GURU GHASIDAS VISHWAVIDYALAYA

(A CENTRAL UNIVERSITY ESTABLISHED BY CENTRAL UNIVERSITIES ACT, 2009)

BILASPUR (C.G.) 495009

DEPARTMENT OF MANAGEMENT STUDIES

MASTER OF BUSINESS ADMINISTRATION PROGRAMM

(MBA)

M.B.A.: 4th Semester

SUBJECT: HUMAN RESOURCE PLANNING AND DEVELOPMENT

PRESENTATION TOPIC: HUMAN RESOURCE PLANNING IN GENERAL

Submitted To: Submitted By:

DR.HARISH KUMAR SHWETA KHARE

(PROFESSOR) 4TH SEMESTER, MBA

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CONTENT:-

 Introduction
 HR Planning At Different Levels
 HR Planning:-
 HR Repositories:-
 Why to Do HRP?
 Need For Human Resource Planning
 Determinants Of HRP
 What Is Labor Market?
 Labor Market Analysis Is The Process Of
 Human Resource Planning Overview
 Human Resource Forecasting
 Demand Analysis Method
 Scanning The Environment
 Significance Of HRP
 Poor HRP May Result Into
 Why HRP
 Effective HRP
 Significance Of HRP
 Factors Affecting HRP
 Strategies For Human Resource Planners
 Guidelines For Making HRP Effective
 Process of Human Resource Planning.
 Advantages Of Using HRP
 Conclusion

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INTRODUCTION

E.W Vetter viewed human resources planning as ―a process by which

an organization 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 places at the
right time, doing things which result in both the organization and the
individual receiving maximum long-run benefit.

Human resource planning is the most important managerial function of

an organization. It ensures three main things:
• It ensures adequate supply of human resources.
• It ensures proper quality of human resources.
• It ensures effective utilization of human resources.

Human Resource Planning:-

(i) Human resource planning must incorporate the human resource needs
in the light of organizational goals.
(ii) Human resource planning must be directed towards clear and well-
defined objectives.
(iii) Human resource plan must ensure that it has the right number of
people and the right kind of people at the right time doing work for
which they are economically most suitable.
(iv) Human resource planning should take into account the principle of
periodical reconsideration of new developments and extending the plan
to cover the changes during he given long period.
(v) Human resource planning should pave the way for an effective
motivational process.
(vi) Adequate flexibility must be maintained in human resource planning
to suit the changing needs of the organization.
HRP or MPP is essentially concerned with the process of estimating and
projecting the supply and demand for different categories of personnel in
the organization for the years to come.

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HR PLANNING AT DIFFERENT LEVELS
Human Resource Planning (HRP) may be done at different levels and
for different purposes. National planners may make a HR plan at the
national level whereas the strategists at a company may make a HR plan
at the unit level. The HR Planning thus operates at five levels.

1. HRP at National Level:

HRP at the national level helps to plan for educational facilities, health
care facilities, agricultural and industrial development and employment
plans, etc. The government of the country plans for human resources at
the national level. National plans for HR forecast the demand and supply
of human resources at the national level. It also plans for occupational
distribution, sector and regional allocation of human resources.

2. HRP at the Sector Level:

HRP at the sector level helps to plan for a particular sector like
agriculture, industry, etc. It helps the government to allocate its
resources to the various sectors depending upon the priority accorded to
the particular sector.

3. HRP at the Industry Level:

HRP at the industry level takes into account the output/operational level
of the particular industry when manpower needs are considered.

4. HRP at the Unit Level:

HR Planning at the company level is based on the estimation of
Human resource needs of the particular company in question. It is based
on the business plan of the company. A manpower plan helps to avoid
the sudden disruption of the company’s production since it indicates
shortages of particular types of personnel, if any, in advance, Thus
enabling the management to adopt suitable strategies to cope with the
situation.

5. HRP at the Departmental Level: HRP at the departmental level looks

at the manpower needs of a particular department in an organization
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HR PLANNING:-

 HRP as a systematic analysis of HR needs in order to ensure that

correct number of employees with the necessary skills is available
when they are required.
 When HR planning is applied properly in the field of HR
management ,it would assist to address the following questions:-
1. How many staff does the organization have?
2. What type of employees as far as skills and abilities does the
company have?
3. How should the organization best utilize the available
resources?
4. How can the company keep its employees?
5.
HR REPOSITORIES:-
Planning means:-
What to do?
How to do it?
When to do?
Who is to do it?

 Planning means peeping into the future

 When planning is done to determine the demand and supply of HR
in future it is called human resource planning.

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WHY TO DO HRP?
1. Opening
2. Expansion
3. Contraction
4. Diversification
5. Merger and acquisitions
6. Closure

NEED FOR HUMAN RESOURCE PLANNING

Human resource planning is needed for foreseeing the human resource
requirements of an organization and supply of human resources. Its need
can be accessed from the following points:

1. Replacement of Person:-
A large number of persons are to be replaced in the organization
because of retirement, old age, death, etc. There will be a need to
prepare persons for taking up new position in such contingencies.

2. Labor Turnover:
There is always labor turnover in every organization. The degree of
Labor turnover may vary from concern to concern but it cannot be
eliminated altogether. There will be a need to recruit new persons to take
up the positions of those who have left the organization. If the concern is
able to forecast turnover rate precisely, then advance efforts are
Made to recruit and train persons so that work does not suffer for want
of workers.

3. Expansion Plans:
Whenever there is a plan to expand or diversify the concern then more
Persons will be required to take up new positions. Human resource
planning is essential under these situations.

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4. Technological Changes:
The business is working under changing technological environment.
There may be a need to give fresh training to personnel. In addition,
there may also be a need to infuse fresh blood into the organization.
Human resource planning will help in meeting the new demands of the
organization.

5. Assessing Needs: Human resource planning is also required to

determine whether there is any shortage or surplus of persons in the
organization. If there are fewer people than required, it will adversely
affect the work. On the other hand, if more persons are employed than
the requirement, then it will increase labor cost, etc. Human resource
planning ensures the employment of proper workforce

DETERMINANTS OF HRP
There are several factors that affect HRP. These factors or determinants
can be classified into external factors and internal factors.
External Factors
• Government Policies:
Policies of the government like labor policy, industrial relations
policy, policy towards reserving certain jobs for different communities
and sons-of-thesoils, etc. affect the HRP.
• Level of Economic Development :
Level of economic development determines the level of HRD in the
country and thereby the supply of human resources in future in the
country.

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• Business Environment :
External business environmental factors influences the volume
and mix of production and thereby the future demand for human
resources.

• Level of Technology :
Level of technology determines the kind of human resources required.

• International Factors :
International factors like the demand for the resources and supply
of human resources in various countries.

Internal Factors
• Company Policies and Strategies:

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Company’s policies and strategies relating to expansion diversification,
alliances, etc. determines the human resource demand in terms of quality
and quantity.

• Human Resource Policies:

Human resources policies of the company regarding quality of
human resource, compensation level, quality of work life, etc. influences
human resource plan.

• Job Analysis:
Fundamentally, human resource plan is based on job analysis. Job
description and job specification determines the kind of employees
required.

• Time Horizons: Companies with stable competitive environment can

plan for the long run whereas the firms with unstable competitive
environment can plan for only short-term range

WHAT IS LABOUR MARKET?

A labor market is a place where you look for the people for your
business / industry /organization having the required professional skills
and abilities.
LABOUR MARKET ANALYSIS IS THE PROCESS OF:-

 Identifying the appreciate labor market for various types of

positions.
 Surveying the market to determine the salaries that are being paid
for like positions.
 Identifying market trends such as: ancillary pay and merit and pay
practices.

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  Establishing ,adjusting and recommending salary changes and
structure for staff positions.
 Consulting with management on their workforce needs.

HUMAN RESOURCE PLANNING OVERVIEW:-

Forecasting HR demand forecasting HR supply

Forecasting of HR surplus and shortage

Goal setting and strategic planning

Program implementation and evolution

HUMAN RESOURCE FORECASTING:-

 HRP determine the demand and supply of HR and provides within

the organization where there will be shortage or surplus of the
manpower.
 3 major steps of HR forecasting:-
a)Forecasting the HR demand
b)Forecasting the HR supply
c)Determining the surplus and shortage
FORECASTING HR REQUIREMENTS:-
Consider the following questions:-
1. What are the company’s objectives?
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 2. Do these goals and objective call for expansion in to the new
market?
3. Are new product dines planned?
4. Are changes in technology necessary to stay competitive?
5. Will the new skills and training meet the company’s goal and
objective?

DEMAND ANALYSIS METHOD:-

 Managerial estimation: -
Collect data and information from managerial staff(As functional
heads)

 Trend analysis :-
Constructing and applying statistical models that predict HR
demand for the next year , given relatively objective statistic from
the previous year.

 Sales projection:-
As what rate the sales will be increase or decrease.
 Correlation / projection:-
Size of the hospital (in terms of bed) No. of the nurse required

200 240
250 260
300 280

 Vacancy analysis:-

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LEVEL EMPLOYED TURNOVE EXPECTED EXPECTED
R VACANCIE TO
S REMAIN
Top 100 20% 20 80
Middle 200 24% 48 152
Lower 600 22% 132 468

 Determining HR supply:-
Succession planning
Post to be filled :GM Marketing

NAME POSITION PRESENT PROMOTION

PERFORMANC POTENTIAL
E
Mr. Raj DGM(Market) Outstanding Ready now
Mr. Ram DGM(Production) Satisfactory Needs training
Mr. Jack DGM(Finance) Satisfactory Questionnaire

 Human resource information system:-

o Personal Data :-

Age ,Gender , Marital status , Number of dependents.

o Education and skill:-

Degrees earned ,License , Certification , Language spoken , Specialty

skills , Ability , knowledge to handle a particular project / product/
machine/ software .
o Job History :-

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 Job tittles held , Locations , Time in each position etc , Performance
appraisals , Promotions received ,Training and Development
o Membership and achievement :-

Professional association , recognition and notable accomplishment

o Preference and interests :-

Career goals ,Types of position sought ,Geographical preference

(Climate ,family)
o Capacity for growth :-

Potential for advancement ,upward mobility and growth in the

capacity.
SCANNING THE ENVIRONMENT:
 Workforce Analysis:-
 How many people do we have and of what kind?
 How many people do we need and of what kind?
 Internal Scan :-
 Changes in legislation / government policies.
 Anticipated changes in funding and budgeting
 Change in leadership and priorities
 Health and safety
 Corporate culture
 Employee engagement
 Organizational restructuring
 Management practices
 Internal policies
 Immigration ,Diversity

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  External Scan:-
 Current workforce trends.
 Demand and supply of employees in certain occupation.
 Candid pools.
 Technological advancement
 Current and projected economic conditions
 Migration patterns
 Intake of students in post secondary institutions
 Employment practices of competing organization

SIGNIFICANCE OF HRP:-

 HRP is forward looking function to ensure the filling gap between

HR demand and supply.
 HRP is influenced by changes in the internal and external
environment of the organization as change in leadership and
priorities , technological changes and other global business
compulsions.
 HRP is an integral part of business planning ,it is obligatory on the
part of the organization to do HRP in order to ensure the survival
and success.
 HRP is decision process it facilitates succession planning.
 It assists in expansion , contraction , diversification of business
activities
 HRP helps in coping with the changes in market conditions ,
technologies , product , government regulation , policies , plans
and programs.
 HRP helps in creating a reservoir of talent.

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  HRP helps in cutting cost
 HRP helps in procuring information ,setting objectives and making
decisions regarding HR
 HRP assist in managing the HR strategically.

POOR HRP MAY RESULT INTO:-

 Wastages of resources including HR

 Huge cost
 Poor performance
 Low level of productivity
 Unnecessary overtime
 Gap in HR demand and supply
 Bad organization image in the eyes of the public
 HR experts must have business knowledge and business expertise
 If you don’t financial consideration in mind.
WHY HRP:-

 Linking business strategy with operational strategy

 Minimizing the risk of loosing
 HRP tells how much to invest in HRD
 HRP is proactive not reactive
 HRP is not done in an insulated manner
 HRP makes the top management and others aware about the
significance of human resource.
EFFECTIVE HRP:-
The HRP will be successful if:-

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  The goals are crystal clear.
 Whole hearted support from top management
 Effective maintenance of talent reservoirs / repositories
/inventories.
 Most suitable method of HR demand and supply forecasts must be
used
 The environment must be completely scanned
 There should always be plan B
 HRP planner must be well aware of organization vision and
mission
 HRP must be treat as integral part of corporate planning
 Effective HRIS
 Coordination I people and plans.
FACTORS AFFECTING HRP:-

 Type and approach of the organization

 Public sector /private sector /manufacturing
 What type of strategic plan / HR policy?
 Involvement and support of people
 Organizational growth cycles and planning
 Embryonic may not be personnel planning
 At growth stage planning is required , HR forecasting becomes
essential
 At maturity stage the growth slows down and a different kind of
less planning is required.
 Planning becomes more formalized and less flexible
 At declination stage HRP with a different focus is required ,
planning is done of layoff , retrenchment and retirement
 Environment uncertainties

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 How effectively the environments are scanned?
 How competent the environment scanners are?
 Quality of forecasting information
 Nature of the jobs being filled
 Time horizons :- for 6 months , 1 year , 10 year and 20 year
 Labor markets
 Outsourcing

STRATEGIES FOR HUMAN RESOURCE PLANNERS

The objective of manpower planning is to help the organization to
achieve its goal. For this purpose, the manpower planners have to
develop some strategies. Stainer has suggested nine strategies for the
benefit of manpower planners:

1. They should collect, maintain and interpret relevant information

regarding human resources.
2. They should periodically report manpower objectives, requirements
and existing employment and allied features of manpower.
3. They should develop procedures and techniques to determine the
requirements of different types of manpower over a period of time
from the standpoint of organization’s goals.
4. They should develop measures of manpower utilization as
component of forecasts of manpower requirement along with
independent validation.
5. They should employ suitable techniques leading to effective
allocation of work with a view to improving manpower utilization.
6. They should conduct research to determine factors hampering the
contribution of individuals and groups to the organization with a view
to modifying or removing these handicaps.
7. They should develop and employ methods of economic assessment
of human resources reflecting its features as income generator and
cost and accordingly improving the quality of decisions affecting the
manpower. These people are known for job hopping, thereby creating
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frequent shortages in the organization. Manpower planning helps
prevent such shortages. Furthermore, technology changes will often
upgrade some jobs and degrade others. Indian Telephone Industries
(ITI) had a stronger technology to ·start with, which later developed
into crossbar telephone system. This was later changed to electronic
technology. Jobs created and people hired when old technologies
were in use became extinct, obsolete and redundant. ITI being a
public sector undertaking, could not retrench its workers, and were
subsequently retrained and redeployed to supervise the electronic
system now in use. Jobs became highly technical necessitating hiring
of engineers who had majored in electronics. So, ITI had no use of
engineers with civil or mechanical engineering as major. Thus, ITI is
in a tight spot so far as shop-floor workers are concerned, whose
number is more than the demand for them. Even with regard to
electronics engineers, the company is not in a comfortable position.
With its existing compensation scheme, ITI is not in a position to
attract talented people.
This situation could have been avoided if ITI had done HRP.
Another facet of the high-talent personnel is management succession
planning. Who will replace the retiring chief executive? From what
pool of people will top executives be selected and how will these
individuals be groomed for their increased responsibilities?
HRP is an answer to these and other related questions.

Identification of Gaps in Existing Manpower.

Human resource planning identifies gaps in existing manpower in
terms of their quantity and quality with the help of suitable training
and/or any other steps, these gaps can be filled in time. Existing
manpower can also be developed to fill future vacancies.

Career Succession Planning.

Manpower planning facilitates career succession planning in the
organization. It provides enough lead time for internal succession of
employees to higher position through promotions. Thus, manpower

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planning contributes to management succession as well as
development.

Improvement in Overall Business Planning.

Manpower planning is an integral part of overall business planning.
Effective manpower planning will lead to improvement in overall
planning also. No management can be successful in the long run
without having the right.

Growth of the Organization.

Manpower planning facilitates the expansion and diversification
of an organization. In the absence of human resource plans, the
required human resources will not be available to execute expansion
and diversification plans at the right time.

Creates Awareness in the Organization.

Manpower planning leads to a great awareness about the effectiveness
of sound manpower management throughout the organization. It also
helps in judging the effectiveness of human resource policies and
programs of management.

Beneficial to the Country.

At the national level manpower planning facilitates educational
reforms, geographical mobility of talent and employment generation.

GUIDELINES FOR MAKING HRP EFFECTIVE

Some of the suggestions for making HR planning effective are as
given below:

1. Integration with Organizational Plans.

Human resource planning must be balanced with organizational
plans. It must be based on the organizational objectives and plans.
This requires development of good communication channels between
organization planners and the human resource planners.
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2. Period of HR Planning.
Period of the planning should be appropriate to the needs and
circumstances of the enterprise in question. The size and structure of
the enterprise as well as the anticipated changes must be taken into
consideration.

3. Proper Organization.
To be effective, the planning function should be properly organized.
If possible, within the human resource department. A separate cell or
committee should be constituted to provide adequate focus and to
coordinate planning work at various levels.

4. Support of Top Management.

To be effective in the long run, manpower planning must
have the full support of the top management. The support from top
management is essential to ensure the necessary resources,
cooperation and support for the success of the planning.

5. Involvement of Operating Executives.

Human resource planning is not a function of manpower planners
only. To be effective, it requires active participation and coordinated
efforts on the part of operating executives. Such participation will
help to improve understanding of the process and thereby reduce
resistance.

6. Efficient and Reliable Information System.

To facilitate human resource planning, an adequate database must
be developed for human resources.

7.Balanced Approach.
The human resource experts should give equal importance to both
quantitative and qualitative aspects of manpower. Instead of matching
existing people with existing job, stress should be laid on filling
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 future vacancies with right people. Promotion should also be
considered carefully. Career planning and development, skill
levels, morale, etc. should be given due importance by the planners
PROCESS OF HUMAN RESOURCE PLANNING.

1.Analyzing the Corporate Level Strategies: –

Human Resource Planning should start with analyzing corporate level
strategies which include expansion, diversification, mergers,
acquisitions, reduction in operations, technology to be used, method of
production etc. Therefore Human Resource Planning should begin with
analyzing the corporate plans of the organization before setting out on
fulfilling its tasks.

2. Demand forecasting: –
Forecasting the overall human resource requirement in accordance with
the organizational plans is one of the key aspects of demand forecasting.
Forecasting of quality of human resources like skills, knowledge, values
and capabilities needed in addition to quantity of human resources is
done through the following methods: - a. Executive or Managerial
Judgment: – Here the managers decide the number of employees in the
future. They adopt one of the three approaches mentioned below: -

Bottom-Up approach:- Here the concerned supervisors send their

proposals to the top officials who compare these with the organizational
plans, make necessary adjustments and finalize them.

Top-Down approach: – Here the management prepares the

requirements and sends the information downwards to the supervisory –
level who finalizes the draft and approves it.

Participative Approach: – Here the supervisors and the management sit

together and projections are made after joint consultations.

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Statistical Techniques:– These methods use statistical methods and
mathematical techniques to forecast and predict the supply and demand
of Human Resources in the future.

Ratio-Trend analysis: – In this method depending on the past data

regarding number of employees in each department, like production
department, sales department, marketing department and workload level,
etc ratios for manpower are estimated. Past values are plotted and
extrapolated to get fairly accurate future projections

Work Study method: – This technique is suitable to study the

correlation between volume of work and labor i.e. demand for human
resources is estimated based on the workload. Work study method is
more appropriate for repetitive and manual jobs when it is possible to
measure work and set standards.

Delphi Technique: – ‗Delphi’ Technique is named after the Greek

Oracle at the city of Delphi. In this method, the views of different
experts related to the industry are taken into consideration and then a
consensus about the Human Resource requirement is arrived at. Delphi
technique is used primarily to assess long-term needs of human resource.
3. Analyzing Human Resource Supply: – Every organization has two
sources of supply of Human Resources: Internal & External. Internally,
human resources can be obtained for certain posts through promotions
and transfers. In order to judge the internal supply of human resources in
future human resource inventory or human resource audit is necessary.
Human resource inventory helps in determining and evaluating the
quantity of internal human resources available. Once the future internal
supply is estimated, supply of external human resources is analyzed.

4. Estimating manpower gaps: – Manpower gaps can be identified by

comparing demand and supply forecasts. Such comparison will reveal
either deficit or surplus of Human Resources in the future. Deficit
suggests the number of persons to be recruited from outside, whereas
surplus implies redundant employees to be re-deployed or terminated.
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Employees estimated to be deficient can be trained while employees
with higher, better skills may be given more enriched jobs.

5. Action Planning: – Once the manpower gaps are identified, plans are
prepared to bridge these gaps. Plans to meet the surplus manpower may
be redeployment in other departments and retrenchment. People may be
persuaded to quit voluntarily through a golden handshake. Deficit can be
met through recruitment, selection, transfer and promotion. In view of
shortage of certain skilled employees, the organization has to take care
not only of recruitment but also retention of existing employees. Hence,
the organization has to plan for retaining of existing employees.

6. Modify the Organizational plans: – If future supply of human

resources form all the external sources is estimated to be inadequate or
less than the requirement, the manpower planner has to suggest to the
management regarding the alterations or modifications in the
organizational plans.
7. Controlling and Review: – After the action plans are implemented,
human resource structure and the processes should be controlled and
reviewed with a view to keep them in accordance with action plans.

ADVANTAGES OF USING HRP:-

Human resource planning can be defined as the process of identifying

the number of people required by an organization in terms of quantity
and quality. All human resource management activities start with human
resource planning. So we can say that human resource planning is the
principle/primary activity of human resource management. The process
of HRP plays a very important role in the organization. The importance
of HRP can be explained as follows.

1. Anticipating future requirements:- Thru this process of HRP, the

company is able to find out how many people will be required in future.
Based on this requirement the company could take further actions. This

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method also helps the company to identify the number of jobs which
will become vacant in the near future.

2. Recruitment and selection process:- The recruitment and selection

process is a very costly affair for a company. Many companies spend
lakhs of rupees on this process. Therefore recruitment and selection must
be carried out only if it is extremely necessary. HRP process helps to
identify whether recruitment and selection are necessary or not.

3. Placement of personnel:- Since the HRP process is conducted for the

entire organization, we can identify the requirements for each and every
department. Based on the requirement, we can identify existing
employees and place them on those jobs which are vacant.

4. Performance appraisal:- HRP make performance appraisal more

meaningful. Since feedback is provided in performance appraisal and
employee is informed about his future chances in same company, the
employee is motivated to work better. Information for all this is
collected from HRP process.
5. Promotion opportunity:- HRP identifies vacancies in the entire
organization including all the branches of all the company. Therefore
when the company implements promotion policy it can undertake its
activities in a very smooth manner.

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CONCLUSION:-
An effective HRP is required for an organization to be effective.HRP
needs to be fully in integrated to the organization plan. Secret of success
is the right type of people available in the right number at time at right
place. Human Resource Management should be seen as a strategic
function of an organization. It helps to build a competitive edge for an
organization by positively engaging its employees. Key ingredients of
effective Human Resource Management are having in place an
appropriate leadership style and effective two-way communications with
employees. This creates an open and honest environment where
employees feel that their ideas are being listened to and that they can
make a contribution to decision making. Engaged employees are more
likely to be proud to work for their organization and therefore will
believe in and live out the values of the organization.

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BIBLIOGRAPHY:-

www.wikipedia.com
businesscasestudies.co.uk
wikieducator.org

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