1. WELCOME TO MBA PROGRAMME 2 3 DR. MD. SHAHADAT HOSSAIN.

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WELCOMETO MBA

PROGRAMME2

3DR. MD . SHAHADAT DR. MD . SHAHADAT HOSSAINHOSSAIN

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LECTURE-TWOLECTURE-TWO

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WELCOMELECTURE – ONE

HUMAN RESOURCE PLANNING PROCESS

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CONTENTS HR PLANNING PROCESS1.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 availability3.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 keeps on changing.

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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.

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 NUMBER OF NURSES

200 240300 260400 470500 500600 620700 660800 820900 860

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3.SIMULATION MODEL/REGRESSION FORECAST

TARGET STORES STAFFING FORECAST

MODELY = 8 + .0011(X1) + .00004(X2) + .02(X3)

Y = Number of employees needed to staff the storeX1 = Square feet of sales spaceX2 = Population of metropolitan areaX3 = 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 ANALYSISHistoric departures used to project turnover

LEVEL # EMPL TURN % Expected Vacancies Expected to Remain

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 536 2964

AVERAGE TURNOVER PERCENTAGE = 536 / 3500 = .1531

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2.DETERMINING LABOR SUPPLYPredicting Worker Flows and Availabilities

• Succession or Replacement ChartsWho 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 CHARTFOR EXECUTIVE POSITIONS

POSITION REPLACEMENT CARDSFOR EACH INDIVIDUAL POSITION - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

POSITION WESTERN DIVISION SALES MANAGER

DANIEL BEALER Western Division Sales Mgr Outstanding Ready Now

PRESENT PROMOTIONPOSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL

SHARON GREEN Western Oregon Sales Manager Outstanding Ready Now

GEORGE WEIN. California Sales Manager Outstanding Needs Training

HARRY SHOW Idaho/Utah Sales Manager Satisfactory Needs Training

TRAVIS WOOD Seattle Area Sales Manager Satisfactory Questionable- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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2.HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)

PERSONAL DATAAge, Gender, Dependents, Marital status, etc

EDUCATION & SKILLSDegrees earned, Licenses, CertificationsLanguages spoken, Specialty skillsAbility/knowledge to operate specific machines/equipment/software

JOB HISTORYJob Titles held, Location in Company, Time in each position, etc.Performance appraisals, Promotions received, Training & Development

MEMBERSHIPS & ACHIEVEMENTSProfessional Associations, Recognition and Notable accomplishments

PREFERENCES & INTERESTSCareer goals, Types of positions soughtGeographic preferences

CAPACITY FOR GROWTHPotential 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 that8.33 JOB INTERVIEWS CAN BE HELD, so that1.67 JOB OFFERS CAN BE MADE, and1.11 PEOPLE MUST BE TRAINED, so that we getONE NEW COST ACCOUNTANT!!!

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Time- Frame

Requirement Basis Where Shown)

Availability Where will get)

Possible Action Plan to meet up the requirement Actions can be ensured)

Less than one year

Annual budget

Existing manpower + contingent staff

Recruiting contingent staffs, Overtime, Recruitment, Layoff.

1-2 years

Business Plans

Current Manpower

Transfer, promotion, new recruit, training. Redundancy.

2-5 years

Long term plans

Projected Manpower (Including those trainees who will be included during period)

Succession Plan, Recruitment, Training and development, Restructuring, Redundancy.

More than 5 years

Perspective plans

Labour Market, Educational Institution

Succession plan, Management development, restructuring of Job, Organizational development.

2.TENTATIVE TIME FRAME TABLE OF MANPOWER FORECAST

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To forecast the manpower requirements at different points of time workload analysis is important.

3. ANALYSIS OF WORKLOAD FACTORS

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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 categoryJob category Hours per Hours per job job

Related to meters Related to meters 0.750.75Related to installation Related to installation 2.502.50Related to maintenance Related to maintenance 1.501.50Related to emergency Related to emergency calls calls

1.501.50

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2. Forecast of jobs in a day for different years

Job Job category category

Year Year

20022002 20032003 20042004 20052005MetersMeters 1515 1313 1111 88Installation Installation 8585 9595 110110 125125MaintenanMaintenance ce

2727 3535 4141 4545

Emergency Emergency 1010 88 66 44

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3. Converting forecast into man hours required per day

Job Job category category

Year Year

20022002 20032003 20042004 20052005MetersMeters 11.2511.25 9.759.75 8.258.25 66Installation Installation 212.5212.5 237.5237.5 275275 312.5312.5Maintenance Maintenance 40.540.5 52.552.5 61.561.5 67.567.5Emergency Emergency 1111 8.88.8 6.66.6 4.44.4Total man Total man hours hours required per required per day day

275.25275.25 308.55308.55 351.35351.35 390.4390.4

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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 No of maintenance staff maintenance staff

requiredrequired Year Year

20022002 20032003 20042004 20052005Employee Employee 57 (275.25/4.8)57 (275.25/4.8) 6464 7373 8484

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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 elements should be considered.

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 Manpower needed2000 4002001 4502002 5002003 6502004 7002005 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+600)/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 Manpowerά= Smoothing ConstantF t-1 = Forecasted demand for

the previous periodA 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= 0.4Ft-1= 500At-1= 480Fm= ? 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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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 looksfor consensus

Leader accepts consensus judgment as group’s choice.

Qualitative models for better managerial judgment 1.THE DELPHI 1.THE DELPHI TECHNIQUETECHNIQUE

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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 be relevant to the objective .

3. criteria for evaluating responses should be consistent ,unbiased and befitting with objective

2.The Nominal Group Technique

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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 analysisManpower 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 HRP- Tavistock Institute of Human Relations, U K suggested wastage analysis using the following curve.

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Induction Crisis

Differential Transit

Settled Connection

Months/YearsTimeWeeks

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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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ExampleAt 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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SolutionNumber of employees leaving =250-

230-20Average number of employees employed =

250-230=240

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Labour Turnover = Number of employees leaving100

Average number of employees employed

20100=8.33%

240=

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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 =

25100=10%

243

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3. Stability IndexNumber with more than year

service now100Total 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 now100

Total Employed one year ago

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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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1st Year 502nd Year 453rd Year 404th Year 355th Year 30

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Length of Service ( in years)

No. Leaving

Cumulative Leavers

Remaining

Survival as percentage of leaving

1. 2. 3. 4. 5.0 0 0 500 100.001 50 50 450 90.002 45 95 405 81.003 40 135 365 73.004 35 170 330 66.005 30 200 300 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 time100

Number engaged at the start

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5. Census AnalysisCensus analysis can eliminate

this problem, taking into account a cross-section 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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