INDIAN INSTITUTE OF TECHNOLOGY, KHARAGPUR

VINOD GUPTA SCHOOL OF MANAGEMENT Subject :

Human Resource Management

( BM50004, 3 2 1 3 ) Topic :

Human Resource Planning

Instructor : Prof. Kalyan Chakravarti

DEFINITION
Human Resource Planning (HRP) is a PROCESS by which an organization strikes a balance between the human resources REQUIRED and ACQUIRED in the organization. HRP includes estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure that personnel supply equals personnel demand at the appropriate time in the future. - Terry L. Leap and Michael D. Crino

DEFINITION
Human Resource Planning is a process of determining and assuming that the organization will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved. - Dales Beach HRP is the process including forecasting, developing and controlling by which a firm ensures that it has the right number of people at the right places at the right time doing work for which they are economically most useful. - E. B. Geisler

OBJECTIVES OF HRP
Ensure adequate supply of manpower as and when required.

2) Ensure proper use of existing human resources in the organization. 3) Forecast future requirements of resources with different levels of skills. human Contd.

OBJECTIVES OF HRP
4) Assess surplus or shortage, if any, human resources available over a specific period of time. 5) Anticipate the impact of technology on job and requirements for human resources. 6) Control the human resources already deployed in the organization. Cont

OBJECTIVES OF HRP
(7) Provide lead time available to select and train the required additional human resource over a specified time period. (8) The ultimate objective is to relate future human resources to future enterprise need so as to maximize the future return on investment in human resources.

NEED AND IMPORTANCE OF HRP

1) The paradox often is that even with growing unemployment, there has been shortage of human resources with the required skills, qualifications and capability to do various work. Hence, the need for HRP. 2) Large numbers of employees who retire, die, leave organizations, or become incapacitated because of physical or mental ailments, need to be replaced by new employees. Human resource planning ensures smooth supply of workers without interruption. Cont

NEED AND IMPORTANCE OF HRP

3) Human resource planning is also essential to replace workforce turnover. These cause a constant ebb and flow in the work force in many organizations. 4) Technological changes and globalization usher in change in the methods of production, distribution and servicing of goods/products. These changes may require change of skills as well as the change in the number of employees required. HRP helps management to adjust and cope with such changes. Cont...

NEED AND IMPORTANCE OF HRP

5) Required to meet the needs of expansion and diversification of the organization. 6) Identifies areas of surplus personnel and also areas where there are shortage of people. Steps can then be taken to re-deploy and/or recruit or downsize.

MANPOWER PLANNING (MP) VIS--VIS HUMAN RESOURCE PLANNING (HRP)

HRP concentrates on the developmental aspects of employees apart from the traditional activities of MP like manpower forecasting, job analysis, career path, training etc. It address the human and humane side of the people to unleash the potential productivity and performance by promoting job satisfaction, organizational commitment, self development etc. all of which contribute to the overall performance and well being of the organization.

THE HRP PROCESS

Fig. 4.2, Human Resource and Personnel Management, K. Aswathappa

FORECASTING TECHNIQUES
1) 2) 3) 4) 5) 6) Managerial judgement Ratio-trend analysis Work study techniques Delphi technique Flow models Mathematical models

MANAGEMENT JUDGEMENT METHOD

The top and operating managers participate. Both bottom-up approach and top-down approach methods are used. - Operating managers prepare manpower plans and send up to the top level for approval. - OR, the top managers prepare the forecast and send down to the operating levels for comments after which it is finalized. Quick method but may suffer from subjectivity.

WORK STUDY METHOD

Can be used where work methods and time standards are available. e.g. - Planned output for next year units : - Standard hours per unit : - Planned hours required (50,000 x 8) : - Productive hours per workman/year : - No. of workers required, 400,000/2000 : 50,000 8 400,000 2000 200

RATIO-TREND ANALYSIS METHOD

Very quick method, on the basis of studying past ratios. e.g. total output/number of workers, total sales volume/number of sales persons) Past ratios are used for future forecasts. e.g. - Production last year : 100,000 units - Number of workers last year : 100 - Estimated production next year : 120,000 - No. of workers required next year : 120, i.e. (120,000 / 100,000) x 100 After computing the above number, adjustments are to be made for planned separations.

DELPHI TECHNIQUE METHOD

This is a more refined judgmental method; hence can be more accurate than the management judgment method. But it is more time consuming. The managers involved do not meet face-to-face. The following steps are involved : The managers are asked to provide manpower estimates on a pre-designed questionnaire, to HR department. Cont

DELPHI TECHNIQUE METHOD

Each manager submits his anonymously and independently. estimate

The HR department compile and summarize the various responses and report the findings back to each the managers. After receiving the feedback, the managers are surveyed once again, for reviewed estimates. Cont

DELPHI TECHNIQUE METHOD

- The summaries and surveys are repeated until the managers opinions begin to agree. - The agreement reached is the forecast of the manpower needs.

FLOW MODELS METHOD

The simplest flow model is the Markov model.
- Fix the time period for the forecast. - Establish employee categories also called STATES. - Enumerate the flows among various categories or STATES for several time Period. - Estimate the probability of flows or movements from one category to another based on past trends in this regards.

The disadvantage is that there is a heavy reliance on PAST data.

MATHEMATICAL MODELS METHOD

Mathematical models express relationship between independent variable (e.g. production, sales, etc.) and dependent variable (e.g. number of workers required). The following model is widely used for forecasting employee needs.

En !

Lagg  G n
y

1x

Where En is the estimated no. of workers required in a number of years (at planning periods)

MATHEMATICAL MODELS METHOD

Lagg is the overall or aggregate level of annual business activity, in rupees. G is the total growth in business activity estimated through period n in todays rupees. x is the average productivity improvement estimated from today, through planning periods n (i.e. if x = 1.08, it means an average productivity improvement of 8%.)

MATHEMATICAL MODELS METHOD

y is the level of business activity per worker. (total level of todays business activity divided by the current member of personnel) The purpose of this model is to predict En- , the level of personnel required in a periods. Before applying the model, estimate of G, x and y must be made. Such estimates are made based on the previous experiences of management, as well as on future strategic choices to which the organization decision makers are committed.

HR SUPPLY FORECASTING
The analysis for supply of manpower covers : Existing Human Resources (skill and management inventories) Internal sources of supply, and External sources of supply.

The demand and supply forecast have to be balanced and steps taken to eliminate any mismatch. Monitoring/Audit and control have to be maintained for keeping the quality and quantity equilibrium.