Markos Melaku Andualem Final Research 2018

ST.
MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
ASSESSMENT OF HUMAN RESOURCE PLANNING

PRACTICES: THE CASE OF ENAT BANK SC.
BY
MARKOS MELAKU
ID NO: SGS/0143/2009A
MAY 2018
ADDIS ABABA, ETHIOPIA

PRACTICES: THE CASE OF ENAT BANK SC.
BY
MARKOS MELAKU
ID NO: SGS/0143/2009A
A THESIS SUBMITTED TO ST. MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS
ADMINISTRATION (GENERAL MANAGEMENT)
MAY 2018
ADDIS ABABA, ETHIOPIA
ST MARY’S UNIVERSITY
FACULTY OF BUSINESS

PRACTICES
THE CASE OF ENAT BANK SC.
BY
MARKOS MELAKU
ID No. SGS/0143/2009A
APPROVED BY BOARD OF EXAMINERS
Dean, Graduate Studies Signature
Advisor Signature
External Examiner Signature
Internal Examiner Signature

DECLARATION
I, the undersigned, declare that this thesis is my original work, prepared under the guidance of
Assistant Professor Mohammed M. All sources of materials used for the thesis have been duly
acknowledged. I further confirm that the thesis has not been submitted either in part or in full to
any other higher learning institution for the purpose of earning any degree.
Name Signature
St. Mary’s University, Addis Ababa May, 2018
ENDORSEMENT
This thesis has been submitted to St. Mary’s University, School of Graduate Studies for
examination with my approval as a university advisor.
Advisor Signature
St. Mary’s University, Addis Ababa May, 2018
TABLE OF CONTENT
ACKNOWLEDGEMENT.............................................................................................................. i
ACRONYMS .................................................................................................................................. ii
LIST OF TABLES ........................................................................................................................ iii
LIST OF FIGRES ......................................................................................................................... iv
ABSTRACT .................................................................................................................................... v
CHAPTER ONE1
1. INTRODUCTION.............................................................................................................. 1
1.1. Background of the Study ................................................................................................. 1
1.2. Statement of the Problem ................................................................................................. 2
1.3. Basic Research Questions ................................................................................................ 4
1.4. Objective of the Study ..................................................................................................... 4
1.4.1. General objective ..................................................................................................... 4
1.4.2. Specific Objective .................................................................................................... 5
1.5. Significance of the Research ............................................................................................ 5
1.6. Scope and Limitations of the Study ................................................................................. 5
1.7. Definition of Basic Terms ................................................................................................ 6
1.8. Organization of the Study ................................................................................................ 7
2. CHAPTER TWO8
LITERATURE REVIEW ............................................................................................................. 8
2.1. Theoretical Background ................................................................................................... 8
2.1.1. HRP as HRM Fundamental...................................................................................... 8
2.1.2. Definition of HRP .................................................................................................... 9
2.1.3. Importance of HRP ................................................................................................ 10
2.1.4. Human Resource Planning Process........................................................................ 11
2.2. Review of Empirical Studies ......................................................................................... 17
2.3. Conceptual Framework .................................................................................................. 19
3. CHAPTER THREE21
RESEARCH METHODOLOGY ............................................................................................... 21
3.2. Research Design............................................................................................................. 21
3.3. Research Approach ........................................................................................................ 22
3.4. Population and Sampling techniques ............................................................................. 22
3.4.1. Target Population ................................................................................................... 22
3.4.2. Participants Selection ............................................................................................. 22
3.5. Source and Tools of Data Collection ............................................................................. 23
3.5.1. Source of Data........................................................................................................ 23
3.5.2. Methods of Data Collection ................................................................................... 23
3.6. Methods of Data Analysis .............................................................................................. 23
3.7. Validity and Reliability Assurance ................................................................................ 24
3.7.1. Validity .................................................................................................................. 24
3.7.2. Reliability............................................................................................................... 24
3.8. Ethical Considerations ................................................................................................... 25
4. CHAPTER FOUR:26
RESULTS AND DICUSSION .................................................................................................... 26
4.1. Introduction:................................................................................................................... 26
4.2. Research Findings and Discussion................................................................................. 26
4.2.1. HRP and Strategic Plan .......................................................................................... 26
4.2.2. Current Human Resource Capacity Assessment .................................................... 28
4.2.3. Forecasting HR Demand and Supply ..................................................................... 30
4.2.4. Implementing Gap-Closing Strategies ................................................................... 32
4.2.6. Challenges of the Bank in Relation to Its HRP Practice ........................................ 35
5. CHAPTER FIVE37
SUMMARY CONCLUSION AND RECOMMENDATIONS ................................................. 37
5.1. Summary ........................................................................................................................ 37
5.2. Conclusion ..................................................................................................................... 39
5.3. Recommendations .......................................................................................................... 40
Reference: ..................................................................................................................................... 42
Appendix 1: Questionnaire ......................................................................................................... 45
Appendix 2: Interview Guide ...................................................................................................... 51
Appendix 2: Organizational Structure of Enat Bank Sc. ......................................................... 52
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ACKNOWLEDGEMENT
My heartfelt gratitude, first and foremost, goes to my father Ato Melaku Andualem and
my mother W/ro Fikerete Yegletu. Words cannot express how grateful I am to them both
for their endless love and support. It was really their back-up which sustained me thus
far!!
My special words of thanks should also go to Ato Biruk Melaku, Ato Getnet Melaku, and
Yosef Tesfye who supported and motivated me in every means they knew how. They all
were the source of my strength over the past two years.
I also would like to express my sincere appreciation and gratitude to my advisor,

Assistant Professor Mohammed M, for his support and guidance during the course of my
study.
I am also deeply thankful to all department and branch managers of Enat Bank Sc. who
has taken their precious time to fill up the questionnaire and of course to the human
resource and support service department manager who was so willing to assist me in
every means.
Glory to Almighty God!
i
ACRONYMS
Acronyms Description
HRP Human Resource Planning
HRM Human Resource Management
HRIS Human Resource Information System
HR Human Resource
ii
LIST OF TABLES
Table 1.1 Definition of Basic Terms………………………………………………… ..8
Table 3.1 Reliability Statistics………………………………………………………….26
Table 4.1 Demographic Profile of the Participants…………………………………… 28
Table 4.2 Participants response on the link between the HRP

and Strategic Planning ………………………………………………………………… 29
Table 4.3 Participants response on the Current Human Resource

Assessment practices…………………………. ……………………………………….30
Table 4.4 Participants response on HR demand and supply

forecasting practices …………………………………………………………………. 32
Table 4.5 Participant’s response on HR demand and supply

gap-closing strategies ………………………………………………………………… 33
Table 4.6 Participant’s response on HRP Effectiveness of

Enat Bank Sc. ………………………….……………………………………………….34
Table 4.7 Participant’s response on Challenges of HRP

Practices of Enat Bank Sc. ………………………….………………………………… 35
iii
LIST OF FIGRES
Figure 1.1 Organizational Structure of Enat Bank Sc.………………………3
Figure 2.1 HRP Process…………………………………………………….11
Figure 2.2 Conceptual Framework of the Study……………………………22
iv
ABSTRACT
The purpose of this study was to explore current HRP practices in Enat Bank Sc. and to
recommend how these practices can further be developed. The study considered all
departments at the head office and all 39 branches of the bank. All department and
branch managers were part of the study. Purposive sampling was used to select the
participants of the study and mixed research approach was the approach used for the
study. The data were gathered using questionnaire and face-to-face semi structured
interview questions. The questionnaire were distributed to all department managers at
the head office and all branch managers of the bank and the interview was conducted
with the human resource and support serviced department manager of the bank. The
results from the questionnaire were analyzed using descriptive statistics and the results
from the interview were narrated and qualitatively analyzed. The findings highlight that,
the HRP practice of the bank has constraints that contributes to the rising employee
turnover currently experienced by the bank. More specifically the findings indicated that
the HRP practices of the bank has limitations in maintaining a good record of the
number and quality of staffs; in following a systematic approach towards forecasting
future human resource needs, in using qualified personnel with technical skills relevant
for HRP and in giving enough emphasis to internal sources when the matching of human
resource needs and human resource supply is done. To improve these problems, it was
recommended that, the bank needs to maintain a profile for each and every individual
personnel by performing HR inventory, apply a standard human resource forecasting
technique in identifying its future human resource needs and also in identifying internal
and external supply of potential qualified personnel, upgrading the skills of HRP
practitioners and make HRP policies and procedures comprehensive and clear to all
parties..
Key words: HRP practices, Strategic Plan, HR inventory, Demand Forecasting, Supply
Forecasting, Enat Bank Sc.
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CHAPTER ONE
1. INTRODUCTION
1.1. Background of the Study

Global competition, rapid technological advancement, and dramatically shifting
demographics are challenges encouraging public and private organizations to consider
people as their most valuable resource (Miracle, 2004). Human Resource Planning (HRP)
is a core process that ensures an organization prepares for its current and future needs by
having the right people in the right place at the right time (Mahapatro, 2010). HRP allows
the building of long-term capacity to meet workforce needs and overcome challenges. If
an organization is effective in the development and implementation of its Human
Resource Planning (HRP), it will be able to better utilize human capital in order to
achieve its strategic objectives. (Stredwick, 2005)
HRP is an outcome of a long period of evolution in management practice; it was

historically known as manpower planning. The focus in manpower planning was on
forecasting the needs for employees into the future, assessments of internal labor supply
for meeting these needs, and identifying the gaps between what will be needed and what
will be available (Santos, Zhang, Gonzalez, & Jain, 2009). The 1980s saw a period of
transition where manpower planning began to be replaced by the notion of HRP
(Bramham, 1994). The process now encompasses not only supply-demand balancing or
quantitative forecasting, but also analyzing an organization’s human resource (HR) needs
as an integrated part of organizational strategy. This change is consistent with the overall
shift taking place in the field of HRM, where employees have been recast as valuable
resources and are considered a vital internal source of organizational competitive
advantage (Kelly, 2003).
Taking into account the critical nature that HRP is evolving with time, it is natural to
conclude its importance in the service sector is high due to the intangibility nature of
1
service. This fact looks more evident when seeing the trend currently unfolding in the
Private Commercial banking industry. Private Commercial Banks, are currently feeling
more pressure to deliver a service experience that fulfills customers’ expectations. This
has been heated up further; with an ever increasing bargaining power of customers and a
growing competitive rivalry among banks, often coming through, in terms of technology,
innovative products, service quality and customer service battles. (Hebret Bank,
2016/17).
Currently, the Ethiopian banking sector is passing through a lot of dynamism,

experiencing significant changes in its operations as well as with regard to the adoption
of new technologies. As a result, the industry is facing intense competition nationally as
well as internationally. These challenges led the industry to compete based on a
competent work force. Needless to say, the service delivery of banks depends highly on
the quality of its work force which is directly related to the effectiveness of its human
resources planning (Worku, 2016).
1.2. Statement of the Problem

A number of studies have been conducted on HRP practices across the world, especially
in relation to the extent to which organizations plan for Human Resource. Among these
studies we can cite a research by Jones Andesson, Hnric Avasalu and David Gavriala
(2002) as an example. In this study the researchers mainly tried to investigate the trend of
HRP practices among eight case study companies operating in different industries across
Sweden. As a result of their finding the researchers indicated that the degree of stability
of organizations in terms of employee turnover and economic fluctuation is clearly
influenced by the ways which companies approach HRP. In another example we can also
see a research by Yaw Opoku-Menshas (2012) from Ghana who tried to examine the
effectiveness of HRP and its effect on organizations. Like the first example in this
research the researcher indicated how HRP should be conducted and the role HRP plays
in an overall organizational effectiveness and stability.
When we came to Ethiopia, we don’t find many research works conducted on HRP
especially in relation to how companies practice HRP and how HRP contributes to the
2
overall effectiveness and stability of organizations. This is particularly true in the
financial industry more specifically in the banking sector. Very few HRP studies have
been undertaken in the context commercial banks, contributing in a very limited way to
the general gap in studies of the Ethiopian banking Industry HRP practices. A research by
Merkeb Tadele (2016) from St. Mary’s University can be one example. Merkeb Tadele
under his research study titled “Assessment of Human Resource Planning Practices, the
case of Commercial bank of Ethiopia” tried to assess how the Commercial Bank of
Ethiopia is practicing its HRP. In his study Merkeb indicated the weak points of the
bank’s HRP practices, such as the lack of proper knowledge among those employees who
are assigned to undertake HRP and recommended how this shortfall can be improved.
The weak point of the Merkeb’s research is that it does not assess the overall process of
HRP in Commercial Bank of Ethiopia and as a result the specific area of problem in the
HRP process is not clearly indicated. In this research attempt were made to fully assess
the overall process Enat bank’s HRP practice.
Further to the research gap, the results of the preliminary survey conducted by the
researcher indicated that the Ethiopian commercial banks are facing a lot of challenges
and problems. Among these challenges stands, weakness of the banks in using HRP as a
tool to build a long term capacity by identifying a short and long term goals as well as the
corresponding work activities to project their human resource requirements both from
internal as well as external resources.
Such a problem seems to surface at Enat Bank where employee turnover is rising as
indicated in the Bank’s 2016/17 compiled progress report that incorporates data from the
Human Resource and Support Service Department. The reason for the rise in employee
turnover as per some exit interview reports which the researcher had the privilege to go
through is linked to a number of factors, including the Bank’s failure in addressing the
demands of its employees in terms of identifying the skills, abilities and knowledge of its
workforce. As a result, quite a number of employees complain that despite having the
required academic credentials and skills for posts they feel they are more viable to benefit
themselves and the Bank, they are not being given the chance to compete for the
3
positions during enlisting. Instead, the Bank usually opts to go on the painstaking process
of recruiting from external sources alone. This, according to their account, has forced
them to get frustrated and leave the Bank to work elsewhere on posts they feel they
deserve.
This raises a lot of questions, especially in relation to the actual HRP practices of the
bank, in the use of internal and external sources; the integration of strategic planning
objectives with HRP; techniques used by the bank to forecast HR supply and demand and
alternative staffing strategies used to address staffing gaps.
Thus, this study tried to examine the existing HRP practices of Enat Bank Sc. based on
empirical data and attempted to analyze the status of the prevailing HRP practices of the
bank and also aimed to fill the research gap in the area of HRP.
1.3. Basic Research Questions

Based on the problem discussed in section 1.3 above, the current study aimed to answer
the following basic questions:
1) How much does Enat Bank integrate its HRP with the strategic plan?
2) How does the bank assess its current human resource capacity?
3) How does the bank forecast its future demand and supply of workforce?
4) How does the bank close the gap between current and future HR needs?
5) How effective is the Bank’s Human Resource planning practices?
6) What challenges does the bank face while implementing its Human Resource
Planning?
1.4. Objective of the Study

1.4.1. General objective
The general objective of this study was to explore current HRP practices in Enat Bank Sc.
and to recommend how these practices can further be developed.
4
1.4.2. Specific Objective
Particularly, the study had the following specific objectives:
1. To investigate the integration between the HRP and the bank’s strategic plan.
2. To examine the current human resource capacity assessment practices of the bank
3. To assess the HR demand and supply forecasting practices of the bank
4. To assess the procedure followed by the bank in closing the gap between current
and future human resource needs. .
5. To examine the effectiveness of the Bank’s current Human Resource Planning
Practices.
6. To investigate the challenges faced by the bank in relation to its Human Resource
Planning practices.
1.5. Significance of the Research

Contribution of this study is believed to appear in three ways: first, it would enable Enat
Bank to improve its practices of HRP. Secondly it would contribute to the limited body of
knowledge on HRP practices in the Commercial banking sector in general and the privet
banking sector in particular. Thirdly it is believed to be a valuable reference material for
students, organizations and other interested persons who may want to undertake similar
study.
1.6. Scope and Limitations of the Study

The scope of the study was limited to the HRP which is only part of the overall human
resource management process. More specifically it was limited to assessment of the
human resource planning process currently being implemented by Enat bank Sc. In
addition to this, the study has primarily took on a single bank particularly focusing on it’s
the head office with all its nine departments that perform their own HRP and all its 39
branches which also are part of the HRP process.
It was taken that a couple of factors may limit the credibility for future use of this work
and renders it less appropriate in making general conclusions. The study may not cover
all aspects and dimensions of Human Resource Planning and therefore, may not be able
5
to provide comprehensive empirical facts and evidence. In addition to this the fact that
the study entirely depended on the opinion of the participants to assess the HRP practices
of the bank and evaluate its effectiveness may significantly affect its credibility. Finally
the study primarily focused on only one bank and that it may not provide adequate and
representative facts and empirical evidence applicable to all commercial banks in
Ethiopia.
1.7. Definition of Basic Terms

The terminology of HRP terminologies have been taken from management discipline and
directly transferred to the context of this research. These terminologies are presented in
Table 1.1 below.
Table 1.1 Definitions of Basic Terms
Terms Definition
HRM HRM can be defined as the art of procuring, developing and maintaining
competent workforce to achieve the goals of an organization in an
effective and efficient manner. (Mahapatra, 2010)
HRP “Human Resource Planning is a Strategic alignment of an organization’s

human capital with its business direction. It is a methodical process of
analyzing the current workforce, determining future workforce needs,
identifying the gap between the present and future, and implementing
solutions so the organization can accomplish its mission, goals, and
objectives.”(IPMA (2002), as quoted by (Al Wahshi, 2016, P. 41)
HR Demand Forecasting Demand Forecasting is the process of estimating the future numbers of
people required by an organization and the likely skill and competences
they will need (Armstrong, 2009, P. 491)
HR Supply Forecasting Supply Forecasting is the process of measuring the number of people
likely to available from within and outside the organization, having
allowed for absenteeism, internal movements and promotions, wastage
and changes in hours and other conditions of work (Armstrong, 2009, P.
492)
6
1.8. Organization of the Study
The paper is organized under five chapters. Chapter one tried to introduce the
background of the study, the statement of the problem, the research questions, the
research objectives, the research scope, the significance of the research, definitions of
basic terms and organization of the study. The second chapter laid the framework of the
research by reviewing the theoretical and empirical literatures and also by presenting the
conceptual framework of the study. Chapter three dealt with presenting the research
methodology, briefing how the entire research work has been done from data collection
to analysis. The forth chapter presented, discussed and interpreted the results of the
study. Finally, the fifth chapter presented summary, conclusions and recommendations
which were made based on the findings.
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2. CHAPTER TWO
LITERATURE REVIEW
2.1. Theoretical Background
2.1.1. HRP as HRM Fundamental

One of the most pervasive and essential management processes that help an organization
to achieve success is identification of a management strategy (Mittenthal, 2002).
Competitive advantage can be obtained by any organization that uses both physical
resources, including technology and equipment, and intellectual sources including
individual knowledge, skills and abilities (Ismail, Rose, Uli, & Abdullah, 2012). Many
organizations seek to create a truly competitive advantage by focusing on their people
(Munteanu, 2015). HRM is undertaken as part of the management process that is
responsible for ensuring that the organization’s human resources gain a competitive
advantage (Duke & Udono, 2012). According to Mahapatra (2010), HRM can be defined
as the art of procuring, developing and maintaining competent workforce to achieve the
goals of an organization in an effective and efficient manner. The function of human
resource management (HRM) is concerned with all aspects of how people are employed
and managed in organizations. It covers activities such as strategic HRM, human capital
management, corporate social responsibility, knowledge management, organization
development, resourcing (human resource planning, recruitment and selection, and talent
management), performance management, learning and development, reward
management, employee relations, employee well-being and health and safety and the
provision of employee services (Armstrong, 2009, P. 5). We can see here that HRP is one
of the key functions of HRM. The main function of HRP is to ensure an organization that
how many people and what sort of people they should have to meet present and future
business requirements. (Armstrong, 2009 P. 486). Thus, all actions involving the
continuous environmental scanning and the reviewing of an organization’s strategies,
8
objectives and policies will be captured by HRP (Deb, 2006; Härtel, Fujimoto, Strybosch,
& Fitzpatrick, 2007; Randhawa, 2007).
2.1.2. Definition of HRP

HRP has been defined by different scholars in several different ways, but the definition
most commonly used by scholars is that ”It is a process that ensure organizations that
they have the right number of human resource with the right capability at the right time
and in the right place (Mathis, 2010). This definition as stated by Reilly (1996) HRP
considers the future in a structured way with the intention of identifying the right type
and number of human resources needed by an organization.
But we can also find a more detailed definition of HRP from the International Personnel
Management association (IPMA). IPMA defined HRP as:
“Human Resource Planning (HRP) is a Strategic alignment of an organization’s human

capital with its business direction. It is a methodical process of analyzing the current
workforce, determining future workforce needs, identifying the gap between the present
and future, and implementing solutions so the organization can accomplish its mission,
goals, and objectives.” IPMA, as quoted by Al Wahshi, 2016, P. 41)
This definition provides a more comprehensive framework of HRP at an organizational

level. It identifies HRP as alignment of an organization’s human capital with its business
direction. It also offers more details about the procedures and goals of HRP. It identifies
elements for all HRP processes, including analyzing the current workforce, determining
future workforce needs, identifying the gap between the present and future, and
implementing solutions.
Looking at these two definitions we can easily see that both are concerned with looking
ahead and more importantly using systematic technique to assess the extent to which an
organization will be able to meet its future requirement for labor. For the purpose of this
study the definition by IPMA will be used.
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2.1.3. Importance of HRP
HRP plays an enormously important role in realizing the organization’s goals as it
involves having the right talent with the right skills, at the right time and for the right
cost. The importance of HRP lies in its potential to identify organizational needs for skills
and competencies for both present and future programs (Randhawa, 2007). HRP can use
various methods to address current and expected workforce needs such as demographic
analysis and retirement projections (Meisinger, 2007). Organizations need HRP to have
the right systems in place to ensure that the organization has the right job in place and
obtains the right people for them (Freedman, 2009). HRP also aims to facilitate
organizational effectiveness. For instance, HRP can involve the collection of data, which
can be used to assess the effectiveness of a program and provide notice when revision is
needed, such as in the area of employees' skills, interests and experience (Ulfertsm et al.,
2009). HRP is also important to assist HR professionals to plan for change and get ready
for sudden events. This can be achieved through HRP by developing a clear vision of
their workforce requirements. It is apparent that HRP is more accurate as it depends on
the prediction of several elements that are related to the HRM function, such as
recruitment, retention, redeployment, leadership and employee development (Sullivan,
2002).
HRP activities provide the opportunity to frame decisions explicitly in terms of long-term
strategies that then turn into effective outcome statements for the organization. This is
important for acquiring, developing, and retaining staff to achieve programmatic goals
(Choudhury, 2007). HRP enables an organization to adjust and quickly respond to current
and emerging business requirements. For instance, by engaging in HRP, an organization
can formulate strategies for success through providing a set of useful inputs such as the
type and number of current employees (Aswathappa, 2005). Achieving a balance
between labor demand and supply is the most common cited benefit of HRP (Imison,
Buchan, & Xavier, 2009). The demand side is concerned with expected trends in the
labor market, while the supply side involves determining the method of job candidate
placement and the position that will be occupied by candidates with the required
qualifications (Snell & Bohlander, 2012).
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2.1.4. Human Resource Planning Process
Source: Decenzo and Robbins (2010, P-119)

Figure 2.1: HRP Process
Without clear cut planning and direct linkage to an organization strategic direction,
estimation of an organization human resource needs can easily be reduced to mere guess
work that may well fall short of the actual organizational needs. This means that
employment planning cannot exist in isolation. It must be linked to organization’s
overall strategy (Decenzo and Robins, 2010 P. 112). According to Mathis, (2010, P.148)
the process of HRP begins with analyzing the overall strategic plan of an organization.
2.1.4.1. Strategic Planning Process

The strategic Planning Process can be defined as the art and science of formulating,
implementing and evaluating cross functional decision that enable an organization
achieve its objectives (David, 2011 P.6).
According to David, the strategic planning process consists of three stages:

Strategy Formulation
Strategy Implementation
Strategy Evaluation
11
Dcenzo and Robins, (2010, P 113) discusses the strategic formulation stage as follow:
During the strategy formulation stage organization’s main emphasis is to determine what
business the organization is in. This is what is commonly known as developing the
mission statement. After the determination of the mission statement, the process of
setting strategic goals will follow. During this process organizations define goals that can
serve the next five to twenty years. The corporate assessment is the next stage in strategic
planning formulation. During this stage an organization begin to analyze their goals in
terms of whether they can be achieved with the current organizational resources. The
factors considered in the corporate assessment process are; the company’s current
strategy, its external environment, its strength and weakness and opportunity and threats.
This process is commonly known as SOWT analysis. At this stage the organization began
to look at what skills, knowledge, or ability are available internally and what shortage in
terms of peoples skill or equipment exist.
2.1.4.2. Assessing Current Human Resource

After going through the organization’s strategic planning process which lays the
foundation for the HRP the process of assessing current human resource will take the
stage. This stage looks at the jobs currently being done and the people doing the job. It is
done based on the results of Human Resource Inventory and Job Analysis (Dcenzo and
Robins, 2010).
A. Human Resource Inventory

According to Dcenzo and Robins (2010) assessing current human resource begins by
developing a profile of current employees. This internal analysis includes information
about the workers and the skills they currently possess. HR inventory describes skills
currently available in the organization. HR inventory tells management what individual
employees can do. From HRP view point, the HR inventory is valuable in determining
what skills are currently available in the organization. Human Resource Information
System (HRIS) is normally used as a source of data for HR inventory. HRIS is a database
device that is used for tracking human resource information inventory information.
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Jahanian et.al. (2014) listes the main information included in the HR inventory as:
 Name of the employee/age/gender/marital status

 Qualifications of the employee
 Training undertaken by the employee
 Prior employment experience of the employee
 Current position held by the employee
 Performance ratings of the employee
 Salary level of the employee
 Capabilities of the employee
 Specialized skills of the employee
 Job and location preferences.
B. Job Analysis
The knowledge, skill and ability are determined based on the job required to meet the
strategic direction of the organization. Accordingly the HRP process must allow for the
recognition of specific job needs as well as the total number of vacancies (Ulferts et.al.
2009). According to Decenzo and Robins (2010) a job analysis is a systematic
exploration of the activities within a job. It provides information about job currently
being done and the knowledge, skill and ability that individuals need to perform their job
adequately.
Stredwick (2005) explains that job analysis begins with a clear understanding of the job
and its link to organizational strategy. HR next determines the tasks necessary to
successfully complete the job, and then determines the skills necessary to complete the
tasks.
Job analysis information about i.e. what people are doing in their job can be gathered in a
variety of ways. According to Mathis (2010) the most common methods used to gather
information for job analysis included observation, interview and questioners. However,
Deconzo and Robins (2010) explains, no matter what methods used to gather data for the
13
job analysis, the information amassed and written down from the conceptual analytical
job analysis process generates three tangible our puts:
 Job description: a written statement of what the job holder does, how it is done,
under what condition and why.
 Job specification: a statement that maintains acceptable qualification, the job
holder expects to possess.
 Job evaluation: a document that provides valuable information for making job
comparison.
2.1.4.3. Determining the Demand for Labor (Demand Forecasting)

Once an assessment of the organization current human resource situation has been made
and the future direction of the organization has been considered, it is time to develop a
projection of future human resource needs (Decenzo and Robins, 2010).
Demand forecasting is the process of estimating the future numbers of people required
and the likely skills and competences they will need (Armstrong 2009, P. 491).
According to Armstrong the basis of the forecast is the annual budget and longer-term
business plan, translated into activity levels for each function and department or decisions
on ‘downsizing’.
For Armstrong the following demand forecasting methods can be used for estimating the
numbers of people required:
 Managerial Judgment
The most typical method of forecasting used. This simply requires managers to sit down,
think about their future workloads, and decide how many people they need. It might be
done on a ‘bottom-up’ basis with line managers submitting proposals for agreement by
senior management or on a ‘top-down’ approach in which company and departmental
forecasts are prepared by top management, possibly acting on advice from the personnel
departments.
14
 Ratio-Trend Analysis
A forecasting method carried out by studying past ratios between, say, the number of
direct (production) workers and indirect (support) workers in a manufacturing plant, and
forecasting future ratios, having made some allowance for changes in organization or
methods. Activity level forecasts are then used to determine, in this example, direct labor
requirements, and the forecast ratio of indirect to directs would be used to calculate the
number of indirect workers needed. (IBID 492)
 Work study techniques
A forecasting method that can be used when it is possible to apply work measurement to
calculate how long operations should take and the number of people required. Work
study techniques for direct workers can be combined with ratio-trend analysis to calculate
the number of indirect workers needed. (IBID 492)
 Forecasting skill and competence requirements
This method is largely a matter of managerial judgment. This judgment should however
be exercised on the basis of a careful analysis of the impact of projected product-market
developments and the introduction of new technology, either information technology or
computerized manufacturing. (IBID 492)
2.1.4.4. Predicting Future Labor Supply (Supply Forecasting)
Once human resources needs have been forecasted, then availability of qualified
individuals must be identified (Mathis 2010 P. 153). Supply forecasting measures the
number of people likely to be available from within and outside the organization, having
allowed for absenteeism, internal movements and promotions, wastage and changes in
hours and other conditions of work. (Armstrong, 2009 P. 492).
According to Mathis (2010, P. 153) supply forecasting considers both external and
internal supplies. For Mathis external Supply includes external supply of potential
employees available to the organization needs to be identified. Extensive use of
15
government estimates of labor force populations, trends in the industry, and many more
complex and interrelated factors must be considered. And internal supply considers the
employees who move from their current jobs into others through promotions, lateral
moves, and terminations. It also considers that the internal supply is influenced by
training and development programs, transfer and promotion policies, and retirement
policies, among other factors. In forecasting the internal supply, data from the
replacement charts and succession planning efforts are used to project potential personnel
changes, identify possible backup candidates, and keep track of attrition (resignations,
retirements, etc.) for each department in an organization.
In another saying for Armstrong (2009) the supply forecasting covers the following areas:
 Existing number of people employed by occupation, skill and potential.

 Potential losses to existing resources through attrition (employee turnover).
 Potential changes to existing resources through internal promotions.
 Effect of changing conditions of work and absenteeism.
 Sources of supply from within the organization.
 Sources of supply from outside the organization in the national and local labor
markets
Factors Affecting Supply Forecasting
Mathis (2010) listed the following factors that should be considered in planning human
resource:
i. Economic and Governmental Factors
The general cycles of economic recession and economic boom in different businesses
affect HR planning. Factors such as interest rates, inflation, and economic decline or
growth affect the availability of workers and should figure into organizational and HR
plans and objectives. A broad array of government regulations also affects the labor
supply and therefore HR planning. As a result, HR planning must be done by individuals
who understand the legal requirements of various government regulations.
16
ii. Competitive Evaluations
When making HR plans, employers must also consider a number of competitive
concerns. Direct competitors are important external force in HR planning.
iii. Changing Workforce Considerations

Significant changes in the workforce that are being exhibited globally must be considered
when doing external assessments for HR planning. Shifts in the composition of the
workforce, combined with the use of different work patterns, have created workplaces
and organizations that are notably different from those of a decade ago. Many
organizations face major concerns about having sufficient workers with the necessary
capabilities. When scanning the potential and future workforce, it is important to consider
a number of variables, including:
 Aging of the workforce
 Growing diversity of workers
 Female workers and work-life balancing concerns
 Availability of contingent workers
 Outsourcing possibilities
2.1.4.5. Matching Labor Demand and Supply

This step according to Decenzo and Martins (2010), matches demand and supply
forecasts to determine future shortages or surpluses of human resources in terms of
quality and quantity. Additional staff will be needed to meet the shortages.
Retrenchment/cut down will be needed for surplus staff. Early retirement, lay-offs, leave
of absence, work sharing, reduced work hours, etc. can be used here.
2.2. Review of Empirical Studies

Several studies have been conducted on HRP practices globally, among these researches
we can take the research by Jonas Andersson, Henrik Avasalu & David Gabrielson, Yaw
Opoku-Menshas and Merkeb Tadele as an example.
17
Jonas Andersson, Henrik Avasalu & David Gabrielson, under their research title “Human
Resource Planning, a case study based analysis of the extent to which organizations plan
for human resources in the contemporary business environment”, aimed to investigate the
extent to which organizations plan for HR. The researchers adopted a multiple case study
approach where they took cases from aviation, engineering, restaurant, banking, telecom,
hospital, and manufacturing industries. The research approach they adopted to undertake
their research was qualitative, and interview was used to collect data. As the result of
their investigation the researchers indicated that the degree of stability in the case study
companies in the selected industries, in terms of employee turnover and economic
fluctuations, clearly influences the way in which the companies approach HRP.
The second study the researcher took as an example here is the research by Yaw Opoku-
Menshas from Ghana. The researcher under his research titled “An Analysis of Human
Resource Planning and its Effect on Organizational Effectiveness – A Case Study of
Information Services Department, Accra Office”, assessed the HRP practices of a
company called “Information Services Department, Accra Office”. The study tried to find
out whether there are HRP policies and practices in the case company; to establish
whether the Human Resource Planning practices and procedures within company are
functioning effectively; and to find out the challenges of the provision of a framework to
guide the implementation of HRP in the company. As the results of the study the
researcher revealed that most of the staffs in the case study company do not have in-depth
knowledge on Human Resource Planning, and that HRP, is not being well practiced by
the company. In his recommendation the researcher suggested, among other things, for
the company to develop and implement comprehensive career development training
programs for its staff so that they can be more proactive and resilient, and effectively
propagate its objectives.
The third example will bring us to Ethiopia. When we came to Ethiopia, we don’t find
many research works conducted on HRP especially in relation to how companies practice
HRP and how HRP contributes to the overall effectiveness and stability of organizations.
This is particularly true in the financial industry more specifically in the banking sector.
18
Very few HRP studies have been undertaken in the context of the publicly owned
commercial banks, contributing in a very limited way to the general gap in studies of the
Ethiopian banking Industry HRP practices. A research by Merkeb Tadele (2016) from St.
Mary’s University can be one example. Merkeb Tadele under his research study titled
“Assessment of Human Resource Planning Practices, the case of Commercial bank of
Ethiopia” tried to assess how the Commercial Bank of Ethiopia is practicing its HRP. In
his study Merkeb indicated the weak points of the bank’s HRP practices, such as the lack
of proper knowledge among those employees who are assigned to undertake HRP and
recommended how this shortfall can be improved.
2.3. Conceptual Framework

After reviewing existing views in the literature concerning the HRP process, in the
theoretical context, conceptual framework shown in figure 2.1 below is developed. The
research framework initially focuses on HRP as integral part of the strategic planning
process of an organization. The study investigates how HRP is used within the
framework of Enat Bank Sc. strategic plan. This step also involves determining how
HRP is deployed and integrated across the strategic planning process. The second step
involves in analyzing the current workforce and positions of Enat Bank. The third step
focuses on how the bank forecast human resource demand and supply to satisfy future
workforce needs. The forth step focuses on how the bank closes the demand and supply.
19
Figure 2.2 Conceptual Framework of the Study
Source: Modified from a design by Al Wahshim (2016, P. 112)
20
3. CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Background of Enat Bank Sc.

Enat Bank Sc. is a privately owned commercial bank established in 2011 in accordance
with the licensing and supervision of banking business proclamation No. 591/2008 of
Ethiopia to undertake commercial banking activates. The bank obtained its license from
the national Bank of Ethiopia (NBE) on 14 November 2012 and started its business
activates as of 05 March 2013. (Annual Report of Enat Bank Sc. 2016/2017).
Currently the bank has elevated its capital to almost a billion having wide shareholders of
which 65% are women. Currently it has 37 branches of which 10 are located in various
regions and the remaining in Addis Ababa. (Annual Report of Enat Bank Sc. 2016/2017).
As of today the bank has created a job opportunity for over 402 people out of whom 241
are female and the remaining 160 are male. (Annual Report of Enat Bank Sc. 2016/2017).
3.2. Research Design
As explained in the first chapter of this study the primary area of interest of this research
was, to assess the current HRP practices in Enat Bank Sc. and to recommend how these
practices can further be developed. The design used for this study is a descriptive survey.
A descriptive research was used because it is basically designed to find out the existing
situation of a particular phenomenon of concern. According to Kothary (2004),
descriptive type of research is a systematic attempt to collect information from members
of an identifiable population.
21
3.3. Research Approach
According to Kothari (2004, P. 5) there are two basic approaches to research, qualitative
research approach and quantitative research approach. For Kothari quantitative research
approach involves the generation of data in quantitative form which can be subjected to
rigorous quantitative analysis in a formal and rigid fashion. Qualitative research approach
on the other hand is concerned with subjective assessment of attitudes, opinions and
behavior where research in such a situation is a function of researcher’s insights and
impressions. The general objective of this study as described in the first chapter is to
explore current HRP practices in Enat Bank Sc. and to recommend how these practices
can further be developed. Hence, considering the nature of each approach, the researcher
found both quantitative and qualitative approach (mixed research approach) most suitable
for this study.
3.4. Population and Sampling techniques
3.4.1. Target Population
Marczyk et.al (2005. P. 18) defined population of a study as “all individuals of interest to
a research”. Accordingly, the area of interest for this research was all departments’ heads
at head office and all branch managers of the bank throughout Ethiopia, who according to
the HR department manager are directly, involved in the HRP activities of the bank.
Currently there are nine (9) departments operating at the head office of Enat bank and
thirty nine (39) operational branches. Therefore the target population of the study will be
all of the Forty Eight (48) department heads and branch managers.
3.4.2. Participants Selection
The strategy chosen for selecting representatives for the study population was purposive
sampling, which is one of the most common sampling strategies used in qualitative
research (Lodico, Spaulding, & Voegtle, 2010). To identify a purposive sample that
would meet the criteria for this study, the researcher asked the HR and support services
department head of Enat Bank to obtain an idea about parties who are directly involved in
22
conducting the HRP activates. According to the manager, HRP is performed at both the
head office and branches of the bank primarily by the department heads and branch
managers. Therefore for the purpose of the study all department and branch managers of
the bank were considered
3.5. Source and Tools of Data Collection
3.5.1. Source of Data

Both primary and secondary data sources were used as the source of data for the research.
The primary data majorly originated from the interviews that the researchers conducted
with the HR department head of Enat Bank and the questionnaires that was distributed to
all department heads and branch managers of Enat bank. Further to this annual reports
and different publications of the selected banks was used as a secondary data source.
3.5.2. Methods of Data Collection

As discussed above the study used interviews that was conducted with the Human
resource and support services head and questionnaires that was distributed to all
department heads and branch managers of the bank, with assistance from the Banks
Branch Operations and Outlet Department head. Interviews were employed for
collecting information because Interviews are a relatively common way of collecting data
in research and the data they collect and the forms they take are very important to fill the
requirements of the research question and the related research design (Marczyk et.al,
2005).
3.6. Methods of Data Analysis
The descriptive statistics (frequencies distribution, mean and standard deviation) was
applied to analyze and present these data. The interview results were analyzed
qualitatively.
23
3.7. Validity and Reliability Assurance
3.7.1. Validity
According to Marczyk et.at (2005), the concept of validity refers to, what the test or
measurement strategy measures and how well it does so. Conceptually, validity seeks to
answer the following question: “Does the instrument or measurement approach measure
what it is supposed to measure?”
The following steps were taken to ensure the validity of the study. Questionnaires were
prepared from the literature review as a reference to validate the result. Pilot test was
conducted with a sample of the participants to enhance the questionnaire’s validity in
terms of the respondents understanding and comprehension. Comments from
professionals and respondents were solicited to ensure validity.
3.7.2. Reliability
Saunders etal. (2003) defined reliability in this way, “reliability refers to the extent to
which the data collection techniques or analysis procedures will yield consistent
findings”.
Cronbach’s alpha is a measure of reliability. Reliability refers to the consistency or

dependability of a measuring instrument. It is defined as the proportion of the variability
in the responses to the survey which is the result of differences in the respondents. That
is, answers to a reliable survey will not differ because respondents have different
opinions, but because the survey is confusing nor has multiple interpretations.
The Cronbach’s alpha for the total scale and the sub scales are above 80% which means
that the scales that will be used in this study are considered reliable.
Table 3.1 Reliability Statistics

Reliability Statistics
Cronbach's N of Items
Alpha
.887 34
24
3.8. Ethical Considerations
The researcher assures that the research is independent and impartial. The respondents
were given a privilege of not writing their name and other identities. This was done
mainly to hide participants form possible unwanted approach that might come from
groups or individuals with interest. Further to this the participants was assured on the
confidentiality of their responses. No respondent was forced to fill the questionnaire
unwillingly and before the actual purpose of the research was made clear to him/her.
25
4. CHAPTER FOUR:
RESULTS AND DICUSSION
4.1. Introduction:
In this section, the results and discussions of the study are presented. The first section
under each topic presents the results of the administered questionnaire. The participants
were asked to indicate the extent to which they agreed and disagreed to the stated items
on a five-point Likert scale (1=Strongly Disagree to 5= strongly agree). The results are
presented using a frequency table which summarized the result in terms of frequency and
percentage and a descriptive statistics table which uses mean score and standard
deviation. For the latter the following were taken as a base. A mean of above 3 is
regarded to measure satisfaction on the items. The Standard deviation as it is used to
indicate the variation or “dispersion” from the “average” (mean), a low standard
deviation indicates that the data points tend to be very close to the mean, whereas high
standard deviation indicates that the data is spread out over a large range of values. This
is well elaborated in the table and narratives below which show the responses and the
statistics.
The second section presents the data collected through semi-structured face-to-face
interviews conducted with the human resource and support service department managers
of the Enat Bank Sc. The objective of the interview was to solicit further information and
detailed explanation on the HRP practices of Enat Bank.
4.2. Research Findings and Discussion

4.2.1. HRP and Strategic Plan
This part elaborates on the participant’s response over the link between the HRP and the
strategic plan of Enat Bank Sc. The general reflection of the participants from the
administered questionnaire and the results of the interview conducted with the HR
manager are presented as follows.
26
Table 4.2 Participants response on the integration between the HRP and Strategic
Planning
Opinion
Items Mean SD
SDA DA N A SA
Fre. 0 2 3 29 14
I am aware of the bank’s strategic plan. 4.1458 0.7143
% 0% 4% 6% 60% 29%
I know the bank has a separate human resource Fre. 3 2 6 22 15
3.9167 1.0883
strategy % 6% 4% 13% 46% 31%
I know that the bank’s human resource strategy is Fre. 3 2 6 22 15
coined in line with the bank’s overall strategic 3.9167 1.0883
plan. % 6% 4% 13% 46% 31%
The bank’s human resource planning process is Fre. 0 1 4 23 20
4.2917 0.71335
oriented to the strategic direction of the bank % 0% 2% 8% 48% 42%
Grand Mean 16.271

Index: SDA: Strongly Disagree; DA: Disagree; N: Neutral; A: Agree; SA: Standard Agree; SD: Standard
Deviation
Source: Questionnaire
As discussed in the theoretical background above without clear cut planning and direct
linkage to an organization strategic direction, estimation of an organization human
resource needs can easily be reduced to mere guess work that may fall well short of the
actual organizational needs. This means that employment planning cannot exist in
isolation. The data were collected to seek the participant’s perception over the
integration between the HRP and Strategic plan of the bank.
In order for the participants to tell whether there is integration between the strategic plan
and the HRP of the bank, it was taken that they have to be familiar with the strategic plan
of the bank. For this reason the participants were asked if they are familiar with the
strategic plan. The result indicates that almost all of the participants are familiar with the
strategic plan. This is clearly seen from table 4.2 above which indicates that 89.3% the
participants confirm that they are familiar with the strategic plan. The corresponding
mean and SD further strengthen this result with a score of 4.14 and 0.71 respectively.
Again from table 4.2 we can see that Enat bank has a separate HRM strategy that is
27
coined in line with the overall strategic plan of the bank. This finding is evident from the
responses which indicate a 77.10% confirmation by the participants and also from the
mean score of 3.91 on both items. More importantly, though, the result indicates that the
bank’s HRP is oriented towards the strategic direction of the bank. This finding is also
well supported by the result indicated on table 4.2 which shows an almost 90%
agreement and off course also by the 4.29 mean score and 0.71 SD.
The result obtained from the interview supports the above finding. The first question
forwarded to the HR manager in relation to the HRP process of the bank was to explain if
there integration between the human resources plan and the Strategic plan of the bank.
The manager stated that every decision made related to the human resource management
of the bank is done in careful consideration of the strategic plan of the bank. Thus he
added the HRP process as one key activity of the department takes careful consideration
of the strategic plan of the bank.
4.2.2. Current Human Resource Capacity Assessment

This section presents the research finding and discussions on the existing human resource
assessment process of Enat bank.
Table 4.3 Participants Response on the Current Human Resource Assessment

practices
Opinion
Items Mean SD
SDA DA N A SA
The bank’s HRP is undertaken Frequency 0 9 8 27 4
3.5417 0.8982
by analyzing existing jobs % 0% 19% 17% 56% 8%
The bank considers Manpower Frequency 0 20 16 9 3
2.8958 0.928
Inventory in setting its HRP % 0% 42% 33% 19% 6%
Grand Mean 6.4375
Index: SDA: Strongly Disagree; DA: Disagree; N: Neutral; A: Agree; SA: Strongly Agree
Referring back the theoretical background, we have seen that after going through the
organization’s strategic planning process which lays the foundation for the HRP the
28
process of assessing current human resource will take the stage. This stage looks at the
jobs currently being done and the people doing the job. It is done based on the results of
Human Resource Inventory and Job Analysis. Having this in mind this section looked
into how the bank is currently assessing its current human resource. From the
questionnaire result presented on table 4.3, we can clearly see that the bank undertakes
job analysis in planning its human resource. This is evident from the 64.3% agreement by
the participants and also by the 3.54 mean score and 0.89 SD which shows how the
responses are close to the mean. However, on the contrary the result shows us that the
bank has some limitations in keeping a profile of its current employees in terms of their
demographic features and skills they possess. We can see this from the 41.7%
disagreement on the item. This result is slightly supported by the mean score which
shows a result a little short of 3. The mean score as shown on table 4.3 is 2.89.
On this point the questions raised to the HR and support service manager were made with
the objective of seeing if the bank assesses job currently being done and the employees
who are currently there to perform the jobs as part of the HRP process. The first issue
raised to the HR manger in relation to the current workforce assessment was its job
analysis practices. Job analysis as we have seen in the theoretical background should be
done as part of the HRP practices because the knowledge, skill and ability that employees
are expected to possess is determined based on the job and its specification, required to
meet the strategic direction of the organization. From the response given by manager the
researches has managed to observe that the bank performs job analysis for every post its
has and as a result it manages to identify the requirements of each job in terms of the
knowledge skills and ability needed to meet its objectives.
On the second issue which we were considering, i.e. the HR inventory practices, the
manager was asked if the bank maintains timely HR inventory in relation to the skills
currently available in the bank that can be used in the HRP process. The response given
as answer indicates that except for a record that shows the total number of employees
with a certain level of education, experience or qualification at a given time the bank does
not keep a separate record showing an up-to-date information on the current knowledge,
skill and ability of the its individual staff. This response implies that the bank relies on a
29
general qualitative assessment made on its employees that focuses only on the total
number of employees with a certain qualification to undertake HRP.
4.2.3. Forecasting HR Demand and Supply
Table 4.4 Participants response on HR demand and supply forecasting practices
Opinion
Items Mean SD
SDA DA N A SA
The bank forecasts its future human resource Frequency 0 5 8 32 3
3.6875 0.74822
needs in setting its HRP % 0% 10% 17% 67% 6%
The bank use Executive Judgment method to Frequency 0 15 25 7 1
2.875 0.73296
estimate its future human resource needs % 0% 31% 52% 15% 2%
The bank use Trend Analysis method to Frequency 3 12 24 9 0
2.8125 0.81623
estimate its future human resource needs % 6% 25% 50% 19% 0%
The bank use Work study method to estimate its Frequency 1 13 34 0 0
2.6875 0.51183
future human resource needs % 2% 27% 71% 0% 0%
The bank’s HRP process considers external Frequency 0 24 16 8 0
2.6667 0.75324
forces in forecasting its future workforce supply % 0% 50% 33% 17% 0%
The bank’s HRP responds to any external Frequency 2 26 12 8 0
2.5417 0.82406
changes % 4% 54% 25% 17% 0%
Grand Mean 17.271
Index: SDA: Strongly Disagree; DA: Disagree; N: Neutral A: Agree and SA: Strongly Agree
This section seeks to investigate the bank’s HR demand and supply forecasting, as
demand forecasting is the next step in HRP process once an assessment of the
organization current human resource situation has been made and the future direction of
the organization has been considered. The results from the administered questionnaire are
presented in table 4.4 above.
Looking the results related to the bank’s HR demand and supply forecasting practices, we
see that the bank actually estimate the future numbers of people required and the likely
skills and competences they will need. However, the fact that the mean values for all the
remaining items under the bank’s demand forecasting practices, fall on the left side of the
midpoint 3 (see table 4.4) shows the bank’s limitation in applying a systematic approach
towards identifying its future human resource needs. Not only this but the result also
30
shows lack of technical knowledge related to the most common workforce demand
forecasting techniques among the participants who as well are key players in the HRP
process of the bank. In relation to the HR supply forecasting the result demonstrates that
the bank neither consider the effects of external forces nor does it responds to any
external changes in forecasting its future human resource supply.
With the objective of further learning about the HR demand forecasting practices of the
bank questions were also raised to the HR and Support Services department manager.
The first question raised to the manager was about the existence of the HR demand
forecasting as part of the HRP process in the bank. From the response the researcher
could grasp that the bank do forecast its future demand for labor. According to the
manager the demand forecasting is directly linked with the strategic plan of the bank
which determines the extent of the future growth of the bank. He said the forecast is done
mainly by considering the number of branches that the bank is planning to open and also
based on individual department and branch separate forecasts which mostly are done in
consideration of expected turnovers, transfers, promotion or expansion rate of the
departments and branches.
The second question raised to the manger in relation to the HR demand forecasting was if
there are any standard procedures or techniques followed by all the concerned parties in
forecasting the future workforce needs of the bank. In his response the manger indicated
that HR forecasting for future branches planned to be opened is done quantitatively based
on trend analysis. Apart from that he said, each department follows its own way of
identifying and assessing its future HR needs.
The above finding suggests that Enat bank do forecast its future human resource needs
based on the strategic plan of the bank and also based on individual forecasts made by
the departments and branches. However it also suggests that the bank does not have a
standard forecasting procedure applicable to all parties of the bank. We can see that HR
forecasts made for newly opened branches are more systematic than the individual
31
forecasts undertaken by departments and branches. This finding further strengthens the
results of the questionnaire.
In order to understand the practice of HR supply forecasting, the HR and Support

services department manager was asked as to how the bank estimates the available
supply of employees and about the data it uses for analyzing the internal HR supply and
the external supply. The manager in his response stated that the bank so far has not done
anything in relation to analyzing future supply of employees both from internal sources
and from external sources. From this response it is evident that there is a significant lack
of capability to forecast HR supply for posts in the bank. The bank does not take into
account assessments of the internal and external sources of supply for its jobs. Current
practice does not include any internal analysis of factors such as retirements, turnover
rates, the potential training needs of current employees, or future staffing requirements.
The case of HR forecasting practice relating to external analysis is similar.
4.2.4. Implementing Gap-Closing Strategies

The Participants who were involved in the administer questionnaire were asked for their
opinion on how the bank implement workforce solution needed to close the gap between
current and future HR needs. They were asked to provide their opinion relating to the
alternative strategies used by the bank to redress employee shortage. The result of their
response is summarized in Table 4.5 below.
Table 4.5 Participant’s response on HR demand and supply gap-closing strategies
Opinion
Items Mean SD
SDA DA N A SA
The bank HRP uses external Frequency 0 5 14 27 2
sources as a future source of 3.542 0.7426
supply of potential employees % 0% 10% 29% 56% 4%
The bank HRP uses internal Frequency 0 23 12 12 1

sources as a future source of 2.813 0.891
supply of potential employees % 0% 48% 25% 25% 2%
Grand Mean 6.354

32
Looking at the results related to the gap-closing strategies the bank most commonly
implement to mitigate potential occupational and skill shortages, we see that the bank
actually do give more emphasis to external sources as compared to the internal sources.
We can see this more clearly from table 4.5 above. From the response it is evident that
majority of the participant almost 60% of them indicated that bank considers external
sources to mitigate potential occupational and skill shortages. The 3.54 mean score
showed on the table for this item further supports the result.
In order to learn more about the practice of the bank with regard to this topic the HR and
support services department manager was asked to explain on the methods or techniques
related with determining and closing the gap between the present and future need. The
human resource manager indicated that preference is given to internal candidates to fill
vacancies by promotion from within the bank in order to increase employee’s job
satisfaction. However form his responses it was evident that there were no clear
standards applied to select the best candidates for the position. It is clear that there is a
gap in applying systematic promotion procedures within the bank. This result in fact
goes against the findings discussed above where majority of the participants indicates
that the bank gives more attention to external source then the internal sources.
4.2.5. Effectiveness of Enat Bank’s HRP Process

The following discussion focuses on the effectiveness of the HRP process of the bank.
The general reflection of the participants concerning the effectiveness of the HRP
practice is summarized in Table 4.6 and the discussions below.
33
Table 4.6 Participant’s response on HRP Effectiveness of Enat Bank Sc.
Opinion
Items Mean SD
SDA DA N A SA
The HRP process helped the bank to Frequency 0 32 8 8 0
efficiently utilize its human resource
2.5 0.77184
% 0% 67% 17% 17% 0%
The bank has clear job description and job Frequency 0 0 8 24 16
specification for every position
4.1667 0.69446
% 0% 0% 17% 50% 33%
The bank has managed to effectively Frequency 0 32 0 16 0
determine its future human resource needs
2.6667 0.95279
% 0% 67% 0% 33% 0%
The banks HRP process is clear and Frequency0 0 32 4 12 0
understandable
2.5833 0.87113
% 0% 67% 8% 25% 0%
The bank’s HRP specifies detailed activities Frequency 0 34 12 2 0
considering all required issues
2.3333 0.55862
% 0% 71% 25% 4% 0%
The bank’s HRP fulfills the manpower Frequency 0 28 12 8 0
requirements of departments and branches
2.5833 0.76724
% 0% 58% 25% 17% 0%
Frequency 0 32 4 12 0
I believe the bank’s HRP is achievable 2.5833 0.87113
% 0% 67% 8% 25% 0%
People involved in the HRP preparation are Frequency 0 0 16 32 0
willing and cooperative
3.6667 0.47639
% 0% 0% 33% 67% 0%
There is free flow of information among the Frequency 0 34 0 14 0
participants of the HRP process
2.5833 0.91868
% 0% 71% 0% 29% 0%
The bank’s HRP considers compensation Frequency 0 8 24 16 0
issues
3.1667 0.69446
% 0% 17% 50% 33% 0%
Frequency 0 8 16 24 0
The bank’s HRP is comprehensive 3.3333 0.75324
% 0% 17% 33% 50% 0%
The human resource planning practice of the Frequency 8 32 2 6 0
bank has played a role in meeting the bank’s 2.125 0.8411
business objective % 17% 67% 4% 13% 0%
Grand Mean 34.2916
As a way of grasping the participants opinion over the effectiveness of the bank’s HRP
practices a number of items were raised to them. One of these was related with the
presence of a clear job description and job specification for every position in the bank.
The result indicated in table 4.6 tells us that the bank has a good practice in terms of
keeping a clear job description and specification for every job undertaken in the bank.
The 4.17 mean score indicated and 80.30% agreement seen in table 4.5 confirms this
finding. The result on majority of the rest of the items under the effectiveness of the HRP
34
practice indicates a lesser satisfaction among the participants. To be more clear we can
see that the mean score of all these items indicated in table 4.6 above, are less than the
average 3 indicating a high level of dissatisfaction among the participants with respect to
the effectiveness of the HRP practice. From this we can gather that the banks HRP
practice effectiveness is limited.
With respect to effectiveness of the HRP practices, the results of the interview indicate
that the Enat bank makes no attempt to assess the effectiveness of its HRP programs and
activities. The HR and Support services manager stated that the bank do not use any
systematic evaluation techniques to separately evaluate the effectiveness of the HRP
practices. This indicates that, the bank does not evaluate its HRP through examining or
studying the cost-benefits of HRP activates, nor does it conduct annual reviews of the
results of the HRP practice. Therefore we can say that the bank undertake evaluation only
at the 'reaction' level, mainly to deal with crises and urgent problems.
4.2.6. Challenges of the Bank in Relation to Its HRP Practice

The discussion in this section focuses on the challenges of the bank in implementing its
HRP. The general reflection of the participants concerning the challenges of the bank in
relation to its HRP is summarized in Table 4.7 below.
Table 4.7 Participant’s response on Challenges of HRP Practices of Enat Bank Sc.
Agreement
Items Mean SD
SDA DA N A SA
Human resource information is compatible Frequency 0 5 2 24 17
with the information used in strategic 4.1042 0.90482
formulation % 0% 10% 4% 50% 35%
There is a conflict between quantitative and Frequency 0 0 8 32 8
qualitative approaches to human resource 4.0000 0.5835
planning % 0% 0% 17% 67% 17%
The main challenge is conflicts between Frequency 0 0 7 41 0
short-term and long term human resource 3.8542 0.3567
need % 0% 0% 15% 85% 0%
There is clear difference of perception Frequency 0 0 38 10 0
towards HRP among the employees who are 3.2083 0.4104
working on the process % 0% 0% 79% 21% 0%
Grand Mean 15.1667
35
From the result we can see that among the challenges the bank is facing in the
implementation of the human resource plan, the compatibility of the human resource
information with information used in the strategic formulation is one. The result which
indicates that 85.4% of the participants agree with the presence of this challenge (see
table4.7) and the corresponding mean score of 4.104 which is well above the average 3
confirms the presence of this challenge. The next challenge which the participants agreed
on its presence in the implementation of the bank’s human resource plan is the conflict
between qualitative and quantitative approach to the human resource planning. This can
be clearly seen from table 4.7. The result displayed on the table shows us that 83.4% of
the participants agree with the presence of the challenge. Off course the 4.0 mean score
indicated for this item further strengthen this outcome. The other challenge which the
participants confirm its existence in the implementation the human resource plan is
conflict between short and long term human resource needs. 85.4% of the participants
confirm its existence in the implementation of the plan. The mean score of 3.8542 again
verify this outcome.
36
5. CHAPTER FIVE
SUMMARY CONCLUSION AND

RECOMMENDATIONS
Introduction
The purpose of this research was to assess current HRP practices of Enat Bank Sc. and to
recommend how these practices can further be developed. This chapter draws on, the
major findings, which were based on the study’s research questions and objective, the
conclusions made from the findings and the recommendations suggested to further
improve the HRP practices of the bank.
5.1. Summary
5.1.1. Integration of HRP with Strategic Planning
Under this section the link between the bank’s human resource planning process and the
strategic plan of the bank was assessed. In general, the findings from both tools suggested
that Enat bank plans its human resource based on the overall strategic plan of the bank.
This indicates the presence of direct link between the HRP and the strategic plan. The
result from the questionnaire also indicates that the bank’s HRP practitioners are familiar
with the strategic plan of the bank and also that the bank has a separate HR strategy that
is coined in line with the overall strategic plan of the bank.
5.1.2. Assessing the Existing Human Resource
This part looked into how the bank is currently assessing its current human resource. The
result obtained by both tools demonstrated that the bank performs job analysis for every
post it has and as a result it manages to identify the requirements of each job in terms of
determining the tasks necessary to successfully complete the job, and the skills necessary
to complete the tasks. But on the contrary the result also indicated that the bank does not
perform HR inventory that describe skills possessed by its existing individual staff. The
interview result in particular indicated that the bank relies on a general qualitative
assessment made of its employees which focuses only on the total number of employees
37
with a certain qualification to perform its HRP. This indicates that the HRP is not being
done based on up-to-date information about the knowledge, skill and ability of the
existing individual staff.
5.1.3. Forecasting HR Demand and Supply
In relation to HR demand forecasting the findings from both tools indicated the presence
of future human resource need forecasting practice in Enat bank. However the result
especially from the interview indicated that the bank does not have a standard forecasting
procedure applicable to all the concerned parties of the bank. According to the HR
manger, except for forecasting done for new branches planned to be opened which is
done quantitatively based on trend analysis, each department follows its own way of
identifying and assessing its future HR needs. In addition to this the result gathered
through the questionnaire indicated lack of technical skill among the participants as far as
systematic human resource need forecasting is concerned. The result related to the HR
supply practice indicated that the HRP processes in place at the Enat bank failed to
undertake identification of the future HR supply for its jobs.
5.1.4. Closing the Gap between the HR Demand and Supply

In relation to matching the HR demand and supply, the result from the administered
questionnaire indicated that the bank gives priority to external sources to fill vacancies
even though the result from the interview stated that internal sources are given more
priority by the bank. This conflicting information indicates a gap in the banks HRP
practices towards following a systematic approach in matching human resource needs
and human resource supply.
5.1.5. Effectiveness of the HRP Practice

This part looked into the effectiveness of the Bank’s Human Resource planning practices.
The result from the administered questionnaire demonstrates that the HRP process under
implementation is not effective. This finding was supported by the results which
indicated that HRP is not helping the bank to efficiently utilize its human resource needs;
38
it is not clear and understandable; it does not specify detailed activities that consider all
required issues and last but not list it is not fulfilling the manpower requirement of the
bank. In addition to this the result from the interview indicated the absence of any
evaluation that can review the results of the HRP practice.
5.1.6. Challenges Faced by the Bank in Implementing its HRP

In relation to the challenges faced by the bank in implementing its HRP the result from
the both tools demonstrated the following as the main challenges faced by the bank:
 conflict between quantitative and qualitative approaches to human resource
planning
 conflicts between short-term and long term human resource need
 clear difference of perception towards HRP among the employees who are
working on the process
5.2. Conclusion
It is very easy for anyone to notice that Ethiopian banking industry is in a very rapid
change. It was only within the last 20 years that sixteen private commercial banks have
been opened and become operational. Not only is this, but it is also very easy for anyone
to notice that the banks are expanding at a rapid rate. This in other words implies that the
banks are operating in a very dynamic environment and that they are expected to compete
strongly for their survival. In this regard, their competent weapon is their human resource
and how they manage it. HRP as part of HRM, plays a very important role in building a
long term organizational capacity, through identifying short and long term goals as well
as identifying corresponding work activities that could help in projecting human resource
requirements both from internal and external sources.
However despite this role that HRP could play, evidences had indicated that Ethiopian
private banks have problems related to properly applying HRP. This problem was
seemingly experienced by Enat Bank, where currently employee turnover is at the rise
mainly due to the bank’s failure to effectively identify the knowledge, skills and abilities
39
of its current workforce and the resulting absence of practices that consider these internal
competences for higher and better vacancies.
Based on the findings of this study it can be concluded that the HRP practice of the bank
has constraints which contributes to the rising employee turnover currently experienced
by the bank. More specifically based on the results obtained, the study concludes that:
 The HRP practices of the bank has limitations in maintaining a good record of the
number and quality of staffs;
 The HRP practices of the bank has limitations in following a systematic approach
towards forecasting future human resource needs,
 The HRP practices of the bank has limitations in using qualified personnel with
technical skills relevant for HRP and in giving enough emphasis to internal
sources when matching human resource needs and human resource supply is
done.
 The effectiveness of the banks HRP practice is limited in terms of efficient
utilization of the bank’s human resource, its clarity and also in fulfilling the
manpower requirements of the bank.
 The banks HRP implementation is faced with a number of challenges including
the conflicts between short-term and long term human resource need.
5.3. Recommendations
Based on the finding and the conclusions drawn from the findings, the following
recommendations were made to further improve the HRP practices of Enat Bank Sc.
To improve its HRP practices, the bank:

 Need to develop a profile on its current employees that should be done based on
internal analysis comprising information about the currently available individual
skill, qualification and competences.
 Need to estimate the future numbers of people required and the likely skills and
competences they will need based on the activity levels for each function and
40
department or decisions and using standard forecasting techniques such as
Managerial Judgment, Ratio-Trend Analysis or Work study techniques
 Need to establish a standard procedure which can be used in the identification of
the future HR supply (both from internal sources and external sources) for its jobs
 Need to give enough emphasis to internal sources when it implements gap-closing
strategies used to mitigate potential occupational and skill shortages. This
includes paying proper attention to the development programs, transfer and
promotion policies, and retirement policies etc…
 Should develop and implement a comprehensive career development training
program related to HRP for the staff especially to those who are directly
participating in the HRP process.
 Need to make its HRP policies and procedures comprehensive and clear so that all
stakeholders can have a common ground to effectively implement them.
41
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44
Appendix 1: Questionnaire
ST. MARY’S UNIVERSITY,

Questionnaire to be filled by employees of Enat Bank

Sc.
NB: The Researcher is a Masters of Business Administration Student at St. Mary’s
University, School of Graduate Studies. In partial fulfillment of the requirements for the
Degree of Master of Business Administration in General Management, the Researcher is
conducting a Study entitled, “Assessment of Human Resource Planning Practices, the
Case of Enat Bank Sc.
This questionnaire is solely for academic purposes and so any information provided
would be completely treated with strict confidentiality and anonymity. You are
respectfully requested to assist the Researcher by completing the questionnaire.
If you have any questions please feel free to contact me.
My contact address is: Cell Phone: +251-929-115703; email:

[email protected]
Thank you very much.
General Instructions
A. It is not necessary to write your name.

B. Please answer the questions by putting mark inside the boxes provided at the
end of each question.
C. Please write any information or idea your may want to add on the space provided
at the end of the questionnaire.
Acronyms:
 HRP: Human Resource Planning

 HRIS: Human resource Information System
45
QUESTIONNAIRE
I. PERSONAL INFORMATION
a. Sex: a. Male b. Female

b. Age Group:
a. 18 – 30 Years
b. 31 – 40 Years
c. 41-50 Years
d. 51-60 Years
c. Marital Status: a. Single b. Married
d. Educational Level:
a. Diploma b. Degree c. Master c. PHD
e. Number of Years of service in Enat bank

a. 1 -2 Years
b. 2 to 4 years
c. 5 year and above
46
II. HUMAN RESOURCE PLANNING PRACTICES AND PROCEDURES
A. The HRP process of Enat Bank Sc.
Strongly Strongly
No. Agreement Factors Agree Neutral Disagree
Agree Disagree
1 I am aware of the bank’s strategic
plan
2 I know the bank has a separate
human resource strategy
3 I know that the bank’s human
resource strategy is coined in line
with the bank’s overall strategic
plan.
4 I am aware of all the human
resource policies and procedures of
the bank.
5 The bank’s human resource
planning process is oriented to the
strategic direction of the bank.
6 The bank’s HRP is developed by
analyzing existing jobs.
7 The bank considers Manpower
Inventory in setting its HRP.
8 The bank uses HRIS to support the
HRP process.
9 The bank forecasts its future human
resource needs in setting its HRP.
10 The bank’s HRP process considers
external forces in forecasting its
future workforce needs.
11 The bank’s HRP responds to any
external changes.
12 The bank’s HRP is flexible to
accommodate future changes.
13 The bank use Executive Judgment
method to estimate its future human
resource needs:
14 The bank use Trend Analysis
method to estimate its future human
resource needs
15 The bank use Work study method to
estimate its future human resource
needs
47
The HRP process of Enat Bank Sc. …… Cont’d
Strongly Strongly
Agree Disagree
16 The bank HRP uses external
sources as a future source of supply
of potential employees.
17 The bank HRP uses internal
sources as a future source of supply
of potential employees.
B. The effectiveness of the bank’s HRP process
Strongly Strongly
Agree Disagree
1 The HRP process helped the bank
to efficiently utilize its human
resource.
2 The bank has clear job description
and job specification for every
position.
3 The bank has managed to
effectively determine its future
human resource needs.
4 The bank has adequate pool of
qualified employees.
5 The banks HRP is clear and
understandable.
6 The bank’s HRP specifies detailed
activities considering all required
issues.
7 The bank’s HRP fulfills the
manpower requirements of
departments and branches.
8 I believe the bank’s HRP is
achievable.
9 People involved in the HRP
preparation are willing and
cooperative.
48
Effectiveness of HRP process …… Cont’d
Strongly Strongly
Agree Disagree
There is free fellow of
10 information among the
participants of the HRP process.
11 The bank’s HRP considers
compensation issues.
12 The bank’s HRP is
comprehensive.
13 The human resource planning
practice of the bank has played a
role in meeting the bank’s
business objective.
C. Challenges faced by the bank in practicing its Human Resource Planning
Strongly Strongly
Agree Disagree
1 Human resource information is
compatible with the information
used in strategic formulation.
2 There is a conflict between
quantitative and qualitative
approaches to human resource
planning.
3 The main challenge is conflicts
between short-term and long term
human resource need.
4 There is clear difference of
perception towards HRP among
the employees who are working
on the process.
Please state if you have faced any other challenges while developing the human resource
plans:
-
___________________________________________________________________
49
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
______________________________-
___________________________________________________________________
___________________________________________________________________
___________
50
Appendix 2: Interview Guide
1. What is your position?

2. What has been the extent of your involvement with HRP in Enat Bank?
3. To what extent does the organizational strategy guide HRP?
4. Is there a linkage between the HRP strategy and the Strategic planning (SP)? a. How
closely do HRP people work with SP people?
5. Describe the process and key activities that are used to conduct HRP in Enat Bank?
6. How do you and how often do you assess your current workforce.
7. Do you have HRIS that support the assessment process.
8. Do you estimate the banks future human resource needs an if so how frequently do
you do that?
9. What techniques do you apply to estimate the future human resource needs.
10. What source of future workforce supply do you give more emphasis to? And why?
11. What factors do you take into consideration in forecasting your future workforce
supply?
12. Does the bank measure the outcomes of HRP? If so how?
13. How do you react to these changes?
14. How frequently, if at all, do you review and make changes to HRP?
15. What are some of the changes you have made to your strategic plan and why?
16. Do you think it is possible to measure the outcomes of HRP? If yes how? Give a list
of global HRP best practices to the interviewee and ask:
17. What challenged do your face in implementing your HRP.
18. How do you communicate with the rest of the staff who are participating the Bank’s
HRP system?
51
Appendix 3: Organizational Structure of Enat Bank Sc.
Source: Enat Bank (2017)
52

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ST.

ASSESSMENT OF HUMAN RESOURCE PLANNING

ADDIS ABABA, ETHIOPIA

A THESIS SUBMITTED TO ST. MARY’S UNIVERSITY, SCHOOL OF

ASSESSMENT OF HUMAN RESOURCE PLANNING

APPROVED BY BOARD OF EXAMINERS

Dean, Graduate Studies Signature

External Examiner Signature

Internal Examiner Signature

examination with my approval as a university advisor.

I also would like to express my sincere appreciation and gratitude to my advisor,

Glory to Almighty God!

HRP Human Resource Planning

HRM Human Resource Management

HRIS Human Resource Information System

Table 1.1 Definition of Basic Terms………………………………………………… ..8

Table 3.1 Reliability Statistics………………………………………………………….26

Table 4.1 Demographic Profile of the Participants…………………………………… 28

Table 4.2 Participants response on the link between the HRP

Table 4.3 Participants response on the Current Human Resource

Table 4.4 Participants response on HR demand and supply

Table 4.5 Participant’s response on HR demand and supply

Table 4.6 Participant’s response on HRP Effectiveness of

Table 4.7 Participant’s response on Challenges of HRP

Figure 1.1 Organizational Structure of Enat Bank Sc.………………………3

Figure 2.1 HRP Process…………………………………………………….11

Figure 2.2 Conceptual Framework of the Study……………………………22

1.1. Background of the Study

HRP is an outcome of a long period of evolution in management practice; it was

Currently, the Ethiopian banking sector is passing through a lot of dynamism,

1.2. Statement of the Problem

1.3. Basic Research Questions

1.4. Objective of the Study

1.5. Significance of the Research

1.6. Scope and Limitations of the Study

1.7. Definition of Basic Terms

HRP “Human Resource Planning is a Strategic alignment of an organization’s

2.1. Theoretical Background

2.1.1. HRP as HRM Fundamental

2.1.2. Definition of HRP

“Human Resource Planning (HRP) is a Strategic alignment of an organization’s human

This definition provides a more comprehensive framework of HRP at an organizational

Source: Decenzo and Robbins (2010, P-119)

2.1.4.1. Strategic Planning Process

According to David, the strategic planning process consists of three stages:

2.1.4.2. Assessing Current Human Resource

A. Human Resource Inventory

 Name of the employee/age/gender/marital status

2.1.4.3. Determining the Demand for Labor (Demand Forecasting)

 Work study techniques

 Forecasting skill and competence requirements

2.1.4.4. Predicting Future Labor Supply (Supply Forecasting)

 Existing number of people employed by occupation, skill and potential.

iii. Changing Workforce Considerations

2.1.4.5. Matching Labor Demand and Supply

2.2. Review of Empirical Studies

2.3. Conceptual Framework

Source: Modified from a design by Al Wahshim (2016, P. 112)

3.1. Background of Enat Bank Sc.

3.2. Research Design