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UNIT 3 HUMAN RESOURCE PLANING

The most important of all the resources of a business enterprise is its human resource. the very fate of an organization is determined by the number and type of person working in it. In fact an institution is recognized more by the quality of its staff rather than by its physical structure. It is there fore, Important that an organization has the right number and type of person at any given point of time to be successful and this is what is achieved through manpower planning or human resources planning.

Meaning of human resources planning


Human resources planning , in simple term, is the process of determining the man power needs of an enterprise so that is possible to fill up any vacancy as and when it arises. Such a plan eliminates the risk of surplus or shortage of staff at any time.

Definition of human resource planning


Given below are some of the important definition of the term human resource planning . 1. human resources planning is the process by which a management determines how the organization should move from its current manpower position to it desired man power position . through planning the management strives to have the right number and the 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 range benefit-E.W.Vetter 2. human resource or manpower planning is the process of determining the manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization-Coleman. 3. manpower planning is the strategy for the acquisition, utilization, improvement and preservation of an enterprise human resources. It relates to establishing job

specification or the quantitative requirements of jobs determining the number of personal required and developing source of manpower.- Stainer. 4. human resources planning is an integrated approach to performing the planning aspects of the personal function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and task required to meet organization objective and satisfy the individual needs and goals of organizational members Leon C. megginson. 5. human resources planning is a process of qualified person, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individual involved Dale S.Beach It is clear from the above definition that human resources planning is concerned with the task of projecting the man power needs of an organization and taking steps to fulfill the same.

Importance of human resources planning


Human resource planning is necessary in view of the following reasons: 1. It helps the organization to procure the required manpower: To perform the various jobs in the organization, people with varying skills, qualification and experience are required. Human resource planning helps to fulfill such a requirement. 2. It further helps to replace employees: Every year, a number of employees retire in workplaces. These employees, therefore, have to replaced. Vacancies arising due to retirement can be anticipated and suitable arrangement for replacement can be made. A vacancy may also arise when an employees dies or becomes incapacitated or dismissed on disciplinary grounds. Proper planning will enable the management to fill up vacancies as and when they arise. 3. It helps in expansion program: No organization is going to remain static. To undertake expansion activities additional hands are necessary. Such additional hands can be secured through effective planning.

4. It ensures optimum investment in human resource: under HR management, the amount spent on human resource is viewed as an investment. But it is necessary that such an investment is made at the optimum level in order to derive maximum benefits. HR planning ensures optimum investment in human resource. 5. It is indispensable to give effect to reservation policy: As per the reservation policy of the government, certain number of posts will have to be reserved for people belonging to certain communities in case of recruitment to govt. departments. To give effect to such a policy, manpower planning is indispensable. 6. It is essential in view of the problem of labor turnover: Every organization faces the problem of labor turnover, i.e., employees leaving their jobs due to various reasons. Proper manpower planning help to tackle the problem. 7. It helps to tackle the problem of surplus or shortage of manpower: In the absence of proper planning of manpower needs, the organization is sure to face the problem of either surplus or shortage of manpower. Surplus employees do not contribute to output. On the other hands, if there is shortage of manpower, the organization cannot cope with the volume of work. To tackle both the problem effectively, proper planning is essential. 8. It becomes necessary to meet the need of changing technology: Repaid technological changes would render the existing workforce inadequate in terms of skills. To tackle such a problem, the organization must require the existing employees to update themselves or recruit a new set of workforce. Here again, human resource planning can help.

Characteristics of Human Resource Planning


The characteristics of human resource planning may be stated as follows: 1. It is goal-oriented: The main objectives of HR planning is to ensure that the amount invested in human resource is justified, i.e., the organization should derive maximum benefits. If further ensures that the organization has the right number and type of persons working at any given point of time.

2. It focuses attention on the present and future manpower needs of an organization: After the present and future manpower needs of an organization have been anticipated, steps may be taken to fulfill the same through proper planning . Human resource planning, thus, has relevance for the present and the future. 3. It follows a systematic approach to the task of fulfilling the manpower needs: In the absence of HR planning, the organization will recruit staff at random. This leads to certain problems, e.g., surplus or shortage of manpower and the organization appointing unsuitable persons. HR planning follows a systematic approach to the entire process of recruiting staff in order to overcome these problems. 4. It promotes efficiency: HR planning is required as it leads to greater efficiency. This it does by keeping the cost of recruitment and selection low and by ensuring right man for the right job. 5. It is a continues process: It is not correct to think that HR planning is required only in the early years of inception of an organization. It is something that is required continuously. In other words, as long as an organization requires manpower, the need of HR planning will be felt. 6. It can be made flexible: There is always a feeling among many that any type of plan makes things rigid. It may be said here that the HR plan can be made flexible needs of the organization.

Objectives of Human Resource Planning


The objectives of human resource planning may be briefly stated as follows: 1. To ensure that the HR plan help to attain overall objective of the enterprise.

2. To keep the cost of recruitment and selection of employees low. 3. To ensure the selection of the right man for the right job. 4. To ensure that the amount invested in human resource is at its optimum level. 5. To ensure that the organization does not face the problem of either surplus or
shortage of manpower.

6. To make available the required manpower when expansion and diversification


activities are undertaken.

7. To give effect to the recruitment policy of the organization. Government


organizations adhere to the reservation policy of the Government in the matter of recruitment of staff.

8. To eliminate or minimize the adverse effects of labor turnover. 9. To find a suitable replacement for those employees, who retire, die, become
incapacitated or are dismissed from service on disciplinary grounds.

10. To guard the enterprise against manpower obsolescence. Factors influencing Human Resource Plan
The various factors influencing human resource plan may be grouped under: (1) (2) Internal Factor External Factors

Factors Influencing Human Resource Plan Internal factor External factor

Recruitment Availability Job Scale Trade Policy of funds Requirement of operations Union Influence

Reservation Availability Willingness Policy of of Manpower of job Govt. seekers

Trend in the Industry

Level of Technology

Internal factors
The internal factor include, among other, the following: 1. Recruitment policy of the organization: The policy of the organization regarding the source of recruitment and the method of selection is an important factors influencing the human resource plan.

2.

Availability of funds:

If finance is not a constraint, the organization will be in a

position to offer an attractive salary package and there by induce deserving persons to apply for the various job. 3. Job requirement: Different jobs call for different qualifications and skill from

prospective applicants. The requirement of every job, therefore, will have to borne in mind while preparing the human resource plan. 4. Scale of operation: The manpower needs of an organization, the scale of operation of which is greater, will naturally be more than the one with a lesser scale of operation. 5. Trade union influence: The demands of trade union regarding the hours of work, source of recruitment etc., may also influence human resource plan.

External Factors
The external factor include, among other, the following: 1. The reservation policy of the government: The reservation policy of the government provides for reservation of jobs for certain communities. The human resource plan of every government organization and government aided organization has to give effect to such a policy. 2.

Availability of the desired manpower: Before preparing the human resource


plan, it must be ensured that the type of human resource needed by the organization is actually available. This is because, sometimes people with a certain skill or qualification may not be willing to apply.

3.

Willingness of the job seekers to accept the terms and conditions : When an
organization wants to recruit staff afresh, it must ensure that its terms and condition of service are acceptable to the job seekers. If they find the term unreasonable, they may not be willing to apply.

4.

Knowledge of the trend in the industry: consideration of the trend in the


industry in the matter of the type of workforce preferred for certain jobs, wage rates, hours of work etc., is important in preparing the human resource plan.

5.

Level of technology: A business enterprise is highly susceptible to technological


changes. Technically qualified persons constantly update themselves to enhance their employment prospects. The job offer of an enterprise, therefore, must be such that the potentials of the individuals are fully utilized and they are also rewarded suitably.

Limitations of Human Resource Planning


Some of the limitation of human resource planning are mentioned below: 1. Expensive: preparation and implementation of the human resource plan is expensive in terms of time, efforts and money required. 2. Inaccurate forecasts; The manpower need of an organization are determined based on forecasts. The human resource plan is prepared in tune with such forecasts. The success of the plan, therefore, depends on the accuracy with which the forecasts are made. Inaccurate forecasts would only result in the failure of the plan. 3. uncertainties: Absenteeism, seasonal nature of certain jobs, labor turnover etc., can jeopardize the human resource plan. 4. Trade union resistance; trade union often criticize the human resource plan of an organization on the ground that it is detrimental to the interests of the employees. The plan may contain such measures as increase in workload, voluntary retirement, redeployment of surplus labor etc. It is for these reasons the trade unions show resistance. 5. Rigidity; Any plan is basically rigid. The rigidity of the human resource plan may, sometimes, affect implementation. Such a plan, thus, remains only on paper. 6. Focus on quantity: The manpower plan often focuses attention on the quantity of human resource rather than quality. Quantity without quality does more harm than good.

Measures to make the human resource plan effective


The following measures can be taken to make the human resource plan effective.

1.

Cost-benefits analysis of the HR plan: One of the limitation of the HR plan is that it is expensive in terms of time, effort and money required. The cost of preparing such a plan may be compared with the benefits accruing to the enterprise. It must be ensured that the benefits are always greater than the costs incurred.

2. Making accurate forecasts: as the success or failure of the HR plan depends on the accuracy of the forecasts, steps must be taken to predict the present and future manpower needs of the organization more accurately. There are several qualitative tools used for the purpose of forecasts. 3. provision for future uncertainties: Adequate provision should be made in the HR plan for such uncertainties as absenteeism, labor turnover etc. This would ensure proper implementation of the HR plan. 4. Involve employees and their Unions: Employees participation in management is an integral part of human resource management. While preparing the human resource plan, the suggestions and views of the employees on the manpower needs of the organization can be received. Where ever possible, steps can be taken to incorporate such suggestions in the HR plan. This would, certainly, help to overcome resistance by the employees and their unions. 5. Introducing flexibility: The rigid nature of the HR plan may hamper implementation. To overcome such a problem, certain amount of flexibility may be introduced into the plan. 6. Consideration of both quantity and quality: The HR plan, to be fruitful, must consider both the quantitative and qualitative aspects of the human resource.

Steps involved in Human Resource Planning (process of HR planning)


The following are the steps involved in human resource planning: 1. Analysis the organizational plan

2. Forecasting the demand for human resource 3. Forecasting supply 4. Making an estimate of the net human resource requirements and

5. preparing the action plan


Let us now discuss these.

Analysis the organizational plans


Every business enterprise will have plans for the successful performance of the following activities: (i) Purchase of raw- materials Installation of machines and their maintenance

(ii)

(iii) Finance and Accounting (iv) Marketing (v)


Research and Development

(vi) Maintenance of employee reveal the manpower needs of the organization.


An analysis of these various plans would reveal the manpower needs of the organization.

Process of Human Resource Planning

Analysis the Organizational Plans

Forecasting demand

Forecasting supply

Estimating net HR Requirements

Preparing the action plan

Forecasting the demand for human resource


Keeping in mind the expansion and diversification program of the enterprise in the near future, the rate of labor turnover and absenteeism, the technological changes, the trend in the industry and in the job market and so on, the future manpower requirements of the enterprise need to be forecasted. The quantity as

well as the quality(in term of skill, experience, knowledge etc.) of the human resource shall be taken into account while making the forecast. Some of the methods used for forecasting the manpower requirements are: (a) Managerial judgment The heads of the various departments will be in a position to estimate the manpower needs of their respective departments in the near future. While making such estimation, they take into account the various factors such as the general trend in the industry, the expansion and diversification program of the enterprise and so on. The aggregate of the departmental estimates would reveal the manpower needs of the whole enterprise. The experience of the managers helps them in making judgment. This method is simple to use and is also less time consuming. But the main drawbacks of this approach is that it is highly subjective and therefore may not be reliable. (b) Time study method The time study makes use of the concept of standard time for completing a certain task. By using such a study, it is possible to determine the manpower needs of an organization. This may be explained with a simple illustration. Standard time per worker per day =6 hours Man-hours needed to complete the weekly production targets=300 hours The number of workers required to complete the task, therefore300/6 =50 The time study method uses a very pragmatic approach to determining the manpower needs of an organization. (c) Ratio Analysis Ratio may be calculated for the past data relating to the number of employees in each category to the level of activity, i.e., Production level Sales level Number of workers Numbers of sales representatives and so on.

Such ratios are useful in knowing the future manpower needs of the enterprise. This has been explained with a simple illustration below: Level of sales in the previous years=2,500 units

Number of sales representative in the previous years= 10 The ratio of sales level to the number of sales representative =250:1 Sales level to be attained in the current year= 4,000 units The number of sales representatives required for attaining the target= 16 Additional hands needed, therefore=6

Forecasting supply
Collecting information about the existing human resource inventory is what is the first step in forecasting the future supply of human resource. Information on the existing human resource inventory is gathered: (i) (ii) (iii) (iv) (v) (vi) (vii) Department-wise (production, marketing, finance etc.) Job category- wise (clerks, cashiers, sales representative etc) Age wise Skill-wise Experience- wise Pay-scale-wise Sex-wise and so on.

Once information on the existing human resource is obtained, the next step is o estimate the future loss of human resource. Loss of human resource can arise on account of the following reasons: (i) (ii) (iii) (iv) (v) (vi) (vii) Retirement Resignation Death Dismissal Disablement Lay-off Retrenchment etc.

Making an estimate of the net human resource requirements


A comparison between the demand and supply forecast of human resource would indicate the net manpower requirements of the enterprise. It may be either surplus or

deficit. Surplus indicates that some employees are redundant while deficiency implies the need for additional hands.

Preparing the action plan


In case of surplus manpower, the employees, found in excess of the equirement, may be redeployed, i.e., sent to branch offices or sister concerns where there is shortage of manpower. Redeployement is prevalent in Government organization. The surplus may also be encouraged to opt for voluntary retirements. If there is deficiency, the number of person needed may be recruited from outside sources.

Human resource Planning at various level


HR planning is undertaken at various levels as mentioned below: 1. Global Level: Eminent persons through out the world are considered for appointment in global organization like the UNICEF, the UNESCO etc. Computer professionals through out the world and in particular from India are working for the corporate giants of the U.S and the European countries. 2. National Level: A citizen of India, possessing the requisite qualification, is considered for appointment in central government organizations. In India, organization like the Union Public Service Commission (UPSC) and the staff selection commission (SSC) are empowered to conduct entrance tests to select suitable candidates for central government service. An employee of the central government must be willing to serve in any part of India. A citizen of India, fulfilling the eligibility criteria, may also be inducted into the Indian army, Navy and Air force. There are also organization that select deserving sports persons, through out the country, to play for India. The board of control for cricket in India (BCCI), for example, has a selection committee that selects talented cr4icketers through out India to play for India.

3. State Level: Vacancies in state government organizations in India are filled up with the help of the respective state public service commission. For example, the Tamil Nadu Public Service Commission (TNPSC) is empowered to hold entrance tests to select candidates for states government service. An employee in the state government service must be prepared to serve in any part of the state.

4. Industry level: The level of activity of a particular industry like automobile, textile, chemical etc., will determine its manpower requirement. Only persons possessing certain specific qualification and experience can be considered for appointment in these industry. For example, a degree or diploma in automobile engineering is necessary for someone to associate himself with the auto industry as a technician. 5. Firm/ Company Level: The scale of operation of a particular firm or company will determine its manpower needs. The recruitment policy of the particular concern will indicate the mode of selection (whether from within or from outside) and the type of candidates (male or female, with or without previous work experience and so on) for the various jobs. 6 Department/Division Level: This is concerning the manpower need of a particular department or division within a firm or a company. The nature of activities of a particular department, the availability of financial resource etc., are some of the factors influencing the human resource plan.

Human resource retention plan


An important feature of the human resource is that it is perfectly mobile. If an employee, working for an organization, finds a better job elsewhere, ther4e is every possibility of his leaving his present organization, it would prove to be detrimental to the interests of the particular concern. Such a trend disturbs stability and also increase the recruitment and training costs. It is, therefore, necessary that every organization takes certain steps to retain its human resource. The human resource retention plan shall provide for the following: 1. Job security for all the employees: Obviously, an employee who does not have job security will quite his present job if he finds a secured job elsewhere. 2. Pay benefit on par with those in rival concerns: The salary and other monetary benefit given to the employee shall be on par with those in rival firms. Only then the employees will have a feeling that the employer does not exploit them. 3. Promotion opportunities: Lack of promotion opportunities result in stagnation. This leads to monotony and boredom in the workplace. There should always be scope for the employees to move to higher positions.

4. Facilities for training: Training enables an employees to update his knowledge and skill. It gives him greater confidence to meet future challenges. 5. Conducive working condition: The physical environment as well as the social environment in the workplace should be conducive for the employees. 6. Encouraging workers participation in management decision: Only then the

employee will have faith in the management, as the latter cannot take unilateral decisions. 7. Challenging works: The work given to any employee must be of a challenging nature. It must give scope for the employee to exhibit their skills. 8. Motivation of employees: Inducement of employees is necessary to get the best out of them . This mat done by offering them suitable tangible and intangible benefits. 9. Encouraging workers to form a union: When there is a trade union, the employees will be in a position to represent all their genuine demands collectively. 10. Facilities for counseling: Employees to undergo stress in view of domestic and work-related problems. Counseling, by the manager or by a specialist, enables them to get rid of their stress and perform their jobs better.