HUMAN RESOURCE PLANNING & DEVELOPMENT

Unit – I
1.1 Human Resource Management: Meaning, Benefits
In common parlance, human resources means the people. However, different management experts
have defined human resources differently. For example, Michael J. Jucius has defined human
resources as “a whole consisting of inter-related, inter-dependent and interacting physiological,
psychological, sociological and ethical components”.

According to Leon C. Megginson “From the national point of view human resources are knowledge,
skills, creative abilities, talents, and attitudes obtained in the population; whereas from the view-point
of the individual enterprise, they represent the total of the inherent abilities, acquired knowledge and
skills as exemplified in the talents and aptitude of its employees”.

Sumantra Ghosal considers human resources as human capital. He classifies human capita into three
categories-intellectual capitals, social capital and emotional capital. Intellectual capital consists of
specialized knowledge, tacit knowledge and skills, cognitive complexity, and learning capacity.
Social capital is made up of network of relationships, sociability, and trustworthiness Emotional
capital consists of self-confidence, ambition and courage, risk-bearing ability, and resilience. Now it
is clear from above definitions that human resources refer to the qualitative and quantitative aspects
of employees working in an organisation.

Define human resource management

In simple words, HRM is a process of making the efficient and effective use of human resources so
that the set goals are achieved.

According to Flippo “Personnel management, or say, human resource management is the planning,
organising, directing and controlling of the procurement development compensation integration,
maintenance, and separation of human resources to the end that individual, organisational and social
objectives are accomplished”.

The National Institute of Personnel Management (NIPM) of India has defined human
resource/personnel management as “that part of management which is concerned with people at work
and with their relationship within an enterprise. Its aim is to bring together and develop into an
effective organisation of the men and women who make up an enterprise and having regard for the
well-being of the individuals and of working groups, to enable them to make their best contribution to
its success”.

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According to Decenzo and Robbins “HRM is concerned with the people dimension in management.
Since every organisation is made up of people, acquiring their services, developing their skills,
motivating them to higher levels of performance and ensuring that they continue to maintain their
commitment to the organisation are essential to achieving organisational objectives. This is true,
regardless of the type of organisation-government, business, education, health, recreation, or social
action”.
Thus, HRM can be defined as a process of procuring, developing and maintaining competent human
resources in the organisation so that the goals of an organisation are achieved in an effective and
efficient manner. In short, HRM is an art of managing people at work in such a manner that they give
their best to the organisation for achieving its set goals.

Objectives:
The primary objective of HRM is to ensure the availability of right people for right jobs so as the
organisational goals are achieved effectively.

This primary objective can further be divided into the following sub-objectives:
1. To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.

2. To utilize the available human resources effectively.

3. To increase to the fullest the employee’s job satisfaction and self-actualisation.
4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.

5. To help maintain ethical policies and behaviour inside and outside the organisation.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual/group goals with organisational goals.

Table 1.2: HRM Objectives and Functions:

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Figure: Werther and Davis have classified the objectives of HRM into four categories
Scope:

The scope of HRM is, indeed, very vast and wide. It includes all activities starting from manpower
planning till employee leaves the organisation. Accordingly, the scope of HRM consists of
acquisition, development, maintenance/retention, and control of human resources in the organisation .
The same forms the subject matter of HRM. As the subsequent pages unfold, all these are discussed,
in detail, in seriatim.

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The National Institute of personnel Management, Calcutta has specified the scope of HRM as
follows:

1. The Labour or Personnel Aspect: This is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and development, lay-off and
retrenchment, remuneration, incentives, productivity, etc.

2. Welfare Aspect: It deals with working conditions, and amenities such as canteen, creches,
rest and lunch rooms, housing, transport, medical assistance, education, health and safety,
recreation facilities, etc.

3. Industrial Relations Aspects: This covers union-management relations, joint consultation,

collective bargaining, grievance and disciplinary actions, settlement of disputes, etc.

Functions:
The definition of HRM explains what managers do. The functions performed by managers are
common to all organizations. For the convenience of study, the function performed by the resource
management can broadly be classified into two categories, viz.

(1) Managerial functions, and (2)

Operative functions (see fig. 1.2).

These are discussed in turn.

(1) Managerial Functions:
Planning: Planning is a predetermined course of actions. It is a process of determining the
organisational goals and formulation of policies and programmes for achieving them. Thus planning
is future oriented concerned with clearly charting out the desired direction of business activities in
future. Forecasting is one of the important elements in the planning process. Other functions of
managers depend on planning function.

Organising: Organising is a process by which the structure and allocation of jobs are determined.
Thus organising involves giving each subordinate a specific task establishing departments, delegating
authority to subordinates, establishing channels of authority and communication, coordinating the
work of subordinates, and so on.

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Staffing: Staffing is a process by which managers select, train, promote and retire their subordinates
This involves deciding what type of people should be hired, recruiting prospective employees,
selecting employees, setting performance standard, compensating employees, evaluating
performance, counseling employees, training and developing employees.

Directing/Leading: Directing is the process of activating group efforts to achieve the desired goals. It
includes activities like getting subordinates to get the job done, maintaining morale motivating
subordinates etc. for achieving the goals of the organisation.

Controlling: It is the process of setting standards for performance, checking to see how actual
performance compares with these set standards, and taking corrective actions as needed.

(2) Operative Functions:

The operative, also called, service functions are those which are relevant to specific department.
These functions vary from department to department depending on the nature of the department
Viewed from this standpoint, the operative functions of HRM relate to ensuring right people for right
jobs at right times. These functions include procurement, development, compensation, and
maintenance functions of HRM.

A brief description of these follows:

Procurement: It involves procuring the right kind of people in appropriate number to be placed in the
organisation. It consists of activities such as manpower planning, recruitment, selection placement
and induction or orientation of new employees.

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Development: This function involves activities meant to improve the knowledge, skills aptitudes and
values of employees so as to enable them to perform their jobs in a better manner in future. These
functions may comprise training to employees, executive training to develop managers, organisation
development to strike a better fit between organisational climate/culture and employees.

Compensation: Compensation function involves determination of wages and salaries matching with
contribution made by employees to organisational goals. In other words, this function ensures
equitable and fair remuneration for employees in the organisation. It consists of activities such as job
evaluation, wage and salary administration, bonus, incentives, etc.

Maintenance: It is concerned with protecting and promoting employees while at work. For this
purpose virus benefits such as housing, medical, educational, transport facilities, etc. are provided to
the employees. Several social security measures such as provident fund, pension, gratuity, group
insurance, etc. are also arranged.

It is important to note that the managerial and operative functions of HRM are performed in
conjunction with each other in an organisation, be large or small organisations. Having discussed the
scope and functions of HRM, now it seems pertinent to delineate the HRM scenario in India.

1.2 Strategic Planning

Strategic planning is an organization's process of defining its strategy, or direction, and making
decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms
for guiding the implementation of the strategy. Strategic planning became prominent in corporations
during the 1960s and remains an important aspect of strategic management. It is executed by strategic
planners or strategists, who involve many parties and research sources in their analysis of the
organization and its relationship to the environment in which it competes.

Strategy has many definitions, but generally involves setting goals, determining actions to achieve the
goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will
be achieved by the means (resources). The senior leadership of an organization is generally tasked
with determining strategy. Strategy can be planned (intended) or can be observed as a pattern of
activity (emergent) as the organization adapts to its environment or competes.

A systematic process of envisioning a desired future, and translating this vision into broadly defined
goals or objectives and a sequence of steps to achieve them.

In contrast to long-term planning (which begins with the current status and lays down a path to meet
estimated future needs), strategic planning begins with the desired-end and works backward to the
current status.
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 • At every stage of long-range planning the planner asks, "What must be done here to reach the
next (higher) stage?"

• At every stage of strategic-planning the planner asks, "What must be done at the previous
(lower) stage to reach here?"

The planned objectives that an organisation strives to achieve. Most senior manager will take the
time to develop and articulate appropriate strategic goals for their business in order to
demonstrate employees what their plans and vision for the company are such strategic goal
should be achievable and should reflect a realistic assessment of the current and projected
business environment.

Importance of Strategic Planning: “Failing to plan is planning to fail”. This often-heard quote from
Alan Lakein, the popular author on time management, is a reminder that many of the day-to-day
operational struggles we face in organizational life had their seeds sown in the past, when we failed to
think ahea . . .d.

1. It can predict the future: Strategic Planning can predict the future. No manager has a
crystal ball in his or her brief case. Every day has its own “we couldn’t see it coming”.
Nevertheless, many severe day-to-day operating problems have, as their origin, a failure from
months or years earlier- a failure in strategic planning. Simply, absence of strategic planning,
or poor strategic plans, usually lead to tactical “days you’d rather forget” of operating
nightmares, some of which can last months. The importance of strategic planning in reducing
these "days you would rather forget" cannot be overemphasized. My definition of strategic
planning is “A systematic, formally documented process for deciding the handful of key
decisions that an organisation, viewed as a corporate whole, must get right in order to thrive
over the next few years. Note that in this definition it speaks of the strategic plan being
for the organization ‘viewed as a corporate whole’. The kind of strategic planning we
are talking about used to be called ‘corporate planning’. In a sense this makes the
importance of strategic planning blindingly obvious.
2. Strategic planning gives overall direction: Strategic planning can provide an overall
strategic direction to the management of the organization and gives a specific direction to
areas like financial strategy, marketing strategy, organizational development strategy and
human resources strategy, to achieve success. These other kinds of planning, some of which
are confused with strategic planning are intended for parts of the organization, or specific
functions or processes within the organization. All of these other types of planning should be
guided and informed by the strategic plan.
3. Strategic planning is planning for the organization as a whole: To repeat strategic
planning involves planning for an organization as a whole - as a corporate whole. So
corporate strategic planning is not product planning, production planning, cash flow planning,
workforce planning or any of the many of other sorts of planning conducted in today's
organizations. All these are designed to plan parts or sections or departments of
organizations. Most companies, even quite small ones, already employ product development
managers, marketing directors, production planners and finance controllers to look after the
planning of these various parts, and when you do strategic planning you certainly do not want
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 to do all these again under a fancy new name. As soon as a strategic plan starts to spell out
detailed production plans, workforce plans, finance plans, and so on, it is going to overreach
and become a initiative-sapping set of edicts from Head Office. The importance of strategic
planning comes not from the degree of control or supervision, and the level of detailed
instruction it includes, but for the scale, time horizon, and importance of the decisions it
embodies.
4. It is Important for strategic planners : Some planners seem to think that strategic planning
means planning the whole organization and so they produce vast schedules showing what is
going to happen to every tiny corner of the organization for years ahead in meticulous detail.
It is possible to plan ahead in great detail for short periods of time; it is also possible to plan
ahead for very long periods, although only in outline. To try to plan in meticulous detail over
long periods, however, is quite misguided. Some people may become suspicious that the
‘strategic planners’ who do this are only trying to cultivate a greater mystique around the
practice of strategic planning. They seem to be saying that you need to be very brilliant to do
strategic planning. This is to confuse the importance of strategic planning with the self
importance of those who se themselves as 'strategic planners'. Top executives in companies
with strategic planning departments get frustrated by 'planners' in their ivory towers, striving
for an unattainable perfection in the messy reality of an uncertain world.
The importance of strategic planning is that it is planning for the corporate whole, not for its
parts. It is not business planning, although it should inform and shape the business plan, it is
not production planning, although it should guide what is produced, it is not workforce or
technology planning or any other type of partial planning, and it definitely is not marketing,
even though it guides who to market to and where to market. It is not coordinating,
forecasting or budgeting. It is a process designed to yield a corporate strategic plan - a
statement of strategies designed to affect the long term performance of the organization as a
corporate whole.

Tools and approaches of Strategic Planning

A variety of analytical tools and techniques are used in strategic planning. These were developed by
companies and management consulting firms to help provide a framework for strategic planning.
Such tools include:

1. PEST analysis, which covers the remote external environment elements such as political,
economic, social and technological (PESTLE adds legal/regulatory and
ecological/environmental);
2. Scenario planning, which was originally used in the military and recently used by large
corporations to analyze future scenarios;
3. Porter five forces analysis, which addresses industry attractiveness and rivalry through the
bargaining power of buyers and suppliers and the threat of substitute products and new
market entrants;
4. SWOT analysis, which addresses internal strengths and weaknesses relative to the external
opportunities and threats;
5. Growth-share matrix, which involves portfolio decisions about which businesses to retain or
divest; and

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 6. Balanced Scorecards and strategy maps, which creates a systematic framework for measuring
and controlling strategy.

Strategic Planning Activities:

Strategic planning activities include meetings and other communication among the organization's
leaders and personnel to develop a common understanding regarding the competitive environment
and what the organization's response to that environment (its strategy) should be. A variety of
strategic planning tools (described in the section below) may be completed as part of strategic
planning activities. The organization's leaders may have a series of questions they want answered in
formulating the strategy and gathering inputs, such as:

1. What is the organization's business or interest?

2. What is considered "value" to the customer or constituency?
3. Which products and services should be included or excluded from the portfolio of offerings?
4. What is the geographic scope of the organization?
5. What differentiates the organization from its competitors in the eyes of customers and other
stakeholders?
6. Which skills and resources should be developed within the organization?

1.3 Human Resource Planning

Strategic planning can be defined as the process of identifying organizational objectives and the
actions needed to achieve those objectives. It involves analyzing such areas as finance, marketing,
and even human sources to determine the capacities of the organization to meet its objectives.

“It involves devising a picture of how the organization will look in three or five years time, and
how it can reach that state during that time period. Common items for consideration include, for
example: Anticipated financial situation (turnover, gross and net profit, return on investment);
intended product markets and market share; Desired output and productivity; Changes in location
and opening of new plants or outlets; employee numbers.” -Penny Hackett, Success in Personnel
Management

Thus human resource is one element of the overall corporate strategy or plan, and the two are
mutually inter-dependent. If the corporate plan envisages a cut in output, for example, or the
closure of a particular plant, then the human resource plan will need to consider redeployment of
staff, redundancies and so on. If the corporate plan specifies a move into a new product market, the
human resource plan will have to source the required labour from outside or within the organization,
through recruitment or training.
Meaning

Human resource planning is the process of anticipating and carrying out the movement of people into,
within, and out of the organization. Human resources planning is done to achieve the optimum use of
human resources and to have the correct number and types of employees needed to meet
organizational goals.

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Thus, it is a double-edged weapon. If used properly, it leads not only to proper utilization, but also
reduces excessive labor turnover and high absenteeism, and improves productivity.

It can also be defined as the task of assessing and anticipating the skill, knowledge and labor time
requirements of the organization, and initiating action to fulfill or ‘source” those requirements. Thus,
if the organization as a whole or one of its subsystem is not performing to the benchmark, in other
words, it is declining, it may need to plan a reduction or redeploys its existing labor force.
On the other hand, if it is growing or diversifying, it might need to find and tap into a source of
suitably skilled labor (for example: GE, the pioneers in BPO industry went for a large scale
recruitment while setting up office here in India.).

That is why; we need to plan in advance even for procuring human resources, which in contrast to a
general myth are not abundant!! Thus, in the same line, we propose that organiza-tion can achieve its
goals effective through effective contingencies of all the HR functions; for example, the structure of
an organization and the design of the job within it affect an organization’s ability to achieve only
through the efforts of people. It is essential therefore, those jobs within the organiza-tion be staffed
with the personnel who are qualified to perform them. Meeting these staffing needs requires effective
planning for human resources

Lets discuss definitions of HRP as given by different experts:

Vetter opines that it is the process by which management determines how the organization should
move from its manpower position to its desired manpower position to carry out integrated plan of the
organization.

According to Geisler, “Manpower planning is the process – including forecasting,

developing and controlling by which a firm ensures that it has:

• The right number of people,

• The right kind of people,
• At the right places,
• At the right time, doing work for which they are economically most useful”.
1.4 Man Power Planning
Definition

According to Gorden MacBeath, manpower planning involves two stages.The first stage is concerned
with the detailed “planning of manpower requirements for all types and levels of employees
throughout the period of the plan,” and the second stage is concerned with “planning of manpower
supplies to provide the organisation with the right types of people from all sources to meet the
planned requirements.”

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According to Vetter, the process by which management determines how the organisation should move
from its current manpower position to its desired manpower position. Through planning, management
strives to have the right number and the right kinds of people, at the right places, at the right time,
doing things which result in both the organisation and the individual receiving maximum long-run
benefit.

Coleman has defined human resource or manpower planning as “the process of determining
manpower requirements and the means for meeting those requirements in order to carry out the
integrated plan of the organisation.”

Stainer defines manpower planning as “Strategy for the acquisition, utilisation, improvement, and
preservation of an enterprise’s human resources. It relates to establishing job specifications or the
quantitative requirements of jobs determining the number of personnel required and developing
sources of manpower.”

According to Wickstrom, human resource planning consists of a series of activities, viz:

1. Forecasting future manpower requirements, either in terms of mathematical projections of
trends in the economic environment and development in industry, or in terms of judgmental
estimates based upon the specific future plans of a company;

2. Making an inventory of present manpower resources and assessing the extent to which these
resources are employed optimally;

3. Anticipating manpower problems by projecting present resources into the future and
comparing them with the forecast of requirements to determine their adequacy, both
quantitatively and qualitatively; and

4. Planning the necessary programmes of requirement, selection, training, development,

utilization, transfer, promotion, motivation and compensation to ensure that future manpower
requirements are properly met.

According to Geisler, manpower planning is the process—including forecasting, developing and

controlling—by which a firm ensures that it has the right number of people and the right kind of
people at the right places at the right time doing work for which they are economically most useful.

Objective of Manpower Planning

Manpower Planning is a two-phased process because manpower planning not only analyses the
current human resources but also makes manpower forecasts and thereby draw employment
programmes. Following are the objectives of Manpower Planning:

1. Shortages and surpluses can be identified so that quick action can be taken wherever required.

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2. All the recruitment and selection programmes are based on manpower planning.
3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing
can be avoided.

4. It also helps to identify the available talents in a concern and accordingly training programmes
can be chalked out to develop those talents.

5. It helps in growth and diversification of business. Through manpower planning, human resources
can be readily available and they can be utilized in best manner.

6. It helps the organization to realize the importance of manpower management which ultimately
helps in the stability of a concern. Benefits of Manpower Planning

1. Key to managerial functions- The four managerial functions, i.e., planning, organizing,
directing and controlling are based upon the manpower. Human resources help in the
implementation of all these managerial activities. Therefore, staffing becomes a key to all
managerial functions.
2. Efficient utilization- Efficient management of personnels becomes an important function in
the industrialization world of today. Seting of large scale enterprises require management of
large scale manpower. It can be effectively done through staffing function.
3. Motivation- Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmes, i.e., incentive plans to be framed for further
participation and employment of employees in a concern. Therefore, all types of incentive
plans becomes an integral part of staffing function.
4. Better human relations- A concern can stabilize itself if human relations develop and are
strong. Human relations become strong trough effective control, clear communication,
effective supervision and leadership in a concern. Staffing function also looks after training
and development of the work force which leads to co-operation and better human relations.
5. Higher productivity- Productivity level increases when resources are utilized in best
possible manner. higher productivity is a result of minimum wastage of time, money, efforts
and energies. This is possible through the staffing and it's related activities ( Performance
appraisal, training and development, remuneration)

Limitations & Problems in Man Power Planning

Many manpower schemes fail completely or do not reach their full potential, mainly because the
programme is not implemented in the way for which it was designed. Some of the reasons for these
failures are indicated below:

(a) The lack of sensitivity to problems and solutions. This important obstacle to the
implementation of effective manpower planning is caused by the general apathy of line
managers. Management still seems to be particularly concerned about financial and material
resources and has a tendency to neglect the critical factor of human resources. Over the past
few decades, productivity has increased as a result of improved technology, but any further

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 improvement will depend, to a very great extent, upon improved manpower utilisation. In
this respect, management is required to show a greater respect to the role of man power in
profitability.

(b) Short term profit goals In the short‐term there is a tendency to view manpower planning as
unprofitable and too costly. This represents the traditional view that costs of personnel are
overhead costs and not direct costs. It is essential that management review this problem and
weigh the benefits against the costs. It is possible that this lack of concern over manpower
planning could be attributed to lack of information. If information is not forthcoming, then
manpower planning is a futile exercise.

(c) Lack of criteria. The lack of information can lead directly to the absence of criteria against
which to measure performance. It is not an easy task to measure human performance
without the use of adequate quantitative data. It is easy to measure the depreciation of
material goods, out human beings tend to appreciate with the passing of time, and this
appreciation quality has never been measured. The tendency of management is to measure
human beings, only in terms of their cost to the organisation. Management should become
aware of the fact that the evaluation of performance is long, complex, uncertain and
abstract, and it is necessary that they continue their planning without the use of objective
criteria.
(d) Complexity of the organisation Many organisations have increased tremendously in recent
years and some appear to have difficulty in determining the exact size of the workforce.
They appear to be incapable of updating the retrievable information which is essential to
manpower planning. Because of the increasing complexity of organisations, it is becoming
more essential to keep a track on the movements of employees, as well as all the personal
details which may be of use in planning. This is where the personnel manager and his staff
must exercise a keen supervision.

(e) Rapid changes The rate of technological change causes difficulties in manpower planning.
This is because, at times, it is difficult to keep up with the technical development. There is
always resistance to change within an organisation, but somehow this resistance must be
overcome if manpower is to be utilised effectively. One possible method of overcoming
this resistance to change on part of the existing staff is to introduce new employees, with
new ideas from outside of the organisation.

(f) Lack of communication This problem is the oldest and most common in personnel
administration. Manpower planning is now becoming a sophisticated process, only

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 involving the use of experts, and these experts must have rapid access to accurate
information.

Process of Manpower Planning:

The planning process is one of the most crucial, complex and continuing managerial functions which,
according to the Tata Electrical Locomotive Company, “embraces organisation development,
managerial development, career planning and succession planning.” The process has gained
importance in India with the increase in the size of business enterprises, complex production
technology, and the adoption of professional management technique.

It may be rightly regarded as a multi-step process, including various issues, such as:
(A) Deciding goals or objectives
(B) Auditing of the internal resources
(C) Formulation of the recruitment plan
(D) Estimating future organisational structure and manpower requirements
(E) Developing a human resource plan A. Deciding Goals or Objectives:

The business objectives have been determined; planning of manpower resources has to be fully
integrated into the financial planning. It becomes necessary to determine how the human resources
can be organised to achieve these objectives.

For this purpose, a detailed organisation chart is drawn and the management of the company tries to
determine “how many people, at what level, at what positions and with what kind of experience and
training would be required to meet the business objectives during the planning period.” The
management of this company considers a time 5 pan of five years as an optimum period for this
purpose.

It stresses the specific and standard occupational nomenclature must be used without which “it would
not be possible to build a firm-cum-industry-wise manpower resources planning.” It suggests the
adoption for this purpose of the international coding of occupations. For a sound manpower planning
it considers as a prerequisite the preparation of a manual of job classification and job description with
specific reference to individual jobs to be performed. B. Audit of the Internal Resources:

The next step consists of an audit of the internal resources. A systematic review of the internal
resources would indicate persons within the organisations who possesses different or higher levels of
responsibilities. Thus it becomes necessary to integrate into the manpower planning process a sound
system of performance appraisal as well as appraisal of potential of existing employees. C.
Formulation of the Recruitment Plan:

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A detailed survey of the internal manpower resources can ultimately lead to as assessment of the
deficit or surplus of personnel for the different levels during the planned period. Whilst arriving at the
final figures, it is necessary to take into account the “actual retirements and estimated loss due to
death, ill health and turnover, based on past experience and future outlook in relation to company’s
expansion and future growth patterns.”

D. Estimating Future Organisational Structure and Manpower Requirements:

The management must estimate the structure of the organisation at a given point of time. For this
estimate, the number and type of employees needed have to be determined. Many environmental
factors affect this determination. They include business forecast, expansion and growth, design and
structural changes, management philosophy, government policy, product and human skills mix, and
competition.

E. Developing of Human Resource Plan:

This step refers to the development and implementation of the human resource plan, which consists in
finding out the sources of labour supply with a view to making an effective use of these sources. The
first thing, therefore, is to decide on the policy— should the personnel be hired from within through
promotional channels or should it be obtained from an outside source.

The best policy which is followed by most organisations is to fill up higher vacancies by promotion
and lower level positions by recruitment from the labour market. The market is a geographical area
from which employers recruit their work force and labour seeks employment.

1.5 Linkage of Human Resource Planning with Human Resource Function

Human Resource Planning in Recruitment and Selection Process:

HR planning has an important role in facilitating the entire recruitment and selection process
particularly:
(i) Facilitating the Pre-Recruitment Review: The facilitating of the Pre-recruitment
review involves providing advice on whether any internal staff should be considered for
filling the new staffing need and if so, what process should be used in considering them;
or providing advice on whether the new staffing need should involve giving opportunity
to both internal and external applicants.
(ii) Providing Expert Advice and Guidance: This focuses on providing expert advise and
guidance in the early stages of the recruitment particularly with defining the position,
drafting the advertisement, identifying and advising on suitable channels for
advertisement, arranging for the announcement to be placed through the agreed channels,
and advising on the composition of the selection committee and allied matters.
(iii) Functioning as an Expert Adviser to the Selection Committee: The HR planner
functions as an expert adviser to the selection committee throughout the entire selection
process particularly, by briefing the committee members on interview techniques and
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 providing expert advice on the modalities, screening, shortlisting, and making final
decision.
(iv) Ensuring That Short-Listed Candidates Have Briefing Materials: the focus is on
providing materials prior to the interview about the venue, employment conditions and
when appropriate, lifestyle issues, and ensuring that all their questions on these issues are
resolved after the interview for successful candidates.
(v) Pre-Interview Briefing Materials: HR planners should ensure that all shortlisted
candidates are provided with an appropriate briefing package prior to their interview. The
contents of the briefing package will depend on the nature of the position. All briefing
packages should include information about the salary range for the position and a
summary of key employment conditions and benefits. Candidates will need to make
decisions and tradeoffs regarding the relative importance of these factors if they are
offered the position. HR planners must ensure that interviewees have the required
information so that the candidate who is offered the position is able to make a fully
informed decision whether to accept the offer or otherwise..
(vi) Regional Stations’ Capability for Recruitment: HR planners may not be able to
provide the full range of services needed for recruitment purposes across all duty stations
in an organization, particularly in smaller regional and field locations. In such
circumstances, it is important for HR planners to identify which services can be provided
and which cannot, all in a bid to ensure hitchfree implementation of the programme.
(vii) Ensuring that all Post-Interview Procedures Are Managed Effectively: The HR
planner manages post-interview process effectively including those that affect the
appointee’s transition into her/his new role, workplace and duty station, and those that
will sustain unsuccessful candidates’ interest for future employment opportunities with
the organization. HR planner adds value to the hiring process by taping from the
experience of other recruiters of consultants providing interview training on recruitment
and selection process, and also looking at perceptions on the needs of the organization or
department from the perspective of other experts outside the department or organization.
(viii) Post Interview Issues: Addressing candidates’ personal issues are critical to successful
recruitment. Some candidates may wish to raise some of the issues already discussed
during the interview and other issues after the interview. HR planners should also ensure
that all post-selection formalities are conducted effectively for unsuccessful candidates to
guarantee future interest in the organization’s recruitment and selection process.
(ix) Future Practice in the organization’s Recruitment and Selection Process: HR
planners need to reflect on the strengths and weaknesses of each selection process,
develop necessary procedural changes for future recruitments (including prerecruitment
action), and provide suggestions to the selection committee to make their task more
objective and rewarding.

Linkage with other HR Function

1. Safety: Workplace safety is an important factor. Under the Occupational Safety and Health
Act of 1970, employers have an obligation to provide a safe working environment for
employees. One of the main functions of HR is to support workplace safety training and
maintain federally mandated logs for workplace injury and fatality reporting. In addition, HR
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 safety and risk specialists often work closely with HR benefits specialists to manage the
company's workers compensation issues. Through different techniques of HRP what are the
risks and uncertainty to perform the task can be identified. This help the HR managers what
safety is to be considered to perform the job.
2. Employee Relations: In a unionized work environment, the employee and labor relations
functions of HR may be combined and handled by one specialist or be entirely separate
functions managed by two HR specialists with specific expertise in each area. Employee
relations is the HR discipline concerned with strengthening the employer-employee
relationship through measuring job satisfaction, employee engagement and resolving
workplace conflict. Labor relations functions may include developing management response
to union organizing campaigns, negotiating collective bargaining agreements and rendering
interpretations of labor union contract issues.
3. Compensation and Benefits: Like employee and labor relations, the compensation and
benefits functions of HR often can be handled by one HR specialist with dual expertise. On
the compensation side, the HR functions include setting compensation structures and
evaluating competitive pay practices. A comp and benefits specialist also may negotiate
group health coverage rates with insurers and coordinate activities with the retirement savings
fund administrator. Payroll can be a component of the compensation and benefits section of
HR; however, in many cases, employers outsource such administrative functions as payroll.
HR Planning play role in determining the compensation of the employee.
4. Compliance: Compliance with labor and employment laws is a critical HR function.
Noncompliance can result in workplace complaints based on unfair employment practices,
unsafe working conditions and general dissatisfaction with working conditions that can affect
productivity and ultimately, profitability. HRP determines the relation of law with other
function of HR.
5. Training and Development: Employers must provide employees with the tools necessary
for their success which, in many cases, means giving new employees extensive orientation
training to help them transition into a new organizational culture. Many HR departments also
provide leadership training and professional development. Leadership training may be
required of newly hired and promoted supervisors and managers on topics such as
performance management and how to handle employee relations matters at the department
level. Professional development opportunities are for employees looking for promotional
opportunities or employees who want to achieve personal goals such as finishing a college
degree. Programs such as tuition assistance and tuition reimbursement programs often are
within the purview of the HR training and development area.

1.6 Factors Affecting Manpower Planning:

Manpower planning exercise is not an easy tube because it is imposed by various factors such as:

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 1. It suffers from inaccuracy because it is very difficult to forecast long-range requirements of
personnel.

2. Manpower planning depends basically on organisation planning. Overall planning is itself is

a difficult task because of changes in economic conditions, which make long term manpower
planning difficult.

3. It is difficult to forecast about the personnel with the organisation at a future date. While
vacancies caused by retirements can be predicted accurately other factors like resignation,
deaths are difficult to forecast.

4. Lack of top management support also frustrates those in charge of manpower planning
because in the absence of top management support, the system does not work properly.

5. The problem of forecast becomes more occur in the context of key personnel because their
replacement cannot be arranged in short period of time.

6. Moreover any system requires the support of top management and manpower planning is no
exception to this.

1.7. Work Measurement

Introduction: Attempts to measure work and to establish work standards have always resulted in
reactions, promoted criticism and generally have been the topic of considerable controversy among
the managements and work force/workers. It gives feeling to the workers that standards may result in
more effective control and they may be required to do hard work for lesser wages. Management feels
that the use of standards may lead workers to work hard which may result in higher wage bills.
Application of techniques designed to establish the time for qualified operator/worker to carry out a
specified job at a defined level of performance is called the work measurement.

In other words, time study is the systematic study of work system with the purpose of:
(i) Developing the desired system and method usually the one with lowest cost.
(ii) Standardising the system and method.
(iii) Determining the time required by a qualified and properly trained worker working at a normal
pace to do a specific operation.

Definition: Work measurement may be defined as “the art of observing and recording the time
required to do each detailed element of an Industrial activity/operation.”

Application of time and motion study and activity sampling techniques to determine the time for a
qualified worker to complete a specific job at a defined level of performance. Work measurement is

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used in budgeting, manpower planning, scheduling, standard costing, and in designing worker
incentive schemes.

The term industrial activity includes mental, manual and machining operation, where
(i) Mental time includes time taken by the operator for thinking over some alternative operations. (ii)
Manual time consists of three types of operations i.e. related with handling of materials, handling of
tools and handling of machines.

(iii) Machining time includes time taken by the machines in performing the requisite operations.
Thus time study standardizes the time taken by average worker to perform these operations.
Objectives of Work Measurement:
The main objectives of work measurement are the followings:
(i) Target time for each job can be scientifically estimated, with this estimate realistic
schedules and manpower requirements can be prepared.

(ii) Sound comparison of alternative methods is possible by comparing their basic times.
(iii) Useful wage incentive schemes can be formulated on the basis of target times.
(iv) It can lead to proper balancing of the work distribution.
(v) It can help to analyse the activities for performing a job with the view to eliminate or
reduce unnecessary or repetitive operations so that human effort can be minimized.

(vi) To standardise the efficient method of performing operations.

(vii) To standardise conditions for efficient performance.
(viii) To determine man and machines ratio for effective and efficient utilisation of both.
(ix) To provide information’s and basis for production planning and scheduling activities.
Techniques of Work Measurement:

International Labour Organization(ILO) defined work measurement as ‘application of techniques

designed to establish the work content of a specified task by determining the time required for
carrying it out at a defined standard of performance by a qualified worker’. Conventionally, it is
known as time study, which is primarily carried out to determine the standard time required to
perform a specific task. Such time standards are used for planning and scheduling work, for cost
estimating or for labour cost control. Otherwise, it may serve as the basis for a wage incentive plan.
But we find it has wide application in deciding a wage incentive plan.

There are different techniques of work measurement. However, the following are the principal
techniques:

1. Time study

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 2. Ratio-delay study (Statistical Sampling Technique)
3. Synthesis from standard data
4. Pre-determined motion time standard
5. Analytic estimating
Out of all these, only the time study technique is widely used because others are complicated in
nature. Here also, we will discuss in detail the time study only, while simply defining the other
techniques.

1. Time Study: ILO defined time study as ‘a technique for determining as accurately as possible
from a limited number of observations, the time necessary to carry out a given activity at a
defined standard of performance’. For carrying out a time study, equipment’s such as
stopwatch, study board, pencils, slide rule, etc. are required.

The different types of stopwatches include:

1. Stopwatches that record one minute per revolution by intervals of one- fifth of a second with
a small hand recording 30 minutes.

2. Stopwatches that record one minute per revolution, calibrated in one- hundredth of a minute
with a small hand recording 30 minutes.

3. Decimal-hour stopwatches recording one-hundredths of an hour with a small hand recording

up to one hour in 100 divisions.

The following steps are necessary for carrying out a time study for the measurement of work:
a. To collect and complete all available information about the job, which should also include the
surrounding conditions and also the attributes of the operators, which are likely to affect the
work

b. To record the details of the methods and also to break down different operations into their
elements

c. To record the time taken by the operators to perform the operation (element-wise) measuring
preferably with a timing device such as a stopwatch

d. To assess the working speed of the operators by comparing the same with a predetermined
normal speed

e. To convert the observed time to normal time

f. To decide the rate of allowances that may be given over and above the normal time of the
operation

g. To determine the allowed time for operation Other Techniques of Work Measurement:
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Since carrying out the time-study for each job is a time consuming task, statistical techniques, that is,
ratio-delay study is often carried out. Ratio-delay is a sampling technique. Instead of going for the
complete job study under ratio-delay techniques, a sufficiently large number of readings are taken at
random intervals.

Like all other sampling techniques, under this method also there are bound to be some errors.
However, since the cost of such study is not much, many organizations which have the expertise
prefer this method. Moreover, under this method, because rating is not done and the time is recorded
directly using a stopwatch, it encounters no resistance from the workers.
Synthesis from standard data method synthesizes time standards that are built up or synthesized from
element times previously obtained from direct time-study. Most of the organizations that have an
independent work study department, build up a synthetic table converting the commoner elements.
However, some units also use such time record of other organizations as standard data. For obvious
non-commonality of technology, skill, process, and working environments, this type of synthesis may
not always be correct.

Pre-determined motion time standards have been developed for different job elements based on the
elementary movement. Usually, for time measurement, work factor and basic motion, times are
recorded in any predetermined time standards. Work study analysts use such time-standards as the
basis for comparing the observed time of the present workers. This enables the work-study men to
quickly decide the efficiency or otherwise of the workers and to make decisions accordingly.
Analytical estimation is normally used in plant maintenance and repair work. This is a compromise
between straight rate fixing and time-study. Since maintenance and repair jobs require adequate
planning and also because such jobs, by their very nature, call for creativity and innovativeness, it is
difficult to enforce straight rate fixing. Analytical estimation is difficult in nature and is also not
always fool-proof for the inexperience of the work-study men.

1.8 Method Study

Concept and Definition: Method study is basically conducted to simplify the work or working
methods and must go towards higher productivity. It is always desirable to perform the requisite
function with desired goal minimum consumption of resources. Method signifies how a work is to be
done i.e. description of how we consume resources in order to achieve our target?

Methods are integral part of work accomplishment and signify:

1. How well our methods utilize the limited available resources such as manpower, machines,
materials and money.

2. How our methods physically affect production output of the unit.

3. The quality of output obtained by application of our methods.
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Thus methods can determine the amount of input materials, time power and money consumed. So
methods may be considered the core where one can attempt to reduce the consumption of resources
thereby reducing cost per unit output through utilization of proper methods. The method design can
decided the cost and quality of output produced.

Method Study may be defined as:

“A procedure for examining the various activities associated with the problem which ensures a
systematic, objective and critical evaluation of the existing factors and in addition and imaginative
approach while developing improvements”.

There are three aspects of its application:

(1) Method study proper is concerned with broad investigation and improvement of a
shop/section, the layout of equipment and machines and the movement of men and
materials.

(2) Motion study is a more detailed investigation of the individual worker/ operator,
layout of his machines, tools, jigs and fixtures and movement of his limbs when he
performs his job. The ergomics aspect i.e. study of environment, body postures, noise
level and surroundings temperature also form part of investigation.

(3) Micro motion study i.e. much more detailed investigation of very rapid movements
of the various limbs of the worker.

So, motion study is an analysis of the flow and processing of material and the movements of men
through or at various work stations. Thus motion study analyses the human activities which make up
an operation. Whereas method study or methods analysis has been defined as: “systematic procedure
for the critical analysis of movements made by men, materials and machines in performing any
work”.

Now because by definition method study includes the study of all facets of human work and all
factors affecting the work so motion study be considered as a part of method study.

Scope of Method Study:

The task of work simplification and compatible work system design concerns the followings:
(i) Layout of shop floor and working areas or work stations.
(ii) Working conditions
(iii) Handling distances (material movement) (iv) Tooling and equipment used.

(v) Quality standards to be achieved.

(vi) Operators and operations in achieving the production targets.

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 (vii) Materials to be used.
(viii) Power required and available.
(ix) Work cycle time.
(x) Working processes.
All these factors are related to method study and possible improvements may be:
(a) Short term: The improvements which can be introduced quickly and economically. These may
be concerned with management and work force.

(b) Long term: The improvements which are not acceptable to management at present and which
require good investment. Improvement approach to method design is essential since a method
describes how resource are to be used in order to convert them into desired output (final products) in
order to accomplish the purpose through a network of facilities.
Operation and route sheets of production process contains in instructions that how a particular
product/component can be manufactured. This usually contains the details about time required to
perform the required operation.

The target is the minimization of production costs by affecting the consumer’s acceptability by
incorporating changes or by developing requisite resigns. But the design engineer will not be
responsible for actual implementation of method designed by him. Likewise the Process Engineer
will try to select best methods which have most economical sequence of operations by using most
efficient infrastructure facilities (may be machines) with processing minimum time .

1.9 Work Study

What is Work Study?
Work Study is the systematic examination of the methods of carrying out activities such as to improve
the effective use of resources and to set up standards of performance for the activities carried out.

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 Figure: Components of Work Study
Another definition of Work Study could be: A generic term for those techniques, particularly
method study and work measurement, which are used in the examination of human work in all its
contexts, and which lead systematically to to the investigation of all the factors which affect the
efficiency and economy of the situation being reviewed, in order to effect improvement'. This has to
do with Productivity Improvement, but also improvement of Quality and Safety.

Operations Management - Work Study

Managing people within operations involves actual design decisions about jobs, methods,
relationships between jobs and machines and systems of control and communication. Work design
involves complex "people" relationships between operative staff, supervisors and specialists e.g.
engineering managers and staff who commission new machines and maintain them. Other specialists
may co-ordinate health and safety systems or monitor performance and plan maintenance.

People are not mere extensions to machines or horsepower to be switched on and off. A worker's
performance may be better than a machine's capability - yet a machine may outstrip the human being
for many tasks.

People can be hurt/injured physically by operating environments or trapped socially and

psychologically in them/by them. How operational systems are designed and the jobs and
performance relationships within them are of great operational, economic and social importance. In
this context then work study is a collection of techniques used to examine work - what is done and

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how it is done - so that there is systematic analysis of all the elements, factors, resources and
relationships affecting the efficiency and effectiveness of the work being studied.

Considerable diplomacy and sensitivity is needed by the industrial engineer or operations manager
who becomes involved in work study (or business process improvement) investigations.

In the Path of F. W. Taylor

Method study and work measurement are two principal activities of work study which originated in
the work of F. W. Taylor (see Rose: 1978). FW's "scientific management" imperatives are:

• Investigate the work situation and identify weaknesses – where and why is poor performance
happening? The "scientific" title for this approach to management means placing emphasis on

• Data gathering and rational analysis

• Certain narrow assumptions about the objectivity of efficiency criteria
• The existence of direct, deterministic relationships between worker performance and
incentive payments and

• Consideration of the worker to some extent as a machine. Thus we can evaluate and introduce
improvements in operating methods. This includes type of equipment, its use, layout of
operations, supply and use of materials, materials handling, work organisation, effectiveness
of planning procedures and so on. Productivity improvement is the aim.

• we can select staff with characteristics that fit the job, train and reward them using payment
schemes the offer particular economic incentive by linking payment to measured
performance.

Such propositions are commonly the stuff of managerial populists and "how-to" texts on human
resource management. Methods study Approach

- is an analysis of ways of doing work. The mnemonic SREDIM (a common-sense heuristic or

general problem solving strategy) represents the method study stages

1. Select the tasks to study

2. Record the facts about it
3. Examine these
4. Develop a new method
5. Install/implement it
6. Maintain it
Work measurement
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- involves assessing the time a job should take to do. Similar steps are involved as to method study
1. Select the tasks
2. Record the facts
3. Analyse them
4. Calculate basic and standard times for the task
5. Agree the method and its related time
In the 1950's and 1960's the work study officer or O&M Person (organisation and methods) gathered
the data and gave advice. In the 1970's the titles evolved e.g. to that of management services officer.
Work-study and methods study came within the scope of the industrial engineer. Today the
techniques of method study are inclusive within the tool-kits and applications of the business systems
analyst. The most modern application of some of the techniques of work study is the early 1990's
managerial receipe; "business process re-engineering" i.e. re-designing business processes which have
developed to the extent that they mismatch the needs of the situation today.

However -- having said this - the scope for work study definition and evaluation is useful for
operations managers in a general sense. Such roles require data on operational capacities and
effectiveness and the use of time and resources. Methods need regular re-evaluation. Some may have
evolved and changed over time to become disjointed, patch works that no longer fully serve
requirements. The case may need to be put for more staff or new methods and equipment. Such
arguments call for data and measurement.

How many extra hours/people are needed?

Why? What will the new method offer?

Is it possible to change methods?

What will be the costs/benefits?

Thus the techniques, assumptions and weaknesses of work study reflect important know-how for the
operations manager generally - and not just those working in engineering or manufacturing
environments. However the assumptions, difficulties and limitations of the claims must be
understood.

Efficiency Indices

Using data on measured work, unmeasured work and idle time we can attempt to derive effectiveness
indices. Constable and New exemplify efficiency and effectiveness indices
a. efficiency while performing measured work (ratio of standard/measured hours of
work produced and the actual time taken)
b. effectiveness

Which includes:

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 • Accounting for work done for which no measured time exists. Such work is typically paid for
by an agreed hourly/day rate i.e. there is no direct, measured relationship between pay and
how much work is actually completed in that hour. Of course a supervisor may pass a
judgment or state that the amount of work and its quality are inadequate.
• Recognition of possible idle time caused e.g. by management not allocating any work,
supplier/materials delays, machine breakdowns etc.

Unit – II

Features of HRP

1. Forecasting future manpower requirements, where we use mathematical projections you

might have studied in ‘business economics’ and ‘quantitative techniques’ paper, to project
trends in the economic environment and development of the industry. Can you remember one
such application?
2. Making an inventory of present manpower resources and assessing the extent to which these
resources are employed optimally.
3. Procuring competent personnel requires positive recruitment efforts and the development
of a variety of recruitment sources. These sources must consider not only the nature and
conditions of the external labor market, but also the presence of qualified personnel who are
available to fill vacancies through internal promotions or transfers.

Keep in mind the recruitment activities is integrated with diversity and equal employment opportunity
initiatives. Staffing needs must be anticipated sufficiently in advance to permit the recruitment and
development of fully qualified personnel.

4. Anticipating manpower problems by projecting present resources into the future and
comparing them with the forecast of requirements to determine their adequacy, both
quantitatively and qualitatively; and
5. Planning the necessary programmes of requirement, selection, training, development,
utilization, transfer, promotion, motivation and compensation to ensure that future manpower
requirements are properly met.

So what do you surmise (figure out) the salient features of HRP from the various definitions?

• It’s a systematic approach. Why??? ‘cause it ensures a continuous and proper staffing. It
avoids or checks on occupational imbalances (shortage or surplus) occurring in any of the
department of the organization.
• There is a visible continuity in the process. Very true!! See the Wickstrom definition.
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 • There is a certain degree of flexibility. That is, it is subject to modifications according to
needs of the organization or the changing circumstances. Manpower plans can be done at
micro or the macro levels 3depending upon various environmental factors.
• HRP is a kind of risk management. It involves realistically appraising the present and
anticipating the future (as far as possible) in order to get the right people into right jobs at the
right time”. (Reiterating the view of Geisler).

Importance of HRP
The importance of planning in general, designing an environment for the effective performance of
individuals working together in groups, a manager’s most essential task is to see that everyone
understands the groups purposes and objective and its methods of attaining them. If group effort is to
be effective, people must know what they are expected to accomplish. This is the purpose of
planning! It is the most basic of the managerial functions (refurbish the text on POSDCoRB!). It
bridges the gap from where we are to where we want to be. It makes it possible for things to happen
which would otherwise not happen. Thus, in the context of Human Resources, planning is a must

‘cause (here I can enumerate many! But, I expect you come up with explanatory example for each.
1. Ensures optimum use of man (woman, too nowadays: power and capitalize on the strength of HR.
The organization can have a reservoir of talent at any point of time. People skills are readily available
to carry out the assigned tasks, if the information is collected and arranged beforehand.

2. Forecast future requirements (this is done by keeping track of the employee turnover.) and
provides control measures about availability of HR labor time. If, for example the organization wants
to expand its scale of operations, it can go ahead easily. Advance planning ensures a continuous
supply of people with requisite skills who can handle challenging jobs easily.

3. Help determine recruitment/induction levels. explain this with an example: you as a manager want
to determine what kind of induction the organization will require at such an such date. If you have a
ready HR plan, you will have fairly good idea what kind of people are being recruited and at what
position. Thus you can successfully plan your induction level.

4. To anticipate redundancies/surpluses/obsolescence. Remember Geisler and Wickstrom’s

definition? 5. To determine training levels and works as a foundation for management
development programmes

6. Know the cost of manpower if there is a new project is being taken up, example: in cases of
expansions or a new factory, one would naturally requires more human resources, hence a

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 budgetary allocation can be made in advance for this upcoming corporate strategic move. Planning
facilitates preparation of an appropriate manpower budget for each department or division. This, in
turn, helps in controlling manpower costs by avoiding shortages/excesses in manpower supply.

7. Assist in productivity bargaining. For example, if a firm is going fully automated, it can negotiate for
lesser workers as required for the same amount of the job by using the manpower predictions
regarding the same. It can offer higher incentives (VRS) to smoothen the process of voluntary
layoffs.

8. Help assess accommodation requirements - You must be wondering how that can be related to
HRP? A good HRP can assist in solving many problems of the firm, from day to day ones to very
strategic ones, too.) for example: an organization decides to establish its production center in a
remote area, an accurate HR plan can help it to decide how many people will be required there, and
thus start the process of establishing a township for them in advance. The physical facilities such as
canteen, school, medical help, etc., can also be planned in advance.

9. Management decisions. Now!! Lets see how this can happen. Example, suppose the question is to
outsource an activity or not? An HR manager knows what is the distribution of workflow, and
whether the present available staff can accomplish these. If it is realized there is no one available for
the job in question, and training cost is coming out to be more or in some cases the skill is not going
to be of much use, then such activities can be subcontracted or outsourced. Right?? Is it clear?? In
addition, HRP (as already pointed out) prepares people for future challenges. The stars can be
picked, mentored and kept ready for leading positions in future. All MNCs have such policies and
programmes (Wipro InfoTech has a leadership development programmes), where a “hot list” of
promising candidate are assessed and assisted continuously for future management positions. This
selection is possible only through a thorough HR plan.

An organization may incur several intangible costs as a result of inadequate HRP or, for that matter,
the lack of HRP. For example, inadequate HRP can cause vacancies to remain unfilled.

The resulting loss in efficiency can be costly, particularly when the lead-time is required to train
replacements. Situations also may occur in which employees are laid off in one department while
applicants are hired for similar jobs in another depart-ment. This may cause over hiring and result in
the need to lay off those employees to make effective plans for career or personal development. As

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 a result, some of the more compe-tent and ambitious ones may seek other employment where they
feel they will have better career opportunities.

Major reasons for the present emphasis on manpower planning include:

• Employment-Unemployment Situation: Though from the above excerpt we can construe that in
general the number of educated unemployed is on the rise, there is acute shortage for a variety of
skills. This emphasizes the need for more effective recruitment and retaining people.

• Technological Changes: The myriad changes in production technologies, marketing methods and
management techniques have been extensive and rapid (e.g.. introduction of HRIS). Their effect has
been profound on job contents and job contexts. These changes cause problems relating to
redundancies, retraining and redeployment. All these suggest the need to plan manpower needs
intensively and systematically.
• Organisational Changes: In the turbulent environment marked by cyclical fluctuations and
discontinuities, the nature and pace of changes in organizational environment, activities and structures
affect manpower requirements and require strategic considerations.

• Demographic Changes: The changing profile of the work force in terms of age, gender participation,
literacy, technical inputs and social background have implications for manpower planning. The
workforce is more diverse than ever before. And the trend shows it is going to be on the rise even
more!!

• Skill Shortages: Unemployment does not mean that the labor market is a buyer’s market.
Organizations have in general become complex and thus, in turn require more specialist skills that are
rare and scarce. The result is more dependency on the professionals. Thus, problems may arise when
such people if they are employees decide to leave or switch to more lucrative employment or if they
are freelancers decide to shift their business somewhere else.

Please note that these are example of implications of what is most happening in the business
world today.

• Governmental Influences: Government control and changes in legislation with regard to affirmative
action for disadvantaged groups, working conditions and hours of work, restrictions on women and
child employment, casual and contract labor, etc. have stimulated the organizations to become
involved in systematic manpower planning.

• Legislative Controls: The days of ‘hire and fire’ policies are gone. Now legislation makes it difficult
to reduce the size of an organization quickly and cheaply, especially in the presence of strong
politicalised trade union scenario in India. It is easy to increase but difficult to shed the fat in terms of

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 the numbers employed because of recent changes in labor law relating to lay-offs and closures. Those
responsible for managing manpower must look far ahead and thus attempt to foresee manpower
problems.

• Impact of Pressure Groups: Pressure groups such as unions, politicians and NGO’s displaced, from
land by location of giant enterprises have been raising contradictory pressures on enterprise
management such as internal recruitment and promotions, preference to employees’ children,
displaced persons, sons of the soil etc.

• Systems Concept: The spread of systems thinking, the advent of the PC’s and the upsurge of people
management concept which all emphasize the planning and having common and transparent
personnel records.

• Lead Time: The long lead-time is necessary in the selection process and for training and
development of the employee to handle new knowledge and skills successfully.Thus, HRP is all the
more imperative. One needs to think strategically, to be ahead of others in acquiring human resources.
Hence we can now easily come to a conclusion on why HRP is necessary? An attempt to look beyond
the present and short-term future, and to prepare for contingencies, is increasingly important. Some
manifestations of this are outlined below.

• Jobs often require experience and skills that cannot easily be bought in the market place, and the
more complex the organisation, the more difficult it will be to supply or replace highly specialized
staff quickly. It takes time to train and develop technical or specialist personnel (say, an airline pilot
or computer programmer), so there will be a lead-time to fill any vacancy. The need will be have to
be anticipated in time to initiate the required development programmes.

• Employment protection legislation and general expectations of ‘social responsibility’ in

organizations make staff shedding a slow and costly process. The cost must be measured not just in
financial terms (redundancy pay and so on) but in loss of reputation as a secure employer and socially
responsible Organization. This, in turn, may make it more difficult to recruit labor in times or skill
areas where it is required -and may even alienate customers and Potential customers.

• Rapid technological change is leading to a requirement for manpower which is both more highly
skilled and more adaptable. Labor flexibility is a major issue, and means that the career and retraining
potential of staff are at least as important as their actual qualifications and skills. They be assessed in
advance of requirements. (In fact, ‘train ability’ as a major criterion for selection is one of the most
popular innovations of the HRM era of personnel management.)

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• In term of international markets, the scope and variety of markets, competition and labor resources
are continually increased by political and economic moves such as the unification of Germany, the
opening of Eastern Europe and continuing progress towards European union.

• Computer technology has made available techniques which facilitate the monitoring and planning
of manpower over fairly long time spans: manipulation of manpower statistics, trend analysis,

‘modeling’ and so on.

From the above discussion we get to the following conclusion. ‘Manpower planning has maintained
its imperatives for several reasons: (i) a growing awareness of the need to look into the future, (ii) a
desire to exercise control over as many variables as possible which influence business success or
failure, (iii) the development of techniques which make such planning possible.’

Human Resource Planning Process

The planning process is influenced by overall organisational objectives and the environment of
business. HRP essentially involved forecasting human resource needs, assessing human resource
supply and matching demand supply factors through human resource related programmes.
Organisational Objectives and Policies HR plans to be made based on organisational objectives
implies that the objectives of the HR plan must be derived from organisational objectives. Specific
requirements in terms of number and characteristics of employees should be derived from the
organisational objectives. Organisational objectives are defined by the top management and the role
of HRP is to sub serve the overall objectives by ensuring availability and utilization of human
resources.

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Human Resource Planning: Tools and Techniques Demand Forecasting-Basic methods

Demand Forecasting- Statistical Techniques We have already learnt some of the approaches and
methods of Human Resource Planning in the previous lesson. Now,let us discuss more on the Tools
and Techniques of Human Resource Planning for the growing demand and supply of man power in
the coming future.

Manpower Forecasting: Tools and Techniques

Demand Forecasting: Demand forecasting is the process of estimating the future quantity and
quality of manpower requirement. A Knowledge of the present situation on manpower
requirement is essential if a satisfactory forecast is to be made. The basis of the manpower forecast
should be the annual budget and long term corporate plan, translated into activity levels for each
function and department. In a manufacturing company, the sales budget would be translated into a
manufacturing plan, giving the numbers and types of products to be made in each period. From this
information the number of man-hours, by skill categories, to set the target for production, would
start from the production plan setting out a programme for installing new machinery. In an
insurance company, forecasts of new business would be translated into the number of proposals
that would have to be processed by the underwriting department. In a mail order company,
forecasts would be made of the number of orders that are to be processed, assembled and
despatched. It will not be unusual if the manager has to identify requirements without a clear
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knowledge of corporate objectives because either there are non explicitly stated or he has not been
informed of them.

Basic Demand Forecasting Methods: The basic demand forecasting methods are :

(i) Work study techniques: Work study is as old as industry itself. Work study, as the name
implies, is the study of human work in the deepest sense and dignity of the word, and not merely in
the special and more restricted meaning used in the physical sciences. Even today it is not limited to
the shop floor, nor even to manufacturing industry. In one form or another it can be used in any
situation wherein human work is performed.

(ii) Job analysis: Before manpower planning can be carried out, management must first define
what are the work to be performed and how the tasks to be carried out can be divided and allocated
into manageable work units, that we called jobs. Such an assignment of tasks to job is commonly
known as “job design”. Once the jobs have been defined, it is important to maintain current
information about their content. This information gathering process is called ‘job analysis’. It
comprises both job description and job specification. Accurate job description and specifications are
intimately related to the preparation of inventories of executive talent, which form a basis of
manpower planning strategy. Pertinent information relating to a specific job can be obtained
through:

• Observation
• Questionnaire

• Interview
• Checklist
• Daily Diary
• Collection of past & present records/historical records

• A combination of two or more of these

(iii)Managerial/Executive judgement: The simplest approach to manpower forecasting is to prepare

estimates of future needs based on the individual opinions of departmental or line managers. This
simply requires managers to sit down, think about their future workloads and decide how many
people they need. It can be done both “from bottomup” by asking junior managers to outline their
requirements and passing these estimates up through the hierarchy for collation and comment.

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Alternatively, a “top downward” approach can be used, in which company and departmental forecasts
are prepared by top management, possibly based on the advise/ information available from the
personnel and organisation and methods departments. The suggested forecasts are circulated
downwards for discussions and thereafter reviewed and agreed with departmental managers.

(iv) Statistical Techniques Projecting Past Trends in Employment: The most commonly used
statistical approaches to manpower forecasting are considered, ranging from methods of simple
extrapolation, through regression or correlation analysis, to econometric models. All of these
methods depend for their validity on the assumption that developments in the future will exhibit
some continuity with the past. Simple extrapolation assumes that past trends will continue,
regression analysis assumes that particular relationships will hold firm and econometric models
assume that the basic interrelationships between a whole range of variables will be carried on into
the future.

(v) Productivity Measurement Method: This approach is closely related to work study method.
Both seek to determine the amount and effectiveness of the human content of the work involved in
any activity. Work study involves a thorough analysis of the work process and seeks to establish the
man-hours needed per unit of output. On the other hand, productivity measurement is generally
more concerned with the inverse of this ratio i.e. output per hour. The use of measures of
productivity in manpower forecasting seems straightforward enough. Output (measured say by
gross tonnage or sales) divided by labour productivity (output per man-hour) gives the number of
man-hours required to complete the task.

(vi) Time series: It is necessary to analyse past trends in manpower activities and sift the significant
points while preparing a forecast. This requires an understanding of the concept of the time series. A
time series is a set of observed values recorded at intervals of time ‘data classified chronologically’
for example, monthly absenteeism rates. The recording of such a casual relationships between
different variables for example, is there a positive correlation between absence and age or length of
service? Or with prediction of future. A time series unlike an algebraic curve will not have a definite
predictable state it will vary with fluctuating data which must be analysed as to their probable
confining or not for making future forecasting.

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