Unit-2

INVESTMENT PERSPECTIVES OF HRM

Introduction
Just as planning is important in our daily lives’, planning forms an integral part of
an organization. An organization’s success lies to a great extent to the skill,
creativity and dedication of its employees. Here comes the importance of Human
Resource Planning. Surprisingly, many organizations tend to overlook this aspect
of HR and some are even not completely aware of it. Organizations that overlook
this aspect of planning, have less chances of surviving in the long run; needless to
say that a proper HR planning can help in dealing with a lot many issues in an
effective way.
HR Planning – Definition
HR planning is a part of the larger gamut of Human Resources, and it is defined as
the systematic analysis of HR needs that ensures that correct number of employees
with the necessary skills are available when they are required. While preparing the
planning programme, practitioners should bear in mind the objectives that they
need to achieve. This is precisely the reason for seeking employment by most
jobseekers. If these requirements are neglected by authorities it can lead to
unnecessary poor performances and other industrial issues.
Becoming a HR Professional
Now, as a task, planning is not easy. It requires a lot of concentrated efforts to
come with such a programme that would help ease your work. Competent HR
professionals put in a lot of effort in order to launch an efficient HR planning
programme. In order to become a HR professional formal training is mandatory.
Several courses related to HR are taught in educational institutes across the globe.
Among all major courses, MBA in HR is the most popular. As a course, MBA in
 HR is offered in several institutes. An extensive course in HR provides the
required curriculum and training that empowers a candidate to excel in this field.
Significance of HR Planning
Planning is a process that has to be commenced from somewhere and completed
for a particular purpose. It involves gathering information that ensures managers
are able to make sound decisions. The obtained information is also utilized in order
to achieve it’s the goals. If HR planning is applied properly, it can help in
answering the four important questions:
 What is the strength of the organization?
 As far as skill sets are required what kind of employees does the
organization have?
 How should the organization function in order to be able to utilize all its
resources properly?
 How can the company retain its employees?
Effective HR planning helps the organization work smoothly and also achieves
success in the present times. HR professionals working towards developing HR
planning for an organization, assists the organization to manage its staff
strategically. Apart from that HR planning can also ensure a proper career planning
for employees and help them in achieving their goals. It will also ensure
augmentation and eventually make the organization a better place to work in. The
major steps involved in HR planning include the following:
 Forecasting
 Inventory
 Audit
 HR Resource Plan
 Actioning of Plan
 Monitoring and Control
From forecasting to Actioning of planning requires a lot of concentrated effort. The
HR department of any organization has an enormous task – that of keeping pace
with all the changes and ensure that the organization has the right kind of
employees at the right time.
Ineffective HR Planning
On the other hand, poor HR planning or the absence of the same in an organization
can result in huge loss or financial crisis. It may take a long time for vacancies to
be filled. Needless to say it hampers work and has an adverse effect on the
organization in the long run.
One of the most important reasons as to why HR planning should be implemented
and effectively managed is the costs that are involved. Since budget forms an
integral part of any business organization, proper planning can ensure provision
costs related to HR.
HR planning must be taken seriously and it should involve creating a path for
advancement for both—the organization and the employee.

Human Resource Planning (HRP) has gained in its importance in the recent years.
The significance and objectives are dealt with in detail with steps in HRP like
deciding objectives and goals, Estimating the future organizational structure and
man power requirements, Auditing human resources, planning job requirements
and job descriptions, developing a human resource plan. 
 
The major activities of HRP has the five areas like, 

1. Demand forecasting,
2. Supply Forecasting,
3. Determining Human Resource Requirements,
4. Action planning, 
5. Monitoring and control.

Right person in a Right place is the key factor of succeeding the HRP in Apparel
Industry. Man power or ‘Human power’ may be taught of as “the total knowledge,
skills, creative activities, talents and aptitudes of an organizations work force as
well as the values, attitudes and benefits of an individual involved. It is the sum
total of inherent abilities, acquired knowledge and skills represented by the talents
and aptitudes of theemployed persons” of all the “Ms” in the management (i.e.) 
The management of 

 Men,
 Materials,
 Machines,
 Methods,
 Money,
 Motive power

The most important is ‘M’ for men or human resources. It is in fact an important
economic resource covering all human resources organized or unorganized,
employed or capable of employment working at all levels supervisors,
executives, sewing section production master, cutting section master, finishing
section master, fabric section executives and technical employees, sewing machine
operators, Helpers are involved in the Apparel Industry. Majority ofthe Garment
sectors always recruiting 70% of the women employees and 30% of the men
employees. 

In apparel Industry, constant true factor is considered to be 25% of the women

employees’ absenteeism. This is due to poor health condition or their family
situations. Daily productivity achievement are always at its back lock position, and
to meet over this type of risk shift system, Individual production system Incentives
on productivity based and some fringe benefits are kind enough to offer their
employees is the key factor to gain successfully run the garment Industry. 

HRP is deemed necessary for all organisations for one or the other of the
following reasons:

To carry on its work, each Apparel organization needs personnel with the
necessary qualification, skills, knowledge work experience and aptitude for work.
These are provided through effective man power planning. 

 There is a constant need for replacing such personnel who have grain old or
who retire, die or become in capacitated because of physical or mental
ailments otherwise the work would suffer. 

 HRP is essential because of frequent labour turn over which is unavailable

and even beneficial because it arises from factors which are socially and
economically sound such as voluntary quits, discharges, marriage,
 promoting or factors such as seasonal and cyclical fluctuations in business
which cause a constant ebb and flow in the work force in many apparel
industries. 

 In order to meet the needs of expansion of the factory due to expectation of

over productivity to be achieved in a given schedule to deliver the goods to
overseas countries. 

 The nature of the present work force in relation to its changing needs
necessitates the recruitment of new labour. 

 Man power planning is also in order to identify areas of surplus personnel or

areas in which there is a shortage of personnel. If there is a surplus, it can be
redeployed and if there is shortage it may be made good.

HRP constitutes an integral part of corporate plan and serves the organizational
purposes in more ways than one. For example it helps organizations to: 

1. Capitalize on the strengths of its human resources.

2. Determine recruitment levels.
3. Anticipate redundancies.
4. Determine optimum training levels.
5. Serve as a basis for management development programme.
6. Cost man power in new projects.
7. Assist productivity bar gaining.
8. Assess future requirements.
9. Study the cost of overhead and value of service functions.
10.Decide whether certain activities need to be sub contracted.

Steps in HRP: 
It may be rightly regarded as a multi-step process including various issues, such as:

 Deciding objectives and goals

 Estimating future organisational structure and man power requirements.
 Auditing human resources
 Planning job requirements and job descriptions.
 Developing a human resource plan.
Major Activities of HRP:

HRP entails following five areas of activity:

1. Demand fore casting

2. Supply Forecasting
3. Determining Human resource Requirements
4. Action planning
5. Monitoring and control

Though these activities are listed separately, they are interrelated and often
overlap. The purpose, methods and techniques of these five activities are briefly
discussed,here. 

The ‘Long-Range’ could be 5 years, while 10 to 15 years span could be used for a
perspective plan. Long-Range plans must be made on the basis of various trends in
the economy and in the labour market, and on long-term trends in the production.
Long-Range plans are general rather than specific, flexible rather than rigid. 

Nevertheless, a plan can be extremely useful in identifying factors and trends that
need to be reckoned with the early warning on possible problems. The long lead
time provides the opportunity and resilience to meet exigencies and make
necessary adjustments. More complete plans can be had as time slowly brings the
long-range,into,short-range. 

The first step in the HRP process is the establishment of a planning horizon. One
should know the period for which the plan will apply. Then, the specific corporate
objectives and strategies should be clear. Based on these, estimates or projections
for demand and supply of human resources can be made using the approach and
methods. The difference between the estimates of demand for and supply of human
resources is often referred to as the HRP strategy i.e. to formulate plans for closing
such gaps – perhaps by recruitment and training. (If the demand is positive i.e.,
demand exceeds supply) or by planned redundancy (If the gap is negative). 

1.Demand,Forecasting 
Refers to the estimation of the future need for Human Resources in the context of
corporate and functional plans and forecasts of future activity levels of the
organisation. Demand for Human Resources in an organisation should be based on
annual budgets and corporate plan, translated into activity levels, for each function
and department. In a manufacturing concern, the starting point is the sales forecast
and targets. Based on these, production plans are prepared specifying the numbers
and types of product to be made over a specific period. Then the number of people,
skill levels, etc., to accomplish the sales and production targets are estimated. The
human resources requirement for a given level of operations vary in the same
organisation over different points of time or among organisations depending upon
the production technologies, process, make or buy decisions etc. 

The plans refer to expected changes in production or manpower levels arising from
changes in working methods or procedures, automation or mechanization. These
could be mentioned as a crude percentage increase in productivity which could be
used to adjust the required man hours for a given level of output. Job analysis and
work-study provide the major inputs for demand forecasting. 

2.Supply,Forecasting 
Every organization will have two major sources of supply of human resources:
Internal and External. In unionized firm, up to certain job levels agreements may
determine the ratio of internal and external sources of supply. Manpower flows in
and out of an organisation can be of a variety of reasons. Policies affecting each of
these aspects need to be reviewed regularly to assess their possible effects on
human,resource,supplies. 

3.Determining,Human,Resources,Requirements 
Human resource requirements are determined by relating the supply to the demand
forecasts and identifying deficits or surpluses of human resources that will exist in
the future. Table shows proforma of how demand and supply forecasts can be
scheduled over a period of 5 years. The reconciliation of demand and supply
forecasts gives the numbers of people to be recruited or made redundant as the case
may be. This forms the basis for the action programme for HRP. 

4.Action,Planning 
The human resource requirements identified with the above procedure need to be
considered within a strategic framework. Organisations operate in a changing
environment. So, they do not remain static. Manpower structures also do not
remain static. Review of activities and roles of persons at different levels and O &
M studies may provide useful insights and opportunities to modify assumption
about manpower structures, job design etc., and change the estimate about
requirements. 
Change in production methods, union agreements on productivity, offloading
maintenance, sub-contract etc., are some of the strategic decisions that help
organisations to significantly alter their human resource needs without affection
the volume of business. Once the human requirements are studied and analysed,
amongst strategic options such as those mentioned above, the following action
plans.

(a) The recruitment plan, which will set out:

 The numbers and types of people required and when they are needed;
 Any special problems in recruiting the right people and how they are to be
dealt with;
 The recruitment programme.

(b) The redeployment plan, which will set out programme for transferring or
retraining existing employees or new jobs. 

(c) The redundancy plan, which will indicate:

 Who is to be redundant and where and when;

 The plans for re-training, where this is possible;
 Alternative programs for voluntary separation (Golden Hand Shake),
retrenchment, lay-off etc.

(d) The training plan, which will show:

 The number of trainees or apprentices required and the programme for

recruiting or training them;
 The number of existing staff who need training or retraining and the training
programme;
 The new courses to be developed or the changes to be made in existing
courses.

(e) The productivity plan which will set out programmes for improving employee
productivity or reducing employee costs through:

 Work simplification through O&M studies

 Mechanization and automation
 Productivity bargaining
 Incentives and profit sharing schemes
  Job re-design
 Training and re-training.

(f) The retention plan to reduce avoidable wastage by review or reasons for
employee turn over through additional information that can be obtained through
exit interviews and initiate necessary changes in;

 Compensation policies and Programmes

 Induction and training
 Changes in work requirements
 Improvements in working conditions.

In each of these areas it is necessary to estimate the cost and weigh them against
possible benefits. 

5.Monitoring&Control 

While assessing future requirements, the estimates depend mostly upon the nature
of human resources assumptions in the organisations. Corporate strategy can
influence manpower strategy and vice-versa. Here the three approaches we can
consider are zero bases budgeting, ideal and realistic. 

Objectives:
The main objective of having human resource planning is to have an accurate
number of employees required, with matching skill requirements to accomplish
organisational goals.

In other words, the objectives of human resource planning are to:

1. Ensure adequate supply of manpower as and when required.

2. Ensure proper use of existing human resources in the organisation.

3. Forecast future requirements of human resources with different levels of skills.

4. Assess surplus or shortage, if any, of human resources available over a specified

period of time.
5. Anticipate the impact of technology on jobs and requirements for human
resources.

6. Control the human resources already deployed in the organisation.

7. Provide lead time available to select and train the required additional human
resource over a specified time period.

According to Sikula “the ultimate purpose/objective of human resource planning is

to relate future human resources to future enterprise need so as to maximise the
future return on investment in human resources”.

Need for and Importance of HRP:

The need for human resource planning in organisation is realised for the
following reasons:
1. Despite growing unemployment, there has been shortage of human resources
with required skills, qualification and capabilities to carry on works. Hence the
need for human resource planning.

2 Large numbers of employees, who retire, die, leave organisations, or become

incapacitated because of physical or mental ailments, need to be replaced by the
new employees. Human resource planning ensures smooth supply of workers
without interruption.

3. Human resource planning is also essential in the face of marked rise in

workforce turnover which is unavoidable and even beneficial. Voluntary quits,
discharges, marriages, promotions and seasonal fluctuations in business are the
examples of factors leading to workforce turnover in organisations. These cause
constant ebb and flow in the work force in many organisations.
4. Technological changes and globalisation usher in change in the method of
products and distribution of production and services and in management
techniques. These changes may also require a change in the skills of employees, as
well as change in the number of employees required. It is human resource planning
that enables organisations to cope with such changes.

5. Human resource planning is also needed in order to meet the needs of expansion
and diversification programmes of an organisation.

6. The need for human resource planning is also felt in order to identify areas of
surplus personnel or areas in which there is shortage of personnel. Then, in case of
surplus personnel, it can be redeployed in other areas of organisation. Conversely,
in case of shortage of personnel, it can be made good by downsizing the work
force.

Human resource planning is important to organisation because it benefits the

organisation in several ways.

The important ones are mentioned below:

1. Human resource planning meets the organisation need for right type of people in
right number at right times.

2. By maintaining a balance between demand for and supply of human resources,

human resource planning makes optimum use of human resources, on the one
hand, and reduces labour cost substantially, on the other.

3. Careful consideration of likely future events, through human resource planning

might lead to the discovery of better means for managing human resources. Thus,
foreseeable pitfalls might be avoided.
4. Manpower shortfalls and surpluses may be avoided, to a large extent.

5. Human resource planning helps the organisation create and develop training and
succession planning for employees and managers. Thus, it provides enough lead
time for internal succession of employees to higher positions through promotions.

6. It also provides multiple gains to the employees by way of promotions, increase

in emoluments and other perquisites and fringe benefits.

7. Some of the problems of managing change may be foreseen and their

consequences mitigated. Consultations with affected groups and individuals can
take place at an early stage in the change process. This may avoid resistance for
change.

8. Human resource planning compels management to asses critically the strength

and weaknesses of its employees and personnel policies on continuous basis and,
in turn, take corrective measures to improve the situation.

9. Through human resource planning, duplication of efforts and conflict among

efforts can be avoided, on the one hand, and coordination of worker’s efforts can
be improved, on the other.

10. Last but no means the least, with increase in skill, knowledge, potentialities,
productivity and job satisfaction, organisation becomes the main beneficiary.
Organisation is benefitted in terms of increase in prosperity/production, growth,
development, profit and, thus, an edge over its competitors in the market.
Levels of Human Resource Planning:
Human resource planning is useful at different levels.

At the National Level:

Human resource planning by Government at the national level covers population
projections, programme of economic development, educational and health
facilities, occupational distribution and growth, mobility of personnel across
industries and geographical regions.

At the Sector Level:

This would cover manpower requirements of the agricultural sector, industrial
sector and service sector.

At the Industry Level:

This would forecast manpower need for specific industries, such as engineering,
heavy industries, textile industries, plantation industries, etc.

Importance of Human Resource planning in an organisation

This assignment is about human resource planning. For the purpose of this
assignment, I selected McDonald and consider myself as human resource senior
manager. McDonald is the world's largest fast food chain with branches all over
the world. The human resource department of McDonald is considered one of the
best in the world. Besides its big name for the quality of products and services,
McDonald also fosters employees training and development programs. Human
resource planning is essential for any organisation in the competitive world of
today because in order to improve and manage the workforce within the
organisation and achieve better performance. I have analysed that human resource
planning is vital for strategic decision making. In order to achieve organisational
goals it is necessary to implement the correct human resource policies. In my
assignment I have taken the example of various organisations which are
successfully using HR planning. This is the fact that employees are the assets of an
organisation so it is crucial to manage them accordingly. Human resource planning
helps in getting the information about need of different departments in terms of
demand and supply of labour. Hence, recruitment and selection are two major
processes completed through human resource management.

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