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Manpower Planning which is also called as Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization. Human Resource Planning has got an important place in the arena of industrialization. Human Resource Planning has to be a systems approach and is carried out in a set procedure. The procedure is as follows: 1. Analysing the current manpower inventory 2. Making future manpower forecasts 3. Developing employment programmes 1.4.Design training programmes
Steps in Manpower Planning

1. Analysing the current manpower inventory- Before a manager makes forecast of future manpower, the current manpower status has to be analysed. For this the following things have to be noted Type of organization Number of departments Number and quantity of such departments Employees in these work units Once these factors are registered by a manager, he goes for the future forecasting. 2. Making future manpower forecasts- Once the factors affecting the future manpower forecasts are known, planning can be done for the future manpower requirements in several work units. The Manpower forecasting techniques commonly employed by the organizations are as follows: i. ii. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure). Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division.

iii.

Work Force Analysis: Whenever production and time period has to be analysed, due allowances have to be made for getting net manpower requirements. v. Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis. 3. Developing employment programmes- Once the current inventory is compared with future forecasts, the employment programmes can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans. 4. Design training programmes- These will be based upon extent of diversification, expansion plans, development programmes,etc. Training programmes depend upon the extent of improvement in technology and advancement to take place. It is also done to improve upon the skills, capabilities, knowledge of the workers. Importance of Manpower Planning

iv.

1. Key to managerial functions- The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the manpower. Human resources help in the implementation of all these managerial activities. Therefore, staffing becomes a key to all managerial functions. 2. Efficient utilization- Efficient management of personnels becomes an important function in the industrialization world of today. Seting of large scale enterprises require management of large scale manpower. It can be effectively done through staffing function. 3. Motivation- Staffing function not only includes putting right men on right job, but it also comprises of motivational programmes, i.e., incentive plans to be framed for further participation and employment of employees in a concern. Therefore, all types of incentive plans becomes an integral part of staffing function. 4. Better human relations- A concern can stabilize itself if human relations develop and are strong. Human relations become strong trough effective control, clear communication, effective supervision and leadership in a concern. Staffing function also looks after training and development of the work force which leads to co-operation and better human relations. 5. Higher productivity- Productivity level increases when resources are utilized in best possible manner. higher productivity is a result of minimum wastage of time, money, efforts and energies. This is possible through the staffing and it's related activities ( Performance appraisal, training and development, remuneration) Need of Manpower Planning Manpower Planning is a two-phased process because manpower planning not only analyses the current human resources but also makes manpower forecasts and thereby draw employment programmes. Manpower Planning is advantageous to firm in following manner:

1. Shortages and surpluses can be identified so that quick action can be taken wherever required. 2. All the recruitment and selection programmes are based on manpower planning. 3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing can be avoided. 4. It also helps to identify the available talents in a concern and accordingly training programmes can be chalked out to develop those talents. 5. It helps in growth and diversification of business. Through manpower planning, human resources can be readily available and they can be utilized in best manner. 6. It helps the organization to realize the importance of manpower management which ultimately helps in the stability of a concern.
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Manpower Planning and Forecasting

by Sree Rama Rao on May 19, 2008 Manpower planning is the first step in the recruiting and selection process. 1. Decide what positions youll have to fill through Manpower planning and forecasting. 2. Build a pool of candidates for these jobs by recruiting internal or external candidates. 3. Have candidates complete application forms and perhaps undergo an initial screening interview. 4. Use selection techniques like tests, background investigations and physical exams to identify viable candidates. 5. Decide who to make an offer to, by having the supervisor and perhaps others on the team to interview the candidates. Planning and forecasting: Employment or Manpower planning is the process of deciding what positions the firm will have to fill, and how to fill them. Manpower planning covers all future positions from maintenance clerk to CEO. However, most firms call the process of deciding how to fill companys most important executive jobs succession planning. Employment planning should be an integral part of a firms strategic and HR planning processes. Plans to enter new businesses, build new plants, or reduce costs all influence the types of positions the firm will need to fill. Thus, when JDS Uniphase, which designs, develops, and manufactures market products for the fiber optics market, decided to expand its Melbourne Florida, operations, its managers knew theyd have to expand its employment there from 140 people to almost 750. That meant they needed plans for who to hire, how to screen applicants, and when to put the plans into place.

One big question is whether to fill projected openings from within or from outside the firm. In other words, should you plan to fill positions with current employees or by recruiting from outside? Each option produces its own set of HR plans. Current employees may require training, development, and coaching before theyre ready to fill new jobs. Going outside requires a decisions about what recruiting sources to use, among other things. Like all good plans, management builds employment plans on basic assumptions about the future. Forecasting generates these assumptions. If youre planning for employment requirements, youll usually need to forecast three things: Manpower needs, the supply of inside candidates, and the supply of outside candidates. Well start with Manpower needs. Forecasting Manpower Needs: The most common Manpower planning approaches involve the use of simple techniques like ratio analysis or trend analysis to estimate staffing needs based on sales projections and historical sales to Manpower relationships. The usual process is to forecast revenues first and then estimate the size of the staff required to achieve this sales volume. Here, HR managers use several techniques. Trend Analysis: Trend analysis means studying variation in your firms employment levels over the last few years. You might compute the number of employees in your firm at the end of each of the last five years, or perhaps the number in each subgroup (like sales, production, secretarial, and administrative) at the end of each of those years. The purpose is to identify trends that might continue into the future. Trend analysis can provide an initial estimate, but employment levels rarely depend just on the passage of time. Other factors like changes in sales volume and productivity also affect staffing needs. Ratio analysis: Another approach, ratio analysis, means making forecasts based on the ratio between (1) some causal factor like sales volume and (2) the number of employees required (for instance number of sales people). For example, suppose as salesperson traditionally generates $500,000 in sales. If the sales revenue to salespeople ration remains the same, you would require six new salespeople next year (each of whom produces an extra $500,000) to produce an expected extra $3 million in sales. Like trend analysis ratio analysis assumes that productivity remains about the same for instance, that each salesperson cant be motivated to produce much more than $500,000 in sales. If sales productivity were to increase or decrease, the ratio of sales to salespeople would change. A forecast based on historical ratios would then no longer be accurate.

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1. How to forecast manpower for managerial staff and technical labour? MANPOWER PLANNING IS A PRODUCT OF HUMAN RESOURCE PLANNING Right number of people with right skills at right place at right time to implement organizational strategies in order to achieve organizational objectives In light of the organizations objectives, corporate and business level strategies, HRP is the process of analyzing an organizations human resource needs and developing plans, policies, and systems to satisfy those needs Setting human resource objectives and deciding how to meet them Ensuring HR resource supply meets human resource demands.

HRP Process Interfacing with strategic planning and scanning the environment Taking an inventory of the companys current human resources Forecasting demand for human resources Forecasting the supply of HR from within the organization and in the external labor market Comparing forecasts of demand and supply Planning the actions needed to deal with anticipated shortage or overages Feeding back such information into the strategic planning process.

1.Basic Human Resources Planning Model 2.Organizational Objectives 3.Human Resource Requirements 4.Human Resource Programs 5.Feasibility Analysis Strategic Human Resource Planning -Links 1 & 5: HR objectives are linked to organizational objectives and planning -Designed to insure consistency between organization's strategic planning process and HRP. -So objectives of strategic plan are feasible and -HR programs are designed around what organizational objectives and strategies require in terms of human resource goals Operational Human Resource Operation Planning model. -Steps 2,3, & 4 -Ensure HRP programs are coordinated and allows the organization to meet its human resource requirements. HR PLANNING Link 1: Determine Demand (labor requirements) How many people need to be working and in what jobs to implement organizational strategies and attain organizational objectives.

Involves forecasting HR needs based on organizational objectives Involves consideration of alternative ways of organizing jobs (job design, organizational design or staffing jobs) Example - Peak production could be handled by temporary workers or assigning overtime. Machine breakdowns assigned to maintenance department or handled by machine operators. Link 2: Determine HR Supply (availability) Choose HRM programs (supply) Involves forecasting or predicting effect of various HR programs on employee flowing into, through and out various job classifications. First determine how well existing programs are doing then forecast what additional programs or combination of programs will do Need to know capabilities of various programs and program combinations.

Determine Feasibility Links 3 & 4 Capable of being done Requires knowledge of programs, how programs fit together and external environmental constraints (e.g., labor force, labor unions, technology created skill shortages) and internal environmental constraints (skill shortages within the organization, financial resources, managerial attitudes, culture) Do the benefits outweigh the costs Difficulty in quantifying costs and benefits.

Revise Organizational Objectives and Strategies Link 5 If no feasible HR program can be devised, the organization must revise strategic plans. HRP should be: Done to guide and coordinate all HR activities so they work together to support the overall strategy Responsive to internal and external environment Planning - done in advance Strategic - linked with higher level planning.

Human Resource Forecasting Process of projecting the organizations future HR needs (demand) and how it will meet those needs (supply) under a given set of assumptions about the organizations policies and the environmental conditions in which it operates. Without forecasting cannot assess the disparity between supply and demand nor how effective an HR program is in reducing the disparity. Forecasting as a Part of Human Resource Planning DEMAND FORECASTING / SUPPLY FORECASTING -Determine organizational objectives -Demand forecast for each objective -Aggregate demand forecast

-Does aggregate -supply meet -aggregate -demand? -Go to feasibility analysis steps Choose human resource programs External programs Recruiting External selection Executive exchange Internal programs Promotion Transfer Career planning Training Turnover control Internal supply forecast External supply forecast Aggregate supply forecast Internal Supply Forecasting Information Organizational features (e.g., staffing capabilities) Productivity - rates of productivity, productivity changes Rates of promotion, demotion, transfer and turnover.

External Supply Forecasting Information External labor market factors (retirements, mobility, education, unemployment) Controllable company factors on external factors (entry-level openings, recruiting, compensation]

Demand Forecasting Information Organizational and unit strategic plans Size of organization Staff and Managerial Support Organizational design

Considerations in Establishing a Forecasting System How sophisticated Appropriate time frame Subjective versus objective forecasting methods.

System Sophistication Organizational size large organizations require more complex forecasting systems and likely to have the required skilled staff Organizational complexity complex career paths and diverse skill requirements lead to more complex forecasting systems Organizational objectives the greater the gap between current HR situation and desired HR situation the more sophisticated the system Organizational plans and strategies the complex the plans are the more complex the forecasting system. Forecasting Time Frame Depends on degree of environmental uncertainty Factors creating uncertainty (shortening time frame) many new competitors, changes in technology, changes in social, political and economic climate, unstable product demand Factors promoting stability (longer time frame) strong competitive position, slowly developing technology, stable product demand.

Subjective VS. Objective Forecasting Objective is inappropriate when: Lack expertise to use objective methods Lack the historical data or HR data base is inadequate Forecasting horizon is too long for the available objective method.

Demand Forecasting Methods Delphi Method Staffing Table Approach Regression Analysis Time Series Analysis Linear Programming.

Supply Forecasting Methods Skills Inventory Replacement Charts Succession Planning Flow Modeling/Markov Analysis Computer Simulations =========================== METHODS OF DEMAND FORECAST

Unaided judgment METHOD.

It is common practice to ask experts what will happen. This is a good procedure to use when experts are unbiased large changes are unlikely relationships are well understood by experts (e.g., demand goes up when prices go down) experts possess privileged information experts receive accurate and well-summarized feedback about their forecasts.

Prediction markets METHOD. Prediction markets, also known as betting markets, information markets, and futures markets have a long history. Some commercial organisations provide internet markets and software that to allow participants to predict.Consultants can also set up betting markets within firms to bet on such things as the sales growth of a new product. PREDICTIONS can produce accurate sales forecasts when used within companies. However, there are no empirical studies that compare forecasts from prediction markets and with those from traditional groups or from other methods.

Delphi METHOD. The Delphi technique helps to capture the knowledge of diverse experts while avoiding the disadvantages of traditional group meetings. The latter include bullying and time-wasting. To forecast with Delphi the administrator should recruit between five and twenty suitable experts and poll them for their forecasts and reasons. The administrator then provides the experts with anonymous summary statistics on the forecasts, and experts reasons for their forecasts. The process is repeated until there is little change in forecasts between rounds two or three rounds are usually sufficient. The Delphi forecast is the median or mode of the experts final forecasts. The forecasts from Delphi groups are substantially more accurate than forecasts from unaided judgement and traditional groups, and are somewhat more accurate than combined forecasts from unaided judgement.

Structured analogies METHOD. The outcomes of similar situations from the past (analogies) may help a marketer to forecast the outcome of a new (target) situation. For example, the introduction of new products in the markets can provide analogies for the outcomes of the subsequent release of similar products in other countries. People often use analogies to make forecasts, but they do not do so in a structured manner. For example, they might search for an analogy that suits their prior beliefs or they might stop searching when they identify one analogy. The structured-analogies method uses a formal process to overcome biased and inefficient use of information from analogous situations. To use the structured analogies method, an administrator prepares a description of the target situation and selects experts who have knowledge of analogous situations; preferably direct experience. The experts identify and describe analogous situations, rate their similarity to the target situation, and match the outcomes of their analogies with potential outcomes in the target situation. The administrator then derives forecasts from the information the experts provided on their most similar analogies. Structured analogies are more accurate than unaided judgment in forecasting decisions .

Judgmental Decomposition METHOD. The basic idea behind judgemental decomposition is to divide the forecasting problem into parts that are easier to forecast than the whole. One then forecasts the parts individually, using methods appropriate to each part. Finally, the parts are combined to obtain a forecast. One approach is to break the problem down into multiplicative components. For example, to forecast sales for a brand, one can forecast industry sales volume, market share, and selling price per unit. Then reassemble the problem by multiplying the components together. Empirical results indicate that, in general, forecasts from decomposition are more accurate than those from a global approach . In particular, decomposition is more accurate where there is much uncertainty about the aggregate forecast and where large numbers (over one million) are involved. Expert systems METHOD. As the name implies, expert systems are structured representations of the rules experts use to make predictions or diagnoses. For example, if local household incomes are in the bottom quartile, then do not supply premium brands. The forecast is implicit in the foregoing conditional action statement: i.e., premium brands are unlikely to make an acceptable return in the locale. Rules are often created from protocols, whereby forecasters talk about what they are doing while making forecasts. Where empirical estimates of relationships from structured analysis such as econometric studies are available, expert systems should use that information. Expert opinion, conjoint analysis, and bootstrapping can also aid in the development of expert systems. Expert systems forecasting involves identifying forecasting rules used by experts and rules learned from empirical research. One should aim for simplicity and completeness in the resulting system, and the system should explain forecasts to users. Developing an expert system is expensive and so the method will only be of interest in situations where many forecasts of a similar kind are required. Expert systems are feasible where problems are sufficiently well-structured for rules to be identified. Expert systems forecasts are more accurate than those from unaided judgement.

Simulated interaction METHOD Simulated interaction is a form of role playing for predicting decisions by people who are interacting with others. It is especially useful when the situation involves conflict. For example, one might wish to forecast how best to secure an exclusive distribution arrangement with a major supplier. To use simulated interaction, an administrator prepares a description of the target situation, describes the main protagonists roles, and provides a list of possible decisions. Role players adopt a role and read about the situation. They then improvise realistic interactions with the other role players until they reach a decision; for example to sign a trial one-year exclusive distribution agreement. The role players decisions are used to make the forecast. Forecasts from simulated interactions were substantially more accurate than can be obtained from unaided judgement. Simulated interaction can also help to maintain secrecy. Information on simulated interaction is available from conflictforecasting.com.

Intentions and expectations surveys METHOD. With intentions surveys, people are asked how they intend to behave in specified situations. In a similar

manner, an expectations survey asks people how they expect to behave. Expectations differ from intentions because people realize that unintended things happen. For example, if you were asked whether you intended to visit the dentist in the next six months you might say no. However, you realize that a problem might arise that would necessitate such a visit, so your expectations would be that the event had a probability greater than zero. Expectations and intentions can be obtained using probability scales . The scale should have descriptions such as 0 = No chance, or almost no chance (1 in 100) to 10 = Certain, or practically certain (99 in 100). To forecast demand using a survey of potential consumers, the administrator should prepare an accurate and comprehensive description of the product and conditions of sale. He should select a representative sample of the population of interest and develop questions to elicit expectations from respondents. Bias in responses should be assessed if possible and the data adjusted accordingly. The behaviour of the population is forecast by aggregating the survey responses.

Methods requiring quantitative data Extrapolation METHOD Extrapolation methods use historical data on that which one wishes to forecast. Exponential smoothing is the most popular and cost effective of the statistical extrapolation methods. It implements the principle that recent data should be weighted more heavily and smoothes out cyclical fluctuations to forecast the trend. To use exponential smoothing to extrapolate, the administrator should first clean and deseasonalise the data, and select reasonable smoothing factors. The administrator then calculates an average and trend from the data and uses these to derive a forecast Statistical extrapolations are cost effective when forecasts are needed for each of hundreds of inventory items. They are also useful where forecasters are biased or ignorant of the situation . Allow for seasonality when using quarterly, monthly, or daily data. Most firms do this . Seasonality adjustments led to substantial gains in accuracy in the large-scale study of time series .

Quantitative analogies METHOD. Experts can identify situations that are analogous to a given situation. These can be used to extrapolate the outcome of a target situation. For example, to assess the loss in sales when the patent protection for a drug is removed, one might examine the historical pattern of sales for analogous drugs. To forecast using quantitative analogies, ask experts to identify situations that are analogous to the target situation and for which data are available. If the analogous data provides information about the future of the target situation, such as per capita ticket sales for a play that is touring from city to city, forecast by calculating averages. If not, construct one model using target situation data and another using analogous data. Combine the parameters of the models, and forecast with the combined model.

Rule-based forecasting METHODS Rule-based forecasting (RBF) is a type of expert system that allows one to integrate managers knowledge about the domain with time-series data in a structured and inexpensive way. For example, in many cases a useful guideline is that trends should be extrapolated only when they agree with managers prior expectations. When the causal forces are contrary to the trend in the historical series, forecast errors tend to be large . Although such problems occur only in a small percentage of cases, their

effects are serious. To apply RBF, one must first identify features of the series using statistical analysis, inspection, and domain knowledge (including causal forces). The rules are then used to adjust data, and to estimate short- and long-range models. RBF forecasts are a blend of the short- and long-range model forecasts. RBF is most useful when substantive domain knowledge is available, patterns are discernable in the series, trends are strong, and forecasts are needed for long horizons. Under such conditions, errors for rule-based forecasts are substantially less than those for combined forecasts . In cases where the conditions were not met, forecast accuracy is not harmed. Neural nets METHODS Neural networks are computer intensive methods that use decision processes analogous to those of the human brain. Like the brain, they have the capability of learning as patterns change and updating their parameter estimates. However, much data is needed in order to estimate neural network models and to reduce the risk of over-fitting the data .There is some evidence that neural network models can produce forecasts that are more accurate than those from other methods . While this is encouraging, our current advice is to avoid neural networks because the method ignores prior knowledge and because the results are difficult to understand. Data mining METHODS Data mining uses sophisticated statistical analyses to identify relationships. It is a popular approach. Data mining ignores theory and prior knowledge in a search for patterns. Despite ambitious claims and much research effort, we are not aware of evidence that data mining techniques provide benefits for forecasting.

Causal models METHODS. Causal models are based on prior knowledge and theory. Time-series regression and cross-sectional regression are commonly used for estimating model parameters or coefficients. These models allow one to examine the effects of marketing activity, such as a change in price, as well as key aspects of the market, thus providing information for contingency planning. To develop causal models, one needs to select causal variables by using theory and prior knowledge. The key is to identify important variables, the direction of their effects, and any constraints. One should aim for a relatively simple model and use all available data to estimate it . Surprisingly, sophisticated statistical procedures have not led to more accurate forecasts. In fact, crude estimates are often sufficient to provide accurate forecasts when using cross-sectional data . ======================================================= General principles Managers domain knowledge should be incorporated into forecasting methods. When making forecasts in highly uncertain situations, be conservative. For example, the trend should be dampened over the forecast horizon. Complex methods have not proven to be more accurate than relatively simple methods. Given their added cost and the reduced understanding among users, highly complex procedures cannot be justified. When possible, forecasting methods should use data on actual behaviour, rather than judgments or intentions, to predict behaviour. Methods that integrate judgmental and statistical data and procedures (e.g., rule-based forecasting)

can improve forecast accuracy in many situations. Overconfidence occurs with quantitative and judgmental methods. When making forecasts in situations with high uncertainty, use more than one method and combine the forecasts, generally using simple averages. Methods based on judgment When using judgment, rely on structured procedures such as Delphi, simulated interaction, structured analogies, and conjoint analysis. Simulated interaction is useful to predict the decisions in conflict situations, such as in negotiations. In addition to seeking good feedback, forecasters should explicitly list all the things that might be wrong about their forecast. This will produce better calibrated prediction intervals. Methods based on statistical data With the proliferation of data, causal models play an increasingly important role in forecasting market size, market share, and sales. Methods should be developed primarily on the basis of theory, not data.

Finally, efforts should be made to ensure forecasts are free of political considerations in a firm. To help with this, emphasis should be on gaining agreement about the forecasting methods. Also, for important forecasts, decisions on their use should be made before the forecasts are provided. Scenarios are helpful in guiding this process. ============================================================= THE DIFFICULT factors, YOU MUST KEEP IN MIND WHILE ''HR PLANNING''. FACTORS COULD INCLUDE --- GOVERNMENT/ ECONOMIC/LEGAL/SOCIAL ************************************************************************************* * -as the economy grows/declines, the demand for HR resources changes not only in quantity but also in quality/ types. -social pressure to provide the right environment for employees. -political pressure to employ local population, irrespective of skills/ knowledge. -legal challenges to recruitment / compensation on discrimination . -technology changes means getting right type of people or provide the right type of training. -competitive pressure to get the right talent at the right compensation. -CORPORATE strategic planning seeks strategic HR planning. -BUDGET constraint put pressure on HR to get the

best resources for the least. -sales / production increases in business, puts pressure on HR to recruit more. -sales / production decreases in business, puts pressure on HR to rationalise recruitment. -new venture means demand for new type of skills/ knowledge. -acquisitions / mergers means rationalization of HR. -Organization development means HR implementing new structure, new culture, new systems etc. -Job redesign means HR implementing new methods, new process, new systems etc. -Globalization means managing HR diversity, new culture change, new training etc. -HR challenges / difficulties include *managing retirement *managing voluntary retirement schemes *managing terminations *managing leave of absence. *managing part time workers/ causals. *managing layoffs -Balancing the INTERNAL SUPPLY ESTIMATES AND EXTERNAL SUPPLY ESTIMATES. *INTERNAL SUPPLY ESTIMATES -staff skills inventories -management inventories -replacements requirements -transition requirements *EXTERNAL SUPPLY ESTIMATES -labor market supply -community attitude -demographic trends *MANAGING WORK OPTIONS -shorter weeks -flexitime -telecommuting

-virtual organizations. ================================== ********************************************************************************** DEMAND / SUPPLY OF HUMAN RESOURCES 1.EXPERT -informal internal surveys. managers prepare their own estimates based on workload. -------------------------------------------------------------------------------------formal external surveys. planners survey managers, using questionnaires or or focused discussion. ----------------------------------------------------------------------------------delphi techniques solicit estimates from a group of managers, until the estimates converge. ============================================ 2.TREND PROJECTIONS -extrapolations extending past rates of change into the future. ---------------------------------------------------------------------------------indexation matching employment growth with , say, sales. ----------------------------------------------------------------------------------statistical analysis ================================================= 3. OTHERS -planning and budgeting systems based on strategic and corporate plannings/ budgeting. ---------------------------------------------------------------------------------------new venture analysis making comparisons with similar operations. -------------------------------------------------------------------------------------computer models using multiple variables. ================================================= INTERNAL DISCUSSIONS Discuss with the various other departments like sales/ production/ distribution/accounting/ IT etc about their requirements -for manpower -recruitments -replacements -training etc etc

Once you get their departmental requirements, HRM develops *INTERNAL SUPPLY ESTIMATES FOR EACH DEPARTMENT/TOTAL -staff skills inventories -management inventories -replacements requirements -transition requirements *MANAGING WORK OPTIONS FOR EACH DEPARTMENT / TOTAL -shorter weeks -flexitime -telecommuting -virtual organizations. HR Planning includes CURRENT SITUATION/ ANALYSIS OF COMPANY HR 1.Assessment / Audit of the current manpower profile -numbers -skills -ages -flexibility -sex -experience -capabilities -character -potential and also -normal turnover, -staff movements planned -retirements -succession planning etc. 2. KEY SUCCESS FACTORS OF HR 3. HR [ SWOT ] ANALYSIS -STRENGTHS -WEAKNESSES -THREATS -WEAKNESSES 4. HR MARKET [ DEMAND/SUPPLY] -SKILL AVAILABILITY

==================================== 1.HR OBJECTIVES 2.HR STRATEGY 3. HR PLANNING YOU DERIVE THE MANPOWER PLANNING These include -Recruitment/ Selection PLAN -Induction / Orientation PLAN -Training / Developement PLAN -Compensation PLAN -Salary administration PLAN -Payroll Administration PLAN -Performance Appraisal PLAN -Performance Management PLAN -Industrial Relations PLAN -Promotions PLAN [ IF ANY ] -Terminations PLAN -Transfers PLAN -Staff amenities. PLAN -retraining plan -early retirement plan -redundancy plan -changes in workforce utilization plan -career path plan -succession plan. -personnel and career plans -------------------------------------------------------------------------FROM THE ABOVE, WE DERIVE -total staff by department -no. of managerial staff. =========================================== LASTLY BASED ON THE ABOVE PLANS, YOU DEVELOP HR BUDGET.

The elements in HR department budget would vary with -company policy -budget process -company accounting system -nature of the business operation -HR PLANNING

etc =============================================== 2. What is integrated budget for manpower management? 1.HR OBJECTIVES 2.HR STRATEGY 3. HR PLANNING These include -Recruitment/ Selection PLAN *FULL TIME *PART TIME *TEMPORARY *CASUAL -Induction / Orientation PLAN -Training / Developement PLAN -Compensation PLAN -Salary administration PLAN -Payroll Administration PLAN -Performance Appraisal PLAN -Performance Management PLAN -Industrial Relations PLAN -Promotions PLAN [ IF ANY ] -Terminations PLAN -Transfers PLAN -Staff amenities. PLAN -retraining plan -early retirement plan -redundancy plan -changes in workforce utilization plan -career path plan -succession plan. -personnel and career plans -------------------------------------------------------------------------=========================================== LASTLY BASED ON THE ABOVE PLANS,

YOU DEVELOP HR/MANPOWER BUDGET.

The elements in HR department budget would vary with -company policy

-budget process -company accounting system -nature of the business operation -HR PLANNING etc HERE is a broad set of guidelines. -recruitment/ selection [ internal/ outsourcing ] *FULL TIME *PART TIME *TEMPORARY *CASUAL -PLACEMENT contractors [external ] -salary/ wages -training/ development [ includes induction/ orientation] -staff benefits -staff amenities -workplace facilities -workplace safety [ OHS] -salary contingency -workers compensation -staff communication [ includes newsletter/ intranet ] -labor relations [ legal/ investigations] -HR administration -HR travels etc etc. ====================================================== These plans will help to bring supply and demand into equilibrium, not just as a one-off but as a continual workforce planning exercise the inputs to which will need constant varying to reflect the actual as against predicted experience on the supply side and changes in production actually achieved as against forecast on the demand side. THE ABOVE APPROACH / CONTENTS IS THE SAME WHETHER IT IS PLANNING FOR 1 YEAR OR 3 YEARS OR 5 YEARS. ================================================== SAMPLE BUDGET

Consolidation of HR Budget Sl.No. Heads Value 1 Capital Expenses 111800

2 Production Payroll 31197210 3 Recruitment Expenses 64350 4 Guest House 679920 5 Company Vehicles 740644 6 Staff Welfare 439346 7 Canteen 6520110 8 Water 441168 9 Transport 13402200 10 Uniforms 542940 11 Medical 306480 12 Visitor's Expense 12000 13 House Keeping 1256280 14 Staff Training 157500 15 Local Conveyance 6000 16 Legal & Professional Fees 2500 17 Security 944034 18 Technical Traning 106500 19 Books, Journals & Subcriptions 87300 20 Stationery 55741 21 Consumables - Canteen 68942 22 Xerox 2190 Total 57145155

ONCE YOU ARRIVE AT THIS TOTAL, -the finance department will review it. -the the CEO will bless it. -it becomes HR BUDGET. IT IS ALWAYS A % OF THE TOTAL COMPANY EXPENSES. IT IS ALSO COMPARED WITH THE TOTAL SALES [ HR EXPENSES % OF TOTAL SALES. ########################################################### 3. How to control manpower costs?

Control system. The management of a firm's costs and expenses in relation to budgeted amounts. -------------------------------------------------The benefit of the control system is that proper accounting system is introduced. Accounting system is a chain of activities in an entity by which transactions are processed for maintaining financial record. There is a need of orderly arrangement of personnel, procedures, records, forms and devices to achieve desirable results. The benefit is that there is better management of business concern. The system analysis can point out the weak areas of management. The goals of business can be achieved if there is proper internal control, internal check and internal audit. It should be noted that management can rely on internal controls for best results.

There are many advantages of the control system. First of all the main advantage is to eliminate the

chances of the frauds. The second thing,it can help them to make the true and clear view of the financial statements of the business. ------------------------------------------------------------internal control as having five components: Control Environment-sets the tone for the organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control. Risk Assessment-the identification and analysis of relevant risks to the achievement of objectives, forming a basis for how the risks should be managed Information and Communication-systems or processes that support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities Control Activities-the policies and procedures that help ensure management directives are carried out. Monitoring-processes used to assess the quality of internal control performance over time. Discrete control procedures, or controls are defined as: "...a specific set of policies, procedures, and activities designed to meet an objective. A control may exist within a designated function or activity in a process. A controls impact...may be entity-wide or specific to an account balance, class of transactions or application. Controls have unique characteristics for example, they can be: automated or manual; reconciliations; segregation of duties; review and approval authorizations; safeguarding and accountability of assets; preventing or detecting error or fraud. Controls within a process may consist of financial reporting controls and operational controls (that is, those designed to achieve operational objectives)." Management: The Chief Executive Officer (the top manager) of the organization has overall responsibility for designing and implementing effective internal control. More than any other individual, the chief executive sets the "tone at the top" that affects integrity and ethics and other factors of a positive control environment. In a large company, the chief executive fulfills this duty by providing leadership and direction to senior managers and reviewing the way they're controlling the business. Senior managers, in turn, assign responsibility for establishment of more specific internal control policies and procedures to personnel responsible for the unit's functions. In a smaller entity, the influence of the chief executive, often an owner-manager, is usually more direct. In any event, in a cascading responsibility, a manager is effectively a chief executive of his or her sphere of responsibility. Of particular significance are financial officers and their staffs, whose control activities cut across, as well as up and down, the operating and other units of an enterprise. Board of Directors: Management is accountable to the board of directors, which provides governance, guidance and oversight. Effective board members are objective, capable and inquisitive. They also have a knowledge of the entity's activities and environment, and commit the time necessary to fulfill their board responsibilities. Management may be in a position to override controls and ignore or stifle communications from subordinates, enabling a dishonest management which intentionally misrepresents results to cover its tracks. A strong, active board, particularly when coupled with effective upward communications channels and capable financial, legal and internal audit functions, is often best able to identify and correct such a problem. Auditors: The internal auditors and external auditors of the organization also measure the effectiveness of internal control through their efforts. They assess whether the controls are properly designed, implemented and working effectively, and make recommendations on how to improve internal control. Internal control can provide reasonable, not absolute, assurance that the objectives of an organization will be met. The concept of reasonable assurance implies a high degree of assurance, constrained by the

costs and benefits of establishing incremental control procedures. Effective internal control implies the organization generates reliable financial reporting and substantially complies with the laws and regulations that apply to it. However, whether an organization achieves operational and strategic objectives may depend on factors outside the enterprise, such as competition or technological innovation. These factors are outside the scope of internal control; therefore, effective internal control provides only timely information or feedback on progress towards the achievement of operational and strategic objectives, but cannot guarantee their achievement Activity categorization Control activities may also be described by the type or nature of activity. These include (but are not limited to): segregation of duties- separating authorization, custody, and record keeping roles to limit risk of fraud or error by one person. Authorization of transactions - review of particular transactions by an appropriate person. Retention of records - maintaining documentation to substantiate transactions. Supervision or monitoring of operations - observation or review of ongoing operational activity. Physical safeguards - usage of cameras, locks, physical barriers, etc. to protect property, such as merchandise inventory. Top-level reviews-analysis of actual results versus organizational goals or plans, periodic and regular operational reviews, metrics, and other key performance indicators (KPIs). IT Security - usage of passwords, access logs, etc. to ensure access restricted to authorized personnel. Top level reviews-Management review of reports comparing actual performance versus plans, goals, and established objectives. Controls over information processing-A variety of control activities are used in information processing. Examples include edit checks of data entered, accounting for transactions in numerical sequences, comparing file totals with control accounts, and controlling access to data, files and programs YOU CAN ALSO USE THE METRICS LISTED BELOW --MONTHLY/ QUARTERLY/ANNUALLY.

S.No Indicator Units Formula THRESHHOLD 1. HR UTILIZATION % TOTAL PAYROLL $ / TOTAL SALES $

2. HR PRODUCTIVITY % TOTAL EMPLOYMENT COST $/TOTAL PRODUCTION VOLUME IN $ X 100 3. HR BUDGET % ACTUAL $ / BUDGET $ X 100

4'. ACCIDENT COSTS 5'. ACCIDENT SAFETY RATINGS

% CURRENT ACTUAL $ / LAST YEAR $ X 100 % CURRENT ACTUAL $ / LAST YEAR $ X 100

6'. EMPLOYEE BENEFITS

% EMPLOYEE BENEFITS $ / TOTAL PAYROLL $ X100

EMPLOYEE BENEFITS $ /TOTAL SALES $ X 100

7'. HR BUDGET % ACTUAL HR EXPENSES $ / TOTAL SALES $ X 100 sales effectiveness 8'. HR EXPENSES per head 9'. HR EXPENSES cost effectivenss $ TOTAL HR EXPENSES $ / TOTAL NO. OF EMPLOYEES

% HR EXPENSES $ / TOTAL EXPENSES $ X 100

10'. NO.OF COURSES CONDUCTED 11. NO. OF SAFETY training programs 12. TRAINING DAYS EFFECTIVENESS

% ACTUAL CONDUCTED / PLANNED X 100

% ACTUAL CONDUCTED / PLANNED X 100

% ACTUAL TRAINING DAYS / PLANNED X 100

13. EMPLOYEES % ACTUAL TAKING PART / PLANNED X 100 involvement in train 14. SICK DAYS nos. TOTAL SICKDAYS TAKEN/ TOTAL EMPLOYEES managemeent effectiveness 15. STAFF orientation % NO. OF NEW STAFF LEAVING IN THREE MONTHS/ EFFECTIVENESS TOTAL NO. OF NEW STAFF ORIENTED X 100

16. TIME TO FILL AN NO.DAYS OPEN POSITION

TOTAL NO OF DAYS / TOTAL NO positions filled

17. TURNOVER BY % TURNOVER / TOTAL RECRUITMENTS X100 RECRUITING source BY EACH SOURCE

18. TURNOVER BY % TURNOVER / TOTAL EMPLOYEES BY EACH EACH JOB CATEGORY

CATEGORY

X 100

19. WORKERS % ACTUAL $ / PLANNED BUDGET $ X 100 ompensation costs

20. HR STAFFING EFFICIENCY

NO. TOTAL HR STAFF / TOTAL EMPLOYEES

21.Absenteeism - Percentage of Employees The formula for percentage of employees absent is the number of employees absent during the time period divided by the total number of employees on payroll during the period. 22.Absenteeism Combined Calculation No. of lost workdays due to absence divided by the average number of workdays during period multiplied by 100. 23.Absenteeism Rate Per Employee The formula for average absence rate per employee is the number of absences divided by the total number of employees 24.Cost Per Hire INTERNAL COST [ HR DEPT SALARY/ TRAVEL ETC] + EXTERNAL COST [ ADVERTISEMENTS ETC] DIVIDED BY NO. OF RECRUITS. 25.Human Capital ROI TOTAL REVENUE minus TOTAL OPERATING EXP minus COMPENS/BENEFITS EXPENSES divided by COMPENS/BENEFITS EXPENSES. 26.Human Resource Ratio FULL TIME HR STAFF is divided by FULL TIME ALL STAFF. 27.Labor Costs as Percentage of Revenue COMPENSATION/ BENEFITS is divided by TOTAL REVENUE X 100 28.Profit Per Employee TOTAL REVENUE minus OPERATING EXPENSES is divided by TOTAL NO. OF FULL TIME STAFF. 29.Revenue Per Employee TOTAL REVENUE is divided by TOTAL NO. OF FULL TIME STAFF

30.Training Costs Per Employee TOTAL TRAINING COST [ training + travel] is divided by TOTAL TRAINEES 31. Turnover Calculation TOTAL NO. OF EMPLOYEE SEPARATION is divided by AVERAGE TOTAL EMPLOYEES X 100 ************************************************************************1)Why Human resources planning is important? Describe the Forecasting techniques that are being used for human resources planning in your organization or any organization you are acquainted with. Describe the organization you are referring to. Importance of HR PLANNING 1) Each Organisation needs personnel with necessary qualifications, skills, knowledge, experience & aptitude . 2) Need for Replacement of Personnel - Replacing old, retired or disabled personnel. 3) Meet manpower shortages due to labour turnover 4) Meet needs of expansion / downsizing programmes 5) Cater to Future Personnel Needs 6) Nature of present workforce in relation with Changing Environment - helps to cope with changes in competitive forces, markets, technology, products and government regulations. Shift in demand from ERP to internet programming has increased internet programmers .

HOW HR PLANNING COULD BE USED i) quantify job for producing product / service ii) quantify people & positions required ii) determine future staff-mix iii) assess staffing levels to avoid unnecessary costs iv) reduce delays in procuring staff v) prevent shortage / excess of staff vi) comply with legal requirements ------------------------------------------------------------Human resource planning is the process of anticipating and carrying out the movement of people into, within, and out of the organization. Human resources planning is done to achieve the optimum use of human resources and to have the correct number and types of employees needed to meet organizational goals. Thus, it is a double-edged weapon. If used properly, it leads not only to proper utilization, but also reduces excessive labor turnover and high absenteeism, and improves productivity. It can also be defined as the task of assessing and anticipating the skill, knowledge and labor time requirements of the organization, and initiating action to fulfill or source those requirements. Thus, if the organization as a whole or one of its subsystem is not performing to the benchmark, in other words,

it is declining, it may need to plan a reduction or redeploys its existing labor force. On the other hand, if it is growing or diversifying, it might need to find and tap into a source of suitably skilled labor . That is why; we need to plan in advance even for procuring human resources, which in contrast to a general myth are not abundant!! Thus, in the same line, we propose that organization can achieve its goals effective through effective contingencies of all the HR functions; for example, the structure of an organization and the design of the job within it affect an organizations ability to achieve only through the efforts of people. It is essential therefore, those jobs within the organization be staffed with the personnel who are qualified to perform them. Meeting these staffing needs requires effective planning for human resources HENCE HR planning is the process including forecasting, developing and controlling by which a firm ensures that it has The right number of people, The right kind of people, At the right places, At the right time, doing work for which they are economically most useful. ===================================================== Why has HR planning increased in importance. BECAUSE OF -globalization -economic growth -demand for skilled workers -mobility of workers -need for productivity improvements -need for efficient growth -diversity in workforce -forward planning of resorces -provides a planned hr resources

-controls wastage. etc etc WHY HRP IS SO IMPORTANT TO BUSINESS/ ORGANIZATIONS **Forecasting future manpower requirements, where we use mathematical projections to project trends in the economic environment and development of the industry. **Making an inventory of present manpower resources and assessing the extent to which these resources are employed optimally. ** Procuring competent personnel requires positive recruitment efforts and the development of a variety of recruitment sources. These sources must consider not only the nature and conditions of the external labor market, but also the presence of qualified personnel who are available to fill vacancies through internal promotions or transfers. Keep in mind the recruitment activities is integrated with diversity and equal employment opportunity initiatives. Staffing needs must be anticipated sufficiently in advance to permit the recruitment and development of fully qualified personnel. **Anticipating manpower problems by projecting present resources into the future and comparing them with the forecast of requirements to determine their adequacy, both quantitatively and qualitatively; **Planning the necessary programmes of requirement, selection, training, development, utilization, transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met.

**Its a systematic approach. because it ensures a continuous and proper staffing. It avoids or checks on occupational imbalances (shortage or surplus) occurring in any of the department of the organization. **There is a visible continuity in the process. **There is a certain degree of flexibility. That is, it is subject

to modifications according to needs of the organization or the changing circumstances. Manpower plans can be done at micro or the macro levels depending upon various environmental factors.

HRP is a kind of risk management. It involves realistically appraising the present and anticipating the future (as far as possible) in order to get the right people into right jobs at the right time.

**Ensures optimum use of man (woman, too nowadays?) power and capitalize on the strength of HR. The organization can have a reservoir of talent at any point of time. People skills are readily available to carry out the assigned tasks, if the information is collected and arranged beforehand. **Forecast future requirements (this is done by keeping track of the employee turnover.) and provides control measures about availability of HR labor time. If, for example the organization wants to expand its scale of operations, it can go ahead easily. Advance planning ensures a continuous supply of people with requisite skills who can handle challenging jobs easily. **Help determine recruitment/induction levels. **To anticipate redundancies/surpluses/obsolescence. **To determine training levels and works as a foundation for management development programmes **Planning facilitates preparation of an appropriate manpower budget for each department or division. This, in turn, helps in controlling manpower costs by avoiding shortages/excesses in manpower supply. =========================================== HR PLANNING IS IMPORTANT BECAUSE IT PROVIDES THE BASE PLATFORM FOR DEVELOPING -Recruitment/ Selection PLAN -Induction / Orientation PLAN -Training / Developement PLAN -Compensation PLAN -Salary administration PLAN

-Payroll Administration PLAN -Performance Appraisal PLAN -Performance Management PLAN -Industrial Relations PLAN -Promotions PLAN [ IF ANY ] -Terminations PLAN -Transfers PLAN -Staff amenities. PLAN -retraining plan -early retirement plan -redundancy plan -changes in workforce utilization plan -career path plan -succession plan. -personnel and career plans ================================================= The organization, I am familiar with is a -a large manufacturer/ marketer of safety products -the products are used as [personal protection safety] [ industrial safety] -the products are distributed through the distributors as well as sold directly -the products are sold to various industries like mining/fireservices/defence/ as well as to various manufacturing companies. -the company employs about 235 people. -the company has the following functional departments *marketing *manufacturing *sales *finance/ administration *human resource *customer service *distribution *warehousing/ transportation *TQM ===================================================== THESE ARE THE TECHNIQUES OF HR SUPPLY FORECASTING 1.EXPERT -informal internal surveys. managers prepare their own estimates based on workload. -------------------------------------------------------------------------------------formal external surveys. planners survey managers, using questionnaires or or focused discussion. ----------------------------------------------------------------------------------delphi techniques

solicit estimates from a group of managers, until the estimates converge. ============================================ 2.TREND PROJECTIONS -extrapolations extending past rates of change into the future. ---------------------------------------------------------------------------------indexation matching employment growth with , say, sales. ----------------------------------------------------------------------------------statistical analysis ================================================= 3. OTHERS -planning and budgeting systems based on strategic and corporate plannings/ budgeting. ---------------------------------------------------------------------------------------new venture analysis making comparisons with similar operations. -------------------------------------------------------------------------------------computer models using multiple variables. ================================================= AT MY ORGANIZATION WE USE THE FOLLOWING TECHNOQUES.

1.EXPERT -informal internal surveys. managers prepare their own estimates based on workload. -------------------------------------------------------------------------------------delphi techniques solicit estimates from a group of managers, until the estimates converge. ============================================ 2.TREND PROJECTIONS -indexation matching employment growth with , say, sales. ---------------------------------------------------------------------------------3. OTHERS -planning and budgeting systems based on strategic and corporate plannings/ budgeting. ==================================================