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Block 1 Human Resource Planning

Unit 1 Assessment Of Human Resource In Organisation And Human Resource Planning

1) What is human resource planning?

Human resource planning is the process of ensuring that an organisation has the right number and types of qualified people in the right jobs at the right time to meet its objectives. It involves anticipating and responding to needs both within and outside the organisation. This planning is concerned with the flow of people into, through, and out of the organisation. It's a strategy for the acquisition, utilisation, improvement, and retention of an organisation's human resources. Human resource planning translates an organisation's objectives and plans into the number of workers needed to meet those objectives. It also anticipates future business and environmental demands to meet HR requirements.

2) What are the reasons for planning? What is the need for organisation to plan for its HR?

• Reasons for planning: Planning helps managers reduce uncertainty about the future and enables them to cope with it more effectively. The fundamental reason for planning is that it can lead to success.
• Need for HR planning: Organisations need HR planning because human resources are their most important asset and must be carefully managed to stay competitive. It is difficult to procure specialised technical talent at specific times, particularly during expansion or promotions. HR planning ensures the organisation has the right mix of employees and skills when and where they are needed. It is also needed to address the increasing complexities and size of organisations, the technological revolution, and the changing demographics of the workforce. HR planning also helps in offering proper advancement and opportunities to highly potential employees.

3) Discuss strategic planning. What are strategic Business and work force plan?

• Strategic planning is the process of setting organisational objectives and deciding on comprehensive action programs to achieve them. It involves data collection, analysis, and management reviews. Strategic planning decisions can result in new business acquisitions, capital investments, or management approaches. The process includes defining the company philosophy, decentralising decision-making, and linking performance measures to financial performance.
• Strategic business and workforce plans are outcomes of and consistent with overall business and HR strategies. Workforce plans need to address what skills and competencies will be needed in the future and how to ensure the right people are available. These plans require considerable data collection, analysis and proper management reviews.

4) What are the various levels of planning?

The sources refer to tactical business plans which serve as a basis for HR strategy. Also mentioned is strategic planning which involves setting organizational objectives and deciding on action plans. However, the sources do not provide detailed information on specific levels of planning.

5) What benefits accrue to the organisation from strategic planning?

Strategic planning helps in reducing the uncertainty of the future, thereby allowing the managers to do a better job of coping with the future. It provides a clear direction for long term organisational development. It also helps in achieving competitive advantage through innovation, quality, and speed. Strategic planning also assists in setting organisational objectives and determining the course of action to achieve these objectives.

6) Discuss the relationship of HR strategy to Business strategy.

HR strategy should be aligned with the overall business strategy. Tactical business plans serve as the basis for HR strategy. HR strategy should support the business goals of the organisation. The HR function should be a full partner in the strategic planning team. This alignment helps the organisation to use its workforce to exploit opportunities and neutralize threats. The HR team needs to get involved from the stage of defining the business strategy to resourcing, recruiting, retaining, retraining, and restructuring.

7) What is talent inventory? How is it used and what are its advantages?

• Talent inventory is an organised database of the existing skills, abilities, career interests, and experience of the current workforce.
• Use: It is used to assess current resources and analyse how employees are currently being used. It helps in understanding the future availability of people with the right skills. The information gathered in talent inventories contains a typical profile for each individual.
• Advantages: Talent inventories are powerful tools for promoting the proper use of human resources more accurately. They help in the effective utilisation of the existing workforce. The talent inventory serves as an organisation's current workforce base, from which a projection of future supply of workers can be made.

8) What are the ways in which this inventory is made and what are its functions?

• Ways of making: To create a talent inventory, organisations must address several questions: who should be included, what information should be collected, how to obtain the information, how to report it to management, how often to update, and how to protect its security. The information is typically stored electronically and linked to other databases.
• Functions: A talent inventory's functions include assessing the skills, abilities, and potential of current employees. It is used to analyse the current use of employees. The information can be used to form a complete human resource information system (HRM) that can be used in various situations. It can help identify employees for promotion, transfer, or training purposes.

9) Discuss forecasting of workforce supply and demand. Describe the process of forecasting supply and demand of the workforce.

• Forecasting workforce supply and demand involves estimating future labour requirements. It includes anticipating the supply of human resources, both inside and outside the organisation, and anticipating the organisation's demands for various types of employees.
• Process: It is a two component process. First, anticipate the supply of human resources, both inside and outside the organisation at some future time period. Second, anticipate the organisational demands for various types of employees. The forecast of the net workforce is only possible after an analysis of the future availability of labour (supply) and future labour requirements (demand) along with the analysis of the external conditions.

10) Define and describe external workforce.

The external workforce refers to the pool of potential employees available outside the organisation. Organisations explore the external labour market when they need to expand or have specific hiring needs. Agencies make projections of external labour market conditions and future occupational supply. It is important to gauge both future supply of workers and future demand. Organisations must consider widespread and sophisticated recruitment procedures.

11) How is the internal workforce different from the external workforce?

• Internal workforce refers to the existing employees within an organisation. Projections of the future supply of workers can be made from the talent inventory. Internal workforce planning considers factors like age, gender, job title, training, performance ratings, and promotability. Management succession plans are a common type of internal supply forecast.
• External workforce refers to the potential employees available outside the organisation. The external workforce is explored when an organisation needs to expand or has specific hiring needs.

12) Discuss workforce demand. What are its significances?

• Workforce demand refers to an organisation's future requirements for employees. Demand forecasts are subjective and require organisations to identify important variables and appropriate forecasting strategies through experimentation.
• Significance: Workforce demand forecasting helps in predicting the number of employees needed for future projects and growth. It helps the organisations to plan for their future staffing needs. It is crucial for aligning human resources with the organisation's strategic goals.

13) What is predictor selection?

Predictor selection is the process of choosing the business factors that workforce needs will be related to. The chosen predictor should be directly related to the essential nature of the business and changes in the factor should be proportional to the required staff.

14) Discuss critically the historical and project relationships.

Understanding the historical and projected relationships is crucial for accurately forecasting future workforce needs. Organisations need a quantitative understanding of the past to plan for the future. This involves determining the past relationship of the business factor to staffing levels and estimating future levels.

15) Define productivity ratio and discuss its importance.

• Productivity ratio is a measure of output per employee, calculated by dividing a business factor by the number of employees.
• Importance: It is important to compute productivity ratios for previous years to determine the average rate of productivity changes. Understanding these changes helps in adjusting future workforce projections. Changes in productivity can result from more efficient machinery or automation. These ratios need to be tempered with the judgment of experienced line managers.

16) How does an organisation forecast workforce requirements?

Organisations forecast workforce requirements by:

• Selecting an appropriate business factor.
• Plotting the historical record of that factor in relation to employees employed.
• Computing the productivity ratio.
• Determining the trend.
• Making necessary adjustments in the trend.
• Projecting to the target year.
• Multiplying the projected level of business factors by the productivity ratio to arrive at the effective number of employees required.

17) How does one ensure accuracy in such forecasts?

Accuracy in demand forecasting depends on the duration of the planning period, the quality of the data, and the degree of integration with strategic business planning. It also depends on the flexibility in staffing the workforce. A 2% to 20% margin of error is generally acceptable.

18) Discuss integrating supply and demand forecasts.

Integrating supply and demand forecasts is essential for effective HR planning. After analysing the future availability of labour (supply) and future labour requirements (demand) an action plan can be initiated to rectify projected problems. This allows the organisation to estimate the net workforce required.

19) What is forecasting? What are the various methods of forecast?

• Forecasting is an attempt to estimate future labour requirements by anticipating the supply of human resources both from inside and outside the organisation. It is a key element in human resource planning.
• Methods: The sources discuss trend analysis for forecasting workforce demand, which involves finding a relevant business factor, plotting its historical record against employees, computing productivity ratios, determining trends, making necessary adjustments, and projecting to a target year. The sources also mention the use of historical and projected relationships to calculate required workforce. The most common type of internal supply forecast is the 'management succession plan’.

20) Elucidate the factors that constitute workforce demand.

Factors that constitute workforce demand include:

• Appropriate business factor
• Historical record of the factor in relation to the employees
• Productivity ratio
• Trend analysis
• Adjustments in trends
• Projected figures
• External conditions like technology, markets, and competition
• The business environment and nature of the job