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Human Resource Planning

Introduction:
The word 'resource' refers to the productive power of natural goods. Human resource is, therefore, the productive power in human beings. They are the ones who provide the resources and also reap the benefits of the products or services. Human resource management (HRM) is a strategic and coherent approach to the management of an organization's most valued asset, the people working there, who individually and collectively contribute to the achievement of its objectives. In other words, HRM is that it is the process of managing people in organizations in a structured manner and it encompasses the management of people in organizations from a macro perspective. Human resource management is a modern term of what traditionally referred to as personnel administration or personnel management. However some experts believe human resource management differs somewhat from traditional personnel management. They see personnel management as being much narrower and more critically oriented than human resource management. Human resource management performs some important functions. Human resource planning is one of them. It is considered as the process of utilizing the human power of an organization. Success of an organization depends much upon it.

Definition of Human Resource Planning:


Human resource planning may be defined as a strategy for the acquisition, utilization, improvement and preservation of the human resources of an enterprise. It is the activity of the management which is aimed at coordinating the requirements for and the availability of different types of employees. Human resource planning is also called workforce planning or personnel planning. It anticipates and carries out the movement of people into, within and
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out of the organization. HRP is done to achieve the optimum use of human resources and to have the correct number and types of employees needed to meet organizational goals. Thus, it acts as a double edged weapon. If used properly it leads not only to proper utilization, but also reduces excessive labor turnover and high rate of absenteeism and improves productivity. It addresses human resource needs both in quantitative and qualitative terms, and hence answers two basic questionsfirst, how many people are needed? second, what sorts of people are needed?

Human resource planning also looks at broader issues relating to the ways in which people are employed and developed in order to improve organizational performance. It can therefore play an important part in strategic human resource management. Lets discuss definitions of HRP given by different scholars. Vetto opines that it is the process by which management determines how the organization should move from its manpower position to its desired manpower position to carry out integrated plan of organization. According to Geisler, Manpower planning is the process including forecasting, developing and controlling by which a firm ensures that it has i. The right number of people, ii. The right kind of people, iii. At the right places, iv. At the right time, doing work for which they are economically most useful.

Concept of Human Resource Planning:


Planning is a process of preparing a set of decisions for action in the future. Human resources planning may then be interpreted as a process of preparing a set of
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decisions on human resources development for action by human resources in future. The actions required on the part of human resources planning are primarily of two types: i. Availing the employment opportunities, and ii. Evolving new technologies to enhance economic development. There are three types of investments which have the potential to contribute to human resources development. They are investments in: i. Health and nutrition, ii. Social and economic equity, and iii. Education and training.

The first two types of investment can only contribute to the accumulation of human beings in terms of health, physical capacity to work and socio-economic status. It is the -third, i.e., education and training, directed towards development of skills in human beings that changes the future asset value, productivity and earning power of human beings. This is the human capital approach to human resources planning. It attaches prime importance to investment in education training and retraining as a means of human resources development

Features of Human Resource Planning:


Salient features of Human resource planning are i. Its a systematic approach as it ensures a continuous and proper staffing. It avoids or checks on occupational imbalances (shortage or surplus) occurring in any of the department of the organization.

ii. Its a visible continuous process. iii. There is a certain degree of flexibility. That is, it is subject to modifications according to needs of the organization or the changing circumstances.

Manpower plans can be done at micro or the macro levels depending upon various environmental factors. iv. Forecasting future manpower requirements, where to use mathematical projections to project trends in the economic environment and development of the industry. v. Making an inventory of present manpower resources and assessing the extent to which these resources are employed optimally. vi. Anticipating manpower problems by projecting present resources into the future and comparing them with the forecast of requirements to determine their adequacy, both quantitatively and qualitatively. vii. Planning the necessary programs of requirement, selection, training, development, utilization ,transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met. viii. Help determine recruitment/induction levels. ix. To anticipate redundancies/surpluses/obsolescence. x. To determine training levels and works as a foundation for management development programs.

Types of Human Resource Planning:


Based on time period: There are two types of human resource planning, on the basis of time span, these includei. Short term manpower planning : This type of human resource planning is made for a short time, like-for a period of not more than two years.
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ii. Long term manpower planning : It is concerned with all jobs and persons at once- with matching total available personnel in the organization to total job requirement. It is also concerned with fulfilling future vacancies, rather than matching the present incumbents to present job requirement.

Hard and soft human resource planning: A distinction can be made between 'hard' and 'soft' human resource planning. The former is based on quantitative analysis in order to ensure that the right numbers of certain kind of people are available whenever needed. "Soft human resource planning" is concerned with securing the right people with the right attitudes and motives, who are committed to the organization and their work, and behave in the expected way. This type of plans is based on assessments of the future requirement for these qualities, and analysis of performance management outcomes. This can result in plans for improving the work environment, providing opportunities to develop skills and careers and adopt a 'Total Reward' approach focusing onfinancial 'Transactional' and non- financial 'relational rewards. They can also lead to the creation of strategies concerned with creating high commitment and create functional flexibility, design jobs in a way that provide intrinsic motivation, emphasize team spirit, de-emphasizing hierarchies and status differentials, increasing employment security, rewarding people on the basis of organizational performance, and enacting organization-specific values and a culture that bind the organization pants together. Soft human resource planning gives more explicitly focus on creating the right organizational culture, to integrate corporate goals and employee values, beliefs and behaviors.

Human Resource Planning Objectives:


The human resource planning system in any organization depends largely on the organization context but in general it aims at: i. Attracting and maintaining the number of people required with the appropriate skills, expertise and competencies;
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ii. Anticipating problems resulting from potential surpluses or deficits of people; iii. Developing a well trained and flexible workforce, that help the organization's to adapt to an uncertain and changing environment; iv. Reducing dependency on external recruitment, regarding key skills. This requires formulating retention, policies and employee development strategies; v. Improving people utilization strategies by introducing more flexible systems of work.

Functions of Human Resource Planning:


As a basic tool of human resource management, human resource planning has to perform some significant functions. These functions are important for organizational efficiency and effectiveness. Major functions of HRP include: i. Forecasting future manpower requirements ii. Inventorying present manpower resources and analyzing the degree to which these resources are employed optimally. iii. Anticipating manpower problems by projecting present resources into the future and comparing them with the forecast of requirements. iv. Planning the necessary programs of recruitment, selection, training, etc. for future manpower requirements. v. Combining human resource to coordinate organizational functions. vi. It provides scope for advancement and development of employees through training, development etc.

vii. It helps to satisfy the individual needs of the employees for the promotions transfers, salary enhancement, better benefits etc. viii. It helps in anticipating the cost of salary, benefits and all the cost of human resources facilitating the formulation of budgets in a society. viii. It helps to foresee the need for redundancy and plans to check of human resources and to change the techniques of management. ix. It helps in planning for physical facilities, working conditions, the volume of fringe benefits like canteen, schools, hospitals, conveyance, child care centers, quarters, company stores etc. x. It causes the development of various sources of human resources to meet the organizational needs xi. It helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover etc. xii.It facilitates the control of all functions, operations, contribution and cost of human resources.

Process of Human Resource Planning:


The process of human resource planning (as illustrated below) is not necessarily a linear one, starting with the business strategy and flowing logically through to resourcing, flexibility and retention plans. It may be circular rather than linear, with a process starting anywhere in the planning cycle. Alternatively, the starting point could be demand and supply forecasts, which form the basis for the resourcing strategy. The analysis of labor turnover may feed into the supply forecast, hut it can also lead to the development of retention plans. There is much to be said for a systematic approach to developing resourcing strategy, scenario planning, demand and supply forecasting and labor turnover analysis. But because of the factors mentioned above, there will often be reservations about the extent to which this process can be formalized. What may emerge is simply a broad statement of intent, although this could be sufficient to
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Figure 1: The Human Resource Planning Process


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guide resourcing practice generally and would be better than nothing at all. The degree to which human resource planning can be carried out systematically will depend on the nature of the organization. If the future is fairly predictable, then formal planning might be appropriate. If it is not, the approach to human resource planning might have to rely on broad scenarios rather than precise forecasts.

These processes are summarized below-

i. Business Strategic Plan: Defining future activity levels and initiatives demanding new skills. ii. Resourcing Strategy: Planning to achieve competitive advantage by developing intellectual capital - employing more capable people than rivals, ensuring that they develop organization specific knowledge and skills, and taking steps to become An 'employer of choice'. iii. Scenario Planning: Assessing in broad terms where the organization is going in its environment and the implications for human resource requirements. iv. Demand Supply Forecasting: Estimating the future demand of for people (numbers and skills), and assessing the number of people likely to be available from within and outside the organization. v. Labor Turnover Analysis: Analyzing actual labor turnover figures and trends as an input to supply forecasts. vi. Work Environment Analysis: Analyzing the environment in which people work, in terms of the scope it provides for them to use and develop their skills and achieve job satisfaction. vii. Operational Effectiveness Analysis: Analyzing productivity, the utilization of people and the scope for increasing flexibility to respond to new and changing demands.

Tools and Techniques of HRP:


Many tools are available to assist the human resource planning process. Some of these tools are discussed belowi. Succession planning: It is techniques that identify specific people to fill future openings in key positions throughout the organization. ii. Organizational Replacement Chart: A Chart that shows both incumbents and potential replacements for given positions within the organization. iii. Commitment Manpower Planning: It is a systematic approach to human recourse planning designed to get managers and their subordinates to thinking about and involvement in human resource planning. iv. Ratio Analysis: A tool used in human resource planning to measure the organizations human resource vitality as indicated by the presence of promotable personnel and existing backups.

Importance of Human Resource Planning: Human resource planning has to perform a wide variety of functions. These functions are very important for the achievement of organizational goals. Human resource planning is important for an organization in the following ways-

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i. Provides quality workforce: One of the Importance of Human Resource Planning is that effective Human Resource Planning fulfills the organization needs for a quality workforce. Quality workforce aids in giving a company a competitive advantage over its rivals.

ii. Reduces labor costs: Another human resource planning is that a proper Human Resource plan reduces labor costs substantially by maintaining a balance between demand for and supply of HR i.e. works as a cost saving device for the company. iii. Facilitates rise in skills: Another Importance of Human Resource Planning is that it facilitates the rise in skills, abilities and potential of the workforce through training and development. Training employees helps them improve in their working capacity thus tend to develop to a quality workforce. iv. Effective motivation: Effective motivation is another Importance of Human Resource Planning. An effective Human Resource Plan provides multiple gains to the employee by way of promotions, increase in salary and other fringe benefits. This definitely boosts employee morale. v. Safety of health: Another Importance of Human Resource Planning is safety of health. It provides for welfare, health and safety of its employees thus leads to an increase in productivity of the employees in the long run.

The Organizational Context of Human Resource Planning:


Human resource planning takes place within the context of the organization. The extent to which it is used, and the approach adopted, will be contingent on the
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extent to which management recognizes that success. It depends on forecasting future people requirements and implementing plans to satisfy these requirements. It is also affected by the degree to which forecasts are accurate. Organizations operating (in turbulent environments in which future activity levels are difficult to predict) may rely on ad hoc and short term measures to recruit and maintain people. However, even these organizations may benefit from these aspects of human resource planning that are concerned with policies concentrating on attracting and retaining key staff.

Factors Affecting Human Resource Planning in an Organization:


Human resource planning is the primary function of human resource management. It can be affected by several factors within an organization. Likei. Employment: HRP is affected by the employment situation in the country i.e. in countries where there is greater unemployment; there may be more pressure on the company, from government to appoint more people. Similarly some company may force shortage of skilled labor and they may have to appoint people from other countries.

ii. Technical changes in the society: Technology changes at a very fast speed and new people having the required knowledge are required for the company. In some cases, company may retain existing employees and teach them the new technology and in some cases, the company has to remove existing people and appoint new. iii. Organizational changes: Changes take place within the organization from time to time i.e. the company diversify into new products or close down business in some areas etc. in such cases the HRP process i.e. appointing or removing people will change according to situation. iv. Demographic changes: Demographic changes refer to things referring to age, population,
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composition of work force etc. A number of people retire every year. A new batch of graduates with specialization turns out every year. This can change the appointment or the removal in the company. v. Shortage of skill due to labor turnover: Industries having high labor turnover rate, the HRP will change constantly i.e. many new appointments will take place. This also affects the way HRP is implemented.

vi. Multicultural workforce: Workers from different countries travel to other countries in search of job. When a company plans its HRP it needs to take into account this factor also. vii. Pressure groups: Company has to keep in mind certain pleasure. Groups like human rights activist, woman activist, media etc. as they are very capable for creating problems for the company, when issues concerning these groups arise, appointment or retrenchment becomes difficult.

Limitations of Human Resource Planning:


Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. Although HRP is a very advantageous method it has some limitations which can be explained as followsi. The future is uncertain: The future in any country is uncertain i.e. there are political, cultural, technological changes taking place every day. This effects the employment situation. Accordingly the company may have to appoint or remove people. Therefore HRP can only be a guiding factor. We cannot rely too much on it and do every action according to it.

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ii. Conservative attitude of top management: Much top management adopts a conservative attitude and is not ready to make changes. The process of HRP involves either appointing. Therefore it becomes very difficult to implement HRP in organization because top management does not support the decisions of other department iii. Problem of surplus staff: HRP gives a clear out solution for excess staff i.e. Termination, layoff, VRS,. However when certain employees are removed from company it mostly affects the psyche of the existing employee, and they start feeling insecure, stressed out and do not believe in the company. This is a limitation of HRP i.e. it does not provide alternative solution like re-training so that employee need not be removed from the company. iv. Time consuming activity: HRP collects information from all departments, regarding demand and supply of personnel. This information is collected in detail and each and every job is considered. Therefore the activity takes up a lot of time. v. Expensive process: The solution provided by process of HRP incurs expense. E.g. VRS, overtime, etc. company has to spend a lot of money in carrying out the activity. Hence we can say the process is expensive.

Conclusion:
Human resource planning is the primary function of human resource management and it is an effective tool for maintaining an organization. A strong Human Resources department is important for any organization hoping to hire and retain the most qualified staff. HR specialists must have the right tools to complete the administrative tasks of a company. In many organizations, human resources personnel work with top executives to change policies, provide training and aid in strategic planning. Without proper planning tools and procedures, human resources workers would not be able to achieve a majority of the duties demanded of them. That is why, only proper human resource planning can ensure the achievement of the organizational goals.
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Reference:
1. Human Recourse Management (New Edition) 2. http://www.egyankosh.ac.in/bitstream/123456789/38237/1/Unit-1.pdf

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