Back ground of the study Human resource management is the part of the organization concerned with the “people” dimension. Human resource management can be viewed in one of the two ways. First Human resource management is a staff or support function in the organization. Its role is to provide assistance in Human resource management matters to line employees or those directly involved in producing the organization’s goods and service. Second, Human resource management is a function of every manager’s job.

Whether or not one works in a formal HRM department, the fact remains that to effectively manage employees all managers must handle the activities to achieving organizational objectives. (D. A. Decenzo&S. P Robbins, Fundamentals of HRM, Page 36-38) Human resource Management is the effective mgt of peoples at work. It examined what can or surround be done to make working people more productive and satisfied. The history of HRM can be traced to England, Where masons carpenters, leather Workers, and other crafts people organized themselves in to guilds.

HRM activities play a major role in ensuring that an organization will survive and prosper. HR planning is both a process and a set of plans. It is how organizations assess the future supply of and demand for human resource. HR planning determines the number and types of employees to be recruited in to the organization or fazed out of it. The type of people employed and the tasks they perform also determine the kind of planning. For example certain high-skill jobs may require planning activities that project year or two in to the future than unskilled jobs.

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One of significant factor affecting HR planning involves the goals of the controlling interests in the organization. If Hr Planning and Effective utilization of HRM are not significant goal for the organization employment planning will not be performed or it will not be performed formally, or it will be done in a slipshod manner. 1. 2. Background of the organization * The leading bank in Ethiopia, established in 1942. * Pioneer to introduce modern banking to the country. * It has 433 branches stretched across the country. * A leading African bank with assets of Birr 114 billion as on June 30th 2011. Plays a catalytic role in the economic progress & development of the country. * The first bank in Ethiopia to introduce ATM service for local users. * Currently CBE has about 2 million Account holders. * It has strong correspondent relationship more than 50 renowned foreign banks and a SWIFT bilateral arrangement with 500 others. * CBE combines a wide capital base with more than 10,000 talented and committed employees. * Pioneer to introduce Western Union Money Transfer Services in Ethiopia. * CBE has reliable and long-standing relationships with many internationally acclaimed Banks throughout the world.


We abide by the law of Ethiopia and other countries in which we do business. We care about society’s welfare and the environment. 2. Customer Satisfaction We strive to excel in our business and satisfy our customers. 3. Quality Service We are committed to offer quality service to our customers’ and aspire to be branded with quality in the minds of our customers and the general public. 4. Innovation We encourage new ideas that can improve customers’ experience and the Bank’s performance. 5. Teamwork We recognize the importance of teamwork for our success.

We respect diversity of viewpoints. 6. Integrity We are committed to the highest ideas of honor and integrity. 7. Employees We are recognizing our employees as valuable organizational resources. 8. Public Confidence We understand that the sustainability of our business depends 1. 3. Statement of the problem Human resource planning is one of the most important elements in a successful human resource management program because it is the processes by which an organization ensures that it has the right number and kind of people, at the right time capable of effectively efficiently

Completing those tasks that will help the organization achieve its overall strategic objective. Employment planning then ultimately translates the organization goal in to the number and type of workers needed to meet those goals. In our case, commercial bank of Ethiopia, because of improper planning of human resources it have not effectively use its human resource in achieving the overall objective of the bank. Without clear-cut planning and direct linkage to the organization strategic directions, estimation of an organizations human resource need are reduced to mere guess work.

Investigating the overall practice of human resource planning in commercial bank of Ethiopia is the concern of this paper. 1. 4. Objective of the study 1. 4. 1 General objective The general objective of this paper is assessment of challenges and practices of human resource planning on the case of commercial bank of Ethiopia. 1. 4. 2 Specific objectives The papers also have some specific objectives needs to be addressed. This are listed below * Identifying the current human resource planning practiced in commercial bank of Ethiopia. * Identifying the major challenges faced by Commercial bank of Ethiopia when they plan the human resource. Determine the possible solutions to be applied to cope up with this challenges and problems. * Finally, providing appropriate solutions to commercial bank of Ethiopia to solve the existing human resource challenge. 1. 5 Limitations and Delimitation of the study 1. 5. 1 Limitations of the study * Shortage of time to conduct the research. * Lack of cooperation when we distribute a quaternaries as well as collecting necessary secondary data (information) which are vital to the study. * Lack of secondary data. * Social life. 1. 5. 2 Delimitation of the study

This research was taken place at Addis Ababa city government, Commercial bank of Ethiopia human resource management department. 1. 6 Significance of the study The major significance this research is to provide concrete information for readers about the way commercial bank of Ethiopia undertake its human resource plan. Moreover, managers of this organization may benefit from these findings as it will give them an idea of where they presently stand in terms of human resource planning practice and what they should be do in the future. 1. 7 Structure of the paper This research paper has five chapters.

Chapter one talks about the introduction which includes the background information about the organization as well as the study, the statement of the problem, objective of the study, limitation and delimitation of the study and structure of the paper. Chapter two contains reviews of related literatures; here we revise what different authors said on the subject matter. Chapter three of the paper shows the methodologies used to conduct this research. Similarly chapter four contains the analysis and presentation of the data’s and finally conclusion and recommendation was forwarded in chapter five.

CHAPTER TWO 2. 1. Human Recourse Mgt Human Resource mgt is the process of acquiring, training, appraising and compensating employed and attending to their labor relation, health and safety and fairness concerns. (Gorg Pessler HRM 9thed page2) Human resource management is consists of four basic functions such as staffing, training and development, motivation, and maintenance. From all these functions our group will focus on staffing which incorporates human resource planning. Human resource planning is the process by which organizations determines its human resource needs.

Human resource planning is one of the most important elements in a successful human resource management program, because it is a process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives. Employment planning ultimately translates the organizations overall goals in to the number and types of workers needed to meet those goals. (D. A. Decenzo;amp;S. P Robbins, Fundamentals of HRM, Page 121-123)

The strategic planning process in an organization is both long and continuous. At the beginning of the process, the organization’s main emphasis is to determine what business it is in. This is commonly known as mission statement. Once these goals are set the next step in the strategic planning process begins the corporate assessment. During this phase, a company begins to analyze its goals, its current strategies, its external environment, its strength and weaknes, and its opportunities and threats, in terms of whether they can be achieved with the current organization’s resource.

Commonly referred as a gap analysis, the company begins to look at what skills, knowledge, and abilities are available internally and where shortages in terms of people skills may exist. (D. A. Decenzo;amp;S. P Robbins, Fundamentals of HRM, Page 126-127) Assessing current human resources begins by developing a profile of organization’s current employees. This internal analysis includes information about the workers and the skills they currently possess. In an era of sophisticated computer systems it is not too difficult for most organizations to generate an effective detailed human resources inventory report.

The input to this report would be derived from form completed employees and checked by supervisors. Such report would include a complete list of all employees by name, education, training, prior employment, current position, performance ratings, salary level, language spoken capability and specialized skills. From planning view points, this input is valuable in determining what skills are currently available in the organization. The inventory serves as a guide for supporting new organizational pursuits or in altering the organization’s strategic direction. This report also has also value in other HRM ctivities, such as selecting individuals for training and development promotion, and transfers. The completed profile of the human resources inventory can also provide crucial information for identifying current or future threats to the organization’s ability to successfully meets its goals. The objective of an organization or department is the goal it seeks to chive its reason for existence. They achieve their objective through human resource management. The following are some of the contribution of human resource management function to the organization. * Helping the organization to reach its goal. Efficiently employing the skill and ability of the work force. * Providing well trained and well motivated employees. * Increasing employees job satisfaction and self actualization. * Archiving quality of work life. * Managing changes. (Jon M. evancevice HRM 9th Ed P. 10) 2. 2. The Human Resource Planning Human resource planning is both a process and a set of plans. If is How organization assess the future supply and demand for human resource. In addition, an effective HR Plan Also Provides Mechanisms to eliminate a gap that may exist between supply and demand.

Thus HR Planning determined the number and types of employees to be recruited in to the organization or fazed out of it. Dynamic by nature the HR Planning process often require periodic re adjustment as labor market condition changes. (Jon M erancrivice HRM 9th Ed P. 155) It is also the process of deciding what position the form will have to fell and how to fill them. (Gorrg Bessur 9th Ed P. 90)/ 2. 2. 1. Human resource Planning Process All Effective human resource Planning Shares certain features. It is generally agreed that human resource Planning involves four distinct phases or stages. Thom. M. evancich) page. 138 1. Situation Analysis and environmental Scanning The first stage of human resource Planning is the Point at Which human resource management and strategic planning initially interacts. The strategic plan must adapt to environmental circumstances and human resource management is one of the adaptation processes. For example rapid technological change in the environment can force the organization to quickly identify and hire employees with new skills that previously weren’t needed by the organization.

Without an effective human resource plan to support the recruitment and selection function in on organization it would be impossible to more fast enough to stay competitive. The problem associated with changing environment are greater today, than ever before because success now depends on an ability to be a “global scanner” i. e. consider one of the essential strategic skill for modern management. 2. Forecast Demand For employees. Forecasting yield advance estimate or calculation of the organization staffing requirement.

It should be obvious that the demand for employees is closely tied to the strategic direction that the organization has to chosen. Trying to estimate how many and what kind of workers will be needed in the future is a difficult task, for organization confront rapidly changing environments. Once as assessment of the organization’s current human resources situation has been made and the future direction of the organization has been considered, it’s time to develop a projection of future human resource needs. This means performing a year-by-year analysis for every significant job level and type.

In effect, the result is human resource inventory covering specified years into the future. Instead, it is necessary to know what type of employees, in terms of skills, knowledge, and abilities, are required. Remember, theses skills, knowledge, and abilities are determined based on the jobs required to meet the strategic direction of the organization. Accordingly, our forecasting methods must allow for the recognition of specific job needs as well as the total number of vacancies. Nonetheless, there are a number of techniques available to the organization help reduce this kind of uncertainty; some of them will be describing here. The Expert estimate The least mathematically sophisticated approach to employment forecasting is for an “expert” or group of experts to provide the organization with demand estimates based on experience, guesses , intuitions and subjective assessment of available and economic and labor force indicators. Concern over a single individual’s ability to provide accurate estimates of such complex issue led to the development of the Delphi technique, it elicits experts estimated from a number of individuals in iterative manner estimates are revised by each individuals based on knowledge of the other individual estimates.

Nominal Group technique (NGT):- Individual generation of estimates is followed by group brain stoning session in the hop of generating one group decision that is preferred over only the individuals decision. * Trend Projection /Analysis The second top-down technique develops a forecast based on predication of demand relationships between a factors related to employment and employment itself. (John M. p. 140). It is studying variation in your firms employee meant level over the last few years to predict future needs. Thus, you might the number in each subgroup (lick sales production secretariat and admin people) at the end of each year. Modeling and multi predictive Trend Projection relates a single factor (Such As Sales) to employment but this model uses most advanced approach related many factors to employment such as (sales GDP and discretion income). They are mathematically model the organization and use simulation with methods Markova model and analytical formulation such as regression. * Unit-Demined Forecasting The unit (which can be an entire department a project team or some other groups of employee) forecast is a bottom-up approach to forecasting demand. H. Q. sums these unit forecasts, and the result become the employment forecast. 3.

Analyzing the current Supply of Employees. Here we try to answer “How many and what kind of employs do i currently have in terms of skill and training necessary for the future? “ If should be obvious that these phase of human resource planning involves much more than” Simply Counting the number of current employees in the organization. Skill inventory:- the major tool wed to asses current supply of employee. These to identify what kind of skills abilities experience and training the employees currently have by keeping track of these, the organization can quickly determine whether the a particular skill is available when it is needed.

Skills inventory vary greatly in their sophistication some are as simple as file drawer containing index cards with relevant information typed on them. Others are tied in to extremely expensive and complex computer database. Maintaining the skills inventory:- While designing the system is the most difficult part of developing a skills inventories planning for a tarring, maintaining, handling and updating of data is very important. A procedure for keeping the files up dated must also be planned. Finally, a decision whether to store the data manually or on the computer must be made.

Estimating changes in internal supply requires HRM to look at those factors that can either increase or decrease its employee base. As previously noted in the discussion on estimating demand, forecasting of supply must also concern itself with the micro, or unit, level. An increase in the supply of any unit’s human resources can come from a combination of four sources: new hires, contingent workers, transfer-in or individuals returning from leaves. The task of predicting these new inputs can range from simple to complex. 29

Decreases in the internal supply can come about through retirements, dismissals, transfer-out of the unit layoffs, voluntary quits, sabbaticals, prolonged illnesses, or deaths. Some of these occurrences are obviously easier to predict than others. The easiest to forecast retirements, assuming that most organizations require some advance notice of one’s retirement intent. At the other extreme, voluntary quits, prolonged illnesses, and deaths are difficult to predict-if not impossible. Deaths of employees are the most difficult to forecast because they are often unexpected. Where Will We Find Workers?

The previous discussion on supply considered internal factors. We will now review those factors outside the organization that influence the supply of available workers. Recent graduates from schools and Colleges expand the supply of available human resources. This market is vast and includes high-school and college graduates, as well as those who received highly specialized training through an alternative supplier of job skills training. Matching Labor Demand and Supply. The objective of employment planning is to bring together the forecasts of future demand for workers and the supply for human resources, both current and future.

The result of this effort is to pinpoint shortages both in number and in kind; to highlight areas where overstaffing may exist ( now or in the near future); and to keep abreast of the opportunities existing in the labor market to hire qualified employees-either to satisfy needs or to stockpile potential candidates for the future. 4. Action Decisions in Human Resource Planning. After human resource planning system has analyzed both the supply of and the demand for future workers, the two forecasts are compared to determine what if any action should be taken.

Whenever, there is a discrepancy between those two estimates the organization needs to be chose a course of action to eliminate the gap. * Action decision with a shortage of employee When employment specialists comparing demand with supply find that the supply of workers is less than demands several possibilities are open to the organization. If the shortage is small and employees are willing to work over time it can be filled with present employees. If there are highly skilled employees training and promotions of present employees together with the recommitment of less skilled employees, are possibilities. Action decisions in surplus condition When comparison of demand for and supply of employee indicates a surplus the alterative solution includes attritions, early retirement, cremation, layoffs and terminations. Decisions in surplus conditions are some of the most difficult that managers must make, because the employees what are considered surplus are seldom responsible for the condition leading to surplus. Human Resource Information Systems To assist in the HR inventory, organizations have implemented a human resources information system (HRIS).

The HRIS (some times referred to as a human resource management system [HRMS] is design to quickly fulfill the human resource management informational needs of the organization. The HRIS is a database system that keeps important information about employees in a central and accessible location – even information on the global workforce. When such information is required, the data can be retrieved and used to facilitate employment planning. At a time when quick analysis of an organization’s human resources is critical, the HRIS is filling a void in the human resource planning process.

With information readily available, organizations are in a better position to quickly move forward in achieving their organizations are in a better position to quickly move forward in achieving their organization goals. 22 Additionally, the HRIS is useful in other aspects of human resource management, providing data support for compensation and benefits programs, as well as providing a necessary link to corporate payroll. 23 CHAPTER THREE RESEARCH METHODOLOGY 3. 1. Research Type and Design A research type is a quantitative research because the researcher used numbers for data analysis.

And the research is designed as descriptive research because the research is trying to find out what really Commercial bank of Ethiopia practice human resource planning and what Challenges are faced when the planning are processed. Therefore for our case descriptive rich an appropriate design. 3. 2. Research Approach There are many approaches how the study is under taken. Since we are trying to trace out challenges and practices of human resource planning in a specific organization i. e. Commercial bank of Ethiopia, our approach is tends to case study. 3. 3. Sampling Techniques The researcher used simple random sampling technique.

This sampling technique involves approach where every observation has the same or equal chance of being selected. This sampling technique is also less affected by personal bias as well as if the size of the sample increases it become more representative of the population. 3. 3. 1. Sample Size The unit of analysis was Commercial bank of Ethiopia Human Resource management Department because Human Resource Planning is undertaken in this department. The total number of employees of human resource management department is 45. From the total employees of the department we select 3 managers and 12 officers totally 20 employees for investigation.


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