What is Human Resource Planning?

Process, Importance, Factor

What is Human Resource Planning?

Human Resource Planning is a process that forecasts the company’s future
manpower demand by analyzing the current supply and the gaps if any.
The ultimate mission or purpose of Human Resource Planning is to align the future
human resources to future organizational strategies and needs so as to maximize the
future returns on investment in human resources.

It ensures that an organization is always equipped with the right number and kind of
people, at the right place and time. They should be capable of effectively and
efficiently accomplish their tasks that are required to achieve the goal of the
organization as a whole.

Objectives of Human Resource Planning are discussed below:

1. To Forecast Future Requirements for HR
2. Realizing Organizational Goal
3. Effective Management of Change
4. Effective Utilization of Human Resources
5. Promoting Employees

To Forecast Future Requirements for HR

HR Planning is essential to project the future manpower needs of an organization. If
HR planning is not done effectively it can lead to overstaffing or understaffing.

Realizing Organizational Goal

The basic aim of HR planning is to have an accurate and optimum number of
employees at any given point in time. They should have the skills required to
accomplish each job to meet the organizational objectives.
Promoting Employees
HR planning is required to maintain data and assess the performance of each
employee. A promotion is viewed as desirable by employees as it is a form of
recognition for those who make significant and effective work contribution.

HR plan continuously works on ensuring regular promotions to competent people on a

justifiable basis.

Human Resource Planning Process

Human Resource Planning Process usually consists of the following steps:

1. Forecasting Manpower Need

2. Assessing Current Manpower Inventory
3. Identifying Manpower Gap
4. Formulating Manpower Plan

Types of HR Forecast Techniques

In order to assess the number of employees required at any given time in future,
organizations apply various manpower demand forecasting techniques. The basis of
the forecast is the annual budget and long term corporate plans, which is then
converted into the man-hours required to achieve them and finally the number of
employees required to complete those man-hours.

Most commonly used techniques are discussed below.

 Delphi technique.
 Nominal technique.
 Brainstorming.
 Ratio Analysis.
 Trend Analysis.
Delphi Technique
Delphi technique is also a very important technique used for estimating
demand for human resources. It takes into consideration the human resources
requirements given by a group of experts i.e. managers.

A small group or panel of ten or fewer experts is identified. Each expert is asked to
give their individual judgments on the issue, they are asked to provide answers to a
structured questionnaire or even interviewed. After which the human resource
planning expert acts as an intermediary, collects all the responses, summarizes them
and send the report back to the experts.

Nominal Technique
A nominal group exists in name only, with members having minimal interaction
before producing a decision. Participants are asked to write their ideas anonymously.
Then the facilitator collects the ideas, and the group votes on each idea.

Brainstorming
Brainstorming is a group or individual’s creativity technique by which efforts are
made to conclude a specific problem by gathering a list of ideas spontaneously
contributed by its member(s).

Ratio Analysis
Ratio Analysis is a forecasting technique for determining future staff requirements by
using ratios between, for example, sales volume and number of employees needed.

Importance of HRP
1. Defining Future Personnel Need
2. Coping with Changes
3. High Cost of Investment in HR
4. HRP and Responsibilities Involved
Factors Affecting Human Resource
Planning
Human resource planning can be very clearly defined as the process of identifying the
number of people required by an organization in terms of quantity and quality. The
various factors affecting HRP are as follows:
1. Employment
2. Technical Changes in Society
3. Organizational Changes
4. Demographic Changes
5. Shortage of Skill due to Labor Turnover
6. Multicultural Workforce
What is Performance Appraisal?
Performance Appraisal is a formal structured system of measuring and evaluating an
employee’s job-related behaviors and outcomes to discover how & why the employee
is presently performing on the job and how the employee can perform more
effectively in the future so that the employee, organization, and society all benefit.

Performance appraisal works towards measuring the performance quality of the job

holder. Performance appraisal evaluates the jobholders’ performance over a period of
time against these standards and targets.

Methods of Performance Appraisal

Methods of Performance Appraisal are:

1. Rating Scale
2. Checklists
3. Performance Test
4. Annual Confidential Report
5. Psychological Appraisal
6. 360-degree Feedback
Rating Scale
The typical rating scale system consists of several numerical scales, each representing
a job-related performance criterion such as dependability, initiative, output,
attendance, attitude, cooperation etc., each scale ranges from excellent to poor.