HRP is a Four-Phased Process.

▪ The first phase involves the gathering and analysis of data through manpower

inventories and forecasts

▪ The second phase consists of establishing manpower objectives and policies and

gaining top management approval of these.

▪ The third phase involves designing and implementing plans and promotions to enable

the organization to achieve its manpower objectives.

▪ The fourth phase is concerned with control and evaluation of manpower plans to

facilitate progress in order to benefit both the organization and the individual. The long run view means that gains may be sacrificed in the short run for the future grounds. The planning process enables the organization to identify what its manpower needs is and what potential manpower problems required current action. This leads to more effective and efficient performance.

The objectives of human resource planning

Forecasting Human Resources Requirements:

• HRP is essential to determine the future needs of HR in an organization. In the absence of this plan it is very difficult to provide the right kind of people at the right time.

Effective Management of Change:

• Proper planning is required to cope with changes in the different aspects which affect the organization. These changes need continuation of allocation/ reallocation and effective utilization of HR in organization.

Realizing the Organizational Goals:

• In order to meet the expansion and other organizational activities the organizational HR planning is essential.

Promoting Employees:

• HRP gives the feedback in the form of employee data which can be used in decision making in promotional opportunities to be made available for the organization.

Effective Utilization of HR:

• The data base will provide the useful information in identifying surplus and deficiency in human resources. The objective of HRP is to maintain and improve the organizational capacity to reach its goals by developing appropriate strategies that will result in the maximum contribution of HR.

NEED FOR HRP IN ORGANIZATIONS

Major reasons for the emphasis on HRP at the Macro level:

1) Employment-Unemployment Situation:

• Though in general the number of educated unemployment is on the rise, there is acute shortage for a variety of skills. This emphasizes on the need for more effective recruitment and employee retention.

2) Technological Change:

• The changes in production technologies, marketing methods and management techniques have been extensive and rapid. Their effect has been profound on the job contents and job contexts. These changes have caused problems relating to redundancies, retention and redeployment. All these suggest the need to plan manpower needs intensively and systematically.

3) Demographic Change:

• The changing profile of the work force in terms of age, sex, literacy, technical inputs and social background has implications for HRP.

4) Skill Shortage:

• Unemployment does not mean that the labor market is a buyer’s market. Organizations generally become more complex and require a wide range of specialist skills that are rare and scare. A problem arises in an organization when employees with such specialized skills leave.

5) Governmental Influences:

• Government control and changes in legislation with regard to affirmative action for disadvantages groups, working conditions and hours of work, restrictions on women and child employment, causal and contract labor, etc. have stimulated the organizations to be become involved in systematic HRP.

6) Legislative Control:

• The policies of “hire and fire” have gone. Now the legislation makes it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but difficult to shed the fat in terms of the numbers employed because of recent changes in labor law relating to lay-offs and closures. Those responsible for managing manpower must look far ahead and thus attempt to foresee manpower problems.

7) Impact of the Pressure Group:

• Pressure groups such as unions, politicians and persons displaced from land by location of giant enterprises have been raising contradictory pressure on enterprise management such as internal recruitment and promotion, preference to employees’ children, displace person, sons of soil etc.

8) Systems Approach:

• The spread of system thinking and advent of the macro computer as the part of the on going revolution in information technology which emphasis planning and newer ways of handling voluminous personnel records.

9) Lead Time:

• The log lead time is necessary in the selection process and training and deployment of the employee to handle new knowledge and skills successfully.

IMPORTANCE OF HRP

1. Future Personnel Needs:

• Human resource planning is significant because it helps to determine the future personnel

needs of the organization. If an organization is facing the problem of either surplus or

deficiency in staff strength, then it is the result of the absence of effecting HR planning. All

public sector enterprises find themselves overstaffed now as they never had any planning for

personnel requirement and went of recruitment spree till late 1980’s. The problem of excess

staff has become such a prominent problem that many private sector units are resorting to VRS ‘voluntary retirement scheme’. The excess of labor problem would have been there if the organization had good HRP system. Effective HRP system will also enable the organization to have good succession planning.

2. Part of Strategic Planning:

• HRP has become an integral part of strategic planning of strategic planning. HRP provides

inputs in strategy formulation process in terms of deciding whether the organization has

got the right kind of human resources to carry out the given strategy. HRP is also necessary

during the implementation stage in the form of deciding to make resource allocation

decisions related to organization structure, process and human resources. In some

organizations. HRP play as significant role as strategic planning and HR issues are

perceived as inherent in business management.

3. Creating Highly Talented Personnel:

• Even though India has a great pool of educated unemployed, it is the discretion of HR

manager that will enable the company to recruit the right person with right skills to the

organization. Even the existing staff hope the job so frequently that organization face

frequent shortage of manpower. Manpower planning in the form of skill development is

required to help the organization in dealing with this problem of skilled manpower

shortage

4. International Strategies:

• An international expansion strategy of an organization is facilitated to a great extent by HR planning. The HR department’s ability to fill key jobs with foreign nationals and

  reassignment of employees from within or across national borders is a major challenge that

  is being faced by international business. With the growing trend towards global operation,

  the need for HRP will as well will be the need to integrate HRP more closely with the

  organizations strategic plans. Without effective HRP and subsequent attention to employee

  recruitment, selection, placement, development, and career planning, the growing

  competition for foreign executives may lead to expensive and strategically descriptive

  turnover among key decision makers.

5. Foundation for Personnel Functions:

• HRP provides essential information for designing and implementing personnel functions,

  such as recruitment, selection, training and development, personnel movement like

  transfers, promotions and layoffs.

6. Increasing Investments in Human Resources:

• Organizations are making increasing investments in human resource development

compelling the increased need for HRP. Organizations are realizing that human assets can

increase in value more than the physical assets. An employee who gradually develops his/

her skills and abilities become a valuable asset for the organization. Organizations can

make investments in its personnel either through direct training or job assignment and the

rupee value of such a trained, flexible, motivated productive workforce is difficult to

determine. Top officials have started acknowledging that quality of work force is

responsible for both short term and long term performance of the organization.

7. Resistance to Change:

• Employees are always reluctant whenever they hear about change and even about job

rotation. Organizations cannot shift one employee from one department to another

without any specific planning. Even for carrying out job rotation (shifting one employee

from one department to another) there is a need to plan well ahead and match the skills

required and existing skills of the employees.

8. Uniting the Viewpoint of Line and Staff Managers:

• HRP helps to unite the viewpoints of line and staff managers. Though HRP is initiated and

executed by the corporate staff, it requires the input and cooperation of all managers within

an organization. Each department manager knows about the issues faced by his department

more than anyone else. So communication between HR staff and line managers is essential

for the success of HR Planning and development.

9. Succession Planning:

• Human Resource Planning prepares people for future challenges. The ‘stars’ are picked up, trained, assessed and assisted continuously so that when the time comes such trained employees can quickly take the responsibilities and position of their boss or seniors as and when situation arrives.

10. Other Benefits:

(a) HRP helps in judging the effectiveness of manpower policies and programs of

management. (b) It develops awareness on effective utilization of human resources for the

overall development of organization. (c) It facilitates selection and training of employees

with adequate knowledge, experience and aptitudes so as to carry on and achieve the

organizational objectives (d) HRP encourages the company to review and modify its human

resource policies and practices and to examine the way of utilizing the human resources

for better utilization.

Figure 2.1 : Factors Affecting HRP.

1. Type and Strategy of the Organization:

Type of the organization determines the production processes involve, number and

type of staff needed and the supervisory and managerial personnel required. HR need is

also defined by the strategic plan of organization. If the organization has a plan for organic

growth then organization need to hire additional employees. On the other hand, if the

organization is going for mergers and acquisition, then organization need to plan for

layoffs, as mergers can create, duplicate or overlap positions that can be handled more

efficiently with fewer employees. Organization first decides whether to be reactive or

proactive in HRP. Organizations either carefully anticipate the needs and systematically

plan to fill the need in advance (proactive) or can simply react to the needs as they arise

(reactive). Likewise, the organization must determine the width of the HR plan.

Organization can choose a narrow focus by planning in only one or two HR areas like

recruitment and selection or can have a broad perspective by planning in all areas including

training and remuneration. The nature of HR plan is also decides upon the formality of the

plan. It can decides to have an informal plan that lies mostly in the minds of the managers

and personnel staff or can have a formal plan which is properly documented in writing The

nature of HR plan is also depended upon the flexibility that is practiced in the organization.

HR plan should have the ability to anticipate and deal with contingencies. Organizations

frame HRP in such a way that it can contain many contingencies, which reflect different

scenarios thereby assuring that the plan is flexible and adaptable.

2. Organizational Growth Cycles and Planning:

All organizations pass through different stages of growth from the day of its inception.

The stage of growth in which an organization is determines the nature and extends of HRP.

Small organizations in the earlier stages of growth may not have well defined personnel

planning. But as the organization enters the growth stage they feel the need to plan its

human resource. At this stage organization gives emphasis upon employee development.

But as the organization reaches the mature stage it experience less flexibility and variability

resulting in low growth rate. HR planning becomes more formalized and less flexible and

less innovative and problem like retirement and possible retrenchment dominate planning.

During the declining stage of the organization HRP takes a different focus like planning to

do the layoff, retrenchment and retirement. In declining situation planning always becomes

reactive in nature towards the financial and sales distress faced by the company.

3. Environmental Uncertainties:

Political, social and economic changes affect all organizations and the fluctuations that are

happening in these environments affect organizations drastically. Personnel planners deal

with such environmental uncertainties by carefully formulating recruitment, selection,

training and development policies and programs. The balance in the organization is

achieved through careful succession planning, promotion channels, layoffs, flexi time, job

sharing, retirement, VRS and other personnel related arrangements.

4. Time Horizons:

HR plans can be short term or long term. Short term plans spans from six months to one

year, while long term plans spread over three to twenty years. The extent of time period

depends upon the degree of uncertainty that is prevailing in an organizations environment.

Greater the uncertainty, shorter the plan time horizon and vice versa.

5. Type and Quality of information:

The information used to forecast personnel needs originates from a multitude of sources.

The forecast depends to a large extent upon the type of information and the quality of data that

is available to personnel planners. The quality and accuracy of information depend upon the

clarity with which the organizational decision makers have defined their strategy, structure,

budgets, production schedule and so on.

6. Nature of Jobs Being Filled:

Personnel planners need to be really careful with respect to the nature of the jobs being

filled in the organization. Employees belonging to lower level who need very limited skills can

be recruited hastily but, while hiring employees for higher posts, selection and recruitment need

to be carried out with high discretion. Organization need to anticipate vacancies far in advance

as possible, to provide sufficient time to recruit suitable candidate.

7. Outsourcing:

Several organizations outsource part of their work to outside parties in the form of

subcontract. Outsourcing is a regular feature both in the public sector as well as in the private

sector companies. Many of the organizations have surplus labor and hence instead of hiring

more people they go for outsourcing. Outsourcing is usually done for non-critical activities.

Outsourcing of non- critical activities through subcontracting determines HRP.

HR PROCESS

ENVIRONMENTAL SCANNING:

It refers to the systematic monitoring of the external forces influencing the organization. By scanning the environment for changes that will affect an organization, managers can anticipate their impact and make adjustments early.

ORGANIZATIONAL OBJECTIVES AND POLICIES:

HR plan is usually derived from the organizational objectives. Specific requirements in terms of number and characteristics of employees should be derived from organizational objectives Once the organizational objectives are specified, communicated and understood by all concerned, the HR department must specify its objective with regard to HR utilization in the organization.

HR DEMAND FORECAST:

Demand forecasting is the process of estimating the future quantity and quality of

people required to meet the future needs of the organization. Annual budget and long-term

corporate plan when translated into activity into activity form the basis for HR forecast.

For eg: in the case of a manufacturing company, the sales budget will form the basis

for production plan giving the number and type of products to be produced in each period. This

will form the basis upon which the organization will decide the number of hours to be worked

by each skilled category of workers. Once the number hours required is available organization

can determine the quality and quantity of personnel required for the task.

HR SUPPLY FORECAST:

Supply forecast determines whether the HR department will be able to procure the

required number of workers. Supply forecast measures the number of people likely to be

available from within and outside an organization, after making allowance for absenteeism,

internal movements and promotions, wastage and changes in hours, and other conditions of

work.

HR PROGRAMMING:

Once an organization’s personnel demand and supply are forecasted the demand and

supply need to be balanced in order that the vacancies can be filled by the right employees at

the right time.

HR PLAN IMPLEMENTATION:

HR implementation requires converting an HR plan into action. A series of action are

initiated as a part of HR plan implementation. Programs such as recruitment, selection and placement, training and development, retraining and redeployment, retention plan, succession plan etc when clubbed together form the implementation part of the HR plan.

CONTROL AND EVALUATION:

Control and evaluation represent the final phase of the HRP process. All HR plan include budgets, targets and standards. The achievement of the organization will be evaluated

and monitored against the plan. During this final phase organization will be evaluating on the number of people employed against the established (both those who are in the post and those who are in pipe line) and on the number recruited against the recruitment targets. Evaluation is also done with respect to employment cost against the budget and wastage accrued so that corrective action can b taken in future.