Human resource planning is the process of deciding what positions the firm will have to fill and have to fill them. Human resource planning involves the collection and use of personnel data, so that it can be used as input into the strategic HR function.
According to David A. Decenzo, “Human resource planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”
To strengthen the human resource planning area the beginning must take place at the educational institutional level, especially, in MBA programs. Students must be given inputs as to the importance of human resource planning and how to go about planning for human resources. The importance of it must be told by relating it to other human resource functions. If they understand how human resource planning forms the basis for sound human resource management, then they will be able to see the relationship.
Learn about:- 1. Meaning of Human Resource Planning 2. Need for Human Resource Planning 3. Nature and Feature 4. Importance 5. Key Elements and Requirements 6. Forms 7. Responsibility 8. Strengthening 9. Process 10. Strategies 11. System and Its Interrelated Activities 12. Relationship between the Budget and HR Planning 13. Advantages 14. Limitations 15. Effective HRP.
Human Resource Planning: Meaning, Need, Importance, Forms, Process, Advantages, Limitations and Responsibility
- Meaning of Human Resource Planning
- Need for Human Resource Planning
- Nature and Feature of Human Resource Planning
- Importance of Human Resource Planning
- Key Elements and Requirements of Human Resource Planning
- Forms of Human Resource Planning
- Responsibility for Human Resource Planning
- Strengthening Human Resource Planning
- Process of Human Resource Planning
- Human Resource Planning Strategies
- Human Resource Planning System Its Interrelated Activities
- Relationship between the Budget and HR Planning
- Advantages of Human Resource Planning
- Limitations of Human Resource Planning
- Effective Human Resource Planning
Human Resource Planning – Meaning
Human Resource Planning (HRP) and Manpower Planning are synonymous. Human Resource Planning have been introduced in 1676, when Samuel Pepys became concerned with the provision of careers for officers in the Royal Navy, but in the present scenario the human resource planning is based on more broad base. Human resource planning is the process of ensuring the right number and right kind of persons, at the right job, at the right time so that an organization can achieve its objectives.
Human resource planning involves the collection and use of personnel data, so that it can be used as input into the strategic HR function. Poor data coming in means poor conclusions. The problem is that there are huge amounts of data one can use in the process.
Human resource planning is the process of deciding what positions the firm will have to fill and have to fill them. According to David A. Decenzo, “Human resource planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”
Organizations plan for human resources as they want suitable employees at the work positions. If qualifications of the work force do not match the job specifications, the organizational objectives cannot be achieved.
In essence HR planners initially seek to estimate their current and future employment needs because it is a forward looking function of an organization. Human Resources are considered the most valuable, most volatile and potentially unpredictable resource of an organization.
If an organization fails to place direct human resources in the right areas of the business, at the right time and at the right cost, serious inefficiencies are likely to arise creating considerable operational difficulties and likely business failure.
The opinion of Dag Hammarskjold regarding human is that “man is the key to our problems not money; competent people can work miracles even with small resources and draw wealth out of barren land”. Therefore an organisation’s performance is directly proportional to the quality and quantity of its human resources. Hence, planning of human resources is an important and essential function of management.
Some important views on HRP are as follows:
“An integrated approach to performing the planning aspects of the personnel function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organizational objectives and satisfy the individual needs and goals of organizational members”. – Leon C. Megginson
“Strategy for the acquisition, utilization, improvement, and preservation of an enterprise’s human resources. It is a way of dealing with people in a dynamic situation. It relates to establishing job specifications or the qualitative requirements of jobs determining the number of personnel required and developing sources of manpower”. – G. Stainer
“The process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization”. – Bruce P. Coleinn
HRP leads to the maximum utilization of human resources, reduces employee turnover and absenteeism, and improves productivity.
Human Resource Planning – Need
HRP plays a crucial role in the future success or failure of an organization. It is a sub-system in the total organizational planning.
HRP is attracting the attention of the management in recent years due to following reasons:
1. Limit the size of the organization and avoid surplus personnel.
2. Frequent employee’s turnover which is unavoidable activity.
3. The change of the speed of technology and new techniques of production.
4. Irregular age distribution of employees of the organization.
5. The expansion programmes or growth of the organization.
6. The lead time for obtaining the required personnel in the organization.
7. The control labour cost as well as the total budget of the organisation.
8. The initiating systematic and scientific recruitment process in the organization.
Human Resource Planning – Nature and Features
The following points of nature of human resource planning are as follows:
(i) Human resource planning aims at ascertaining the human resource needs of the organisation both in number and kind.
(ii) It presents an inventory of existing human resource of the organisation. An analysis of the inventory of human resource helps in ascertaining the status of the available personnel and to discover untapped talent presently available with the organisation.
(iii) It helps in determining the shortfall (or surplus) of workforce by comparing the total human resource needs with the present supply of human resource. It also helps in projecting future human resource needs.
(iv) It is concerned with the initiation of various programs depending upon the demand and supply of human resources. If the future needs exceed presently available talent, this gap becomes the basis for a program of employment and training. And, if the presently available talent exceeds the future needs, this difference may become the basis for a program of retirements, discharge, etc.
(v) Effective human resource planning is the basis acquisition, utilisation, improvement, and preservation of the organisation’s human resources.
Features of Human Resource Planning:
(1) HRP is a forward looking function – It tries to estimate in advance the human resource required considering changes expected in demand, supply and other factors.
(2) It refers the overall corporate plan – Any action of recruitment, section, lay off etc. taken up by the human resource planning clearly speaks of the mind-set of the top management.
(3) It is dynamic – The human resource plan is subject to changes every day to suit the needs of the organization at any point of time.
(4) Human resource planning has to work on foresight and past experiences – It makes a plan depending upon future vision. If the forecasting is perfect the plan is successful otherwise it’s a failure. To combat the contingencies, the HRM may have contingent plans.
Human Resource Planning – Importance of Human Resource Planning to the Organization
Human resource planning is an important and highly specialized activity. If this activity is taken up professionally by the human resource team it can offer numerous benefits to the organization.
(1) Provides organization with competent Personnel – It prepares the workforce for all challenges by providing training and development programs for work force. Organization can have a reservoir of talented employees at any point of time.
(2) Enables organization to optimally use manpower – It serves the organization by designing the programs which will use the employees skills and talents in the best possible manner, populates the position in the organization with suitable manpower. Thus, HR planning leads to efficiency in organization.
(3) Human resource planning enables a company to plan its expansion and diversification at the right time. As and when there is a need for more manpower, the HRM starts evaluating the existing employees for new positions and recruits from outside at the appropriate time. These facilities expansion of organization.
(4) Human resource planning contributes towards management succession and development by training employees for higher positions. Thus, HR plans the career development of employees in the company.
(5) It helps in planning physical facilities of the organization like staff quarters, canteen, recreation centres, schools and hospitals for employee’s families. These facilities motivate employees to a great extent.
Human Resource Planning – 3 Key Elements and Requirements
A good human resource plan shall be derived from the strategic plan of organization.
There are three key elements of human resource planning:
i. Forecasting labor demand.
ii. Forecasting labor supply (both external and internal).
iii. Analyzing the ‘gap’ and developing HRP programs to fill these gaps.
Requirements of Human Resources Planning:
Generally, Human Resource plan structure has provided personnel demand forecast and supply requisition change overtime with change in technology, job description, cost of considerations, etc. Thus, the plan must be carrying out timely adjustments. Manpower planning is a continuous process and requires reviewing from time to time. People, jobs, time and money are the four basic ingredients of the planning process.
Strategic management decisions and environmental uncertainties, these two factors determine the length of time for which the plan has been undertaken, its limits, information available to policy planners and the nature of jobs to be filled. On the basis of empirical studies conducted over the period of time, the measures for effective
Human resource (manpower) plan, generally examines the output of the sector, which come in after ten or twenty years. Human resource is applied to the absolute increase in production to arrive at a forecast of the extra labour requirement. Therefore, the main objective of the human resource management is for only increase of production in the organisation.
Human Resource Planning – 3 Important Forms: Short Term, Medium-Term and Long Term Human Resource Planning
Generally three forms of Human resource planning are adopted and they are as follows:
Form # 1. Short Term Human Resource Planning:
It is applied for a short term and its period is one or two years. The main gain of this planning is to match the present employees to their present job. The aim is also to fill up current vacancies with available employees. This problem commonly arises when the ability of the employees is either less or more than the requirement.
Change of job is the first step in which the particular job is given to some other employee and suited job is provided to the person from whom it has been taken. If the ability of the employee is above the norms required, extra supervisory charges are handed over to him. Short term planning also includes the temporary arrangement due to death, resignation or transfer of an employee.
Form # 2. Medium-Term Human Resource Planning:
This planning is simply an extension of short term planning and the period may extend up to five years. Methods adopted under this planning are the same as mentioned above.
Form # 3. Long Term Human Resource Planning:
This Planning is adopted when the period is more than five years and it is almost a future manpower planning. In this planning, through study of the present job distribution and future need of employment due to extension or vacancy arising out of requirements, promotions, transfers and resignation cases is under taken. It also deals with matching people with future requirement. It includes proper training and filling the gaps. A gap-sheet is prepared so that shortcoming may be removed. A model of manpower planning is prepared for proper guidance.
While estimating manpower requirement, the present position of the organisation is always kept in mind. Coordination and integration is not ignored. Modern machines and computerisation have deeply affected the manpower requirement. Direct sale from production center has also diminished the labour requirement. Now determination of sale forecasting and determination of scheduled production are also included in estimation. It is a regular specialised process in many organisations.
Human Resource Planning – Responsibility Stated by Geisler
The HRP is the responsibility of the HRM department. The responsibility for manpower aspects of various divisions is on their respective heads. The plans are prepared by HRM department is consultation with other corporate heads.
The responsibilities of HRM department in regard to HR planning have been stated by Geisler in the following manner:
i. To assist and counsel the operating managers to plan and establish objectives.
ii. To collect and summarise manpower data in total organizational terms and to ensure consistency with long-range objectives and other elements of the total business plan.
iii. To monitor and measure performance against plan and keep the top management informed about it, and
iv. To provide proper research base for effective manpower and organizational planning.
The organization must plan their short-term, medium term, and long-term manpower needs. It can increase the prospect of an organization managing its resources better and coping more effectively with dynamic situations. These needs periodical reviews also.
Human Resource Planning – How to Strengthen Human Resource Planning?
After all these years of hearing about human resource planning, put into practice in some innovative multinational companies and being taught in human resource courses at the MBA level programs, still it is lagging in practice. Human resource planning helps to get all other human practices organized from their initial stages.
We have already examined as to how it helps to recognize future needs and fulfil those needs in a more systematic manner for the short and long range needs. Price states that in determining or planning the human resource requirements, a company may adopt hard (head count) or soft (skills and aptitude) approaches. At times, the companies simply ignore or not aware of the importance of human resource planning.
To strengthen the human resource planning area the beginning must take place at the educational institutional level, especially, in MBA programs. Students must be given inputs as to the importance of human resource planning and how to go about planning for human resources. The importance of it must be told by relating it to other human resource functions. If they understand how human resource planning forms the basis for sound human resource management, then they will be able to see the relationship.
The human resource planning can be an important topic in the executive development programs and seminars at the corporate levels. The participants can be provided information on the practical aspects of human resource planning. Examples can be drawn from companies where such practices are in use.
In utilizing human resource planning or considering it as an important aspect of the company’s human resource management department, unions can be a stumbling block for the fear that such planning will either affect the job prospects or affect their wages and salaries. Their fear is that by using such techniques and methods, companies can manipulate the income level of employees.
Of course, if the employees can be taught about the use and benefits of having human resource plans, everyone will benefit as long as the system is not just used to justify the actions of management. Unless the companies have a good climate which fosters positive attitude in employee relations, it may not be that easy to impart a positive attitude towards the planning process.
The human resource planning should never be considered as anti-labor. The characteristics of human resource planning are highlighted at the end. The methods of strengthening the practice of human resource planning at the academic and practitioner levels was brought out. The human resource planning must be recognized as an on-going mechanism or process so that the internal and external environments can be managed on a sustained basis.
Just like any other system, the human resource planning system must also be evaluated to assess its success. If one can put cost figure to replacement costs, it can be quite high. The cost includes finding replacements, providing orientation, training and development and opportunity costs of getting the recruits to speed.
Some companies prepare replacement charts when it comes to human resource planning or succession planning which list current jobholders and identify possible or potential candidates for replacement, in case position openings are available.
In recent times, human resource planning is viewed as the way management comes to grasp tougher human resource problems confronting an organization. The tools, methods, and the processes used depend on the problems being confronted by management. The key to having effective human resource planning is the analysis of the factors indicating change which affects survival and growth.
There is a lot of meaning in saying human resource planning leads to better results and success. We can easily distinguish between successful companies and the ones which are not on the basis of how human planning is put to use in those companies. Without good human resource plans, events are left to chance.
Planning helps us to explore alternative courses of action. Remember the saying, “If you don t use your head, you are going to use your feet.” We have to do errands because we did not think ahead.
Even with all the sophisticated techniques and methods, management decision is still needed. These techniques do not replace managers or managerial intuitions and judgment. Forecasts have not been taken seriously by some top managers. This may be due to the fact that the forecasts have been wrong in the past. Reliable information is more crucial to the successful use of forecasting techniques.
Human Resource Planning – 4 Step Process of HRP: Forecasting Demand and Supply for Human Resources, Developing HR Plans and Evaluation of HRP
Institute of Personnel Management, 1988, attempted to establish the use of ‘systematic human resource planning’, defined as a long-term strategic planning of human resources concerned more with the development of skill, quality and cultural change than statistical numerical fore casting, succession planning and hierarchical structures.
This survey was to assess the extent to which human resource planning was being practiced by the organizations. The results indicated that only 60% claimed that they were now practising human resource planning in terms of the identification of future training, retraining and development needs.
According to Cowling and Walters 1990, the modern style of human resource planning places considerable emphasis on a proactive strategy which anticipates and responds to changes in the environment linked to a corporate strategy designed to enhance competitive advantage. The process of HRP is one of the most complex and continuing managerial functions generally followed in a large organization.
The HRP process has the following four steps:
Step # I. Forecasting Demand for Human Resources:
It is a starting point for forecasting demand of human resource. The analysis of the organizational objectives and goals helps in forecasting the demand for the human resources in the organization. Under this step two main activities are involved.
1. External Challenges:
The key external challenges are globalization, nature of competition, technology and technological changes, economical, social, political and legal conditions affect the HR forecasting in the organization. Technology is a double edged weapon and would be very difficult to predict its impact on HR plans.
In a similar way, the competition is beneficial to customers but suicidal for organizations operating on very narrow margins. In addition, it is generally argued that industry and business are increasingly demanding more skilled worker. The demand for Engineering and Management graduates are increasing in recent times as compared to simple graduates. Therefore, HRP forecasting under such situations becomes complicated.
2. Demand Forecasting Techniques:
No forecast can be hundred percent correct, however scientifically designed the forecasting techniques are in view of the reason that the future is uncertain.
However, the most widely used technique for forecasting manpower demand are:
(i) Jury of Executive Judgment Method:
In tins method, the experts in a particular field are requested to give their estimated manpower requirements for future and then aggregated for the whole organization. Generally small or medium size organization adopt this method.
This method is also called the Hunch Method since the experts give their opinions after weighing pros and cons of all factors affecting the demand and arrive at an estimate, which is nothing but a hunch; the hunch of course in backed by knowledge and experience of the experts. This is an expeditious method for developing a demand forecast but the reliability of this technique is questionable.
(ii) Delphi Method:
Named after the ancient Greek Oracle at the city of Delphi. This is a group decision by experts in which the individual experts act separately. The HR experts act as intermediaries and summarise the views of various experts and an attempt is made to arrive at consensus.
If the views of the experts differ significantly, then the individual experts are fed with the views of other experts in areas where there is distinct difference and they are asked to further analyze the problem and to revise their views in the light of views of the other experts in the group.
The process can be repeated till a near coincidence of views are achieved. This method seems to be more accurate and less expensive than the traditional face-to-face interaction and the experts are free to express their views.
(iii) Trend Analysis Method:
Under the trend analysis method, HR needs can be estimated by analysing the past trends and projecting future demand by extrapolating the trend. The basic assumption of trend analysis is that in future all the factors that were responsible for the past movements will be present and will exert influence in the same way as had been in the past.
The relationship is often expressed in the form of a mathematical formula.
Now the future additional requirements for the year 2006-07 are:
(a) Number of workers required = 200-150 = 50 workers
(b) Number of supervisors required = 8 – 6 = 2 supervisors
(iv) Work Study Method:
This method is useful where the volume of work can be quantified. The number of man hour required to produce each unit is carefully calculated then to calculate the number of persons required with reference to a planned output after giving due weight-age to absenteeism, rest, idle time, and ability of person. For example –
(a) Planned output for year 2006-07 = 50000 units
(b) Standard time required to produce one unit = 2 hours
(c) Total planned hours required to produced 50000 units = 50000 x 2 = 100000 hours
(d) Productive hours per person per year = 2000 hours
(e) Number of workers required = 10000/2000 = 50 workers
(f) If span of control in the unit is 10 per officer, then 5 officers are also required.
This method is particularly suitable for production line work and short-term estimates. A study of past trends may serve as a useful guide in this regard.
(v) Work Force Analysis Method:
Under this method, the average loss of manpower due to retirement, death, discharge, labour turnover and rate of absenteeism may be taken into account during process of demand forecasting of human resources.
Step # II. Forecasting Supply for Human Resources:
Forecast demand analysis provides the means of estimating how many and what kind of employees will be required. Management must determine if they will be able to secure employees with necessary skills and from what sources these individuals may be obtained. In general, the supply of employees may be met by obtaining people from within the organization or the management may decide to go outside the organization to meet its needs.
Therefore, every organization will have two major sources of supply of manpower:
1. Internal Supply:
Many of the workers that will be needed for future positions with the organization are already employed. The management knows all workers so that their skills and aspiration can easily be matched.
Management inventories and skills inventories are available to identify internal sources of supply of human resources may be discussed below –
(i) Management Inventories:
The management inventory information relates to managers contains detailed data regarding each officer. An inventory would likely include data such as –
Work history, strengths and weakness, personal data, promotions potential, and career goal etc.
(ii) Skill Inventories:
The skills inventory contains information regarding non-executive employees. Possible information that might be included in a skills inventory is –
Personal data, specific knowledge and skills, work experience, supervisory evaluations and career aspirations, etc.
A properly designed and updated skills inventory system helps an organization to readily identify employees and match forthcoming job openings with employees back grounds.
2. External Supply:
After working out internal availability, management will have to survey the external market. The rapid employment of new employees from open market can be an expensive and typically quite difficult. Therefore, it is relevant to prepare attractive employment conditions to ensure a steady flow of new applicants.
Forecasting can assist not only in identifying where the supply of employees may be located but also in predicting what type of individuals will likely succeed in the organization.
Step # III. Developing HR Plans:
After having decided the supply of human resources, the next step refers to the development and implementation of the human resource plan. The HR planner should have a thorough knowledge of the labour market and to be in close liaison with different sources and use them as when the need arises.
The HR plan contains the following activities- Recruitment, Training and Re-training, Productivity, Redeployment, and Retention.
Step # IV. Evaluation of HRP:
The responsibility of management to evaluate their HRP efforts to determine their effectiveness in helping to achieve organizational goals on one hand and on the other hand, to initiate any corrective action, if needed.
J.W. Walker may restrict the evaluation broadly to the following:
1. The extent to which HR planners are tuned into personnel problems and opportunities.
2. The quality of their working relationship with personnel and financial specialists and line managers who supply data and use human resources planning results.
3. The quality of communication among the parties involved.
4. The extent to which decision makers from line manager to top management are making use of human resources planning forecasts, plans and recommendations.
5. The perceived value of human resource planning among decision makers.
In nut shell, an obvious measure of planning effectiveness is how well human resource needs are anticipated and met.
Human Resource Planning – Top 9 Strategies Recommended by Stainer for HRP Managers
The objective of HRP is to maintain and improve the organisation’s ability to achieve its goal by developing strategies that will result in optimum contribution of human resources. For this purpose, Stainer recommends nine strategies for human resource planning managers.
1. Collect, maintain and interpret relevant information regarding human resources;
2. Report periodically manpower objectives, requirements, and existing employment and allied features;
3. Develop procedures and techniques to determine the requirements of different types of manpower over a period of time;
4. Develop measures for manpower utilization along with independent validation, if possible;
5. Employ suitable techniques leading to the effective allocation of work with a view to improving manpower utilisation;
6. Conduct research to determine factors hampering the contribution of the individual and groups to the organisation with a view to modifying or removing these handicaps;
7. Develop and employ methods of economic assessment of human resources, reflecting its features as an income generator and cost and accordingly improving the quality of decisions influencing the manpower;
8. Evaluate the procurement, promotion and retention of the effective human resources in the context of the forecast requirements of the organization; and
9. Analyse the dynamic process of recruitment, promotion and loss to the organization and control these processes with a view to encouraging maximum individual and group performance without involving excessive cost.
Stainer thinks that the strategies can be as many or even more than the number of objectives to be accomplished. It involves both the long term as well as short term decisions. HRP is the responsibility of both the Line and staff manager because it is an integral part of the process of setting and meeting corporate objectives. The line manager is responsible for estimating manpower requirements while the staff manager may simply furnish supplementary information such as – turnover rates, which many be incorporated in the ultimate estimations.
The staff manager is expected to report about manpower utilization in the present and past, and also present the overall forecasts of departmental managers. The HRP planner have to take several factors into account such as – changing characters of the business, the rate of retirement, variations in social and employment variables, changes in educational system, changes in job components, changes in the organizational structure and promotion system of the organisation.
HR planning system comprises several specific interrelated activities viz., Talent Inventory, HR Forecasting, Action Plans and Control and Evaluation.
It is a fundamental requirement of any HR planning system. It is an organized data base of the existing skills, abilities, career interests and experience of the employees.
Information included in the inventory are:
(i) Current position of the individual.
(ii) Previous position(s) in the present company.
(iii) Total work experience (present and previous companies).
(iv) Educational background which includes degrees, diplomas, licenses, certificates and etc.
(v) Language skills- Number of languages known.
(vi) International experience- Number of countries and duration of stay.
(vii) Training and Development programmes attended.
(viii) Leadership positions held and responsibilities.
(ix) Performance appraisal data, past and present.
(x) Disciplinary actions taken, if any, in the present and past positions.
(xi) Awards and recognitions.
Talent inventory helps in identifying candidates for promotion, management succession planning, assignment to special projects, transfer, training, compensation planning, career planning and etc.
The objective of HR forecasting is to estimate manpower requirements at some future time period. Forecasts are two types viz., manpower demand and manpower supply.
Demand depends on products/service demand, economics, technology, financial resources, absenteeism/turnover, Organizational growth, management philosophy, age distribution of workforce, terminations, retirements, and etc.
Techniques employed are quantitative as well as qualitative.
a. Quantitative Approaches:
These forecasts involve the use of statistical or mathematical techniques. The common technique is trend analysis, which forecasts employment requirements based on some organizational index.
Steps in trend analysis are:
(i) Selection of an appropriate business factor such as sales, which is the best available predictor of HR needs.
(ii) Plotting a historical trend of the business factor (e.g., Sales) in relation to the employees. The ratio of employees to the business factor will provide a labour productivity ratio (e.g., Sales/employee).
(iii) Computation of productivity ratio for at least the past five years.
(iv) Calculating manpower demand: dividing the business factor (e.g., Sales) by the productivity ratio.
(v) Projecting manpower demand to the target year.
Example- If the expected sales for 2014 is Rs.3880 Lakhs and the labour productivity (sales/employee) trend is 12.52, then the number of employees required for 2014 is 310 (i.e., 3880/12.52)
While trend analysis relies only on a single factor such as sales, advanced methods combine several factors such as interest rates, gross national product, disposable income and sales to predict manpower demand.
b. Qualitative Approaches:
In contrast to quantitative approaches, qualitative approaches are less statistical. They mostly depend on the interests, abilities and aspirations of individual employees with the present and future manpower needs of an organization. In this approach, HR managers, in both small and large organizations, rely on experts.
These are the opinions or judgments of supervisors, department managers, experts and others who know more about the HR need of the organization.
Originally developed as a method to facilitate group decision making, Delphi technique is being used in workforce forecasting. It attempts to decrease subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of experts. It requires a great deal of coordination and cooperation to ensure satisfactory forecasts.
(i) Delphi technique was developed during the late 60s by the Rand Corporation.
(ii) The objective is to predict future developments in a particular area by combining the independent opinions of experts.
(iii) Experts are chosen on the basis of their knowledge/expertise.
(iv) Face-to-face group discussion is avoided to elicit free opinions without any inhibition.
(v) For coordination an intermediary is used. His or her job is to pool, summarize and then feedback the information generated independently by all the experts in the first round of forecasting.
(vi) The cycle is repeated to enable the experts to revise their forecasts based on the feedback of others’ opinion.
(vii) With 3 to 5 successive rounds there will be some sort of consensus.
Supply of manpower depends on internal considerations as well as external considerations such as demographic changes, education of workforce, labour mobility, government policies and unemployment rate. As with demand forecasts, the process of supply forecasts involve tracking of current manpower availability and making future projections.
Techniques in forecasting of supply are:
(i) Staffing Tables:
These are graphic representations of all organizational jobs along with the number of employees presently occupying those jobs and future (monthly or yearly) employment requirements.
(ii) Markov Analysis:
This shows the actual number as well as the percentage of employees who remain in the job year after year and the proportions of those who are promoted, demoted or transferred or exit the organization. It is a method of tracking the pattern of employee movements through various jobs.
(iii) Skill Inventories/Management Inventories:
Skill inventories list each employee’s education, past work experience, vocational interests, specific abilities/skills, knowledge, and compensation history and job tenure. These inventories allow managers to quickly match job openings with employee backgrounds. When data/information on managers are collected by the management, it becomes management inventory.
(iv) Replacement Charts:
These charts are made based on talent inventories (skill and management inventories) and list current job holders and people who are potential replacements if an opening occurs.
(v) Succession Planning:
It is the process of identifying, developing and tracking key individuals for top-level executive positions.
There are two sources to get forecast data and requirements. Internal sources for obtaining manpower forecast requirements are the existing employees of the organization. External sources for HR requirements and supply can be from Competitors, consultancies, cold applications, trade associations, government agencies, economic forecasts or data and etc.
Action plans involve balancing supply and demand.
When demand exceeds supply, the organization goes for recruitment.
(i) Full-time employment
(ii) Part-time employment
(iii) Recalls (old employees)
When supply exceeds demand the organization resorts to reductions through:
The objective of control and evaluation is to guide the HR planning activities, identifying deviations from the original plan and analysing the causes for deviation. The objectives could be qualitative, quantitative or a combination of both.
Quantitative objectives make the evaluation and control process more objective and measure deviations more precisely. But, generally, evaluation is likely to be more qualitative than quantitative, with little emphasis on control.
As supply-demand forecasts are mostly based on ‘hunches’ and subjective opinions, HR planners are expected to assess the following:
(i) Workforce problems, opportunities and prioritization of activities.
(ii) Relationship with staff specialists and line managers who provide data and use HR planning results. That is, how closely the; HR planners work with these specialists and line managers on a day- to-day basis.
(iii) The extent to which the decision makers, right from line managers who select employees to top level managers who develop long- term business strategy, use the forecasts, action plans and recommendations.
(iv) The perceived value of HR planning among the decision makers. That is, to what extent they consider the forecasts are useful.
In established HR planning systems efficacy of forecasting is measured by the following key comparisons:
(i) Actual staffing levels vs. forecast staffing requirements.
(ii) Actual levels of workforce productivity vs. anticipated productivity.
(iii) Actual workforce flow rate vs. desired rates.
(iv) Action programs implemented vs. action programs planned.
(v) Actual results of the action programs vs. expected results.
(vi) Labour/action program costs vs. budgets.
(vii) Action program benefits vs. action programme costs.
Human Resource Planning – Relationship between the Budget and HR Planning
Human resource planning is greatly integration with the PPBS. The need for careful budget and manpower planning is crucial for the success of any project, programme or policy. The principles of budget and manpower planning is particularly critical at the formulation and monitoring stages.
Both budget and Human Resource face the following problems, due to the poor formulation and monitoring:
i. Non or incomplete implementation of projects due to understated costs and manpower needs, leading to chronic shortages of human and physical resources.
ii. The rejection of projects, programmes or policies because of over-stated budget and manpower requirements at the formulation stage.
iii. A tendency for personnel costs to rise with time, a squeezing out other important project cost items and preventing effective implementation.
iv. In the developing countries, like India, budget and Human resource planning are attended to only at the implementation stage. The chief problem of budget and Human Resource Planning in developing countries is how to deal with contingencies. Thus, careful formulation and monitoring are imminent to minimise uncertainties which are exacerbated by financial and manpower shortages at crucial times.
There are four important considerations in budget and Human Resource Planning, which is analysed in the following ways:
i. Understand the relationships between inputs.
ii. Include contingency measures for all project inputs.
iii. Identify resources critical to project success and find out the possibility of project modification in case of non-availability of these resources; and
iv. Understand relationships between recurrent and capital costs, and personnel costs and non- personnel costs.
The following issues need to be considered by Human Resource planners:
i. Capital expenditure incurs future recurrent costs. Likewise, staff costs breed non-staff costs.
ii. In the time of formulation, it is important to identify which inputs are crucial for the success for project and to negotiate to secure them.
iii. When assessing the future availability of Human resource, allow for wastage and for the time required to train replacements and additions.
iv. If crucial resources are not available then they modify the project
v. Think about phasing inputs. Bar charts can be a useful tool for scheduling operations.
vi. As a safety measure, include contingency allowances in budget projections. Contingency measures are of two types-physical contingencies and price contingencies.
vii. Effective times management is achieved through a well-documented pre-prepared plan. Planning the labour is an important part of accomplishing service work profitably. The manpower section of the tasking software can help to streamline the work assignment process for the manager.
Human Resource Planning – Top 10 Advantages: Determination of Future Personnel Needs, Coping with Change, Creating Highly Talented Personnel and a Few Others
Human resource planning is an important aspect of human resource management.
Following are the advantages of human resource planning:
1. Determination of Future Personnel Needs:
Human resource planning defines the future personnel needs and this becomes the basis for recruitment, and the development of personnel. In its absence, there will be a mismatch between the personnel needed and the personnel available.
2. Coping with Change:
Human resource planning enables an enterprise to cope with changes in competitive forces, markets, and technology and government regulations. Due to these changes, sometimes there is shortage of manpower and at other times, there is surplus of manpower. It helps in creating a balance in such a situation, as through this manpower, needs and availability can be identified much in advance.
3. Creating Highly Talented Personnel:
Jobs are becoming more complicated and knowledge oriented, due to which profile of manpower requirements has changed. Therefore, an organisation should be ready to face such an eventuality by adopting proper human resource planning.
4. Protection of Weaker Section:
The well-conceived human resource planning would protect the interest of weaker and backward sections of the society. Human resource planning helps in fulfilling this social responsibility of the business.
5. Foundation of Personnel Functions:
Human resource planning makes available important information for designing and implementing personnel functions such as recruitment, selection, personnel movements, training and development.
6. Reduced Labour Cost:
With the help of human resource planning, the management can estimate the surplus or shortages of manpower. The management can take the corrective action in time before this situation becomes unmanageable and costly to rectify. Therefore, the overall labour cost reduces.
7. Identification of Gaps in Existing Manpower:
The gaps in existing manpower in terms of quality and quantity are identified through human resource planning. With its help, existing manpower can also be developed to fill the future vacancies.
8. Creating Awareness in the Organisation:
Human resource planning helps in evaluating the management policies and programmes in relation to the human resources. It helps in creating awareness about the effectiveness of human resource management throughout the organisation.
9. Optimum Utilisation of Human Resources:
Human resource planning prevents the shortage and surplus of human resource position in the organisation, and also leads to the overall development of the human resources in the organisation. In this way, it leads to the optimum utilisation of human resources.
10. Resistance to Change and Move:
The existing employees in the organisation resist to change and move. This makes difficult for the organisation to change and move its employees anywhere; this creates the need for human resource planning.
Human Resource Planning – 6 Major Limitations: Depends on Forecasts, Time Consuming and Expensive, Lack of Top-Management Support and a Few Others
Human resource planning is a very challenging area for professionals. It is very complex to make the plan and even more so to administrator the HR plan.
Some limitations are listed as follows:
Limitation # 1. The Human Resource Plan Depends on Forecasts:
Since the accuracy of forecasts over a period of time cannot be hundred percent accurate, the dependence on it may become risky. These inaccuracies creep in because of changes in departmental forecasts which may not have been made with adequate research. Technological changes, environmental changes, competitive pressures also add on to make the HR plan a flop.
Limitation # 2. It is Very Time Consuming and Expensive to Make:
An organization has to spend a lot of time in collecting data from all departments to make a plan for them. Many a times they take help of outside professionals to get their plans in place. It is a limiting factor for the organization as all organizations cannot afford it.
Limitation # 3. Lack of Top-Management Support:
HR planning requires total support and commitment by the top management. If it is not supportive enough and feels that there is no immediate tangible gain out of the plan, the effort of the HR department goes waste. Top management, at times is unwilling to commit funds for building an appropriate “Management Information Systems.” This makes planning impossible.
Limitation # 4. Employees Resist the HR Plans:
Employees and unions feel that the HR plans are made to increase their work load for bringing about productivity. It has been often felt that HR department does not offer more to employees to get more work done from them. Employees perceive it as an employer friendly attitude of the HR department and so they resist all plans made by the HR department.
Limitation # 5. Excessive Dependence on Quantitative Aspects:
The plan is excessively dependant or quantitative data it does not consider qualitative dimensions of the workforce. If the qualitative dimension consisting of motivation, morale, training, and career prospects of employees are discontinued thoroughly, the plan may become unrealistic.
Limitation # 6. Under Developed HRIS in Indian Organizations:
The human resource information system a far more developed in organizations in USA, France, UK, and Germany but are not fully developed in most organizations in India. In such a situation, it may not be possible to develop an ideal human resource plan with inadequate data at disposal of an organization.
Human Resource Planning – How to Make HRP Effective? (Guidelines to Minimize Problems)
Human resource planning has not been given adequate attention in Indian organization as surveyed by prominent HR planners. In most cases computerized information about manpower is not available and in others, it is very inadequate for planners. To add to this problem further, there are unpredictable movements in external influences like labour market conditions, technological advancements, business cycles, competitive pressures etc.
These problems could be minimized if the following guidelines are followed by the organization:
(a) Human resource planning to be based on corporate objectives – The HR plan must coincide with the objectives of the organization. Important aspects like the present manpower in the organization, working condition, human relationship etc., must be kept in mind before making plan. The planners must work closely with the management and communicate all important matters to the top management.
(b) Support of top management is a must – If the top management is not committed to the HR plan, it cannot be run successfully in the long-run. Since all resources have to be sanctioned by them, it is important that they are involved with plan throughout its making and implementation in the long run.
(c) Employee skills inventory should be maintained with the help of computers – Any change in individual skills, program performance ratings should be considered seriously while making the plan.
(d) Co-ordination with other management function – HR plan must be co-ordinated with other management functions to be effective. The tendency of human resource planners to keep to themselves only and not involve operational managers in any effort will lead to coordination problems/conflict between them. Thus, HR planner has to work in coordination with operating managers.
(e) A balanced approach rather than quantitative one – The quality and quantity of human resource should be considered in a balanced manner while making the plan. Focus on quality of people will refrain wrong people with existing jobs and training go up to the ladder of growth. HRM should fill future vacancies with appropriate people rather than merely match existing staff with existing jobs.