1

HRPD- BABY SIR

Human Resource Planning & Development (Mod.I)
Introduction
Human Resource Planning:
Human resource planning (also called employment or personnel planning) is essentially the process of
getting the right number of people into the right job at the right time so that an organization can meet
its objectives.
HRP is the process by which an organization ensures that it has the right no and kind of people at the
right places, at the right time, capable of effectively and efficiently completing those tasks that will help
the organization achieve its overall objectives
Human resources planning is a process that identifies current and future human resources needs for an
organization to achieve it goals
E.W.VETTER viewed HRP as a process by which an organization should move its current manpower
position to its desired manpower position. Through planning, management strives to have the right
number and right kind of people at the right places at the right time, doing things which result in both
the organization and the individual receiving maximum long run benefit.
OBJECTIVES: Forecast personnel requirements:
HR planning is essential to determine the future manpower needs in an organization.In the absence of
such a plan,it would be difficult to have the services of right kind of people at the right time.
Cope with changes:
HR planning is required to cope with changes in market conditions,technology,products and
government regulations in an effective way.These changes may often require the services of people with
the requisite technical knowledge and training. In the absence of an HR plan we may not be in a position
to enlist their services in time.
Use existing manpower productively:
By keeping an inventory of existing personnel in an enterprise by skills level,training,educational
qualifications,workexperience,it will be possible to utilize the existing resources more usefully in
relation to the job requirements.This also helps in decreasing wage and salary costs in the long run.
Promote employees in a systematic manner:
HR planning provides useful information on the basis of which management decides on the promotion
of eligible personnel in the organization. In the absence of an HR plan, It may be difficult to ensure
regular promotions to competent people on a justifiable basis.
To recruit and retain the human resource of required quantity and quality.
To foresee the employee turnover and make the arrangements for minimising turnover and filling up of
consequent vacancies.
To meet the needs of the programmes of expansion, diversification etc
To foresee the impact of technology on work, existing employees and future human resource
requirements.
To improve the standards,skill,knowledge,ability,discipline,etc
To assess the surplus or shortage of human resources and take measures accordingly
To maintain congenial industrial relations by maintaining optimum level and structure of human
resources.
To minimize imbalances caused due to non-availability of human resources of right kind, right number
in right time and right place
To make the best use of its human resources; and
2

HRPD- BABY SIR

To estimate the cost of human resources.
Human resource planning may be viewed as
Foreseeing the HR requirements of org. and the future supply of HR
Making necessary adjustments between these two
Foreseeing the possibility of developing the HR to match with the requirements by introducing necessary
changes in the function of HRM
HRP is subject to revision in tune with requirements of an org. from time to time
The focus is to get right number of right people at right time.
Objectives
To recruit and retain the HR of required quantity and quality.
To foresee the employee turnover and make arrangements for minimizing turnover and filling up of consequent
vacancies
To meet the needs of expansion , diversification
To foresee the impact of technology and future HR requirements.
To improve the standards, skills, knowledge etc.
To assess the surplus or shortage of HR & take measures.
To maintain congenial IR by maintaining optimal level of HR
To minimize imbalances and make best use of HR
To estimate cost of HR and promote HR in systematic manner
Benefits /Importance of HRP
Future personal needs- part of strategic planning - create highly talented personnel-increase investments in
HR through training and development -foundation for personal function- (include also relevant features under
objectives)
It checks the corporate plan of the organisation.
HRP offsets uncertainties & changes to the maximum extent possible & enables the organisation to have
right men at right time & in right place.
It provide scope for advancement & development of employees through training & development.
It helps to anticipate the cost of salary enhancement, better benefits etc.
It helps to anticipate the cost of salary, benefits & all the cost of human resources facilitating the
formulation of budgets in an organisation.
To foresee the need for redundancy & plan to check it or to provide alternative employment in
consultation with trade unions, other organisations & government through remodelling organisational,
industrial & economic plans.
To plan for physical facilities, working conditions & the volume of fringe benefits like canteen, schools,
hospitals, conveyance, child care centres, quarter s, company stores, etc..
It gives an idea of types of tests to be used & interview techniques in selection based on the level of
skills, qualifications, intelligence, values, etc.., of future human resource.
It facilitates the control of all the functions, operations, contribution & cost of human resources.
Future personnel needs.
Part of strategic planning.
Creating highly talented personnel.
Foundation for personnel functions.
Problems/barriers of HRP
External factors:
Governmental policies.
Level of economic development.
Business environment.
Information technology.
Level of technology.
Outsourcing.
Internal factors:
3

HRPD- BABY SIR

Strategies of the company.
Human Resources policy of the company.
Job analysis.
Time horizons
Type & quality of information.
companys production operations policy.
Trade unions.
Conflict between short term and long term HR needs
Conflict between quantitative and qualitative HRP
Non involvement of line managers renders HRP in effective
HR practitioners who formulate the plan may not be experts in managing business. Hence HRP may not be
compatible with organizational plan
external factors (uncontrollable):govt. policies, level of economic development, business environment, level of
technology, international factors
Internal factors: company policies and strategies, HR policies, stability in competitive enviornment, type and
quality of information, companies production- operation policy, influence of trade unions
Process of HRP
1. Environmental scanning (external & internal factors)
2. Analyzing the org. plans(production, technological, expansion, diversification, Mktg., sales, plans etc)
3. Aligning with org. objectives and policie
4. Demand forecasting:
Demand forecasting is the the process of estimating the quantity and quality of people required to meet
the future needs of org.
- Forecasting Techniques
1. managerial judgment
2. ratio-trend analysis (ratios are calculated for the past data relating to employees of each category and
future requirement is estimated on the basis of
established ratios)
3. econometric models (analyzing the past statistical data and bring the relationships among variables.
Econometric models is used to forecast man power needs based on movement in various variables which
include those factors which affect man power requirement like production, sales etc. Regression analysis is an
important econometric model.
4. Work study Technique: These techniques are more suitable where the volume of work is easily
measurable. Under this method total production in terms of units are estimated in a year and man hours
required for the above production are estimated. Then the required number of employees are calculated.
5. Job Analysis: Job analysis include job description (a factual statement of duties and responsibilities of a
specific job) and job specification (information on attributes like education, skill, aptitudes etc.)
6. Delphi Technique: It invites estimates of personal needs from a group of experts usually managers. HRP
experts summarize the various responses from managers and report the findings back to managers. After such
repeated interactions between managers and HRP experts, agreement is reached for the forecast of personal
needs.
7. Flow Models: The simplest flow model is called Markov model. In this technique forecasters determine the
time to be covered, establish categories to which employees can be assigned, count annual movement or
flows among different categories for several time periods. These flows are gains or losses to the company or
change in position levels and estimate the probability of transition from one category to another on past trends.
Demand is a function of those who make a transition.
5. Supply Forecasting:
It determines whether HR department will be able to procure the required number of personnel. The
supply analysis covers:-
1. Existing human resources: analyzing present employees is facilitated by HR audit of non managers
which are called skill inventories(personal data, job history, salary, benefits, promotion, training, retirement etc
4

HRPD- BABY SIR

and HR audit of managers which are called management inventories (personal data, work history, promotion
potentials, career goals number of persons supervised, psychological assessments etc.
2. Internal supply: (inflows, outflows, turnover rate, condition of work and absenteeism, productivity
level, movement of jobs etc)
3. External Supply: (college, university, consult- ants, competitors, unsolicited application etc.)
6. Determining the man power gaps between demand forecasting and supply forecasting. By this the
number of people to be recruited or made redundant are estimated.
7. HR plan implementation :
-recruitment, selection, placement, training, development
-retention plan(performance appraisal, better career opportunities, resolving conflicts)
o re-deployment(sister organizations)
o out sourcing
o out placement programs (other companies)
-down sizing plan (reduction in working hours, transfer, reassigning employees, reduced working
hours, creation of adhoc projects)
-early retirement, compulsory retirement
-layoff(temporary and permanent)
-managerial succession planning
-attrition(process where the employees leave their jobs for various reasons)
8. Control and review mechanism:
-consider the decision reg. additions at highest level
-audit HR and study man power utilizations
-measure labor productivity
-conduct level of job satisfaction and employee morale, absenteeism, irregularities, over time etc
-sending periodic reports to top management
Skill Inventories
Skill inventories consolidate information about non- managers in the organization. This information is used as
input to transfer and promotion decisions. The following seven broad categories of information are included in
skill inventory.
- Personal data(age, sex, marital status)
- Skills (education, job , experience, training)
- Special Qualification (membership in professional bodies, special achievements)
- -Salary and job history(present and past salary, date of pay hike, various jobs held)
- -company data(benefit plan, retirement data, seniority)
- -capacity of individual(scores on psychological and other tests, health information)
- -special preference of individuals(geographic location, type of job)
- This skill inventory record should be updated every two years. The popularity of skill inventory has increased
with the proliferation of computers and introduction HR information systems.
Management Inventory
Management Inventories consolidate information about managers in the organization. These includes such
data as
- work history-strengths-weaknesses (identification of specific training programs needed to remove the
weaknesses)- promotion potential-career goals personal data-number and types of employees supervised-
previous management duties-total budget managed- scores on psychological assessment
- Management inventories are generally computerized and updated once in two years. Before updating managers
are encouraged to report major changes, if any, in their careers.
Wastage analysis
Analysis of manpower supply at the enterprise level is also done using some quantitative techniques. One such
technique wastage analysis. Wastage analysis is severance from the organization which include retirement,
resignations , dismissals etc. Recruitment decisions without wastage analysis may lead to inaccuracies in HRP.
5

HRPD- BABY SIR

Tavistock Institute of Human relation , UK suggested wastage analysis using a curve. The curve identifies three
different phases. During induction phase marginal employees leave. During differential transit phase, an
employee learns about the organization and identifies his roles in it. While during the settled connection phase,
an employee settles down and decides to stays long.
Wastage also decreases with the increased skills and age of employees. Working conditions, size of the firm,
level of employment are also important variables of man power wastage
Methods of Wastage Analysis:
1.Labour turnover index: This index indicates the number of leavers as percentage to average number of
employees. Average number of employees employed in a given time period is decided by:
employees at the beginning + employees at the end
2.Stability Index: This index indicates stable workforce percentage for a given period and can be compiled as
Number of employed more than one year of service x 100
Total employed one year ago
Macro Level Manpower Planning
Macro Level Manpower Planning
HRP cannot be done in isolation with macro issues like general environmental factors that is employment-
unemployment situations- demographic changes- legal control- institutional policies- policies on globalization,
liberalization and privatization etc. Macro issues unlike micro level issue are exogenous, ie. uncontrollable.
Development of HR is one of the important objectives of any country for long term economic growth. Following
are the major issues before our government to develop HR at national level:
1. Population planning and control: Govt. of India has adopted a national policy in 2000 to ensure population
stabilization. The policy emphasised on an affordable reproductive healthcare and increased quality of life.
Despite regional imbalances, there is significant rise in population control awareness among people.
2. Literacy and education: Govt. of India has adopted a national policy on education in 1986 which provided a
broad framework for complete eradication of illiteracy in the country by declaring primary level education
compulsory. Accordingly the policy emphasized on govt. and non govt. expenditure in education. There is
significant rise in literacy level.
3. 3. Health and medical care: Despite initiatives taken by the government , barring a few positive changes in life
expectancy ratio, infant mortality rate etc., the country is still far away from improving general health indices.
Core communicable and non-communicable diseases not contained to the expected levels. More than 50% of
our population is not having access to basic health care
4. 4. Housing:Govt. has renewed its effort by adopting the National Housing and Habitat policy 1998 to achieve e
development of housing infrastructure through public-private partnership the role of HUDCO, commercial
banks and other agencies significant development
Labor markets
Demand, supply and institutions interact in labor markets. Analysis of labor markets are carried out for
different occupational segments like markets for blue collar and white collar workers, professionals and skilled
workers. Differentiating demand and supply forces in the markets, geographic and industrial mobility,
unemployment, wage pattern are also areas for studying the labor markets.
Recruitment planning
The first stage in the recruitment process is planning. Planning involves the translation of likely job vacancies
and information about its nature into a set of targets that specifies the number and type of applicants to be
contacted.
No: of contacts: Organization plans to attract more applicants than they will hire as some of those
contacted will be either uninterested or not found eligible for the post. Companies calculate Yield Ratios (yRs)
which express the applicant inputs to outputs at various decision points.
For eg: Assume that an orgasnization attempting to recruit sales people ran a series of advertisements.
-the ad generated resumes from 2000 applicants of which 200 were judged qualified, (yR=10:1)
-of these 200, 40 were shortlisted after a test(yR=5:1)
-of these 40, 30 were offered jobs after a interview (yR=4:3)
6

HRPD- BABY SIR

-of these 30, 20 accepted the jobs(yR=3:2)
Thus the overrall yR is 100:1
Thus a requirement of say 30 hirers during a specified period would mean a recruitment target of 3000
No yR will be available for recruiting employees for the first time. Recruiters in such cases have to depend upon
their counterparts in other organizations or make their own guesses.
Type of Contacts: This refers to the type of people to be informed about the job opening. The type of
people depends on the tasks and responsibilities involved and the qualifications and experience expected.
These details are available through job description and job specification.
Succession planning/management
Succession planning is the process of ensuring suitable supply of successors for current and future senior
position arising from business strategy so that the careers of individuals can be planned and managed to
optimize the organizations needs and individual aspirations. A succession plan is a plan for identifying who is
currently in post and who is available and qualified to take over in the event of retirement, dismissal and
resignation.
Succession management includes the following activities:
- identifying the shortage of leadership skills and defining the requirements
- identifying potential successors for key positions
- coach and groom the stars
- secure top managements support
Hiring from within and hiring form outside
HRPD-MODULE II
Job Analysis (JA)
It is a systematic investigation of tasks, duties and responsibilities necessary to do a job. A task is an
identifiable work activity carried out for a specific purpose, for example, typing a letter. A duty is a
larger work segment consisting of several tasks(which are related by some sequence of events) that are
performed by an individual, for example, pick up, sort out and deliver incoming mail. Job
responsibilities are obligation to perform certain tasks an d duties
Uses of job analysis
Human resource planning
Recruitment
Selection
Placement and orientation
Training
Counseling
Employee safety
Performance appraisal
Job design and Redesign
Job evaluation
Promotion and transfer
Industrial relations

Process of JA
Jobs can be analyzed through a process which consists of six basic steps:
Collection of background information: Back ground information consists of Organizational charts
which show the relation of job with other jobs; class specifications of the describes the general
requirements of the class of job to which this particular job belongs and job description which
provides a good starting point for JA
Selection of representative position/job to be analyzed as it is too difficult to analyze all jobs
Collection of JA data(features of the job, HR requirements, required employee behavior)
7

HRPD- BABY SIR

Developing a job description(describing the contents of the job in terms of functions, duties,
responsibilities , operations etc.
Developing a job specification which describes the personal qualities, traits, skills, knowledge and
background necessary for the job
Developing the employee specification which describes physical qualifications , educational
qualifications , experience etc. of an employee required for the given job specification
Methods of collection JA data
Job performance: In this method the job analyst actually performs the job in question
Personal observation
Critical incidents: It is a qualitative approach to job analysis. Here the job holders are asked to describe
critical incidents based on their past experiences. The incidents so collected are analyzed according to
the job areas
Ordinary Interview
Interview by panel of experts
Diary method: several job incumbents are asked to keep diaries or logs of their daily job activities and
record the time spent on each activity. By analyzing these activities over a period of time , a job analyst
is able to record the jobs essential characteristics
Questionnaire method

Job description (JD)
JD is an important document which is basically descriptive in nature and contains a statement of job
analysis
Characteristics of a good job description:-
It should indicate the scope & nature of work
It should be clear reg. the position and duties ie. the kind of work; the degree of complexity; degree of
skill required; the extent of workers responsibility for each phase of work; the degree and type of
accountability
Supervisory responsibility should be shown to the incumbents
Content of JD
JD normally contains the information on the following lines: - Job title supervision given and received
materials, tools, machinery worked with designation of the immediate supervisors and subordinates
details of salary and other perks complete list of duties to be performed daily, weekly ,and monthly
estimated time to be spent on each day condition of work like location, time, speed of work, health
standards, accident hazards, training and development facilities promotional channels
Major steps of JD
The job analyst has to write the JD after consulting the worker and the supervisor. The following modes
may be used in writing :
Get the questionnaire filled in by the immediate supervisor of the employee
Job analyst has to complete the JD form by observing the actual work done by employee
All the information pertaining to the job should be secured from the worker
Thus the job analyst finalizes the JD and write the final draft. The JD should be reviewed and updated
after the final draft is prepared.
Job specification (JS)
It is a written statement of traits, physical and mental characteristics an individual must possess to
discharge the job duties and responsibilities effectively. It includes:
Physical specifications(height, weight, vision, hearing, health, capacity to operate machine)
Mental specification(arithmetical ability, interpretation of data, general intelligence )
Emotional, social specification(emotional stability, social adaptability in human relationship)
Behavioral specification(judgement, creativity, research, teaching ability, conciliation, maturity etc)

CAREER Planning & Management
8

HRPD- BABY SIR

Career is all the jobs that are held during ones working life. A career path is the sequential pattern of
jobs that form a career. Career goals are the future positions one strives as a part of career. Career
planning is the process by which one selects career goals and path to these goals
Features of career
A career develops over time
It is the individual who ultimately must judge the success of his career
psychological success which basically is sense of personal accomplishment and fulfillment is the most
important element of a career
A typical career of a person today would include many different positions and transitions and
organization more so than so in the past.
Career planning
Career stages
Exploration(searching for the job)
Establishment (getting the job)
Mid career stage(performance increases, decreases or maintains)
Late career stage(no longer earning about his job pleasant stage-playing a part of the elder states
person)
Need for/objectives of career planning
To attract competent persons and to retain them in the organization
To provide suitable promotion opportunities
To enable the employees to develop and to make them ready to meet future challenges
To increase the utilization of managerial reserves within an organization
To correct employee placement to reduce employee dissatisfaction and turnover
To improve motivation and morale

Process of career planning
Analyzing individual skills, knowledge, abilities and attitudes
Analysing career opportunities
Aligning the needs and opportunities
Action plan
Periodic review
Pre-requisites of success of career planning
Strong commitment of top management
Clear corporate goals
Self motivated and committed work force
Developing, expanding and diversifying the activities in a phased manner
Selecting the most suitable man and place him in the right job
Minimum career stress
Publicize widely the career planning program
Proper age composition in manpower planning

Career management
It includes both organizational and individual efforts aimed at setting career goals, formulating and
implementing strategies , administering the results. A balanced approach to career management
includes initiatives to balance individual career goals and organizational needs. These strategies
complement and reinforce each other
SELECTION
After identifying the sources of HR, searching for prospective employees and stimulating them to apply
for jobs in an organization, management has to perform the function of selecting the right employees at
9

HRPD- BABY SIR

the right time. The selection procedure is the system of functions and devices adopted in a given
company as to ascertain whether the candidate specification are matched with the job specification
Factors affecting selection decision
Profile matching: - The scores secured by candidates who are already selected in the company after
conducting various test in the past are taken as a standard to decide the success or failure of the current
candidates
Organizational and social environment: - Candidates specification must match with not only job
specifications but also organizational and social environment
Successive hurdles: -The applicants must successfully pass each successive hurdle like written test,
preliminary interview, GD, final interview etc.
Multiple correlation: - It is based on the assumption that a deficiency in one factor can be counter
balanced by an excess amount of another

Environmental factors :
Internal environment: It includes size of the company, type of organization structure, type of job design,
complexity, technology, personal prejudice, nepotism and favoritism of managers involved in the process
External environment : It includes labor laws, labor market conditions , Government rules, policies, and
regulations , influence of politicians, trade unions, professional associations
Selection procedure
Steps in scientific selection process
Job analysis: -Every organization should finalize the job analysis , job specification, job description
before proceeding to the next step of selection.
Recruitment: It refers to the process of searching for prospective employees and stimulating them to
apply for jobs in organization
Application form: Information like personal background information, educational attainments, work
experience, salary drawn/ expected, personal details, references etc
Written examination:-It covers the candidates ability in arithmetical calculations, aptitude for
reasoning, general knowledge, English language etc
Preliminary interview: It is to solicit necessary information from the prospective candidate to assess
the applicants suitability to the job generally conducted by an assistant in HR dept
Business games: Some of the business games and their utility in the selection process are : case
study(analytical, judgment and decision making skills),role play(human relations skills),in-basket
method(Situational judgment, social relations, decision making skills, problem solving skills),
sensitivity(degree of openness, concern for others, tolerance for individual differences) and
simulation(encountering skills)
Group discussion: - Initiating the discussion, Explaining the problem, keenly observing the discussion of
others, clarifying controversial issues, speaking effectively, mediating arguments among the
participants and concluding
Tests :-The objective of the test is to solicit further information to assess the employees suitability to the
job
Aptitude tests: - These test measure whether an individual has the capacity to learn a given job if given
adequate training. Some of the aptitude tests are: intelligent tests, mechanical aptitude tests,
psychomotor tests(measuring abilities like manual dexterity) and clerical aptitude tests
Achievement tests: -These tests are conducted when an applicant claims to know something as these
test are concerned with what one has accomplished. These test are classified into job knowledge test,
and work sample test.
Situational test:-The test evaluates candidate in a similar real life situation. In this test, a candidate is
asked either to cope up with the situation or solve critical situations of the job. Some of the tests are
group discussion, in-basket exercise etc.
Interest test: - These tests are inventories of the likes and dislikes of candidates in relation to work, job,
occupation, hobbies etc
10

HRPD- BABY SIR

Personality tests:-These tests prove to discover individuals value system, emotional reactions,
maturity and characteristic moods. Some of the personality tests are: Thematic Apperception
test(Candidates are shown a series of pictures and are asked to write a story based on these pictures.
This test measures candidates imaginative, and interpretative skills) and ink-blot tests.
Final interview: - In this step the interviewer matches the information obtained about the candidate
through various means to the job requirements. The types of interviews are : preliminary
interview(unstructured and informal) and core interview(background information interview, stress
interview, group interview, discussion interview, panel interview etc) .The steps in the interview
process are preparation, conduct, closing and evaluation of the interview.
Medical examination
Reference checks
Final decision by the line manager
Employment.
Recent trends in Selection
Selection by invitation(inviting the key executives of competitors)
Leasing(employing the specialists from the pool of consultants at an agreed fee covering salary)
360 degree selection(involving the subordinates and employees in the conduct of tests and interviews)
POTENTIAL APPRAISAL
The objective of the potential appraisal is to identify the potential of a given employee to occupy higher
positions in the organizational hierarchy and undertakes responsibilities.
Steps for potential appraisal: Role description- qualities needed to perform the roles rating
mechanisms organizing the systems feedback
CAREER DEVELOPMENT
Career development consists of personal actions undertaken to achieve a career plan. These actions
may be initiated by the individual himself or by the organization.
Steps for individual career development:
Performanceexposurenetworking (personal and professional contacts outside for job, business)-
leveraging(resigning the existing job to join new employer)-loyalty to career-mentors and sponsors-
qualified and knowledgeable subordinates-professional training, additional degrees and certifications
Steps for organizational career development
Self-assessment tools (After individuals complete self assessment, they share their findings with others
in career planning workshops which show how to prepare and follow through individual career
strategies. Another tool is the career work book which consists of a form of career guide in question
answer format)
Individual counseling (HR Dept. official or expert)
Information services(a. Job posting system: informing employees about vacancies in the organization
through news letters, notice boards etc.; b. Skills inventory: containing employees work history,
accomplishments, qualifications, career objectives ,retirement dates; c. career ladders and career paths;
d. career resource centre: a sort of library to distribute career development materials such as reference
books, career manuals, news letters brochures etc)
Employee assessment programs(several assessment programs used to evaluate the employees potential
for development/growth like psychological tests; promotability forecasts; succession planning: a report
card showing which individuals are ready to move into higher positions; assessment centre: a number
of performance simulation tests and exercises
Employee development programs(Consists of skill assessment and training to groom the employees for
future vacancies like seminars, workshops, job rotation, mentoring programs)
Career performance for special groups(programs for dual career families; outplacement programs for
employees who are laid off or retrenched; special programs for minorities, employees with disabilities,
women etc.)
Advantages of career planning&development
11

HRPD- BABY SIR

A) For individuals:
Availability of knowledge of career prospects
Selection of the best career suitable to him
Better morale and job satisfaction
Employees commitment and loyalty
Lowers employee turnover
Improves employee performance
Satisfy employee esteem needs
Identification of internal employees for promotion
B) For organization:
Availability of human resources with required skill and knowledge
Ability to attract and retain highly skilled and talented employees
Enhances cultural diversity by attracting and retaining people with different cultures
Promotes organizational goodwill
Cordial employer-employee relations
Better customer service and increased bottom lines
Limitations of career planning&development
Dual career family problem due to transfers
Career with low scope for promotion/ advancement in certain careers
Careers affected by restructuring/downsizing
Declining career opportunities in select areas due to technological/economic factors
Upsetting the career planning by environmental factors such as government policy, reservation policy,
regional pressures, trade union demands
Steps for effective career plg. and career devt:
Challenging initial job assignment-career option information-assessment centers-career counseling-career
development workshops-continuing education and training-periodic job changes-sabbatical for attending
executive development programs-management simulation-mentor-protg relationship-interaction with
professional organizations
Career management
It includes both organizational and individual efforts aimed at setting career goals, formulating and
implementing strategies , administering the results. A balanced approach to career management
includes initiatives to balance individual career goals and organizational needs. These strategies
complement and reinforce each other
Succession planning
Succession planning is the process of ensuring a suitable supply of successors for current and future
senior positions so that the careers of individuals can be planned and managed to optimize the
organization needs and the individual aspirations. If qualified candidates are not available within the
company, outsiders can be considered. A succession plan is a plan for identifying who is currently in
post and who is available and qualified to take over in the event of retirement, dismissal or sickness.
Succession management
The basic purpose of succession management is to ensure that the right talent is available when needed
and that adequate experiences are provided for higher level employees. It includes the following
activities:
Identifying the shortage of leadership skills
Identifying potential successors for such posts
Coach and groom such identified employees
secure top management support
Career anchors
Career anchors are distinct pattern of self-perceived talents, attitudes, motives and values that guide
and stabilize a persons career. Some of them are as follows:
12

HRPD- BABY SIR

Managerial and technical competencejob securitycreativity-autonomy-dedication to change-pure
challenge-life style
Counseling
Characteristics:
It is an exchange of ideas and feelings between two people
It tries to improve organizational performance
It may be performed by both professionals and non professionals
It is usually confidential
It involves both job and personal problems
Need for counseling: Emotions-interpersonal problems and conflict at work place-inability to meet job
demands-over work load-confrontation with authority- accountability and responsibility-conflict with
subordinate and co-workers-family problems-health problems-career problems
Functions of counseling: Advice-reassurance-communication upward and downward-release of emotional
tensions-clarified thinking-reorientation

Types of counseling
Directive counseling(It is counselor- oriented. It is the process of listening to an employees problem,
deciding with the employee what should be done and telling and motivating the employee to do it)
Non-directive counseling(It is counselee-oriented. The employee primarily controls directions of
counseling, takes up the responsibility to develop solutions, assumes equal status with the counselor
and is psychologically independent as a person)
Participative counseling(It is a counselor-counselee relationship that establishes a cooperative
exchange of ideas to help an employees problem)

JOB DESIGN
The logical sequence to job analysis is job design. It involves 3 steps:
Specification of individual tasks specification of the methods of performing each task the
combination of tasks into specific jobs to be assigned to the individual

Factors affecting job design:
i. Organizational factors( characteristics of task work flow Ergonomics ie. Concerned with
designing and shaping jobs to fit the physical abilities and characteristics of individuals so that
they can perform the jobs effectively work practices )
ii. Environmental factors(employee abilities and availability social and cultural expectations)
iii. Behavioral factors(feed back autonomy use of abilities)

Job design approaches
i. Job design rotation(moving employees from job to job to add variety and reduce boredom)
ii. Job engineering(sit focuses on the tasks to be performed, methods to be used, work flows
among employees, lay out of the work lace, performance standards and inter dependencies
among people and machines)
iii. Job enlargement(It attempts to add somewhat similar tasks to the existing job so that it has
more variety to be more interesting)
iv. Job enrichment(It involves more motivators to a job to make it more rewarding . Job becomes
enriched when it gives job holder more decision making, planning and controlling powers)
Characteristics of job enrichment are :
direct feed back new learning scheduling own work unique experience control over resources
direct communication authority personal accountability
13

HRPD- BABY SIR

Outcomes of job enrichment are : knowledge of result sense of responsibility self-control
self esteem meaningfulness achievement variety motivation - better performance
satisfaction with the job low absenteeism job involvement
Performance management
PM involves two related activities:
- Evaluate employee performance against standards set for them
- Helping them develop action plans to improve performance
Purposes of PM
- It is administrative in nature because it directly affects a firms administrative decisions
regarding its work force
- It is developmental In nature using performance evaluation to help employees to improve
their performance in order to add more value to the company
Steps for developing and implementing a good PM process
i. Identifying performance dimensions which relate to the specific tasks and activities for which
employees are responsible
ii. Developing performance measures:
Valid and reliable measures: Effective performance evaluation system use performance
measures that are valid and reliable. Reliability refers to how well a measure yields consistent results
over time and across raters. Validity is the extent to which you are measuring what you want to
measure and how well that is done. A performance measure is said to be contaminated or deficient
when it captures information that is irrelevant to an individuals job performance.
PERFORMANCE MEASURE STANDARDS: Without a standard bench mark correct evaluation of the
employee performance cannot be conducted. The standards may be qualitative or quantitative. They
must be clear and attainable
iii. Evaluating employee performance :
Managers can evaluate the performance of their employees in number of ways. The methods
vary in several important ways. Some methods focus on measuring performance outcomes whereas
other s focus on employee traits or behaviors. The various methods also differ in terms of their
usefulness in meeting the administrative or developmental purposes of a firms performance
management system.
Methods of appraisal/measurement :
1.Individual evaluation methods:
Confidential report (made by the immediate supervisor not generally made public no
feedback to the employee highly subjective)
Essay evaluation (the rater is asked to express the strong and weak points of the employees
behavior highly subjective)
Critical incident method (critical incidents or events represent the outstanding or poor
behavior of the employee on the job assessed by the manager. At the end of the rating period
these recorded incidents are used in the evaluation of workers performance)
Check list (A check list represents a set of statements about his behavior essential for the
employee performance. The rater checks whether the appraise possesses them or not.
Employee performance is rated based on these behavioral skills)
Graphic rating scale (These compare individual performance to an absolute standard. In this
method judgments about performance are recorded on a scale 1 to 5. The points given by the
rater to each character are all added up to find out the overall performance )
14

HRPD- BABY SIR

Behaviorally anchored rating scale (It is a combination of rating scale and critical incident
techniques. The critical incidents serve as anchor statements on a scale. Then they rank and
validate specific behaviors for each of the components)
Management by objectives (MBO)(MBO is a process whereby the superior and subordinate
jointly identify its common goals, define each individuals major areas of responsibility and
assess the contribution of its members)
2. Multiple person evaluation techniques
These are methods of evaluating one employee in comparison to another
Ranking method (The rater finds the employee with the highest and lowest performance on
some characteristics. Then he selects the next highest and next lowest and go on until he rates
all the employees in that group)
Paired comparison method (Each worker is compared with all other employees in the group
for every trait. Thus paired comparisons are made for every trait , tabulated and then rank is
assigned to each worker)
Forced choice method (A large number of statements in groups are prepared. Each group
consists of two favorable and two unfavorable statements concerning employee behavior. The
appraiser is asked to select one statement each that mostly describe employee behavior out of
two favorable statements and two unfavorable statements. The items are designed to
discriminate effective from ineffective workers.
3.Other methods
Group appraisal (employee is appraised by a group of appraisers consisting of immediate
supervisor, other supervisors who use multiple appraisal techniques)
Human resource accounting (HRA)(It is the process of accounting for people as an
organization resource. HR costs include costs incurred by the company in hiring, training, and
compensating people. Contribution of HR is the money value of labor productivity. Employee
performance can be taken as positive when contribution is more than the cost and negative if
the cost is more than contribution
Assessment centre (individuals from various departments are bought together to spend a few
days working on group or individual assignments similar to the ones they would be handling
when promoted. It is basically meant for evaluating the potential candidates to be considered
for promotion, training and development)
Field review method (A trained representative of HR Dept. goes into the field and assist the
line supervisor with their ratings of their subordinates
360* feedback (This system collects performance information from multiple parties, including
ones subordinates, peers, supervisors and customers)
Post appraisal interview (It provides employee the feedback information. It also gives
opportunity to the employee to explain his views about the rating. It helps both parties to
review standards, set new standards, help, guide , coach the employee for his advancement

Limitations of Performance appraisal/measurement
a) Judgment errors:
Primacy effect (first impression effect)
Halo effect (error occurs when one positive aspect of performance affects the raters
evaluation of other performance dimensions
Horn effect (error occurs when one negative aspect of performance affects the raters
evaluation of other performance dimensions)
Leniency
15

HRPD- BABY SIR

Central tendency(occurs when appraiser rate all employees as average/very good
performance)
Stereotyping (a mental picture that an individual holds about a person because of that
persons sex, age, caste, religion etc. By generalizing on the basis of such blurred image the
rater grossly overestimates or underestimates a person s performance)
Recency effect (rater gives more weight age to recent occurrences than earlier performance)
Poor appraisal forms
Lack of raters preparedness
iv. Providing feedback:
It involves providing feedback to employees to help them improve their performance. Some of
the important aspects to be considered are: frequency/periodicity of measurement targeting
behaviors our outcomes rather than the individual being balanced in the
measurement/appraisal encouraging employee participation
v. Developing action plans to improve employee performance
Understanding the causes of poor performance(due to employees, employers or
circumstances)
Taking action(remove the barriers to employee success training and development coaching
and mentoring -review the standards of performance with employees ensure the
performances measures are accurate disciplining evaluate potential role concerns.
HRD STRATEGIES
Strategy is the direction and scope of an organization over long term, matching its
sources to its changing environment and in particular its markets, customers, or clients,
so as to meet the stake holders expectations
Strategic planning is the process of thinking through the current mission of the
organization with due cognizance to current environmental conditions both external
and internal. Such plans therefore set guidelines for future decision and results.
HR STRATEGY FACTORS
1. Recruiting and selection (outsourcing - direct recruitment contractual or on permanent roll
multi skills attributes or specialization)
2. Career development(career mapping - succession planning management development
integration of career development with OD initiatives
3. Performance appraisal(designing appropriate tools and aligning such appraisal with training
needs, promotion, transfer and relocation)
4. Training and development(developing in house training - training budgets - evaluation of
training
5. Compensation and incentive schemes
6. Human Resource planning(Development of HR Information system aligning HRP with
corporate strategies, skills and competency mapping)
7. PHASES OF HRD STRATEGY
Acceptance of HRD philosophy and policy
Determination of major objectives of HRD
Identification of HRD needs
16

HRPD- BABY SIR

factors affecting HRD(OCTAPACE: openness; confrontation for solving; trust; autonomy;
proactively; authenticity; collaboration; Experimentation)
Identification of HRD needs
Human Resource planning
Development of HRD climate
building up of infrastructural facility
emphasis on long term results
evaluation and corrective action
Development of HRD as a profession
HRD CULTURE/CLIMATE :HRD Culture is an integral part of organizational culture. It can be defined
as the employees perception about the development environment of their organization. HRD facilitates
development of an enabling culture in an organization. Enabling culture creates an environment where
employees are motivated to take initiative and risk , feel enthused to experiment, innovate and make things
happen
Characteristics of HRD culture
Importance given to human resource
climate of trust faith in employees capabilities -
openness of communication -
encouragement given to risk taking and experimentation
feed back given to employees about their strengths and weaknesses
employees tendency to help each other
team spirit
tendency to discourage stereotypes and favoritism
supportive policies etc
The above characteristics are reflected in: Top management style and philosophy - personnel
policies HRD instruments and systems attitudes of personnel and HRD staff - commitment
of line managers to the development of their subordinates
Essence of HRD climate (OCTAPACE)
1. Openness (the extent of willingness to share and receive information, ideas and suggestion with the
employees. Existence of two-way communication , suggestion system are some indicators)
2. Confrontation(willingness to face and solve problems rather than to avoid them willingness of
executives to solve problem at the shop floor level and to encourage workers to form quality circles)
3. Trust(extent of faith with people have for one another loose or no supervision and organization trust)
4. Autonomy(degree of freedom enjoyed by workers existence of self-managed teams quality circles
flexible working time)
5. Proactive(tendency to think ahead of the problem plans and policies of organization)
6. Authenticity(When one say what he means and mean what he says)
7. Collaboration ( peoples tendency to live and work together as cohesive groups. Team building,
common facilities common uniform )
8. Experimentation(existence of supporting environment to take risk and innovate)
Results of HRD climate
1. Drive fear out of the organization
2. encourage people to admit their mistakes openly
3. strengthening the belief that problem never lies with people rather with the system
4. develop an atmosphere of learning
17

HRPD- BABY SIR

5. develop an atmosphere where system are criticized and not individual
Indian culture and HRD
1. Concern for others
2. traditions
3. casteism
4. dependency motive
5. avoid involvement or open discussion
6. individualism
7. more emotional rather realistic
8. extreme religious
9. strong beliefs
10. fundamentalism
11. submission to fate
Quality of Work Life(QWL)
QWL is the degree to which members of a work organization are able to satisfy important personal needs
through their experiences in the organization
Elements of QWL
Program seeks to promote human dignity and growth
Employees work with collaboration
They determine work changes anticipatively
It assumes compatibility of people and organizational goals
Major issues of QWL
Pay(equitable pay)
Benefits(safe and healthy working conditions and other benefits)
job security
alternate work schedules( flexi time [flexible working hours]
staggered hours
compressed work week(more hours per day for few days)
job enrichment (exciting, interesting, stimulating, challenging work)
autonomous work groups(some control on decision making, additional responsibility, no or less
supervision) -
occupational stress
worker participation in decision making -
social integration(opportunities for preserving an employees personal identity and self-esteem
through freedom from prejudice , a sense of community , inter-personal openness)
work and total life space(work schedules should not eat too much into a persons leisure time and
family life)
QWL COUNCILS
It consists of steering committee and other departmental committees. Its main purpose is to improve
the QWL of people working at various levels in organization by redesigning the organizational work
and systems along the lines suggested above
18

HRPD- BABY SIR

MEASUREMENT OF QWL
Turnover data
morale surveys
number of grievances handled -
absenteeism data-
performance criteria
personal interviews carried out from time to time
OBSTACLES TO QWL
Managerial attitudes
union attitudes
cost considerations
IMPROVING QWL
Employment conditions(safety, health, physical environment)
equitable rewards (pay , incentives, benefits, services)
job security
enhancing the self-esteem of people
participative climate and team spirit
training to employees, managers and supervisors so that they share the vision , values and culture of
the organization
recognition of work done followed by rewards so as to encourage commitment and belongingness
congenial worker-
supervisor relations
offering proper feed back on results achieved
job redesign and job enrichment
open and transparent management style
atmosphere of trust and open communication
MANAGEMENT OF CHANGE
Organizsational change
It implies creation of imbalances in the existing pattern or situation. It requires individuals and organizations
to make new adjustments
Types of changes
i. Proactive change( a planned attempt to prepare for anticipated future challenges)
ii. Reactive change(an automatic response or a planned response to change taking place in the
environment)
iii. Work change( changes in machinery, working hours, methods of work, job enlargement, job
enrichment, job re-design)
iv. Organizational change(change in an en employee due to transfer, promotion, retrenchment, lay off,
restructuring, introduction of new products or services, imposition of regulation, changes in
organizational goals or objectives
19

HRPD- BABY SIR

FORCES OF CHANGE
i. Nature of work force(cultural diversity and need for unification increase in professionalism
increased formal education increased level of soft skills- positive attitude)
ii. Economic shocks(global recession changes in oil prices)
iii. Competition(global competition mergers and acquisitions E-business customer Relationship
Management & quality
iv. Social trends(careers first and others second increased career orientation among young ladies)
v. Political(opening markets of China and emergence of China in global economy)
vi. Technology(faster and cheaper computers total Quality Management business process re-
engineering(changes in process of business) need for bio-professionals(proficiency in two disciplines)
jobs become intellectual
CHANGE AGENTS
I. Change agents foresee the possible changes in technology, products in the company and implement the
modification. They are persons who act as catalysts and assume responsibility for managing change
activities. These change agents may be either employees or managers of a company or outside
management consultants. The activities of change agents include:
II. Changing organizational structure; technology; physical setting; changing people(attitudes, values,
norms , aptitude, behavior leadership skills, openness, communication, abilities, problem solving skills)
RESISTANCE TO CHANGE
I. Economic reasons(fear of reduction in employment, fear of demotion and fear of work load)
II. Personal reasons( need for training boredom and monotony no participation in change)
III. Social reasons (new need for social adjustment with the new group, work situation and new boss
taking change as imposed from outside other consideration(the false impression that every
change brought about is for the benefit of the organization and not for the benefit of workers or
general public)
CONDITIONS FAVORING CHANGE MANAGEMENT
Competition owing to globalization
information technology
declining role to trade unions
growth in technology
cases of closure of companies
change in the organizational attitude towards training and training expenditure p-
train employees first and the trained employees initiate change
APPROACHES TO ORGANIZATIONAL CHANGE
Participation of employees
planning for change
protecting employees interests
slow introduction
positive motivation
sharing the benefits of change
training and development
20

HRPD- BABY SIR

career planning and development
group dynamics (ever changing interactions and adjustments in mutual relations among members)
PRINCIPLES OF CHANGE
Understanding the change itself, its purpose, its benefits and then making them understood to the
employees
Estimating the reasons for the possible resistance to change and preparing t allay their fears
Mindful of channels of authority
Listening to the questions, criticism and suggestions of empl- oyees and incorporating them in the
scheme as far as possible
Creating interest in the, convincing them and preparing them
Keeping in touch with the process of change
PLANNING AND IMPLEMENTING CHANGE
Unfreezing (implies that old ideas and practices need to be cast aside so that new ones can be learnt)
Change( this is the step in which new ideas and practices are learnt so that an employee can think and
perform in new ways )
Re-Freezing( means that what has learnt is integrated into actual practice)
Implementation is the institutionalization and internalization of a change after it has been accepted by
an organization and a decision has been taken to accept and make it part of the on going activity.
Institutionalization is making the change permanent part of the organization and internalization means
stabilsation of the change
TOTAL QUALITY MANAGEMENT (TQM)
The term quality refers to a sense of appreciation that something is better than something else. It means doing
things right the first time , rather than making and correcting mistakes. TQM is a way of creating an
organizational culture committed to the continuous improvement of skills, team work , processes, product and
service quality and customer satisfaction.
TQM: Main ideas
1. Do it right the first time : The emphasis on quality has come through four distinct phases since World
war II:
a. The Fid it in approach to quality(rework any defective products identified by quality inspectors at the
end of the production process which is a reactive approach)
b. The inspect it in approach to quality(quality inspectors sample work in process and prescribe
machine adjustments to avoid substandard output also a reactive approach)
c. The build it in approach to quality(Make every one who touches the product responsible for spotting
and correcting defects. Emphasis is on identifying and eliminating causes of quality problems: a
proactive approach)
d. The design it in approach to quality(intense customer and employee involvement drives the entire
design production cycle. Emphasis is on continuous improvement of personnel, processes and products
: a proactive approach)
e. Present day managers are moving away form the first two approaches and toward the build it in and
design it in approaches.
ii. Be customer centered
21

HRPD- BABY SIR

TQM demands all employees who deal directly with outsiders to be customer centered. Being customer
centered means: anticipating the customer needs listening to t he customer learning how to satisfy
the customer responding appropriately to the customer.
iii. Make continuous improvement a way of life
There are four ways of achieving improvements: improved and more consistent product and service
quality; faster cycle times ; lower cost and less waste
iv. Build team work and improvement
Prerequisites of TQM
motivation from top management
elimination of waste
multi skilling (ability to perform more than one task)
team work (designing reward system that encourage team work form cross functional teams
and link rewards to quality targets instead of quantitative targets)

Human Resource Information System (HRIS)
HRIS is basically a database system that offers important information about employees in a central and
accessible location. When such information is needed the data can be retrieved and used to facilitate HRP
decisions
Objectives of HRIS
- To offer adequate comprehensive and ongoing information system people and jobs
- To supply up-to-date information at a reasonable cost
- To offer data security and personal privacy which can be dealt with passwords and codes
Limitations of manual system and need for HRIS
Costlyinaccurate-difficult to analyzeinformation not available at a central place and in accessible form
Setting up of HRIS
I. Plan (information needs of an organization should be spelt out initially. This involves a detailed study
of the activities carried out internally , work patterns and relationships, constraints affecting the
system)
II. Design:(the system analyst examines the flow of information, identifies gaps needed to organize the
flow of information in an economical and effective manner)
III. Implement (setting up of HRIS taking the organizational needs into account - adequate training to
employees facilitates upgraded procedures streamlined with a view sto integrated HRIS with various
organizational components)
IV. Evaluate (It involves measuring the contributio9ns of the system and identifying the gaps and
undertaking remedial steps to ensure smooth operation. The system is continually evaluated in the light
of changes within and outside the organization)
Computerized HRIS
22

HRPD- BABY SIR

A computerized HRIS is designed to monitor control and influence movement of people from time to
time they join he organization till they leave the organization . It consists of the following sub-systems:
1. Recruitment information(advertisement module, applicants profile, appointment and placement data)
2. Personal administration information( leaves, transfer, promotion, increment)
3. Manpower planning information(career planning, succession planning and inputs for skills
development)
4. Training information( designing course material, arranging need based training and appraising the
training program)
5. Health information(health safety, welfare of employees)
6. Appraisal information(which serves for promotion, career and succession planning)
7. Pay roll information(wages, salaries, incentives, allowances fringe benefits)
8. Personnel research information(employees attitudes, turnover)
USES OF HRIS
1. Compensation and benefits(pay structures wages/salary administration benefit plans vacation)
2. HR development(employee training profiles training need assessment succession planning career
interests)
3. Staffing( recruiting sources applications tracking job offer refusal analysis )
4. HR planning and analysis (organization charts staffing needs skill inventories
turnover/absenteeism analysis)
5. Health, safety and security( safety training, accident rewards , employee health records, regulatory
compliance )
6. Performance appraisal( employee competency data , meeting actual performance with standards)
7. Labor relations (union negotiations, attitude survey results, exit interview analysis, employee work
history)
BENEFITS OF HRIS
It can process, store, retrieve entire data in an economical way
Records can be updated quickly.
Improved accuracy
It can greatly reduce fragmentation and duplication of data
Information can readily be manipulated, merged, disaggregated in response to special complex
demands and presented promptly.
HR Audit
HR audit is a systematic survey and analysis of different HR functions. Basically it examines and evaluates
policies, procedures and practices to determine the effectiveness of HR functions in an organization. HR audit
ensures that sound and cost effective policies are implemented.
Objectives of HR audit
i. To determine the effectiveness of management programs which facilitate the development , allocation
and monitoring of human resources
23

HRPD- BABY SIR

ii. To analyze factors involved in HR and develop a statement of findings with recommendations for
correcting the deviations , if any.
iii. To study the extent to which line managers have compiled with HR policies
iv. Study manpower inventory and identify shortfall or excess, if any.
JOB/ROLE OF HR AUDITOR
i. To get the current facts
ii. To study the effectiveness of the present system by answering the following issues:
iii. Why was the practice introduced? what would be the result if the practice is discontinued? what
needs were intended to be fulfilled and whether those have been fulfilled or not? what could be
the best possible alternative for fulfilling such needs? what changes can improve the effectiveness
of the existing practice? Are such intended changes economically and operationally viable? are
such changes sustainable from the unions point of view? What should be the time frame for
introducing the change
IMPORTANCE OF HR AUDIT
Helps to identify the training needs and development of new training modules
Helps to identify the need of changes required in all spheres of HR in tune with the environmental
changes
Ensures the effective utilization
Ensures administrative regulations/legal compliance
Helps to inculcate sense of confidence in management
Helps to develop and sustain organizational reputation
Perform a due diligence review of various stake holders
Identifies the deficiency in HR record keeping
RECORDS USED FOR HR AUDIT
records on scores obtained in tests and other examinations-
medical and accident reports
Time study records
grievance reports
time standards
cost records
attitudinal survey reports
turnover reports
data on work stoppages
performance reports
pay roll data
labor cost data
SCOPE OF HR AUDIT
Corporate missions
goals
policies and objectives
manpower planning -
career planning and development
24

HRPD- BABY SIR

promotion and transfer policies
performance appraisal system
training and development functions
recruitment and selection
PRE-REQUISITES OF HR AUDIT
Legal compliance
compensation /salary administration
exit interviews
employment/recruiting
termination
training and development
employee relations-
communications
files/records maintenance
policies and procedures
new employee orientation
employee manual
employee surveys
HUMAN RESOURCE ACCOUNTING (HRA): Human resources refer to the aggregate of
employee attributes including knowledge, skills, experience and health which are presently and
potentially available to an organization for the achievement of goals.
Human resource accounting is the [process of identifying and measuring data about human resources
and communicating this information to interested parties. It is the process of developing financial
assessment for people within organization and society and the monitoring of these assessments
through time. It deals with investments in people and with economic results of those investments
AIMS AND OBJECTIVES
Increased managerial awareness of the value of HR
Better decision about people, based on improved information system
Greater accountability on the part of management for its HR
Developing new measures of effective manpower utilization
Enabling a longer time horizon for panning and budgeting
Better human resource planning
Providing cost value information about HR
Enabling management to effectively monitor the use of HR
ix. Find whether the human assets are appreciation/depreciating
APPROACHES TO HRA
The various approaches to the valuation of HR may be broadly grouped under two categories.
1. Monetary measures: These measures focus on cost or economic value. The monetary measures include
the following:
a. Historical cost method (In this method all cost of recruitment, training and other cost involved
in developing an employee are capitalized. The amount so capitalized is written over the period
an employee serves the organization)
25

HRPD- BABY SIR

b. Replacement cost method (This requires an estimation of the cost of replacing the existing
personnel under existing organizational conditions)
c. Standard cost method( To avoid complicated of calculation under replacement cost, standard
cost of recruiting, hiring, training and developing per grade of employees are developed and
established up to date every year)
d. Economic value method (In this method HR are valued on the basis of the contribution they
are likely to make to the organization during their continuance in the organization. The
payments to be made to the person by the organization in the forms of pay, benefits etc, are
estimated and discounted appropriately to arrive at the present economic value of the
individual
e. Asset multiplier method (In this method the employees working in an organization are
classified into four categories: top management, middle management, supervisory management
, operative and clerical staff. The salary bill of each category is multiplied with a suitable
multiplier to calculate the total value of each. Multiplier is an instrument for relating the
personal worth of employees to the total asset value of the organization)
f. Discounted present value of future earnings method (The method involves three steps. a)
employees are classified into homogenous groups based on age , experience, skills etc. b)
earning of each group are estimated. c) present value of earnings of each group till retirement is
taken as the value of HR using an appropriate discounted rate.)
2. Non-monetary measures
a. Expected realizable value method (The elements of expected realizable value such as
productivity, transferability, promo- ability can be measured through personnel research,
appraisal techniques and objectives methods)
b. Discounted net present value of future earnings ( Three sets of variables such as casual,
intermediate and output variables help in measuring effectiveness over a period of time. Casual
variables such as leadership style and behaviour affect intermediate variables such as morale,
motivation , commitment to goals etc.. Which in turn affect output variables such as production,
sales, net profit etc.)
BENEFITS OF HRA
I. It throws light on the strengths and weaknesses of the existing workforce in an organization and
thus disclosed the value of human resources
II. It provides valuable feedback to managers regarding the effectiveness of HR policies and practices
III. It helps potential investors judge a company better on the strength of human assets utilized therein
IV. It helps management in taking appropriate decisions regarding the use of human assets in an
organization regarding hiring, promoting, transferring, outsourcing etc.
V. The system of HRA pave the way for increasing productivity of HR
LIMITATIONS
I. It is not easy to vale the human assets in an organization
II. HR is full of measurement problems
III. Employees and trade unions will not like the idea
IV. There is no empirical evidence to support the idea that HRA is an effective tool to measure the
economic value to the organization