R S HR Planning Slides 18032023 012357pm

Human Resource Planning
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
organization’s 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
 Assessing Current Human Resources
 Demand Forecasting
 Supply Forecasting
 Matching demand and supply
 Action Plan
Step 1:
Assessing Current HR
 HR Inventory: details of workforce

(something like CV or personal history
form)
 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 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

 Ratio analysis
 Ratio trend analysis
 Managerial judgment
 Important modifying factors
 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 of
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
 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 compiled 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 short-term 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?
Recruitment- Review
1. 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 Recruitment Philosophy

- Numbers needed - Internal vs external
- JS - Job vs career
- AA goal - Short vs long term
- Other considerations
Recruitment Strategy
Development Screening/ selecting
- Where/whom to recruit employees
- How to recruit
- Choice of recruiters
Recruitment Evaluation
- What information to share
- Number of jobs filled
Recruitment Activities - Timeliness of jobs filled
- Job posting - Cost per job filled
- Advertisements - Goals met?
- Campus visits
- Other methods
-Follow up actions
-Record keeping
Sources & Methods of Recruitment
Internal source
(within the organization)
Internal method
Job posting
Employee referrals
HR Planning HR inventory
How many?
Job Analysis Where? External source
What? (outside the organization)
Legal consideration
External method
Walk-ins
Advertisement (media)
Campus visits
Agencies
Trade unions
Internal vs External Recruitment
Internal Recruitment
Advantages Disadvantages
• Better selection • Limited choice
(foreknowledge of candidates’ • Failed applicants become
strengths and weaknesses) discontented
• Increases employee morale • Time wasted interviewing
• Adaptability (less training & inside candidates who will not
orientation required) be considered
• Cost effective • In-breeding of status quo
• Favoritism/nepotism
External Recruitment
Advantages Disadvantages
• Greater choice for selection • High cost
• Balanced HR mix • Adaptability problems
• Fairness • Wrong selection
• 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

Constructing an effective ad
 Wording related to job interest factors
should evoke the applicant’s attention,
interest, desire, and action (AIDA) and
create a positive impression of the firm.
 Be creative: use of ad agencies might help
develop & promote company’s image.
Executive recruiters
(Headhunters)
 Special employment agencies retained by employers to
seek out top-management talent for their clients.
 Contingent-based recruiters collect a fee for their services

when a successful hire is completed.
 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
• YP 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
Accept Reject
Correct Reject
Successful Decision Error
Accept Correct
Error Decision
Unsuccessful
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?
Ways to demonstrate test’s
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
• Effectiveness of Selection Predictors
Predictor Validity Cost Legality Reaction
Application blank Low Low ? Neutral
Weighted application High High High Neutral
Biographical/interest High High High Negative

blanks
Recommendation letters Low Low ? Positive
Cognitive ability tests High Low Low Negative
Job knowledge tests High High High Positive
Work sample tests High High High Positive
Assessment centers High High High Positive
Interviews Low Low Low ?

(unstructured)
Interviews (situational) High High High Positive

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Human Resource Planning

Man is the key to our problems,

• It is a process of deciding what positions

• It is a process of determining HR needs

 To assess the future supplies of and demands

 To match supplies and demands, making them

 Analyzing corporate plans

 Forecasting staffing level and categories in the

 Formulating HR programs to address the needs.

 Matching demand and supply

 HR Inventory: details of workforce

 Job Analysis (details of jobs, resulting in JD

 Estimates the number of people required in

◦ Project the demand for the product or service

◦ Project sales and revenues

◦ Plan the volume of production or activity level

◦ Estimate the size of the staff required to

Staffing plans must reflect:

 Projected turnover of staff

 Quality and skills of employees in relation to the

 Strategic decisions (eg. Upgrade quality, enhance

 Technological and other changes resulting in

Study the past staffing needs over a period of years to

Use of ratios between one or more business factors and

 Ratio trend analysis

Use of ratios of the past years to predict needs

◦ Trends, ratios and relationships unlikely to continue

◦ Judgment needed to modify the forecast based on the

◦ Strategic decisions about quality or market

◦ Technological/managerial changes for productivity

 Internal supply forecasts

 External supply forecasts

Forecasting Internal Supply

 Personnel inventory and development

Company records showing present

 Position replacement card

A card prepared for each position in a

 Monitoring general economic conditions

 Local market conditions

 Occupational market conditions

To determine future shortages or

◦ Additional staff will be needed

◦ Retrenchment will be needed

Concerned with the preparation of action

2. What should we expect our employees to

3. How many and what type of staff do we need to

4. How are we going to acquire them?

5. Whom to acquire and how to select?

 Attract suitable candidates to

Recruitment Planning Recruitment Philosophy

 Trade and professional journals

 Internet job sites

 Contingent-based recruiters collect a fee for their services

 Retained executive searchers are paid regardless of the

 Internet technology and specialization trends are changing

Recruiting yield pyramid

All selection activities, from the initial screening

Effective selection involves finding the match

 Ask about gaps in employment