INTRODUCTION
According to Bulla and Scott human resource planning is “the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements. It determines the human resources required by the organization to achieve its strategic goals. Human resource planning is generally concerned with businesses of longer terms but sometimes it also addresses businesses of short terms as well. In order to improve organizational effectiveness, it looks at the broader issues how people are employed and developed. Human resource planning is an integral part business planning”.
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In this assignment, firstly I will explore that how HR plan supports organization’s strategic objectives. Then I will discuss the legal requirements which influence HR planning. In next part, recruitment and selection of new staff is explained in detail and with it the effect of organizational culture on recruitment and retention of staff is described. In last part, human resource management procedures are discussed which are grievance, discipline and dismissal procedures.
The strategic planning process projects to changes in the type of activities carried out by the organization. In order to achieve the goals, resource and skill requirements it identifies the core competencies the organization needs. Quinn Mills says that human resource planning is a decision making process and consist of three steps:
- Identify appropriate number of people with right skills
- Motivate these people to achieve high performance
- Create links between business objectives and people planning activities.
- Human resource planning consists of four steps
- To forecast future needs
- To analyse the availability and supply of people
- To draw up plans
- To monitor how plans are implemented
- A strategy is a plan of a company which shows that how it matches its internal strengths and weaknesses to external threats and opportunities.
CHALLENGES TO STRATEGIC HUMAN RESOURCE
Human resource management priorities are focusing on boosting competitiveness, reducing costs and improving employee performance.
COMPANY’S BASIC STRATEGIES
CORPORATE STRATEGY
- Corporate strategy is portfolio of businesses that comprise the company and the ways by which these are related to each other. It consists of
- Diversification strategy identifies the expansion of a company by adding new products
- Vertical integration strategy shows the expansion of a company by producing its raw materials or selling its products
- Consolidation reduces the size of a company
- Geographic expansion takes the business abroad
COMPETITIVE STRATEGY
Competitive strategy strengthens the long term position of the company’s business in the marketplace. Managers use different corporate strategies to achieve corporate advantage.
COST LEADERSHIP aims to make the company a low cost leader in industry.
DIFFERENTIATION COMPETITIVE STRATEGY is a strategy in which a company wants to be unique in the industry
FUNCTIONAL STRATEGY
It is a basic course of action that each department of business pursue to achieve its competitive goals.
STRATEGIC HUMAN RESOURCE MANAGEMENT
In planning and achievement of any organization, human resource management plays a bigger role in the success. Strategic human resource management formulates and executes HR systems and HR policies.
HR ROLE IN THE FORMULATION OF STRATEGY
A strategic plan identifies, analyze, and balance the company’s internal strengths and weaknesses and external threats and opportunities.
Human resource planning process takes place within the context of labour market. According to Elliott (1991): “The market for labour is an abstraction; it is an analytical construction used to describe the context within which the buyers and sellers of labour come together to determine the pricing and allocation of labour services.”
The internal labour market consists of labour within the company. It is a main source of future labour requirements by introducing the policies like training, development, and career planning and management succession.
The external labour market consists of regional, local, national and international labour markets. In order to find the right people for the right job, it is necessary to consider that which of these labour markets are the best source.
Both the sources are extensively used depending on the size of the company, the rate of growth and decline and the policies of employee resourcing. The firm much relies on internal market and believes in long term careers of the staff through training sessions or apprenticeship.
The aims of human resource planning are as follows:
- The skillful and competent people are obtained and retained
- Makes the best use of human resource planning
- To overcome the problems like deficit of people or potential surplus
- To develop a trained workforce
- Reduce to rely on external recruitment
- Human resource planning consist of four steps
- Forecast future needs
- Analyze the supply and availability of people
- Make plans to match supply to demand
- Monitor the implementation of plan
For future demands, human resource planning concentrates on skills and competencies which indicate the numbers required in longer term. Its main aim is to produce policies like training, retention and utilization of human resources and development.
Human resource planning addresses the following questions:
How many people will be needed?
What competencies and skills are required for future?
Is training or development needed further?
Is there is a need for recruitment?
When will there is a need for new people?
When will the training and recruitment start?
How to tackle the situation of reducing cut costs?
How can the flexibility be achieved on the use of people?
FORMULATION OF BUSINESS STRATEGY
HR strategy contributes to the formulation of business strategy which identifies to make the best use of existing human resources.
IMPLEMENTATION OF BUSINESS STRATEGIES
It consists of;
Development strategies are the needs to increase skills to fit people for greater responsibility. It also defines the outputs required from training programmes.
Retention strategies indicate the intentions of the company to get the right people
Utilization strategies describe how the organization intends to improve productivity and cost
Flexibilities strategies define the company’s strategies in developing flexible work arrangements
Downsizing strategies are the needs to be done by the organization to reduce the numbers employed.
FORMULATION OF HR STRATEGIES
Formulation of strategies addresses a number of questions
Where are we now?
Where do we want to be in the future?
How are we going to get there?
Resourcing strategies are converted to business strategies by depending on the following plans
SCENARIO PLAN conducts an environmental scan on the issues which affect the labour market. This is possibly based on PEST approach.
DEMAND FORECASTING estimates the future needs of the people. Its base is long term business plan and annual budget. For the company’s plans, details are required which results in increased or decreased demands of employees. The introduction of new technology would also have to be considered in order to bring changes to working methods or procedures. There are four methods of demand forecasting
MANAGERIAL JUDGEMENT
This method requires managers to sit together and think about the future pressure and workload. The managers have to decide that how many people they need. Line managers and senior managers are involved in this agreement. Top management prepares company and department forecasts and these forecasts are reviewed and agreed with department managers. All the guidelines should be prepared for departmental managers indicating the future activities which will effect their department. With the help of these guidelines, departmental managers prepare their forecast to a laid- down format. They can seek help from personnel department. The personnel department prepares a human forecast of the company. Human resource planning committee then reviewed these two forecasts and reconciles with the department managers about these two forecasts and submits a final amended forecast to top management for approval.
RATIO TREND ANALYSIS
It is a study of past ratios between direct and indirect workers. In this way, future ratios are forecasted and made some allowances for changes in the company.
WORK STUDY TECHNIQUES
Work study techniques are used in work measurements to calculate long operations and the requirement of people for those operations. The production budget of any manufacturing company is prepared in volumes of sealable products or in volumes of output for individual departments. The productive hours are then compiled by the use of standard hours. The standard hours per unit of output are multiplied by the planning volume of units to be produced to give the total planned hours. This is divided by the number of actual working hours for an individual operator.
MODELLING
Technique like computers and spreadsheet can help in demand and supply forecast.
FORECASTING COMPETENCE AND SKILL REQUIREMENT
This shows an impact of projected, product market developments and the introduction of new technology.
SUPPLY FORECASTING estimate the supply of manpower by reference to analyses of current resources and future availability. Supply forecasting consists of number of people from inside or outside of the organization. It covers
Existing human resources
Losses to existing human resources through employee wastage
Changes to existing human resources through internal promotions
The effect of changing conditions and absenteeism of work
Sources of supply from inside or outside the organization
FORECASTING REQUIREMENTS analyse the demand and supply forecasts to identify future deficits with the help of models.
DEMAND AND SUPPLY FORECASTING MODELS
Models help to make decisions and make the decision makers to understand the situation in which these decisions are made. These modelling techniques help to prepare human resource forecast. It also helps to understand the career evaluation and predict and measure wastage for setting and operating models, data is required which is as follows:
Human resource system- gives a description of the people who enter or exit of the organization and their progress at different levels.
Stocks – the number of people employed in each grade. They are analysed in age or length of service
Flows- recruits, leavers and promotion flows are analysed by age or length of service
Assumptions- assumptions are made for future behaviour of the system and in this way the implications of different outcomes can be evaluated.
Career analysis- a career prospectus is made to build up analysing data on promotions. This links the data to information on the database about the potential of current employees.
FLEXIBILITY
It aims to achieve increased organizational effectiveness. It has following forms
CONTRACT BASED FLEXIBILITY is an employee contract which shows the flexibility of terms and conditions. The overall purpose of the job descriptions is written in terms. This flexibility can be achieved by employing contract workers to work on any task according to their skills.
TIME BASED FLEXIBILITY is achieved by the flexible hours.
JOB BASED FLEXIBILITY is a functional flexibility in which workers can move from task to task according to their skills. Companies make the fullest use of flexibility in order to make the fullest use of their workforce. Functional flexibility is also associated with pay schemes and ensures that all staff is treated equally in terms of benefits.
SKILL BASED FLEXIBILITY is a range of staff to perform different tasks to exercise greater responsibility. it is based on the competencies and the utilization of the capabilities of the workers.
ORGANIZATION BASED flexibility makes use of contract workers and part time and temporary staff.
PRODUCTIVITY AND COST ANALYSIS analyse the productivity and costs to identify the need for improvement. An increase in activity level can improve the productivity and recruits more employees. In order to reduce costs, a company looks at productivity and employment costs.
The input of employees gives an output of goods and services as productivity. Employment costs consist of pay, employee benefits, national insurance contributions, recruitment costs, training costs, leaving costs including redundancy payments, loss of production, replacement and training, the cost of health and safety and personnel administration costs.
ACTION PLANNING
Action planning is derived from the resourcing strategies and are made in the following areas
OVERALL PLAN
The overall human resource plan
Improves methods in sorting out young people for recruitment
Links with schools and colleges to create interest of the young people
Attracts young people by developing programmes and training sessions
Widens to recruit woman and part time workers
Arrange working hours for new employees
Provide benefit packages
Provide training programmes for the new employees and make better use of their skills and talents
HUMAN RESOURCE DEVELOPMENT PLAN
The human resource development plan shows
The number of existing staff who needs training
The number of trainees required and the programmes for recruiting and training them
New learning programmes or the changes to the existing courses
THE RECRUITMENT PLAN
The recruitment plan set out
The need of the numbers and types of people required to make up any deficits
To attract candidates by training and development programmes, pay and benefit packages, working hours arrangement, child care facilities etc
The dealing of the problems in the supply of the recruits by the recruitment programme
THE RETENTION PLAN
The retention plan is based on the analysis of why people leave. It addresses the following areas
PAY
This problem arises due to unfair and uncompetitive systems. Actions to be taken are
Review pay levels on the basis of market surveys
Review pay schemes so that everyone is treated equally
Make sure that employees understand the relation between performance and reward
JOBS
They should be designed in such a way which can increase skill variety and provide opportunities for learning and growth.
PERFORMANCE
If the employees are not clear of their responsibilities or performance then they can be demotivated. Related to performance, following actions can be taken
Encourage managers to praise the staff for their performance by giving them a healthy and informative feedback.
Train managers in counselling; give briefing on performance management system and get a feedback on how it has been applied
TRAINING
If the people are not trained then this can create an increase in resignations. Training and learning programmes should be introduced to employees before joining the organization. Training programmes give employees the confidence and make them more competent in their performance. In this way they can make better use of their abilities and can do variety of tasks and enhance their skills and competencies.
CAREER DEVELOPMENT
Promotion prospectus and career prospectus in many of the organizations is limited which make most of the employees to turnover. To have a stable workforce, employers need planning in providing career opportunities by
Developing promotion procedures
Giving advice on career prospectus
Encourage promotion from within
COMMITMENT
Commitment can be increased by explaining the mission and strategies of the company. Communication with employees is very important especially face to face communication. This also seeks the views of other people at work.
CONFLICT WITH MANAGES AND SUPERVISORS
This is another reason of turnover. This should be solved by
Selecting those managers who are qualified and with well developed leadership
Giving them training in resolving conflicts and dealing with grievances
Recruitment and selection
Poor selection results in rapid turnover. Selection of the employees should match with their capabilities.
THE FLEXIBILITY PLAN
The aim of the flexibility plan is utilize all the skills and capabilities of employers. It also reduces the employment cost and increase productivity. The flexibility plan consist of
ALTERNATIVES TO FULL TIME PERMANENT STAFF
The core of permanent full time staff consist of managers and team leaders who are needed to run the teams of core workers.it also include professional staff such as personnel which provides high level professional advice and services. Knowledge workers, technicians and highly skilled workers is also a part of team. The next step is the right use of the temporary workers, part-time workers and subcontracting workers.
FLEXIBLE HOUR ARRANGEMENT
This is also included in flexibility plan. Flexible hours can be arranged in the following ways:
FLEXIBLE DAILY HOURS is a day to day pattern according to work loads
FLEXIBLE WEEKLY HOURS are the weekly hours which are done at the peak time of the year
COMPRESSED WORKING WEEKS is a pattern where employees work less than five days
OVERTIME
To reduce the overtime costs, flexibility plan offers flexible hours, new shift arrangements and overtime limitations.
ARRANGEMENT OF SHIFT WORKING
This reduces the overtime and is modified to meet demand requirements.
THE PRODUCTIVITY PLAN
This plan increase productivity and reduce employment costs by improving the methods like automation, mechanization and computerization.
THE DOWNSIZING PLAN
This plan sets out
Arrangement for consulting with employees and their trade unions
Forecast of the number of losses that can be taken up by natural wastage
Forecast of the number who want to leave voluntarily
Redundancy terms
Arrangements by telling individual employees about the redundancies and keeping the trade unions informed
CONTROL
In spite of including budgets and targets, human resource plan also clarifies the implementation and control. This reports on the numbers employed against establishment and on the numbers recruited against the recruitment targets. Against budget, it also report employment costs and trends in wastage and employment ratios.
RECRUITMENT AND SELECTION OF NEW STAFF
The overall aim of the recruitment and selection process is to obtain the number and quality required at a minimum cost in order to satisfy the company’s human resource requirements. The recruitment and selection process is a series of three steps:
Define requirements
Decide terms and conditions of employment, prepare job descriptions and specifications
Attract candidates
Review and evaluate by building a pool of candidates for the jobs by recruiting internal and external candidates, advertisement, use agencies and consultants
Select candidates
By interviewing, testing, assessing, assessment centres, offering employment, asking references, and preparing employment contracts
DEFINE REQUIREMENTS
In recruitment programme, the number of people required should be specified which is derived from the human resource plan. In addition, there will be demands for new jobs to be filled and these should be checked for justification. It is necessary to check the type of employee required for a specific job. For assessing candidates, this information provides a basic introduction required to agencies or recruitment consultants. A candidates profile, educational background, experience and skills produce criteria for a suitable job and is assessed by interviewing or by means of psychological tests.
JOB DESCRIPTION
A job description sets the overall objective of the job, basic details of the job, main activities and any other special requirements. For the purpose of recruitment, the information can only be provided on the arrangement for training and career opportunities. Pay, benefits, mobility and travelling are included in terms and conditions.
PERSONNEL SPECIFICATIONS
It is also known as recruitment, person specification or job specification. It requires educational background, qualification, experience, skills, competencies and training from the candidate.
EDUCATIONAL BACKGROUND OR QUALIFICATION- academic or technical qualification is required
EXPERIENCE- achievements or merits obtained
COMPETENCIES- it consist of any special skills achieved such as numeracy
TRAINING- any special training that a candidate has taken
SPECIFIC DEMANDS- a candidate is expected to develop new markets, productivity, best customer services and sales and introduce new techniques and systems
ORGANIZATIONAL FIT- the candidate is expected to work within the corporate culture
SPECIAL REQUIREMENTS- mobility, unsocial hours and travelling
The most familiar classification scheme introduced by Rodger (1952) and is known as
THE SEVEN POINT PLAN
The seven point plan consists of
PHYSICAL APPEARANCE- physique, health, appearance and speech
ATTAINMENTS- education, qualification, experience
GENERAL INTELLIGENCE- intellectual quality
SPECIAL APTITUDES- mechanical, manual dexterity
INTERESTS- intellectual, practical, physically active, social, artistic
DISPOSITION- influential, power of acceptance, steadiness, dependable, self reliance
CIRCUMSTANCES- domestic circumstances, occupations of family
Another classification system is produced by Munro- Fraser and is known as
THE FIVEFOLD GRADING SYSTEM
The fivefold grading system covers
IMPACT ON OTHERS- appearance, make-up, speech, manner
ACQUIRED QUALIFICATION- education, vocational training, experience
INNATE ABILITIES- aptitude for learning, natural quickness of comprehension
MOTIVATION- goals set up by an individual and determination to follow them and success in achieving them
ADJUSTMENT- emotional stability
Both systems are proved to be good for interviewing but seven point plan is more stable and has a longer pedigree.
COMPETENCY BASED APPROACH
During selection process, competency based approach is used as a framework for a particular role. According to Roberts (1997)
The benefit of taking a competencies approach is that people can identify and isolate the key characteristics which would be used as the basis for selection, and that those characteristics will be described in terms which both can understand and agree…..The competencies therefore become a fundamental part of a selection process.
According to Wood and Payne (1998), the advantages of competency based approach are;
It increases the accuracy of prediction about stability
It facilitates a closer match between the person’s attributes and the demands of the job
It helps to prevent interviewer’s making ‘snap’ adjustments
It can underpin the whole range of recruitment techniques- application forms,, interviews, tests and assessment centres
ATTRACTING CANDIDATES
It is a matter to identify, evaluate and use the most appropriate sources of applicants. If difficulties occur in attracting candidates then being an employer there should be a proper study at the strengths and weaknesses of the company.
ANALYSIS OF RECRUITMENT STRENGTHS AND WEAKNESSES
It covers the matters like pay, employee benefits, working conditions, security of employment, educational and training opportunities, career prospectus and the reputation of an organization. The aim of an organization is to build a better image by use of advertisements, brochures or interviews.
SOURCES OF CANDIDATES
To fill the anticipated openings, if there are no qualified candidates inside then the outside candidates are given more consideration. This may require forecasting general economic, local market and occupational market conditions.
To forecast general economic conditions is the expected prevailing rate of unemployment. Lower rate of unemployment lowers the labour supply and then it’s more difficult to recruit personnel
Local labour market conditions are also important. Finally, the forecasting of candidates for jobs in specific occupations is to be recruited.
Once a position is filled, the next step is to develop an applicant pool either from internal or external sources. Recruitment efforts are for the welfare of the strategic plans of the company. Some recruiting methods are superior to others, depending what your sources are and who a company is recruiting.
If no candidates are available within an organization then the main sources of candidates are
ADVERTISING
Advertising is a best source to attract candidates. For successful advertisement, a company needs to address two issues: the media and the ad’s construction. The selection of best medium depends on the types of positions a company is recruiting.
OBJECTIVES OF ADVERTISEMENT
Attract attention
An advertisement should be attractive enough to gain an attention of a potential candidate
Create and maintain interest
The information of an ad is to be communicated in an attractive way about the job, the organization, qualifications and the terms and conditions of employment.
Stimulate action
An advertisement should be conveyed in such a way that it not only attracts candidates but encourage them to read at the end and apply.
ANALYSE THE JOB REQUIREMENT
It’s necessary for a company to establish that how many jobs to be filled and when. Then comes the job description and person specification for qualification and experience. The next step is to consider where suitable candidates are likely to come from and the companies, jobs or educational establishments they are in. Finally the pay and the benefits of the company are clearly shown in an advertisement.
EMPLOYMENT AGENCIES AS A SOURCE OF CANDIDATES
There are three basic types of employment agencies
THOSE OPERATED BY FEDERAL OR LOCAL GOVERNMENTS
These agencies are on the rise these days. These agencies fill up the jobs, counsellors visit the work site. Review the job requirements and help the employer to write job description.
THOSE ASSOCIATED WITH NONPROFIT ORGANIZATION
Most societies have units which help their members in finding a suitable job. Public welfare agencies place the people who are disabled and war veterans.
PRIVATE OWNED AGENCIES
These agencies charge to every applicant for the application they place. These agencies are the sources of managerial personnel, clerical and white collar.
RECRUITMENT CONSULTANTS
Recruitment consultants advertise, interview and shortlist.
STEPS FOR CHOOSING RECRUITMENT CONSULTANT
Check its reputation with others
Check the advertisements of other companies in order to know the consultancy
Meet the consultant who is working on the assignment
Compare its fee with other recruitment consultants
USING RECRUITMENT CONSULTANTS
It is necessary to
Brief them the terms and conditions of the company
Give them assistance in job defining
Clarify arrangements for interviewing and short- listing
Clarify the fee and expenses structure
Make sure the arrangements made are directly dealing with the consultant
USING EXECUTIVE SEARCH CONSULTANTS
These are also known as “head hunter”. These consultants are for senior jobs and direct the limited number of people to specific jobs. They are bit expensive consultants .These consultants have their own contacts and have researchers who identify specific people for a specific job. The consultant forwards the shortlist of candidates with full report to the client when a number of potential candidates have been assembled.
CHOOSING AN ADVERTISING COMPANY
Following steps should be taken while choosing an advertising company
Experience in handling recruitment advertising
Services provided to the clients
Fee structure
Staff meeting who are working on advertisement
Discuss methods of working
RECRUITMENT ADVERTISEMENT
A recruitment advertisement should start with a compelling headline and then it covers the areas like the organization, the job, qualification and experience, terms and conditions of job, the location and the action to be taken.
The headline should be a job title and in bold letters. For attracting customers, quote the salary in an attractive way. The name of the company should be given. Create interest in the job and convey the essential features of the job by giving a brief description of the duties of a job holder.
The qualification and experience should be stated. This will vary from candidate to candidate. Pay scale and the job requirements will give them the enough information about the experience required.
Final section of the advertisement is how a candidate can apply for a job? Candidates would be appreciated if they apply in writing, or have a telephonic conversation or may be called for an informal chat at some suitable place.
SEX DISCRIMINATION ACT 1975
According to this law it is unlawful to discriminate by favouring sex in advertisement. Sexiest job titles should be avoided. There are certain jobs which are unisex and are non discriminatory.
TYPE OF ADVERTISEMENT
CLASSIFIED/ RUN- ON- they are cheap and suitable for routine jobs. In this a copy is run on, having no white space in or around the advertisement and no paragraph spacing.
CLASSIFIED/SEMI-DISPLAY-it is much more effective and is fairly cheap. The h
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