A good job analysis must provide the following if it is to be
viewed favorably:
1. It should yield a thorough, clear job description.
2. The frequency and importance of task behaviors should be
assessed.
3. It must allow for an accurate assessment of the knowledge,
skills, abilities, and other characteristics (KSAOs) required by
the job.
4. It must yield information about the relationship between job
duties and these KSAOs.
 That is, it must clearly determine which KSAOs are important for
each job duty.
 In addition to helping organization satisfy their legal
requirements, job analysis is closely tied to HRM programs and
activities.
Methods of Data Collection for Job Analysis

 Observation method – job analyst watches

employees directly or reviews film of workers
on the job.
 Individual interview method – a team of job
incumbents is selected and extensively
interviewed.
 Group interview method – a number of job
incumbents are interviewed simultaneously.
 Structured questionnaire method – workers
complete a specifically designed questionnaire.
Contd…
 Technical conference method – uses supervisors
with an extensive knowledge of the job.
 Diary method – job incumbents record their daily
activities.
-Combination of methods- job analyst often rely on
combinations where two or more techniques are used
concurrently
-The best results are usually achieved with some
combination of methods.
 Job design
 Job design is the process of defining the way work will be
performed and the tasks that will be required in a given job.
 Job redesign refers to changing the tasks or the way work is
performed in an existing job.
There are factors that play a vital role in job design or redesign.
These are:
 Technology- it has an impact on job design. The type of machines,
tools, equipments, and other work aids as well as particular work
layout and methods used in producing goods and services tend to
act as constraints.
 Economic factors- if job redesign is believed it improve output and
workers level of satisfaction, it must consider the adequacy of the
firm’s resources. Since job redesign is an expensive undertaking,
the management must carefully balance the benefits of job design
or redesign with its costs
 CONTD…
 Union pressure- the philosophy, policy, and strategy of the
union can affect job design or design.
The contract between union and management specifies and
defines the type of jobs and the duties responsibilities of
employees.
 Employee’s potential- the abilities, attitudes and motivation
of the organizations’ employees must be considered when
planning to design or redesign a job.
 Management philosophy- the general organizational
policies and strategies can determine the degree to which job
redesign is possible.
 Laws and government regulation-Job design or redesign is
also affected by government regulation
Techniques of job redesign

 Job rotation- this technique refers to the movement of employees

from one job to another
 Jobs are not changed only employees are rotated
 Job enlargement is a technique used to expand the number of
related tasks in a job. It increases job scope.
 Job enrichment is a technique in which employees are given
autonomy to set their own pace, design their own work methods, etc.
 According to Herzberg (1979), job enrichment efforts should be
based on the following principles:
 Increases job demands
 Increase workers accountability
 Providing work scheduling freedom
 Providing feedback
 Providing new learning experience
CONTD…
 Job enlargement and rotation are horizontal expansion
while job enrichment is a vertical expansion.
 Job enlargement and rotation increase job scope while job
enrichment increases job depth.
 Job enlargement attempts to increase satisfaction by
giving employees a greater variety of things to do. The
expansion of the work is, however, considered horizontal,
since the employees are not given more responsibility or
authority in decision making. Rather, they are merely
allowed to do a greater number of tasks. Thus, an
enlarged job is not as specialized or routine as a job
designed according to scientific management, but it may
not be any more meaningful.
CONTD…
 Job Enrichment: A Motivational Approach
Rather than simply increasing the variety of tasks
performed by an employee,
job enrichment tries to design jobs in ways that help
incumbents satisfy their needs for growth, recognition,
and responsibility. Thus, enrichment differs from
enlargement because the job is expanded vertically;
employees are given responsibility that might have
previously been part of a supervisor’s job.
Problems with Job Analysis
 Lack of Management Support
 Lack of Co-operation from Employees
 Inability to Identify the Need of Job Analysis
 Biasness of Job Analyst
 Using Single Data Source
 Lack of training of the analyst
Other problems are:
• Intentional or unintentional distortion from incumbent
• Absence of a review
• Lack of participation of all stakeholders
• Job-based rather than person-based.
• Lack of reward for providing quality information
• Insufficient time allowed for the process
• Time spent of job analysis too lengthy.
Human Resource Planning
 Human Resource Planning (HRP) is the starting point in
staffing function
 Human Resource Planning basically deals with forecasting
of additional human resources required in an organization
in future.
 Human resource planning is a means of deciding the
number and type of personnel that organization needs now
and in the future.
 The purpose of HRP is to assess where the organization is,
where it is going, and what implications these assessments
have on future supplies and demands of human resource.
 Importance of HRP(MPP)
 Its supply of personnel must be sufficient to ensure the healthy
operation of the organization of. HRP, according to Chatterjee
(1995), therefore,
 Assume a critical role in the future success or failure of an
organization.
 Enable a manager to predict his/her manpower requirements, to
determine the deployment of personnel and to control wage and
salary costs.
 Assesses the kinds of skills required to be developed as well as
recruited.
 Estimate human resource requirements over a specified time
frame in relation to the organization’s goals. It provides an
indication of the lead time that is available to evolve new
strategies in selecting and training the required additional
manpower or reducing the strength of the workforce.
In general, importance of HRP
 Future human resource requirements
 Planning is vital for determining the human resource needs for the
future
 Cope with change
 HRP enable the management to cope with changes in technology,
competitive forces, markets, government regulations
 Decreasing and increasing growth of organizations
 The manner, the pace, and direction in which an organization is
growing dictates the need for a human resource plan
 Foundation for human resource functions
 The plan provides essential information for designing and
implementing human resource functions such as recruitment,
selection, employee mobility (transfers, promotions, lay-offs) and
training and development
 HR Planning Process
. All effective HR planning shares certain features. It is generally agreed that
HR planning involves four distinct phases or stages.
1. Situation analysis or environmental scanning.
2. Forecasting demand for human resources.
3. Analysis of the supply of human resources.
4. Development of plans for action.
1. Situation Analysis and Environmental Scanning
 The first stage of HR planning is the point at which HRM and strategic
planning initially interact.
 The strategic plan must adapt to environmental situation, and HRM is one
of the primary mechanisms that an organization can use during the
adaptation process.
 For example, rapid technological changes in the environment can force an
organization to quickly identify and hire employees with new skills that
previously weren’t needed by the organization. Without an effective HR
plan to support the recruitment and selection functions in the organization,
it would be impossible to move fast enough to stay competitive.
 CONTD…
2. Forecasting Demand for Employees (hr forecast)
 The next phase of an effective HR planning process is estimating not only how
many but also what kinds of employees will be needed. Forecasting yields
advance estimates or calculations of the organization’s staffing requirements.
Although many quantitative tools can help with forecasting, it involves a great
deal of human judgment. In addition, many successful HR planners rely heavily
on their “gut instincts” about future conditions.
 It should be obvious that the demand for employees is closely tied to the
strategic direction that the organization has chosen.
 Are we in a growth mode? Or are we engaged in reengineering that will shrink
our workforce in the coming years? Trying to estimate how many and what
kind of workers will be needed in the future is clearly an incredibly difficult
task, especially for organizations that confront rapidly changing environments
such as those found in the computer industry.
 Nonetheless, a number of techniques available to organizations help reduce
this kind of uncertainty.
 Four of these techniques will be briefly described in the following sections.
These include: expert estimates, trend projections, statistical modeling, and
unit-demand forecasting.
 CONTD…
 HRF techniques-Forecasting techniques range from judgment to sophisticated
quantitative models. The most commonly used techniques of forecasting are:
 Judgment and experience (Delphi technique)-This method is based on the
estimates made by people like executives or experts who are very familiar with the
entire nature of the jobs in the organization. It is appropriate for short range
forecasts
 The expert estimate The least mathematically sophisticated approach to
employment forecasting is for an “expert” or group of experts to provide the
organization with demand estimates based on experience, guesses, intuition, and
subjective assessments of available economic and labor force indicators. It is
determining the relationship between tasks and the number of employees needed to
perform the tasks.
Concerns over a single individual’s ability to provide accurate estimates of such
complex issues lead to the development of the
 Delphi technique. The Delphi technique elicits expert estimates from a number of
individuals in an iterative manner—estimates are revised by each individual based
on knowledge of the other individuals’ estimates.
Another group-based judgment forecasting method is called the nominal group
technique (NGT).Individual generation of estimates is followed by group
brainstorming sessions in the hope of generating one group decision that is
 CONTD…
 Trend projection. Trend projection develops a forecast based on a past
relationship between a factor related to employment and employment itself.
For example, in many businesses, sales levels are related to employment
needs. The planner can develop a table or graph showing past relationships
between sales and employment. Quantitative methods are based on the
assumption that the future is an extrapolation from the past.
 Modeling and multiple-predictive techniques this approach of demand
forecasting uses the most sophisticated forecasting and modeling
techniques. Trend projections relate a single factor (such as sales) to
employment. The more advanced approaches relate many factors to
employment such as sales, gross national product, and discretionary
income. Or they mathematically model the organization and use
simulations with methods such as Markov models and analytical
formulations such as regression analysis.
The use of Markov chain analysis involves developing a matrix to show the
probability of an employee’s moving from one position to another or leaving
the organization. A full treatment of HRM applications of Markov analysis
is found in management science or operations management literature.
 3. Analysis of the supply of human resources .
 This phase of HR planning should answer the question:
“How many and what kinds of employees do I currently have, in terms
of the skills and training necessary for the future?”
 This involves more than simply counting current employees
 The smaller and more centralized the organization, the easier it is to
conduct a skills inventory
 Both a skills inventory and a management inventory:
 Identify the skills, abilities, experiences, and training employees
currently have
 Are useful for career planning, management development, and related
activities
 In its simplest form, a skills inventory is a list of:
 Names
 Characteristics
 Skills
 CONTD…
 Skills inventories vary greatly in their sophistication
 Some are as simple as a file drawer of index cards
 Others involve expensive and complex computer databases
 Action decisions in HRP
 If the supply of workers is less than the demand:
 It can be filled with present employees who are willing to work overtime

 If there is a shortage of skilled employees:

 Train and/or promote present employees
 Recruit less-skilled employees
 Recall employees who were previously laid off
 Possible solutions to an employee surplus:
 Early retirements
 Demotions
 Layoffs
 Terminations

Possible mixtures for Shortage of Employees

 Part-time workers
 Subcontractors
 Independent professionals
 Factors affecting Human resource
planning
 Employment-pressure on the company, from government
 Technical changes in the society-Technology changes at a very fast speed
and new people having the required knowledge are required for the
company
 Organizational changes-Changes take place within the organization from time
to time i.e. the company diversify into new products
 Demographic changes-age, population, composition of work force etc
 Shortage of skill due to labor turnover-Industries having high labor turnover rate
 Multicultural workforce-Workers from different countries travel to other
countries in search of job
 Pressure groups-Company has to keep in mind certain pleasure. Groups like
human rights activist, woman activist, media etc. as they are very capable
for creating problems for the company

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Any Questions?