HRM

1. MODULE-2

2. Module Outcomes
Understand the
• Meaning and definition of HRP.
• Features and importance of HRP.
• Process of HRP.
• Factors affecting HRP.
• Guidelines for effective HRP.

3. “if you wish to plan for a year, sow seeds
if you wish to plan for ten years, plant
trees
if you wish to plan for a life time,
develop men”.

4. • Human resource planning is a process that identifies current and
future human resources needs for an organization to achieve its
goals.
• Human resource planning should serve as a link between human
resource management and the overall strategic plan of an
organization.
• It ensures the right type of people, in the right number, at the right
time and place, who are trained and motivated to do the right kind
of work at the right time.
• It is always based on forecasting and predicting future.

5. Meaning
• Human Resource Planning (HRP) is the process of
forecasting the future human resource requirements
of the organization and determining as to how the
existing human resource capacity of the organization
can be utilized to fulfill these requirements.
• HR is an important corporate asset and overall performance
of companies depends upon the way it is put to use.

6. Definition
• According to E.W. Vetter, human resource planning is “the process by which a
management determines how an organisation should make from its current
manpower position to its desired manpower position.
• According to Jeisler, "Manpower planning is the process including forecasting,
developing and controlling— by which a firm ensures, it has the right number of
people and the right kind of people and at the right places at the right time
doing things for which they are economically most useful“
• According to Stainer, “the strategy for the acquisition,utilisation,improvement
and preservation of an organisation’s human resources. It is aimed at co-
ordinating the requirement for and the availability of different types of
employees”.
• According to Russ C.F, “man power planning is the process of getting the right
number of qualified people into the right job at right time”.

7. FEATURES OF HRP
• Incorporate the human resource requirement both in number
and kind.
• Maintains economy in utilisation of human resources.
• Presents an inventory of the existing manpower.
• Flexible – suits to the changing needs of an organisation.
• Projecting future demand.
• Continuous process.
• Concerned with acquisition, utilization, improvement and
retention of the organisation’s human resources.
• Two phase process- estimation of the demand and supply of
human resource to maintain equilibrium.

10. • It ensures adequate number of persons are selected and trained in
advance to fill future job vacancies of the organisation.
• It identifies the gaps in existing manpower in terms of their quantity
and talents.
• Helps to identify replacement of personnel –retirement, death,
resign, injury.
• Future personnel need- surplus or deficiency
• Coping with change- competition and technology changes
• It helps in avoiding skills deficiency.
• Helps to anticipate cost of human resources to prepare budget leads
to reduce cost through effective utilisation.

12. HUMAN RESOURCE PLANNING PROCESS
HR needs
Forecast
HR supply
Forecast
Corporate objectives
and policies
HR Programs
HRP Implementation
Control and evaluation
Of programs
Surplus
Restricted hiring
Reduced hours
VRS, layoff etc
Shortages
Recruitment
Source: Aswathappa, 2008, p.82
Environmental scanning

13. Human resources planning ensures the best fit between
employees and jobs while avoiding manpower shortages or
surpluses.
1. Objectives of Manpower planning: It should be integrated
with overall organizational objectives. HRP should be more
concerned with filling future vacancy with the right kind of
people.
2. Analyzing current manpower inventory: The main purpose
of HRP is to avoid understaffing or overstaffing. Manpower
inventory refers to the assessment of the present and
potential qualifications of present employees qualitatively
and quantitatively.

14. 3. Demand Forecasting:
• The process of estimating organization's quantity and
quality of future workforce.
• HR demand forecast must consider both internal (budget
constraints, production level, new products and services,
employment policy etc.) and external factors (local and
global competition, economy, political and legal conditions
etc.)
• It projects how business needs will affect HR needs using
qualitative and quantitative methods.

15. Factors affecting demand forecasting
• Employment trend
• Replacement needs: Due to death, resignation, and termination of
employees.
• Absenteeism: Is a situation when person fails to come for work, when
it is scheduled to work.
• Rate of absenteeism=
𝑀𝑎𝑛 𝑑𝑎𝑦𝑠 𝑙𝑜𝑠𝑡 𝑑𝑢𝑒 𝑡𝑜 𝑎𝑏𝑠𝑒𝑛𝑡𝑒𝑒𝑖𝑠𝑚
𝑀𝑎𝑛 𝑑𝑎𝑦𝑠 𝑤𝑜𝑟𝑘𝑒𝑑+𝑀𝑎𝑛 𝑑𝑎𝑦𝑠 𝑙𝑜𝑠𝑡
• Expansion and growth plans of the business.
• Work study.

16. Qualitative Techniques
a. Managerial Judgments
• Managers brainstorm and share their ideas and list them in
writing.
• As the ideas are presented, a master list of the ideas is compiled
so that everyone can refer back to them.
• In bottom up approach line managers submit their future
demands.
• In top down approach top management decides company's and
departments future workforce demand.

17. b. Delphi Technique
• More accurate and refined method.
• The experts go through various rounds of forecast
estimates but no face to face meeting of the experts takes
place as an intermediary is involved.
• Managers are asked to provide manpower requirement as
per pre-designed questionnaire to HR Dept.
• Each manager submits requirements.
• The responses are summarized and then send again to
managers for further processing.
• This process continues till a final conclusion on the forecast
is reached.
• Time consuming and difficult in administration.

18. Quantitative Techniques
• These techniques are based on the assumptions that the
future is an extrapolation from the past.
a. Trend Analysis
• Quick and easy way to forecast demand.
• Past ratio between sales volume and number of workers are
reviewed to determine future demands.

19. b. Workforce Study Techniques
• Calculation of amount of labour required by determining
length of operations and units of production.
Planned output for next year : 20,000 unit
Standard hours per unit : 5
Planned hours for the year (20000x5) : 100,000
Productive hours per man : 2,000
(allowing normal overtime, absenteeism and idle time)
Number of direct labour required : 50 (100000/2000)

20. New Venture Analysis
• Useful for new business ventures.
• Estimating HR needs based on analysis of existing
companies in same business.
• For example: Company starting coal mine operation
can predict future personnel needs by analyzing the
workforce demand of companies operating in industry.
10/10/12

21. 4. Labour Supply Forecast
• Whereas the labour demand forecast projects HR needs, the
labour supply forecast projects resource availability.
• Through this forecast one can come tom know the firms
current and projected competencies.
• In supply forecasting, availability of kind and number of
workers measured from two sources:
• Internal supply
• External supply

22. Estimation of Internal Supply of Computer Programmer
INTERNAL SUPPLY
internal supply =current personnel level – outflows + inflows
Sources of Inflows No. of
People
Current Personnel
level
Sources of
Outflows
No. of
People
Transfer 12 Resignations 13
Promotions 10 Discharges 2
Current Personnel
level 250
Demotions 4
Retirements 10
Promotions 13
Total inflow 22 Total outflow 42
Adopted from Aswathappa, 2008, p. 92
Internal supply:
250-42+22=230

23. EXTERNAL SUPPLY
External sources important for several reasons such as
1. New blood and new experience will be available.
2. Organization needs to replenish lost personnel.
3. Organization growth and diversification.

24. 5. Manpower gaps:
• Difference between demand forecast and supply forecast.
• It helps to identify surplus and shortage of HR in future.
• Gap may occur in terms of knowledge, skills, aptitude.
Gap is zero(supply=demand)
Gap is positive(supply>demand)
Gap is negative(supply<demand)
6. Action plan:
• Converting HR plan into actions.
• Plans to meet surplus manpower may be redeployed in other departments
and retrenchment in consultation with trade unions.
• People may be persuaded to quit voluntarily through golden handshake.
• Deficits can be met through recruitment, selection, transfer, promotion etc

25. HR PLAN IMPLEMENTATION
Strategies for Managing Shortages Strategies for Managing Surplus
Recruitment of new employees Freeze hiring
Offer incentive to postpone retirement Don not replace leaving staff
Rehire retiree/part time staff Reduce work hours
Attempt to reduce turnover Leave of absence
Work current staff overtime Across the board cut in pays
Subcontract work layoffs
Hire temporary employees Reduce outsource work
Redesign jobs (BPR) Switch to variable pay plan
Strategic HR Initiatives
Adopted from Aswathappa, 2008, p. 95

26. 7. Appraisal of manpower planning (feedback)
Training and Development
• Training is not only for new comer but also to the existing
employees to update skills and knowledge.
• Identification of trainers for conducting development program.
• Frequency of training and development and budget allocation for
such program.
• Effectiveness of man power planning process is to be evaluated and
comparison has to be made between HRP with its actual
implementation to ensure the availability of employees for different
jobs.

28. External factors:
Government policies: Regulatory frame work of the country having influence on HRP.
policies of the government like labour policy, industrial relation policy, policy towards
reserving certain jobs for different communities and law of the soil etc affect the HRP.
 Economic development: an economy with high GDP growth rate, a huge growing
market creates more job opportunities leads to increase in production and sales and
more employment opportunities.
Business environment:
Level of technology: it determine the kind of human resource required.
International factors: demand for resources and supply of resources in various
countries. Availability of outsourcing facilities with required skills and knowledge of
people reduces the dependency on HRP.
Information technology: new technology brings new skills requirements, so
companies need to be aware of proficiencies and training needs. Technology changes
very fast and companies plan according to the requirements. Initiatives on supply
chain management, enterprise resource planning, computer aided design etc have
influenced the quality and quantity of manpower required in the organisation.

29. Internal factors:
Company policies and strategies: company policies and strategies relating to
expansion, diversification, alliances determines the HR demand in terms of
quality and quantity.
Human resource policies: policies of the company regarding quality of human
resource, compensation level, quality of work life influence HR plan.
Formal and informal groups:
Job analysis: consist of job description and job specification determines the type
of human resource required.
Time horizon: short term and long term forecast have to be considered and if the
company having stable competitive environment can plan for long run and
unstable competitive environment can plan for short term plans.
Type and quality of forecasting information(HIRS): any planning process needs
qualitative and accurate information. This is related to HR plan, strategy,
organisational and specific information.

30. Company’s production operations policy: policy relating to how much to
produce and how much to buy from outside to prepare final output influence
the number and kind of people required.
Organisational changes and organisational culture: changes takes place with
in organisation from time to time that is the company diversify into new
product or closedown in some area etc appointing or removing people will
change according to situation. HRP needs are to be taken in to account in
relating to flexibility in terms of working hours, dress code etc.
Availability of funds: planning must occur with in the budget allowed to
maximise resource usage.
Employees turnover: directly affects a firms labour demand, include the
voluntary and involuntary termination of employees with in an organisation.
Employees movements: company can use promotions, transfer, demotions.

31. Guidelines for Effective Human Resource
Planning

32. Barriers to effective Human resource Planning
1. Improper Linkage between HRP and Corporate
Strategy
2. Inadequate Appreciation of HRP
3. Rigidity in Attitudes
4. Environmental Uncertainty
5. Inappropriate HR Information System
6. Lack of coordination with other Functions