human resource management iii

7/30/2019 Human Resource Management III

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UNIT 3

HUMAN RESOURCE PLANING

The most important of all the resources of a business enterprise is its human resource.

the very fate of an organization is determined by the number and type of person working init. In fact an institution is recognized more by the quality of its staff rather than by its

physical structure. It is there fore, Important that an organization has the right number and

type of person at any given point of time to be successful and this is what is achieved

through manpower planning or human resources planning.

Meaning of human resources planningHuman resources planning , in simple term, is the process of determining the man power

needs of an enterprise so that is possible to fill up any vacancy as and when it arises. Such a

plan eliminates the risk of surplus or shortage of staff at any time.

Definition of human resource planning

Given below are some of the important definition of the term human resource

planning .

1. human resources planning is the process by which a management determineshow the organization should move from its current manpower position to it

desired man power position . through planning the management strives to have

the right number and the right kind of people at the right places, at the right time

, doing things which result in both the organization and the individual receiving

maximum long range benefit-E.W.Vetter

2. human resource or manpower planning is the process of determining themanpower requirements and the means for meeting those requirements in order

to carry out the integrated plan of the organization-Coleman.

3. manpower planning is the strategy for the acquisition, utilization, improvementand preservation of an enterprise human resources. It relates to establishing job


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specification or the quantitative requirements of jobs determining the number

of personal required and developing source of manpower.- Stainer.

4. human resources planning is an integrated approach to performing the planningaspects of the personal function in order to have a sufficient supply of adequately

developed and motivated people to perform the duties and task required to meet

organization objective and satisfy the individual needs and goals of

organizational members Leon C. megginson.

5. human resources planning is a process of qualified person, available at theproper times, performing jobs which meet the needs of the enterprise and which

provide satisfaction for the individual involved Dale S.Beach

It is clear from the above definition that human resources planning is concerned

with the task of projecting the man power needs of an organization and taking steps

to fulfill the same.

Importance of human resources planning

Human resource planning is necessary in view of the following reasons:

1. It helps the organization to procure the required manpower: To perform thevarious jobs in the organization, people with varying skills, qualification and

experience are required. Human resource planning helps to fulfill such arequirement.

2. It further helps to replace employees: Every year, a number of employees retire inworkplaces. These employees, therefore, have to replaced. Vacancies arising due to

retirement can be anticipated and suitable arrangement for replacement can be

made. A vacancy may also arise when an employees dies or becomes incapacitated

or dismissed on disciplinary grounds. Proper planning will enable the

management to fill up vacancies as and when they arise.3. It helps in expansion program: No organization is going to remain static. To

undertake expansion activities additional hands are necessary. Such additional

hands can be secured through effective planning.


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4. It ensures optimum investment in human resource: under HR management, theamount spent on human resource is viewed as an investment. But it is necessary

that such an investment is made at the optimum level in order to derive maximum

benefits. HR planning ensures optimum investment in human resource.

5. It is indispensable to give effect to reservation policy: As per the reservationpolicy of the government, certain number of posts will have to be reserved for

people belonging to certain communities in case of recruitment to govt.

departments. To give effect to such a policy, manpower planning is indispensable.

6. It is essential in view of the problem of labor turnover: Every organization facesthe problem of labor turnover, i.e., employees leaving their jobs due to various

reasons. Proper manpower planning help to tackle the problem.

7. It helps to tackle the problem of surplus or shortage of manpower: In the absenceof proper planning of manpower needs, the organization is sure to face the

problem of either surplus or shortage of manpower. Surplus employees do not

contribute to output. On the other hands, if there is shortage of manpower, the

organization cannot cope with the volume of work. To tackle both the problem

effectively, proper planning is essential.

8. It becomes necessary to meet the need of changing technology: Repaidtechnological changes would render the existing workforce inadequate in terms

of skills. To tackle such a problem, the organization must require the existing

employees to update themselves or recruit a new set of workforce. Here again,

human resource planning can help.

Characteristics of Human Resource Planning

The characteristics of human resource planning may be stated as follows:

1.

It is goal-oriented: The main objectives of HR planning is to ensure that theamount invested in human resource is justified, i.e., the organization should

derive maximum benefits. If further ensures that the organization has the right

number and type of persons working at any given point of time.


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2. It focuses attention on the present and future manpower needs of anorganization: After the present and future manpower needs of an organization

have been anticipated, steps may be taken to fulfill the same through proper

planning . Human resource planning, thus, has relevance for the present and the

future.

3. It follows a systematic approach to the task of fulfilling the manpower needs: Inthe absence of HR planning, the organization will recruit staff at random. This

leads to certain problems, e.g., surplus or shortage of manpower and the

organization appointing unsuitable persons. HR planning follows a systematic

approach to the entire process of recruiting staff in order to overcome these

problems.

4. It promotes efficiency: HR planning is required as it leads to greater efficiency.This it does by keeping the cost of recruitment and selection low and by ensuring

right man for the right job.

5. It is a continues process: It is not correct to think that HR planning is requiredonly in the early years of inception of an organization. It is something that is

required continuously. In other words, as long as an organization requires

manpower, the need of HR planning will be felt.

6. It can be made flexible: There is always a feeling among many that any type ofplan makes things rigid. It may be said here that the HR plan can be made flexible

needs of the organization.

Objectives of Human Resource Planning

The objectives of human resource planning may be briefly stated as follows:

1. To ensure that the HR plan help to attain overall objective of the enterprise.2. To keep the cost of recruitment and selection of employees low.

3. To ensure the selection of the right man for the right job.4. To ensure that the amount invested in human resource is at its optimum level. 5. To ensure that the organization does not face the problem of either surplus or

shortage of manpower.


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6. To make available the required manpower when expansion and diversificationactivities are undertaken.

7. To give effect to the recruitment policy of the organization. Governmentorganizations adhere to the reservation policy of the Government in the matter of

recruitment of staff.

8. To eliminate or minimize the adverse effects of labor turnover.9. To find a suitable replacement for those employees, who retire, die, become

incapacitated or are dismissed from service on disciplinary grounds.

10. To guard the enterprise against manpower obsolescence.Factors influencing Human Resource Plan

The various factors influencing human resource plan may be grouped under:

(1) Internal Factor

(2) External Factors

Factors Influencing Human Resource Plan

Internal factor External factor

Recruitment Availability Job Scale TradePolicy of funds Requirement of operations Union

Influence

Reservation Availability Willingness Trend in Level of TechnologyPolicy of of Manpower of job the IndustryGovt. seekers

Internal factors

The internal factor include, among other, the following:

1. Recruitment policy of the organization: The policy of the organization regarding

the source of recruitment and the method of selection is an important factors

influencing the human resource plan.


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2. Availability of funds: If finance is not a constraint, the organization will be in a

position to offer an attractive salary package and there by induce deserving persons

to apply for the various job.

3. Job requirement: Different jobs call for different qualifications and skill from

prospective applicants. The requirement of every job, therefore, will have to borne

in mind while preparing the human resource plan.

4. Scale of operation: The manpower needs of an organization, the scale of operation

of which is greater, will naturally be more than the one with a lesser scale of

operation.

5. Trade union influence: The demands of trade union regarding the hours of work,

source of recruitment etc., may also influence human resource plan.

External Factors

The external factor include, among other, the following:

1. The reservation policy of the government: The reservation policy of the

government provides for reservation of jobs for certain communities. The human

resource plan of every government organization and government aided

organization has to give effect to such a policy.

2. Availability of the desired manpower: Before preparing the human resourceplan, it must be ensured that the type of human resource needed by the

organization is actually available. This is because, sometimes people with a certain

skill or qualification may not be willing to apply.

3. Willingness of the job seekers to accept the terms and conditions : When an

organization wants to recruit staff afresh, it must ensure that its terms and

condition of service are acceptable to the job seekers. If they find the term

unreasonable, they may not be willing to apply.

4. Knowledge of the trend in the industry: consideration of the trend in the

industry in the matter of the type of workforce preferred for certain jobs, wage

rates, hours of work etc., is important in preparing the human resource plan.


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5. Level of technology: A business enterprise is highly susceptible to technological

changes. Technically qualified persons constantly update themselves to enhance

their employment prospects. The job offer of an enterprise, therefore, must be such

that the potentials of the individuals are fully utilized and they are also rewarded

suitably.

Limitations of Human Resource Planning

Some of the limitation of human resource planning are mentioned below:

1. Expensive: preparation and implementation of the human resource plan is

expensive in terms of time, efforts and money required.

2. Inaccurate forecasts; The manpower need of an organization are determined based

on forecasts. The human resource plan is prepared in tune with such forecasts. The

success of the plan, therefore, depends on the accuracy with which the forecasts are

made. Inaccurate forecasts would only result in the failure of the plan.

3. uncertainties: Absenteeism, seasonal nature of certain jobs, labor turnover etc., can

jeopardize the human resource plan.

4. Trade union resistance; trade union often criticize the human resource plan of an

organization on the ground that it is detrimental to the interests of the employees.

The plan may contain such measures as increase in workload, voluntary retirement,

redeployment of surplus labor etc. It is for these reasons the trade unions show

resistance.

5. Rigidity; Any plan is basically rigid. The rigidity of the human resource plan may,

sometimes, affect implementation. Such a plan, thus, remains only on paper.

6. Focus on quantity: The manpower plan often focuses attention on the quantity of

human resource rather than quality. Quantity without quality does more harm than

good.

Measures to make the human resource plan effective

The following measures can be taken to make the human resource plan effective.


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1. Cost-benefits analysis of the HR plan: One of the limitation of the HR plan isthat it is expensive in terms of time, effort and money required. The cost of

preparing such a plan may be compared with the benefits accruing to the

enterprise. It must be ensured that the benefits are always greater than the costs

incurred.

2. Making accurate forecasts: as the success or failure of the HR plan depends onthe accuracy of the forecasts, steps must be taken to predict the present and

future manpower needs of the organization more accurately. There are several

qualitative tools used for the purpose of forecasts.

3. provision for future uncertainties: Adequate provision should be made in theHR plan for such uncertainties as absenteeism, labor turnover etc. This would

ensure proper implementation of the HR plan.

4. Involve employees and their Unions: Employees participation in managementis an integral part of human resource management. While preparing the human

resource plan, the suggestions and views of the employees on the manpower

needs of the organization can be received. Where ever possible, steps can be

taken to incorporate such suggestions in the HR plan. This would, certainly, help

to overcome resistance by the employees and their unions.

5. Introducing flexibility: The rigid nature of the HR plan may hamperimplementation. To overcome such a problem, certain amount of flexibility may

be introduced into the plan.

6. Consideration of both quantity and quality: The HR plan, to be fruitful, mustconsider both the quantitative and qualitative aspects of the human resource.

Steps involved in Human Resource Planning (process of HR planning)

The following are the steps involved in human resource planning:1. Analysis the organizational plan2. Forecasting the demand for human resource

3. Forecasting supply4. Making an estimate of the net human resource requirements and


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5. preparing the action planLet us now discuss these.

Analysis the organizational plans

Every business enterprise will have plans for the successful performance of the

following activities:

(i) Purchase of raw- materials(ii) Installation of machines and their maintenance(iii) Finance and Accounting(iv) Marketing(v) Research and Development(vi) Maintenance of employee reveal the manpower needs of the organization.An analysis of these various plans would reveal the manpower needs of the

organization.

Process of Human Resource Planning

Analysis the Forecasting Forecasting Estimating Preparing

Organizational demand supply net HR the action

Plans Requirements plan

Forecasting the demand for human resourceKeeping in mind the expansion and diversification program of the enterprise in

the near future, the rate of labor turnover and absenteeism, the technological

changes, the trend in the industry and in the job market and so on, the future

manpower requirements of the enterprise need to be forecasted. The quantity as


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well as the quality(in term of skill, experience, knowledge etc.) of the human

resource shall be taken into account while making the forecast.

Some of the methods used for forecasting the manpower requirements are:

(a) Managerial judgmentThe heads of the various departments will be in a position to estimate the

manpower needs of their respective departments in the near future. While

making such estimation, they take into account the various factors such as the

general trend in the industry, the expansion and diversification program of the

enterprise and so on. The aggregate of the departmental estimates would reveal

the manpower needs of the whole enterprise. The experience of the managers

helps them in making judgment.

This method is simple to use and is also less time consuming. But the main

drawbacks of this approach is that it is highly subjective and therefore may not

be reliable.

(b) Time study methodThe time study makes use of the concept of standard time for completing a

certain task. By using such a study, it is possible to determine the manpower

needs of an organization. This may be explained with a simple illustration.

Standard time per worker per day =6 hours

Man-hours needed to complete the weekly production targets=300 hours

The number of workers required to complete the task, therefore300/6 =50

The time study method uses a very pragmatic approach to determining the

manpower needs of an organization.

(c) Ratio AnalysisRatio may be calculated for the past data relating to the number of employees in

each category to the level of activity, i.e.,

Production level Number of workers

Sales level Numbers of sales representatives and so on.

Such ratios are useful in knowing the future manpower needs of the

enterprise. This has been explained with a simple illustration below:

Level of sales in the previous years=2,500 units


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Number of sales representative in the previous years= 10

The ratio of sales level to the number of sales representative =250:1

Sales level to be attained in the current year= 4,000 units

The number of sales representatives required for attaining the target= 16

Additional hands needed, therefore=6

Forecasting supply

Collecting information about the existing human resource inventory is what is

the first step in forecasting the future supply of human resource. Information on

the existing human resource inventory is gathered:

(i) Department-wise (production, marketing, finance etc.)(ii) Job category- wise (clerks, cashiers, sales representative etc)(iii) Age wise(iv) Skill-wise(v) Experience- wise(vi) Pay-scale-wise(vii) Sex-wise and so on.

Once information on the existing human resource is obtained, the next step is o

estimate the future loss of human resource. Loss of human resource can arise on

account of the following reasons:

(i) Retirement(ii) Resignation(iii) Death(iv) Dismissal(v) Disablement(vi) Lay-off(vii) Retrenchment etc.

Making an estimate of the net human resource requirements

A comparison between the demand and supply forecast of human resource would

indicate the net manpower requirements of the enterprise. It may be either surplus or


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deficit. Surplus indicates that some employees are redundant while deficiency implies

the need for additional hands.

Preparing the action plan

In case of surplus manpower, the employees, found in excess of the equirement, may be

redeployed, i.e., sent to branch offices or sister concerns where there is shortage of

manpower. Redeployement is prevalent in Government organization. The surplus may

also be encouraged to opt for voluntary retirements. If there is deficiency, the number

of person needed may be recruited from outside sources.

Human resource Planning at various level

HR planning is undertaken at various levels as mentioned below:

1. Global Level: Eminent persons through out the world are considered for

appointment in global organization like the UNICEF, the UNESCO etc. Computer

professionals through out the world and in particular from India are working for the

corporate giants of the U.S and the European countries.

2. National Level: A citizen of India, possessing the requisite qualification, is

considered for appointment in central government organizations. In India, organization

like the Union Public Service Commission (UPSC) and the staff selection commission

(SSC) are empowered to conduct entrance tests to select suitable candidates for central

government service. An employee of the central government must be willing to serve in

any part of India. A citizen of India, fulfilling the eligibility criteria, may also be

inducted into the Indian army, Navy and Air force. There are also organization that

select deserving sports persons, through out the country, to play for India. The board of

control for cricket in India (BCCI), for example, has a selection committee that selects

talented cr4icketers through out India to play for India.

3. State Level: Vacancies in state government organizations in India are filled up with the

help of the respective state public service commission. For example, the Tamil Nadu

Public Service Commission (TNPSC) is empowered to hold entrance tests to select

candidates for states government service. An employee in the state government service

must be prepared to serve in any part of the state.


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4. Industry level: The level of activity of a particular industry like automobile, textile,

chemical etc., will determine its manpower requirement. Only persons possessing

certain specific qualification and experience can be considered for appointment in these

industry. For example, a degree or diploma in automobile engineering is necessary for

someone to associate himself with the auto industry as a technician.

5. Firm/ Company Level: The scale of operation of a particular firm or company will

determine its manpower needs. The recruitment policy of the particular concern will

indicate the mode of selection (whether from within or from outside) and the type of

candidates (male or female, with or without previous work experience and so on) for the

various jobs.

6 Department/Division Level: This is concerning the manpower need of a particular

department or division within a firm or a company. The nature of activities of a

particular department, the availability of financial resource etc., are some of the factors

influencing the human resource plan.

Human resource retention plan

An important feature of the human resource is that it is perfectly mobile. If an

employee, working for an organization, finds a better job elsewhere, ther4e is every

possibility of his leaving his present organization, it would prove to be detrimental to

the interests of the particular concern. Such a trend disturbs stability and also increase

the recruitment and training costs. It is, therefore, necessary that every organization

takes certain steps to retain its human resource. The human resource retention plan

shall provide for the following:

1. Job security for all the employees: Obviously, an employee who does not have

job security will quite his present job if he finds a secured job elsewhere.

2. Pay benefit on par with those in rival concerns: The salary and other monetary

benefit given to the employee shall be on par with those in rival firms. Only then the

employees will have a feeling that the employer does not exploit them.

3. Promotion opportunities: Lack of promotion opportunities result in

stagnation. This leads to monotony and boredom in the workplace. There should always

be scope for the employees to move to higher positions.


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4. Facilities for training: Training enables an employees to update his knowledge

and skill. It gives him greater confidence to meet future challenges.

5. Conducive working condition: The physical environment as well as the social

environment in the workplace should be conducive for the employees.

6. Encouraging workers participation in management decision: Only then the

employee will have faith in the management, as the latter cannot take unilateral

decisions.

7. Challenging works: The work given to any employee must be of a challenging

nature. It must give scope for the employee to exhibit their skills.

8. Motivation of employees: Inducement of employees is necessary to get the best

out of them . This mat done by offering them suitable tangible and intangible benefits.

9. Encouraging workers to form a union: When there is a trade union, the

employees will be in a position to represent all their genuine demands collectively.

10. Facilities for counseling: Employees to undergo stress in view of domestic and

work-related problems. Counseling, by the manager or by a specialist, enables them to

get rid of their stress and perform their jobs better.

human resource management iii

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