Sunday, 29 September 2013

The Human Resource Planning Process

The HR Planning Process
  1. Environment Scanning:
    • Systematic monitoring of the external forces influencing the organization.
    • Internal and external environment
    • External: economic factors, technological changes (automation, robotics)
    • Demographic changes: age, composition and literacy
    • Political and legislative issues, laws, social concerns, child care, education, facilities and priorities
  2. Organization objectives and Policies:
    • HR plan need to be based on organization objectives
    • Number of employees, characteristics of employees
    • Vacancies to filled by
      • Promotions
      • Hiring from outside
    • Training and development objectives
    • Union constraints, how to enrich jobs
    • Downsizing to make it more competitive
    • Level of automation ( production and operation)
    • Adaptive and flexible workforce
  3. HR demand forecast:
    • The process of estimating the quality and quantity of people required to meet future needs of organization
      • Managerial Judgment
      • Ratio trend analysis
      • Regression analysis
      • Work study analysis
      • Delphi technique
      • Flow models: time, categories(states), count annual movement(flows), probability of transition from one state to another
  4. HR supply forecast:
    • Source of procurement
    • From within and outside an organization, after making allowance for absenteeism, internal movement and promotions, wastage and change in hours
    • The supply analysis covers:
      • Existing human resource
      • Internal source of supply
      • External source of supply
    • Skills and abilities
    • Skills inventories
  5. HR programming:
    • Personnel demand and personnel supply must be balanced
    • Programming:
      • Right employees
      • At the Right time
  6. HR plan implementation:
    • Converting plans into action
    • Shortage: Recruitment and selection, T&D, retention, rewards, redeployment, succession plan
    • Surplus: Restricted hiring, reduced hours, VRS, layoffs
  7. Control and evaluation:
    • HRP plan should include budgets, targets, and standards
    • Establish reporting procedure

Factors affecting HR planning

Factors affecting HR planning

  1. Type and Strategy of Organization:
    • Production Process (Manufacturing or service)
    • Number of people
    • Type of staff needed
    • Supervisors and managers
    • Internal growth:
      • Required additional staff, hiring
    • External growth:
      • Overlapping positions
      • Merger and acquisitions
      • Layoffs plans
  2. Organization growth cycle and planning
    • Early stage: No such need
    • Growth: HR forecasting become essential
    • Mature: formal planning, retirement, Layoffs
  3. Economic Uncertainties:
    • PEST environment
    • Political, Economic, Social and technical
  4. Time Horizons:
    • Exact time span
    • Uncertain environment: short term plan
    • Certain environment: long term plan
  5. Type and quality of information
    1. Information regarding:
      1. Strategic Plan
        • Product Mix
        • Customers
        • Geographic limits
      2. General Information
        • Organization structure
        • Production, distribution and sales department
      3. Specific information:
        • Job analysis
        • Recruitment sources, plans
        • Retirement plans
  6. Nature of job being filled:
    • Shop floor positions: easily employed
    • Managerial Position: Lot of sourcing required
  7. Outsourcing: 
    • Contract, sub-contract
    • Off-loading
    • Ancillarisation

Human Resource Planning

Human Resource Planning

  1. Process of forecasting a firm’s future demand for and supply of the right type of people in the right time.
  2. Right number of people
  3. Right kind of people, right place (position), location  and right time
Importance of Human Resource Planning:
  1. Future Personnel Needs:
    • Surplus or deficiency(shortage)
    • Public sector (over staffed)
    • VRS ( Voluntary Retirement Scheme)
  2. Part of Strategic Planning:
    • HR strategies aligned with organization strategies
    • Strategic Planning = HR planning (no differences)
  3. Creating Highly Talented Personnel:
    • Prevent shortage
    • Technological changes, retrained employees
    • Redeploy employees after training
    • Succession planning: who will replace retiring chief executive??
  4. International strategies:
    • International expansion strategies
    • Culture, language, development
    • Motivate and compensate them
  5. Increasing investment in employee:
    • Develop skills, training, job assignments
    • Employees are used effectively throughout their career
  6. Resistance to change and move :
    • Plan before moving employee
  7. Others:
    • Labor cost may be less
    • More time to locate talent
    • Better opportunities for women and minorities

Job Analysis

Job Analysis

  1. Collecting and Process job related information
  2. Preparation of job description (duties)
  3. Preparation of Job specifications (skills)
  4. Collecting information, relating to operations and responsibilities of specific job.
  5. Duties and responsibilities
  6. Job analysis:
    1. Job descriptions
      • Duties
      • Responsibilities
      • Reporting relationships
      • Working conditions
    2. Job Specifications
      • Human requirements
      • Requisites (Basics, Fundamentals) education
      • Skills
      • personality

Job Descriptions: Statement containing items like:
  • Job title
  • Location
  • Job Hours (from … ……)
  • Job summery
  • Duties ( Daily, Periodic, irregular intervals)
  • Machines and Tools, equipment
  • Material and forms used
  • Supervision given and received
  • Working conditions
  • Hazards

Friday, 27 September 2013

Factors Determining the Amount of Working Capital

Factors Determining the Amount of Working Capital:

1)     Size of small scale industry

2)     Process of Production:

a.       Short Process: Less working capital

b.       Long Process: More working capital

3)     Proportion of raw material  to total cost:

a.       Price of raw material

b.       Quantity of raw material

4)     Term of Purchase and Sales

a.       Use of credit

5)     Turnover of Inventories:

a.       Large Inventory: Inventory turnover slow, Large working capital required

b.       Less Inventory: inventory turnover quick, small working capital required

6)     Importance of Labor:

a.       Labor intensive: More working capital required

7)     Cash requirement

8)     Seasonal Variations:

a.       During the season working capital requirement is High, more WC is required

9)     Banking Facilities:

a.       Good banking connections, Minimum working capital required

Financial Requirements for Small Scale Business

The entrepreneurs should have right amount of capital at the right time to meet his financial requirement.
Short term or Working Capital Requirement:
  • Usually one year financial needs
  • Current Assets: Cash, stock, credit, sales, semi-finished goods.
  • Raw material.
  • Operational losses.
  • Advances to suppliers.
  • Commission to selling agents
  • Interest on loans.
  • Expenditure on wages, salaries, rent, advertising etc.
  • Expenditure on consumables.
  • Day to day administrative expenses.
Long term capital requirement:
  1. Fixed assets:
    • Land and building
    • Furniture
    • Motor-Vehicles
    • Plant and Machinery etc.
  2. Cost of setting up enterprise
  3. Intangible assets like goodwill, patents etc.
  4. Margin money required for raising working capital requirement.
  5. Manufacturing Unit: More Fixed Assets
  6. Trading Units: Less Fixed assets, more current assets & Working capital

Saturday, 21 September 2013

Selection of Product or Project for Small Scale Industry:

Project Selection:
  1. Does the idea fire-up your motivation?
  2. Is a viable business proposition in your place?
  3. Does it match the need of your client?
  4. Check it out with basic market research?
  5. Consult with expert
  6. Competition in the field
  7. It is a sunrise industry??
  8. Project conception: 4 P’s of Project Conception
    • Product ( Shape, size, nature)
    • Technology to produce (Process)
    • Place: location of plant
    • Partners: technological and Financial partners/Collaborations

Making a Product Choice:
  1. Product line, depth, width
  2. Packing
  3. Branding
  4. After sales service (Coolers in Bikaner, e.g. Sheetal, Trishul)
  5. Ease of Raw material availability
  6. Process Technology
  7. Access to market
  8. Incentive and support from Government

Export opportunities:
  • Export-product portfolio?
  • Special packing requirement (Wooden packing not allowed in Australia)
  • ISO certificate, WTO rules about child labor

Development of export product portfolio:
  • External demand conditions
  • Internal supply conditions
  • Complexity of market tasks
  • Amount of investment required to penetrate the market

Selection of Location for Small Scale Industry:

While selecting a location for your small scale Industry, Entrepreneurs must take care of following factors:
  1. Availability of raw material
  2. Nearness to market
  3. Availability of Power
  4. Transport facility
  5. Suitability of climate
  6. Government Policy
  7. Competition between states
  8. Availability of labor
  9. Civic amenities for workers
  10. Finance and Research facilities
  11. Availability of water and fire-fighting facilities
  12. Local tax and restrictions
  13. Momentum of an early start
  14. Personal Factors
  15. Soil, Size and topography (Detail description)
  16. Disposal of waste
  17. Housing facilities for workers
  18. Road, Rail and Water (Ship) connectivity