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Human Resource

Management Practices


PDM ( 2016 18)
Human Resource Planning (HRP)
HRP is the process of forecasting a firms future demand for, and supply of,
the right type of people in right numbers at the right place.

In other words, HRP is understood as the process of forecasting an organisations future demand for and
supply of human resources.
HRP is a part of Organisational Planning that includes managerial activities that set the companys
objectives for the future and determines the appropriate means for achieving those objectives.
Also known as strategic manpower planning/ employment planning/manpower planning
Evolving Nature of HRP

Broad and proactive
Narrow, and reactive
Carried on quarterly basis
Done once a year
Strategic activity integrated with
Carried on in isolation business strategy
Co-ordination with local newspapers, Strategic alliances with recruiting
agencies and relationships firms, leveraging internet as a tool
Hire considering current skills and Hire focusing on assessment of
experience individual potential
Factors affecting HRP
Type and Organisational
strategy of growth cycle
organisation Environmental

Human Resource
Planning Outsourcing
Time horizon

Type and quality Labour Market

of forecasting

Organisational Objectives
and Policies

HR Demand Forecast HR Supply Forecast

HR Programming and
plan implementation

Control & evaluation of


Restricted hiring, VRS, Recruitment, Selection
Lay-offs etc. etc.
Refers to the systematic monitoring of the external forces
influencing the organization
Economic Factors including general and regional conditions
Technological Factors including robotics and automation
Demographic changes including age, composition and literacy
Political and legislative issues including laws and statutes
Social Concerns including child care, educational facilities and priorities
By scanning the environment for changes that will affect the
organization, managers can anticipate their impact and make
adjustments early.
Organisational Objectives and Policies
Requirements in terms of numbers and characteristics of employees
should be derived from Organisational Objectives
The role of HRP is to subserve the overall objectives by ensuring
availability and utilisation of Human Resources
In developing these objectives, policies need to be formulated or revised
to address the following questions:
Are vacancies to be filled by promotions from within or hiring from outside
How do the training and development objectives interface with HRP objectives?
How to enrich employees jobs? Can it be done through HRP?
How to downsize the organization to make it more competitive?
How to ensure continuous availability of adaptive and flexible workforce?
HR Demand Forecast
Process of estimating the future quantity and quality of people required.
The basis of the forecast is annual budget and long-term plans, translated into
activity levels for each function and department.
Demand forecasting considers both, internal and external factors:

Competition Budget constraints

Economic Climate Production Levels
Laws and regulatory New Products and
bodies services
Changes in technology Organisational Structure
Social Factors Employee separation
HR Demand Forecast (Contd)
Functions of HR Demand Forecast:
Quantify the jobs necessary for producing a
Managerial Judgment given number of goods or offering a given
amount of services
Ratio-trend analysis
Determines what staff-mix is desirable in
Regression Analysis future
Work study techniques Assess appropriate staffing levels in
different parts of the organisation so as to
Delphi Technique avoid unnecessary costs
Flow Models Prevent shortage of people where and
when they are needed most
Monitor compliance with legal
requirements with regard to reservation of
HR Supply Forecast
Supply forecasting measures the number of people likely to be
available from within and outside the organization, after making
allowances for absenteeism, internal movement and promotions and
other conditions
HR Supply Forecast (Contd.)
Supply analysis covers:
Existing Human Resources through HR Audit and HRIS:
Skill inventories
Management Inventories
Internal sources of supply through HR Audit and HRIS:
Inflows and Outflows
Turnover Rate
Conditions of work and absenteeism
Productivity Level
Movement among jobs
External sources of supply from open markets
Geographical Location
Strategies for maintaining Demand-
Supply balance
Strategies for managing Shortages Strategies for managing Surpluses
Recruit new permanent employees Freeze Hiring
offer incentives to postpone retirement Do not replace those who leave
Rehire retirees part-time Offer Voluntary Retirement Scheme
Attempt to reduce turnover Reduce work hours
Subcontract work to another company Layoffs
Hire temporary employees Reduce outsources work
Redesign the jobs so that fewer Switch to variable pay plans
employees are required
Expand operations/diversify
A Case!
Neemla is a two-year old entrepreneurial company set up as an SSI initiative
with Government funding. Currently it is a 20 crore revenue generating venture,
per annual books. Employing around 200 contract employees, primarily women,
production units are set up in semi-urban/rural towns and villages in one state
in the eastern part of the country. Its products are all neem based and range
from soaps, liquid soaps, talcum powder, lotions, massage oil, hair oil and
antiseptic cream for medicinal purposes. The founder owner, Ritesh Rao, spent
the first two years focusing on setting up the two production units and the
marketing network in Orissa and moved to Andhra Pradesh last year. He is now
planning to set up a production unit in Andhra Pradesh and establish a
marketing network there as well.
How should he do the HRP?