Human Resource Planning

1. Chapter-04
Human Resource Planning
Prepared By:
Jannatun Nahar
Reg. No: 06114
&
Md. Nahid Mahmud Sakib
Reg. No: 06159

2. Agenda
• Defining HRP
• Activities required for HRP
• Responsibilities of the HR department
• Steps for HRP
• Objectives of HRP
• Manpower Demand Forecasting
• Analysis of performance
• Analysis of productivity
• Macro and Micro Human Resource Planning
• Labor Economics

3. Definition of Human Resource
Planning/Manpower Planning
Human resource or manpower is a primary resource without which other resources,
physical and financial, cannot be put into use.
Human resource planning is a process that identifies current and future human
resources needs for an organization to achieve its goals.
Manpower planning, an organization strives to have the right number and the right
kinds of people at the right places at the right time.

4. Activities required for human resource planning
Manpower planning consists of a series of activities, which can be listed as follows:
Forecasting future manpower requirements.
Preparing an inventory of present manpower.
Anticipating problems of manpower.
Meeting manpower requirements.

5. Responsibilities of the HR department
HR department, as an internal agency , plays a crucial role in manpower planning. Its
responsibilities in regard to manpower planning may be summed up as follows:
To put pressure on the operating management to plan and establish objectives.
It has to collect data in total organization terms and to ensure that manpower planning
is carried out.
It has to measure and monitor performance against the plan and provide feedback to
the top management.
It has to carry out research for effective manpower and organizational planning.

6. Steps for HRP/Manpower Planning
Manpower planning should proceed a number of steps. These are-
1. Job Analysis
2. Job Description and Job Specification
3. Developing work rules
4. Application of industrial engineering techniques
5. Other factors(Layout, Statutory Requirements, Shifts , Leave Reserve

7. Objectives of Human Resource Planning
Objectives of manpower planning are to –
Achieve efficiency of work in all spheres of the corporate body,
Ensure cost minimization,
Eliminate all types of wastages including waste of time
Maintain required levels of skills and competency , matching present and future
needs of the organization .

8. Manpower Demand Forecasting
Manpower demand forecasting is influenced primarily by two important factors, i. e.,
volume of output and the level of productivity. Manpower requirement may change
due to change in output volume or mix, which calls for analysis of performance.
Similarly, as the level of productivity alters over time, it also affects manpower
requirements. This calls for analysis of productivity.

9. Analysis of Performance
To derive the manpower demand, it is necessary to estimate the manpower
requirements in relation to the workload. To start with, each unit of manpower
required for different categories of job to accomplish the job in its entirety, are
determined. After such determination the total workload is related with the
manpower units of different categories and then finally the total requirement of
manpower of different categories is determined. Such analysis, therefore,. calls for
analysis of performance either through direct or indirect methods.
Direct analysis is to review past performance to derive a ratio between two variables
(workload and manpower of certain category).

10. Analysis of Productivity
Productivity has two major components, technological change and manpower
utilization. As technological change requires huge capital investment, organizations
look for better manpower utilization to achieve increased productivity. With better
human relations, productivity can be increased. Again rates of productivity
substantially vary the level of performance.

11. Macro and Micro Human Resource Planning
At the aggregative or macro level, HRP is influenced by general environmental
factors like, employment unemployment situation, demographic changes, legal
control and institutional policies, policies on globalization opening of markets, etc.
At organizational micro-level, HRP is more influenced by technology changes,
organizational restructuring, skill and competency gap, strategic objectives, trade
unions pressure, lead time for manpower procurement.
Macro level issues are exogenous, i.e., uncontrollable, while micro level issues are
endogenous and therefore, controllable by an organisation.

12. HRP at Macro Level
Development of human resources is one of the most important objectives of any
country for long term economic growth.
Following are the major issues before our Government to develop human resources
at the national level:
i. Population Planning and Control
ii. Literacy and Education
iii. Health and Medical Care
iv. Housing

13. Macro level Manpower Planning Models
and Technique
Some of the well known models and techniques are
The Manpower Requirement Approach (MRA)
This is the dominant model of manpower planning, (according to Youdi, 1985). The
three major steps in this model are: (a) assessing the demand for manpower (b)
assessing the supply of manpower and (c) balancing the supply and demand.

14. Rate of Return Approach (RRA)
RRA or cost-benefit analysis of human capital is applied to decide the aggregate
investment requirement for different skill development. Cost and earnings of an
individual over his productive life cycle is first computed and then the discounted
value is estimated to assess the rate of return.

15. The MACBETH Model
MACBETH model is a recursive simulation model of the labour market and the
evolution of occupational mismatches. This model is robust to data inconsistencies but
straightforward for quick application.
Labour Market Signaling
Labour market signaling advocates guiding of schooling and training decisions is based
the need for wage and employment trends. Thus, this approach evaluates the functioning
of the labour markets, estimating upward or downward pressure on the economic
returns to investment in specific skills.

16. Labour Economics
Labour Economics studies the demand supply for the important factor of
production, i.e., human beings. Matshall and Smith are the two pioneering
economist who first recognized that the study of market for labour is not possible
without understanding the social relations of production, long-term contractual
agreement, problems of motivation, institutions like unions and internal labour
market, etc.