HRM MODULE

1.2
HUMAN
RESOURCE
PLANNING
MEANING:
 In simple words, HRP is understood as the
process of forecasting an organization's
future demand for, and supply of, the right
type of people in the right number.
 After HRP the HRM department can initiate
the recruitment and selection process
 Its called as HRP, manpower planning,
personal planning or employment planning
 DEFINITION OF HRP
• HRP is the process by which an organization
ensures that it has the right number & kind of
people, at the right place, at the right time,
capable of effectively & efficiently completing
those tasks that will help the organization
achieve its overall objectives.
 OBJECTIVES & SIGNIFICANCE OF
HRP

 To ensure optimum use of existing HR.

 To forecast future requirement for HR.
 To provide control measures to ensure that necessary
HR are available as and when required.
 To asses the surplus and shortage of HR.
 To anticipate the impact of technology on jobs and HR.
 To determine the level of Recruitment and Training.
 Developing training & retraining programmes
 Formulating compensation policies
 Gaining competitive advantage
 Shaping future plans & strategies
FACTORS AFFECTING HRP

Organisational
growth cycle
and planning Environ
Type and
mental
strategy of
Uncertain
organization
ties

HRP
Time
Outsourcing
horizons

Type and
Quality of Nature
forecasting of job
Information
ADVANTAGES OF MANPOWER
PLANNING
 Basis of recruitment & selection of employees: Manpower planning
provides a basis for recruiting new employees considering the future
manpower needs. As a result, the production & any other related work does
not stop for lack of employees of desired skills & abilities .
 To plan the development of employees :- The present employees can be
trained for some higher position this gives encouragement to the exiting
employees & intern creates psychological climate for motivation
 Reduction in personnel costs :- It reduces personnel’s cost because the
management’s ability to anticipate shortage or surpluses of manpower and
correct these imbalances before they become unmanageable and expensive.
 Manpower Inventory :- Personnel or manpower inventory can provide
information to management for the internal succession of managerial
personnel if there is a turnover which is not anticipated.( expected)
 Improvement in business planning process :- It leads to improvement
of business planning process.
HRP PROCESS
 ENVIRONMENT

ORGANISATIONAL
OBJECTIVES AND POLICIES

HR NEEDS FORECAST HR SUPPLY FORECAST

HR PROGRAMMING

HRP IMPLEMENTATATION

CONTROL AND
EVALUATION OF PROGRAMME

SURPLUS SHORTAGE
RESTRICTED HIRING RECRUITMENT
REDUCED HOURS AND SELECTION
VRS, LAY OFF, etc

THE HRP PROCESS

 Environment
1) Economic factors
2) Technological Changes
3) Labor market scenario
4) Political and legislative issues
5) Social concerns
 Organizational objectives and policies

 HR plans need to be based on organizational

objectives.
Eg:
Are vacancies to be filled from promotions from
within or hiring from outside?
How to enrich employees job? Should the routine
and boring jobs continue or be eliminated?
How to downsize the organization to make it more
competitive?
 HR need or demand forecast
 The process of estimating the future quantity
and quality of people required.
 The basis of forecast will be annual budget
and long term corporate plans.
 Demand forecasting must consider several
factors like
i. Internal (Budget constraints, employee
separations, production level etc.)
ii. External (Competition, laws, change in
technology).
Forecasting Techniques
 Managerial judgment
 Ratio analysis
 Work study techniques
 Delphi technique
 Trend analysis
 Bottom up
 Top down
 Zero base forecasting
HR Supply forecasting

 Supply forecasting measures the no. of people

likely to be available from within and outside an
organisation, after making allowance for
absenteeism, internal movements and
promotions, wastage and changes in hours and
other conditions of work.
 Replacement charts
 Labor Turnover Rate
 Productivity level
 HRIS
 succession planning
 HR Programming
 Once the Organization’s HR need and
supply are forecast
 Comparison
 Then vacancies can be filled by the right
employee at the right time.
 HR Plan Implementation
 Implementation requires converting HR
plans into action
 Action programs are..
 Recruitment
 Selection & placement
 Training and development
 Retraining
 The retention plan
 The redundancy plan
 The succession plan
 If Shortage of employees
- Do-
 Hire new full-time employees
 Offer incentives for postponing retirement
 Re-hire retired employees on part-time basis
 Attempt to reduce turnover
 Bring in over-time for present employees
 Subcontract work to another company
 Hire temporary employees
 If surplus of employees is expected
-Do-
 Do not replace employees who leave
 Offer incentives for early retirement
 Transfer or reassign excess employees
 Use slack time for employees training or
equipment maintenance
 Reduce work hours
 Lay off employee
Barriers to HRP
 Insufficient realisation to the importance
of HRP
 Glut in the labor market : due to excess
supply short term & necessity based
based approach is followed
 Union Resistance
 Cost benefit misconception
 Future uncertainity
1) The Bigger Picture…..
 One morning a professor of philosophy stood in front of his
class and wordlessly began to fill a very large and empty jar
with golf balls. He then asked the students if the jar was full.
They agreed that it was.
 The professor picked up a box of tiny pebbles and tipped
them into the jar. He shook the jar lightly allowing the
pebbles to roll into the open areas between the golf balls
before asking the students if the jar was full. They agreed it
was.
 Next the professor poured a box of sand into the jar filling
up all the remaining space and once more asked his class if
the jar was full. The students responded with a unanimous
“yes.” The professor then produced two glasses of wine from
under the table and poured the entire contents into the jar,
the students laughed.
 “Now,” said the professor, as the laughter subsided, “I want you to
recognize that this jar represents your life.
 The ‘golf balls’ are the important things; your family, your children, your
health, your friends and your passions. In other words, all those things
that if everything else was lost, and if only they remained, your life would
still be full.
 The ‘pebbles’ are the other things that matter like your job, your house,
your car, holidays, etc.The sand is everything else, all the small stuff.
 Now if you put the sand into the jar first,” he continued, “there is no
room for the ‘pebbles’ or the ‘golf balls’.
 The same goes for life. If you spend all your time and energy on the
small stuff, you will never have room for the things that are truly
important to you. So pay attention to the things that are critical to your
happiness, play with your children, take care of your health, make time
for your friends, and go out to dinner with your partner because there
will always be time to clean the house and fix the car.
 Set your priorities and take care of the ‘golf balls’ first, for they are the
things that really matter. All the rest is just sand.”
 One of the students raised her hand and asked, “What does the wine
represent?” The professor smiled, “I’m glad you asked. I was also showing
you that no matter how full your life may seem, there’s always room for
a couple of glasses of wine with a friend.”