HUMAN RESOURCE PLANNING (HRP)

Planning is knowing where you are going and how are you going to get there.
1.Concept of human resource planning
Human resource planning is one of the crucial aspects of human resource management because it helps to
ensure the needed manpower for organizational goal.
Due to the globalization movement, the competition to provide quality and low cost products has been
increasing day by day. In this situation, the HR department has to plan in order to provide the quality
manpower to compete in the market. The supply of manpower must be sufficient to ensure the healthy
operation of the organization. Otherwise, the stated goals and objectives cannot be accomplished on time.
Human resource planning is the process by which an organization ensures that it
has the right number and kinds of people, at the right places, at the right time,
capable of effectively and efficiently completing those tasks that will help
organization achieve
its overall objectives. Human resource planning, then,
translates the organizations objectives and plans into the number of workers
needed to meet those objectives.
It may be looked upon a strategy for the acquisition, utilization, improvement and
preservation of an enterprises human resources.
Definition:
According to Decenzo and Robbins:
Human Resource planning is the process of determining an organizations human
resource needs.
According to Whether and Davis:
Human resource planning systematically forecasts an organizations future supply
of, and demand for, employees.
According to Michal Armstrong:
Human resource planning ensures that the organization knows and gets what it
wants in the way of the people needed to run the business now and in the future.
Characteristics of Human Resource Planning

Goal directed:
HRP is directed towards achieving HR goals as well as organizational goals.
Future oriented:
HRP estimated the size and composition of future workforce. It involves
forecasting of human resources.
Time extent:
1

HRP is time bonded it can be short term as for one year and long term for five
years and more.
Right number HR and right kinds:
HRP estimates right number of human resources with skills, knowledge and
experienced.
System oriented:
HRP matches demand and supply forecasts to determine future human
resources shortages or surpluses.Action plan are prepared to fulfill human
resource gaps.
Part of acquisition function:
HRP is concerned with the acquisition function of human resource
management.
Need for Human Resource Planning
Each organization needs human resource with necessary qualifications,
skills, knowledge, work experience and capability for work. These are
provided through effective human resource planning
Replace:
Every year a large number of human resources have to be replaced who
retire, die or become unable to work, there is a constant need for replacing
such personnel.
Labour turnover :
Due to frequent labour turnover which
is unavoidable. Voluntary quits,
marriage, promotions.
Increase in demand :
Increase in demand and expansion of the programmes or growing population,
rise in income human resource planning unavoidable.
Identify areas of surplus:
Human resource planning is also needed in order to identify areas of surplus
personnel or areas in which there is a shortage of personnel.
Changing technology:
To meet the challenge of a new and changing technology and techniques of
production, new blood injected in an organization.

Importance of Human Resource Planning

To select Competent HR:

Human resource may be thought of as the total knowledge , skills, creative
abilities , talents, and aptitude of an organizations workforce, as well as the
values attitudes and benefits of an individuals involved in an organization.
To manage Human resource:
Among human, physical, financial, information resources the most important
resource is human . Human resource is the most valuable asset of an
2

organization.
Who
are employed in creating, designing, developing,
managing and operating productive and service enterprises and other
economic activities. The success and progress of an enterprise depends upon
the capabilities of their human resources , therefore human resource is very
important.
2.Approaches to Human Resource Planning:
Human resource planning involves estimating the size and composition of
the future work force.
1. Top down approach to HRP ( Quantitative approach) / Hard approach.
This approach is management driven . This approach is views human resource
planning as a numbers game designed to track the flow of people across the
departments.This approach is also known as traditional or hard approach to HRP.
Top-down Management the classical approach to management suggests that
change should evolve from the top.
It is based on :
a.Human resource management information system and human resource
inventory.
b.Demand forecasting techniques,especially statistical and mathmetical
techniques, consisting of :
Trend Analysis.
Mathematical models.
Econometric method.
c.Work study techniques to lay down work standards to utilize human resources
in cost effective manner. Top-down management approach: This approach is
designed to have the least participants in the formulating and participating in
policies and decision making. This obviously contributes toward centralization of
the decision making process. It is characterized as a structured approach
towards the achievement of goals and objectives, which is communicated
throughout the organization structure from top management.
The focus of this method to forecast human resource shortage and surpluses.
2. Bottom up approach to HRP (Qualitative approach) /Soft approach.
This approach is employee driven, it is related with promotions , performance
evaluation, career development ,flexibility and creativity.
The fundamentals of this approach are based on consultative management which encourages employee
participation in the decision making process throughout the organizational structure.
3.Mixed approach
This approach is combined both the top-down and bottom up approaches for
human resoure planning . There seems to be a consensus that both top-down and bottom-up
management approach influences this phenomenon. Research however indicates that top-down
and bottom -up management approaches influences employee motivation and
retention
3

3. Human Resource Planning Process:

The process o f human resource planning consists the following steps:
Assessing current human resources.
forecasting human resource demand.
Forecasting human resource supply.
Matching demand and supply forecasts.
Preparation of Human resource action plans.
1. Assessing current human resources:
Human resource inventory :
Human Resources Inventory is an inventory of skills of human resources currently
employed in the organization. It tells management what individual employees can do.
The profile of the human resource inventory can provide information for identifying
current or future threats to the organization's ability to perform.
Human resource information system: It provides data relating to human
resoures . This system is designed to quickly fulfill
the personnel
information needs of the organization with almost no additional expenditure
of resources.
Job analysis :
it defines the job within the organization and behaviours necessary to
perform these jobs.The task comprising a job and qualification needed for
doing the job are identified by job analysis.
2. Forecasting Human resource Demand:
The corporate plan and its various components such as finance, marketing,
production or sevice plans can be used as the basis for developing the human
resource planning model.Analysis of the organizational plan helps in forecasting
the demand for human resources since it provides clear indications as to the
quantum of future work activity.
Factors that affect human resource demand forecast are:

A . External environmental forces:

Economic
socio-cultural forces
technological
Legal

b. Organizational objectives
They are desired results that the organization plan to achieve in future ,They
Are :
Expansion through new venture
Planned Technological change
Planned Organizational changes restructuring,
4

Market share to be gained.

c. Business plan : This estimates scale of business activities in terms of
revenue forecast.
d.Succession plan : Managerial employ ready to move into higher position.

e.Work force factor

Workload norms
Employee reallocation
Separation
Turnover
Temporary help
3. Forecast Human resource supply
Estimating changes in internal supply requires the organization to look at
those factors that can either increase or decrease its human resources.
Forecasting supply concern itself with the micro, or unit, level.
Factors that affect human resource supply forecasts are:
a.Internal sources forecast:
The HR inventory of current human resources provides information about
human resources that are available in internal sources.
I.

Increasing supply: An increase in the supply of any unit's human

resources can come from: new hires, transfers in and personnels
returing from leaves.New hires are easy to predict.

It is more difficult to predict about transfer, since they often depend on

concurrent action in other units. There are clear effects on individual
departments. it takes time to adjustment.
The net effect on internal supply by people returning from leaves must be
considered. Absenses due to: Maternity, home leave, illness leave,
vacation. Such increase easy to estimate.
II.

Decreasing supply:

It is very easy to forcast retirement of personnel assuming that a specific

age criteria exists within the organization.If mandatory retirement ocurs
at age fifty eight there is no difficulty in forecasting.At the other extreme ,
voluntary quits, prolonged illnesses, and deaths are difficult to forecast.
It can be studied by probalibity techniques to study the number of deaths.

Probablity study can be done in a big company where are

workers.Weak predictive ability in small units.

thousand

b. External sources forecasts:

Factors outside the organization that influence the supply of available
workers.
Recent graduates from schools and colleges expand the supply available
human resources.This market is vast and includes every from h igh -school
graduates to individuals who have received specialized training at the
graduate level. Other sources than scools/colleges include house wives
who are seeking full time or part time work to supplement the family
income.Changing attitudes, aspirations and career expectations has all
acted as forces to increase the number of women enteing the labour
market.Migration of the population and entering into urban areas also
affect the labour market.Formal or on the job training also increases the
supply.
4.Matching Demand and supply
The objective of human resource planning is to bring together our
forecast of future demand and supply.Should an organization find
that the demand for human resources will be increasing in future, thenwill
have to hire additional staff or transfer people within the organization, or
both to balance the numbers, skills, mix the quality of its human
resources.Retrenchment (an act of cutting down or reduction, particularly of
expenditure or to reduce costs) may be needed to tackle surpluses.

4. Preparation of Action Plan:

An action plan is a detailed plan outlining actions needed to reach one or more goals.
a.Recruitment plan
Recruiting planning is where an organisation puts together ideas and thoughts on how
to attract and hire competent candidates.
b. Development plan

Development Plan will be based on an assessment of the organizations

training and development needs.

c. Retention plan

Retention plan is a plan for operating a business using techniques designed to keep
good employees. Employee retention is beneficial for the business because retaining
employees reduces costs spent hiring and training new employees to replace lost
employees. Factors that affect employee retention are many, and include rewards,
communication, and a sense of purpose in the job.

d. Redeployment plan
Redeployment is the process of moving people within the organization and from
units where there are excess employees to the departments where there is
shortage.
e. Redundancy plan
Elimination of jobs caused by downsizing, rightsizing, or outsourcing.
Based on extensive experience in handling the human dimension of redundancy plans can help you
minimize the negative impacts of the restructuring and improve the motivation of remaining
employees.
f. Promotion plan:
Ratio and basis of promotion
e. Succession plan
Succession planning is a process for identifying and developing internal people with the
potential to fill key business leadership positions in the company.
7
Human resource Inventory Include :
Employee:
1. Name of the employee/age/sex/marital status
2. Educational qualifications
3. training undertaken
4. Prior employment experience
5. current position held
6. performance ratings
7. salary level
8. language spoken
9. capabilities
10.
specialized skills
11.
job and location freference
Human resource information system ( HRIS) provides information:

current number employees by departments, service, skills,

level, age ect.
number of employees joining and leaving
staff turnover rates , including its trend
sickness and absenteeism rates
salary bills including overtime payments ect.
Benefits of Human resource inventory
To assess what skills are currrently are available in the
organization.
Useful for planning the selection, training, promotion and
transfre of employee.
serves as a decision making tool for deploying and effectively
utilizing existing human resources.
serves
as a guide for considering opportunities for
diversification and expansion of operations.
It provides crucial informaion for identifying human resource
related threats to the organization. For example, technical
obsole scene of employees can be managed effectively.

References:
David A. DeCenzo and Stephen P. Robbins, Personnel /Human Resource
Management,Prentice- Hall of India Pvt. Ltd, New Delhi, 1998.
Bhaskar Chatterjee, Human Resource Management, A contemporary text, Sterling
Publishers Pvt. Ltd. New Delhi, 1996.
DR. C.B. Mamoria, Personnel Management (Management of Human Resources),
Himalaya Publishing House, Bombay, 1997.Dr. Govind Ram Agrawal, Human
Resource Development in Nepal,M.K.Publishers and Distributers,Kathmandu,Nepal,
2013,
http://www.slideshare.net/psmunish/humanresourceplanningconceptandneedfactorsaffectinghrphrpprocessl312253761188688
258#