Lec-4 Human Resource Planning-I

Good morning, today, we have the topic of Human Resource Planning, now you all know what planning is right, yes or no? Yes Tell me what is planning? Planning is planning, what is planning, tell me again, making schedules in advance, so something into the future advance is it not? You look into the future and make schedule, can you give me an example? We plan how to study for exams, prepare for exams, plan how to study for exam, what would be the plan? What to study and when to study? Yes, so what to study and when to study; so then some of the definitions which have been given for planning are here Human resource planning, for short we call it HRP is a process by which an organization strikes a balance between human resources required on the one hand, and acquired on the other hand in the organization. So, there are two distinct steps, first step is, to estimate how much you require, second step is then you acquire, what is estimate? And it is like a balance sheet, you have to strike a balance. If you want a good plan, the good plan will only have the first component, and the second part of the planning definition, that is acquiring will be done by what we call recruitment and selection So, you plan, see one definition says that, it is the whole thing that it includes making the plan that is what is required, and also the acquiring process. But most people look at it in two aspects, they say plan is making an estimate of what is required and implementing that, plan is basically the recruitment and the selection. Now, tell me how do you think you will estimate, what manpower you will require for human resource planning human resource planning in organization, what is the work requirement? So, we say what is the work requirement and how do you go about that work requirement, whom do you ask or how do you make it out? The sales department; sales department, so you ask the sales department, why you ask the sales department? Because they are going to sell the product, because they are going to sell the product, going to sell the product,

so what is the outcome? The output when you ask that question to sales, what is the output you will expect from the sales, what will sales tell you, they can tell you how many products they will sell is it not? What else, we are talking a HRP human resource planning Turnover, turnover means sales, turnover means how much sales in rupees. Sell and profit, sell and profit how it tells you how many people will require, is it not? Can you think, you ask sales we are following a line of thought where we say what is your manpower required, you ask the sales department, and why he says because they are going to sell the product, then if you ask the sales department how much manpower our organization requires, will they be able to tell you because they sell the product? They will not directly say this; you need a figure to estimate this I am at a loss to understand, say I am in sales and you are in HR, and you asked me look in our company how many people will our company require next year, say starting from 1st of April 2005 to 31st March 2006 next year. Now, we are in the month of October, so I say that, we require making a plan for next year So, the entire organization, HRP is for the entire organization, isn’t it? So, how will you as HR manager go about making a plan for the manpower; the human resource, not only by asking sales, you ask all departments, is it not? Because each department will be able to estimate, what will be the number of people that they require for them to carry out their planned work? For instance, if the sales departments ask what are they going to do, they are going to have internal meeting, then they say, next year what is it that we are going to sell, do you know our target? If they say yes, we know our target. Management has asked us to sell 20 percent more than last year, then do we require more manpower to sell 20 percent more or not? This is a sort of question they themselves will ask, there are right people to tell you Do you think they will require more manpower for 20 percent sales? No, why not 20 percent more, why? Because they are also going to increase their efficiency, they are also going to increase their efficiency. So, they have to debate among themselves you know in their own department, how much manpower we require, and it will then depend on many factors, as he said efficiency; if we increase efficiency then, you do not require a proportionate increase in the manpower in proportion to the amount of sales increase, any other factors it will require. Job scheduling, Job scheduling, now what exactly do you mean by job scheduling? You are in the sales department, imagine you are sitting in head office in Calcutta, you have 20 salesman in your department, now you are saying you schedule your job that is one of the factors that will depend on how much increase of manpower you require to make 20 percent more sales, so scheduling it may be correct, what you are saying, but how? We know that you start work on 1st April and you end on 31st march, there is the period for which you have to increase and normally they break it down every month what should

be the sale The annual sale is x; then the multi sale is divided either by 12 or if there some period like Pooja your holidays, we saw at month of October, if it is Pooja, then you cannot have one-twelfth because they will be less sales, so some other months you have to make it up. So, you make a plan of how much sales you get, how many orders you get every month But he is right, you know scheduling, for instance in Kolkata, you may be looking after the whole territory of West Bengal and Bihar, Jharkhand and Assam and all the other north eastern states, so if you regroup the territory which one person is going to cover; if you schedule it by regrouping the territory after all in order to sell people have to travel, they have to travel to the places meet the customer So, if you regroup territory on a logical basis which is clusters, say two salesmen will visit clients in one cluster then, you are saving a time of their travel, by saving time you are throwing up more time for them to visit more clients, because travel time is saved. If they visit more clients, the chances are that they will be able to get more orders that is the assumption to visit client you can get more orders, so scheduling is one Similarly, you are asking all the departments and finally what we going to get from all departments, for the year as we say 2005-2006, we have sales department, what other department we have? Production department, then finance department, what else? Yes, your own department let us say, HR department itself. I will put it into bracket because that you have to do yourself, let us say R and D, from each of these you get a figure So, this is a kind of process by which you will ask each department how much they are going to need is it not; so HRP, therefore see this definition, HRP includes estimation of how many qualified people are necessary, just now what we were discussing is just a hash total as we call it. You are not classifying into various qualifications or categories or skills, we just saying total numbers, but that is not good enough finally, finally in real life you have to get what categories of people you will require So, it includes estimation of how many qualified people are required, or are necessary to carry out the assigned activities. How many people will be available and what if anything must be done to ensure that personnel supply equals personnel demand at the appropriate time in the future. So, now you find another aspect here, how many people will be available? That also is important, you may find that you are able to find out how many you require, how much are necessary, but what if they are not available, how are you going to get them? So, in the HR department, that is your responsibility, when people asked you that we require so many men of so much qualification, it is your job then to fill those vacancies isn’t it? In IIT, whose job is it to fill vacancies for faculty members? Register’s job, dean of faculty and planning, head of department, whose job is it? Do we have a planning process in IIT? There is a selection committee; there is a acquiring part of it, acquire what about

human resource planning, among human resource in our IIT you may require faculty, there is one classification, then staff and officers that will be second classification, third classification may be subordinate staff So, there does not seem to be any HRP in this organized educational like you will have in normal companies, where in normal companies every year there has to be what they call a budgeting exercise. Now, budgeting exercise does not only mean money budget; now, when we talk of budget we think of money. So, in companies, in organization profit making companies budget also means, first the money budget and then the manpower that is a personnel or human resource budget, and then also the capital budget. Now, here in educational institution, we do a capital budget that is what is the infrastructure we will require, what is the money we will require. So, two types of money: one is money by which you make infrastructure you create an asset, and the other is, that is called capital expense, because you create a lasting asset which can last for 10 years – 20 years Other is revenue expenses, which is money which you spend and is gone, you buy some goods and services for it, but you do not create an asset, what are those expenses? Salary, yes, you are buying services of people, but do you see a building or a pipeline or anything you do not create an asset, so that is revenue expenses. So, here we do the money budgeting, but here we do not seem to do the planning for faculty because I do not think we see plans into the future, how many will retire this year and therefore, how much will be the expansion, what new departments should we expected to come, what kind of people you will require? Today, we have got 19 departments, if you make a five year plan and then break it up into one year plan thereafter, and then you will find that you get closer and focus closer to right. If we are going to expand the student’s trend you will require more people, if you are going to add new departments, you will also require more people, but there will be a difference. In new department the type of people and the qualification may be different than expecting, to expect mechanical engineering department, we will require mechanical engineering oriented faculty, but if you add a new department, you will require more people but of a different qualification, so all these are elements of planning So, unless you plan what is going to happen, if we do not know how many people will retire, how many faculties this year, next year? You would not be able to acquire that, so who does that planning, do you think we don’t know planning at all, someone must be doing some planning; where do you think the planning is done? It may be the HOD’s that is right So, instead of one centralized department like here we are saying the HR department doing the planning for the entire company, there is another way for doing it also. There is a way of each individual departments doing the planning and then sending that plan to a central person, who then takes certain actions So, here probably what happens? If you make a plan and send it to the dean faculty and planning, but here the point I am making is not as structured as in a profit making organization It is less structured, for instance Vinno Guptha School of Management may not be asked by anyone, dean faculty of planning or any other authority, how many faculty we require or how many staff we require. So, I will have to then do it myself by whatever plan I have,

and then send that, but may not be in a form which is the consolidated form, may be in a form on case to case basis, that is I want one faculty or I want two staff So, HRP includes estimation of how many qualified people are necessary to carry out assigned activities, how many people will be available and what if anything must be done to ensure that personnel supply equals personnel demand at the appropriate time into the future. Now depending on what systems you follow will depend on how efficient you are in correctly planning, what will be your requirement in the future, and also efficiently acquiring; efficient acquiring means what? That post should not be unfilled for long length of time isn’t it, that is one indicator of efficiency Another indicator of efficiency is post should not be overfilled, that you have taken more than you have planned, because then you do not have the balance. So, these are the kind of indicators by which you judge the efficiency of HRP whichever department does it, see another definition Human Resource Planning is a process of determining and assuming that the organization will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provides satisfaction to the individuals involved Now, he has added another element, isn’t it? The previous two definitions did not talk of satisfaction to the individual involved This says that that also must be there to fulfill a good HR planning process, and why does it say that? Because we have been seeing in our study of human behavior and management that there is a focus which is too prolonged always, we talk of human satisfaction and we also talk of organizational effectiveness; that is the performance should be good, but at the same time people who are doing the performance, they should be happy and satisfied You are always talking about these two, so the definition has included the second aspect So, this is more holistic and then here you see is another definition, HRP is the process including forecasting; that means estimating, developing and controlling- by which a firm ensures that it has the right number of people at the right places at the right time doing work for which they are economically most useful. So, yet another angle has been introduced here, the money part of it, economically most useful. Now, for it to be economically most useful there are two ways, two elements or sub elements; one is you should deploy the right kind of quantifications for the right table job, because if you are under employing someone that is he is too qualified and you are paying him because of his qualification and experience, but the work he is doing is below the level of work which he should be doing and can be doing, then it is economically a loss to the organization And then the second is the quantity, if you are too many people then obviously, you are wasting money because in order to carry out the work you require less people, you are having too many people. So this concept is introduced into the definition itself, economically most useful, and that raises an interesting question, in many good organizations now in industry. The HR department has a right to question when they ask each department that how many people you will require and what types in the next year, they will get the reply, they will get a chart so many people, and they can have the right for justification,

why? Because the responsibility of seeing that it is economically some company is having it, that there is economy that is on the HR department and there are broad parameters by which you judge this economic use of manpower; very broad parameter. They are ratios basically for the total sales of the company, what was the manpower last year, what is it this year and how much are they asking next year? And as we have discussed earlier, always there is an attempt that it should not be a linear growth, if you expand your business and your sales by 20 percent you should have less than 20 percent manpower; that means, the efficiency should be better So, that is a kind of total factor of productivity ratio which we apply, then that is not good enough sometimes because, the type of job may have changed, type of business may have changed, so you then look at departmentally and see the ratio, how much is the department have in terms of manpower last year what were their business? Can you think of any other ratio in order to just economic use, what is the ratio of number of people to the amount of sales, any other infrastructure, what would be the ratio? Number of persons for number of machines, it may be, because say you have introduced a new system that one man is tending two machines then you have increased the productivity Any other way, may be the profit or the cost if the department is the cost centre, then the amount of money that you have saved over the number of people, and so depending on the type of business, the type of company and the type of industry, you can have different types of indicators to measure, what is the efficiency Another factor may be for measuring is how many direct people and how many indirect people? You understand the difference between direct and indirect? A direct person say in an organization here you might call the faculty as a direct manpower, because the mission and the goal of the organization, what is the main what is our business as educational institution? To impart teaching; and those who are doing the teaching directly, they are called direct people, direct employees. But they cannot do it unless they are supported by various other departments, isn’t it? Administrative work has to be done, so they are equally valuable, they are also supporting the teaching, but not directly you mean indirectly, so they are called indirect staff Now, normally we try to see that economic use of man power is that there should be a high ratio of the direct employees to the indirect employees that is where the efficiency comes. clear now For instance, if we have 50 percent faculty and 50 percent support that is 50 direct and 50 indirect on the one hand, and on the other hand for the same number of students, let us say you are teaching, same exams, same number of courses you got 50 direct, and you only got 20 indirect, isn’t it more efficient? Because look at the other way; that means, if you are as efficient as that with the same support staff, you can teach more students than in terms of support So, these are various ways of trying to see the economy, personnel- they are always indirect because they are support, very important that is why I made clear in the beginning that everyone is equally important. Then, why they will be treated as indirect one, because they directly do not do the job, but we are not saying that direct is more important than indirect. We are just defining the kind of work they do. Why you are assuming, you are assuming mentally that indirect is less important? They are not in certain industries for instance,

R and D department, if it is a knowledge driven kind of company in industry the R and D people are very important, but classification wise they will be indirect because, they are not directly contributing to revenue in stream, money coming. Who are those people? Those people are the sales and marketing usually the sales, marketing also is a semi indirect because they are back office; they do advertising, product costing and so on and so forth, but the sales people who go and actually get the order, they are called direct and the production people who make the goods. You know when the order comes here we produce it either goods or service and that production we will therefore, unless you produce it, you cannot give a bill, so they are called direct, but the indirect are very important, not convinced? And it varies from industry to industry, as I just gave an example such an industry which are market driven like say fast moving consumer goods. If you read these newspapers you have seen this term FMCG, what is FMCG? Fast Moving Consumer Goods examples, soaps, toiletries, health care items, cosmetic items foods, you know, jams, jellies, these are fast moving consumer goods. You also have another term consumer durables, what are those goods? Consumer durable, or white goods they call it, white goods etcetera are durable that is refrigerator, air conditioner toaster, geysers, you know in the bathroom, those are not consumed, they are enduring know, so fast moving consumer good FNCG and consumer durables Now, in these companies essentially, it is clear that competition is very high, so people who are really directly involved is the sales and production people, but does it mean that the others are less important? No, they are not. See, analogy often given is the human body, so I ask you what is the most important tell me, what is your view human body human being which is the most important organ or part, anyone? Now, you know the answer because I told you, but often you have people saying you know brains are more important because the human being is differentiated from animal because they have brains, they can think animals are doing by instinct, where human beings are thinking, but then someone said the heart is more important, because you cannot think if you are dead, No, if the heart stops beating you are dead immediately and so on Then someone says it depends on the situation say, that you are chasing being chased by a tiger who is going to eat you up then, you have lungs are more important, how much stamina you have and your legs how fast you can run, so the debate goes on. So the answer really is each are equally important, but depending on the situation, sometimes one part or organ or one department assumes a little more importance in the eyes of the top management than the others in situations If you have a situation where the company is losing money and you have to immediately curtail the expenditure, so which are the departments then at that time who control expenditure? Accounts and finance, so to top management they become very important at that time, but when market is growing who is becoming important, sales and production because you are losing business, if you cannot produce it market is growing, you can get the orders, production usually becomes more important, because sales can get the orders; it is not that difficult market is growing, but production cannot be you are losing because you cannot deliver or orders are being given by clients, but you have to deliver it, so you have to expand the capacity, you have to produce so that is where production becomes. So, when you select which department of a company you will go into, you can select whichever you

like, all are equally important But then, some people say you see there is always life is not simple, there is always if’s and but’s, some people say if you are in a business, then you should be in a department which generally is a money earning department, because business is all about money. So, those who earn money and those who understand the market place, that are the sales people and marketing people ultimately they will go to the top. Your R and D may be very important, but they do not understand business, they understand technical things Some people do that reasoning, but my advice is whichever you think you are good at and you enjoyed doing, you join that department and if it is a good organization they will see how well you are doing in your existing And if you have got inclination and abilities for doing general business, general management, then they will pick you out and they will train you So, economy you cannot get away from, therefore, objectives of HRP’s ensure adequate supply of man power as and when required, ensure proper use of existing human resources in the organization, forecast future requirement of human resources with different level of skills. So, this brings in objective that management expects the HR department to be proactive; they are to forecast the requirements Now, in order for them to forecast they require some inputs, so they require inputs from the departments – operating departments, they require inputs from the top management of the company of what is the direction in which the company is going to grow unless they know that how can they plan? Then, assess surplus or shortage if any human resources available and available over a specific time period that they assess Then, another objective is, anticipate the impact of technology on job and requirements for human resources. So, before the computer came and the IT came, we used to take more man power to do the job, even in the factory when there were no CNC machines where manually operated machines, their productivity, their production worthiness was lower, when computers came in robots came in, so that is an impact of technology, so you have to anticipate that Now, in the educational field also we have to anticipate, how technology will effect and accordingly the manpower will have to be planned, what do you think will impact education field, what technology? Educational technology where are we sitting, right now, we are sitting in the centre for educational technology. Now, we are recording the lecture, these lectures can be sent to various people, they do not have to come and sit in this classroom What is the next step? We need not even record or even if we record the technology will make it possible to beam this to various other cities, if we have receiving equipment put there, and people can be sitting in class at this time anywhere in the world, if you hook up and beam the lectures real time, isn’t it? So, you can then teach more students with fewer professors, so you can anticipate the technology, the requirement of human resources in terms of number of professors may reduce Now, ministry, if they tell us you are having 4000 students in IIT, you must have 8000 students immediately we think we should double the number of faculty because, there is a limit we set to the classes beyond a certain number of students is not efficient, the learning process and the teaching process, so we have to make sections, each section means two professors

instead of one, now you see how the technology is going to compress it, one professor can efficiently teach hundreds, maybe thousands of people distributed over different sector So, the impact of technology is very very immense, is vast, this has to be anticipated but what is the general direction that technology is taking us with the relation to manpower, what is the general direction, is it reducing the employment and jobs? No. why? Look at the machines on a shop floor the CNC machine works so fast, the machining centers multistate presses they work so fast now. Their entire shift you can eliminate, but you are saying that it does not eliminate job, what views on this, you are all engineers, you have a nagging doubt that it does not actually eliminate jobs, but you do not know why, is it? It creates more jobs, but in different areas, here you retrain the people So, if you are in a factory, you had a press shop with manual presses, and there were 20 presses and you are working two shifts, you have a CNC machine which can make you work with one machine in one shift and it can produce the same amount of job. So, you will have a lot of people who are surplus, surplus in inverted commas, but they would not be surplus because the C N C programming of the CNC, you can retrain those people; you need not have highly qualified engineer, because these are simple programming you can teach, you can remove, you can retrain them for sales, because you can produce more, you can retrain people, so that is why the HR role comes in redeployment with retraining and history has shown that it creates large number of other material. For instance, it shows up new types for instance technicians who are recording this category was not there 50 years ago, because technology was not there But another category which was there is extinct now, what is that? Draftsman; do you find any draftsman in any office, 50 years ago any engineering office will have huge drawing boards you know, departments all draftsman there you need a draftsman; junior draftsman, senior draftsman whole career there doing drafts drafting. Nowadays we do not have; does that mean there is less jobs? No, if u look at the macro indicator, jobs are growing So, although this is a kind of paradox, although it appears the technology is reducing jobs and it is immediately in the short run, in the long run it is creating more jobs. So, control the human resources already deployed in the organization; that means what, how do you control, what do you mean? If they are already deployed like draftsmen or when we had computers which when it first came in 45, 50 years ago, what was the computer in every organization? Huge mainframes, we used to call it mainframe computers, with air condition block and it was like a temple, you have to remove your shoes whispering soft voices and go in computer. Nowadays what is computer? It is lying around, you know strewed around, laptop you are carrying it many of them are more powerful than your computers which you had huge box that all of us know, it has become miniaturized and the computing power has expanded, so distributed processing has become order of the day In those days, all the factory’s union agreements, we say computer operator was one category; that means, they came and they only operated computer, they did not do anything else, no one else operated computer, you wanted anything to be fed into the computer, you will send it to the computer operation department from each department of the factory, they will feed it, they will only operate the computer, that concept is gone today. In whole of this institution we have so much computing power

know in IIT, do we have any computer centre that we sent in. No, we all compute here So, what has happened to the computer operator category is extinct species but, are they extinct? No, they have been retrained, they have been used elsewhere, but say you did not do that then what would happen? Then, they will sit there and this is what is trying to point out, to control the human resources already deployed. They would be earning their wages and salary doing no work, because everyone is doing their work on PC’s. So, you have to redeployed, you have to constantly see monitor, that with the change of technology change or with the change of the business of the company and the products they were selling, they are no longer selling. Has there been any change in the type of work? And if so, what is the deployment of the people? That control you have to do and that is done by HR people; Provide lead time available to select and train the required additional human resource over a period of time The ultimate objective is to relate future human resources to future enterprise needs so as to maximize the future return on investment in human resources, investment in human resource is personnel related cost Each company in their annual report, sometime would give a pie chart, a kind of pie chart and then they will say personnel related expenses, then they say will materials used, these are all costs, then these are overheads and various other elements of costs. And this has to be studied to see that this remains a percentage which is commensurate with the type of business you are in, and the type of products that you make So, the paradox often is that even with growing unemployment, there has been shortage of human resources with the required skills, this we hear again and again know. On the one hand, we have large quantity of people, but when we want to have someone, we do not seem to find the right person to fit into our kind of job. And large numbers of employees who retire, die, leave organizations, or become incapacitated because of physical or mental ailments, need to be replaced by new employees, human resource planning ensures smooth supply of workers without interruption And human resource planning is also essential to replace workforce turnover; turn over means people separating from the company, leaving the company for whatever reason, these cause constant ebb and flow in the workforce in many organizations. Technological changes and globalization assuring in change in methods of production, distribution and servicing of goods and products what we are talking about? Change in the method, these changes may require change of skills that is why we say you have to redeploy and retrain, as well as the change in the number of employees, we discussed this, HRP helps management to adjust and cope with such changes. If you have questions please interrupt me ask your questions What is EBB? Means ebb and flow that is something if you stand on a sea shore you will find that the tide goes out after so many hours then the water comes in near that is the ebb and flow – reduction and increase Then HRP of course, is required to meet the needs of expansion and diversification of the organization, say, you want to diversify into a new business immediately HRP’s role is very important because, you have to hire that new skill which has never been there in the organization before. Identifies areas of surplus personnel and also areas where

there are shortage of people, steps can then be taken to redeploy and or recruit or downsize, downsize means what? Give VRS or ask people to go, that is reduce the people downsize Manpower planning VIS-A-VIS human resource planning; now they are making a distinction between these two terms manpower planning and human resource planning. HRP which is human resource planning concentrates on the developmental aspect of the employee, apart from the traditional activities of manpower planning that is MP, like manpower forecasting, job analysis, career path, training etcetera It addresses the human and the humane side of people to unleash the potential productivity and performance by promoting job satisfaction, organization commitment, self development etcetera.- all of which contribute to the overall performance and well being of the organization Now, are you able to see the distinction they are making between HRP and MP or not, can you see the distinction, is it clear to nobody, no one? Alright, so HRP concentrates on development, developmental of whom? The people, they are focusing on the people as individuals and also groups whereas, MP does what? It focuses on numbers and types. Now, you see the difference, if I focus on you as person, but I focus you as a type and number, that is mechanical engineering, roll number so and so. Type mechanical engineer post graduate thermal, but I focus on you as a person, name so and so, staying in this hostel, these are the kind of developmental needs, requires to attend the course on human resource because never had that before, I am concentrating on the human being and not on the numbers, now is it clear? So, the planning is to fold, HR Planning – this is the concept being introduced, it plans at macro level of how many people of what qualification, what type, in which department and when, what and when we say, but having the people already there with you, it also plans what is the kind of jobs they are likely to get into, what is the kind of training they require, in order to grow and so on So, sometimes that is called the HRD – Human Resources development, so that is the distinction we make It addresses human and humane side of the people to unleash the potential productivity and performance by promoting job satisfaction; that is motivating the people how to do organizational commitment, that is building a culture, where people are very happy to be working with that organization, like you happy to be working with Tata’s or Larsen and turbo commitment to the organization. Self development, happy that they have got the opportunity to learn about more computer usage, because these facilities are available, to attempt few courses – training courses to learn more instead of just what they learnt when they joined the organization, to develop, so that is the aspect which HRP addresses The factors affecting HRP; type and strategy of the organization, organizational growth cycles and planning, environmental uncertainties, time horizons, type and quality of forecasting

information, nature of jobs being filled, off-loading the work, everything is clear? All these factors- they affect human resource planning, all clear? Time horizon when do we require? Remember, we said planning was, what and when, remember that, so horizon is when, we say what and when? Horizon is something which is far off, so you require it in longer time, any other questions? Now, we will take a five minute break