PA

Chapter Three:

Human Resource Planning,

Recruitment and Selection
Presented by
Mohamed Mahad Isse

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Chapter 3 outline

• Areas of focus or Main topics

 Introduction
 What is the HRP
 HRP objectives
 Limitations of HRP
 Steps in manpower process

 Role/ importance of HRP

 Organizational downsizing
 Voluntary retirement scheme
 Employees ownership structure

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Chapter 3 outline

 What is the recruitment

 Sources of recruitment
 What is the selection
 Types of selection
 Interview concept

 Techniques of interview
 steps in selection procedures
 Tests for screening candidates
 Chapter summary

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Quizzes
 Why human resource management is an important?
 Outline major advantages of managing employees?
 Discuss the job design and job specification?
 State HR manager responsibilities
 What are the qualities of HR managers?

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Introduction

• Manpower Planning and Human Resource Planning is

rather synonyms HR planning is a strategy for the
• procurement, development, allocation and utilization of
an organization’s human resources.
• Such us:-
- future personnel required
- organizational capacity
- performance standardized

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Objectives/ needs of HRM planning

• To ensure that necessary human resources available.

• To make suitable and scientific arrangement for the staff

• To ensure optimum utilization of human resources

• To determine future manpower requirements of the
organization.

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Advantages of HRM planning

• Facilitates scientific recruitment and selection of

manpower as per future needs.
• Ensures orderly working and growth of an organization.

• Regulates labor costs and manpower requirements.

• Motivate existing employees and keep their morale.
• Prevents sudden disruption in the organization.

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Limitation of HRM planning

• HR planning may be ineffective as future manpower need

• HRP is time consuming and costly due to services of
experts required for HRP.

• Inadequate attention to environmental changes

• Shortage of skilled labor and high labor turnover
• Surplus manpower in a country like India makes laid off.

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Steps in manpower process

1. Deciding the objectives of human resource planning

2. Estimating the overall human resource requirements
3. Determining actual human resource requirement

1. Preparing a human resource recruitment , selection

2. Developing appropriate manpower development plan

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Role/ importance of HRM planning

• Human resource planning plays an important role at

different level, i.e.
- national level,
- international level
- organizational level
- industry level
• Further- summarized objectives and advantages of HRP

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Organizational downsizing

• Downsizing of an organization means reducing the

excess employees by suitable measures and adjusting
them as per need of the organization.

• Such downsizing is necessary when:

- market demand reduces or
- when new technology is introduced or
- when certain activities are closed down.
- when organization’s overall productivity loses.

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Types of downsizing

o Retain all existing employees but reduce the work hours

o The make for reduction in the total wage payment.
o Transfer employees in other parts of organization

o If or where additional employees are needed.

o Offer incentives for early retirement in the form of VRS
o Declare lay-off for dealing with surplus staff.

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Voluntary Retirement Scheme

• Voluntary Retirement Scheme is a type of voluntary

separation of old and unproductive employees from the
organization.
• It is also called Golden Hand Shake Plan. VRS is
followed in private as well as public sector organizations.
• VRS the surplus employees are offered following types of
monetary incentives:

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Types of VRS

 Pension and lump sum gratuity.

 Loyalty bonus
 Employee Stock Ownership Plans (ESOP)
 Prizes and rewards for long service in the organization

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Purpose of VRS

 VRS is advocated on the following grounds:

- To reduce financial burden on the organization
- To reduce surplus labor
- To ensure optimum utilization of operating manpower.
- To introduce extensive use of computers , technology.

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Advantages of VRS

 It is an economical and time saving method for reducing

surplus staff.
 Generally it is favored by employees and unions.

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Limitations of VRS

o In many organizations competent employees decided for

o VRS and not incompetent employees selected.

o VRS Failed due to inadequate employment opportunities.

o Sometimes, VRS become compulsory retirement scheme

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Employee Stock Ownership Plans (ESOP)

 Under ESOP employees are offered the company’s share

at a concessional price.
 ESOP When the market price of the shares increases,
the employees earn substantial capital gain.

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Merits of ESOP

 It enables the company to retain efficient employee.

 It encourages the employees to show better performance.

 It develops a sense of ownership and responsibility.

 It links compensation package closely to employee act.

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Demerits of ESOP

 It can be used only by profit making companies.

 Employees will suffer loss if share prices are falling.

 Unsound market fluctuations cause inconvenience to staff

 Lack of transparency may lead to criticism on the ground

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Recruitment and selection

 Recruitment: Definition:
• According to Edwin Flippo, “Recruitment is the process of
searching for prospective employees
• and stimulating or motivating them to apply for jobs in the
organization”.

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Purpose

 Purpose:
• To attract maximum number or interested candidates
through applications.
 Priority:
• Recruitment is prior to selection. It creates actual base
for proper selection.

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Nature of function

 Nature of Function:
• It is a positive function in which interested candidates are
encouraged to submit applications.
 Process:
• It is a short process, only publicity is given to
vacancies and applications are collected.

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Cost involved

 Cost Involved:
• It is not costly, only expenditure is advertisement given
for publicity.
 Steps Involved:
• Vacancies available are finalized
• Publicity is given to them
• Applications are collected

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Selection

 Selection: Definition
• Selection is a process of choosing most suitable
candidates out of many interested candidates.
 Purpose
• To select the best candidates out of those qualified and
interested in appointment
 Priority
• Selection is next to recruitment.

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Nature of Function:

 Nature of function
• It is a negative function in which the unsuitable candidates
are eliminated and the best one is selected.
 Process
• It is a lengthy process, involves analysis of applications,
giving tests, interview and medical examinations.

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Cost involves

 Cost involves
• It is a costly process, expenditure is needed for testing
candidates and conducting interviews.
 Steps involved
• Applications are studied
• Tests, interviews and medical examinations are
conducted.

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Sources of recruitment

Internal Sources of Manpower:

 Promotions
 Transfers
 Internal notifications
 Retirements
 Recalls
 Former employees

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Merits of Internal Sources

o It is economical, quick and most reliable method

o The present employees already know the company well.
o It provides security and continuity of employment.

o People recruited internally do not need induction training.

o It reduced labor turnover as capable employees get
internal promotions.

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Demerits of Internal Sources

 It prevents the entry of young blood in the organization.

 It unable the organization to attract capable persons from
outside.
 Promotions create a feeling of discontent among those
who are not promoted.
 Promotions may not be possible due to non-availability of
competent person.

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External Source of Manpower

1. Campus Selection
 The growth of management institutes, IITs and
engineering colleges has provided
 a popular source of recruitment known as Campus
Selection.

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Advantages:

 It is easy, quick and economical

 It is suitable to the company as well as candidates.
 It is an excellent source of selecting management
trainees.
 Promising students get job security immediately after
securing degree.

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External source-

2. Press advertisement is also called Recruitment

Advertisement,
 as its purpose is to give publicity to vacancies available in
the organization
 and to appeal deserving candidates to submit their
applications.
 Recruitment Advertisement has following contents:

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Essential requirements

 Details of the job i.e. job description and job specification.

 Information to be supplied
 Copies of documents to be attached
 To whom the application is to be submitted
 Perform of application blank,

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External source of manpower

3. Recruitment Through Consultants and Private

Employment Exchanges:
4. Deputation of Personnel: short term loan

5. Management Training Scheme: internship training

6. Walk-ins, Write-ins, and Talk-ins: direct/ in direct searching
7. Miscellaneous Sources: public/ private enterprise retires
and professional associations

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Merits of External Sources

 Entry of young blood in the organization is possible

 Wide scope is available for selection
 Selection can be made in an impartial manner
 Reservation can be provided to the backward section of
the society.

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Demerits of External Sources

 It leads to labor turnover particularly of skilled and

experienced employees.
 Existing employees may lose their sense of security.
 Relations between employer and employee decline
leading to industrial disputes.

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Steps in selection procedures

1. Job analysis
2. Advertisement notification
3. Collection of application
4. Analysis of applications received
5. Written test

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Selection steps- 2

6. Psychological test
7. Personnel interview
8. Reference checks
9. Medical check up
10. Final selection for appointment

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Interview frequently asked questions

 Tell us about yourself.

 What are your major strengths and weaknesses?
 How much do you know about our organization?
 How much do you expect to be paid?

 What are the most important considerations for you in

choosing a job?
 How long do you expect to stay with us?

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Tests for screening candidates

o Intelligence Test: IQ test

o Vocational Aptitude Test: open-minded
o Analytical Test- conceptual skills
o Synthetic Test- man made test
o Trade Test. Technical test

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Chapter summary

• Areas of focus or Main topics

 Introduction
 What is the HRP
 HRP objectives
 Limitations of HRP
 Steps in manpower process

 Role/ importance of HRP

 Organizational downsizing
 Voluntary retirement scheme
 Employees ownership structure

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Chapter summary

 What is the recruitment

 Sources of recruitment
 What is the selection
 Types of selection
 Interview concept

 Techniques of interview
 steps in selection procedures
 Tests for screening candidates
 Chapter summary

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Chapter 3 the end

• Chapter 3 the end

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