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Download Human Resource Management Unit -2 Human Resource Planning Human Resource Management is veryimportant for the survival and prosperity of an organisation. Procurement of rightkind and right number of employees is the first operative function of HumanResource Management. Before selecting the right man for the right job, it becomesnecessary to determine the quality and quantity of people required in theorganisation. This is the primary function of Human Resource Planning. Human Resource Planning Human Resource Planning is the planning of Human Resources. It is also calledmanpower planning/ personnel planning/ employment planning. It is only afterHuman Resource Planning that the Human Resource department can initiate therecruitment and selection process. Therefore Human Resource Planning is a sub-system of organisational planning.

Definition Human Resource Planning is a strategy for the acquisition, utilisation,improvement and preservation of an organisations human resource - Y.C. Moushell Human Resource Planning is a process of forecasting an organisations futuredemand for human resource and supply of right type of people in right numbers J.Chennly.K Features of Human Resource Planning 1.It is future oriented : - Human Resource Planning is forward-looking. It involvesforecasting the manpower needs for a future period so that adequate andtimely provisions may be made to meet the needs.2.It is a continuous process : - Human Resource Planning is a continuousprocess because the demand and supply of Human Resource keepsfluctuating throughout the year. Human Resource Planning has to bereviewed according to the needs of the organisation and changingenvironment.

3.Integral part of Corporate Planning : - Manpower planning is an integral part of corporate planning because without a corporate plan there can be nomanpower planning.4.Optimum utilisation of resources : - The basic purpose of Human ResourcePlanning is to make optimum utilisation of organisations current and futurehuman resources.5.Both Qualitative and Quantitative aspect :

- Human Resource Planningconsiders both the qualitative and quantitative aspects of Human ResourceManagement, Quantitative meaning the right number of people andQualitative implying the right quality of manpower required in theorganisation.6.Long term and Short term : - Human Resource Planning is both Long-term andshort-term in nature. Just like planning which is long-term and short-termdepending on the need of the hour, Human Resource Planning keeps long-term goals and short-term goals in view while predicting and forecasting thedemand and supply of Human Resource.7.Involves study of manpower requirement : - Human Resource Planninginvolves the study of manpower availability and the manpower requirementin the organisation. Objectives of Human Resource Planning 1.Optimum utilisation of human resources currently employed in theorganisation.2.To reduce imbalance in distribution and allocation of manpower in organisation for various activities.3.To ensure that the organisation is well-equipped with the required Q uantityand Q uality of manpower on a sustained basis.4.To anticipate the impact of technology on jobs and resources. 5.To control cost of Human Resources employed, used and maintained in theorganisation.6.To provide a basis for management development programmes. 7.To ensure optimum contribution and satisfaction of the personnel withreasonable expenditure.8.To recruit and retain human resource of required Quantity and Quality. Need for Human Resource Planning

1.Shortage of Skills : - These days we find shortage of skills in people. So it isnecessary to plan for such skilled people much in advance than when weactually need them. Non-availability of skilled people when and where theyare needed is an important factor which prompts sound Human ResourcePlanning.2.Frequent Labour Turnover : - Human Resource Planning is essential becauseof frequent labour turnover which is unavoidable by all means. Labourturnover arises because of discharges, marriages, promotion, transfer etcwhich causes a constant ebb and flow in the workforce in the organisation.3.Changing needs of technology : - Due to changes in technology and newtechniques of production, existing employees need to be trained or newblood injected into an organisation.4.Identify areas of surplus or

shortage of personnel : - Manpower planning isneeded in order to identify areas with a surplus of personnel or areas in whichthere is a shortage of personnel. If there is a surplus, it can be re-deployed, orif there is a shortage new employees can be procured.5.Changes in organisation design and structure : - Due to changes inorganisation structure and design we need to plan the required humanresources right from the beginning. Problems with Human Resource Planning 1.Resistance by Employers : - Many employers resist Human Resource Planningas they think that it increases the cost of manpower for the management.Further, employers feel that Human Resource Planning is not necessary ascandidates will be available as and when required in the country due to thegrowing unemployment situation.2.Resistance by Employees : Employees resist Human Resource Planning as itincreases the workload on the employees and prepares programmes forsecuring human resources mostly from outside.3.Inadequacies in quality of information : - Reliable information about theeconomy, other industries, labour markets, trends in human resources etcare not easily available. This leads to problems while planning for humanresources in the organisation.4.Uncertainties : - Uncertainties are quite common in human resource practicesin India due to absenteeism, seasonal unemployment, labour turnover etc.Further, the uncertainties in the industrial scenario like technological changesand marketing conditions also cause imperfection in Human ResourcePlanning. It is the uncertainties that make Human Resource Planning lessreliable.

5.Time and expense : - Human Resource Planning is a time-consuming andexpensive exercise. A good deal of time and cost are involved in datacollection and forecasting. Guidelines for making Human Resource Planning effective 1.Adequate information system : - The main problem faced in Human ResourcePlanning is the lack of information. So an adequate Human resource databaseshould be maintained/developed for better coordinated and more accurateHuman Resource Planning.2.Participation : - To be successful, Human Resource Planning requires activeparticipation and coordinated efforts on the part of operating executives.Such participation will help to improve understanding of the process andthereby, reduce resistance from the top management.3.Adequate organisation : - Human Resource Planning should be properlyorganised; a separate section or committee may be constituted within thehuman resource department to provide adequate focus and to coordinate theplanning efforts at various levels.4.Human Resource Planning should be balanced with corporate planning : -Human resource plans should be balanced with the corporate plans of theenterprise. The methods and techniques used should fit the objectives,strategies and environment of the particular organisation.5.Appropriate time horizon : - The period of manpower plans should beappropriate according to the needs and circumstances of the specificenterprise. The size and structure of the enterprise as well as the changingaspirations of the people should be taken into consideration. Factors affecting Human ResourcePlans External factors Internal factorsGovernment policies Strategies of thecompanyLevel of economic development Human Resource policyI n f o r m a t i o n T e c h n o l o g y J o b A n a l y s i s L e v e l o f T e c h n o l o g y T i m e h o r i z o n B u s i n e s s E n v i r o n m e n t T y p e a n d q u a l i t y o f i n f o r m a t i o n I f n a t c e t r o n r a s t C i o o n a l m p a n y s

p r o d u c t i o n a n d operation policy Trade unions External factors They are the factors which affect the Human Resource Planning externally. Theyinclude:-1.Government policies : - Policies of the government like labour policy, industrialpolicy, policy towards reserving certain jobs for different communities andsons-of-the-soil etc affect Human Resource Planning.2.Level of economic development : - Level of economic developmentdetermines the level of human resource development in the country andthereby the supply of human resources in the future in the country.3.Information Technology : Information technology brought amazing shifts inthe way business operates. These shifts include business processreengineering, enterprise resource planning and Supply Chain Management. These changes brought unprecedented reduction in human resource andincrease in software specialists.Example: Computer-aided design (CAD) and computer-aided technology(CAT) also reduced the existing requirement of human resource.4.Level of Technology : Technology is the application of knowledge to practicaltasks which lead to new inventions and discoveries. The invention of thelatest technology determines the kind of human resources required.5.Business Environment : - Business environment means the internal andexternal factors influencing the business. Business environmental factorsinfluences the volume of mix of production and thereby the supply of humanresources in the future in the country.6.International factors : - International factors like the demand and supply of Human resources in various countries also affects Human Resource Planning. Internal factors: 1.Company Strategies : - The organisations policies and strategies relating toexpansion, diversification etc. determines the human resource demand interms of Quantity and Quality 2.Human Resource policies : - Human Resource policies of the companyregarding quality of human resources, compensation level, quality of workingconditions etc. influence Human Resource Planning.3.Job analysis : Job analysis means detailed study of the job including the skillsneeded for a particular job. Human Resource Planning is based on jobanalysis which determines the kind of employees to be procured.4.Time Horizon : Companys planning differs according to the competitiveenvironment i.e. companies with stable competitive environment can plan forthe long run whereas firms without a stable environment can only plan forshort term. Therefore, when there are many competitors entering business/when there is rapid change in social and economic conditions of business/ if there is constant change in demand patterns/ when there exists poormanagement practice, then short term planning is adopted or vice-versa forlong-term planning.5.Type and Quality of Information : - Any planning process needs qualitative andaccurate information about the organisational structure, capital budget,functional area objectives, level of technology being used, job

analysis,recruitment sources, retirement plans, compensation levels of employees etc. Therefore Human Resource Planning is determined on the basis of the typeand quality of information.6.Companys production and operational policy : - Companys policies regardinghow much to produce and how much to purchase from outside in order tomanufacture the final product influences the number and kind of peoplerequired.7.Trade Unions : - If the unions declare that they will not work for more than 8hours a day, it affects the Human Resource Planning. Therefore influence of trade unions regarding the number of working hours per week, recruitmentsources etc. Affect Human Resource Planning.8.Organisational Growth Cycles : - At starting stage the organisation is smalland the need of employees is usually smaller, but when the organisationenters the growth phase more young people need to be hired. Similarly, inthe declining/recession/downturn phase Human Resource Planning is done tore-trench the employees. Process of Human Resource Planning 1.Analysing the Corporate Level Strategies : - Human Resource Planning shouldstart with analysing corporate level strategies which include expansion, diversification, mergers, acquisitions, reduction in operations, technology tobe used, method of production etc. Therefore Human Resource Planningshould begin with analysing the corporate plans of the organisation beforesetting out on fulfilling its tasks.2 . D e m a n d f o r e c a s t i n g : - Forecasting the overall human resource requirementin accordance with the organisational plans is one of the key aspects of demand forecasting. Forecasting of quality of human resources like skills,knowledge, values and capabilities needed in addition to quantity of humanresources is done through the following methods: -a.Executive or Managerial Judgement : - Here the managers decide thenumber of employees in the future. They adopt one of the threeapproaches mentioned below: -I . B o t t o m - U p a p p r o a c h : - H e r e t h e c o n c e r n e d s u p e r v i s o r s s e n d their proposals to the top officials who compare these with theorganisational plans, make necessary adjustments and finalisethem.I I . T o p - D o w n a p p r o a c h : - H e r e t h e m a n a g e m e n t p r e p a r e s t h e requirements and sends the information downwards to thesupervisory level who finalises the draft and approves it.I I I . P a r t i c i p a t i v e A p p r o a c h : - H e r e t h e s u p e r v i s o r s a n d t h e management sit together and projections are made after jointconsultations.Drawbacks The chief drawback of these methods is that estimation of manpower ismade using guesswork.b.Statistical Techniques : These methods use statistical methods andmathematical techniques to forecast and predict the supply anddemand of Human Resources in the future.Ratio-Trend analysis: - In this method depending on the past dataregarding number of employees in each department, like productiondepartment, sales department, marketing department and workloadlevel, etc ratios for manpower are estimated. Past values are plottedand extrapolated to get fairly accurate future projections.

c.Work Study method : - This technique is suitable to study thecorrelation between volume of work and labour i.e. demand for humanresources is estimated based on the workload. Work study method ismore appropriate for repetitive and manual jobs when it is possible tomeasure work and set standards.d.Delph i Technique : - Delphi Technique is named after the Greek Oracleat the city of Delphi. In this method, the views of different expertsrelated to the industry are taken into consideration and then aconsensus about the Human Resource requirement is arrived at.Delphi technique is used primarily to assess long-term needs of humanresource.3.Analysing Human Resource Supply : - Every organisation has two sources of supply of Human Resources: Internal & External. Internally, human resourcescan be obtained for certain posts through promotions and transfers. In orderto judge the internal supply of human resources in future human resourceinventory or human resource audit is necessary. Human resource inventoryhelps in determining and evaluating the quantity of internal human resourcesavailable. Once the future internal supply is estimated, supply of externalhuman resources is analysed.4.Estimating manpower gaps : - Manpower gaps can be identified by comparingdemand and supply forecasts. Such comparison will reveal either deficit orsurplus of Human Resources in the future. Deficit suggests the number of persons to be recruited from outside, whereas surplus implies redundantemployees to be re-deployed or terminated. Employees estimated to bedeficient can be trained while employees with higher, better skills may begiven more enriched jobs.5.Action Planning : - Once the manpower gaps are identified, plans are preparedto bridge these gaps. Plans to meet the surplus manpower may beredeployment in other departments and retrenchment. People may bepersuaded to quit voluntarily through a golden handshake. Deficit can be metthrough recruitment, selection, transfer and promotion. In view of shortage of certain skilled employees, the organisation has to take care not only of recruitment but also retention of existing employees. Hence, the organisationhas to plan for retaining of existing employees.6.Modify the Organisational plans : - If future supply of human resources formall the external sources is estimated to be inadequate or less than therequirement, the manpower planner has to suggest to the managementregarding the alterations or modifications in the organisational plans. 7.Controlling and Review : - After the action plans are implemented, humanresource structure and the processes should be controlled and reviewed witha view to keep them in accordance with action plans.

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