MIDHUN JOHNY GEORGE

1ST M.COM
PG DEPARTMENT OF COMMERCE
ST.THOMAS COLLEGE, PALAI
 HUMAN RESOURCE PLANNING
CONCEPT OF HRP
• The process by which management determines how an organisation should
move from its current manpower position to its desired manpower position.
• Through it management strives to have the right number and the right kind of
people at the right places, at the right time, doing things which result in both
the organisation and the individual receiving maximum long-range benefit.
• Procurement of the right kind and right number of personnel is the first
operative function of human resource management.
• Before selecting the right man for the right job, it becomes necessary to
determine the quantity and quality of the people required in an organisation.
• Human Resource Management begins with Manpower Planning
DEFINITIONS OF HRP

“Manpower planning is the strategy for the acquisition, utilisation, improvement

and preservation of organisation’s human resources. It is aimed at coordinating
the requirements and the availability of different types of employees.”
-STAINER
“Human Resource Planning is a process of determining and assuming that the
organisation will have an adequate number of qualified persons , available at
the proper times , performing jobs which meet the needs of the enterprise and
which provide satisfaction for the individuals involved.”
-BEACH

Human resource planning is the process of determining manpower needs and

formulating plans to meet these needs.
 CHARACTERISTICS OF HRP

1. Human resource planning like all planning is forward looking or future

oriented.
2. HRP is an ongoing or continuous process because the demand for and the
supply of human resources undergo frequent changes.
3. HRP is an integral part of corporate planning.
4. The basic purpose of HRP is to make optimum utilisation of an organisation’s
current and future human resources.
5. HRP has both quantitative and qualitative aspects. The former implies the
right number of employees while the latter means the right talents required in
the organisation.
6. HRP can be long-term or short-term.
7. HRP is a two-phased process . Demand forecasting and Supply forecasting.
 OBJECTIVES OF HRP

1. To ensure optimum use of existing human resources.

2. To forecast future requirements of human resources.
3. To provide control measures to ensure that necessary human resources are
available as and when required.
4. To link human resource planning with organisational planning.
5. To assess the surplus and shortage of human resources.
6. To anticipate the impact of technology on jobs and human resources.
7. To determine the levels of recruitment and training.
8. To estimate the cost of human resources and housing needs of employees.
9. To provide a basis for management development programmes.
10. To meet the needs of expansion and diversification programmes.
 NEED AND IMPORTANCE OF HRP (BENEFITS)

1. HRP is helpful in selection and training activities. It ensures that adequate

number of persons are selected and trained well in advance to fill future job
vacancies in the organisation.
2. HRP identifies gaps in existing manpower in terms of their quantity and talent.
Existing manpower can be developed to fill future vacancies.
3. Provision for replacement of personnel can be made through HRP.
4. HRP facilitates the expansion and diversification of an organisation.
5. HRP creates awareness about the effective utilisation of human resources
throughout the organisation. It helps to reduce wastage of manpower.
6. HRP is helpful in effective utilisation of technological progress. To meet the
challenge of new technology existing employees need to be retrained and
new employees may be recruited.
7. With the help of HRP, areas of surplus manpower can be anticipated and
timely actions can be taken (Eg : redeployment).
8. HRP is useful in anticipating the cost of human resources which facilitates the
budgeting process.
9. HRP facilitates career succession planning in the organisation.
10. HRP helps in planning for physical facilities like canteen, staff quarters,
dispensary and school for the staff and their children.
11. At the National level, HRP facilitates educational reforms, geographical
mobility of talent and employment generation.
 PROCESS OF HRP (ASSESSING HUMAN RESOURCE REQUIREMENTS)

1. ENVIRONMENTAL SCANNING

Environmental scanning refers to the systematic monitoring of

the external forces influencing the organisation. These include economic
factors, technological factors, demographic conditions, political and legislative
issues and social concerns.

By scanning the environment for changes that will affect an

organisation , managers can anticipate their impact and make adjustments
early.
2. ANALYSING ORGANISATIONAL PLANS

HR plans need to based on organisational objectives. This implies

that the objectives of the HR plan must be derived from organisational
objectives.

Specific requirements in terms of number and characteristics of

employees should be derived from the organisational objectives.

Plans concerning technology, production, marketing, finance,

expansion and diversification give an idea about the volume of future work
activity.
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. It is necessary to make projections for
new positions to be created and the vacancies arising in current manpower.

Techniques employed in manpower forecasting are :

a) Managerial judgement- under this method, experienced managers
estimate the manpower requirements for their respective departments on
the basis of their knowledge of experienced future work load and employee
efficiency.
b) Work-study method- In this method, time and motion study are used to
analyse and measure the work being done.
c) Mathematical model- A mathematical model expresses the relationship
between independent variables (investment, production, sales,…) and
dependent variables (number of employees required)

d) Ratio-trend analysis- This technique involves studying past ratios between the
number of workers and sales in an organisation and forecasting future ratios
by making some allowance for changes in the organisation or its methods.
4. HR SUPPLY FORECAST

The next logical step for the management is to determine whether it

will be able to procure the required number of personnel and the sources for
such procurement. Supply forecasting measures the number of people likely to
be available from within and outside an organisation, after making allowances
for absenteeism, internal movements and promotions, wastage and changes in
hours and other conditions of work. The supply chain covers existing human
resources , internal sources of supply and external sources of supply.
5. HR PROGRAMMING (ESTIMATING MANPOWER GAPS)

Once an organisation’s personnel demand and supply are

forecasted , the two must be reconciled or balanced in order that vacancies

can be filled by the right employees at the right time.

6. HR PLAN IMPLEMENTATION (ACTION PLANNING)

Implementation requires converting HR plan into action. A series of

action programmes are initiated as a part of the HR plan implementation. Some

such programmes are recruitment, selection and placement, training and

development, retraining and redeployment, the retention plan, the succession

plan,…
7. MONITORING AND CONTROL

Once the action plans are implemented, the human resource

structure and system need to be reviewed and regulated. The HR plan should
include budgets, targets and standards. It should also clarify responsibilities for
implementation and control and establish reporting procedures which will
enable achievements to be monitored against the plan.
 LEVELS OF HUMAN RESOURCE PLANNING

1. National level-The central government plans for human resources at the

national level. It forecasts the demand for and supply of human resources for
the country as a whole. National level plan covers factors like population
projections, economic development programme, educational facilities,
mobility of people,… The Government of India has specified the objectives
of HRP in successive five-year plans.

2. Sectoral level – Central and state governments formulate human resource

plans for particular sectors. Eg: agricultural sector, industrial sector, tertiary
sector. Projections are based on government policy, projected
output/operations,…
3. Industry level- Human resource plans for specific industries like textiles,
cement, iron and steel, petrochemicals, computers,… are prepared on the
basis of projected operations/output of the particular industry.

4. Unit level – Human resource requirements of a particular enterprise are

forecasted at this level. These may be estimated department wise, job
category wise,…
 PROBLEMS / LIMITATIONS OF HRP

1. Inaccuracy- HRP involves forecasting the demand for and supply of human
resources. Therefore, it cannot be a cent percent accurate process. Longer
is the time horizon, greater is the possibility of inaccuracy.
2. Employee resistance- Employees and trade unions feel that due to
widespread unemployment people will be available for jobs as and when
required. Moreover, they feel that HRP increases their workload.
3. Uncertainties- Labour absenteeism, labour turnover, seasonal employment,
technological changes and market fluctuations are the uncertainties which
serve as constraints to human resource planning.
4. Inefficient information system- In most of the Indian industries, human
resource information system has not been fully developed. In the absence of
reliable data it is not possible to develop effective human resource plans.
5. Lack of top management support- In the absence of support and
commitment from the top, human resource experts find it difficult to obtain
vital inputs.
6. Time and expense- Manpower planning is a time consuming and expensive
exercise. A good deal of time and cost are involved in data collection and
forecasting.
7. Unbalanced focus- In some companies, there is too much focus on the
quantitative aspect than quality of human resources. Career planning and
development, skill levels, morale,… are likely to suffer due to such
unbalanced approach to human resource planning.
 GUIDELINES FOR MAKING HRP EFFECTIVE

1. Tailor made- Human resource plans should be balanced with the corporate
plans of the enterprise.
2. Appropriate time horizon- The period of a human resource plan should be
appropriate to the needs and circumstances of the specific enterprise.
3. Adequate organisation- HRP function should be properly organised. A
separate cell, section or committee may be constituted within the human
resource department to provide adequate focus and coordination of plans
at various levels.
4. Top management support- Before starting the HRP process the support and
commitment of top management should be ensured. It should be carried
out within the limits of a budget.
5. Participation- To be successful, HRP requires active participation and
coordinated efforts on the part of operating executives.

6. Information system- An adequate database should be developed for

human resources to facilitate human resource planning.

7. Balanced focus- The quantity and quality of human resources should be

stressed in a balanced manner. Upward mobility of existing staff needs to be
considered carefully.
 TYPES OF HR PLANNING

1. Aggregate planning-

Aggregate planning is done for the group of employees at

specific level, usually the low level jobs. Aggregate planning is forecasting the
demand for employees. In this method, each individual unit, department or
branch of the organisation estimate its future needs for employees. The single
greatest indicator of the demand for employees is demand for organisation’s
product or services. Once the demand for the employees is forecasted, the
organisation plan for an adequate supply of employees to meet its demand.
2. Succession planning-

Succession planning involves identifying the key managerial

positions that the organisation cannot afford to have vacant. These are
generally senior management positions that the organisation’s feels difficult to
fill. It not only helps to ensure that key management positions remain filled but
also helps to identify critical training and development needs of both individual
managers and the organisation as a whole. It involves taking an investment-
oriented approach towards employee.
 FACTORS AFFECTING HRP IN AN ORGANISATION

1. Employment- HRP is affected by the employment situation in the country . That is, 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 labour and they may have to appoint people from
other countries.

2. 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 have to remove existing people and
appoint new.
3. Organisational changes- Changes take place within the organisation from
time to time. That is, the company diversify into new products or close down
business in some areas. In such cases, the HRP process ie, appointing or
removing people will change according to situation.

4. Demographic changes- It refers to things referring to age, population,

composition of work force,… A number of people retire every year. A new
batch of graduates with specialisation turns out every year. This can change
the appointment or the removal in the company.
5. Shortage of skill due to labour turnover- Industries having high labour turnover
rate, the HRP will change constantly. That is, many new appointments will
take place. This also affects the way HRP is implemented.

6. Multicultural workforce- Workers from different countries travel to other

countries in search of job. When a company plans it’s HRP, it needs to take
into account this factor also.

7. Pressure groups- Company has to keep in mind certain pressure groups like
human rights activist, women activist, media,… as they are very capable for
creating problems for the company. When issues concerning these groups
arise, appointment or retrenchment becomes difficult.
8. Environmental uncertainties – Political, social and economic changes affect
all organisations. Personnel planners deal with environmental uncertainties
by carefully formulating recruitment, selection, training and development
policies and programmes.

9. Time horizons- A plan cannot be for too long on a time horizon as the
operating environment itself may undergo changes. Plans for companies
operating in an unstable environment (computers), must be for a short
period. Plans for others where environment is fairly stable (university plan),
may be long-term. In general, the greater the uncertainty, the shorter the
plan’s time horizon and vice-versa .