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Human Resource Management (MGT501)
VU
Lecture 12
HUMAN RESOURCE PLANNING (HRP)
After studying this chapter, students should be able to understand the following concepts:
A. Human Resource Planning (HRP)
LECTURE OVERVIEW
We will examine the human resource planning process and some human resource forecasting techniques.
Next, we discuss forecasting human resource requirements and availability and describe what actions could
be taken should either a surplus or a shortage of workers exist.
A. Human Resources Planning (HRP)
To understand the Human Resource Planning First, we will see what is Planning? and why is it needed?
What is planning? Plans are methods for achieving a desired result. Goals or objectives are specific results
you want to achieve. Planning is thus "the process of establishing objectives and courses of action prior to
taking action."
What is planning concerned with? Planning provides a sense of purpose and direction.  It is a
comprehensive framework for making decisions in advance. It also facilitates the organizing, leading, and
controlling functions of management. Planning: allows you to make your decisions ahead of time, it helps
you to anticipate the consequences of various courses of action, it provides direction and a sense of
purpose, it provides a unifying framework against which to measure decisions, and thus helps you avoid
piecemeal decision making. Planning also helps identify potential opportunities and threats, and facilitates
control. It is concerned with the end (what is to be done) as well as with means (how it is to be done).
Is planning really needed? If... organizations... never faced changes in the environment, there would
have been no need for planning. Planning is one of the functional areas of HR.
B. Strategic Planning And The Human Resource Planning Process
Strategic planning: is the process by which top management determines overall organizational purposes
and objectives and how they are to be achieved.
Human resource planning (HRP): is the process of systematically reviewing human resource
requirements to ensure that the required number of employees, with the required skills, is available when
they are needed. After an organization's strategic plans have been formulated, human resource planning can
be undertaken. Human resource planning has two components: requirements and availability. Forecasting
human resource requirements involves determining the number and type of employees needed by skill level
and location. In order to forecast availability, the human resource manager looks to both internal sources
(presently employed employees) and external sources (the labor market). When employee requirements and
availability have been analyzed, the firm can determine whether it will have a surplus or shortage of
employees. Ways must be found to reduce the number of employees if a surplus is projected. Some of these
methods include restricted hiring, reduced hours, early retirements, and layoffs. If a shortage is forecasted,
the firm must obtain the proper quantity and quality of workers from outside the organization. In this case,
external recruitment and selection is required.
The process of anticipating an organization's future human resource needs and then developing action plans
for fulfilling identified needs. The systematic review of human resource requirements getting the right
people at the right place at the right time.
i.  Objectives of Human Resource Planning
Enable organizations to anticipate their future HR needs to identify practices that will help them meet those
needs
ii. Benefits of HR Planning
 Helps in planning job assignments
 Helps cope with fluctuations in staffing
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Human Resource Management (MGT501)
VU
Identifies recruiting needs
Provides other useful information
iii. Planning Includes Forecasting
Forecasting is carried out in two basic areas which are demand forecast of workforce for organization and
supply forecast for the organization
Following approaches are used to perform this function or activity:
 Statistical approaches
a) Trend analysis
b) Ratio analysis
c) Regression analysis
 Judgmental methods
a) Managerial judgment
Forecasting Involves Two Activities
 Monitoring current HR programs and personnel staffing levels
 Investigating future HR needs and concerns
Forecasting Human Resource Requirements
A requirements forecast is an estimate of the numbers and kinds of employees the organization will need at
future dates in order to realize its goals. Several techniques of forecasting human resource requirements and
availability are currently being used by organizations.
a. Zero-Base Forecasting
This method uses the organization's current level of employment as the starting point for determining
future staffing needs. The key to zero-base forecasting is a thorough analysis of human resource needs.
b. Bottom-Up Approach
A forecasting method in which each successive level of the organization, starting with the lowest, and
forecasts its employee requirements in order to, ultimately, provide an aggregate forecast of employment
needs.
c. Use Of Mathematical Models
Mathematical models can assist in forecasting HR requirements. The relationship between sales demand and
the number of employees needed is a positive one.
d. Simulation
It is a technique for experimenting with a real-world situation through a mathematical model representing
that situation. A model is an abstraction of the real world.
Forecasting Human Resource Availability
Determining whether the firm will be able to secure employees with the necessary skills and from what
sources these individuals may be obtained is called an availability forecast.
Surplus of Employees Forecasted
When a comparison of requirements and availability indicates a worker surplus will result, restricted hiring,
reduced hours, early retirements, or layoffs may be required to correct the situation.
a.
Restricted Hiring
When a firm implements a restricted hiring policy, it reduces the workforce by not replacing employees who
leave.
b. Reduced Hours
Reaction to a declining demand can also be made by reducing the total number of hours worked. Instead of
continuing a 40-hour week, management may decide to cut each employee's time to 30 hours.
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Human Resource Management (MGT501)
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c.
Early Retirement
Early retirement of some present employees is another means of reducing the supply of workers.
d. Layoffs
At times, the firm has no choice but to actually lay off part of its workforce.
Shortage of Workers Forecasted
Faced with a shortage of workers, many organizations had to intensify their efforts to recruit the necessary
people to meet the needs of the firm. Some actions that were taken included:
a.  Creative Recruiting
A shortage of personnel often means that new approaches to recruiting must be used. The organization may
have to recruit in different geographical areas than in the past, explore new methods, and seek different
kinds of candidates.
b. Compensation Incentives
Firms competing for workers in a high-demand situation may have to rely on compensation incentives.
Premium pay is one obvious method. However, this approach may trigger a bidding war that the
organization cannot sustain for an extended period. More subtle forms of rewards may be required to
attract employees to a firm, such as four-day workweeks, flexible working hours, telecommuting, part-time
employment, and child care centers.
I.
c.  Training Programs
Special training programs may be needed to prepare previously unemployable individuals for positions with
a firm. Remedial education and skills training are two types of programs that may help attract individuals to
a particular company.
d. Different Selection Standards
Another approach for dealing with shortages of workers is the lowering of employment standards. Selection
criteria that screen out certain workers may have to be altered to ensure that enough people are available to
fill jobs. For instance, instead of desiring extensive work experience, a firm may be willing to hire an
inexperienced worker and train him or her to do the job.
Succession Planning and Development
a. Succession Planning
The process of ensuring that a qualified person is available to assume a managerial position once the
position is vacant.
b. Succession Development
The process of determining a comprehensive job profile of the key positions and then ensuring that key
prospects are properly developed to match these qualifications.
c. THE GOAL OF HR PLANNING
The goal of forecasting and planning is to keep a stable workforce that meets needs of the organization.
d. STEPS IN HRP PROCESS
Determine the impact of organizational objectives on specific organizational unit
Define the skills required to meet objectives (demand for Human Resource)
Determine additional human resource requirements in light of current HR (net HR
requirements)
Develop action plan to meet the anticipated HR needs
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Human Resource Management (MGT501)
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e. Importance Of Hrp
HRP has become more important in recent years for a number of reasons like:
 Globalisation of Business
 New Technologies
 The changing skill levels in the Workforce
 The changing demographics of the workforce
 Mergers and Acquisitions
 Legal developments
f.  Requirements for effective HR planning
Successful HR planning requires:
 HR personnel understand the HR planning process
 Top management is supportive
 The communications between HR staff and line management are healthy
 The HR plan is integrated with the organization's strategic business plan
Linking HR planning practices to competitive advantage
Effective HR planning provides best options for supply of workforce of the organization and s stated in
earlier chapters if organization is able to have efficient and effective workforce it will be have competitive
advantage.
KEY TERMS
Plans
Plans are methods for achieving a desired result.
Simulation
A technique for experimenting with a real-world situation through a
mathematical model representing that situation. A model is an abstraction of
the real world.
Strategic planning
is the process by which top management determines overall organizational
purposes and objectives and how they are to be achieved.
Layoffs
At times, the firm has no choice but to actually lay off part of its workforce.
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Table of Contents:
  1. INTRODUCTION TO HRM:Growing Importance of HRM, Road Map of the Course
  2. ESSENTIALS OF MANAGEMENT:Concepts and Essential of Management, Managerís Roles
  3. ORGANIZATION AND COMPONENTS OF ORGANIZATION:Open versus Closed Systems, The Hawthorne Studies
  4. PEOPLE AND THEIR BEHAVIOR:Why to work in organizations?, The Goals of Organizational Behavior
  5. INDIVIDUAL VS. GROUP BEHAVIOR:What Are Roles?, Problem solving Team
  6. PERSONNEL MANAGEMENT TO HUMAN RESOURCE MANAGEMENT:Records and Administration, Competitive Advantage
  7. HRM IN A CHANGING ENVIRONMENT:Productivity, New Trends at Work Place
  8. How organization Cultivate a Diverse Workforce, STEPS TOWARD MANAGEMENT OF DIVERSITY
  9. FUNCTIONS AND ENVIRONMENT OF HRM:Compensation and Benefits, Safety And Health, Interrelationships of HRM Functions
  10. LINE AND STAFF ASPECTS OF HRM:Authority, Line versus Staff Authority, Staff Manager
  11. LEGAL CONTEXT OF HR DECISIONS:Doing the Right Thing, Affirmative Action, Unintended Consequences
  12. HUMAN RESOURCE PLANNING (HRP):Benefits of HR Planning, Forecasting Human Resource Availability
  13. STRATEGIC PLANNING AND HRIS:HRís Strategic Role, Human Resource Information System, Common HRIS Functions
  14. JOB ANALYSIS:Purposes of the job Analysis, Questions Job Analysis Should Answer
  15. JOB ANALYSIS:Methods of Collecting Job Analysis Information, Observation, Source of Data
  16. JOB ANALYSIS (CONTD.):SURPLUS OF EMPLOYEES FORECASTED, Diversity through Recruiting Efforts
  17. SOURCES OF RECRUITMENT:ALTERNATIVES TO RECRUITMENT, Quantity of the Applicants, Quality of the Applicants
  18. SELECTION:Initial Screening, Advantages of Successful Screening
  19. SELECTION TESTS:Characteristics of Properly Designed Selection Tests, Guidelines for Conducting an Interview
  20. SELECTION PROCESSÖ CONTD:Background Investigations, Physical Exam, Selecting Managers
  21. SOCIALIZATION:Compensation and Benefits, Team Membership, Stages in socialization Process, Training and Development Trends
  22. TRAINING AND DEVELOPMENT:Learning, Phases of Training, Why Transfer of Training Fails
  23. MAXIMIZING LEARNING:Following up on Training, Repetition, Feedback, Purposes of T & D
  24. CAREER MANAGEMENT:Individual career planning, Career Planning and Development Methods
  25. PERFORMANCE:Determinants of Job Performance, Why is performance measured?, Performance Management
  26. PERFORMANCE APPRAISAL:What to Evaluate, The Appraisal Interview, PROBLEMS IN PERFORMANCE APPRAISAL
  27. JOB EVALUATION AND PRICING:THE APPRAISAL PERIOD, Ranking method,
  28. COMPENSATION SYSTEM:Pay, Job Pricing, Compensation: An Overview, Compensation Surveys
  29. BENEFITS:Total Compensation, Discretionary Benefits (Voluntary), Workplace Flexibility
  30. ROLE OF MONEY IN PERFORMANCE OF EMPLOYEES:Types of Pay-for-Performance Plans, Empower Employees
  31. MOTIVATION:The Motivation Process, Motivational Theories, Challenges of motivating employees
  32. OCCUPATION, HEALTH & SAFETY:Physical Conditions, Accident Investigation, Smoking in The work place
  33. STRESS MANAGEMENT:Symptoms of Stress, Managing Stress,
  34. COMMUNICATION IN ORGANIZATION:Burnout, Social Support at Work & Home, Communication in organization, Meetings
  35. TRADE UNIONS:Collective Bargaining, The HRM Department in a Nonunion Setting, Phases of Labor Relations
  36. CONFLICT AND NEGOTIATION:Transitions in Conflict Thought, Individual Conflict Management Styles
  37. POWER AND POLITICS:Sources of Power, Advantages and Disadvantages of PowerPower and Politics in Context
  38. EMPLOYEE RIGHTS AND DISCIPLINE:Contractual Rights, Management Rights, Disciplining Employees,
  39. DISCIPLINE (CONT...):Factors to Consider when Disciplining, Disciplinary Guidelines, Employee Separations
  40. LEADERSHIP:The Leaderís Behavior, Situational Theories of Leadership, Becoming a Leader
  41. REVISION (LESSON 12-21):Plans, Job Specification, Human resource planning, Selection Process, Corporate Culture
  42. REVISION (LESSON 22-26):Training, Case Study Method, Training, Performance
  43. REVISION (LESSON 27-35):Classification Method, Compensation, Empowerment, Mediation
  44. INTERNATIONAL DIMENSIONS OF HRM:Global Corporation, Type of staff members, Approaches to Global Staffing
  45. CONCLUSION & REVIEW:Strategies for Gaining Competitive Advantage, High-performance Work System