HUMAN

RESOURCE
MANAGEMENT
COURSE DETAILS
Unit-1 Introduction
Unit-2 Human Resource Planning
Unit-3 Job Analysis & Design
Unit-4 Employee Recruitment & Selection
Unit-5 Training & Development
Unit-6 Performance Appraisal
Unit-7 Rewards Management
Unit-8 Employee Grievances & Disciplines
Unit-9 Labor Relations & Labour Regulations in Nepal
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 Keshav Gadtaula

https://www.facebook.com/ksvgadtaula/

9851253357

[email protected] 9/22/2020 9:48 PM

 HR planning concept
Characteristics
Importance
HR PLANNING

HRP process
Major HRP activities:
• Assessment of current HR
• HR inventory-management and skills inventory
• HR information system
• Succession planning
HR demand and supply forecasting.
Techniques of HR demand and supply forecasting

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Planning is knowing
where to go and how
to get there.

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 Human Resource
Planning?
Human resource planning involves getting the right number
of qualified people into the right jobs at the right time.

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Concept - Human Resource Planning
• HR planning is the process of analyzing and
identifying the need for and availability of human
resources so that the organization can meet its
objectives.
• It ensures that the organization has the right
number of employees in the right place at the right
time so that critical HR planning problems can be
solved as and when occur.
• HR department engages in determining the right
number manpower needed.
• The number of manpower in demand and supply
derived from environmental and operational
analysis.
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Concept - Human Resource Planning

Gary Dessler:
“Human resource planning is the process of deciding what positions
the firm will have to fill and how to fill them.”

Decenzo and Robbins:

“Human resource planning is the process of
determining an organization’s human resource
needs.”
“Human resource planning is the process by which an
organization ensures that it has the right number and
kinds of people at the right place, at the right time,
capable of effectively and efficiently completing those
tasks that will help the organization achieve its overall
objectives.
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Concept - Human Resource Planning

Michael Armstrong:
“Human resource planning ensures that the organization knows and
gets what it wants in the way of the people needed to run the
business now and in the future.”

Torrighton and Hall:

“Human resource planning is fundamental in
developing and implementing the organization’s
human resource strategy, which, in turn, enables the
organization to meet its goals.”

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Concept - Human Resource Planning
• Integration of human resource planning
with business strategies.
HR Planning
• Influence the way people are managed
in the organization.
• Integration of all human resource
activities carried out both by HR
departments and line manager
(including senior managers)
• Utilization of human resources in a cost
effective and efficient manner; and
• Estimation of demand and supply of
human resources.

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Characteristics - Human Resource Planning

Goal Directed Future Quantitative & System Continuous

Oriented Qualitative Oriented Process

Optimum Part of Part of Environmental Foresight &

Utilization of Corporate Acquisition Influence Past
HR Plan Function Experience
9/22/2020 9:48 PM 10
 Uncertainty reduction Objective focused

Environmental adoption Acquisition of human Technological changes,

resource globalization, job diversity,
shortage of critical skills,
need for organizational
Utilization of human Development of human development, increasing legal
resource resource provisions and labour union
pressures have led to rising
importance of human resource
planning.
Control of human Improved labour
resource relation

9/22/2020 9:48 PM 11
• It helps in growth and diversification of business.
Through manpower planning, human resources can
be readily available and they can be utilized.
• It helps the organization to realize the importance
of manpower management which ultimately helps in
the stability of a concern.
• Shortages and surpluses can be identified so that
quick action can be taken wherever required.
• All the recruitment and selection programmes are
based on manpower planning.
• It also helps to reduce the labour cost as excess
staff can be identified and thereby overstaffing
can be avoided.
• It also helps to identify the available talents in a
concern and accordingly training programmes can
be done to develop those talents.

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Role of information in HR Planning

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 Human resource strategy is concerned with the
HUMAN RESOURCE STRATEGY long term direction and scope of human
resource function of the organization. It is a
broad action plan to achieve the objectives of
human resource management function.
It includes the corporate philosophy, environment
scan and constraints and objectives and goals of
the organization. Such plans are prepared with
the involvement and direction of the chief
executive officer (CEO) who guides future
business activities.

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Human Resource Strategy
It is based on:

 Human resource strengths of the organization,

 Core competencies possessed by human resources,

 Competitive capabilities of human resources, such as specialized skills high loyalty, low turnover,

 Proactive management.

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HR Strategy Characteristics

9/22/2020 9:48 PM
HR Strategy Steps

Review Strategic
Elements

Conduct SWOT
Analysis

Identify Strategic
Options

Evaluate Strategic
Options

Make Strategic
Choice
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HR Strategy Steps
Review Strategic
Elements

1. Vision: It is where the organization aspires to be. It is

reexamined in the context of likely future changes in the
environment of HRM.

2. Mission: It is the reason for the existence of the organization.

It follows from the vision. It is reexamined to that it is relevant
for HRM.

3. Objectives: They are long term desired outcomes follow from

mission. They are reviewed in term of HRM needs.
4. Strategies: They should follow from objectives. They are means
to achieve objectives. They are reviewed. They are
reformulated if necessary.
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HR Strategy Steps
Review Strategic
Elements

Conduct SWOT
analysis

1. Internal Environment
2. External Environment

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HR Strategy Steps
Review Strategic
Elements

Conduct SWOT
analysis

Identify strategic
option

1. Grand Strategies: In terms of stability, expansion, retrenchment of human resources.

2. Market Oriented Strategies: In terms of low cost leadership, product differentiation and
market focus of organization.
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HR Strategy Steps 1. Suitability: The option should be suitable to the
environmental circumstances of HRM.
Review Strategic
2. Acceptability: The option should be acceptable in terms
Elements of risk, return and stakeholder expectations.

Conduct SWOT 3. Feasibility: The option should be feasible in terms of

analysis human resources and competencies of the organization.

Identify strategic
option

Evaluate strategic
option

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HR Strategy Steps
Review Strategic
Elements

Conduct SWOT
analysis

Identify strategic
option

Evaluate strategic
option

Make strategic
choice 9/22/2020 9:48 PM
 Top Down
Approach

APPROACHES/ Bottom Up
METHODS TO Approach
HR PLANNING

Mixed
Approach

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 Top Down
Approach
• Traditional
• Management driven
APPROACHES/ • Views human resource planning as number game.
METHODS TO • Hard approach
HR PLANNING • Focus on forecast human resource shortages and surpluses.

This approach is based on:

• HRM information system and HR inventory.
• Demand forecasting techniques, especially statistical and mathematical
techniques i.e. trend analysis, mathematical model’s, econometric models
etc.
• Work study techniques to lay down work standards.
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 Bottom Up
Approach
• Employee driven and only focus on concern of employees.
• Soft approach to HRP.
APPROACHES/
METHODS TO This approach is based on:
HR PLANNING • Matching organizational needs with employee needs.
• Employee development, training, creativity, compensation and incentive
schemes, employee safety and welfare.
• Employee motivational techniques to increase productivity.
• Work flexibility.
• Promotion, career planning and development of employees.
• Protection of special focus groups such as women, disabled persons.
• Managerial judgment and forecasts by experts are the techniques for
forecasting qualitative human resource requirements. 9/22/2020 9:48 PM 25
 Mixed
Approach
• Combine both the top down and
bottom up approaches for human
APPROACHES/ resource planning.
METHODS TO
HR PLANNING • Efforts are made strike a balance
between both approaches.

This approach produces the best

results for human resource planning.
HRP assumes a strategic role in the
overall corporate plan.

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 Determining HR
objectives and
Environmental policies
Analysis Assessment of current HR skills and knowledge
based on the information provided by HR inventory
Socio economic and information system
Technological
Organizational objectives and planning
Annual operational plans
HR forecast

Control and Action Plan Determining of HR demand

Determining of HR supply
evaluation
Recruitment, selection and socialization.
Compare HR objectives with achievement.
Training and development.
Monitoring the degree of attainment of HR
Job analysis and evaluation.
objectives.
Transfer and promotion.
Career development
HR PLANNING PROCESS 9/22/2020 9:48 PM 27
Adhikari, Dev Raj (2009) Human Resource Management (Forth Edition). Kathmandu: Buddha Publication.
 Forecasting human
Assessing current resource demand
human resource

Forecasting human
resource supply
Preparation of HR
action plans

Matching demand
and supply
forecasts

HR PLANNING PROCESS 9/22/2020 9:48 PM 28

Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Assessing current
human resource

This step looks at jobs currently being done and the people doing those jobs.
It is based on:
a. Human resource inventory: It describes competencies currently available in the

organization.

b. Human resource information system (HRIS): It serves as the data base for HR information.

HRIS assists in processing of HRM information.

c. Job analysis: It provides information about jobs currently being done. The tasks of a job

and qualifications needed for doing the job are identified.

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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Forecasting human
resource demand

This Forecasting future human resource demand in terms of quantity and quality
and is an important aspect of human resource planning. It is the time-bound
process of determining future needs for human resources.
Factors that affect human resource demand forecast are:

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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Forecasting human
resource demand

This Forecasting future human resource demand in terms of quantity and quality
and is an important aspect of human resource planning. It is the time-bound
process of determining future needs for human resources.
Factors that affect human resource demand forecast are:
a. External Environmental Forces:
Political-legal
Economic
Socio-cultural
Technological forces
They influence future demand for human resources. They are dynamic and keep on
changing.

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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Forecasting human
resource demand

This Forecasting future human resource demand in terms of quantity and quality
and is an important aspect of human resource planning. It is the time-bound
process of determining future needs for human resources.
Factors that affect human resource demand forecast are:
b. Organizational objectives: They are desired results that the organization plans to achieve in
future. They can be:
Expansion through new ventures, contraction through downsizing, diversification in new
areas.
Planned technological changes, such as computerization or technological up gradation,
quality leadership.
Planned organizational changes, for example restructuring.
New product lines to be developed. Market share to be gained.
Profits to be achieved etc.
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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Forecasting human
resource demand

This Forecasting future human resource demand in terms of quantity and quality
and is an important aspect of human resource planning. It is the time-bound
process of determining future needs for human resources.
Factors that affect human resource demand forecast are:
c. Business Plan: This estimates the scale of business activities in terms of revenue forecast. The
revenue forecast serves as an important basis to estimate the number and skills of human
resources needed in future.
d. Succession Plan: It provides internal supply forecast of managerial employees ready to
move into higher position.
e. Work force factors: Workload norms, employee re-allocation, separation, turnover, temporary
help.
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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 HR PLANNING PROCESS
Forecasting human
resource supply

This Supply forecasting estimates future sources of human resources that are
likely to be available from inside and outside the organization. Its concern is
filling projected job openings in the organization.
Factors that affect human resource supply forecasts are:
a. Internal sources forecasts: Potential additions to human resource inventory, potential

losses to human resource inventory.

b. External sources forecast: Educational and training institutes, labour market.

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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
 Matching demand
HR PLANNING PROCESS
and supply
forecasts

Demand and supply forecasts of human resources are matched to determine future human
resource requirements. Additional human resources will be needed to meet the shortages.
Retrenchment may be needed to tackle surpluses.

Preparation of
action plans

Demand Action plans are prepared to deal with shortages and surpluses of human resources.
They specify time-bound specific activities for implementation purposes. They can be:
Recruitment action plan, development action plan, retention action plan,
redeployment/relocation action plan, redundancy/laid-off action plan, promotion
action plan, succession action plan.
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Agrawal, GR. (2017) Foundation Human Resource Management in Nepal. Kathmandu: M.K. Publishers and Distributors
Major HRP Activities: Assessment of current HR

The profile of HR inventory

helps to determine what skill
is currently available in
organization that can take
advantages of opportunities
to expand or change the
organization strategy.

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Major HRP Activities: Assessment of current HR
HR Inventory
HR inventory is concerned with
telling the organization what
individual employees can do.

It gathers workers related

information like name,
education, training, prior jobs,
current position, performance
rating etc. through HRIS and
make report.

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Major HRP Activities: Assessment of current HR
Management inventory consists of information
HR Inventory about managerial human resources currently
Management Inventory
employed in the organization.
It consists of information about managerial human resources currently employed in the
organization.
The information included in this inventory are:
• Personal Data: Name, gender, age, marital status of the manager.
• Skills Data: Educational qualifications, training received, experience, languages spoken
special skills, capabilities.
• Position Data: Current position in the organization, duties and responsibilities, previous
position held in the organization, jobs held in other organizations, work location.
• Compensation Data: Current salary and allowances, salary history, bonus, shareholding
in the organization, awards received.
• Performance Data: Current and past performance appraisal, fulfillment of
performance contract, performance problems, training needs, potential for assuming
higher level managerial jobs.
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Major HRP Activities: Assessment of current HR
HR Inventory
Management Inventory

Benefits of Management Inventory

• It facilitates succession planning at managerial levels. Promotion decision become easy.
• It helps to assess managerial skills currently available to cover future vacancies. Skills
shortages can be spotted.
• It helps to transfer and deploy managers.
• It helps to identify management development needs for managers.
• It provides management turnover data. Organization can develop strategies to retain
quality managers.

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Major HRP Activities: Assessment of current HR
A skill inventory summarized the skill,
HR Inventory education and experiences of current
Skills Inventory
employees.

• Depending on the size and complexity of a business, the process for preparing a skills
inventory will vary.
• Some businesses use commercial software. Other firms use database programs. Some
small businesses use simple worksheets or even a paper based system to prepare the skills
inventory.
• Whatever the method, if done correctly a skills inventory will provide a collective business
inventory of the skills, knowledge, and real-world experience that a firm’s workforce
possesses.

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Major HRP Activities: Assessment of current HR
HR Inventory
Skills Inventory

The information included in the inventory are:

• Name of the employee/age/sex/marital
status.
• Educational qualifications of the employee.
• Training undertaken by the employee.
• Prior employment experience of the employee.
• Current position held by the employee.
• Performance ratings of the employee.
• Salary level of the employee.
• Languages spoken by the employee.
• Capabilities of the employee in terms of future
potential.
• Specialized skills of the employee.
• Job and location preferences. 9/22/2020 9:48 PM
Major HRP Activities: Assessment of current HR
HR Inventory
Skills Inventory

Benefits of skill inventory

It enables management to assess what skills are currently available in the organization.
It is useful for planning the selection, training, promotion and transfer of employees.
It serves as a decision making tool for deploying and effectively utilizing existing human
resources. It helps to make person-job fit.
It serves as a guide for considering opportunities for diversification and expansion of
operations.
It provides crucial information for identifying human resources related threats to the
organization. For example, skills deficiency of employees can be managed effectively.
It supports decision making, coordination and control relating to human resources.
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Major HRP Activities: Assessment of current HR

HRIS is a systematic way of

storing data and information
for each individual employee
to aid planning, decision
making and submitting of
returns and reports to the
external agencies.

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Major HRP Activities: Assessment of current HR

• It is a database device for systematically tracking

human resource information.
• It is designed to collect, analyze, store, retrieve and
disseminate information about jobs and employees.
• The information can be retrieved as and when
needed.
• It is a computer based system developed from
employee and pay roll records.

It can be briefly defined as integrated systems used to gather, store and

analyze information regarding an organization's human resources.
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Major HRP Activities: Assessment of current HR
Human Resource Information System
Contents of HRIS

9/22/2020 9:48 PM
Major HRP Activities: Assessment of current HR
Human Resource Information System

Dashboard

Notification

Sign-In Self Service

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Major HRP Activities: Assessment of current HR
Human Resource Information System
Uses of HRIS

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Major HRP Activities: Assessment of current HR

Succession planning is the

ongoing process of
systematically identifying,
assessing and developing
organizational leadership
to enhance performance. It
is the process of
forecasting future demand
of managerial human
resources.

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Major HRP Activities: Assessment of current HR • It is the identification and development of
Succession Planning potential successors for key positions in an
organization through a systematic evaluation
process and training. It is predictive in judging an
individual for a position her or she might never
have been in.

It is the development of tools, process, systems,

structures and cultures explicitly to improve the
creation, sharing and use of knowledge critical
for decision making.

• Planning for Tomorrow's Sustainability

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 Major HRP Activities: Assessment of current HR
Succession Planning
It is proactive and systematic process where organizations identify those positions considered
to be at the core of the organization and then create a strategic plan to fill those positions
with qualified and capable employees.

• It identifies potential successors.

• It is generally done for middle and top level
managers.
• It considers both the individual managers and the
positions they occupy.
• It takes a long term view of the managerial
human resource needs of the organization.
• It identifies high potential employees as
successors to key jobs.
• It builds an employee bank. 9/22/2020 9:48 PM
Major HRP Activities: Assessment of current HR
Succession Planning
A separate management inventory is generated from human resource inventory for succession
planning purposes.
It includes additional information on each manager about the following:
• Current performance
• Long term growth potential
• Promotability
• Developmental needs (skills deficiencies)
The positions highlighted are those that are If managerial shortages are spotted for
likely to become vacancy in future due to: vacancies in the management succession
• Retirement plan, candidates are developed through:
• Promotion • Training and management development
• Death • Special assignments
• Registration • Job rotation
• Transfer • Understudy
• Other means 9/22/2020 9:48 PM
BENEFITS OF SUCCESSION
PLANNING

Continuity Career Development

Planning

Create Keep extra Maintain

Structure for eyes on job brand
training and identity
development

Helps the company plan for the long term

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 A one time event Decided by an
individual

Used solely for

individual career
advancement Reacting only when a
opportunities position becomes open

Line managers relying Senior executives does

solely one their own not want new
knowledge/comfort leadership.
with candidates.
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Forecasting Human Resource Demand

Forecasting human
resource demand is Potential human
the process of resource requirement is
estimating the future to be estimated
human resource keeping in view the
requirement of right organization's plans
quality and right over a given period of
number in the time.
organization.

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Factors affecting Forecasting Human Resource Demand

• Analysis of employment trends.

• Organizational objectives.
• Business plan.
• Succession plan.
• Work force factors (Replacement needs
of employees due to death, Resignation,
Retirement/ termination, Re-allocation,
Absenteeism and Labour Turnover)

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Techniques For Forecasting Human Resource Demand

Management
Judgment

Expert
Forecasts

Statistical
Analysis

Other Methods

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Techniques For Forecasting Human Resource Demand

Management
Judgment

Under this method, firstly experienced managers estimate the manpower requirements for their
respective departments. This is done on the basis of their knowledge of expected future
workload and employee efficiency. At last, the top management then aggregates and
approves the departmental estimates. This is a very easy and time-saving method.
Top Down Approach: Bottom Up Approach Participative Approach
Top management The line mangers send Top management and
forecasts the human their departmental departmental heads
resource requirement for requirement of human meet and decide about
the entire organization resources to top the future human
and various management. Top resource requirement.
departments. This management ultimately
information is supplied forecasts the human
to various departmental resource requirement
heads for their review for the overall
and approval. organization on the
basis of proposals of
departmental heads. 9/22/2020 9:48 PM
Techniques For Forecasting Human Resource Demand

Expert
Forecasts

The demand forecast for future human resources is based on judgement of the experts.
The estimates of human resource need can be based on: Surveys, Delphi Techniques,
Nominal Group Techniques etc.
Surveys
HR experts conduct a survey
of line managers who are
thought to have desired
information about future
human resource needs. Here
information are collected by
asking questions to them. The
responses are analyzed to
forecast requirements.

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Techniques For Forecasting Human Resource Demand

Expert
Forecasts

The demand forecast for future human resources is based on judgement of the experts.
The estimates of human resource need can be based on: Surveys, Delphi Techniques,
Nominal Group Techniques etc.
1st Round
Analysis of results
Delphi Techniques
Feedback Output:
Delphi Technique named after the ancient Greek
Report for
Oracle at the city of Delphi, the Delphi technique is a
manpower
method of forecasting personnel needs. It solicits requirement
2nd Round
estimates of personnel needs from a group of
Analysis of results
experts, usually managers. It is pooling of
judgements and opinions about estimates of future Feedback
human resource needs from a group of experts who
collects the manpower needs, summarizes the
various responses and prepare a report. This 3rd Round
process is continued until all experts agree on Analysis of results
estimated human resources requirement. Experts Feedback
are not face to face.
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Techniques For Forecasting Human Resource Demand

Expert
Forecasts

The demand forecast for future human resources is based on judgement of the experts.
The estimates of human resource need can be based on: Surveys, Delphi Techniques,
Nominal Group Techniques etc.
Generating Ideas
Nominal Group Techniques(NGT)
Experts sit face to face to make forecasts as a
group. In the first stage members generate ideas
independently. In the second stage, each members Recording Ideas
presents his or her ideas orally and those ideas are
write on a board for the other participants to see and
the entire group discusses all ideas simultaneously. Selection of
Then after group members individually and secretly Discussing Ideas highly ranked
vote on each proposed solution. idea

Voting on Ideas

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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Trend Analysis
Trend analysis links historic employment patterns to
future labor demand. Managers plot trends that
affected employee numbers, such as the company's
performance or developments in the industry sector,
across a given period. They use this data to identify
continuing trends that will influence the number of
employees required in the future. For example, if a
business has grown by five percent each year for six
years, managers may anticipate that this trend will
continue. Any increase in employee numbers across
the previous six years will be projected to continue in
the future.
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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Trend Analysis
This technique projects past trends in the future.

Extrapolation
It is based on past data and attempt is made to find a trend or a
pattern that might continue in to the future. Here past rates of change
are extended into the future.

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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Trend Analysis
This technique projects past trends in the future.

Indexation
Indexation is a method of estimating future employment needs by
matching employment growth with an index e.g. ratio of production
employees to sales. Here a particular index is used to forecast future
needs. Planners may discover that for each million rupees increase in
sales, the production department requires 10 new assemblers.

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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Trend Analysis
This technique projects past trends in the future.

Regression Analysis
Regression analysis is more statistically sophisticated. An organization
first draws a diagram showing the relationship between sales and
workforce size. It then calculates regression line – a line that cuts right
through the center of the points on the diagram. By observing the
regression line, one can find out number of employees required at
each volume of sales.
It can be simple linear or multiple linear analysis. Projection of future
demand is based on past relationships between variables.
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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Trend Analysis
This technique projects past trends in the future.

Econometric Models
These models are based on mathematical and statistical techniques
for estimating future demand. Under these models relationship is
established between the dependent variable to be predicted (e.g.
manpower/human resources) and the independent variables (e.g.,
sales, total production, work-load, etc.). Using these models, estimated
demand of human resources can be predicted.

9/22/2020 9:48 PM
Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Markov Analysis
A transition matrix, or Markov matrix, can be used to model the internal flow of human resources. These
matrices simply show as probabilities the average rate of historical movement from one job to another. Below
mentioned table presents a very simple transition matrix. For a line worker, for example, there is a 20%
probability of being gone in 12 months, a 0% probability of promotion to manager, a 15% probability of
promotion to supervisor, and a 65% probability of being a line worker this time next year. Such transition
matrices form the bases for computer simulations of the internal flow of people through a large organization over
time.
Andrei Andreyevich Markov

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Techniques For Forecasting Human Resource Demand

Statistical
Analysis

The demand forecast for future human resources is based on statistical analysis.
The estimates of human resource need can be based on: Trend Analysis (extrapolation,
indexation, regression analysis, econometric models), Markov Analysis, Work Study
Techniques.
Work Study Techniques
This technique is based on work measurement. It indicates how much time an operation should take to complete. Work
standards are laid down which are used to calculate human resource needs for a given volume of work.
Let us assume that the estimated production of an organization is 3,00,000 units. The standard man-hours required to produce
each unit are 2 hours. The past experiences show that the work ability of each employee in man-hours in 1500 hours per
annum. The work load and demand of human resources can be calculated as under:
Estimated total annual production = 300000 units.
Standard man-hours needed to produce each unit = 2 hours.
Estimated man-hour needed to meet estimated annual production (3,00,000x2) = 600000 hours.
Work ability/contribution per employee in terms of man-hour = 1500 units.
Estimated number of workers needed = 600000/1500
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= 400 workers.
Techniques For Forecasting Human Resource Demand

Other Methods

The demand forecast for future human resources is based on analysis other than Management
Judgement, Expert Forecasts and Statistical Analysis.
The estimates of human resource needs can be based on New Venture Analysis,
Mathematical Analysis, Computer Simulations.
New Venture Analysis
This New venture analysis will be useful when new
ventures contemplate employment planning. This
technique requires planners to estimate HR needs in line
with companies that perform similar operations. For
example, a petroleum company that plans to open a coal
mine can estimate its future employment needs by
determining employment levels of other coal mines.
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Techniques For Forecasting Human Resource Demand

Other Methods

The demand forecast for future human resources is based on analysis other than Management
Judgement, Expert Forecasts and Statistical Analysis.
The estimates of human resource needs can be based on New Venture Analysis,
Mathematical Analysis, Computer Simulations.
Mathematical Analysis
They are based on mathematics and can be
various for forecasting human resource needs.

Computer Simulations
They are used to create future scenarios.

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Forecasting Human Resource Supply

Supply forecasting estimates The purpose of identifying future HR supply

requirements is to determine the number of
future sources of human
employees required for each job and their
resources that are likely to be knowledge, skills, abilities and other characteristics.
HR supply forecasting is essential in determining
available from inside and
the characteristics of hiring sources within the
outside the organization. Its predetermined planning horizon in order to
establish whether future HR supply is sufficient to
concern is filling projected job
match future HR demands.
openings in the organization.

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Factors affecting Forecasting Human Resource Supply
External
• Supply and demand of jobs or skills.
• Educational attainment levels within a
region.
• Compensation patters based on
experience, education or occupation. Internal
• Immigration and emigration patterns within • Organizational features (e.g. staffing
an area. capabilities)
• Forecasts of economic growth or decline. • Productivity- rates of productivity,
• Competition for talent. productivity changes.
• Industry or occupational expected growth • Rates of promotion, demotion, transfer and
levels. turnover.
• Public policy, government and legal
changes.
• Trends in labour force participation
(including entry and exit).
• Technological development patterns. 9/22/2020 9:48 PM 71
Techniques For Forecasting Human Resource Supply
Replacement
Chart

Succession
Planning

Management
Judgment

Markov
Analysis

Computer
Simulations

Statistical
Techniques 9/22/2020 9:48 PM
Techniques For Forecasting Human Resource Supply
General
Manager (GM)

Replacement
Chart Deputy GM Deputy GM Deputy GM Deputy GM
Administration Marketing Account Planning
A replacement chart can be used to predict
the internal supply of manpower for a year.
In the chart, names of the potential ⟁ ⟁
candidates will be written, together with their
Mr. A Δ Mr. D Δ Mr. G  Mr. J Δ
present performance level and potentiality
Mr. B Δ Mr. E  Mr. H Δ Mr. K 
for future promotion. From the analysis of a
Mr. C Δ Mr. F Δ Mr. I Δ Mr. L Ο
replacement chart one can easily understand
where the potential vacancies are and what Present
performance
Promotion
potential
type of the position must be urgently filled.
Only those candidates from the list will be
Outstanding Ready now

promoted who have shown outstanding Satisfactory Needs further
Δ
performance. It provides identification of
⟁ training
Need Questionable O
potential replacements for vacancies within improvement
an organization. 9/22/2020 9:48 PM
Techniques For Forecasting Human Resource Supply

Succession
Planning
It is a longer term process of grooming a
successor (selected from a pool of candidates on
the basis of perceived competency) for
management or critical positions.
Determining the internal labour supply calls for
a detailed analysis of how many people are
currently in various job categories or have
specific skills within the organization.
The planner then modifies this analysis to reflect
changes expected in the near future as a result
of retirements, promotions, transfers, voluntary
turnover and terminations.
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Techniques For Forecasting Human Resource Supply

Succession Replacement
Planning Planning

Succession planning builds a long term pool of talent. Replacement planning fills an immediate need.

It looks at integrating policies throughout the company. It focuses on the now.

It helps determine candidates based on the role. It maintains the status quo.

It looks at expanding the skills of current valued It may be limiting for current employees.

employees.
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Techniques For Forecasting Human Resource Supply

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Techniques For Forecasting Human Resource Supply

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Techniques For Forecasting Human Resource Supply

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Techniques For Forecasting Human Resource Supply

Management
Judgment

Managerial estimates or rules of

thumb are used to forecast

supply of human resources.

They are based on judgment of

managers.

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Techniques For Forecasting Human Resource Supply

Markov
Analysis
It is the analysis that helps to predict internal employee movement from one year to
another by identifying percentages of employees who remain in their jobs, get promoted or
demoted, transfer and exit out of the organization.
To help predict internal employee movement from one year to another by identifying
percentages of employees who remain in their jobs get promoted or demoted, transfer and
exit out of the organization.
By tracking and predicting employment movement within an organization, the Markov
analysis allows for the development of a transition matrix to forecast internal labour supply.

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Techniques For Forecasting Human Resource Supply
Computer
Simulations

They create a number of different future scenarios by altering the values of simulation
parameters.

Statistical
Techniques

Trend Analysis: It projects past trend into the future.

Regression Analysis: it establishes relationship with past levels of supply to predict
future supply of human resources.
Renewal Analysis: It derives future flow of human resources based on upward
movement of employees, vacancies created by expansion and employee losses.
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PROBLEMS/BARRIERS TO HRP
HRP is as important is not so easy to make. The planners face various problems while
formulating human resource plans. The major ones are discussed as follows:

•People perceive that people perceive that people are available in abundance in our labour surplus
economy. Then, why to spend time and money in forecasting human resources? Surprisingly, this
perception about human resource planning is also held by the top management.
•Another problem in human resource planning is that the demand for and supply of human
resources in not cent percent accurate. Experience suggest that longer the time horizon for
forecasting human resource requirements, greater is the possibility of inaccuracy in estimates of
human resource needs.
•Various types of uncertainties like labour turnover, absenteeism, seasonal employment, market
fluctuations and changes in technology render human resource planning ineffective. The reason

5&6
being these uncertainties makes human resource forecast ere a guess far from reality.

Roll No.
9/22/2020 9:48 PM
PROBLEMS/BARRIERS TO HRP
HRP is as important is not so easy to make. The planners face various problems while
formulating human resource plans. The major ones are discussed as follows:
•Generally, human resource personnel are perceived as experts in handling personnel matters. But,
they are not experts more than often. Hence, human resource requirements estimated by such
people are not realistic ones. The organizational plans based on such estimates are endangered to
be flopped.
•Sometimes human resource planning suffers from a conflict between quantitative and qualitative
approaches used for it. Some people view human resource planning as a mere numbers game to
track the flow of people across the departments and in and out of the organization. Conversely,
others take a qualitative approach focusing on the quality of human resources like career planning
development, skill, morale etc.
•As human resource planning is based on data relating to human resources, the same is not
maintained in a proper manner in some of the industrial organizations. Then, in the absence of
reliable data, it becomes difficult to develop effective human resource plans.
In sum and substance, problems in human resource planning arise both from inherent limitations of

5&6
forecasting, on the one hand and from weaknesses of human who do it, on the other. But both can
be overcome.
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Roll No.
HOW TO MAKE HRP EFFECTIVE?
Following are some of the steps that may improve the effectiveness of human resources
planning.
•Human resource plan must be viewed as an integral part of corporate planning. So to say, human
resource plans should be tailored with the objectives, strategies and overall environment of the
particular organization.
•The support and commitment of the top management be ensured before starting the process of
human resource planning.
•Personnel records must be complete, up-to-date and readily available to ensure and adequate and
strong date base. Data base serves as backbone for human resource planning.
•The time horizon of the human resource plan should be appropriate to accommodate the changing
needs and circumstances of the particular organization.
•Both quantitative and qualitative aspects of human resource plans should be stressed in as
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balanced manner in order to avoid conflict between the two.
BOARD QUESTIONS
• Specify the steps normally taken in the condition where supply exceeds demand in manpower planning. 1
• State the strategies normally adopted by HR managers in HR planning where HR demand exceeds supply. 1
• Mention the commonly used techniques for forecasting human resource demand. 1
• List four objectives of HR planning. 1
• What are the steps involved in the HR planning process. 1
• What is skill inventory? 1
• Provide the concept of HR supply forecasting. 1
• How do you assess the current HR? 1
• Determine two major factors that shape the HR plan. 1
• List out the characteristics of HR planning. 1
• Write down the techniques for HR demand forecasting. 1
• Define human resource information system. Why it is important in human resource planning? 5
• What is HR demand forecasting under HR planning? Explain the major techniques of HR demand forecasting. 5
• What is HR planning? How does human resource information system help the organization to plan its human
resources? 5
• Define human resource planning. How is current human resource in HR planning process assessed? Explain. 5
• Identify the role of information system in planning human resources. Support your answers with suitable examples. 5

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CASE
Read the following case carefully and answer the questions given below?
Saugat Ltd. is a multinationall manufacturing company located in Nawalparasi district producing cosmetic products since last five
years in Nepal. It has large scale production of various types of cosmetic production of international brand. From the current fiscal
year it has decided to prepare a plan for expansion of its distribution in major cities of Nepal.
For the expansion in Nepal, the company management prepared plans to increase in volume of products by 50% as compared to
that last fiscal year. For this purpose, the company management decided to recruit and appoint new high skilled employees in the
concerned area of knowledge. The management also decided to train existing employees to improve their working skills.
At present the company has the system of base remuneration plus wage on the basis of output units. The standard rate of per unit
of output is already determined by considering need of effort and time. The company management also decided to continue the
same compensation system for the coming fiscal year.
Company management appointed fifty new employees in the production department who are efficient in production. New employees
to work with senior colleagues in specified unit. They have started production on the basis of guidance for management.
The senior peers have base pay of Rs.10,800 per month and Rs.10 per unit of output whereas new employees have base pay of
Rs.8,000 per month and per unit rate is equal to senior peers. At the end of the month it was found that most of new employees
were drawing more remuneration that senior employees.
The senior employees felt upset and approached management and demanded to increase their base salary upto Rs.11,000.
however, management directly rejected the demand of old employees. It specified that the company has policy to maintain link
remuneration with production outcome. Then senior employees decided to take support from union for discussion.
Question:
a. What are the major issues in the case?
b. The company has the provision of base pay plus remuneration based on output. Do you appreciate such compensation system?
Why? Or why not?

7&8
c. Why monthly remuneration obtained by most of new employees is more that the existing employees? Give your justification.
d. How do you respond to the demand of senior employees? Give you opinion.

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Roll No.
CASE
Read the following case carefully and answer the questions given below:
Bir Gorkhali Printing Press is the top private sector printing press of the country having state of the art equipment and workforce of
325 employees at different departments. Krishna Kaluwar is the manager of pre-press division, where 48 employees report to him. In
course of the work on of its clients Global Tech, which is a multinational company, rejected the brochure printed by Bir Gorkhali
Printing Press. Krishna was furious with this and called Wangdu Sherpa the desktop publishing unit in-charge and blamed him and his
unit for errors in desktop publishing work which led to rejection of the brochure. Wangdu tried to explain his unit’s problems but
Krishna was in no of listening, which further created resentment of both of them.
Three months later, at the time of performance appraisal, Krishna rated Wangdu’s performance as not satisfactory and asked him to
sign the appraisal form. At the performance appraisal interview, Wangdu expressed his dissatisfaction to Krishna regarding ratings
and refused to sign the appraisal form. Krishna was also not ready to change his stance regarding performance appraisal citing the
example of rejection of brochure by Global Tech. after the performance appraisal interview, Wangdu reported his dissatisfactions to
the General Manager Mr. Nishant Shah as well as the employee trade union. The union officials immediately discussed it and served
notice to the employees. Trade union now added more demands and presented to the management and warned that they will agitate
until their demands are fulfilled. Watching the developments Nishant is now worried and contacted Printing Press Association, Ministry
of Industries and Ministry of Labours for settling the dispute at earliest. He also decided to meet both union officials and Krishna to
solve the deadlock.
Questions:
a. What happened in the performance appraisal interview and in your opinion what should be the objectives of the performance
appraisal interview?
b. If you are Nishant, how will your handle the employee grievances?
List the actors of industrial relations in above case and explain their objectives in industrial relations.

9 & 10
c.
d. What are the major causes of labour dispute in above case?

Roll No. 9/22/2020 9:48 PM

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