11. Nature of Human Resource Management
i. It is comprehensive, as it covers all types of people at all levels in the organization.
ii. It is people oriented, as it is concerned with employees as individuals as well as groups.
iii. It is action oriented, as it stresses the solution of personal problems to achieve both organizational
goals and employees’ personal goals.
iv. It is individual oriented, to provide services and programmes to facilitate employee satisfaction
and growth.
v. It is development oriented, as it is concerned with developing potential of employees so that they
get maximum satisfaction from their work and give their best efforts to the organisation.
vi . It is pervasive, as it is inherent in all the organisations and at all the levels.
12. vii. It is a continuous function.
viii. It is future oriented.
ix. It is a challenging function, due to the dynamic nature of people.
x. It is a science as well as an art, as it includes both principles and techniques, as well as handling the people.
xi. It is a staff function, as it is advisory in nature.
xii. It is interdisciplinary, as it involves application of knowledge drawn from several disciplines like sociology, psychology
economics, etc.
xiii. It is a coordinative function.
xiv. It is a strategic function.
xv. It is focus on business values.
29. Human Resource Planning
Human resource planning deals with anticipating staff requirements, taking into account current
and likely future demand for skills, and the probable availability of individuals with such skills. It
is the process by which a firm determines how a management should move from its current
manpower position to its desired manpower position. Through planning, management strives to
have the right number and right kind of people at the right place and at the right time to do
things which result in both the organisation and individuals receiving the maximum long range
benefits.
30. “Human resource planning is the process by which management ensures
that it has the right number and kinds of people at the right places, and
at the right time, who are capable of effectively and efficiently
completing those tasks that will help the organization to achieve its
overall objectives.”
Robbins and Coulter
31. Features of HRP
i. It is a part of strategic management planning
ii. It is used to create a balance between demand and supply of human resources
iii. A continuous process
iv. A goal-oriented process
v. It provides a basis for recruitment and selection process
vi. It is like a double edged weapon providing advantages to both employee and organisation
vii. It provides an organisation the right employee at the right time and at the right cost
viii. It concentrates on both present and future human needs
ix. It identifies and fulfils the surplus and shortage gap
x. It requires the quantitative methods for forecasting
xi. It coordinates individual’s goals with organisational goals
32. xii. It is a result oriented activity
xiii. A pervasive activity
xiv. Influence other corporate plans
xv. Observe environmental changes
xvi. A subsystem in the total organisational planning
33. Objectives of Human Resource Planning
i. To ensure optimum use of existing human resources.
ii. To forecast future requirements for human resources.
iii. To provide control measures to ensure that necessary human resources are
available as and when required.
iv. To link human resource planning with organisational planning.
v. To anticipate the impact of technology on jobs and human resources.
vi. To determine levels of recruitment and training.
34. vii. To estimate the cost of human resources and internal needs of employees.
viii. To provide a basis for management development programmes.
ix. To assess the surplus and shortage of human resources.
x. To facilitate productivity bargaining.
xi. To meet the needs of expansion and diversification programmes.
xii. To relate future human resources to future enterprise needs so as to
maximise the future return on investment on human resources.
35. Need or Reasons for Human Resource Planning
i. Shortage of skills
ii. Technological changes
iii. Organizational changes (organizational size, organizational environment, activities and structure etc.)
iv. Demographic changes (workforce diversity in terms of age, gender, technical skills, social background etc.)
v. Specialist / technical skills
vi. Government influences
vii. Legislative controls (lay offs, working hours, casual and contract labour, closure strikes etc.).
viii. Pressure groups (unions, politicians etc. create pressure for internal recruitment)
ix. Systems concept (new ways of handling things)
x. Cost of human resources
36. Process of HRP
1.
Corporate Analysis
• Objectives and Strategies
• Company Organizational Plans
• Market forecasts and Budgets
• Financial plans
• Production Targets
2.
Demand Forecast
• Numbers
• Job Categories
• Skill requirements
3.
Supply Forecast
• Manpower Inventory
• Losses and Additions
• External Supply
4.
Manpower Gaps
• Surplus of Numbers and
Skills
• Shortages
5.
Manpower Plans
• Recruitment and selection
• Training and Development
• Retrenchment
• Retention or Internal Mobility
•Productivity
6.
Monitoring and Control
Modify
organizational
Plans
37. Analysing Organizational Objectives: The objective to be achieved in future in
various fields such as production, marketing, finance, expansion and sales
gives the idea about the work to be done in the organization.
Inventory of Present Human Resources: From the updated human resource
information storage system, the current number of employees, their
capacity, performance and potential can be analysed. To fill the various
job requirements, the internal sources (i.e., employees from within the
organization) and external sources (i.e., candidates from various
placement agencies) can be estimated.
Forecasting Demand and Supply of Human Resource: The human resources
required at different positions according to their job profile are to be
estimated. The available internal and external sources to fulfill those
requirements are also measured. There should be proper matching of job
description and job specification of one particular work, and the profile
of the person should be suitable to it.
38. Estimating Manpower Gaps: Comparison of human resource demand and human
resource supply will provide with the surplus or deficit of human resource.
Deficit represents the number of people to be employed, whereas surplus
represents termination. Extensive use of proper training and development
programme can be done to upgrade the skills of employees.
Formulating the Human Resource Action Plan: The human resource plan depends on
whether there is deficit or surplus in the organization. Accordingly, the plan
may be finalized either for new recruitment, training, interdepartmental
transfer in case of deficit of termination, or voluntary retirement schemes and
redeployment in case of surplus.
Monitoring, Control and Feedback: It mainly involves implementation of the human
resource action plan. Human resources are allocated according to the
requirements, and inventories are updated over a period. The plan is monitored
strictly to identify the deficiencies and remove it. Comparison between the
human resource plan and its actual implementation is done to ensure the
appropriate action and the availability of the required number of employees for
various jobs.
39. Quantitative and Qualitative aspect of Human
Resource Planning
Quantitative aspect of human resource planning involves demand forecasting and supply
forecasting.
1. Demand forecasting: demand forecasting means estimating the future requirement of the employees. It can
be done on the basis of estimating sales, number of proposals company get or on the basis of estimating the
number of orders the company has.
The main three methods of demand forecasting are:
a) Statistical techniques: it is one of the reliable source for long range forecasting of employees. The important
tools for forecasting are:
i) Regression analysis: it is used to estimate the future requirement of the employees on the basis of sales,
output, etc., when dependent and independent variable are related to each other.
40. ii) Burkes- smith model: this model uses the equation
En = [ (Lagg+G)1/X]/Y
where En
is the estimated demand of employees in n planning period
Lagg is overall turnover of business
G is total growth of business
X is the average productivity improvement
Y is conversion figure relating today’s overall activity to personnel required.
iii) Ratio and trend analysis: in this method the ratio is calculated on the basis of past data.
Future ratios are calculated on the basis of changes expected in the human resources.
41. b) Managerial judgment: in small companies generally this method is used where the
managers sit down, think about the future work load and decide how many people they need.
It can be done on bottom up basis where managers give the proposal to the top management
and can be done on the top down basis where top management make the forecast and give it
to the departmental managers for review.
c) Work load forecasting: it means how long the operation would take and how much labor is
required.
For example annual production of the company is 400000 units. The standard time required to
complete the task is 2 hours. Past records show that workers contribute 4000 hours per year.
So planned man-hours for year=400000* 2 = 800000 hours.
Number of workers required= 800000/ 4000= 200
So 200 workers are needed to meet the target of 400000 units
But due to absenteeism and labor turnover 20% margin is required which means 200*20%=
40. 200+40=240 workers are required in a year.
42. 2. Supply forecasting: Supply forecasting is another quantitative aspect of human
resource planning. It is concerned with estimating the supply of manpower by
analyzing the current resources and future availability. For this purpose the external
supply and internal supply of manpower must be considered by human resource
planner.
a) Simulation technique: it means alternative flows which are examined for effects
on future manpower supplies.
b) Renewal analysis: this technique measures future flow and supplies of manpower
by calculating vacancies created by the organization.
c) Goal programming: here the planner tends to optimize the goal.
d) Markov analysis: in this method the likelihood of a person in a particular job is
estimated.
Thus, the above discussed are the Quantitative aspect of human resource planning.
43. Quantitative aspects of human resource planning:
i) The Economic Considerations relating to the determination of economic situation and in the
light of that future sales and production estimates are made. These estimates affect
manpower requirements.
(ii) Expansion programs in the future also affect future manpower requirements.
(iii) The availability of existing manpower resources of different kinds should be kept in mind.
This is helpful in forecasting future manpower requirements.
(iv) Rate of labor turnover is an important instrument with the help of which estimates with
regard to future manpower requirements can be made. It provides required information
statistically i.e. how many employees have left and joined the organization during a specific
period of time. Labour turnover rates are calculated by applying the separation method,
replacement approach, and flux method. In the light of labor turnover rate future manpower
requirements can be estimated,
44. (v) Resignations and retirements, promotion, demotion, separation, transfers, dismissals and lay off, etc. are
other important considerations to be borne in mind before initiating the process of human resources planning.
(vi) Changes in management thinking, philosophy, and plans, etc. also affect manpower plans. Technological
changes and diversifications etc. bring about changes in the skills and performance of workers.
45. Qualitative aspect of human resource planning
(i) Work-load analysis. It is a technical aspect of manpower planning. It includes
and studies auditing of human resources, study of work standards and demand
analysis etc.
(ii) Auditing of Employees Involves Preparation of Skill Inventory. Skill inventory
covers data regarding skill and work priorities pertaining to work of different
categories of workers. Big organisations prepare organisational charts and other
employee information cards for this purpose.
(iii) Study of work standards is necessary for the quality of workers required. It is
indispensable for preparing job analysis which includes job specifications and job
descriptions.
