Report On HR Planning
Of Energypac BD Ltd
INTRODUCTION:
Often, business time-frames are too short to encourage good strategic planning. The best companies take the time and do it well. Workforce planning or Human Resources Planning as it is commonly called is one of the most impact full aspects of business planning. Management literature is packed full of reasons why HRP is crucial to business success. Without it there is little chance of the business having the right people at the right place at the right time doing the right work.
This issue has been studied for decades. In a 1985 study based on a survey of 53 corporations in the US and Canada and their approaches to business and human resource planning Elmer Burack found that “the respondents, both human resource and business planners, emphatically endorsed the concept that strategic and long-range business plans should include a human resource component.”That position is one still held firmly by business executives globally.
Human resources planning in the broadest sense include both strategic and operational human resource planning as a continuous process rather than an activity limited to a fixed segment of the business planning process. Often HRP is considered to be a “human resources” program rather than a necessary business activity. Operationally driven managers often forget the real purpose of planning. “By definition, the strategically driven human resource function will be devoted to finding ways to help the organization gain important advantages over its competitors.”Those advantages are often described in terms of the capacity that a business has with which to pursue its objectives. “The capacity of an organization to achieve its strategic objectives is influenced by human resources in three fundamental ways: cost economics; capacity to operate effectively; capacity to undertake new enterprises and change operations.” This discussion is divided into sections covering planning, workforce planning, management resources planning and a summary.
Company Overview:
Energypac is one of the leading power engineering companies in Bangladesh. Continual research and development, state of the art production facility, quality products, competent services, and countrywide operations have made it warmly acceptable to the customers. Energypac was incorporated in 1982 as a private limited business enterprise. It is powered by 1200 skilled manpower of which 150 are graduated engineers. The relentless efforts and dedication of these people are providing continual help to improve technology to innovate and develop new products, just in time delivery, pre and post sales services to maintain a long term business relationship with the customers. To meet countrywide demand of its products and services, Energypac has extensive distribution network throughout Bangladesh with full-fledged offices in the major cities like Chittagong, Khulna, Rajshahi, Sylhet, and Bogura. In an effort to introduce its products globally, Energypac has established its offices in India, and China. Energypac has already experienced its products and service supply to India, Yemen, Ghana, Sudan, Uganda, Nigeria, Saudi Arabia, and United Kingdom. Energypac is an ISO 9001:2008 and 14000:2004 certified company. Energypac enhances the business of its customers by providing them with complete solutions. While creating better and environmentally compatible technologies, Energypac focuses on the customer’s demand with appropriate products and solutions as well as services.
Vision, Mission and Strategy:
Vision
We will be the most preferred business partner of our customers.
Mission
We will provide total power solutions to enhance the business of our customers, concurrently creating better technologies that benefit both the customers and the environment.
Strategy
Our strategic aim is to strengthen the leading position we enjoy in our markets, and to ensure continued growth. We rely on our capability to integrate and deliver solutions from our broad equipment and service portfolio which meet the specific needs of our customer segments globally. Our priority is to offer the best efficiency, reliability and value available.
Products & Services:
Energypac Engineering Limited presets a wide range of products and services for its valued customers. Apart from our standard offerings, we provide our clients customized offers suitable to their demands.
Our Products:
Our illustrative product range includes the manufacturing, marketing and powering with complete solutions or as per customer demand. All of our products are manufactured at controlled environment following international standards like IEC, BS, and ANSI. Our range of products can be broadly categorized as:
Transformer
Switchgear
Outdoor Vacuum Circuit Breaker
Control, Metering, and Relay Panels
Disconnecting switch
Outdoor Off-load Disconnections
Our Services:
Energypac Engineering Limited provides comprehensive services to the customers on turnkey basis or as and when required by the customers. Our services are catered but not limited to the followings:
Installation and Commissioning
Engineering, Procurement, and Construction (EPC)
Tests:
We maintain strict compliance of quality in our entire manufacturing process. Meticulous procedures are followed in every step of the production. To ensure better quality, we use modern testing equipments. Our testing procedure verifies that our design and construction withstands the conditions stipulated by national and international standards. Tests are performed into two main categories:
Sales and Marketing:
Energypac Engineering Limited is a customer oriented company to understand, produce, sell, and post sales caring of its products and services. We take pride on learning our customer’s demand until we comprehend their demands. Our young, dynamic and responsive sales and marketing people are scrupulous to attend customer’s enquiry, visit them, discuss the demands, and providing suitable solutions as to customer’s demand. We are catering our entire market segment in three broad categories, namely:
Project Sales: Project Sales Department handles the enquiries mainly from the public sector. Mostly, these sales are based on competitive local and international biddings. A team of intellects are engaged to explore demands, understanding the materialistic and documentary requirements, bid submission, contract signing. Spectacular growth has been achieved in this sector having tough competition with local and international bidders. Thanks to our colleagues who has made it a success through their sincere efforts.
Private Sales: Private Sales Department is one of the most departments of Energypac who are dedicating widespread efforts to take lead in the local market especially in the private sector. They have intense contacts with the customers and the business channel partners. They cater our products to all section of customers starting from individual to corporate.
Export Sales: Export Sales Department is dedicated to promote our business beyond the border of Bangladesh. Its main responsibility is to source local partners in the intended country of business, look for business opportunities, and extend necessary supports either directly or through our business partners. We are inspired that we have received expected response from the countries we have aimed to do business. Our vision is to place signature of our products and services across the globe
Brief Overview of HRM
Meaning of HRM
Human resource including the experiences, skills, knowledge, judgment and creativity belonging to the organization along with the means of organizing, structuring, and rewarding these capabilities. Human resource management is concerned with the flow of people into, through, and out of an organization. Human resources planning involve forecasting the need for labor and supply of labor and supply of labor, then planning the programs necessary to ensure that the organization will have the right mix of employees and skills when and where they are needed.
Functions (Activities) of HRM
The functions include a wide range of activities that create a direct impact on each and every part of the organization. The society of human resource management has identified six major functions:
i) Human resource planning, recruitment and selection.
ii) Human resource development.
iii) Compensation and benefits.
iv) Health and safety.
v) Employee and labor relation.
vi) Human resource research.
H R Process
The process of H R planning involves the following steps:
a) Setting Organizational Objectives:
The objectives of the organization must be determined at first. To reach to goals of the enterprise number of persons and their require fitness, experiences and qualities have to be ascertained.
b) Studying the Environment:
On the work of the environment the internal and external environmental factors have impact and influence. So production target, and its socio-economic condition, competition in the markets.
c) Formulating short-term and long-term planning:
In this phase, specific schedules to be used for short-term and long-term shall be prepared indicating required personnel strength with their skill and efficiency.
d) Finding Present Manpower:
There shall be record of employees working at different levels and position. This shall be used for future information and evaluation.
e) Labor Market:
On preparing a manpower list, available sources, both internal and external, have to be searched out and made a comparative analysis.
f) Preparing Manpower Forecasting:
At this stage, a complete manpower forecasting are to be made showing:
i) Retirement, termination, promotion of employees.
ii) Probabilities of changing organizational policies.
iii) Probable expansion of Business.
iv) Possibilities of technological change.
v) Demand of the employees’ etc.
g) Implementing the Program:
For implementation of the HR program, employee recruitment, placement, job evaluation, training and development, motivation, wages and salary structure, promotions and transfers etc. should be prepared in schedules.
h) Adapting the Plans:
Plans should be compared with achieved result, finding deviations if any and taking corrective measures thereof. Plans have to be adapted to the total situation in the organization with environmental changes.
Management and Employee Relations
Employee – management relation or industrial relation indicates the relation between the employers and the employees. The concept is wider. The concept includes the relationship between the management and the employees, between employers and employees, between the owners and the trade unions, between unions and unions, and between the employers and the government. The term industrial relations explain the positions of the employees and the employers at large directly or indirectly.
The Human Resource Management
There are four functional areas of management that any business must concern it with. These are Production Management, Marketing Management, Financial Management, and Human Resource Management. HR Management in a design firm has three primary functions: acquiring human resources, developing human resources, and maintaining human resources- in other words, staff recruitment, retention, and development. A fourth function has recently been added to these: minimization of employment-related liability issues. Liability issues are becoming a greater and greater concern to design firms, as all management activities today have potential liability implications.
Good Human Resource Management is good business
There’s better way to sell managers on a new ides than to appeal to them, rationally and economically. Although it’s not always possible to justify what you propose economically, it could probably be done far more often than often than most people realize. And there really is some tangible economic benefits to effective HR management in a garments company. Those economic benefits fall into one of two categories- indirect benefits and immediate benefits. Indirect benefits to the company arise from not being punished for some misdeed. These misdeeds and their penalties including firing someone for the wrong reasons, then getting slapped with a lawsuit; violating the fair Labor Standards Act damages judgment; or having one of your managers make unwelcome sexual advances to an employee, thus getting the stuck with a million- dollar sexual harassment suit. Good HR management provides tangible economic benefits to the firm by minimizing the likelihood of these events.
Some more justification for good HR management
Ø Between 1986 and 1988 JURY verdicts in wrongful discharge cases averaged.
Ø Design firms are in the business of selling labor and are therefore only as good as their people.
Ø About 15 percent of the women in U.S. companies say they’ve been sexually harassed on the job in the past year.
Ø The competition for experienced staff has never been greater than was in the 1980s, and it will undoubtedly get worse in the 1990s.
Ø About 115 percent of workers age 51 and older in Fortune 500Companies say they’ve been discriminated against because of age.
Ø Health benefit costs are skyrocketing, with some firm’s premiums increasing by 50 percent to 100 percent per year.
It should be apparent by now that good HR management saves both and makes money!
Some Statistics
The next step in the process is to set some very specific goals for HR management efforts. This is tough for many firms because, in most cases, they don’t have any historical data to use as benchmarks for how they are currently doing. As a bare minimum, performance statistics should be maintained in each of the following areas:
Turnover
New often each position in the firm, branch, department, or job category is filled with someone new over the course of the time period specified. Performance statistics should be kept on professional, technical, and support turnover and on department-by-department, office-by-office, and firm wide range o turnover, they should be reported on a current month, year-to-date and annual projected basis each month.
Staff numbers
The number of people, who work in the firm, branch, department, or job category. Numbers should be kept on a professional, technical, support, department-by-department, office-by-office, and firm wide basis. They should be reported on a current month, year-to-date and annual projected basis each month.
Utilization Rates:
The percentage of staff time charged to billable projects. Utilization rate performance statistics should be kept on a professional, technical, and support, department-by-department, office-by-office, and firm wide basis. They should be reported on a current month, year-to-date and annual projected basis each month.
Number of position open:
The number and type of positions open in the firm positions filled reported on a current basis each month.
Agency/ Search firm fees:
The total dollar amount paid out to employment agencies and search firms. This should be reported month and should include data on the current month, year-to-date, and annual projection compared to budget
Human Resource Goals:
Employment advertising expenditure:
The total dollar amount paid out for employment advertising. This should be reported monthly and should include data on the current month, year-TO-date, and annual projection compare to budget
Employee relocation expenditures:
The total dollar amount paid out by the firm to relocate new employees. This should be reported monthly and should include data on the current month, year-to-date, and annual projection compared to budget.
Interview / Offer Ratio:
The number of candidates the firm interviews for a position before extending an offer. This statistics should be kept on a current month and year-to-date basis and reported monthly.
Offer/ acceptance ratio:
The number offers for employment the firm formally extends compared with the number of acceptances received.
Human Resource Management & the Quality Improvement Effort:
- Make sure all teams work within a policy- deployment process to ensure their efforts are consistent with the firm’s goals. Do not institute quality improvement teams as separate, parallel organization structures. Simply trying to superimpose such teams outside the normal chain of command elicited resistance from supervisors, many of whom made comments like “I don’t know what these people are doing -they’re not helping me do my job”. The teams should, to the greatest extent possible, be composed of natural work units.
- Do not treat the quality improvement program as if it has and end. It is important to emphasize that it is really a systematic and continuing way of doing business, one that has no end.
- Recognize that training is essential. Quality improvement is successful largely because training continually upgrades the problem analysis and statistics skills of even first-line employees. This training is crucial both to provider the required analytical skills and also to emphasize the firm’s commitment to the program.
- Remember that whether or not the company achieves its quality goals is important but almost secondary. The new employee values that emerge are the heart of the program.
How to be an effective manager
One of the primary duties of a manager is to keep the performance of employees at a high level. Indeed, much of what a manager does will affect the productivity level of the employees he or she supervises.
There are four general techniques that have a great effect on the productivity of an employee. They are:
-Coaching
-Feedback
-Counseling
-Discipline
Coaching is the ongoing, informal training and encouragement that a manager gives employees on a regular basis. It confirms to the employee that he or she is doing well and gives him or her confidence to continue the behavior. It most often takes place while the employee is working.
Feedback occurs when managers provide specific information to employees to let them know how well he or she is performing. This frequently takes place while the employee is working or when he or she has just completed a task.
The Human Resources Process
The activities involved in human resources management should be viewed as a series inter related steps that managers and specialists perform to acquire and maintain the right people in the right positions.
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Human Resource Planning:
Well managed companies must forecast future personnel needs carefully. They are for too important to be left to guesswork. The overall human resources planning process for an organization, which includes forecasting the demand for and supply of personnel, has three parts:
I. Forecasting the personnel requirements
II. Comparing the requirements with the talents of present employees, and
III. Developing specific plans for how many people to recruit.
Human resources forecasting:
Human resources forecasting attempts to predict the organization’s future demands for people and for jobs. Major factors to be examined are the company’s objective (growth, construction, status quo) and the employment history of the company (retirements, resignations, terminations, promotions, and deaths). The combination of these two sources results in an initial forecast of personnel needs.
Job analysis
Job analysis is the gathering and analyzing of data about a specific job so that a job description and job specification can be written. It clarifies the nature of the work and the conditions under which it is done.
Job description
Job description is a written summary of the scope, function, duties, responsibilities, and relationships involved in a job. Job descriptions help management to select, orient, and compensate employees effectively.
Job specification
Job specification is a document that describes the characteristics and qualifications needed in someone who could successfully perform a given job. Job specification helps managers determine an applicant’s fitness for a certain position by defining qualifications for education, training, experience, and behavioral qualities the person must have to perform the job. A company is much more likely to recruit and eventually sect beer employees if it has clear job specification.
Recruitment:
By recruitment the organization attempts to identify and attract candidates to meet the recruitments of anticipated or actual job openings.
Objectives:
Ø Ensuring compliance by organization with government Regulations
Ø Maximizing the pool of applicants at minimum cost.
Ø Attracting suitably qualified & skilled applicants.
Energypac BD Ltd follows some General Guide Lines for recruitment
Ø The Company employs the best person for every position amongst those available for selection, according to the company’s authorized Employment procedure.
Ø No employment in any category can be made unless the position has been approved in writing by the management.
Ø Minimum Educational standards are laid down for every position depending on the requirement of the position.
Ø No discrimination is made in selection due to religion, cast, creed or Regional considerations.
Ø Ordinance Instruction.
Ø No discharged or dismissed workers of the company shall be reemployed except under the requirements of law.
There are two sources of applicants- internal and external. Internal sources are the employees of the organization. This has a positive impact on the organizational member and the internal working environment. The opportunity for advancement has three distinct benefits:
1. It can reduce turnover.
2. Provide incentive to learn jobs quickly and
3. Assist in making the individual a functioning member of the organization faster because the person already knows the policies and expectations of the company.
Another method is to attract candidates by announcing job openings in company newsletters and by posting position vacancies on bulletin boards. This strategy provides all employees the equal opportunity to apply if they see the notices.
Types of Recruitment:
As per this schedule of recruitment,- selection of any personnel against any specific post will be done in two ways as follows:
a. Direct recruitment, and
b. Recruitment through promotion.
a. Direct Recruitment:
It will be done through open advertisement. None of the applicants will be considered for direct recruitment unless he/she:
Fulfils the criteria mentioned in SIL schedule.
If any post as per schedule is not available for promotion, and if it is not referred by the selection committee.
Probation:
Ø Anybody recruited directly will be under probation for a period of three months. But the concerned department or recruiting committee can extend the probation period for further three months.
Ø The management has right to cancel the service contract if his/her performance is found to be unsatisfactory during the probation period.
Ø Confirmation of service depends on the satisfactory performance of the candidate.
b. Recruitment through Promotion:
Ø Management can fill certain posts through promotion if candidates are found available & suitable for the required post.
Ø None will be considered for promotion if his/her service record is Unsatisfactory.
Recruitment Procedure:
Ø Providing advertisement in the newspaper, local areas
Ø Providing notice on the notice board.
Ø Head-hunting
· Interviews are conducted on the candidates, which includes the following process.
a. Viva voice
b. Practical test on individual’s skill.
c. Health test by company appointed physician.
Appointment letter is issued to the selected candidate that includes the detailed terms of employment.
· Upon joining the company, a separate file is created for the individual worker in order to maintain his/her service records. This file contains the following information.
i. Detailed bio-data of the employee.
ii. Job application.
iii. Evaluation report during the interview.
iv. Educational certificates and/or .
v. Age certificate.
vi. Increments & benefits
Interpretation:
Form my point of view internal sources sometimes may not hold good for mid and upper level positions requires specialized training and experience, if they are not available within the organization.
For certain opening it may be necessary to hire individuals from the outside who have gained form another employer the knowledge and experience for the jobs.
Selection:
Selection is the process of deciding which candidates, out of the pool of applicants developed in recruiting, has the abilities, skills and characteristic that most closely match job demands. The decision comes after the candies go through a series of steps that compose the selection process.
Selection process:
The decision making system used to identify which job applicants are best suited to the vacant position.
Key aspects:
-Reliability
-Validity
-Selection devices.
Orientation:
Once an employee is hired, it is important to bring the person into the mainstream of organization as quickly as possible. Firms accomplish this by developing and orientation program-a series of activities that gives the new employees information to help them adapt to the organization and their new jobs.
Training & Development
What is training?
Training is a systematic process of changing behavior or attitudes of employees to improve the organization’s effectiveness. It is usually accomplished by providing learning experiences or educational opportunities to staff members. Learning is not an end in itself; training should improve job performance. In addition to improving job- related skill, training experiences can also be a significant motivator. In one study of the motivations of professionals, the chance to grow and learn was fourth on the list of important motivating factors.
Development:
Development refers to teaching managers and professionals the skills needed for both present and future jobs. Since training involves learning, certain principles of learning theory apply to job- related training for design and other technical Professionals. These principles are: All human beings can learn, even if not at the rate
· To orient new hires
· Teach new employees how to perform their initial assignment
· To learn, individuals must be motivated.
· Learning is active process and is stimulated by involving the senses.
Performance:
Performance is defined as evaluating an employee’s current as past performance relative to his or her performance standards. Keith Davis said that “It is the process through which the organizations access the quality of work of its employees and attempts to improve the performance.”
Promotion
One employment decision is a promotion. A promotion is a movement by a person into a position with higher pay and greater Responsibilities. Promotion reward competence and ambition. They act as incentives to perform above the average in one’s present job and to expand one’s abilities, aptitudes, and knowledge through additional training.
Promotion decisions, even though they should be rewards for performance, often are influenced by other factors, federal and state laws affect the ways in which promotions can be made. Affirmative action programs may dictate who or what kind of person gets the promotion. Promotion of the best qualified and most eligible may be blocked by seniority rules and the union performance.
a. Termination of service:
For termination of the service of a permanent/temporary employee by the employer, his employer shall give 120 days’ written ‘notice in the case of permanent employee and 60 days’ written notice in the case of Temporary Employee. Provided that pay for 120 days or 60 days’ as the case may be shall be paid in lieu of such notice provided further that the worker whose employment is so terminated, shall be paid compensation at the rate of one month’s pay for every completed year of service or for any part thereof in excess of six month in addition to any other benefits to which he may be entitled to under the terms of employment.
b. Resignation:
1. A permanent employee shall be required to give one month’s written Notice in case of resignation from the services of the company.
2. An employee who resigns from service of the company but fails to give the required notice shall surrender pay in lieu of such notice thereof.
3. The employer shall accept the resignation if due notice is given or due payment in lieu of notice is made pay is surrendered in lieu of such notice.
4. Notwithstanding anything stated above no employee against whom a disciplinary proceeding is pending shall resign from the service of the company unless 60 days’ have elapsed from the drawing up of the departmental proceeding.
c. Discipline & grievance procedure;
- Where an employee of the company in the option of the employer is inefficient, or
- Corrupt, or
- Guilty of misconduct under Bangladesh Labor & Industrial Act, the employer may impose one him/her or more of the penalties, if after enquiry. S/he is found guilty of any of the charges.
Human Resource Planning:
There are numerous considerations that the human resources professionals must take into account. For instance: “Inconsistencies between culture and strategy can severely impair the successful pursuit of a given course of action.”Often the political aspects of producing a viable plan are insurmountable obstacles to overcome; as are other primary factors such as the process itself or the plan measurements. Only the most seasoned corporate politician often has enough sensitivity and negotiating skill to achieve the pre-planning buy-in of the critical powers.
The concept of planning boiled down is that in order to determine the direction for human resource plans you must have “a series of questions that your organization needs to answer in order to predict and perhaps control some of the major change areas for the future. This means that you begin by asking the right questions – the questions which, if asked regularly and systematically, will force you to produce answers of maximum value in shaping your future human resources.” It is also important to look at the planning activity from an activity standpoint. From an operational view human resources planning is the analysis of human resource requirements of organizations and the related needs for management policies, programs and resources to satisfy these requirements. As is shown by Figure A, human resources planning are critically interdependent with all aspects of the business. “A human resource strategy is a critical component of the firm’s corporate and business strategies, comprising a set of well-coordinated objectives and action programs aimed at securing a long-term, sustainable advantage over the firm’s competitors. A human resource strategy should be consistent with the firm’s corporate and business strategies, as well as with the other managerial functional strategies.”
The primary objective of people responsible for doing human resources planning is to acquire, develop and implement the technology, tools, expertise and resources necessary to effectively do Human Resource Planning and Development as an integral part of the business planning processes. It must not be done in a vacuum. “Human resource strategies should be developed within a company’s strategic business planning process.”
The strategy that is often the basis for the planning process is to build networks of internal human resources professionals and external human resources professionals that will promote the sharing of information, technology and tools to be applied to the Human Resource Planning and Development activities; Collect, evaluate and implement tools, processes and resources; integrate tools and resources into a consistent strategy which uses existing resources whenever possible. Again and again it is important to make sure that the process is a legitimate piece of the company plan. “Human resource strategic planning takes place within the overall corporate / total organization strategic planning model“They will consult with and to human resource managers and line management to achieve a high utilization of tools and resources to achieve functional goals. Those goals include creating and implementing a workforce inventory and forecasting tool customized for Line Organizations; and creating and consulting on custom management planning tools and strategies for line Organizations.
Figure A is an overview of human resource planning from a strategic planning viewpoint. The model shows the relationship of internal factors and external factors as they relate to the human resources issues. They are factors that not only create; but also shape and change the issues. The business plan usually establishes the basic environment within which other variables impact in order to determine those issues. Out of those issues grow the human resources strategies and plans that are most often developed and implemented by and with the assistance of the human resources department.
When it concerns human resources, there are the more specific criticisms that it is over-quantitative and neglects the qualitative aspects of contribution. The issue has become not how many people should be employed, but ensuring that all members of staff are making an effective contribution. And for the future, the questions are what are the skills that will be required, and how will they be acquired.
There are others, though, that still regard the quantitative planning of resources as important. They do not see its value in trying to predict events, be they wars or takeovers. Rather, they believe there is a benefit from using planning to challenge assumptions about the future, to stimulate thinking. For some there is, moreover, an implicit or explicit wish to get better integration of decision making and resource across the whole organization or greater influence by the centre over devolved operating units.
Cynics would say this is all very well, but the assertion of corporate control has been tried and rejected. And is it not the talk of the process benefits to be derived self indulgent nonsense? Can we really afford this kind of intellectual dilettantism? Whether these criticisms are fair or not, supporters of human resource planning point to its practical benefits that optimizing the use of resources and identifying ways of making them more flexible. For some organizations, the need to acquire and grow skills which take time to develop is paramount. If they fail to identify the business demand, both numerically and in the skills required, and secure the appropriate supply, then the capacity of the organization to fulfill its function will be endangered.
Why HR Planning:
Human Resource Planning: an Introduction was written to draw these issues to the attention of HR or line managers. We address such questions as:
- What is human resource planning?
- How do organizations undertake this sort of exercise?
- What specific uses does it have?
In dealing with the last point we need to be able to say to hard pressed managers: why spend time on this activity rather than the other issues bulging your in tray? The report tries to meet this need by illustrating how human resource planning techniques can be applied to four key problems. It then concludes by considering the circumstances are which human resource can be used.
1. Determining the numbers to be employed at a new location
If organizations overdo the size of their workforce it will carry surplus or underutilized staff. Alternatively, if the opposite misjudgment is made, staff may be overstretched, making it hard or impossible to meet production or service deadlines at the quality level expected. So the questions we ask are:
- How can output be improved your through understanding the interrelation between productivity, work organization and technological development? What does this mean for staff numbers?
- What techniques can be used to establish workforce requirements?
- Have more flexible work arrangements been considered?
- How are the staffs you need to be acquired?
The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office.
2. Retaining your highly skilled staff
Issues about retention may not have been to the fore in recent years, but all it needs is for organizations to lose key staff to realize that an understanding of the pattern of resignation is needed. Thus organizations should:
- monitor the extent of resignation
- discover the reasons for it
- establish what it is costing the organization
- Compare loss rates with other similar organizations.
Without this understanding, management may be unaware of how many good quality staff is being lost. This will cost the organization directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability.
Having understood the nature and extent of resignation steps can be taken to rectify the situation. These may be relatively cheap and simple solutions once the reasons for the departure of employees have been identified. But it will depend on whether the problem is peculiar to your own organization, and whether it is concentrated in particular groups (eg by age, gender, grade or skill).
3. Managing an effective downsizing programmed
This is an all too common issue for managers. How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organization? A question made all the harder by the time pressures management is under, both because of business necessities and employee anxieties. HRP helps by considering:
- the sort of workforce envisaged at the end of the exercise
- the pros and cons of the different routes to get there
- how the nature and extent of wastage will change during the run-down
- the utility of retraining, redeployment and transfers
- What the appropriate recruitment levels might be.
Such an analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established.
If instead the CEO announces on day one that there will be no compulsory redundancies and voluntary severance is open to all staff, the danger is that an unbalanced workforce will result, reflecting the take-up of the severance offer. It is often difficult and expensive to replace lost quality and experience.
Where will the next generation of managers come from?
Many senior managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognize that while this may have dealt with a short-term skills shortage, it has not solved the longer term question of managerial supply: what sort, how many, and where will they come from? To address these questions you need to understand:
- the present career system (including patterns of promotion and movement, of recruitment and wastage)
- the characteristics of those who currently occupy senior positions
- the organization’s future supply of talent.
This then can be compared with future requirements, in number and type. These will of course be affected by internal structural changes and external business or political changes. Comparing your current supply to this revised demand will show surpluses and shortages which will allow you to take corrective action such as:
- recruiting to meet a shortage of those with senior management potential
- allowing faster promotion to fill immediate gaps
- developing cross functional transfers for high fliers
- hiring on fixed-term contracts to meet short-term skills/experience deficits
- Reducing staff numbers to remove blockages or forthcoming surpluses.
Thus appropriate recruitment, deployment and severance policies can be pursued to meet business needs. Otherwise processes are likely to be haphazard and inconsistent. The wrong sort of staff is engaged at the wrong time on the wrong contract. It is expensive and embarrassing to put such matters right.
HR Planning Application:
The report details the sort of approach companies might wish to take. Most organizations are likely to want HRP systems:
- which are responsive to change
- where assumptions can easily be modified
- that recognize organizational fluidity around skills
- that allow flexibility in supply to be included
- that are simple to understand and use
- which are not too time demanding.
To operate such systems organizations need:
- appropriate demand models
- good monitoring and corrective action processes
- comprehensive data about current employees and the external labor market
- an understanding how resource works in the organization.
If HRP techniques are ignored, decisions will still be taken, but without the benefit of understanding their implications. Graduate recruitment numbers will be set in ignorance of demand, or management succession problems will develop unnoticed. It is surely better if decision makers follow this maxim in the way they make and execute resource plans.
HR Planning Process
The planning processes of most best practice organizations not only define what will be accomplished within a given timeframe, but also the numbers and types of human resources that will be needed to achieve the defined business goals number of human resources; the required competencies; when the resources will be needed; etc.
Competency-based management supports the integration of human resources planning with business planning by allowing organizations to assess the current human resource capacity based on their competencies against the capacity needed to achieve the vision, mission and business goals of the organization. Targeted human resource strategies, plans and programs to address gaps hiring / staffing; learning; career development; succession management; etc. are then designed, developed and implemented to close the gaps.
These strategies and programs are monitored and evaluated on a regular basis to ensure that they are moving the organizations in the desired direction, including closing employee competency gaps, and corrections are made as needed. This Strategic HR Planning and evaluation cycle is depicted in the diagram below.
Implementation Stages
The following implementation stages are suggested for mid to large organizations implementing competencies in support of Strategic Human Resources Planning.
Stage 1
- Establish a Competency Architecture and Competency Dictionary that will support Strategic Human Resource Planning.
- For each group to be profiled, define the roles and career streams to help identify current and future human resources needs.
- Determine how competencies will be integrated with the existing HR Planning process and systems (e.g., Human Resource Information Management systems; other computer-based tools, for example forecasting models).
Stage 2
- Build or revamp HR Planning tools, templates and processes to incorporate elements as determined in Stage 1.
- Train managers and / or facilitate corporate HR Planning process.
- Continuously monitor and improve processes, tools and systems to support HR Planning
Overarching Policy, Process & Tools
Common Competency Dictionary and Architecture
Establishing a common Competency Dictionary and Architecture is fundamental for the successful implementation of competencies throughout the organization. Maintaining this common architecture is essential for ensuring that all human resource management applications are fully integrated and that maximum efficiencies can be gained. It is important, therefore, to identify an organizational group accountable for the maintenance of the Competency Dictionary and Architecture on an ongoing basis.
Human Resource Information Management Infrastructure
In a recent review, the CBM talent management initiatives have not necessarily yielded the desired benefits and return on investment, for the main part because organizations have not invested in the talent management software systems and infrastructure to facilitate full and effective implementation. To gain maximum benefit from CBM, organizations need to have a human resources management system and on-line tools and processes that will support many of the implementation recommendations contained in this document.
Governance / Accountability Structure
Organizations that have effectively implemented competencies on a corporate-wide basis have ensured that there is an appropriate project management, governance and accountability framework in place to support the development, maintenance and revision / updating of the competency profiles to meet changing demands.
Process Implementation Stages
The following implementation stages are suggested for mid to large organizations.
Stage 1
- Establish a Common Competency Dictionary and Architecture to support competency profiling within the organization.
- Ensure that the internal (and external, if needed, such as consulting expertise) project resources and framework are in place to support the development of competencies and their implementation in the planned applications. (This is critical to the successful implementation of CBM.).
- Review and establish the governance structure and accountabilities for implementing and maintaining CBM within the organization.
- Communicate the importance and the benefits of competency-based management for employees, managers and the organization regularly and widely.
- Identify the infrastructure and system requirements to support full implementation (e.g., Human Resources Information Management System; other on-line software tools needed to support various CBM applications).
- Develop the competency profiles.
- Implement the competency profiles in a staged-way to demonstrate benefits and create buy-in (e.g., as soon as profiles for a group are developed, implement quickly within a low-risk high-benefit planned application for the group).
- Communicate success stories as competency profiles are implemented.
Stage 2
- Develop, revise / update competency profiles to meet changing demands.
- Monitor and evaluate applications to ensure that they are meeting organizational needs, and adjust programs / plans, as needed, to meet evolving needs.
LONG-TERM PLANNING for SHORT-TERM SUCCESS:
Often, however, operating pressures move all of the planning from a longer-term focus to a short-term one. That normally tends to create an environment within which the plan cannot be fully successful. “Over-reliance on short-term planning can be quite costly. Ample lead time is required to recruit or develop talented personnel, and reaction management that responds to short term events or needs will usually limit the choices of options or endanger longer-range economic plans.”
As most planning models would indicate, the planning processes need to be circular and connected dynamically. “The link between human resource planning and business strategic planning is vital if personnel programs and systems are to be attuned to the changing needs of an organization.”
The relationship between short and long-term planning goals and activities are shown in Figure B. This is a dynamic model. If you consider each of the four boxes as analogous to the legs of a four-legged stool, you can see the impact of removing one leg of the process. The impact of not doing long-term human resources planning is to cause the overall business plan to be limited to current human resources in trying to accomplish the plan. To achieve most long-term business plans requires some change in human resources from current state to the necessary state. The business goals achieved are often less that those possible with successfully implemented human resource plans.
WORKFORCE PLANNING:
In exploring the strategic human resource issues, a basic step is to determine if the organization has the ability to execute its strategies.
Workforce inventory and planning is an integral part of human resources planning. It is where the greatest amount of energy is usually spent because it is the most quantitative part of the planning activity. People who view workforce planning as being the total work of HRP define human resources planning as “planning for the corporation so as to have the right numbers of people at the right time, at the right place and with the right skill.”
Necessary to any business success are strategies, components, and tool development. Workforce planning strategies that are necessary to success are: to become a part of the business and operations planning teams; and to automate the collection, processing and analysis of quantitative data. It is apparent that any attempt at having the line management do useful and credible workforce planning is dependent upon that availability and use of automated capabilities that remove the “numbers crunching” aspect of the exercise and allow the manager to concentrate on the qualitative and forecasting part of the plan. “The two essential building blocks for human resource planning are: a comprehensive human resource information system; and a basic business plan.”See Figure C for a snapshot picture of the integrated workforce planning process. Note that every aspect of the model is interdependent with every other aspect. The workforce planning components that make up the plan include a workforce forecast / business plan, current workforce inventory and adjustments, and workforce change needs. The forecast / business plan is a listing of all labor required to meet business plans. It is usually forecasted by fiscal year quarter and by job classification (long-term goals should be to do forecasts by skill needs instead of job classifications). The current workforce inventory and adjustments component is a listing of all employees by labor category, job classification and fiscal year quarter. Anticipated changes in the population and workforce due to attrition, college hiring, promotions, job rotation, etc. are accounted for. The workforce change needs component is the part of the workforce plan that states the differences between employee workforce projections and planned business workforce needs by group, job classification, fiscal year quarter, etc.
Human resource forecasting involves making projections of both the organization’s personnel needs and the available supply of qualified and skilled people. To the extent that these projections of demand and supply are not fully compatible, detailed strategies will need to be developed to fill whatever gaps may exist.”
A workforce planning tools development program is usually necessary even in the most experienced organizations. It often includes steps such as:
1. Develop a capability for computer based personnel database manipulation and analysis
2. Determine inventory reporting data and format needs of organizations
3. Construct one set of reporting formats for workforce inventory and planning
4. Introduce and modify workforce-planning tools to the line organizations and consult to organizations on technology, process, tools and quality.
“The more different technical skills there are involved in the design, manufacture, marketing, and sales of a product, the more vulnerable the organization will be to the critical process, and the higher the interdependence among the various specialists. The higher the interdependence, the greater the need for effective integration of all the specialties because the entire process is only as strong as its weakest link.”
As can be seen in the model and suggested process in Figure C the process is continual and circular. Almost every aspect of workforce analysis and planning is subject to the change made in any other aspect. The interdependence of all parts of the process is important; but the external variables are just as important. Consider, for instance, the impact of something as unpredictable and simple as a flu epidemic on a workforce plan. The plan will need to change to reflect increased absenteeism, etc. The driving business plan will probably change because of the human resource capacity; but even more certainly the people part of the plan will change.
MANAGEMENT RESOURCES PLANNING:
A good human resource plan will almost always include a management resources plan. The objective of such a plan is to provide strategies, tools, technology and expertise for the planning for and development of current and potential management human resources in order to allow for enhanced management of the business. See FIGURE D for a model of management resources planning. As Dessler points out: “Management development is important for several reasons. The main reason is that promotion from within is a major source of management talent.”
The primary strategy is to acquire and develop tools and resources to meet the long-term management needs; consult on the development of group and individual strategies and development. “The call for improved productivity from managerial professional and technical positions ultimately translates into improved individual performance.”
Very often, specific goals include:
• to develop generic strategies and tools for needs assessment and inventory;
• develop and implement Management Development planning tools;
• identity and integrate Management technology and expertise;
• and to implement and institutionalize Management Development.
Specific program plans may include:
• using workforce planning results for parts of needs assessment;
• fostering integration of consultative expertise in Management theory and practice into planning efforts;
• consulting with Managers on Management Resources Planning and Development;
• and building a reference capability for management development programs and resources.
Similarly, management development facilitates organizational continuity by preparing employees and current managers to smoothly assume higher-level positions.” As figure D shows, management resources planning is a segment of overall workforce planning; however, it is generally singled out in the planning models as a separate activity. There are some excellent reasons for this singular treatment. First of all, a company’s management is commonly considered an important company resource and asset by itself. As a matter of fact, when companies are evaluated for mergers or acquisition their management assets are always an important factor in the decision formula. Second, when developing support for a plan, it is important to demonstrate that the plan will attend to the vested interests of those that must approve and support the plan if it is to be successfully implemented. Third, the overall responsibility for the utilization and contribution of a company’s human resources belongs to the management resources. Therefore, all of the impact of the human resources plan is the responsibility of the management.
CONCLUSIONS:
Human resource planning is probably one of the most critical elements in linking the work of the human resources function to the business goals of the company. “It is important to recognize that certain aspects of human resource management tend to have potentially high strategic consequences.”
Especially in the areas of policy development and implementation it is “obvious and difficult to refute advice that effective human resource policies require human resource planning, which in turn, requires effective integration with an organization’s strategic planning process.”
It is evident that human resources planning are becoming more and more important in business circles. “Because business profits are squeezed by inflation and a weakened economy, management is also concerned with personnel costs and is seeking to achieve increased output with the same or fewer staff.”
Productivity concerns and material constraints also add to the emphasis on the ability to plan and fully utilize all of a company’s resources. The human resources are right on the top of the list in most enterprises. “The current demands on the world’s material resources and their spiraling cost are building pressure to increase the productivity of human resource.”
Government at all levels both nationally and internationally (Federal, state, local, etc.) is interested in how employers treat their employees. They, therefore, add factors that must be considered in any human resource plan (work and wage laws, labor laws, etc.). “The net impact of the expanding government intervention has been an increase in the attention given to human resource planning in all of the problem areas.”
So, while the principles and processes of planning have not changed much, the complexity and timeliness have. Information technology enables the collection and analysis of more data than was even dreamed of in the 1980s. The complexity of planning across countries, cultures, economies, and new technologies is almost infinite. This makes the art, the gut feeling, the best guess, that much more important. The best that can be accomplished is to predict the probability of multiple successful solutions.
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