Since the origins of the modern industrial organisation human resource planning has been management function (Walker, 1980). Division of labour,specialisation, organisation of management into levels, work simplification,application of standards for selecting employees measuring their performance

During the first part of the 20th century the focus :hourly production worker. The aim of improving efficiency through work engineering and early industrial psychology

During the Second World War and the post war years, the focus intensified on employee productivity. There was also greater concern regarding the availability of competent managerial personnel, as there was a talent shortage in combination with significant demand for goods and services

The 70s came with new legislation, court decisions and governmental regulations. Management attention then turned to affirmative action planning and other aspects of compliance

HRP during the early 90s fundamentally consisted of a range of tasks designed to ensure that the appropriate number of the right people are in the right place in the right time. HRP was seen as a way to plan for the future demand for people

VARIOUS DEFINITIONS OF HRP

E.W. VETLER viewed HRP as “ A process by which an

organization should have from its Current Manpower

position to its desired manpower position.”

According to Leon C.Megginson HRP “is an integrated

approach to performing the planning aspect of the

personnel function in order to have a sufficient supply of

adequately developed and motivated people to perform the

duties and tasks required to meet original objective and

satisfy individual need & goals of organization.”

Coleman has defined HRP as “the process of determining

manpower requirement and means for meeting those

requirement in order to carry out integrated plans of the

organisation.

Stainer defines MPP as “Strategy for the acquisition,

utilisation, improvement & preservation of an enterprises

human resources.”

According to Beach “HRP is a process of Determining and

assuming that the organisation will have an adequate

number of qualified persons available at the proper time

performing job which meet the needs of an enterprise and

which provide satisfaction for the individual involved.

OBJECTIVES OF HRP :

To ensure adequate supply of manpower as and when required.

Ensure proper use of existing HR in the organisation.

Future forecast requirement of HR with different levels of skills.

Anticipate the impact of technology on jobs & requirement for HR.

OBJECTIVES OF HRP :

1. Forecast personnel requirement.

2. Cope with changes

3. Use existing manpower productively.

4. Promote employee in a systematic manner.

Importance Reservation of Talent Prepare people for future Expand or Contract Cut costs Succession planning

GUIDING PRINCIPLES FOR EFFECTIVE HRP

Commitment & involvement of top management in HRP.

Greater participant of line manager at all levels in HRP process.

Effective design of HRIS integrated with MIS of the organisation.

Linking HRP with Corporate Strategic Management Process.

Flexibility in HR plans to take care of changing situation.

Organisational objectgives

Organisational objectives & policies

HR Demand forecast HR supply forecast

HR programming

HRP implementation

Control and evaluation of programme

ShortageRecruitment and

selection

Surplus Restricted hiring, VRS,

layoff

RATE OF GROWTH IN HUMAN RESOURCES IS DETERMINED BY 2 DIMENSIONS

Quantity

Quality

Quantity of HR is determined by

Population policy (population growth such as fertility, marriage and mortality)

Population structure (sex ratio and age composition)

Migration

Labour force participation

Population as a stimulant to economic development 1. In a backward economy, population growth results in increase

in supply of labour. This in turn results in the availability of cheap

labour in the economy. Therefore, under a given technology with the availability of capital, production can be increased by increasing the labour use.

2. Population growth results in increased demand for products. Increased demand results in increased production, employment

and income in the economy. As a result, the economy will develop.

3. Due to population growth, the supply of goods and services increases. Increased supply results in increased production,

which in turn results in specialisation. Specialisation will induce technological

improvements. 4. Increased demand and increased supply of products result in

scarcity of resources, which induce technological improvements.

1. High Birth Rate:In India, although the birth rate has declined from 45.8 per

thousand during the period 1891-1900 to about 25.8 per thousand in 2001,

it is still considered to be substantially high Low Death Rate Early Marriage Grinding poverty Social and Religious reasons Standard of living Illiteracy

Fertility : The ratio of live births in an area to the population of that area; expressed per 1000 population per year

Mortality: The ratio of deaths in an area to the population of that area; expressed per 1000 per year

Migration :The movement of persons from one country or locality to another.

If net migration is positive, the population grows at a faster rate than that indicated by the natural growth

Workers: persons whose main activity is participation in economically productive work by his mental or physical presence.

Non workers: fulltime students persons engaged in house hold duties infants and dependents doing no work retired persons and rentiers giving no rent

on an agricultural or non agricultural royalty

beggars, vagrants & others with unspecified sources of income.

un employed but available for work

Labour force: Employers Employees Self-employed persons and those engaged in

family enterprises without pay

Labour force participation rate: labour force/total population*100

Quality of HR is determined by

Education & Training

Health & Nutrition

Equality of opportunity

Population in categorised into

de facto (complete count)

de jure (physically present)

To assess the availability of hr needed for production.

To estimate the required basic infrastructure. To estimate the requirments of products and

services. To understand the social and cultural structure of a

population. To compare with the population of other countries. To assess the quality of standards of living

Strict conformity to either of these concepts is not possible because of difficulties in enumeration.

Nationals living abroad

Nomadic population

Jungle inhabitants

Population in disturbed areas

Growth of hr is dependent on the growth of population

• Social Demand Approach • Rate of Return Approach • Manpower Requirement Approach.

Projections of social demand for education are contingent upon given levels of:

• incomes of educated people, • tastes and preferences of households for

education, • demographic characteristics such as fertility

and mortality, • direct costs of education, • student grants, and • existing standards of admissions to various

levels of education

Added to these constraints, there are the perennial problems associated with the data base on demographic aspects at disaggregated levels such as district, block and village, and data on wastage and stagnation in education, and intensity of utilisation of existing educational facilities

Rate of return approach looks upon education as a contributor to productivity and in this sense, it is expected to facilitate investment decisions in education – whether or not the student should undergo more schooling, or whether or not the state should invest more and expand educational facilities

To an economist, education is only a screening device in analysing the process of human capital formation

.

• Costs of education, • Returns to education, and

• Discount rate (used in discounting future returns to arrive at present value).

a) Costs of Education Economic analysis of investment in education has a simple two-element

taxonomy of cost: Direct costs and indirect costs DIRECT COSTS again have two components: private expenditure on

education (as tuition fees, cost of books, extra room and board expenses and out-of-pocket expenses)

public expenditure on education. recurring items of expenditure ( salaries of teaching and non-teaching staff,

maintenance expenditure, office expenses including contingencies, library books, lab equipments and expenditure on student welfare)

non-recurring items of expenditure (costs of buildings and sports complex, etc.

Indirect costs Indirect cost may be viewed from both

private and social angles. From the private angle it is the earning foregone by individual students while attending school

Social view point of indirect costs involves estimation of opportunity cost of public expenditure on education

Direct monetary benefits (the extra life-time earnings received that can be attributed to schooling)

Indirect monetary benefits (the skills and experience) and

Non-monetary benefits (higher prestige and greater independence, and less of stress and strain ) Education reduces crime and improves social order Causes better understanding and appreceation of the

importance of health and hygiene thus leading to health standards of the society.

• either the rate of interest at which an individual borrows for financing education,

• or the rate of return from the best possible alternative to investment in education.

The fundamental axiom of manpower requirements approach is that there is a definite link between education and economic growth, and that lack of skilled manpower in required numbers which impedes (hinders) growth.

In this approach an attempt is made to forecast future requirements of educated manpower to fulfil a future target of Gross National Product (GNP) or specific targets of industrial production.

Based on the forecasts of educated manpower requirements over a specified period, the planners would then indicate the directions of development of the educational sector over the same specified period

The basic steps involved in this exercise are as under: • Anticipating the directions and magnitude of

development of each individual sector of the economy. • Evolving norms for employing manpower in each

individual sector keeping in view the technological options – present as well as future – for each sector of the economy.

• Estimating the educational equivalents of the manpower requirements.

• Analysing the implications of estimates of educated manpower requirements for educational development; based on assumptions regarding enrollment rates, transition probabilities, and wastage and stagnation rates at each level of education .

Need for HRP

Growing unemployment

Voluntary quits

Retirement

Death

Marriages

Promotion, Transfer

Technological change

Expansion & Diversification

Work Force Turnover

ROLE OF HR PLANNER

To provide timely advice to the management on the status of existing human resources in the enterprise.

To understood the need of the enterprise in terms of quantity and quality of employees required in

the short as well as long run.

To evolve strategies for the effective utilisation of internal resources including process improvements, original restructuring, automation, training etc.

To evolve hiring strategies in order to acquire the right resources at the right time.

IMPORTANCE OF HRP :

Meets organization need for right type of people in

right number at right times.

HRP helps the organisation create and develop

T&D for employees & Managers.

Provides multiple gains to the employees.

Systematic HRP forces top management of an

organisation to participate actively in total HRM

function.

In Nutshell

Productivity improvement plan.

Career and succession plan.

Separation plan.

Organisation development and restructuring plans.

Hiring plans.

Employee Retention plan.

Re-deployment plans.

HRP

IDENTIFICATION OF

HUMAN RESOURCE GAP

HRP PROCESS

ORGANISATIONAL OBJECTIVES,

PLANS & POLICIES

FORECASTING DEMAND FOR

HUMAN RESOURCES

FORECASTING SUPPLY OF

HUMAN RESOURCES

SURPLUS HUMAN

RESOURCES

SHORTAGE OF HUMAN

RESOURCES

ACTION PLAN FOR

BRIDGING GAP

Ratio Trend Analysis – Based on Time-series data

Main emphasis is on production/sales

Ratio between direct operatives and other personnel.

Total output / No. of workers

Total sales volume / No. of sales person

Delphi Technique

Named after the ancient Greek oracle at the city of DELPHI

Method of forecasting personnel needs

Members are asked to provide their estimates of HR requirement through a designed questionnaire.

Evaluation of Questionnaire

Each member receive the copy of the result

After viewing the result, members are again asked to review their estimates.

Ratio-Trend Analysis :

Production level in 1999-2000 1,00,000 units

No. of workers in 1999-2000 100

Ratio (Workers/Production) 100/100000 or 1:1000

No. of Supervisors in 1999-2000 10

Ratio (Supervisor/worker) 10/100 or 1:10

Estimated production in 2000-01 1,20,000 units

No. of workers required in 2000-01 1,20,000*11000

= 120

No. of supervisor required 1\10*120 =12

12010

1x

It is possible to measure work measurement to calculate the length of operations and the amount of labour required.

WORK-STUDY METHOD

Planned output for next year 25000 units

Standard hours per unit 4

Planned hours required for the year (25000x4) 1,00,000

Productive hours per worker/year 2,000 (after allowing normal overtime, absenteeism and idle time)

No. of Workers’ Required = =1,00,000/50= 50 workers

MARKOV MODEL 1. determine the time that should be

covered. shorter length of time are generally more accurates than longer ones.

Establish categories, also called states, to which employees can be assigned. These categories must not overlap and must take into account every possible category to which an individual can be assigned.

Mathematical Model

En =

En = the estinated level of personnel demand in n planning periods (e.g. years).

Lagg = the overall or aggregate level of current business activity in rupees. G is the total growth in business activity anticipated through period n in today’s rupees.x = the average productivity improvement anticipated from today through planning period n (e.g. if x = 1.08, it means an average productivity improvement of 8%).y = a conversion figure relating today’s overall activity to personnel required (total level of today’s business activity divided by the current number of personnel). It reflects the level of business activity per person.

Y

xGlaggn /

Y

xGlaggn /

An organisation has received 1000 application for certain number of vacancies. So YR at various decision point would be :-

Screening of application (900 qualified) YR = 9:10

Selection test (700 appeared) YR = 7:9

Test Result (300 passed) YR = 3:7

Interview (100 passed) YR = 1:3

Jobs offered to 50 YR = 1:2

Joined 40 YR = 4:5

Total YR 40 : 1000 or 4 : 10

ISSUES IN DEMAND FORECASTING Social Factors Technological Factors Political Factors Economic Factors

Productivity rise cannot be attributable to increased human effort. Thus increase of productivty due to changes in technology or managerial efficiency are the factors needed to be integrated while doing manpower forecasting.

Is difficult to get units of output in the same form for all jobs. Eg maintainance, customer relationship management.

Increase in output may lead to economies of scale and resultant cost efficiency and rise in productivty, which may not be attributable to manpwer productivty

HRIS MAY NOT EXIST IN an org. Employees cannot be always be related to output in a

direct way. Data on past workload may not be available

SUPPLY FORECASTINGReasons :-

Helps to quantify the No. & position

Access Existing staff levels in different parts of the

organization.

Prevent shortages of human resources.

Supply Analysis covers :

Present Employment

Internal supply

External supply

SUPPLY FORECASTING (Preparing Manpower Inventory)

Objective : To find out the size and quality of personnel available within the organisation and outside the organisation.

Reasons :

Helps quantify number of people and position expected to be available in future.

Access existing staff levels in different parts of the organisation.

Prevents shortages of HR.

Present Employee HR Inventory Skill invntory Manpower inventory

HRI involves :

Categorisation of Age. One can study average age, average

distribution, min. and max.age by job categories, functions, skills,

qualifications etc.

Segmentation of Employee by function, Job Group, Departments,

Skills

Categorisation by gender, religion, ethnic group, language

Categorisation by performance level.

Segmentation by organisational hierarchy.

Segmentation by Salary Group.

Understanding the exact wastage due to normal retirement . This will indicate the level of shrinkage in each work group that is likely to take place during the plan period.

Comparing the average age of fresh recruits with the average age of the organisation , one can draw the inference on the rate of growth of the employees thus eflecting on the promotion policies of the enterprise

Comparing various work groups will indicate the comparative growth rates , levels of fresh intake, stagnation

Turnover analysis along with skills inventory may give indications of shortages of certain skills in the future and also provide supply position in the market.

Performance ratings and skill inventory can togeter enable the enterprise to draw appropriate training strategies and determine the quality of personnel to be hired in future .

Matching skills with knowledge inventory of employees with their job description can indicate over and under qualified personnel.

MICRO LEVEL FORECASTING

External Supply Forecasting

Internal Supply Forecasting

External Supply arises primarily through recruitment which is necessarily meant to augment internal supply.

Internal Supply within an organisation is governed by two factors.

Wastage – The out movement from the organisation caused by Voluntary Resignation, Death or

Retirement.

Internal Movement resulting from Transfer and Promotion

Analysis of Wastage :-

Annual ManpowerWastage =

Drawback Does not provide any meaningful indication for HRP

Difficult to assess the operational and financial implication of any given rate of wastage.

100.

xpositioninManpowerAvg

yearainleavingManpower

2. STABILITY INDEX :

Alternative method which takes into account the length of service of the persons leaving the organisation, termed as Stability Index.

Stability Index measures the compliment of Wastage Rate i.e.

Rate of Retention =

1001

.1x

ttimeatpositioninManpower

ttimeatserviceyrwithManpower

3. MODIFIED STABILITY INDEX : (BOWEY’S STABILITY INDEX)

BSI =

4. Turnover Analysis –

Method of measuring wastage of Employee

Annual Employee

Turnover Rate =

100

.

x

wastagemanpowerofNobeenthere

hadofserivicelengthpossibleTotal

analysisoftimetheatemployed

ManpowerofserviceoflengthTotal

100...

..

x

yeartheduring

employedEmpofNoAvg

yeartheduring

leavewhoEmpofNo

5. ABSENTEEISM =

6. COHORT ANALYSIS :

Reverse of Turnover Analysis

Also known as Survivor Analysis

Manpower Cohort is a Group of staff who are more or less Homogenous and who joined the organisation at the same time. At the end of each year the number of emp. From the Cohort who survive is calculated and expressed as a Y. age of total no. of Emp. Hired when the Cohort was formed.

100.

xPlannedMandaysTotal

AbsencetoduelostMandaysofNo

COHORT ANALYSIS ON THE BASIS OF AGE :

The theory behind this method was developed by K.F. Lane and J.E. Andruo

Eg. No. of employee engaged in the

beginning of a year = 50

No. of employee leavers for different

length of service as 1st Year = 502nd Year = 453rd Year = 404th Year = 355th Year = 30

Length of service

(in years)

No. of Emp.Leaving

No. of Emp.Remaining

Survival as% age of leaving

012345

05045403530

500450405365330300

100.0090.0081.0073.0066.0060.00

Survivor Analysis = 100.

Re.x

starttheatengagedofNo

timegivenaatmainingofNo

THE CENSUS METHODS :Here a snap shot of the total situation is taken at a

particular point of time or over a short period of time and data on leavers with completed length of service is obtained.

Length of service on 01.01.95 in

years

# of Emp. As on

01.01.95

# Emp. Separated during 95

TurnoverRate

SurvivalRate

SurvivalFunction

0-1 20 6 0.3 0.7 0.7

2-3 20 4 0.2 0.8 0.56

3-4 25 5 0.2 0.8 0.448

4-5 10 3 0.3 0.7 0.313

5-6 18 3 0.167 0.833 0.266-7 24 4 0.167 0.833 0.216

7-8 10 2 0.2 0.8 0.1728-9 15 3 0.2 0.8 0.137

9-10 8 1 0.125 0.875 0.11910-11 16 1 0.16 0.84 0.09911-12 18 1 0.555 0.445 0.04412-13 10 0 0 1 0.04413-14 17 0 0 1 0.04414-15 7 1 0.143 0.857 0.037Total 218 34 0.156 0.844

Length of service on 01.01.95 in

years

# of Emp. As on

01.01.95

# Emp. Separated during 95

TurnoverRate

SurvivalRate

SurvivalFunction

PROMOTIONIN

REDEPLOYMENTIN

EXTERNALHIRING

MERGER&

ACQUISITION

PROMOTIONOUT

REDEPLOY-MENTOUT

VOLUNTARYSEPARA-

TION

RETIREMENT

INVENT-ARY

SEPARA-TION

LONGILLNESSDEATH

HUMANRESOURCEINVENTORY

SKILLS INVENTORY

Employee Personal Data

Skills

Special Qualification

Company Data (Benefit Plan Data, Retirement

Information, Seniority)

Salary & Job History

Capacity of Individual

Special preference of Individual (Geographical location,

Type of Job)

FACTORS AFFECTING INTERNAL LEVEL

Reasons for increase in Emp. Gr.

Promotion In

Redeployment In

External Hiring

Mergers & Acquisition

Reasons for Decrease

Promotion Out

Redeployment Out

Voluntary Separation

Retirement

Involuntary Separation

Prolong Idleness, Death

xa

b y

Manpower

LINEAR REGRESSION METHOD – Describe the relationship between 2 variables.

Production Output Manpower > Two variables

Production LevelIf the level of output that an enterprise expects in specified, it is possible to use this method to forecast the level of manpower that will be required.

Manpower Soap Brand B

Soap Brand A

Multiple Regression Method

Manpower in the dependent variable 2 brands of Soap are independent. 3 variables are considered, a 3 dimensional space is created.

logn