Human Resource Planning (HRP)

Man is the key to our problems, not money. Competent people can work miracles even with small resources and draw wealth out of barren land. What is HRP? Human resource planning is a systematic approach to ensure that the right people will be in the right place at the right time. It is a process of deciding what positions the firm will have to fill, and how to fill them. It is a process of determining HR needs of the organization in the context of its strategic planning. The Need for HRP To ensure that HR is available: provide the information and data to an organization on when, where and how many employees need to be recruited. To assess the future supplies of and demands for HR: reduce shocks and disturbances within the employment patterns of large organizations. To match supplies and demands, making them compatible with the achievement of the organizations future goals.

Needs determined by Assessing current human resources Analyzing corporate plans Forecasting staffing level and categories in the light of corporate objectives Assessing availability of HR Determining HR needs Formulating HR programs to address the needs. Steps in HRP 1. Assessing Current Human Resources 2. Demand Forecasting 3. Supply Forecasting 4. Matching demand and supply 5. Action Plan Step 1: Assessing Current HR HR Inventory (details of workforce: something like CV or personal history form) 1. Job Analysis (details of jobs, resulting in JD and JS)

Step 2: Demand Forecasting Estimates the number of people required in future and their capacity. To forecast personnel needs: Project the demand for the product or service Project sales and revenues Plan the volume of production or activity level to meet the planned sales, revenue or activity requirements Estimate the size of the staff required to achieve it How to forecast personnel needs? Staffing plans also must reflect:  Projected turnover of staff  Quality and skills of employees in relation to the changing needs of the organization  Strategic decisions (eg. Upgrade quality, enhance productivity, enter into new markets)  Technological and other changes resulting in increased productivity  Financial resources

HR Forecasting Methods Trend analysis Study the past staffing needs over a period of years to predict future needs. Ratio analysis Use of ratios between one or more business factors and staffing level as well as between different staff categories if the current year to forecast future needs. Ratio trend analysis Use of ratios of the past years to predict needs Managerial judgment A big role Trends, ratios and relationships unlikely to continue unchanged Judgment needed to modify the forecast based on the factors that are likely or should be changed Important modifying factors Strategic decisions about quality or market Technological/managerial changes for productivity increase

Step 3: Supply Forecasting Internal supply forecasts 2. External supply forecasts Forecasting Internal Supply Qualifications inventories Manual or computerized records listing employees education, career and development interests, languages, special skills etc to be used in selecting inside candidates for promotion Personnel inventory and development Information is complied about each employee manually and recorded. Forecasting Internal Supply Personnel replacement charts Company records showing present performance and profitability of inside candidates for the most important positions Position replacement card A card prepared for each position in a company to show possible replacement candidates and their qualifications

Forecasting External Supply Monitoring general economic conditions Local market conditions Occupational market conditions Step 4: Matching demand & supply To determine future shortages or surpluses Additional staff will be needed to meet the shortage Retrenchment will be needed for surplus staff Step 5: Action Plan Concerned with the preparation of action plans to deal with shortages and surpluses of human resource Recruitment plan Training and Development plan Retention plan Promotion plan Redeployment plan Redundancy plan Transfer plan Succession plan

 In summary HR planning is concerned with the demand and supply of labor and problems arising from the process of reconciling these factors. The need for HR planning lies with the long-term and shortterm operational and growth needs of the organization but also with needs and aspirations of individuals within the organization. Issues to be addressed in HR Planning How many employees does the organization currently employ? What is the age profile, by department, of employees? Where in the organization are these employees to be found? Which are the biggest departments in the organization? What skills do the employees possess? How many employees, on average, leave the organization every year? In which areas of expertise do the organization tend to loose more employees? HRP in Nepal Analysis is in its infancy / Fire-fighting tendencies / Kowledge base (ad-hoc, guess work) / Short term planning / Overstaffing (govt. & public organizations)/ Nepotism/ favouritism (private org.)

Recruitment- Review What should we know about HR so that we can make effective decision? HRIS 2. What should we expect our employees to do?JA:JD/JS 3. How many and what type of staff do we need to achieve our organizational goals? HRP 4. How are we going to acquire them? RECRUITMENT 5. Whom to acquire and how to select? SELECTION Recruitment Process of attracting eligible candidates. Process of generating a pool of suitable candidates for available jobs. The process begins when the new recruits are sought and ends when applications are received. Purpose of recruitment Attract suitable candidates to apply. Discourage unsuitable ones. Provide job information. Project organization image. Alternatives to recruitment Reorganization / Employee leasing / Outsourcing / Internal redeployment / Technology

Recruitment process Recruitment Planning - Numbers needed - JS - AA goal Recruitment Strategy Development - Where/whom to recruit - How to recruit - Choice of recruiters - What information to share Recruitment Activities - Job posting - Advertisements - Campus visits - Other methods -Follow up actions -Record keeping Recruitment Philosophy - Internal vs external - Job vs career - Short vs long term - Other considerations Screening/ selecting employees Recruitment Evaluation - Number of jobs filled - Timeliness of jobs filled - Cost per job filled - AA goals met

Sources & Methods of Recruitment

Internal source (within the organization) Internal method Job posting Employee referrals HR inventory External source (outside the organization)

HR Planning Job Analysis Legal consideration How many? Where? What?

External method Walk-ins Advertisement (media) Campus visits Agencies Trade unions

Internal vs External Recruitment Internal Recruitment Advantages Better selection (foreknowledge of candidates strengths and weaknesses) Increases employee morale Adaptability (less training & orientation required) Cost effective Disadvantages Limited choice Failed applicants become discontented Time wasted interviewing inside candidates who will not be considered In-breeding of status quo Favoritism/nepotism Disadvantages High cost Adaptability problems Wrong selection

External Recruitment Advantages Greater choice for selection Balanced HR mix Fairness Environmental adaptability

Ad Construction - The Media: selection of the best medium depends on the positions for which the firm is recruiting. Newspapers Trade and professional journals Internet job sites Marketing programs Constructing an effective ad Wording related to job interest factors should evoke the applicants attention, interest, desire, and action (AIDA) and create a positive impression of the firm. Be creative: use of ad agencies might help develop & promote companys image. Executive recruiters : Headhunters Special employment agencies retained by employers to seek out top-management talent for their clients. a. Contingent-based recruiters collect a fee for their services when a successful hire is completed. b. Retained executive searchers are paid regardless of the outcome of the recruitment process. Internet technology and specialization trends are changing how candidates are attracted and how searches are conducted.

Recruiting Yield Pyramid

Recruiting yield pyramid The historical arithmetic relationships between recruitment leads and invitees, invitees and interviews, interviews and offers made, and offers made and offers accepted. Significance of YP YR will help to estimate the suitable candidate number required in future. Saves time and resource.

Selection
A process of choosing from a pool of candidates the persons who are most likely to meet the criteria of the job. All selection activities, from the initial screening interview to the physical examination are directed toward making effective selection decision. Effective selection involves finding the match between organizational needs for qualified individuals & individuals needs jobs in which they are interested. Selection Decision Outcomes Reject Accept Correct Reject Successful Decision Error Unsuccessful Accept Error Correct Decision

Importance of Selection Why careful selection is important? Evaluate, hire, and place job applicants in the best interests of both organization & individual

High performance of employees from the beginning High costs for hiring (selection cost, induction and training/development cost, labor turnover cost) Costly legal implications of incompetent hiring (negligent hiring litigation) How to avoid litigation Carefully scrutinize Ask about gaps in employment Get written authorization for reference checks Save records Reject applicants Balance privacy right with need to know Take immediate action Key Selection Methods Application blank References Psychometric tests (ability, aptitude, achievement, personality, motivation) Performance/ work sample test Interview (structured, unstructured, individual, group, situational) Assessment centre

 Choice of Selection Methods In choosing the right selection methods, several technical factors need to be considered like predictors and criteria to use. Usefulness of methods used depends on their reliability and validity. Test Validity Test validity checks whether or not a test measures what it is supposed to measure. Does the test actually measure what we need for it to measure? 2 main ways to demonstrate tests validity: Criterion validity: positive correlations between predictor (test scores) and criterion (performance) Content: identify task & behaviour critical to performance and select a sample of the tasks and behaviour to be tested. If content of test correlates highly with job content then the test is content valid. Test Reliability Test reliability tests consistency or accuracy of scores obtained by the same person when retested with the same or equivalent methods. Are the test results stable over time? Causes of test unreliability :Focus of test / Errors on testing

Validation of Selection Methods

Job Analysis Identification of Predictors Measurement of Predictors Identification of Criteria

Measurement of Criteria

Correlation of Scores
+VE Correlation Validated : Continue, Review Selection Approaches Single predictor approach :Using one piece of information Multiple predictor approach: More than one methods being used Multiple hurdle/ discrete: Screening of candidates at each step, Useful: large number and long selection process Compensatory/ Comprehensive: Selection based on aggregate performance on selection tests, Useful: small number and few tests Hybrid: Combination of both -VE Correlation Invalidated: Change Predictors

Effectiveness of Selection Predictors

Predictor Application blank Weighted application Biographical/interest blanks Recommendation letters Cognitive ability tests Job knowledge tests Work sample tests Assessment centers Interviews (unstructured) Interviews (situational) Validity Low High High Low High High High High Low High Cost Low High High Low Low High High High Low High Legality ? High High ? Low High High High Low High Reaction Neutral Neutral Negative Positive Negative Positive Positive Positive ? Positive