Q. Discuss the steps involved in Human Resource Planning in a business organisation.
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What are the objectives of manpower planning? Explain its process.
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What is human resource planning? Explain the steps involved in human resource planning process.
Ans. Meaning of Human Resource Planning: Human Resource Planning is also known as Manpower planning. It is a forward looking function. It may be defined as a procedure by which the management ensures the right number of people and right kind of people at the right time, doing the right things for which they are suitable for the achievement of goals of the organisation.
Human Resource Planning is a process which determines how an organisation should move from its current manpower/human resources position to its desired manpower/human resources position.
Objectives: HRP is required to achieve the following objectives:
1. To recruit and maintain the HR of requisite quantity and quality.
2. To predict the employee turnover and make the arrangements for minimising turnover and filing up of consequent vacancies.
3. To meet the requirements of the programmes of extension, diversification etc.
4. To anticipate the impact of technology on work, existing employees and future human resources requirements.
5. To progress the knowledge, skills, standards, ability and discipline etc.
6. To appraise the surplus or shortage of human resources and take actions accordingly.
7. To maintain pleasant industrial relations by maintaining optimum level and structure of human resource.
8. To minimise imbalances caused due to non-availability of human resources of right kind, right number in right time and right place.
9. To make the best use of its human resources.
10. To estimate the cost of human resources.
So, human resource planning is required to achieve the objectives of estimating potential human resources requirements, to cope with changing requirements of the organisation taking into consideration the changing technology, to make full utilization of existing and potential workforce of the organisation; and career planning of employees.
Human Resource Planning Process: Process of human resource planning involves the following steps:
(1) Analysing Organisational Objectives, Plans and Policies: The person concerned with human resource planning must be clear about the objectives, plans and policies of the overall organisation. He must also be clear about the objectives of woman resource planning. The objective of human resource plan are derived from organization’s objectives. The objectives of human resource plans must be in consistency with the objectives of overall organisation. The ultimate objective of human resource planning is to relate future human resource requirements to future organisational needs. Human Resource Department should begin the human resource planning process with analysis of objectives, plans and policies of the organisation. He should also analyse various other plans e.g. expansion, diversification, technological, financial, marketing, production etc. Analysis of overall organisational plans and other plans will help in making decisions about potential HR requirements. Further, organisational policies and HR policies regarding personnel should also be analysed. Organisation’s plans relating to production technique and automation will help in forecasting of human resources requirements. Thus, analysis of organisational objectives, plans and policies are the starting points for forecasting human resource requirements.
(2) Forecasting Human Resource Demand: Forecasting human resource demand is the process of estimating the future human resource requirement of right quality and right number. Analysis of employment trends, the replacement needs of employees due to death, resignations, retirement termination, productivity of employees, growth and expansion of organisation, absenteeism and labour turnover are the relevant factors for human resources forecasting. Demand forecasting is affected by a number of external and internal factors.
There are number of techniques of estimating/ forcasting human resources demand:
(a) Managerial Judgement: Managerial judgment technique is very common technique of demand forecasting. This approach is applied by small as well as large scale organisations. This technique involves two types of approaches i.e., ‘bottom-up approach’ and ‘top-down approach’. Under ‘bottom-up approach’, line managers send their departmental requirement of human resources to top management. Top of manages management ultimately forecasts the human resource requirement for the overall organisation on the basis of proposals of departmental heads. Under the ‘Top-down approach’, top management forecasts the human resource requirement for the entire organisation and various departments. This information is supplied to various departmental heads for their review and approval. However, a combination of both the approaches i.e. ‘Participative Approach’ should be applied for demand forecasting. Under this approach, top managements and departmental heads meet and decide about the future human resource requirement. So, the demand of human resources can be forecasted with unanimity under this approach.
(b) Work-Study Technique: This technique is also known as ‘work-load analysis’. This technique is suitable where the estimated work-load is easily measurable. Under this method, estimated total production and activities for a specific future period are predicted. This information is translated into number of man-hours required to produce per units taking into consideration the capability of the workforce. Past experience of the management can help in translating the work-loads into number of man-hours required. Thus, demand of human resources is forecasted on the basis of estimated total production and contribution of each employee in producing each unit items.
(c) Ratio-Trend Analysis: Demands for manpower/human resources is also estimated on the basis of the ratio of production level and number of workers available. This ratio will be used to estimate demand of human resources.
(d) Econometrics Model: These models are based on mathematical and statistical techniques for estimating future demand. Under these models relationship is established between the dependent variable to be predicted (e.g. manpower/human resources) and the independent variables (e.g. sales, total production, wotk-load, etc.). Using these models, estimated demand of human resources can be predicted.
(e) Delphi Technique: Delphi technique is also very important technique used for estimating demand of human resources. This is a technique takes into consideration human resources requirements given by a group of experts i.e. managers. The human resource experts collect the manpower needs, summarise the various responses and prepare a report. This process is continued until all experts agree on estimated human resources requirement.
(f) Other Techniques: The other techniques of human resources demand forecasting are:
(a) Following the techniques of demand forecasting of human resources used by other similar organisations.
(ii) Organisation-cum-succession-charts.
(iii) Estimation based on techniques of production.
(iv) Estimates based on historical records
(v) Statistical techniques e.g. co-relation end regression analysis.
(3) Forecasting Human Resource Supply: The demand forecasting helps in determining the number and type of personnel/human resources required in future. The next step in human resource planning is forecasting supply of human resources. The purpose of supply forecasting is to determine the size and quality of present and potential human resources available from within and outside the organisation to meet the future demand of human resources. Supply forecast is the estimate of the number and kind of potential personnel that could be available to the organisation.
The above figure illustrates that supply for the forecasting can be estimated based on the following:
(a) Present/Existing human resources: The first step in forecasting supply of human resources is to start with the present/existing human resources of the organization. Existing inventory of human resources refers to the present inventory of human resources department-wise, age-wise, sex-wise, marital-status wise, skill wise, experience wise, qualification wise, training wise and potential wise. Internal mobility of the employees as a result of transfer and promotion etc. should also be evaluated. So, present inventory of human resources is availability of talent in terms of skills, performance and potential.
(b) Potential additions of human resources: There may also be potential additions to the force of human resources. These are editions to human resources may be due to fresh retirement, selections, transfers and promotions of human resources in the various departments of the organisation.
(c) Potential losses of Human resources: In a running organisation, there may be potential losses of human resources. These potential doses of human resources may be due to deaths, retirements, resignations, retrenchment, discharge and promotions, transfers etc. There may also be losses of human resources due to absenteeism and labour turnover.
(4) Human Resource Programming or Estimating Net Human Resources Requirement: After estimating the future demand and supply of human resources, the next step is to ascertain the human resource gap between demand and supply. This gap has to be measured both in quantitative and qualitative terms. Human resource programming is also called estimating net human resources requirement. The net human resources requirement can be obtained by subtracting estimated supply of human resources from demand of human resources. It will help in determining number and kind of employees required in various departments and the entire organisation. On the basis of human resources programming surplus or shortage of human resources requirement can be determined.
(5) Implementation of HR Plan: The next step after determining net human resources requirement is implementation of human resources plans. Human resources programming indicates the shortage or surplus of availability of human resources. If HR programming indicates that there will be shortage of human resources, then the decision to adjust separate the surplus human resources will have to be implemented. The excess human resources in one department can be adjusted in other department or given some other job after training or retrenched. However, if there will be shortage of human resources, then plan for recruitment, selection and placement has to implemented.
(6) Control and Appraisal of Human Resource Plan: The final step of human resource planning is the control and review mechanism. Finally, the organisation should assess their human resource planning efforts. It should be assessed to determine how far it has helped in achieving organisational objectives. If human resource planning has not worked effectively there is need for either reviewing the human resource plan or modifying the organisational plan.
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