Human Resource Planning

& Development
UNIT - 1

Introduction
Human Resources planning is a process by which
management determine how the organization should move
from its current manpower position to its desired manpower
position. Through planning, management strives to have
the right number and the right kinds of people, at the right
place, at the right time, doing things, which result in both
organization and the individual receiving maximum long-run
benefits HR planning is a mechanism created to forecast the
required human resource to perform a specific task. It also
assesses the skill requirement of employees for each job. It
is a complex task which estimates the future demand and
supply position of HR in the organization. Hence, it gives a
picture of infinite future in advance in terms of human
resource requirement for the company.

Meaning

Human resource planning involves getting the right number

of qualified people into the right jobs at the right time
It involves:
Identifying and acquiring the right number of people
with the proper skills
Motivating them to achieve high performance
Creating interactive links between business objectives
and resource planning activities

Concept of HRP

Human Resource Planning (HR Planning) is both a process

and a set of plans.

An effective HR plan also provides mechanisms to eliminate

any gaps that may exist between supply and demand.
Thus, HR planning determines the members and types of
employees to be recruited into the organization or phased
out of it.

Dynamic by nature, the HR planning process often requires

periodic readjustments as labor market conditions change

It is how organizations assess the future supply of and

demand for human resources.

Definition
Acc to Geisler, HRP is the process
including forecasting, developing,
implementing & controlling by which a
firm ensures that it has the right number
of people & right kind of people, at the
right place ,at the right time doing things
for which they are economically most
suitable.

Why is HRP important ?

Even an imperfect forecast is better
than none at all
Anticipating needs prepare for the
future gives you an edge
Address potential problems avoid
skill deficiencies

What is HRP?
HRP is a sub-system of total
organizational planning.
HRP facilitates the realization of the
companys objectives for the future
by providing the right type and
number of personnel
HRP is also called Manpower
planning, Personnel planning or
Employment planning

 HRP ensures that the organization

has:
Right
Right
Right
Right

Number
Kind
Place
Time

Objectives of HRP
Forecasting Human Resource
Requirement
Effective Management of change
Realizing Organizational Goals
Effective utilization of HR
Promoting Employees

Objectives of HRP
Forecasting Human Resources Requirements: HRP is essential
to determine the future needs of HR in an organization. In the absence
of this plan it is very difficult to provide the right kind of people at the
right time.
Effective Management of Change: Proper planning is required to
cope with changes in the different aspects which affect the
organization. These change needs continuation of allocation/
reallocation and effective utilization of HR in organization.
Realizing the Organizational Goals: In order to meet the
expansion and other organizational activities the organizational HR
planning is essential.
Promoting Employees: HRP gives the feedback in the form of
employee data which can be used in decision-making in promotional
opportunities to be made available for the organization.
Effective Utilization of HR: The data base will provide the useful
information in identifying surplus and deficiency in human resources.

Needs of HRP

Employment Unemployment situation

Technological change
Organizational change
Demographic change
Skill shortage
Government influence
Legislative control
Impact of the pressure group
Systems approach
Lead time

NEEDS OF HRP
Employment-Unemployment Situation: Though in general the number of
educated unemployment is on the rise, there is acute shortage for a variety of
skills. This emphasis is the need for more effective recruitment and retaining
people.
Technological Change: The myriad changes in production technologies,
marketing methods and management techniques have been extensive and rapid.
Their effect has been profound on the job contents and job contexts. These
changes cause problems relating to redundancies, retaining and redeployment. All
these suggest the need to plan manpower needs intensively and systematically.
Organizational Change: In the turbulence environment marked by cyclical
fluctuations and discontinuities, the nature and pace of changes in organizational
environment, activities and structures affect manpower requirements and require
strategic considerations.
Demographic Change: The changing profile of the work force in terms of age,
sex, literacy, technical inputs and social background has implications for HRP.
Skill Shortage: Unemployment does not mean that the labour market is a buyers
market. Organizations generally become more complex and require a wide range of
specialist skills that are rare and scare. Problems arise when such employees leave.

Cont
Governmental Influences: Government control and changes in legislation with regard to
affirmative action for disadvantages groups, working conditions and hours of work,
restrictions on women and child employment, causal and contract labour, etc. have
stimulated the organizations to be become involved in systematic HRP.
Legislative Control: The policies of hire and fire have gone. Now the legislation makes
it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase
but difficult to shed the fat in terms of the numbers employed because of recent changes
in labour law relating to lay-offs and closures. Those responsible for managing manpower
must look far ahead and thus attempt to foresee manpower problems.
Impact of the Pressure Group: Pressure groups such as unions, politicians and persons
displaced from land by location of giant enterprises have been raising contradictory
pressure on enterprise management such as internal recruitment and promotion,
preference to employees children, displace person, sons of soil etc.
Systems Approach: The spread of system thinking and advent of the macro computer as
the part of the on-going revolution in information technology which emphasis planning and
newer ways of handling voluminous personnel records.
Lead Time: The log lead time is necessary in the selection process and training and
deployment of the employee to handle new knowledge and skills successfully.

Benefits of HRP

Defining future personnel needs

Coping with change
Providing base for developing talents
Forcing top management to involve
in HRM

Factors affecting HRP

ORGANIZATIONAL GROWTH CYCLES & PLANNING

Embryonic stage No personnel planning

Growth stage HR forecasting is essential
Maturity stage Planning more formalized & less flexible
Declining stage Planning for layoff, retrenchment &
retirement

ENVIRONMENTAL UNCERTAINITIES

Political, social & economic changes

Balancing programmes are built into the HRM
programme through succession planning, promotion
channels, layoffs, flexi time, job sharing, retirement,
VRS, etc.

Factors affecting HRP

TIME HORIZONS

Short-term & Long-term plans

TYPE & QUALITY OF FORECASTING

INFORMATION

Type of information which should be

used in making forecasts

NATURE OF JOBS BEING FILLED

Difference in employing a shop-floor

worker & a managerial personnel

HRP Process
ENVIRONMENT
ORGANISATIONAL
OBJECTIVES AND POLICIES
HR NEEDS FORECAST
FORECAST

HR SUPPLY

HR PROGRAMMING
HRP IMPLEMENTATATION
CONTROL AND
EVALUATION OF PROGRAMME

SURPLUS
RESTRICTED HIRING
RECRUITMENT
REDUCED HOURS
SELECTION
VRS, LAY OFF, etc

SHORTAGE

AND

THE HRP PROCESS

Organizational Objectives and

Policies
HR plans need to be based on Organizational Objectives.
The role of HRP is to subserve the overall objectives by
ensuring availability and utilization of Human Resources.
In developing these objectives, specific policies need to be
formulated to address the following questions:
Are vacancies to be filled from promotions from within or hiring
from outside?
How do training and development objectives interfere with the
HRP objectives?
What union constraints are encountered in HRP and what policies
are needed to handle these constraints?
How to enrich employees job? Should the routine and boring jobs
continue or be eliminated?
How to downsize the organization to make it more competitive?

HR Demand Forecast
Demand forecasting is the process of
estimating the future quantity and
quality of people required.
The basis of the forecast must be the
annual budget and long-term
corporate plan, translated into
activity levels for each function and
department

 Demand forecasting must consider several

factors both internal and external.
Among external factors are competition(foreign
and domestic), economic climate, laws and
regulatory bodies, changes in technology and
social factors.
Internal factors include budget constraints,
production levels, new products and services,
organizational structure and employee
separation.

Demand forecasting helps

to:
Quantify the jobs necessary for producing a
given number of goods
Prevent shortage of people where and when
they are needed most
Determine what staff-mix is desirable in the
future
Monitor compliance with legal requirements with
regard to reservation of jobs
Asses appropriate staffing levels in different
parts of the organization so as to avoid
unnecessary costs

Forecasting Techniques

Managerial judgement
Ratio-trend analysis
Work study techniques
Delphi technique
Flow models
Other technique

Managerial Judgement
In this all managers sit together,
discuss and arrive at a figure which
would be the future demand for
labour.
This technique may involve a
bottom-up or top-down approach.
A combination of both could yield
positive results.

Ratio-trend analysis
This is the quickest forecasting
technique.
This technique involves studying past
ratios, say, between the number of
workers and sales in an organization
and forecasting future ratios, making
some allowance for changes in the
organization or its method

Work-study techniques
Work study techniques can be used
when it is possible to apply work
measurement to calculate the length
of operations and the amount of
labour required

Delphi technique
This technique is the method of forecasting
personnel needs.
It solicits estimates of personnel needs
from a group of experts, usually managers.
The HRP experts act as intermediaries,
summarize the various responses and
report the findings back to the experts.
Summaries and surveys are repeated until
the experts opinion begin to agree.

HR SUPPLY FORECAST
Supply forecasting measures the no
of people likely to be available from
within and outside an organization,
after making allowance for
absenteeism, internal movements
and promotions, wastage and
changes in hours and other
conditions of work.

Need for supply forecast

Quantify no of people and positions
expected in near future.
Clarify the staff mixes.
Prevent shortage of people
Asses present staffing levels in
different parts of organization.

Supply Analysis
Existing human resources
Internal sources of supply
External sources of supply

Existing human resources

Skill inventories
1. Personal data
2. Skills
3. Special qualifications
4. Salary and job history
5. Company data
6. Capacity of individual
7. Special preference of individual

 Management inventories
1.
2.
3.
4.
5.
6.
7.
8.
9.

Work history
Strengths
Weakness
Promotion potential
Career goals
Personal data
Number and types of employees supervised
Total budget managed
Previous management duties.

Internal supply and

techniques
Inflows and outflows
IS= current supply outflow
+ inflow
Turnover rate
No of seperations during one year
100
Avg no of employees during the
year

 Conditions of work and absenteeism.

Absenteeism is given by
no of persons days lost
100
Avg no of persons no of working
days
Productivity level

External supply
New blood and new experience
To replenish old personnel
Organizational growth and
diversification

HR programming
After personal demand and supply
forecast, the two must be balanced
or reconciled. this will help to fill the
vacancies at right time with right
kind of employees

HR Plan implementation
Converting HR plan into action.
Action programmes are..

Recruitment
Selection & placement
Training and development
Retraining & redeployment
The retention plan
The retrenchment plan
The VRS plan

Control and evaluation

Establish the reporting procedures
Identifying who are in post and those
who are in pipe line
It should report employment costs
against budget and trends in
wastage and employment ratios

Approaches to HRP

Social demand Approach

Rate of return Approach
Manpower requirement Approach
Quantitative Approach
Qualitative Approach
Mixed Approach

Social Demand Approach

The social demand approach lies on the assessment of societys requirement for
education. In principles, it is an aggregate of individuals demand for education in
respect of all individuals within the society. It is not always possible particularly in
large societies, to assess individual demand for education. In practice, therefore,
social demand approach relies on a projection of past trends in demographic aspects
of population and the enrollment at the different levels of education.
Social demand approach is thus capable of revealing the number of students with
differently typesof professional preparations that may be a given target date, based
on past experiences. Projections of social demand for education are contingent upon
given levels of:
Income of educated people,
Taste and references of household for education,
Demographic characteristics such as fertility and mortality,
Direct costs of education,
Student grants, and
Existing standard of admission to various levels of education.
Added to these constraints, there are the perennial problems associated with the
data base on demographic aspects at disaggregated levels such as districts, blocks
and villages and data on wastage and stagnation in education, and intensity of
utilization of existing educational facilities. Social demand approach thus suffers from
the suffers from the difficulties associated with any futurological exercise. difficulties
associated with any futurological exercise.

Rate of Return Approach

Critics of social demand approach argue that the decision to choose
more or less of education, beyond a legal school-learning age, is made by an
individual who attaches
a positive value to the present and the future benefits of education. Aggregate
of individuals demand
for education, which is constructed the social demand for education, should
then be based exaggerate
of individuals assessment of benefits of education-reflecting the social
benefits.
This brings us the rate of return approach to education:
Rate of return approach looks upon education as a contributor to
productivity and this sense, it is expected to facilitate investment decisions
in education whether or not the students should undergo
more schooling, or whether or not the state should invest more and
expand educational facilities.
Like in the rate of return on investment analysis, rate of return on
investment in education is used
to expand educational facilities until schooling equalizes.
On the one hand yield of investment in different types of education, and
On the other hand yield of investment in education vis--vis other sectors
of economy.

Manpower Requirement
Approach
The fundamental axioms of manpower requirements
approach is that there is a definite link between the
education and economic growth and that lack of
skilled manpower in required number impedes
growth. In this approach an attempt is made to
forecast future requirements of educated manpower
to fulfill a future target of Gross National Product
(GNP) or specified targets of industrial production.
Based on the forecasts of educated manpower
requirement over a specified period, the planners
would then indicate the directions of development of
the educational sector over the same specific period.

Basics steps in MRA

Anticipating the directions and the magnitude of
development of each individual sectors of the economy.
Evolving norms of the employing manpower in each
individual sector keeping the view the
Technological optionsPresent as well as futurefor each
sector of the economy.
Translating the physical targets for the development of
each individual sector into the manpower requirement
using the sector specific manpower norms.
Estimating the educational; equivalents of the manpower
requirement.
Analyzing the implications of estimates of educated
manpower requirements for educational

Quantitative Approach
It is also known as top down approach of HR planning
under which top level make and efforts to prepare the
draft of HR planning. It is a management-driven approach
under which the HR planning is regarded as a number's
game. It is based on the analysis of Human Resource
Management Information System and HR Inventory Level.
On the basis of information provided by HRIS, the demand
of manpower is forecasted using different different
quantitative tools and techniques such as trend analysis,
mathematical models, economic models, market analysis,
and so on. The focus of this approach is to forecast human
resource surplus and shortages in an organization. In this
approach major role is played by top management.

Qualitative Approach
This approach is also known as bottom up approach
of HR planning under which the subordinates make an
effort to prepare the draft of HR planning. Hence, it is
also called sub-ordinate-driven approach of HR
planning. It focuses on individual employee concerns.
It is concerned with matching organizational needs
with employee needs. Moreover, it focuses on
employee's training, development and creativity.
Similarly, compensation, incentives, employee safety,
welfare, motivation and promotion etc. are the
primary concerns of this approach. In this approach,
major role is played by lower level employees.

Mixed Approach
This is called mixed approach because it
combines both top-down and bottom-up
approaches of HR planning. In fact, the effort
is made to balance the antagonism between
employees and the management. Hence, it
tends to produce the best result that ever
produced by either of the methods. Moreover,
it is also regarded as an Management By
Objective(MBO) approach of HR planning.
There is a equal participation of each level of
employees of the organization.

IMPORTANCE OF HRP
1. FUTURE PERSONNEL NEEDS

Surplus or deficiency in staff strength

Results in the anomaly of surplus labor with the lack of top
executives

2. COPING WITH CHANGE

Enables an enterprise to cope with changes in competitive forces,

markets, technology, products & government regulations

3. CREATING HIGHLY TALENTED PERSONNEL

HR manager must use his/her ingenuity to attract & retain

qualified & skilled personnel
Succession planning

4. PROTECTION OF WEAKER SECTIONS

SC/ST candidates, physically handicapped, children of the socially

disabled & physically oppressed and backward class citizens.

IMPORTANCE OF HRP
5. INTERNATIONAL STRATEGIES

Fill key jobs with foreign nationals and re-assignment of

employees from within or across national borders

6. FOUNDATION FOR PERSONNEL FUNCTIONS

Provides information for designing & implementing

recruiting, selection, personnel movement(transfers,
promotions, layoffs) & training & development

7. INCREASING INVESTMENTS IN HUMAN

RESOURCES

Human assets increase in value

8. RESISTANCE TO CHANGE AND MOVE

Proper planning is required to do this

IMPORTANCE OF HRP
. OTHER BENEFITS

Upper management has a better view

of the HR dimensions of business
decision
More time is provided to locate talent
Better opportunities exist to include
women & minority groups in future
growth plans
Better planning of assignments to
develop managers can be done

Time Dimension of HRP

Short term Human Resource
Planning
a. Matching at organizational
level
b. Matching at individual level
Long term Human Resource
Planning

Types of HR Plans
Philosophy: The organisations role that they wish to play in society in
terms of
philosophy. The philosophy of the company should have clarity of thought and
action in the accomplishment of economic objectives of a country. The
philosophy bridges the gap between society and the company.
Purpose: Every kind of organized group activities or operations has a
purpose.
For example, the purpose of a bank is to accept deposits and grant loans and
advances.
Objectives: Objectives are the ends towards which organisational activity
is
aimed. Every department has its own objectives which may not be completely
same as of the other department or organisation.
Strategies: Strategy is determination of the basic long term objectives of
an
enterprise and the adoption of courses of action and allocation of resources
necessary to achieve these goals.

 Policies: Policies are general statements or understandings which

guide or
direct thinking and action in decision making. However, all policies are not
statements.
Procedure and Rules: Procedures are plans that establish a desired
method of
handling future activities. They detail the exact manner in which a certain
activity must be accomplished.
Programmes: These are complexes of goals, policies, procedures,
task
assigment rules, steps to be taken, or sources to be employed and other
elements
necessary to carry out a given course of action.
Budget: A budget is a statement of expected results in terms of
members. It may
be referred to as a numerical programme. Cash budget, sales budget, capital
expenditure budget are some of the examples of budget.

Requisites for successful HRP

Recognize of corporate planning

Backing of top management for HRP
HRP responsibilities should be centralized
Personnel record must be complete, up-date
and readily available
The time horizon of plan should be long for
remedial action
The techniques of planning should be best suit
Plans should be prepared by skill level
Data collection, analysis, techniques

Barriers to HRP
Improper linkage b/w HRP &
corporate strategy
Inadequate appreciation of HRP
Rigidity in attitude
Environmental uncertainties
Conflict b/w long term & short term
HRP
Inappropriate HR information system