Transcript IMPORTANCE OF HR MANAGEMENT

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WELCOME
TO MBA
PROGRAMME
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DR. MD . SHAHADAT HOSSAIN
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LECTURE-TWO
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HUMAN RESOURCE
PLANNING PROCESS
WELCOME
LECTURE – ONE
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CONTENTS
HR PLANNING PROCESS
1.INTRODUCTION
2. TIME FRAME TABLE OF MAN
POWER FORECAST
3. WORKLOAD ANALYSIS FACTORS
4.TIME SERIES ANALYSIS METHOD
5. ANALYSIS MANPOWER SUPPLY
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1. INTRODUCTION:
Forecasting of manpower at
the organizational level is
necessary keep importance
in demand and supply
analysis which are available
internally or externally.
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Determination of time is
the most important task
of
human
resource
forecast which further
related with the
following factors:
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1.Demand and supply analysis
2.Internal availability
3.External availability
4.Employment practice
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Depending on the timeframe
which again depends
on
1. the basis of requirements,
2. nature of analysis
of above factors
changing.
keeps
on
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Thus, it is evident that
depending
on
the
timescale, human resource
manpower forecast pattern
also changes.
However, these practices are
done by the observation of
annual operating result.
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Forecasting
Methods
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HUMAN RESOURCE FORECASTING
• HR Forecasting attempts
to determine the supply
and demand for various
types of human
resources, and to predict
areas within the
organization where there
will be labor shortages or
surpluses.
There are three major
steps to forecasting:
1. Forecasting the demand
for labor
2. Determining labor
supply
3. Determining labor
surpluses and shortages
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1.FORECASTING HR REQUIREMENTS (DEMAND ANALYSIS)
(Trying to predict future staffing needs)
•
Managerial Estimates
•
Sales Projections
•
Simulations
•
Vacancy Analysis (projected turnover)
2. FORECASTING HR AVAILABILITY (SUPPLY ANALYSIS)
(Predicting worker flows and availabilities)
•
Succession or Replacement Charts
•
Skills Inventories (use of HRIS)
•
Labor Market Analysis
•
Personnel Ratios
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1. Forecasting the Demand for Labor
MANAGERIAL ESTIMATES :
Trend Analysis
• Constructing and applying statistical models that predict labor
demand for the next year, given relatively objective statistics
from the previous year.
Leading Indicators
• Objective measures that accurately predict future labor
demand.
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2.CORRELATIONS/PROJECTIONS
SIZE OF HOSPITAL
200
300
400
500
600
700
800
900
NUMBER OF NURSES
240
260
470
500
620
660
820
860
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3.SIMULATION MODEL/REGRESSION FORECAST
TARGET STORES STAFFING FORECAST
MODEL
Y = 8 + .0011(X1) + .00004(X2) + .02(X3)
Y = Number of employees needed to staff the store
X1 = Square feet of sales space
X2 = Population of metropolitan area
X3 = Projected annual disposable income in millions of dollars
Y = 8 + .0011(50,000sq ft) + .00004(150,000popul) + .00000002($850 million)
Y = 8 + 55 + 6 + 17
Y = 86 employees needed at this store
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4.VACANCY ANALYSIS
Historic departures used to project turnover
LEVEL
# EMPL
TURN %
TOP MGMT
100
20 %
20
80
MID MGMT
200
24 %
48
152
LOW MGMT
600
22 %
132
468
SKILLED W
600
16%
96
504
ASSY WKRS
2000
12 %
240
1760
TOTALS 3500
Expected Vacancies
536
AVERAGE TURNOVER PERCENTAGE = 536 / 3500 =
Expected to Remain
2964
.1531
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2.DETERMINING LABOR SUPPLY
Predicting Worker Flows and Availabilities
• Succession or Replacement Charts
Who has been groomed/developed and is ready for promotion right NOW?
• Human Resource Information Systems (HRIS)
An employee database that can be searched when vacancies occur.
• Transition Matrices (Markov Analysis)
A chart that lists job categories held in one period and shows the proportion of
employees in each of those job categories in a future period.
It answers two questions:
1. “Where did people in each job category go?”
2. “Where did people now in each job category come from?
• Personnel / Yield Ratios
How much work will it take to recruit one new accountant?
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1.SUCCESSION PLANNING
REPLACEMENT CHART
FOR EXECUTIVE POSITIONS
POSITION REPLACEMENT CARDS
FOR EACH INDIVIDUAL POSITION
-------------------------------------------------------
POSITION
WESTERN DIVISION SALES MANAGER
DANIEL BEALER
Western Division Sales Mgr Outstanding
POSSIBLE CANDIDATES
CURRENT POSITION
Ready Now
PRESENT
PERFORMANCE
POTENTIAL
SHARON GREEN Western Oregon Sales ManagerOutstanding
Ready Now
GEORGE WEIN. California Sales Manager
Outstanding
Needs Training
HARRY SHOW
Satisfactory
Needs Training
Idaho/Utah Sales Manager
PROMOTION
TRAVIS WOOD
Seattle Area Sales Manager Satisfactory Questionable
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2.HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)
PERSONAL DATA
Age, Gender, Dependents, Marital status, etc
EDUCATION & SKILLS
Degrees earned, Licenses, Certifications
Languages spoken, Specialty skills
Ability/knowledge to operate specific machines/equipment/software
JOB HISTORY
Job Titles held, Location in Company, Time in each position, etc.
Performance appraisals, Promotions received, Training & Development
MEMBERSHIPS & ACHIEVEMENTS
Professional Associations, Recognition and Notable accomplishments
PREFERENCES & INTERESTS
Career goals, Types of positions sought
Geographic preferences
CAPACITY FOR GROWTH
Potential for advancement, upward mobility and growth in the company
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3.Determining Labor Surplus or Shortage
• Based on the forecasts for labor demand and
supply, the planner can compare the figures to
determine whether there will be a shortage or
surplus of labor for each job category.
• Determining expected shortages and
surpluses allows the organization to plan how
to address these challenges.
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4.PERSONNEL / YIELD RATIOS
Past experience has developed these yield ratios for recruiting a Cost Accountant:
FOR EVERY 12 APPLICATIONS RECEIVED, ONLY 1 LOOKS PROMISING ENOUGH TO
INVITE FOR AN INTERVIEW
OF EVERY 5 PERSONS INTERVIEWED, ONLY 1 IS ACTUALLY OFFERED A POSITION IN
THE ORGANIZATION
OF EVERY 3 JOB OFFERS MADE, ONLY 2 ACCEPT THE POSITION
OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING PROGRAM, ONLY 9
SUCCESSFULLY COMPLETE THE PROGRAM
THUS:
100 APPLICATIONS MUST BE RECEIVED, so that
8.33 JOB INTERVIEWS CAN BE HELD, so that
1.67 JOB OFFERS CAN BE MADE, and
1.11 PEOPLE MUST BE TRAINED, so that we get
ONE NEW COST ACCOUNTANT!!!
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2.TENTATIVE TIME FRAME TABLE OF MANPOWER FORECAST
TimeFrame
Requirement
Availability Where Possible Action Plan to meet up the
Basis Where will get)
requirement Actions can be ensured)
Shown)
Less
Annual
than one budget
year
Existing manpower Recruiting
contingent
staffs,
+ contingent staff
Overtime, Recruitment, Layoff.
1-2
years
Business
Plans
Current
Manpower
2-5
years
Long
plans
term Projected
More
Perspective
than 5 plans
years
Transfer, promotion,
training. Redundancy.
new
recruit,
Succession
Plan,
Recruitment,
Training
and
development,
those Restructuring, Redundancy.
Manpower
(Including
trainees who will
be included during
period)
Labour Market,
Educational
Institution
Succession plan, Management
development, restructuring of Job,
Organizational development.
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3. ANALYSIS OF WORKLOAD FACTORS
To forecast the manpower
requirements
at
different
points of time workload
analysis is important.
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Analysis of present and
future workload depends
on the possibility of
quantifying the content
of work in every area of
an organization.
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Step -1:CLASSIFICATION OF WORK:
Step-2.FORECASTING THE NUMBER OF JOBS :
Step-3. CONVERTING THE PROJECTING JOBS IN A
MAN HOURS :
Step-4;Converting the man hour into manpower
requirement
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1.
Classification of work
Job category
Hours per job
Related to meters
0.75
Related to installation
2.50
Related to maintenance
1.50
Related to emergency calls
1.50
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2. Forecast of jobs in a day for different years
Job
category
Year
2002
2003
2004
2005
Meters
15
13
11
8
Installation
85
95
110
125
Maintenance 27
35
41
45
Emergency
8
6
4
10
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3. Converting forecast into man hours required per day
Job category
2002
2003
Year
2004
Meters
11.25
9.75
8.25
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Installation
212.5
237.5
275
312.5
Maintenance
40.5
52.5
61.5
67.5
Emergency
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8.8
6.6
4.4
Total man
hours required
per day
275.25
308.55
351.35
390.4
2005
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3.Converting man hours into manpower requirement per day
This is done considering skill interchangeability of
maintenance of staff for the identified job categories
with 20% fatigue allowance and 20% leave reserve
.
Therefore , in a given day of 8 man hours per
employee , net available time for attending customer
complaints get reduced by 40%per employee, i.e.
only 4.8%man hour per day ,per employee is
available to attend customer complaints . The
manpower forecasting has to be done ,considering
4.8 manpower's per employee per day
No of maintenance
Year
staff required
Employee
2002
2003
2004
2005
57 (275.25/4.8)
64
73
84
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4. TIME SERIES ANALYSIS METHOD
Employment data over a time period are
used as a basis of manpower forecasting.
However, mere projecting the past into future
without considering the percentage of
changes will increase the forecasting errors
resulting under forecasting or over
forecasting of the manpower.
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For observing the employment records the
following
considered.
elements
should
be
1.Trends: Fluctuation in the level of
employment over a time period.
2.
Cyclical effects:
Change of
employment relation to some
particular event like economic or
policy liberalization of a country.
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3. Seasonality: Seasonal fluctuation
occurs more than a one time in a
year like in the end events or in
any other festive events.
4. Step: This is a sudden change in
the employment level due to the
economic environment. This may
be for increasing market share or
procuring new machines.
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5. Random Fluctuation: Which occur
randomly in a natural way without
following any obvious pattern.
problem
1.In the agricultural sector this
problem are seen often.
2. This may be due to political or
leadership problem.
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5. Moving Average Method:
This method is useful to guard
against the random fluctuation.
Here period selection is more
important.
If time period are chosen too few
the result may show wide
variability in the result.
Therefore
considering more
periods we will get better result.
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For example a company needs the
manpower in the following way
Year
2000
2001
2002
2003
2004
2005
Manpower needed
400
450
500
650
700
600
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Than, it is necessary to
forecast the manpower
needs in 2006. We will
solve the problem in the
following way:
(400+450+500+650+700+60
0)/6 = 550 manpower.
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If we make average for 4
years (from 2002) it will
shown as follows;
(500+650+700+600)/ 4=
612.
Thus we need more time
periods
for
accurate
forecasting.
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For achieving better result we
can follow weight assigned to
different time periods at the
discretion of the analyst.
 For 400, 450 and 500 we
consider weight 1,
 for 600 weight 2
 for 650 weight 3, and
 for 700 weight 4.
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Thus the average would be
1(400)+1(450)+1(500)+2(600)+
3(650)+4 (700)+/ ∑ w i.e. 12
=
400+450+500+1200+1950+2800=
7300/12= 608
Thus there is a substantial difference
in forecasting the demand in this
system from those in before.
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6. Exponential smoothing:
In moving the average method a wide
range of previous data is necessary
to analyze.
We can avoid such method by
adapting Exponential smoothing
method.
This method smoothen random errors
by giving exponentially decreasing
weights in historical data.
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This weight factor is indicated by
alpha (ά) which is a smoothing
constant, a non linear decimal
value which lies between 0 and
1.
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The formula for exponential value is
Fm= Ft+ ά(At-1 – F t-1)
Where
Fm= Forecasted Manpower
ά= Smoothing Constant
F t-1 = Forecasted demand for the
previous period
A t-1 = Actual manpower required
for the previous period
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Assume
that
the
forecasted requirement
of a company
for
previous was 500 and
the actual requirement
was 480.
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Considering alpha value a
0.4 which company feels will
give good result.
Compute
the
manpower
requirement for the current
period.
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Here
ά= 0.4
Ft-1= 500
At-1= 480
Fm= ?
Thus Fm= 500+0.4(-20)
= 500-8
= 492.
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Assignment :
1.Assume that the forecasted
requirement of a company for
previous was 800 and the actual
requirement was 750.
Consider alpha value a 0.5 which
company feels will give good
result. Compute the manpower
requirement for the current
period.
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2.
Assume that the forecasted
requirement of a company for
previous was 1200 and the actual
requirement was 1350.
Consider alpha value a 0.6 which
company feels will give good
result.
Compute
the
manpower
requirement for the current
period.
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Qualitative models for better managerial judgment 1.THE DELPHI TECHNIQUE
Leader identifies judgment issues and develops questionnaire.
Prospective participants are identified and asked to cooperate.
Leaders send questionnaire to willing participants, who record their
judgments and recommendations and return the questionnaire.
Leaders compiles summaries and reproduces participants’ responses.
Leader sends the compiled list of judgment to all participants.
Participants comment on each other’s ideas and propose a final
judgment.
Leader looks
for consensus
Leader accepts consensus judgment as group’s choice.
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It depends on :
1. Experts should be chosen that they have
requisite knowledge and skills to give
the best answer.
2.Qustions should
objective .
be
relevant
to
the
3. criteria for evaluating responses should
be consistent ,unbiased and befitting
with objective
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2.The Nominal Group Technique
A small group of 4-5 people gathers around a table. Leader identifies
judgment issue and gives participants procedural instructions.
Participants write down all ideas that occur to them, keeping their lists
private at this point. Creativity is encouraged during this phase.
Leader asks each participant to present ideas and writes them on a
blackboard or flipchart, continuing until all ideas have been
recorded.
Participants discuss each other’s ideas, clarifying, expanding, and
evaluating them as a group.
Participants rank ideas privately in their own personal order
and preference.
The idea that ranks highest among the participants is adopted as the
group’s judgment.
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The coordinator assumes the role of a
facilitator ,allowing the experts to sit
together to discuss their ideas and
records of such discussions are made
on flip chart .after that round table
discussions on ideas ,experts are asked
to rank their ideas according to their
perceived priority .
The group consensus is then derived
mathematically in terms of individual
ranking.
the coordinator ultimately decides the
best course of action
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5. ANALYSIS MANPOWER SUPPLY
Analysis of manpower supply at the enterprise
level is also done- using some quantitative
techniques for accurate Human Resource
Requirement.
Some of the important techniques are
discussed below:
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1. Wastage analysis
Manpower wastage is an element of
labour turnover. Therefore, it is not
labour turnover; per se.
Wastage is severance from the
organisation,
which
includes
voluntary
retirement,
normal
retirement,
resignations,
and
deaths dismissals.
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Marginal
recruitment
decisions, without wastage
analysis
may
lead
to
inaccuracies
in
HRPTavistock Institute of Human
Relations, U K suggested
wastage analysis using the
following curve.
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Induction
Crisis
Differential
Transit
Settled Connection
Weeks
Time
Months/Years
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The above curve identifies
three
different
phases.
1. During introduction phase,
marginal employees leave.
2. During differential transit
period, an employee learns about
the organisation and identifies his
role in it.
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3.While during the period of settled
connection, an employee settles down
and decides to stay long. Wastage
decreases with the increase of length of
service.
 Wastage also decreases with the
increased skill exercises and age of
employees.
 Characteristically
wastage
of
manpower is more in female than
male employees.
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It varies with the level of
employment and also exhibits
seasonal variations.
Working conditions and size of
the firm are also important
variables of manpower wastage.
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2. Labour turnover index
This index indicates the number of
levers as percentage to average
number of employees.
Average number of employees
employed in a given time period is
decided by adding the employees at
the beginning and end and then
dividing the same by two.
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Example
At the beginning of a year, a firm has
250 employees, while at the end it
has 230.
Assume no recruitment has been made
in between. Compute the labour
turn over index.
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Solution
Number of employees leaving =250-230-20
Average number of
250-230
=240
employees employed =
2
Labour Turnover =
Number of employees leaving
100
Average number of employees employed
=
20
240
100=8.33%
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Suppose 5 people have been
recruited in between during the year,
then labour turnover would be:
Number leaving
= (250 + 5 - 230) = 25
Average number employees employed
Labour turnover =
25
243
100=10%
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3. Stability Index
Number with more than year service
now100Total Employed one year ago
This index indicates stable workforce
percentage for a given period and
can be computed as under:
Number with more than year service now
Total Employed one year ago
100
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4. Cohort analysis:
Cohort means homogeneous
groups. Cohort analysis takes
into account the length of service,
which is an important variable of
wastage analysis.
This, therefore, eliminates the defect
of labour turnover index. Cohort
analysis is more accurate for a
small homogenous group.
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However, changing social and
economic
conditions
can
invalidate this analysis.
In the table below, we have
illustrated
a
cohort
analysis,
assuming
number
of
people
engaged in the beginning of a year
as 500 and number of leavers for
different length of service as under:
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st
1
Year
nd
2 Year
rd
3 Year
th
4 Year
th
5 Year
50
45
40
35
30
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Length of No.
Service ( Leaving
in years)
1.
2.
0
1
2
3
4
5
0
50
45
40
35
30
Cumul Remain Survival
as
ative
ing
percentage of
Leaver
leaving
s
3.
4.
5.
0
50
95
135
170
200
500
450
405
365
330
300
100.00
90.00
81.00
73.00
66.00
60.00
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The percentage remaining in
column 5 can be presented on a
graph paper, which is known as
the survival curve. This 'was
obtained using the following formula
Number remaining at a given time X
100 Number engaged at the start.
Number remaining at a given time
Number engaged at the start
100
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5. Census Analysis
Census analysis can eliminate this
problem, taking into account a crosssection of the organisation, i.e., all the
age specific wastage rates at a given
time and applying a smoothing
algorithm to the resulting data to
identify a general pattern.
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Census
analysis
requires
three sets of data :
1. The number of employees at
the beginning of the census
2. The number of employees at
the end of the census, and
3. The number of leavers during
the census period.
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