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Manpower Planning

What is this HRP ?


It is nothing but to plan strategically and mainly focus on reduction of labor costs with limited consideration of other elements related to human resources. We have seen after sep.11 2k attack many companies have laid off their staff or they went for heavy downsizing e.g. of few of the companies are : Daimler Chrysler (100,000 workers) Kmart (60,000 workers) Lucent technologies (40,000 workers) IBM (40000 workers) General electric (75000 workers)

What is this HRP?

Why did these companies lay off such huge staff? What is the reason? Why did they recruit at first place at all? On the other hand we have company, which did extremely well even at the time of crisis.

Advantages of manpower planning

Manpower planning ensures optimum use of available human resources.  It is useful both for organization and nation.  It generates facilities to educate people in the organization.  It brings about fast economic developments.  It boosts the geographical mobility of labor.  It provides smooth working even after expansion of the organization.

Advantages of manpower planning

It opens possibility for workers for future promotions, thus providing incentive.  It creates healthy atmosphere of encouragement and motivation in the organization.  Training becomes effective.  It provides help for career development of the employees.

Steps in Manpower Planning


Predict manpower plans Design job description and the job requirements Find adequate sources of recruitment. Give boost to youngsters by appointment to higher posts. Best motivation for internal promotion. Look after the expected losses due to retirement, transfer and other issues. See for replacement due to accident, death, dismissals and promotion.

Importance of HRP
Future Personnel needs  Part of strategic planning  Creating highly talented personnel  International strategies  Foundation of Personnel functions  Increasing investments in HR  Resistance to change and move  Other benefits.

Penalties for incorrect HRP

Understaffing loses the business economies of scale and specialization, orders, customers and profits.  Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, minimum periods of notice, etc. Very importantly, overstaffing reduces the competitive efficiency of the business.

Demand should match Supply

1st Step towards HRP

Satellite picture' of the existing workforce profile (numbers, skills, ages, flexibility, gender, experience, forecast capabilities, character, potential, etc. of existing employees) and then to adjust this for 1, 3 and 10 years ahead by amendments for normal turnover, planned staff movements, retirements, etc, in line with the business plan for the corresponding time frames.

Future staffing needs will derive from:


Sales and production forecasts The effects of technological change on task needs Variations in the efficiency, productivity, flexibility of labor as a result of training, work study, organizational change, new motivations, etc. Changes in employment practices (e.g. use of subcontractors or agency staffs, hiving-off tasks, buying in, substitution, etc.) Variations, which respond to new legislation, e.g. payroll taxes or their abolition, new health and safety requirements Changes in Government policies (investment incentives, regional or trade grants, etc.)

Forecasting Techniques:

Judgment Ratio-trend analysis Regression analysis Work study techniques Delphi technique

Forecasting Techniques:


technique may involve a bottom-up or a top-down approach.  This technique is used in smaller organizations or in those companies where sufficient database is not available.

Forecasting Techniques:


involves studying past ratios and forecasting future ratios making some allowances for changes in the organization or its methods.


No.of employees Produ Inspect ction or 1500 150 1800 2000 2500 2750 180 180 200 210 230 Ratio Inspector : Production 1 : 10 1 : 10 1 : 11 1 : 11 1 : 12 1 : 12

-3 Actual -2 Last year Forecast +2 +3

Next year 2200

Regression Analysis:
A firm first draws a diagram depicting the relationship between sales and workforce size. It then calculates regression line a line that cuts right through the center of the points on the diagram.  By observing the regression line, one can find out number of employees required at each volume of sales.

WorkWork-study Techniques:

1. 2. 3. 4.


This can be used when it is possible to apply work measurement to calculate the length of operations and the amount of labor required. Planned o/p for next year 20,000 units Standard hours per unit 5 Planned hours for the year 1,00,000 Productive hours per man/year (allowing normal overtime, absenteeism and idle time) 2,000 Number of direct workers required (4/5) 50

Delphi Technique:
Named after the ancient Greek oracle at the city of Delphi, the Delphi technique is a method of forecasting personnel needs.  It solicits estimates of personnel needs from a group of experts, usually managers.  The HRP experts act as intermediaries, summaries the various responses and report the findings back to the experts.


Points of Discussion:
Opening Case: Problem of Booming BSchools  Meaning and definition  Purpose and importance of Recruitment  Factors governing recruitment  Recruitment process  Philosophies of Recruitment  Alternatives to Recruitment  Closing case: Morale gone bust

Meaning and definition: HRP

Determine recruitment and selection needs

Job Analysis

Meaning and definition:

Recruitment is the process of searching for and obtaining applicants for jobs, from among whom the right people can be selected. Defn.: Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected.

Purpose and Importance

The general purpose of recruitment is to provide a pool of potentially qualified job candidates. Others are: 1. Determine the present and future requirements of the organization in conjunction with its HRP and job-analysis activities. 2. Increase the pool of job candidates at minimum cost. 3. Help increase the success rate of the selection process by reducing the number of visibly under qualified or overqualified job applicants.

Purpose and Importance



Help reduce the probability that job applicants, once recruited and selected, will leave the orgn only after a short period of time. Evaluate the effectiveness of various recruiting techniques and sources for all types of job applicants.

Purpose and Importance

A recruiting programme helps the firm in at least 4 ways:





Attract highly qualified and competent people. Ensure that the selected candidates stay longer with the company Make sure that there is match between cost and benefit. Help the firm create more culturally diverse work-force.

Factors governing recruitment:

External Forces
Supply and demand Unemployment rate Labour market Political-social Sons of soil Image

Internal forces
Recruitment policy HRP Size of the firm Cost Growth and expansion

Recruitment Process

Sources of Recruitment

Internal Sources:

Present employees Employee referrals Former employees Previous applicants Professional or trade associations Advertisements Employment exchanges Campus recruitment Walk-ins and Write-ins

External sources:

Sources of Recruitment

External sources:
Consultants  Contractors  Displaced persons  Radio and television  Acquisitions and mergers  Competitors  E-Recruiting

Evaluation of Recruitment Process

Keeping the main objective in mind, the evaluation might include:

Return rate of applications sent out.  Number of suitable candidates for selection.  Retention and performance of the candidates selected.  Cost of the recruitment process.  Time lapsed data.  Comments on image projected.


Points to be discussed:
1. 2. 3. 4.

Meaning and definition Outcomes of Selection decision Selection Process Barriers to effective selection

Outcomes of Selection Decision:

False Negative Error
True Negative Error (Lose Win) Failure Expected True Positive (Win Win)



False Positive Error

Success Expected

Selection Process
Preliminary Interview Selection Tests Employment Interview Reference and Background Analysis Selection Decision Physical Examination Job Offer Employment Contract Evaluation

Barriers to Selection
Perception Fairness Validity Reliability Pressure

Career Planning:

Meaning of Career:
Career means a lifelong sequence of professional, educational, and developmental experiences that project an individual through the world of work.


Objective career Subjective career

Career Planning: Planning:


Career planning is the process or activities offered by the organization to individuals to identify strengths, weaknesses, specific goals and jobs they would like to occupy.

Career Planning: Planning:

 1. 2. 3. 4. 5. 6.

Career planning is important for several reasons: In order to build commitment between the individual and the organization. In order to develop long-range perspective. In order to reduce labour turnover expenses. In order to lessen employee obsolescence. In order to ensure the effectiveness of the organization. In order to allow the individual to achieve personal and work-related goals.

Succession Planning:


Succession planning is a process or activities connected with the succession of persons to fill key positions in the organization hierarchy as vacancies arise.