Human Resource Planning PDF

**2 HUMAN RESOURCE PLANNING** **OBJECTIVE OF THE UNIT** After the completion of the unit, the student will be able to: 1\. Understand the need and importance of Human Resource Planning 2\. Know the objectives of HR Planning 3\. Explain the steps in Human Resource Planning 4\. Explain the vario...

**2 HUMAN RESOURCE PLANNING** **OBJECTIVE OF THE UNIT** After the completion of the unit, the student will be able to: 1\. Understand the need and importance of Human Resource Planning 2\. Know the objectives of HR Planning 3\. Explain the steps in Human Resource Planning 4\. Explain the various types of Human Resource Planning 5\. Understand Corporate Planning and the Human Resource Planning Process 6\. Explain Human Resource Information System 7\. Understand current interest in HR Planning **INTRODUCTION** Human Resource Planning is concerned with planning the organization\'s future workforce requirements. HR manager ensures that the company has the right type of people in the correct number at the right time and place, who are trained and motivated to do the proper work at the right time. Human resource planning primarily makes appropriate projections for the organization\'s future workforce needs, envisages a plan for developing the workforce to suit the organization\'s changing needs from time to time, and foresees how to monitor and evaluate future performance. It also includes replacement plans and managerial succession plans. Human Resource planning is how management determines how an organization should move from its current to its desired workforce position. Through planning, management strives to have the correct number and the right kinds of people at the right places and time to do things that result in both the organization and the individual receiving the maximum long-range benefit. **Definitions of Human Resource Planning:** **1. Coleman** has defined Human Resource Planning as ―the process of determining workforce requirements and the means for meeting those requirements to carry out the integrated plan of the organization. **2.** According to **Wikstrom,** Human Resource Planning consists of a series of activities, viz., **Coleman** has defined Human Resource Planning as ―the process of determining workforce requirements and the means for meeting those requirements to carry out the integrated plan of the organization. Human resource planning is a double-edged weapon. If used properly, it leads to the maximum utilization of human resources, reduces excessive labor turnover and high absenteeism, improves productivity, and aids in achieving the objectives of an organization. Faultily used, it leads to disruption in the flow of work, lower production, less job satisfaction, high cost of production, and constant headaches for the management personnel. Therefore, for the success of an enterprise, human resource planning is an essential function that can be neglected only at its peril. **NEED AND IMPORTANCE OF HUMAN RESOURCE PLANNING** Human Resource planning is how management determines how an organization should move from its current to its desired workforce position. Through planning, management strives to have the correct number and kinds of people at the right places and time to do things that result in both the organization and the individual receiving the maximum long-range benefit. Human resource planning is a double-edged weapon. If used properly, it leads to the maximum utilization of human resources, reduces excessive labor turnover and high absenteeism, improves productivity, and aids in achieving the objectives of an organization. Faultily used, it leads to disruption in the flow of work, lower production, less job satisfaction, high cost of production, and constant headaches for the management personnel. Therefore, for the success of an enterprise, human resource planning is an essential function that can be neglected only at its peril. **Coleman** has defined Human Resource Planning as ―the process of determining workforce requirements and the means for meeting those requirements to carry out the integrated plan of the organization. **Objectives of HR Planning** The primary objectives of Human Resource Planning in an organization are to : i. ensure optimum use of human resources currently employed; ii. \(ii) avoid balances in the distribution and allocation of human resources; iii. \(iii) assess or forecast future skill requirements of the organization's overall objectives; iv. \(iv) provide control measures to ensure the availability of necessary resources when required; v. \(v) control the cost aspect of human resources; vi. \(vi) formulate transfer and promotion policies. **STEPS IN HUMAN RESOURCE PLANNING** Human resource planning refers to a process by which companies ensure they have the correct number and kinds of people at the right place and time capable of performing different jobs efficiently. Planning the use of human resources is an essential function in every organization. A rational estimate of various categories of personnel in the organization is critical to human resource planning. HRP involves the following steps : 1. **Analysis of Organisational Plans and Objectives:** Human resource planning is a part of the organization\'s overall plan. Plans concerning technology, production, marketing, finance, expansion, and diversification give an idea about the volume of future work activity. Each project can further be analyzed into sub-plans and detailed programs. It is also necessary to decide the time horizon for which human resource plans must be prepared. The future structure and job design should be made clear, and organizational structure changes should be examined to anticipate workforce requirements. 2. **Forecasting Demand for Human Resources:** Human resource planning starts with estimating the number and type of personnel required at different levels and departments. The main steps involved in the HRP process are (a) to determine and identify present and prospective human resource needs and (b) to discover and recruit the required number of persons. (c) to select the correct number and type from the available people. (d) to hire and place in the positions for which they are qualified, (e) to provide information to the selected people about the nature of work assigned to them, (f) to Promote or to transfer as per the needs and the performance of employees, (g) to denote if the employees are disinterested or their performance is not upto the mark, (h) to terminate if they are not needed or their performance is below standard and shows no hopes of improvement. It is the most crucial and critical area of HRD. This HRD manager must pay attention to placing the right man for the right job through recruitment selection, Training, and Placement of employees. This calls for adopting a systematic procedure to complete recruitment and selection. 3. **Forecasting Supply of Human Resources:** One of the critical areas of human resources planning is to allocate persons to different departments depending upon the workload and requirements of the departments. While giving workforce to other departments, care has to be taken to consider appointments based on promotions and transfers. Allocation of human resources should be so planned that the available workforce is put to full use to ensure the smooth functioning of all departments. 4. **Estimating Manpower Gaps:** Comparing demand and supply forecasts can identify net human resource requirements or workforce gaps. Such a comparison will reveal either a deficit or a surplus of human resources. Deficits suggest the number of persons to be recruited from outside, whereas the rest implies redundancy to be redeployed or terminated. Similarly, gaps in knowledge, skills, and aptitudes may occur. Employees deficient in qualifications can be trained, whereas employees with higher skills may be given more enriched jobs. 5. **Matching Demand and Supply:** One of the objectives of human resource planning is to assess the demand for and supply of human resources and match both to know shortages and surpluses on both sides in kind and number. This will enable the human resource department to understand overstaffing or understaffing. Once the workforce gaps are identified, plans are prepared to bridge these gaps. Plans to meet the surplus workforce may be redeployment in other departments and retrenchment with the trade unions in consultation. People may be persuaded to quit through voluntary retirement. The deficit can be met through recruitment, selection, transfer, promotion, and training plans. Realistic plans for the procurement and development of the workforce should be made after considering the macro and micro environments which affect the workforce objectives of the organization. **TYPES OF HUMAN RESOURCE PLANNING** In most developing countries, the development of human resources has been regarded as one of many objectives of long-term economic growth. As a result, even the objectives of financial planning and the priorities thereof began to be shifted away from purely growth-oriented development strategies to those that recognize and partly remedy the past neglect of such social sectors like population planning, health, education, housing, social security, and other social services. The following have been the prime concerns of governments in developing countries. - How to cope with the phenomenal explosion in population? - \(ii) How to provide productive employment to the unemployed and those entering the labor market? - \(iii) What supplementary programs to initiate for specific target groups (rural/urban poor, socially disadvantaged groups like the scheduled castes/tribes, backward classes, minorities, women, children, physically handicapped, etc.) for employment creation, income generation, and poverty alleviation? - \(iv) What proactive measures to take to meet the skill shortages so that there is no problem in realizing plan targets due to deficiencies in critical skills at various levels and in different trades/disciplines? - \(v) How to upgrade technical, administrative, and managerial skills in different sectors of the economy to sustain and improve productivity and further the pace of economic development? - \(vi) How to cope with the growing imbalances in the supply and demand side of human resources in an uncertain and turbulent environment within and outside the country in an increasingly interdependent world? The broad framework for Human Resource Planning at the macro level would encompass all these and other concerns, dealing with the problems\' supply and demand side. It should cover not only quantitative aspects but also qualitative factors. The objectives of Human Resource Planning in India, as in most other developing countries at the macro level, should thus encompass all aspects of human resource development, from population planning on the one hand to investments in health, education, housing, and other social welfare services on the other. The significant components of human resource planning based on environmental analysis and adjustment are: \(a) Population Planning, Employment Planning \(b) Educational Planning \(c) Other aspects of Social and Human Development The Government of India has spelled out the human resources/workforce planning objectives at the macro level in successive five-year economic plans. The prime concern has been finding a solution to the unemployment problem and the poverty that goes with it. The critical issues involved relate to questions on the rate and growth pattern. A database is created to facilitate the formulation of sound policies and programs. The decennial census conducted by the office of the Registrar General constitutes the most comprehensive source of population statistics. In contrast, the quinquennial labor force survey conducted by the National Sample Survey Organization (NSSO) is the most crucial source of labor force statistics. The Annual Survey of Industries (ASI) also furnishes vital data on employment trends in the industry. The gravity of the unemployment situation led the government to initiate, from time to time, a variety of special employment schemes such as the National Rural Employment Programme (NREP), Minimum Needs Programme, National Scheme of Training Rural Youth for Self-Employment (TRYSEM), Integrated Rural Development Programme (IRDP) and the Self-Employment Scheme for Education Unemployed Youth (SEEUY). State planning boards and district-level workforce planning generation councils have been set up as part of the decentralized human resources planning and employment generation strategy. These councils are assisted by the District Employment Exchange, District Industries Centre, District Agriculture Office, Lead Bank, University Employment and Guidance Bureau, and Special Employment Exchanges for major public sector projects, as also those for people with disabilities, professionals, etc., in preparing a portfolio of opportunities for salaried, self and wage employment. The employment exchanges have three broad functions. i. registration and placement of job seekers; ii. rendering vocational training and career advice services; and iii. collection and dissemination of workforce data. Along with measures for generating employment in the successive plans, attention was paid to providing a substantial infrastructure for education and technical training. Skill formation has also been provided for in various beneficiary-oriented programs. The Apprenticeship Act was enacted to induce the corporate sector to participate in the skill formation process. The primary concerns are still on how to substantially bring about improvements in education, training, values, knowledge, skills, and attitudes relevant to the needs of society and its development tasks. Special measures are also required to deal with the paradox of unemployment and skill shortages in particular disciplines/sectors, the persistent problem of migration, and the regulation of overseas employment to minimize their exploitation and deal with the adverse effects of possible brain drain. Various legislative and administrative measures have occurred at national, state, and district levels. Thus, the broad framework, contents, and processes involved in Human Resource Planning at the macro level are indeed complex---the rapid environmental changes in many senses of the term further compound the complexity. Therefore, the approach to Human Resource Planning at the macro level is dynamic. It is indeed difficult to make any objective evaluation of the success of efforts in this context. While India can boast of having the third-largest pool of scientific and technical personnel, the technological lag in its economy is striking. The country still has critical shortages in specific skills, even as many trained/educated in related disciplines remain unemployed. There is the irony of doctors without patients and patients without doctors! These are some of the issues that become critical in matching the supply and demand of human resources. The objectives of Human Resource Planning at the micro level are to ensure that the organization: - obtains and retains the quantity and quality of human resources it needs at the right time and place; and - makes optimum utilization of these resources. **Corporate Planning and Human Resource Planning Process Human Resource Planning,** constitutes an integral part of the corporate plan and serves the organizational purposes in more ways than one. For example, it helps organizations to i. capitalize on the strengths of their workforce; ii. determine recruitment levels; iii. anticipate redundancies; iv. determine optimum training levels; v. serve as a basis for management development programs; vi. cost workforce for new projects; vii. assist productivity bargaining; ( viii. assess future requirements; ix. study the cost of overheads and value of service functions; and x. Decide whether certain activities need to be subcontracted. The Human Resource plan is a part of the corporate plan. Without it, there can be no Human Resource Plan for human resources. If there are several imponderables and unpredictable in the corporate strategy, there will be difficulties in Human Resource Planning. Whether or not Human Resource Planning meets the requirements and is in tune with reality depends on the clarity of goals and the validity of the stated assumptions. The other important point is the time frame for defining the future. In Human Resource Planning, the future can be classified into three periods: i. the short-range or immediate future; ii. the mid-range; and iii. the long-range future, none of which can be spelled out in terms of a set number of days, months, or years. The immediate future may refer to current situations and experiences and may even concern issues such as overtime and replacements. If there has been previous planning for human resources, such plans can serve as a guide in the immediate future. If not, a beginning should be made at once. The mid-range end has a different period in various companies. It can be as short as a few months or as long as several years. Most would agree upon a 2-3 years period as a mid-range. The long-range plan could be five years, while 10 to 15 years span could be used for a perspective plan. Long-range plans must be made based on various trends in the economy, the labor market, and long-term production trends in the company. Long-range plans are general rather than specific, flexible rather than rigid. Nevertheless, a project can be beneficial in identifying factors and trends that need to be reckoned with for early warning of possible problems. The long lead time provides the opportunity and resilience to meet exigencies and make necessary adjustments. More complete plans can be made as time slowly brings the long and short-range. The first step in the Human Resource Planning process is the establishment of a planning horizon. One should know the period for which the plan will apply. Then, the specific corporate objectives and strategies should be clear. Based on these, estimates or projections for the demand and supply of human resources can be made. The difference between the estimates of demand for and supply of Human Resources is often called the Human Resource gap. One of the main components of the Human Resource strategy is to formulate plans for closing such gaps-perhaps by recruitment and training (if the demand is buoyant, i.e., demand exceeds supply) or by planned redundancy (if the gap is negative). **HUMAN RESOURCE INFORMATION SYSTEM** HRIS is an essential element in human resource development. It is a system of maintaining, collecting, and analyzing the organization\'s human resources data. It helps managers in decision-making regarding promotion, wage fixing, recruitment, training, and development. In this way, HRIS acts as a decision support system. The inputs of HRIS include the information relating to employees, their abilities, qualifications, potentialities, creative instincts, age, pay scales, various jobs in the organization, their required skills and qualifications to do them, the number of employees and executives staffing different positions, organizational objectives, policies, and procedures, etc. **Current Interest in HR Planning,** Primary reasons for the present emphasis on workforce planning include the following: 1. **Employment-Unemployment Situation:** Though, in general, the number of educated unemployed is on the rise, there is an acute shortage of various skills. This emphasizes the need for more effective recruitment and retaining people. 2. **Technological Change:** The changes in production technologies, marketing methods, and management techniques have been extensive and rapid. Their effect has been profound on job contents and contexts. These changes can cause problems relating to redundancies, retraining, and redeployment. All these contribute to intensively and systematically planning human resource needs. 3. **Organizational Change:** In a turbulent environment marked by cyclical fluctuations and discontinuities, the nature and pace of changes in an organizational setting, activities, and structures affect human resource requirements and require strategic consideration. 4. **Demographic Changes:** The changing profile of the workforce in terms of age, sex, literacy, technical inputs, and social background have implications for human resource planning. 5. **Skill Shortages:** Government control and changes in legislation about affirmative action for disadvantaged groups, working conditions and hours of work, restrictions on women and child employment, casual and contract labor, etc., have stimulated organizations to become involved in systematic human resource planning. 6. **Legislative Controls:** The days of executive fiat, hire, and fire policies have passed. Now legislation must make it easier to quickly and cheaply reduce an organization\'s size. It is easy to increase but challenging to reduce the numbers employed because of recent changes in labor law relating to lay-offs and closures. Those responsible for managing human resources must look far ahead and attempt to foresee human resource positions. 7. **Impact of Pressure Groups:** Pressure groups such as unions, politicians, and persons displaced from land by the location of giant enterprises have been raising contradictory pressures on enterprise management in areas such as internal recruitment and promotions, preference for employees' children, displaced persons, sons of the soil, etc. 8. **Systems Concept:** The spread of systems thinking and the advent of microcomputers as part of the ongoing revolution in information technology emphasizes planning and adopting newer ways of handling voluminous personnel records---section process and for training and development of the employees to take new knowledge and skills successfully.