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Human Resource Planning

Chapter 5 (Dipak Kumars Book) Human Resource Planning Process

HRM - 411 (Human Resource Planning) Sec-02, Summer-2012 MARS

HRP Process
HRP process is a strategy for the acquisition, utilization and retention of an enterprise's human resources. It seeks to link policy and practice in day to day decision making. HRP process cannot be applicable universally. It varies from organization to organization.

HRP Process Outline

We can broadly outline the HRP process into four different stages as under:

Stage 1: Investigation

It is the primary stage of HRP in any organization. In this stage, organizations try to develop their awareness about the detailed manpower scenario by looking at their current manpower. A SWOT analysis can reveal a better picture with due consideration of the external environment, performance, productivity trends, working practices, operational and strategic plans.

Stage 2:Forecasting

After adequate investigation, in the next phase of HRP process, analysis of demand and supply of manpower is done. There are different models of demand forecasting. Manpower supply analysis is done considering both internal and external supply. While doing internal supply analysis, career planning and development, training and succession plan aspects are considered along with corporate policies and procedures. Like in case of promotional policy- will it be done on merit basis or seniority basis. External supply analysis is done considering macro level issues to understand their availability. It helps to identify the status of employment (permanent, contracting, sub-contracting)

Forecasting as a Part of Human Resource Planning


Choose human resource programs


Determine organizational objectives

Internal programs

External programs

Transfer Career planning

External selection Executive exchange

Demand forecast for each objective Aggregate demand forecast


Turnover control
Internal supply forecast External supply forecast

Does aggregate supply meet aggregate No demand? Yes

Aggregate supply forecast

Go to feasibility analysis steps

Stage 3: Planning and Control of Manpower

At this stage, forecasts of manpower are translated into HR policies, which encompass all HRP related issues like recruitment, training, and development. While going for recruitment, it is necessary to understand the job descriptions and job roles. To address the problem of knowledge and skill obsolescence in the context of changing technology, training and development policies of the organizations should be made accordingly. While doing HRP, flexibility and inter-relationship of all other policies also need to be considered. Control must be there to correct any observed deficiency in such plans.

Stage 4: Utilization
In this final stage of HRP process, success is measured in terms of achievement trend, both in quantitatively and qualitatively. While quantitative achievement is visible from productivity trend, manpower cost, etc.

Qualitative achievement is a subjective appraisal on achievement of organizational objectives. Reflection of qualitative achievement can also be studied in the context of prevailing industrial relations, level of motivation and morale, grievance pattern etc.

Forecasting of Demand
(Quantitative Tools)
Time Scale of HRP Forecasts- Determining time scale of
human resource forecast is very important to decide about their availability and chart the possible action to meet the requirement. Depending on time frame , which again depends on the basis of requirement, nature of analysis of externalinternal source , keeps on changing.

Analysis of Workload Factors

To forecast the manpower requirements at different points of time. Analysis of present and future workload depends on the possibility of quantifying the work content in every area of an organizational activity.

Steps of workload analysis:

1. Classification of Work Classification of work is done by identifying the work or job content and time requirement for such job or work unit. It helps in breaking jobs in different components, which together completes an operation. 2. Forecasting the Number of Jobs After classification of jobs and work content and its time requirement, in the next phase, job forecasting in quantitative terms for a number of jobs is done for a time period. 3. Converting the Projected Jobs in Man-hours Multiplying the time requirement of each job with the number of projected jobs, man-hours for jobs are computed. 4. Converting the Man-hours into Manpower Requirement In the final phase of workload analysis, aggregate manhours are converted into manpower requirements.

Time Series Analysis

Employment data over a time period (time series) are used under this method as the basis for manpower forecast. It has five distinct elementsTrend: Fluctuations in level of employment over a time period. Cyclical Effects: Change in employment in relation to some particular event. Seasonality: Seasonal fluctuations occur more than once in a given time period. Step: This is a sudden change in employment level due to economic environment or increased market share or procurement of some new machines, etc. Random Fluctuations: These are fluctuations in employment level which are random in nature, i.e., such fluctuations do not follow any obvious pattern.

Time Series Analysis

Moving Average Method Weighted Moving Average Method Exponential Smoothing

Managerial Judgment
A manager has to make a judgment about the future employment levels. Such judgmental decision is based on his past experience, which he relates to past occurrences of some events and its effects on manpower plans. Combining quantitative tools with judgment yield better results.

Analysis of Manpower Supply

Wastage Analysis
Manpower wastage is an element of labour turnover. It is not labour turnover by itself. It includesvoluntary retirement, normal retirement, resignations, deaths and dismissals.

Wastage Analysis Curve identifies three different

phases During induction phase, marginal employees leave. During differential transit period, an employee learns about the organization and identifies his role in it. During the period of settled connection, an employee settles down and decides to stay long.

Analysis of Manpower Supply

Wastage Analysis
Wastage decreases with the increase of length of service. Wastage also decreases with the increased skill exercises and age of employees. Characteristically wastage of manpower is more in female than male employees. It varies with the level of employment and also exhibits seasonal variations. Working conditions and size of the firm are also important variables of manpower wastage.

Different Methods of Wastage Analysis

Labour Turnover Index

Indicates the number of leavers as percentage of average number of employees. Average number of employees employed in a given time period is decided by adding the employees at the beginning and end then dividing the same with two.

Stability Index

Indicates stable workforce percentage for a given period.

Different Methods of Wastage Analysis

Cohort analysis Cohort analysis takes into account the length of service, which is an important variable of wastage analysis. It is more accurate for a small homogenous group. But changing social and economic conditions can invalidate this analysis.