Manpower Planning and Resourcing Answer sheet to

(MU0010) Assignment Set-1

Q.1 What are the five steps in Manpower Planning?

Ans. Manpower planning requires that an estimate of the present and future
needs of the organization should be compared with the available manpower and
future predicted manpower. Appropriate steps are then taken to bring demand and
supply into balance. The outcome of this planning is a well ‘thought out’ and logical
manpower demand plan for varying dates in the future which can then be
compared with the crude manpower supply schedules. The comparisons will then
indicate what steps should be taken to achieve a balance. The 5 steps in the
manpower planning process are:

· Evaluate present manpower inventory

· Manpower forecasting

· Develop a manpower sourcing plan or retrenchment plan

· Manpower allocation

· Building requisite competencies

1.4.1 Evaluate Present Manpower Inventory

It is very important to evaluate the present manpower status before making a

forecast for future manpower planning. To evaluate the present manpower status a
department by department analysis and a job-role by job-role analysis is conducted
to arrive at the required manpower versus the available manpower. This is
accumulated across the organization at different levels and departments. The final
report will consolidate and state the required manpower versus the available
manpower in terms of the quantitative analysis. Another analysis on the qualitative
side conducted similarly shows the competencies required versus competencies
available for each of the job roles. This provides the present manpower inventory.
There may be excess or deficit or in extremely few cases just the right number
quantitatively. The report on the qualitative front may rarely have a 100% match
between required competencies versus available competencies.

1.4.2 Manpower Forecasting

Manpower planning is done based on the manpower forecasts. The common

manpower forecasting techniques are:

(i) Expert Forecasts: This includes formal expert surveys, informal decisions and
the Delphi technique.

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(ii) Trend Analysis: Manpower needs can be seen through the past practice of the
firm or organization keeping the principle year as a basis and a central tendency of
measure

(iii) Work Load Evaluation: This depends on the nature of the work load in a
branch, department, or a division in a firm or organization.

(iv) Work Force Evaluation: As production and the time duration are to be kept in
mind, allotments have to be made for getting the total manpower requirements.

(v) Other Methods: A few mathematical models with the help of computers are also
used to forecast manpower needs.

You will learn more about forecasting in unit 2.

1.4.3 Develop a Manpower Sourcing Plan or Retrenchment Plan

Once the current inventory is compared with the future manpower forecasts then
the manpower sourcing or retrenchment plan is drawn.

The sourcing plan includes recruitment, selection, placement, hiring temporary

staff and outsourcing. You will learn more about the sourcing plan in unit 6.

The retrenchment plan involves sending show-cause notices to bottom performers

called bottom scraping, asking people to leave the organization by providing the
requisite severance allowance, allowing employees to go on a sabbatical and
finally out-placing employees in other organizations to reduce the manpower. It is
harder to retrench manpower. The need for retrenchment could also be minimized
by very objectively approving any additional manpower.

1.4.4 Manpower Allocation & Retention

Manpower allocation helps in managing the impact of deficits and excess in

manpower supply through promotions, transfers and job-rotations. Enhancing
manpower utilization requires managing the dynamics of leadership and
motivation.

Manpower retention would mean taking necessary steps to ensure that the
organization provides a conducive-atmosphere to the employees to perform and
keeps each employee engaged.

1.4.5 Building Requisite Competencies

Once the future manpower forecasts are compared to the current inventory, there
may be some gaps in competencies amongst the available internal resources for

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them to qualify for the future manpower forecasts. In such cases organizations
may choose to develop resources through training programs. A training calendar is
designed to ensure competencies of existing staff are enhanced to meet the future
manpower forecasts. Additional training programs may be designed when
organizations are diversifying or expanding. Training programs may be designed to
train existing resources on the latest improvements and advancements in
technology or the related business subject. Training is provided to improve the
knowledge, skill and capability of the employee.

Q.2. Explain supply forecasting.

Ans. Supply Forecasting

Demand analysis provides the manager the means of evaluating the number and
kind of employees that will be required by the firm or organization. The only logical
next step for the management to do is to determine if it will be able to provide the
number of required employees and the sources. This information is supplied by
supply forecasting.

Supply forecasting measures the number of employees available within or outside

the firm or organization. It also has to keep absenteeism, shift changes, number of
working hours, promotions etc in mind.

Valid reasons for making supply forecasting are:

· It helps to decide the number of employees and positions that are available for
further need.

· It helps to evaluate the present staffing levels in different parts of the firm or
organization.

· It helps to prevent a shortage of employees when and where they are needed the
most.

· It helps to match the future requirement with the job specification.

Hence demand and supply forecasting are very essential to firms and
organizations as it then helps them to decide between the various forecasting
methods to be chosen.

Based on the demand forecast the sourcing team of HR identifies the sources of
supply of manpower. Broadly speaking two key sources of supply of manpower
exist. They are:

· Internal Supply

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· External Supply

2.5.3 Internal Supply

Internal supply options are employees moving up the ladder by way of promotions.
Promotions occur usually in an organization at a certain periodicity. Once in six
months based on the half yearly performance appraisals process. The other
method is that the organization posts internal job posting. The eligibility criteria, for
employees to apply for such a job posting is defined such that it only promotes
meritocracy and length of service.

The other internal supply option is when employees are transferred from other
departments or locations where there may be excess staff, to a department which
has a dearth of quality resources. This process is also called transfer. Transfers
are also usually announced at a certain periodicity. It could be quarterly. If it is
annually done, it may also align with the starting of schools for a new academic
year. However, business pressures today are so severe, that such practices seem
to be fading away at least in private enterprises. Only organizations with highly
stable operations can plan and execute as per plan.

2.5.4 External Supply

External supply options could be the following:

· From the same industry

· From different related industries

· From unrelated industries

· From the same city

· From peripheral cities

· From metros

· From across the country

· From rural parts with good colleges

· From dying public sector units

· From other companies which are getting shut down

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External supply sources may also required companies to reconsider their location
strategy. If there is a large pool of resources based in a location, where the
organization can relocate to or add a branch, then it would save the company huge
costs in terms of relocation expenses and paying higher salaries. Candidates
joining in home location may be able to accept jobs at comparatively lower salaries
than existing in a city/metro.

Q.3. What is the cost approach of HR ACCOUNTING?

Ans. Cost Approach

Cost is the expense to acquire a resource to obtain service and benefits thereof.
This expense has two portions – current expense and asset portions. Current
expense is the amount incurred to derive benefits in the current financial year.
Asset portion is the amount incurred on expected benefits in future. Differentiating
clearly between both is not easy.

Certain other ways to classify cost are – Historical Cost, Opportunity Cost, and
Replacement Cost. These costs can be further divided into direct and indirect cost.
Direct cost is the expense made on hiring, training and placement of new
employees while indirect cost is the time spent by the supervisors and trainers on
these activities.

Historical cost is defined as the expense made on hiring, training, placement, etc.
in the past. It also considers the salaries and other payouts.

Opportunity cost method looks at what would have been the returns if the cost
incurred on HR was invested somewhere else. This method has a limited
application as it is very subjective.

Replacement cost method is deployed to calculate the cost if existing employees

were to be replaced by new ones. It considers separation cost of existing
employees and hiring, training, placement, etc. cost of new employees.

Q.4. Discuss qualitative side of Manpower planning.

Ans. Qualitative Side of Manpower Planning

In this section, you will learn about the qualitative side of manpower planning.
Faced with the ever increasing changes, organizations need to develop a more
focused and logical approach to manpower planning. In developing the manpower
plan a very important question must be answered, “What kind of employees’ does
your organization need to manage and run the business to meet your strategic
goals and objectives?” Answer to the above question has been provided in three
parts below:

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I) Culture

Culture refers to the values, beliefs, adherence to rules and regulations,

management style demonstrated consistently. Values the organization needs to
exhibit. Do existing and prospective employees hold the same values? Stemming
from the values an organization’s beliefs and approaches to work are defined.
Based on those beliefs, rules and regulations and the management style of the
organization are defined. Do existing and prospective employees have the same
beliefs? Will they be able to respect the rules and regulations? Can they
demonstrate a management style that is inclusive and result oriented?

Solution: Behavioral Event Interviewing

II) Organization

Organization refers to the organizational structure (flat, hierarchical), the

organizations environment (fun, meritocracy, result oriented, open to feedback and
learning), team player, job roles and reporting lines of the organization.

Solution: Standard interviews

III) People

The knowledge, skill levels, behavior and attitude required or demonstrated

consistently, competency level of the employee, potential of the employee as
individual contributor, people developer and a smooth business operator.

Solution: Competency Mapping (Skill Inventory included)

Q.5. Write a note on internal sourcing.

Ans. Internal Sourcing

When you hire staff or contract staff who is working or was working with your
organization earlier, then it is called as internal sourcing. An internal source is
considered for:

Promotions

Availability of competent resources within the organization are given first

preference and considered for filling the vacancies at higher levels by way of
promotions.

Transfers

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In case of excess hiring or businesses slowing due to various reasons in one

branch of an organization and shortage of employees in another branch,
organizations consider transferring surplus employees to meet the shortage of staff
in the other branch rather than sourcing externally.

Temporary Staff

Many organizations appoint temporary staff for short projects. At the end of such
projects organization often try to retain efficient resources by deploying them to
available positions in other roles.

Retired Employees

Sometimes organizations prefer to re-employ their retired employees due their

immense experience and knowledge and lack of suitably skilled and efficient
candidate matching their requirement for the job opening.

Advantages of Internal Sourcing

The advantages of internal sourcing are:

· Reduces cost of recruitment.

· Reduces cost of training, induction and orientation.

· The time to transfer to the new role may be shorter.

· The past performance track record of the employee is known.

· Motivates employees and provides experienced competent people for the job
role.

· Stability of employment can be ensured for the candidate.

Disadvantages of Internal Sourcing

· Limits the options for selection.

· Lack of new ideas and approaches from outside the business.

· Creates another vacancy by moving the candidate from current job.

· May discourage the candidates not appointed.

Q.6. Write a note on performance management.

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Ans. Performance Management drives the employees to perform better and

meet or exceed standards of performance. Every time the performance exceeds
expectations an incentive or bonus is offered. For consistently meets expectations
performers, increments in salary are done. For consistently exceeds expectations
performers, substantial increments in salary is done. This drives productivity and
quality, resulting in lower requirement of manpower. This also requires lesser
infrastructure, administrative costs and training cost. Thus performance
management is a key component of resourcing strategy.

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