CHAPTER THREE

JOB ANALYSIS AND HUMAN RESOURCE PLANNING

Job Analysis: - Meaning and definition

A job is a collection or aggregation of tasks, duties and responsibilities which as a whole is

regarded as a regular assignment to individual employees. Job analysis is a procedure by which
relevant information is obtained about a particular job. It involves detailed and systematic study
of information related to the operations and responsibilities of a specific job. “Job analysis is the
process of getting information about jobs: specially, what the worker does; how he gets it done;
why he does it; skill, education and training required; relationship to other jobs; physical
demands; environmental conditions.” It is study of every known and determinable factor of a job.

According to Wendell French

Job analysis is the systematic investigation of job content, the physical circumstances
in which the job is carried out, and the qualifications needed to carry out job
responsibilities.
A job analysis is a systematic exploration of the activities within a job. It is a technical procedure
used to define a job’s duties, responsibilities and accountabilities. This analysis “involves the
identification and description of what is happening on the job accurately and precisely
identifying the required tasks, the knowledge, and the skills necessary for performing them, and
the conditions under which they must be performed.

Concepts which are involved in job analysis are,

Job description: It is written record of duties, responsibilities and requirements of a particular

job. It gives information of about the title, location, duties, working conditions and hazards. It is
a description of the job.

Job specification: It is a statement giving the requirements of personnel who should be made
responsible for a given job. It gives information regarding the characteristics, qualities (physical,
psychological and demographic), qualifications, experience, etc., of the worker who is most
suitable to carry out the activities mentioned in the job description.

Job design: It is the division of the total tasks to be performed into manageable and efficient
units. This division of work is both horizontal and vertical.

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 Steps in Job Analysis

A typical job analysis involves five steps (see figure below)

Examine the overall organization
Select jobs to be analyzed
Collect data on jobs
Prepare job description Prepare job specification

Steps in Job Analysis

1. Examine how each job fits into the overall organization
 This step involves creating or reviewing the organization chart, focusing
on the formal relationships among departments, jobs, and individuals.
 Background information of the organizations is collected by finding out
the kind of job relations in the organization, class/grade specifications of
the jobs, and existing job descriptions.
2. Select the jobs to be analyzed
 Managers must in on the specific jobs to be analyzed and determine that
job's unique function within the overall organization.
 Analysis of all the positions in the organization is not possible so limited
number of important positions is selected for analysis.
3. Collect data on the jobs to be analyzed
 Data must be collected on the characteristics of the job, the behaviors and
activities it requires, and the necessary employee skills and knowledge
(qualification) etc from the employees undertaking the job themselves or
from the employee’s supervisor.
4. Prepare a job description
The information collected is developed into a job description.
 The job description is a written summary of the job and its:
 activities,
 equipment required to perform the activities, and
 The working conditions of the job.
 Job description can help the organization with planning, recruiting, selecting
the right person, evaluating performance, training, etc
 Job description helps workers understand what a specific job entails and what
jobs fit their skills and interests.
5. Prepare a job specification
 A job specification is a written explanation of skills, knowledge, personal
qualities, traits, and abilities needed for a job.
 A job specification describes the characteristics of the person doing the job.

Types of Information needed for Job Analysis

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For making job analysis, collection of data/ information is most important. So in the collection
process the following types of information are needed for Job analysis
 Work Activities (What the worker does?)
 Specific tasks or activities that are involved in the job
 Procedures used to perform activities
 Complexity of activities and their relative timing
 Personal responsibility for property, funds, etc.
 Hazards and discomforts of job.
 Worker-oriented activities (How the job is performed?)
 Nature of operations, motions such as handling, lifting, walking,
driving etc.
 Human behaviors such as communicating, sensing, decision making
skills.
 Machines and materials used (What does the worker use?)
 Types of machines, equipment and tools used.
 Type of materials used, such as metal, plastic, yarn, grain etc.
 Knowledge dealt with or applied, such as in accounting, law.
 Products made or services rendered.
 Job performance standards (What are performance standards?)
 Quantity standards for the job.
 Quality standards for the job
 Time taken for the job (Time study)
 Job context (What is the job context?)
 Physical working conditions.
 Work schedule
 Incentives, financial and non financial
 Job relationships (interactions with people and organizations)
 Personal Attributes (What personal attributes are needed?)
 Education and training required.
 Work experience needed
 Aptitudes and social skills
 Physical strength etc.

Sources of Information for Job analysis

Information about job analysis can be collected from the following sources:
 Employees
They actually perform the job. They possess firsthand knowledge about the
elements and activities involved in jobs.
 Supervisors

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 They supervise the employees while the job is being done. They deal with the
problems that arise while the job is being performed. This makes them
knowledgeable about the job.
 Independent Expert
Persons specializing in job analysis are appointed to watch the employees
performing the job. They systematically record the activities involved in a
job. They also possess rich experience in analyzing jobs.
 Job Review Committee
Such committee consists of representatives from Human Resource
department, and labour unions. They review the job for analysis purposes.
 Non-human sources
They consist of:
 Existing job description and specifications.
 Equipment maintenance records
 Blueprints of equipment and architectural designs of work areas
 Films of workers on the job
 Training manual etc.

Methods for Collecting Job Analysis Information

Job analysis may be carried out in two ways. It may be affected by managers and job holders
discussing and agreeing among themselves, or it may be carried out by HR staff of the
employing organization or by external consultants or some mixture of these. Whether it is carried
out by managers and job holders or others will depend on the nature of the organization, the jobs
in question and the preferences of individual organizations.
Cost-effectiveness is a major consideration. For a large organization, in which there are groups
of identical jobs, it may be worthwhile to employ the HR staff or external consultants to carry
out a comprehensive analysis.
For other organizations, which are small or where a number of jobs are unique, it would probably
be impracticable to incur the time and expense of a comprehensive, in-depth analysis. There is
another important consideration: jobs are changing all the time, affected by technological and by
economic and social factors. Therefore, job descriptions need constant revision and amendment.
Job analysis carried out through discussions between managers and job holders can be an
important part of the appraisal review. Before considering the performance of the person and
what future action may be needed, it is obviously necessary to enquire whether the tasks in the
job and criteria for effective performance are the same before drawing any conclusions about
performance. When job analysis is carried out by HR staff or outside consultants, the following
methods are often used:

1. Direct observation: here the analyst observes actual work in progress and makes notes as
necessary under the various headings of the job description. These notes can be used as a basis

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for subsequent questions that the analyst may wish to ask. The advantages of seeing a job
performed for oneself are obvious, but the method has the following limitations:
(a) It is very time-consuming: A great deal of time would be needed adequately to observe a
number of jobs. All jobs need to be observed with very close concentration over a period of time
in order to appreciate the fluctuations between, for example, the quieter and busier periods.
(b) There is no substitute for personal experience of the job and the evidence of observations can
be very misleading. Special skills expertly applied may make jobs seem easier. Skilled workers
could make jobs seem more difficult if they chose to do so.
(c) Behavior that is formally observed is inevitably influenced by the act of observation, unless
this is done without the knowledge of those being observed (which would raise ethical
questions). All the research data confirm this phenomenon (often described as the ‘Hawthorne
effect’ from the studies carried out at the Hawthorne plant described earlier).
(d) There is a great difference between observation of manual and managerial jobs. It is unlikely
that an observer can obtain any kind of accurate picture or evaluation of the mental energy
expended, personal pressures, contemplative and planning activities or the subtleties of
interpersonal relationships, which form a large part of the managers’ and supervisors’ work.
2. Interviews: these should be carried out with the job holders themselves, their immediate
managers and any others who can give useful information. The interview is a necessary and
potentially useful method in job analysis, enabling the job analyst to raise questions to elucidate
the evidence of observation and to compare the perception of one job holder with others.
The interviews can be divided as individual interview method and group interview method.
 Individual Interview Method: The individual interview method assembles a team
of job incumbents for extensive individual interviews. The results of these interviews are
combined into a single job analysis. This method is effective for assessing what a job
entails. Involving employees in the job analysis is essential.
 Group Interview Method: It is similar to the individual interview method except
that job incumbents are interviewed simultaneously. Accuracy is increased in assessing
jobs, but group dynamics may hinder its effectiveness.
The caveats that need to be made about the use of the interview in job analysis are these:
(a) As in all other interview situations considerable skill is needed. The interview has to be
systematic and purposeful, and conducted with particular sympathy, tact and sensitivity.
(b) For reasons already explained, however cooperative the job holders may be, the job analyst
has always to deal with personal biases and perceptions of jobs.
(c) The interviewer needs to be careful to distinguish fact from opinion.
3. Diaries: using this method, the job analyst provides job holders with the areas of the job
description about which information is required. Job holders then analyze their own work over a
period of time, recording information systematically in diary form under the required headings
and the time spent on each item. The advantages and disadvantages of the diary method are
these:
(a) Self-recorded data of this kind can be made over a longer period and thus provide a more
reliable picture of the nature of the job.

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(b) The data can be used as valuable bases on which to conduct interviews.
(c) The data are an obvious means of saving some of the time that prolonged direct observation
of jobs requires.
(d) Like the other methods, diaries are inevitably affected by factors of subjectivity. Moreover,
because the information is self-recorded there is no means of verifying accuracy.
(e) To be of real value the diary has to be kept accurately, conscientiously and regularly. This
approach can soon become a chore, especially if job holders are not in sympathy with the job, in
which case it might be perfunctorily fulfilled or neglected.
4. Questionnaires: here the job analyst compiles a series of questions designed to elicit the
maximum possible useful information about the jobs under analysis, and distributes these with
careful instructions about the completion of the form. The advantages and disadvantages of
questionnaires are:
(a) They enable the job analyst to put standard questions to all the job holders taking part in the
survey.
(b) Specialized skill is needed in devising the questionnaire and framing the questions. For
example, attractive as the prospect of open questions may seem to be, it is probably better to
require the respondent to choose from a range of answers that best fit particular situations. Skill
is also required in the analysis of responses.
5. Critical incident reviews: as the term implies, this method uses examples of real events at
work as a means of eliciting what the criteria for effective performance should be. The
component tasks of a job are systematically analyzed with job holders, who are asked to cite
actual examples of incidents from their experience of the job and how they dealt with them.
It is unlikely that any one of these methods will be adequate by itself. In practice, therefore, a
combination of techniques is usually employed and adapted to meet the needs of particular
situations.

Job Design
 Job design is the result of job analysis. A good job design will enable employees to
exercise discretion decision-making in their work roles.
 Managers, to the extent possible, must involve employees in the job design process. The
manner in which jobs are designed has an important bearing on what they ultimately deliver
to the organization.
 An effective job design specifies three characteristics of jobs: range, depth, and
relationships.

Range and Depth

 Job range refers to the number of tasks a job holder performs. The individual who performs
eight tasks to complete a job has a wider job range than a person performing four tasks.
 In most instances, the greater the number of tasks performed, the longer it takes to complete
the job.

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  Job depth, the amount of discretion an individual has to decide job activities and job
outcomes.
 Job depth relates to personal influence as well as delegated authority. Thus, an employee
with the same job title and at the same organizational level as another employee may
possess more, less, or the same amount of job depth because of personal influence.
Job Relationships
 Job relationships are determined by managers' decisions regarding departmentalization bases
and spans of control. The resulting groups become the responsibility of a manager to
coordinate toward organization purposes. These decisions also determine the nature and
extent of jobholders' interpersonal relationships, individually and within groups.
 Group performance is affected in part by group cohesiveness. And the degree of group
cohesiveness depends upon the quality and kind of interpersonal relationships of jobholders
assigned to a group.
 The wider the span of control, the larger the group, and consequently the more difficult it is
to establish friendship and interest relationships. Simply, people in larger groups are less
likely to communicate than people in smaller groups.
 Without the opportunity to communicate, people will be unable to establish cohesive work
groups. Thus, an important source of satisfaction may be lost for individuals who seek to
fulfill social and esteem needs through relationships with coworkers.
Perceived Job Content
 Perceived job content refers to aspects of a job that define its general nature as perceived by
the jobholder as influenced by the social setting.
 Individuals perceive and describe their jobs using many different adjectives. These
adjectives describe aspects of the job's range, depth, and relationship and are termed job
characteristics.
 The job characteristics model suggests that jobs should be designed to include five important
core dimensions that increase motivation, performance, and satisfaction, reducing employee
turnover and absenteeism.
 The five characteristics of perceived job content are:
 Skill variety: the degree to which the job requires a variety of different activities in
carrying out the work.
 Task identity: the degree to which the job requires completion of an identifiable task
or output.
 Task significance: The degree to which the job has an impact on other jobs within the
organization or related organizations.
 Autonomy: The degree to which the job provides the worker with the freedom and
discretion in setting work schedules, and in determining the appropriate means of
doing the job.
 Feedback: the degree to which individuals are able to obtain data concerning the
fulfillment of the job requirements.

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 Redesigning Job Range
Job Rotation
 Rotating an individual from one job to another to enable the individual to complete more job
activities because each job includes different tasks.
 The practice of job rotation does not change the basic characteristics of the assigned jobs.
Job Enlargement
 Job enlargement strategies focus on the opposite of dividing work they are a form of
increasing the number of tasks that an employee performs. For example, a job is designed
such that the individual performs six tasks instead of three.
 An enlarged job requires a longer training period; job satisfaction usually increases because
boredom is reduced. The implication, of course, is that the job enlargement will lead to
improvement in other performance outcomes.
 If they have the required ability, then job enlargement should increase satisfaction and
product quality and decrease absenteeism and turnover.
 If management desires to implement the redesign strategy that enlarges job depth and job
enrichment. Job enlargement is a necessary precondition for job enrichment.

Redesigning Job Depth

Enrichment
 The impetus for redesigning job depth was provided by Herzberg's two-factor theory of
motivation.
 The basis of this motivation theory is that factors, which meet individuals' need for
psychological growth, responsibility, job challenge, and achievement, must be characteristic
of their jobs.
 The implementation of job enrichment is realized through direct changes in job depth.
 Managers can provide employees with greater opportunities to exercise discretion by making
the following changes.
 Direct Feedback: the evaluation of performance should be timely and direct.
 New learning: A good job enables people to feel that they are growing. All jobs should
provide opportunities to learn.
 Scheduling: People should be able to schedule some part of their own work.
 Uniqueness: Each job should have some unique qualities or features.
 Control over resources: Individuals should have some control over their job tasks.
 Personal accountability: People should be provided with an opportunity to be
accountable for the job.
 Job enrichment incorporates high-level motivators, including more job responsibility, greater
recognition, more opportunities for personal growth, and greater job discretion or autonomy.

Importance of Job Analysis information

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 It is useful in organizing (planning, division of work and duties, etc.) and in manpower
planning.
 It helps the human resource manager of an organization in recruitment and selection because
job analysis identifies the type of qualities required which are suitable for the job.
 A job analysis states the qualifications, experience, skills, of the employee suitable for the
job and also details the risk and hazards faced by the employee, fixation of wages and
salaries becomes smoother and much more accurate.
 It is useful in job reengineering. Job allocation may not always be perfect. Job analysis helps
the management in identifying the areas which are not yielding results and when the problem
is concerned with job allotment. Job reengineering involves changing jobs in order to better
suit the job or activity with the human resource.
 Job analysis can be used as a standard for measuring the actual output of the employees in
the performance appraisal exercises carried out by the HR department.
 Since job analysis identifies the risks, hazards of the jobs it becomes easier to the safety
manger to provide for the required safety equipment for risky activities. Also this analysis
identifies the unhealthy atmosphere (pollution) generated by certain activities which serve as
a warning in advance to the management and they may try to minimize pollution by
installing pollution treatment equipment.

Purposes of Job Analysis

 Job analysis achieves two vital purposes in the organization:
 It specifies the tasks that must be accomplished to complete a job
 It determines the knowledge and the skills necessary to perform the tasks
 Job analysis generate:
 Job description
 Job Specification
 Job Standards
 Job Evaluation
 Job analysis provides information
 To recruit and select effectively, qualified person must be matched with job
requirement
 To establish equitable pay system
 Job analysis translates task, human and technological factors into job designs.
Job analysis is an important input for conducting the following human resource
management activities.
 Preparation of Human Resource Inventory and development of Human
Resource Information System for human resource planning.
 Recruitment, selection and placement of employees
 Training and Development of employees
 Performance appraisal of employees
 Developing a compensation package based on job evaluation

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  Welfare, safety and health schemes for employee retention
 Job design and redesign.

Human Resource Planning:-Meaning and Definition

Whenever the organization is in the process of determining its HR needs, it is engaged in a

process we call Human Resource Planning. Human Resource Planning (HRP) is one of the most
important elements in a successful HRM program, because it is a 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 strategic objectives. Employment planning, then, ultimately
translates the organizations over all goals into the number and types of workers needed to meet
those goals. Without clear cut planning, and a direct linkage to the organization’s strategic
direction, estimations of an organization’s HR needs are reduced to mere guesswork. This
means that employment planning cannot exist in isolation. It must be linked to the organization’s
overall strategy.

Human Resource Planning is the process of systematically reviewing human resource

requirements to ensure that the required numbers of employees, with the required skills, are
available when they are needed. It involves matching the internal and external supply of people
with job openings anticipated in the organization over a specified period of time.
According to Wendell French
“Human resource planning is the process of assessing an organization's human
resources needs in relation to organizational goals and making plans to ensure that a
competent, stable workforce is employed.”
Major benefits of planning would include:
 Planning forces managers to think ahead
 Planning leads to the development of performance standards that enable more
effective management control
 Having to formulate plans forces management to articulate clear objectives
 Planning enables an organization to be better prepared for sudden developments.

Coleman has defined human resource or man power planning as the process of determining
manpower requirements and the means for meeting those requirements in order to carry out the
integrated plan of the organization.

Stainer defines manpower planning as “strategy for the acquisition, utilization, improvement and
preservation of an enterprise’s human resources.

As defined by Bulla and Scott (1994), human resource planning is ‘the process for ensuring that
the human resource requirements of an organization are identified and plans are made for

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satisfying those requirements’. Reilly (2003) defined workforce planning as: ‘A process in which
an organization attempts to estimate the demand for labour and evaluate the size, nature and
sources of supply which will be required to meet the demand.’
According to Wickstrom, human resource planning consists of a series of activities i.e.

1. Forecasting future manpower requirements in terms of mathematical projections or in

terms of judgmental estimates based on the specific future plans of a company.
2. Making an inventory of present manpower resources and assessing the extent to which
these resources are employed optimally.
3. Anticipating manpower problems by projecting present resources into the future and
comparing them with the forecast of requirements to determine their adequacy, both
quantitatively and qualitatively.
4. Planning will be done necessary programmes concerning recruitment, selection, training,
development, utilization, transfer, promotion, motivation and compensation to ensure that
future manpower requirements are properly met.
Manpower planning consists in projecting future manpower requirements and developing
manpower plans for the implementation of the projections.

Importance of Human Resource Planning

The reasons why human resource planning is needed are

 To carry out the work of the organization skilled and qualified manpower is needed. A good
human resource plan would help the management in recruiting and selecting the best
available personnel to carry out the activities of the organization effectively and efficiently.
 People leave organizations for a number of reasons like retirement, transfers, better
opportunities in other organizations, and it is the duty of the human resource department to
replace them. A good HR plan would go a long way in trying to predict when the vacancies
would be created and when the recruitment and selection should be carried out.
 Labor turnover and absenteeism seen among workers are also factors which make human
resource planning important.
 In order to meet the requirements of expansions and diversification programs of the
organization a HR plan is important.
 The present situation of fast paced change in technology, and changing needs of the
workforce has also necessitated creation of an effective HR plan to cope with future
uncertainties.
 Human resource planning will help the management in identifying the areas where there are
surplus personnel. These Surplus personnel can be transferred to other departments or can be
assigned some other duties.
 It is useful in deploying the right kind of personnel to the right kind of job at the right time
which would ensure higher productivity.

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Steps (procedures) in Human Resource Planning

Basically a HR plan consists of the following five phases or steps.

 Determining future human resource requirement. This requirement depends on the general
business plans of the organization. If in the business plan it is indicated that there would be
an expansion in the production activity the HR manager will have a very good idea when to
start the recruitment process and what kind of personnel to recruit.
 Determining future human resource availability. In this step the HR manager tries to
determine the number, category and types of employees who will remain with the
organization at the end of the plan period.
 Conducting external and internal environmental scanning. External environmental scanning
involves tracking trends and developments in the areas of economics, labor, workers unions,
laws and regulations, etc.; recording relevant information and conveying this information to
the concerned departments or individuals.
 Reconciling requirements and availabilities. Comparing the future human resource
requirement with the future human resource availability in the light of the external and
internal environmental scan will lead to identification of the problems or gaps. Thus any
future recruitment tries to fill up these gaps and solve any problem identified in the
reconciliation. Objectives of the human resource plan can also be derived by this
reconciliation.
 Action planning. After the objectives of human resource plan are finalized strategies to
pursue these objectives are made. This involves generating alternatives, assessing these
alternatives and selecting the best one which can achieve the objectives of the HR plan.

Human resource information system (HRIS)

To assist in the HR inventory, organizations have implemented a HRIS. The HRIS sometimes
referred to as a human resource management system (HRMS) is designed to quickly fulfill the
HRM informational needs of the organization. The HRIS is a database system that keeps
important information about employees in central and accessible location- even information on
the global workforce. When such information is required, the data can be retrieved and used to
facilitate employment planning decisions. Its technical potential permits the organization to track
most information about employees and jobs and to retrieve that information when needed.

HRISs have grown significantly in popularity in the past two decades. This is essentially due to
the recognition that management needs timely information on its people; moreover, new
technological breakthroughs have significantly cut the cost of these systems. Additionally,
HRISs are now more “user friendly” and provides quick and responsive reports- especially when
linked to the organization’s management information system.

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At a time when quick analysis of an organization’s HR is critical, the HRIS is filling a void in the
HRP process. With information readily available, organizations are in a better position to quickly
move forward in achieving their organizational goals. Additionally, the HRIS is useful in other
aspects of HRM, providing data support for compensation and benefits, programs, as well as
providing a necessary link to corporate payroll.

Purposes and uses of HRIS

An HRIS serves two major purposes in organizations. One relates to administrative and
operational efficiency, the other to effectiveness. The first purpose of an HRIS is to improve the
efficiency with which data on employees and HR activities is compiled. Many HR activities can
be performed more efficiently and with less paperwork if automated. When on-line data input is
used, fewer forms must be stored, and less manual record keeping is necessary. Much of the
reengineering of HR activities has focused on identifying the flow of HR data and how the data
can be retrieved more efficiently for authorized users. Workflow, automation of some HR
activities, and automation of HR record keeping are key to improving HR operations by making
workflow more efficient.
The second purpose of an HRIS is more strategic and related to HR planning. Having accessible
data enables HR planning and managerial decision making to be based to a greater degree on
information rather than relying on managerial perception and intuition. For example, instead of
manually doing a turnover analysis by department, length of service, and educational
background, a specialist can quickly compile such a report by using an HRIS and various sorting
and analysis functions.
HR management has grown in strategic value in many organizations; accordingly, there has been
an increased emphasis on obtaining and using HRIS data for strategic planning and human
resource forecasting, which focus on broader HR effectiveness over time.
An HRIS has many uses in an organization. The most basic is the automation of payroll and
benefit activities. With an HRIS, employees’ time records are entered into the system, and the
appropriate deductions and other individual adjustments are reflected in the final paychecks. As a
result of HRIS development and implementation in many organizations, several payroll functions
are being transferred from accounting departments to HR departments. Another common use of
HRIS is EEO/affirmative action tracking. Beyond these basic activities, many other HR activities
can be affected by the use of HRIS in the organization.

Employee and Labor

Relations Health, Safety, and
• Union Negotiation Security
Costing • Safety Training
• Auditing Records • Accident Records
Compensation and
• Attitude Survey Results • Material Data
Benefits
• Exit Interview Analysis Records
• Pay Structures
• Employee Work History
• Wage/Salary Costing
• Flexible Benefit
Administration
Equal Employment • Vacation Usage
• Affirmative Action Plan • Benefits Usage
• Applicant Tracking Analysis
• Workforce Utilization
• Availability Analysis
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 HRIS
HR Planning and HR Development
Analysis • Employee Training
• Organization Charts Profiles
• Staffing Projections • Training Needs
• Skills Inventories Assessments
• Turnover Analysis • Succession Planning
• Absenteeism • Career Interests and
Analysis Staffing Experience
• Restructuring • Recruiting Sources
Costing • Applicant Tracking
• Job Description • Job Offer Refusal
Tracking Analysis

Human resource Audit

It is basically the audit of the manpower on the rolls of the firm. It is an inventory of each
employee’s skills, abilities, experiences, work preferences and other items of information which
indicates the value of the individual employee to the firm. It indicates the potential of an
employee to be promoted or the capacity of an employee to handle more challenging work. This
information is stored in a data base and this information is used whenever the manpower
planning is carried out. It helps the manpower planner to find out what kinds of employees are
present in the organization and what kind of personnel are to be recruited. The information
recorded will be personal information( name, age, sex, permanent address, marital status, etc.);
education & training(institutes attended, degrees/diplomas obtained, kind of training undergone,
etc.); experience & skills(job areas, titles, tenures, special skills, etc.); and additional
information( salary, grade, absenteeism record, performance ratings, career plans, etc.).

Forecasting Human Resource Demand

Forecasting future human resource demand in terms of quantity and quality is an important
aspect of human resource planning. It is the process of determining future needs for human
resources.
Factors that affect human resource demand forecast are:
 External Environmental forces: They can be economic, technological, political,
legal, social and cultural forces. They influence future demand for human
resources.
 Overall organizational objectives: They indicate the courses that the organization
plans to take in future. They can be
- Expansion or contraction of activities; new ventures.
- Planned technological changes, for example computerization.

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 - Planned organizational changes, for example restructuring.
- New product lines
- Budgetary ceilings etc.
 Human resource demand forecast must follow from overall organizational objectives.
 Marketing plan: This indicates the sales estimates for future revenue forecast. The
revenue forecast serves as an important basis to estimate the number and mix of
human resources.
 Human Resource Inventory: It indicates the present and potential skill levels within
the organization. It serves as the point of reference for estimating future human
resource needs.
 Work Force Factor: They consist of:
- Employee reallocation, resulting from promotion and transfers
- Separation, resulting from retirement, resignation, termination, death etc.
- Turnover, resulting from employees leaving the organization
- Temporary help, resulting from need for temporary or part time employees.

Projected HR Inventory
 Demand forecasting for human resources consists of preparing a projected human
resource inventory for specified future years.
 A year-by-year analysis for every job level and type is done.
 Jobs are redesigned as needed. Both qualitative and quantitative estimates for future
demand are made.
Demand Forecasting Techniques
The techniques available for demand forecasting of human resources are
 Management Judgment
 Expert Forecasts
 Statistical analysis
 Work Study Method
Management Judgment
The demand forecast for future human resources is based on the judgment of the
managers. It is a guesswork based on rules of thumb. The estimates of human resource
needs can be based on:
 Top-down approach: Top management prepares the estimates of requirements and
sends the information to lower level managers.
 Bottom-up approach: Sectoral managers prepare the estimates of requirements
and send the information to top management.
 Participative approach: management and supervisors estimate requirements
through joint consultation.
Expert Forecasts
They can be based on:

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  Surveys: Human resource experts conduct a survey of line managers about the
future human resource needs. The responses are analyzed to forecast
requirements.
 Delphi Technique: It is pooling of opinions about estimates of future human
resource needs from a group of experts. Various rounds of responses are solicited
to find out-group consensus about the requirements.
Statistical Analysis
They can be:
Trend Analysis: this technique projects past trends into the future. The methods can
be
 Extrapolation: Past rates of change are extended into the future. For example, if
100 workers were employed last year, extrapolation will forecast the need for 100
workers for the coming year.
 Indexation: A particular index is used to forecast future needs. For example, one
employee may be required for Br. 200,000 increase in sales. It is based on
existing ratios of activities.
 Econometric Models: They are based on analysis of movements in various
variables affecting human resource needs. Such variables can be sales,
production, workload etc. Relationship among variable is mathematically
described. Computers are generally used for building econometric models.
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. For example:
- Planned production units 40,000 units
- Standard hours per unit 2 hours
- Yearly standard hours 80,000 hours
- Productive hours per man year 2,000 hours
- Number of workers required 40
3.6 Forecasting Human Resource Supply
 Supply forecasting estimates future sources of human resources that are likely to be
available from inside and outside the organization.
 Factors that affect human resource supply forecasts are:
Internal Sources Forecasts:
The Human Resource Inventory of existing human resources provides information
about human resources that are likely to be available from internal sources.
 Potential additions to human resource inventory can be through promotion,
transfers, demotions and employee returning from leave of absence and study
leaves.

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  Potential losses to human resource inventory can be through retirement,
resignation, termination, death, disablement etc. Labour turnover rate is also a
good indicator of potential losses of human resources.
 Human Resource Audit is an important technique to estimate internal supply of
human resources. It summarizes each employee's skills and abilities. The audit
of non-managers is called "Skills inventory" The audit of managers is called
"management inventory"
 The search for human resources should always begin within the organization.
External Sources Forecasts
 External sources consist of human resources who currently do not work for the organization.
The sources can be:
 Educational and training Institutes
 Labour market
 The information flow from the labour market about job seekers should be constantly
monitored to analyze trends.

3.7 Matching Demand and Supply Forecasts

 Demand and supply forecasts of human resources should be matched to determine
future human resource requirements.
 Additional human resources will be needed to meet the shortages.
 Retrenchment may be needed to tackle surpluses.
 Action plans should be prepared to deal with shortages and surpluses of human
resources. They can be:
- Recruitment plan,
- Development plan
- Retention plan
- Redeployment plan
- Redundancy plan

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