SDPS Women’s College
BBA – II Semester Subject Notes
Human Resource Management
Unit – 1
Human Resource Planning
Concept & Meaning of HRP
Human Resource Planning (HRP) is the process of forecasting the future human
resource requirements of the organization and determining as to how the existing
human resource capacity of the organization can be utilized to fulfill these
requirements. It, thus, focuses on the basic economic concept of demand and
supply in context to the human resource capacity of the organization.
It is the HRP process which helps the management of the organization in meeting
the future demand of human resource in the organization with the supply of the
appropriate people in appropriate numbers at the appropriate time and place.
Further, it is only after proper analysis of the HR requirements can the process of
recruitment and selection be initiated by the management. Also, HRP is essential in
successfully achieving the strategies and objectives of organization. In fact, with
the element of strategies and long term objectives of the organization being
widely associated with human resource planning these days, HR Planning has now
became Strategic HR Planning.
Though, HR Planning may sound quite simple a process of managing the numbers in
terms of human resource requirement of the organization, yet, the actual activity
may involve the HR manager to face many roadblocks owing to the effect of the
current workforce in the organization, pressure to meet the business objectives
and prevailing workforce market condition.
Human resource planning may be defined as a process of predetermining future
human resources needs and course of action needed to satisfy those needs to
achieve organizational goals. It ensures that organization has right number and
kind of people, at right place, and at right time capable of performing well in the
organization. Human resource planning is a continuous process rather than a one
shot affair.
Thus, human resource panning (HRP) is a complex and continuous process which
helps determine the manpower requirement of the organization. It helps to
translate the organization's objectives and plans into the number of workers
needed to meet the objectives. Hence, it claims at:
* Balancing demand and supply of workers
* Controlling cost of human labor
* Formulating policies on transfer, succession, relocation of manpower
* Ensuring right kind of people at the right time and right place.
Characteristics Of Human Resource Planning
1. Future Oriented
Human resource planning is prepared to assess the future requirement of
manpower in the organization. It helps identify the size and composition of
resources for future purpose.
2. Continuous Process
Human resource planning is a continuous process. The human resource planning
prepared today may not be applicable for future due to ever changing external
forces of the environment. Hence, to address such changing factors, the human
resource planning needs to be revised and updated continuously.
3. Optimum Utilization of Human Resources
Human resource planning focuses on optimum utilization of resources in the
organization. It checks how the employees are utilized in a productive manner. It
also identifies employees' existing capabilities and future potentialities to perform
the work.
4. Right Kinds and Numbers
Human resource planning determines the right number and kind of people at the
right time and right place who are capable of performing the required jobs. It also
assesses the future requirement of manpower for organizational objective.
5. Determination of Demand And Supply
Human resource planning is a process of determining demand for and supply of
human resources in the organization. Then a match between demand and supply
estimates the optimum level of manpower.
6. Environmental Influence
Human resource planning is influenced by environmental changes, hence, it is to be
updated as per the change occupied in the external environment.
7. Related To Corporate Plan
Human resource planning is an integral part of overall corporate plan of the
organization. It can be formulated at strategic, tactical and operational levels.
8. A Part of Human Resource Management System
As a part of total human resource management system, human resource planning is
regarded as a component or element of HRM which is concerned with acquisition
ans assessment of manpower. It serves as a foundation for the management of
human resource in an effective and efficient manner.
Significance or Importance Of Human Resource Planning
Human resource planning aims at fulfilling the objectives of manpower requirement.
It helps to mobilize the recruited resources for the productive activities. The
human resource planning is and important process aiming to link business strategy
and its operation. The importance of human resource planning are as follows:
1. Future Manpower Needs
Human resource planning ensures that people are available to provide the continued
smooth operation of an organization. It means, human resource planning is regarded
as a tool to assure the future availability of manpower to carry on the
organizational activities. It determines the future needs of manpower in terms of
number and kind.
2. Coping with Change
Human resource planning is important to cope with the change associated with the
external environmental factors. It helps assess the current human resources
through HR inventory and adapts it to changing technological, political, socio-
cultural, and economic forces.
3. Recruitment of Talented Personnel
Another purpose of HR planning is to recruit and select the most capable personnel
to fill job vacancies. It determines human resource needs, assesses the available
HR inventory level and finally recruit the personnel needed to perform the job.
4. Development of Human Resources
Human resource planning identifies the skill requirements for various levels of
jobs. Then it organizes various training and development campaigns to impart the
required skill and ability in employees to perform the task efficiently and
effectively.
5. Proper Utilization of Human Resources
Human resource planning measures that the organization acquires and utilizes the
manpower effectively to achieve objectives. Human resource planning helps in
assessing and recruiting skilled human resource. It focuses on the optimum
utilization of human resource to minimize the overall cost of production.
6. Uncertainty Reduction
This is associated with reducing the impact of uncertainty which are brought by
unsudden changes in processes and procedures of human resource management in
the organization.
Human Resource Planning Approaches
HR planning is a mechanism created to forecast the required human resource to
perform a specific task. It also assesses the skill requirement of employees for
each job. It is a complex task which estimates the future demand and supply
position of HR in the organization. Hence, it gives a picture of infinite future in
advance in terms of human resource requirement for the company. Here, the
approaches to HR planning are as follows:
1. Quantitative Approach
It is also known as top down approach of HR planning under which top level make
and efforts to prepare the draft of HR planning. It is a management-driven
approach under which the HR planning is regarded as a number's game. It is based
on the analysis of Human Resource Management Information System and HR
Inventory Level. On the basis of information provided by HRIS, the demand of
manpower is forecasted using different quantitative tools and techniques such as
trend analysis, mathematical models, economic models, market analysis, and so on.
The focus of this approach is to forecast human resource surplus and shortages in
an organization. In this approach major role is played by top management.
2. Qualitative Approach
This approach is also known as bottom up approach of HR planning under which the
subordinates make an effort to prepare the draft of HR planning. Hence, it is also
called sub-ordinate-driven approach of HR planning. It focuses on individual
employee concerns. It is concerned with matching organizational needs with
employee needs. Moreover, it focuses on employee's training, development and
creativity. Similarly, compensation, incentives, employee safety, welfare, motivation
and promotion etc. are the primary concerns of this approach. In this approach,
major role is played by lower level employees.
3. Mixed Approach
This is called mixed approach because it combines both top-down and bottom-up
approaches of HR planning. In fact, the effort is made to balance the antagonism
between employees and the management. Hence, it tends to produce the best
result that ever produced by either of the methods. Moreover, it is also regarded
as an Management By Objective(MBO) approach of HR planning. There is a equal
participation of each level of employees of the organization.
Human Resource Planning Process
Human resource planning is a process through which the company anticipates
future business and environmental forces. Human resources planning assess the
manpower requirement for future period of time. It attempts to provide sufficient
manpower required to perform organizational activities. HR planning is a continuous
process which starts with identification of HR objectives, move through analysis of
manpower resources and ends at appraisal of HR planning. Following are the major
steps involved in human resource planning:
1. Assessing Human Resources
The assessment of HR begins with environmental analysis, under which the
external (PEST) and internal (objectives, resources and structure) are analyzed to
assess the currently available HR inventory level. After the analysis of external
and internal forces of the organization, it will be easier for HR manager to find out
the internal strengths as well as weakness of the organization in one hand and
opportunities and threats on the other. Moreover, it includes an inventory of the
workers and skills already available within the organization and a comprehensive
job analysis.
2. Demand Forecasting
HR forecasting is the process of estimating demand for and supply of HR in an
organization. Demand forecasting is a process of determining future needs for HR
in terms of quantity and quality. It is done to meet the future personnel
requirements of the organization to achieve the desired level of output. Future
human resource need can be estimated with the help of the organization's current
human resource situation and analysis of organizational plans an procedures. It will
be necessary to perform a year-by-year analysis for every significant level and
type.
3. Supply Forecasting
Supply is another side of human resource assessment. It is concerned with the
estimation of supply of manpower given the analysis of current resource and future
availability of human resource in the organization. It estimates the future sources
of HR that are likely to be available from within an outside the organization.
Internal source includes promotion, transfer, job enlargement and enrichment,
whereas external source includes recruitment of fresh candidates who are capable
of performing well in the organization.
4. Matching Demand and Supply
It is another step of human resource planning. It is concerned with bringing the
forecast of future demand and supply of HR. The matching process refers to bring
demand and supply in an equilibrium position so that shortages and over staffing
position will be solved. In case of shortages an organization has to hire more
required number of employees. Conversely, in the case of over staffing it has to
reduce the level of existing employment. Hence, it is concluded that this matching
process gives knowledge about requirements and sources of HR.
5. Action Plan
It is the last phase of human resource planning which is concerned with surplus and
shortages of human resource. Under it, the HR plan is executed through the
designation of different HR activities. The major activities which are required to
execute the HR plan are recruitment, selection, placement, training and
development, socialization etc. Finally, this step is followed by control and
evaluation of performance of HR to check whether the HR planning matches the
HR objectives and policies. This action plan should be updated according to change
in time and conditions.
