HUMAN RESOURCE MANAGEMENT

PLANNING
 Human Resource Planning(HRP)
• HRP is a process of sticking balance between human resources required & acquired
in an organisation.

• In other words, HRP is a process by which an organisation determines how it should

acquire its desired manpower to achieve the organisational goals. Thus, HRP helps
an organisation have the right number & kind of people at the right places & right
times to successfully achieve its overall objectives.

• In the word of Beach, “ human resource planning is a process of determining &

assuming that the organisation will have an adequate number of qualified persons,
available at the proper times, performing jobs which meets the needs of enterprise
& which provide satisfaction for the individuals involved”

• Thus HRP helps an organisation have the right number and the right kind of people
at the right places and right times to successfully achieve its overall objectives.
HRP is essential wherever production of goods
and services are involved. It is done by either-

• External agencies- consultants, suppliers of

plant and machineries.

• Internal agencies- personnel dept., industrial

engineering dept., production dept., etc.
• HRP is a planning process by which an org. can
move from its current manpower position to
its desired manpower position.

• It is a strategy for acquisition, utilization,

improvement and retention of human
resources.
 Objectives of HRP
• The main objective of having human resource planning is to have an
accurate number of employees required, with matching skill
requirements to accomplish organizational goals. Objectives are-
• Ensure adequate supply of manpower as and when required
• Ensure proper use of existing human resource in the organisation
• Forecast future requirement of human resources with different levels
of skills.
• Assess surplus or shortage, if any, of human resources available over
a specified period of time.
• Anticipate the impact of technology on jobs & requirements for
human resources
• Control human resources already deployed in the organisation
• Provide lead time available to select & train the required additionally
human resource over a specified time period.
 Need of HRP
• Despite growing unemployment, there has been shortage of human
resources with required skills, qualification & capabilities to carry on
works. Hence the need for human resource planning.

• Large number of employees who retire, die, leave organizations, or

become incapacitated because of physical or mental ailments, need
to be replaced by new employees. Human resource planning ensures
smooth supply of workers without interruptions.
 Need of HRP

• Technological changes & globalization usher in change in the method

of products & distribution of production & services & in management
techniques. These changes may also require a change in the skills of
employees, as well as change in the number of employees required.
It is human resource planning that enables organisation to cope with
such changes.

• Human resource planning is also needed in order to meet the needs

of expansion & diversification programmes of an organisation.
 Importance of HRP
• HRP meets the organisation need for right type of people in right number at right
times.
• By maintaining a balance between demand for & supply of human resources, HRP
makes optimum use of human resources, on the one hand, & reduces labour cost
substantially, on the other.
• Careful consideration of likely future events, through HRP might lead to the
discovery of better means for managing human resources. Thus, foreseeable
pitfalls might be avoided.
• Man power shortfalls & surplus may be avoided, to a large extent.
• HRP helps the organisation create & develop training & succession planning for
employees & managers. Thus, it provides enough lead time for internal succession
of employees to higher positions through promotions.
• It also provides multiple gains to the employees by way of promotions, increase in
emoluments & other prerequisites & fringe benefits.
• HRP helps in avoiding in resistance for change.
 Levels of HRP
• At National Level- HRP by govt. at the national level covers
population projections, programme of economic
development, educational and health facilities,
occupational distribution and growth.
• At the sector Level- this would cover manpower
requirements of the agriculture sector, industrial sector and
service sector.
• At the industry Level- this would forecast manpower need
for specific industries, such as engineering, textile and
plantation industries etc.
• At the level of industrial unit- it relates to the manpower
needs of a particular enterprise.
 Human Resource Information System(HRIS)
• HRIS refers to a computerized system that aids the processing of
information relating to human resource management.
• It is a system of gathering, classifying, processing, recording &
disseminating the information required for effective management of
human resources in the organisation.
• HRIS forms an integral part of management information System(MIS).
MIS includes information relating to assets, finances, production,
marketing, sales, accounting, etc. HRIS collects & analyze data
relating to human resources of the organisation.
• Managers find HRIS as a decision support system device for managing
human resources in the organisation. As it helps them in keeping all
information about workforce in an organized & in an easily assessable
manner.
 HRP Process
• HRP involves forecasting personnel needs,
assessing personnel supply and matching
demand- supply factors through personnel –
related programme.
• The planning process is influenced by overall
org. objectives and the environment of
business.
 HRP Process

1. Environmental Scanning-refers to the systematic

monitoring of the external forces influencing the
org.–economic technological, demographic, political
and social.
2. Organizational Objectives and Policies- HR plans
need to be based on org. objectives as org.
objectives are designed by the top management.
 HRP Process
3. 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 level for each function and dept.
 HRP Process
Demand forecasting consider factors-
• External-are competition, economic climate, laws &
regulatory bodies, changes in technology & social
factors.
• Internal- includes budget constraints, production
levels, new products & services, org. structure.
 Reasons to conduct demand forecasting
It can help-
Quantify the jobs necessary for producing a given number
of goods, or offering a given amount of services.
Determine what staff mix is desirable in the future.
Asses appropriate staffing level in different parts of the org.
so as to avoid unnecessary costs.
Prevent shortage of people where and when they are
needed most.
Monitor compliance with legal requirement with regard to
reservations of jobs.
 Forecasting technique/approaches

• Management judgment
• Ratio-trend analysis
• Work study techniques
• Delphi method
• Mathematical model
 Forecasting technique/approaches
1. MANAGEMENT JUDGEMENT

• This technique is very simple & time saving. Under this technique
either a “bottom-up” or a “top-down” approach is employed for
forecasting future HR requirement of an org.
• In bottom up approach the line managers submit their departmental
proposals to top managers who arrive at the company forecasts.
• In ‘top down’ approach top managers prepare company &
departmental forecast. These forecast are reviewed with
departmental heads & agreed upon.
• Suffer from subjectivity, suitable for small firms.
 Forecasting technique/approaches
2. Work study method

• Is used when it is possible to measure work & set

standards & where job methods do not change frequently.
• In this method, as used by Fredrick Winslow Taylor in his
scientific management, time & motion study are used to
ascertain standard time for doing a standard work. Based
on this , the number of workers required to do standard
work is worked out.
 Forecasting technique/approaches

3. Ratio-trend analysis

Quickest forecasting technique. Under this method,

forecasting for future HR requirement is made on
the basis of time series data. Involves studying past
ratios & based on those forecasting is made for
future ratios.
 Forecasting technique/approaches
4. Delphi Method

• Named after ancient Greek oracle at the city of DELPHI. This is

judgmental methods of forecasting HR needs. Complex & time
consuming, does not require the physical presence of the group
members.
• It solicits estimates of personnel needs from a group of experts. The
HRP experts act as a intermediaries, summarize the various
responses & report the findings back to the experts. This is repeated
until the experts opinions begin to agree.
 Forecasting technique/approaches
5. Mathematical method
• Express relationship between independent
various(e.g. , production, sales, etc.) & dependent
variable(e.g. number of workers required.)
 4. HR SUPPLY FORECAST
Determines whether the HR department will be able
to procure the required number of people.
Supply forecast measures the number of people likely
to be available from within & outside an
organisation
Supply analysis covers
a) Existing/ present HR
b) Internal sources of supply
c) External sources of supply
a) Existing Employees-
• Analysis of present employees is facilitated by HR
audits
• HR audit summarizes each employees skills &
abilities.
Skill Inventories
 Audit of non managers are
called S.I.
 Contain information about
non-managers current job-
such as-:
Personal data, skills, special
qualification, salary & job
history, special preference
of individual(geographical
location)
Management Inventories
 Audit of managers are M.I.
 Include data as
Work history, strengths,
weakness, promotions,
career goals, personal data,
total budget managed,
educational background,
current job performance,
anticipated retirement
data.
b) Internal sources of supply-
Inflow & outflow->

New recruit   Promotions

Promotions   Transfers
Transfer 
 Retirement
 Terminations
 Resignations
 Deaths
Current personnel level – outflows + inflows = internal
supply
• Turnover Rate -> to forecast internal supply
Number of separations during 1 year/average no. of employees during the year * 100

• Conditions of work & absenteeism

Changes in conditions of work such as normal weekly working hours, overtime policies,
timing of holidays etc.

• Absenteeism  unauthorized absence from work. When employee is scheduled

to work but fails to report for duty.

• Productivity level
Any change in productivity would affect the number of persons required per unit of
output. Increase in productivity will reduce the requirement.
c) External supply
• Prospective employees from external sources are
important for org
• College & universities, consultants, competitors or
unsolicited applications.
 5) HR Programming
Once an org. personnel demand & supply are
forecast, the two must be balanced in order, that
vacancies can be filled by the right employees at the
right time.
 6) HR Plan Implementation

Implementation requires converting an HR plan into an action.

A series of action programmes are initiated as a part of HR Plan
implementation. Such programmes are-

• Recruitment, selection & placement

• T&D
• Retraining & redevelopment
• The retention plan- Compensation plan, Performance appraisal,
Employees quitting because of conflict, Shortages, Unstable recruits.
• Succession plan
 7) Control & evaluation
HR structure & system need to be reviewed &
regulated regularly.
The HR Plan should include budgets, targets &
standards.
It should also clarify responsibilities for
implementation & control & establish reporting
procedures which will enable achievements to be
monitored against the plan.
For this identification of both those who are in post &
those who are in pipeline are required.
 HRP Activities
HRP could be seen as a process, consisting of the following series of
activities
• Forecasting future personnel requirements ‘ either in mathematical
term or based on trends in the economy & development of industry ,
or of judgments & estimates based upon specific future plans of the
company.
• Inventorying , present manpower resources & analyzing the degree
to which these resources are employed optimally.
• Anticipating manpower problems , by projecting present resources
into the future & comparing them with the forecast of requirements,
to determine their adequacy, both quantitatively & qualitatively.
• Planning, the necessary programmes of recruitment, selection,
training, employment, utilization, transfer, promotion, development,
motivation & compensation so that future man power requirements
will be duly met.
 Guiding Principles of Effective HRP

• The plan should be as detailed as expenditure constraints

allow.
• Plan should not extend too far into the future, accurate
prediction of the distant future is simply impossible.
• All alternative courses of action should be considered.
• Side effects & implications of the actions envisaged should
be examined.
• Instructions to individuals & departments must be
incorporated into the plan.
• Plans should be concise & easy to understand.
 How to make HRP EFFECTIVE
• HRP must be viewed as an integral part of corporate planning. HRP
should be tailored with the objectives, strategies & overall
environment of the particular organisation.
• The support & commitment of the top management be ensured
before starting the process of human resource planning.
• Personnel records must be complete, up to date & readily available to
ensure an adequate & strong data base. Data base serves as
backbone for HRP.
• The time horizon of the human resource plan should be appropriate
to accommodate the changing needs & circumstances of the
particular organisation.
• Both quantitative & qualitative aspects of human resource plans
should be stressed in a balanced manner in order to avoid conflicts
between the two.
• Sound and up to date information system
 Barriers &/Problems in HRP
Resistance by employers & employees/perception
Employers resist HRP as they think that it increases the cost of manpower (demand for
employees based on the plan, more facilities & benefits including T & D.)

• HRP is not necessary because of growing unemployment situation. People perceive

that people are available in abundance in our labour surplus economy. Then why to
spend time & money in forecasting human resources? Surprisingly, this perception
about HRP is also held by the top management.

• Various types of uncertainties like labour turnover, absenteeism, seasonal

employment, market fluctuations & change in technology render HRP ineffective.
The reason being these uncertainties make HR forecast mere a guess far from
reality.
• As HRP is based on data relating to HR, the same is not maintained in a proper
manner in some of the org.
• Employees resist HRP as they think that it increases the workload of employees &
prepares programs for securing HR mostly from outside.
 Problems/ Barriers to HRP
• Another problem in HRP is that the demand for & supply of human resources is not
hundred percent accurate. Experience suggest that longer the time horizon for
forecasting human resource requirement, greater is the possibility of inaccuracy in
estimates of human resource needs.
• Conflict between quantitative & qualitative approaches used for HRP.

• Generally human resource personnel are perceived as experts in handling

personnel management. But, they are not experts more than often.

• Experience suggests that demand & supply of HR can not be hundred percent
accurate.
• Problems in HRP arise both from inherent limitations of forecasting & from
weaknesses of human who do it. But both can be overcome.

• Main problems misperception, inaccuracy, uncertainty, unbalance focus &

unrealistic.