TERM PAPER

ON
“Human Resource Planning”

UM18MB566-SHRM

BY
AKSHATHA M
PES1201802544

MBA PROGRAM
DEPARTMENT OF MANAGEMENT STUDIES
PES UNIVERSITY, BANGALORE-560085
 RUBRICS FOR EVALUATION OF INTERNAL ASSESSMENT- TERM PAPER
(50 points reduced to 10)
NAME OF STUDENT: Akshatha M COURSE: UM18MB566
CRITERIA LOW MEDIUM HIGH VERY HIGH
1 2 4 5
CONSTRUCT GENERAL ORDINARY FOCUSED SPECIALISED
(2) 2 4 8 10

CONTENT (2) GENERAL SPECIFIC FOCUSED SPECIALISED

WEB BASED WEB BASED Own own
2 4 8 10

ORGINALITY General Specific cut Focused Specialised

(2) Cut and Paste and paste Own style Own style
2 4 8 10
INTEREST (2) LOW MEDIUM HIGH VERY HIGH
2 4 8 10
TIMELINESS LATE Late by 1day On the day WELL IN
(2) 0 ADVANCE
2 8 10
Score for 50

Score for 10

SIGNATURE
OF FACULTY
 INDEX

CHAPTER CONTENT PAGE NO

1 INTRODUCTION TO TOPIC 1
PRIMARY INFORMATION ABOUT BACKGROUND OF
2 2-4
TOPIC (Literature review)
3 THEORETICAL BACKGROUND 5-8

3 DISCUSSION 8-15

4 CONCLUSIONS 16

5 REFERENCES 17

6 PLAGIARISM CHECK REPORT

1 INTRODUCTION

For any of us to be successful in our life and achieve our goals planning is very a
crucial step. Similarly for an organization to be successful planning is needed. One of
the major asset of an organization is its workforce/employee .Any organization which
treats its people /employee’s right is bound to carve a niche for itself .The people of
the organization have to work together with coordination to make the organization
efficient and successful one. The different people working for the organization in the
organization are known as its HUMAN RESOURCE .In an organization different
people have different competency, efficiency and temperament It is the responsibility
of the organization to make sure right people are put at the right place at the right point
of time to make the organization a success .This is possible with proper staffing of the
available resource If not done right it is bound to face loss of revenue and reputation
over a period of time. In order to overcome all these the organization should plan its
human resource allocation beforehand i.e.

Human Resource Planning can defined as a process where the organization can plan
and predict the human resource requirement for the future and to see how the existing
human resource can be used in order to achieve the desired results.

In broad sense it is something which concentrates on the present Demand and supply
ratio of the human resource organization

Human Resource planning of the organization can be established based on

 Size of the organization

 Size of its workforce
 Major Objectives or Goal of the Organization.

Incorrect Human Resource Planning leads to surplus expenses to the organization

due to either surplus or less employees than needed .It also causes a major blow to
employees i.e. workers are either burdened too much or not performing to the fullest
of their capacity

Human Resource Planning is also known as “Man Power Planning, Personnel

Planning or Workforce Planning.

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2 LITERATURE REVIEW

Planning is a definite activity in any organization it has been widely discussed since a
1960’s .It was identified that the human resource available in the system has to be
planned for the organization to perform effectively and efficiently. Kidder in 1969
worked on Human Resource Planning in the Private sectors. According to Edwards
and Pearce (1988) “Human resource planning is particularly important for emerging,
rapid-growth and high tech business. Mature business in need of new products,
services, markets, acquisitions or divestitures must also plan to identify, attract or
reallocate the talent necessary for revitalization and continued competition”.

Dwevedi (2012) describes “Planning for future balance by comparing the number of
employees needed to the number of present employees who can be expected to stay
with the organization, a project manager should give more time to the human
resources experts to work on that”.

Jonathan Rice (2011) specified that Human Resource Planning is a permanent

process ordered in a manner that correctly employs the man force of the of the firm.In
order to construct and retain the suitable relation between the work and worker,
planning is essential.

“The three key elements of the HR planning process are”

 “Forecasting labour demand”.

 “Analysing present labour supply”.
 “Balancing projected labour demand and supply”.

Storey (1995) argues that HR planning today is a very significant job of each existing
organization’s HR department. According to him, HR planning comprises of the skill
identification and competency recognition within the firm, then filling the identified

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spaces/gaps, and the enabling of movements of employees within the organisation.
“An essential part of the HR planning is the succession planning which aims to
ensure the supply of individuals and filling of gaps on senior key positions when they
become vacant and replenish competences to areas where they are most valued
(Wolfe, 1996)”

“An essential part of the HR planning is the succession planning which aims to ensure the
supply of individuals and filling of gaps on senior key positions when they become vacant
and replenish competences to areas where they are most valued (Wolfe, 1996)”

In order to gain competitive advantage over the competitors, Gould (1984)

i i i i i i i i i i i i i i i i i i i i i

i explained that different advantageous ways are found out using strategic human
i i i i i i i i i i i i i i i i i i i i i

i resource functions, thus showing that these functions play a critical role in making
i i i i i i i i i i i i i i i i i i i i i i i i

i i a company competitive. Biles et al.(1980) elaborated that organization’s ability to

i i i i i i i i i i i i i i i i i i i i i

i achieve strategic objectives is discriminated by its human resource in following

i i i i i i i i i i i i i i i i i i i i i

i three ways: cost economics, capacity for effective operations, ability to take new
i i i i i i i i i i i i i i i i i i i i i i i

i enterprise and change the operations.

i i i i i i i i

According to Edwards and Pearce (1988) “Human resource planning is particularly

important for emerging, rapid-growth and high tech business. Mature business in need
of new products, services, markets, acquisitions or divestitures must also plan to
identify, attract or reallocate the talent necessary for revitalization and continued
competition”.

For making the employees satisfied and content about the organization and its work
culture and to satisfy the demands of the organization, aggregate planning succession
planning etc. HRP is very essential. If the labour /employees in the organization is
more than the required number or less than the required number the tacking of the
situation can be done through the efficient HRP.

According to Craft (1980), “Human resource planning owns a significant role in

deciding and specifying the characteristics of applicants, in order to select the best fit
that organization looks for. Noe et al (2003) elaborated that it is important to rightly
implement human resource planning in order to create the lead time necessary to
confront potential problems.”

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The human component is a very crucial element for any firm to function in today world,
this is because the contribution of this resource for the organizations success is more
than compared to any other resource’s contribution. The organization can achieve
sustainable competitive advantage through its human resource available .It can
achieve any heights when the human resource management of the organization is in
place this can be done by proper panning of the available resource any the
management.

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3 THEORETICAL BACKGROUND

HUMAN RESOURCE PLANNING is needed to find the flaws in the existing manpower
and take necessary corrective actions to improve the efficiency of the Organization
.i.e. either through training, technological upgradation etc.

Human Resource Planning is helpful for the development of overall strategy of the
organization .No organization can develop a successful strategy without having
knowledge about the workforce and its production capability.

Human Resource Planning is needed to promote retention of the necessary skills

within the organization Human Resource Planning is concerned with the process of
attracting the talents as well as ensuring they are retained within the organization.

Organization structure and design is dynamic in nature and keeps changing over a
period of time Human Resource Planning is needed to carefully and strategically plan
the man force within the organization.

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3.1 NATURE OF HUMAN RESOURCE PLANNING

 Human Resource Planning deals with the manpower requirements of an

organization i.e. Human Resource Planning is concerned with assessing the
staff. It is concerned with all the procedures such as Recruitment, training and
the selection of the employees within the organization.
 Maintaining a healthy working environment :Human Resource Planning not
only deal with the hiring process it is also responsible for creating a healthy
working environment and making sure the man force is working in the right
direction to its complete potential.
 It is a Dynamic Process: It is a continuous process and it is needed for the
organization to grow across the various dimensions.
 Keeping track of the current Workforce of the organization Human Resource
Planning has to keep a record of its man force and check the utilization and the
efficiency level of the man force
 Concerned about the policies: Human Resource Planning is responsible for the
various policy formation which is of interest to the human resource of the
organization.

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3.2 OBJECTIVES OF HRP

 To utilize the available resources within the organization and make sure it
is effective and efficiently utilized.
 Ensure a balance in the supply and demand of the employee needed in the
future for the functionality of the firm.
 To ensure coordination between the human resource and the management
of the organization to ensure adequate selection, training and development
programmes.
 Human Resource Planning is required to maintain the level of competency
skills and matchings required for the future of the organization.
 To access the deficit and shortage required over a period of time in the
organization.
 To make sure the trainings and selections are given to the human resource
over a period of time.
 HR planning provides information on the basis of which the overall
management can take decisions.

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3.3 LEVELS OF HRP

 National Level
 Sector Level
 Industry Level
 Industry Unit Level
 Department Level

3.4 TYPES OF HUMAN RESOURCE PLANNING

 Short Term Planning

 Medium Term Planning
 Long Term Planning

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4 DISCUSSIONS

Human Resource Planning process that helps the management of the company in
meeting the future demands of the human resource in the company with the supply of
appropriate people in the appropriate number and appropriate time and appropriate
place .It is only after the proper analysis of the HR the recruitment ,selection training
can be started .Human Resource Planning is essential to achieve the strategies and
the objectives of the company.Human Resource Planning is neede for optimum usage
of human resources.There are several factors which affect Human Resource Planning

4.1 FACTORS AFFECTING HRP

The Factors affecting Human Resource Planning can be broadly classified as External
and Internal Factors respectively. Further they can be classified as follows.

1. Type and strategy of the Organization

It detemines the Production process involve an the type of manforce needed for
the proper functioning of the organization.The Strategic plan of the company
determined the overall HR plan of the company .If the Organization is planning for
Organic growth it has to hire additional employees where as if the organization is
plannig for Mergers and acqiusion it has to plan for layoff as it can create excesss
employess.

Organization can be PROACTIVE OR REACIVE IN Human Resource Planning

 Proactive :Carefully anticipate the needs of the employees and fills them
carefully before hand i.e in advance
 Reactive: The organization reacts to the needs from time to time.

2. Flexibility
Nature of Human Resource Planning depends on the flexibility of the firm.
Stage of Growth of an organization and size of the Organization i.e.
organizations Lifecycle will have an impact on the Human Resource Planning
of the Organization.

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 Eg:
Growth phase: New employees are hired to meet the demands.>Proactive Plan
is followed.
Declining Phase: Employs are Laid off to cut costs>Reactive Planning is
followed.
In both the cases Human Resource Planning is very crucial.

3. Environmental Changes
Human Resource Planning has to deal with the uncertainties in Environmental
political situations and have to carefully plan the recruitment, training an
selection planning .Balance is achieved by careful succession planning ,Ly off,
flexi timings etc. .

4. Time Horizon
Human Resource Planning can be for a short span of time or for long span of
time .Short span refers to 6 months to 1 year where as long term means more
than 5 years .It mainly depends on the degree of uncertainty prevailing in the
organization.
Uncertainty and the Human Resource Planning time span is inversely
proportional.
GREATER UNCERTAINITY LESSER IS THE TIME SPAN FOR THE Human
Resource Planning and vice versa.

5. Job analysis
HR analysists should be aware of the nature of the jobs being filled i.e. if the
job is a lower level job not much process or filtering is needed as the skill set
will be quite low where as for the jobs which are of higher level the selection
and the recruitment procedure is quite tedious and has to be done carefully .So
the HR analysists have to predict the vacant positions in the organization in
order to fill it on time without affecting the organization’s growth and
development.

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6. Outsourcing
Few organizations outsource their work for the external means in order to
reducing cost generally done for non-critical work.

7. Government Polices and the Economic development

Several Government policies like the Labour Policies, Reservation of policies
affect the Human Resource Planning of the Organization .The level.

8. Business Environment
The business environment and the technology affect the future demand and
needs and the kind of Human Resource Planning.

9. Technological Development prevailing in the country/organization:

The Level of technological advancement of the country/organization
determines the quality and the quantity of the man force required

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4.2 STEPS INVOLVED IN HRP:

HPR also known as Manpower planning involves the forecasting of the man force
required for the future of the organization. It is based on future requirement of man
force for the organization. For determining the qualitative as well as the quantitative
requirement of the man force for the future, I is also involved in meeting the man
resource by training recruitment selection, promotion etc. to ensure that the man
resource is requirement is met correctly in the future.

Human Resource Planning is the subsystem of total organization planning.

 Analysis of organization plan and objectives:

Human Resource Planning has to analyse the overall aspect of the organization
such as production, marketing, finance etc. to predict the movement of the man
force I the organization .Exact Numbers can be given by Human Resource
Planning only after the changes in organization structure and the job is
assessed by the HR analysts.

 Fore casting the Demand of the manpower

It is a procedure of predicting or guessing the expected man power the skill of
the manpower required for various jobs within the firms. It is most important
step of the Human Resource Planning. It mainly depends on the activities the
firm carries out the size of the firm all these activities has to be considered while
deciding the requirements of employees for the organization.

 Forecasting the supply of the Human Resource

This is the next major step in the Human Resource Planning process after the
demand forecasting is done .Once the number of employees required is
determined then the analysis have to estimate the supply of the employees at
the point of time and at the location required.

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 Matching the demand and supply
Human Resource Planning asses the demand and supply of the man power
and matches them in order to avoid any surplus or deficit.

 Estimating the Manpower Gaps

The estimation of the man power gaps is a technique which compares the
estimated demand and estimated supply within the firm .It takes into account
the various factors such as the size of the organization, skill Level of the
employee, location etc. .This tells us about surplus or the deficient employees
in terms of numbers or competency.

Estimating Man Power Gaps

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4.3 DEMAND FORECASTING TYPES

There are two types of Demand forcasting

1) Judgemental Forecasting :
2) Statistical Forecasting :

Judgemental Forecasting is type of forecasting the demand of the human

resource based on the judgement of the HR analysists /executives organization
who have extensive knowledge.

 Managerial Forecasting
In this technique the managers of various departments discuss together
and asses the demand of the employees. It can follow either BOTTOM
UP or TOP DOWN approach. Either one of them or a combination of
both can be used as per the requirement for maximum efficiency.

 Delphi Method
This is a survey method the experts are required for taking decision and
to forecast the man force needed.

Statistical Projections: They are based on the statistical data obtained. Here
the demand is forecasted based on the statistical data obtained.

 Ratio analysis
It is a technique of computing the ratio between the certain business factors
and the number of employees needed in an organization.
It has demerit of avoiding certain crucial elements such a efficiency of the
employees technological lacking etc.

 Trend Analysis
Here the forecasting is done based on the trends followed in the past in the
organization. The Future requirement is done based on the past requirements.

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  Work Study Techniques
Here the volume of the future work is analysed and then the compared with the
productivity pattern of the employees at the present.

 Econometric Model
Different variables affecting the manpower requirement over the years is
analysed then it is deduced into an equation.

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4.4 METHODS OF SUPPLY FORECASTING:

This is to be done after determining the demand in the organization. The HR analysts
have to determine the supply of man power and the sources of the man power required
for the organization.

 Trend Analysis
The information regarding the hiring pattern, labour pattern, retirement pattern
is collected and is used for the future as it assumes the trend is constant.

 Skill/Competency Model
It is concerned with identifying the competency supply within the organization
and help focus the future recruitment, training etc. it basically is concerned with
matching the skills or competency needed for the job with the skill available in
the firm.

 Replacement Chart
Here the core position within the organization which can be vacant is identified
and the necessary steps needed to fill these vacancies is done.

 Staffing Tables
It gives a pictorial representation of the of the firms positions along with the
employees in each of the levels.

 Markov analysis
It gives the percentage of the number of employees in the organization along
with the details of number of employees being transferred, promoted within the
organization

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5 CONCLUSIONS AND LIMITATIONS

The process of human resource planning is vital in assessing both the current and
future potential needs of the organisation in terms of quality and quantity. It is a
fundamental process which directly links human resource activities with organisations
goals and objectives. Further this process leads organisation in different challenges
preparing for different factors external or internal that might affect its process. It should
thus be taken as an important determinant for successful implementation and
achievement of organisation and individual objectives.
 Improper Linkage When the Human Resource Planning is not aligned with the
corporate strategy of the company the Human Resource Planning will not give
desired results and will not help the organization in its growth and development.
 Resistance from the Employees: Whenever certain changes or policies is done
by the Human Resource Planning there will be opposition from the labour union
as well as the top level management as they feel it might increase their overall
work load or they might assume that there job might be at stake. The planning
cannot efficiently implemented in these cases.
 Time Consuming: Generally the Human Resource Planning takes time to show
results and this might make the firm feel that it is adding burden to the
organization and let go the plan.
 Inaccurate Forecasting the Human Resource Planning activity is mainly based
in the forecasting if the forecasting is not accurate then the whole planning will
not be beneficial to the organization.
 Clash between short term and long term plan
 Incorrect information of the present human resource in the organization. In the
absence of reliable data the effectiveness of the Human Resource Planning is
compromised.
 Uncertainties Absentees, seasonal jobs, technological changes are the certain
uncertainties.
 Improper Coordination To be effective the Human Resource Planning has to be
integrated with other managerial activities
 Identity Crises

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6 REFERENCES

Barnard, W. (2006) “seven steps of effective workforce planning”.

Kidder, D. E. (1969). Private Industry and Manpower Planning in India: A Study of the
Calcutta Engineering Industry. Indian Journal of Industrial Relations, 5(4), 440-452.
doi:http://www.jstor.org/stable/27760917.

https://writepass.com/journal/2011/10/hr-lit-reviewfree-human-resources-literature-
review/

http://shodhganga.inflibnet.ac.in/bitstream/10603/187336/13/13_chapter4.pdf

Speamerfam, G. (2011) “What is human resource planning and the level of importance
to
an organization”?

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