IOP3702 Marked Assignment.

IOP3702 Marked Assignment. IOP3702 - Personnel Psychology: Organisational Entry. Forecasts and Estimations Forecasts and Estimations are the second phase or step in the human resource planning process and it entails predictions about the future based on information gathered during investigative phase. This, second phase, involves forecasting and estimating the supply of and demand for human resources in the organisation. It is a process of determining the future needs and requirements for human resources based on the knowledge of internal conditions of the organisation. This refers to the state and conditions of its human resources, for example, staff turnover, number or employees, skills and ability of the employees. Internal conditions also include information on the short- and AnnemieWessels Assignment1: S2 2013 IOP 3702 Page 3 of 10 long-term organisational objectives. Being able to predict future needs for human resources allows human resource managers and organisations to modify recruitment procedures, introduce training and education courses and design development programmes. It also enables the organisation to make plans in order to meet these future human resource needs. The influence of external factors and the organisational climate should be taken into consideration when making forecasting and estimating plans. Current external influences are affirmative action, legislation and skill scarcities. Employment Services South Africa (ESSA) is a source of information about the supply and demand of scares and critical skills in South Africa. √ 1.) Workforce analysis The human resource planning process generally commences with an accurate workforce analysis. Comprehension of the company’s current workforce and planning for anticipated shortfalls and surpluses in the workforce, are two key pieces in the human resource planning. The data for a workforce analysis is obtained via internal and external environmental scans, the strategic plan of the company, the Sector Skills Plan and the ESSA. Workforce analysis involves 3 types of analysis: Supply analysis denotes the actual inventory levels of human resources currently available for the organisation to make use of. It includes internal supply, for example workforce demographics and workforce trends, and external supply. √ Demand analysis entails recognising what the current supply and expected future supply of human recourses are. What the company needs now as well as what the company will need in the future, regarding critical skills, capabilities and competencies of their human resources, as well as the actual number of employees needed. It also includes anticipated changes of procedures, programs and services, for example duration, quantity and location, as well as vacancy rates. √ A Gap analysis occurs after the supply and demand analysis has been identified and determined. It involves the gaps or differences between the supply analysis and demand analysis. The gap analysis is useful for determining the future shortfalls and surpluses in the amount of employees required, what types of occupations or jobs and what skills and qualifications will be needed. After the gap analysis is done an action plan can be drawn up to decrease these gaps. 2.) Forecasting future demand Part of planning employment requirements entails forecasting for future human capital or human resource needs. Forecasting future demand can be completed with the assistance of numerous modules. Through these modules a human resource service can be offered to management on a daily basis. These modules can also provide managers with information that they can use in the company’s strategic planning process or during the strategic human resource planning process. √ You show a well-rounded and systematic knowledge base of the theory applicable to the assignment. AnnemieWessels Assignment1: S2 2013 IOP 3702 Page 4 of 10 The purpose of human resource planning can also, at an operational level, ensure the human resources will be able to meet the short and long-term objectives of the company. The information need for forecasting includes the current amount of employees, skills needed or available, as well as training and time needed for training and turnover rates. There are two types of measures that can be used when calculating labour turnover rates. The wastage rate is when the number of employees leaving gets divided by the total number of employees currently employed by the company. The other measure is the stability index. The number of employees with a minimum period of service at a specific date gets divided by the total number or employees currently employed by the company at that same specific date. Well done to include these rates in your discussion Forecasting future human resources needs and demands is a challenging process and the accuracy of forecasts or predictions can differ greatly. These future predictions can be constructed on intuitions or experience, as in the case of the following two predictions. The expert or managerial estimates technique. These estimates or predictions use the knowledge and intelligence of an expert or manager. This technique can be used in combination with the Delphi technique and is regularly used in small and medium sized organisations. √ The Delphi technique is a decision-making technique that does not require the physical attendance of the participants or decision makers. It involves a series of confidential questionnaires given to a group of experts in order to improve on a solution, eliminate a problem or to make predictions. The answers of the questionnaires are then summarised to provide information on the average and most extreme responses or options. These summaries are then given back to the group for additional evaluation or decision making. This process will continue until a final answer or forecast is reached. Future predictions can also be constructed on maths or statistics, as in the case of the following three predications. √ Trend projection connects a single factor, for example room occupancy or seasonal peaks, to employment. The trend projection method is basically the study of the progress of a variable through time. This requires prolonged and consistent time series data, for example a company’s inventory level of human resources of the past five years. This projection method is used under the assumption that the factor responsible for previous trends will continue to play its part in the future and in the same way that they did in the past. Thus it involves studying a factor in the past, over a period of time, to be able to predict the future needs or predictions about human resources. This makes identification of patterns and trends easier and allows for prediction future trends. √ AnnemieWessels Assignment1: S2 2013 IOP 3702 Page 5 of 10 Trend analysis is a method of analysis that permits managers of a company to predict what will happen with and to their human resources in the future. It is centred on past data about the performance of the employees, given the overall trends of the market and particular indicators within the market. The first step is to find the predictor or business factor that is connected to the human resources needs. For a company making handmade wooden furniture, the business factor can be speciality chairs. The second step will be to plot out the historical or past record of the ratio for the business factor to the speciality chairs. This past connection or ratio must be determined precisely and the future levels for the business factor must be projected. The company has to know how many employees it takes to make x amount of speciality chairs as well as how many chairs one employee can make per annum. The latter is known as labour productivity. The third step would be to calculate the past couple of years’, between 5-10 years, labour productivity. After these calculations the average rate of change in productivity can be established. This changing rate can determine the requirements for future employees. The next step will be to multiply the projected level of business factors with the labour productivity ratio to give you the efficient number of employees needed. The net figure for the demand of employees at that time can be done by making adjustments for special factors to the projections, as in the case of contract employees.