5 steps in human resource planning process

5 steps in human resource planning process

Top 5 Steps Involved in Human Resource Planning Process

Read this article to learn about the five steps involved in human resource planning process.

1. Analysis of Organisational Plans and Objectives:

Human resource planning is a part of overall plan of organisation. Human resource planning process begins with the analysis of overall plan of the organisation into departmental, sectional and sub-sectional plans and functional plans like sales, marketing, technological plans. This break up of overall plan provides for assessing the human resource requirement for each department and activity. Besides analyzing the organisational plans, the objectives of the organisation are also analyzed.

If the objective of the organisation is speedy growth and expansion, it requires more manpower in all functional activities and departments to meet the challenges of increased market share, finances, size of assets, new markets, inventory, and new products. The new growth strategy of the organisation requires large number of skilled manpower. The human resource department needs to go for quick recruitment and training to meet the human resource requirement of the organisation.

In case the organisation facing tough times of falling demand for its products has to curtail production thereby needs to reduce manpower. The human resource department has to take some harsh decisions to retrench the existing manpower. In modern corporate world mergers and acquisitions pose fresh challenge to human resource department.

The human resource department has to face tough time because of conflicting corporate culture and working environment of the two or more firms coming together in the event of merger or acquisition. Human resource department has to formulate plans for lying off or hiring and amalgamation of conflicting cultural working environment. Sometimes the decisions regarding wage cuts have to be taken. This will displease the employees paving the way for labour unrest.

2. Analysis of Human Resource Planning Objectives:

Human resource planning is a part of corporate plan. Its objectives are to be fixed in the light of corporate objectives. The emphasis is given on future requirements than the present one. The main purpose of human resource planning is to match the present and future manpower needs of the organisation.

The human resource department should specify the policy regarding acquisition of human resources. It may recruit them by way of promotion; transfer i.e. from within the organisation or from external source. It also has to clarify the selection criteria and the need for training and development.

It has to decide on abolishing or continuing some old and routine jobs or replace them by meaningful new jobs to meet challenges thrown by the speedily changing business and industrial environment. These objectives should be integrated with the objectives of all the functional areas of the organisation. The emphasis should also be given on to maximize the return on investment in human resources.

3. Forecasting for Human Resource Requirement:

The correct forecasting for required human resources for the organisation becomes simple if design and structure of the jobs examined thoroughly keeping in view the skills, potentialities and knowledge required to perform them and make an estimate for the future requirements. It should not be taken for granted that the design and structure of the existing jobs are perfect and cannot be changed overtime. The recent development in technology and use of computers and robots in manufacturing has changed the scenario.

Now the computer aided designs (CAD) and computer aided manufacturing (CAM) has entered in ousting the traditionally used old methods. This has changed the design of jobs altogether. In modem times welding and other related jobs are done by robots.

The point is the need of capabilities, skills, knowledge, potentialities in the employees present and future must be reviewed. It will change the human resource planning. The improved techniques have not only upgraded the quality of the product but also have brought about restructuring of jobs design. The new jobs design requires more people with the knowledge of computer, engineering and other technology. There is, therefore, a growing demand for engineers and technocrats with management background by the companies.

The other factors dominating the forecast for human resources are the following:

(a) Expansion of the enterprise,

(b) Mergers and acquisitions,

(c) Retirement, death, resignation and terminations,

(d) Change in style of leadership,

(e) Improvement in productivity.

The above factors dominate the quality and quantity of the human resources. The various skills required to perform the jobs will enable the forecasting of human resource requirement for the organisation. Determining the skill needs and fulfilling them is vital aspect of human resource planning. The demand for human resources is forecasted by using some statistical and work study methods and managers opinions regarding the manpower requirements for their respective departments. This is how the forecasting of demand for quality and quantity of human resources for the whole organisation is made.

4. Assessment of Supply of Human Resources:

To make assessment of supply of human resources for the organisation it should begin with the current human resource inventory of the organisation. It is also known as auditing of human resource to be undertaken by the departments of the organisation where complete information regarding skills, abilities, qualifications, capacity for hard work is available and so also the quantity and quality of human resources manning various positions, the probable retirements.

On the basis of this information they can determine the supply of manpower which is sufficient enough to meet the departmental need or in excess or in short supply. This can be quantitatively and qualitatively worked out. The sum total of supplies of all departments shall equal the organisations supply of human resources. In this way the current or present human resource inventory is accounted for.

The supply of human resources may be less because of layoffs, dismissals, voluntary retirements, retirements, deaths etc. If the supply is less than the demand for or is inadequate to meet the requirement for human resources then it can be fulfilled through external sources. The graduates from educational institutions serve the purpose.

Also the existing manpower be asked to work extra and overtime wages may be paid to them. This is purely ad hoc arrangement. After some time the organisation has to hire the required number and kind of people to meet the need.

It is one of the objectives of human resource planning to assess the demand for and supply of human resources and match both to know shortages and surpluses on both the side in kind and in number. This will enable the human resource department to know overstaffing or understaffing. In case of shortages of human resources to meet certain jobs in the organisation and are not available in the labour market then under such circumstances it is advisable to change the objectives of the organisation.

In case of shortages the human resource department should be in touch with all the known sources to meet the requirement. The human resource manager may recommend the retention plan for the employees such as higher pay, improvement in work life or to grant extension to those employees are on the verge of retirement. In case of surplus human resources in some departments then the scheme for redeployment in other departments or other job may be recommended.

If the surpluses could not be absorbed in any of the departments or jobs then in consultation with the employee’s union retrenchment may be undertaken giving them full benefits under the law. A promise may be given to the retrenched employees for help to get job elsewhere or whenever vacancies exist they will be preferred. Human resource planning must get a support from the organisation with relevant personnel policy statement. The human resource plan becomes an action plan for the organisation as regards manpower requirement.

The organisation must follow the human resource philosophy as a guiding principle. Career planning must be kept in view while planning for human resources. Any individual who joins the organisation has a long way to go. During his long span he aspires high and wants that his talent should get recognition by way of further promotion on high level and should be rewarded monetarily. This is especially important for those who are professionals joining vocations. Thus an organisation gets professionals or experts in particular field. It is because of this certain people are becoming professional. The career planning is a part of human resource development.

Steps In Human Resource Planning HRP Process

HRP is done by the HRD manager. He is supported by the HRD department. He takes following Steps in the process of Human Resource Planning HRP.

1. Review of Organisation's Objectives

The HRD Manager first studies the objectives of the organisation. Then he prepares a list of all the activities (jobs) that are required to achieve the objectives. He also does Job's analysis.

2. Estimation of Manpower Requirements

The HRD manager then estimates the manpower requirement of the organisation. That is, he finds out how many people (manager and employers) will be required to do all the jobs in the organisation. Estimation of manpower requirements must be made in terms of quantity and quality.

3. Estimation of Manpower Supply

The HRD manager then estimates the manpower supply. That is, he finds out how many managers, and employers are available in the organisation.

4. Comparison of Manpower

The HRD manager then compares the manpower requirements and manpower supply.

5. In case of no difference

If there is no difference between the manpower requirements and the manpower supply, then the HRD manager does not take any action. This is because manpower requirements are equal to the manpower supply.

6. In case of difference

If there is a difference between the manpower requirements and the manpower supply the HRD manager takes the following actions.

If the manpower requirements are less then the manpower supply then there is a surplus.

During manpower surplus, the HRD manager takes the following actions :-

  1. Termination i.e removal of staff.
  2. Lay-off.
  3. Voluntary retirement.

If the manpower requirements are greater than the manpower supply then there is manpower shortage.

During manpower shortage, the HRD manager takes the following actions :-

  1. Promotions
  2. Overtime
  3. Training to improve quality.
  4. Hire staff from outside, etc.

7. Motivation of Manpower

HRP also motivates the employers and managers by providing, financial and non-financial incentives.

8. Monitoring Manpower Requirements

The HRD manager must continuously monitor the manpower requirements. This is because many employees and managers leave the organisation by resignation, retirement, etc. and new work force must take their place fill the manpower gap. This helps in uninterruptible functioning of the organisation.

Process of Human Resource Planning

Human resource planning is the responsibility of all managers. It focuses on the demand and supply of labor and involves the acquisition, development and departure of people. This is recognized as a vital HR function as the success of an organisation depends on its employees.

The purpose of HR planning is to ensure that a predetermined number of persons with the correct skills are available at a specified time in the future. Thus, HR planning systematically identifies what must be done to guarantee the availability of the human resources needed by an organisation to meet its strategic business objectives. To achieve this HR planning cannot be undertaken in isolation. It must be linked to the organisation’s overall business strategy, and concentrate on the organisation’s long-range human resource requirements.

Process of Human Resource Planning

Human Resource Planning is a continuous process. The manager responsible for human resource planning has to be concerned doing some exercise in this regard every time. He may have to revise employment plan and training and development programme from time to time depending upon the changes in circumstances such as sudden changes in the volume of production, unexpected high rate of labour turnover, obsolescence of existing skills and so on. A brief explanation of the steps of the human resource planning process in given below:

Job analysis is the qualitative aspect of manpower requirements since it determines the demands of a job in terms of responsibilities and duties and then translates these demands in terms of skills, qualities and other human attributes. It helps in determining the number and kinds of jobs and qualifications needed to fill these jobs because with the help of job analysis it is known that what is the quantum of work which an average person can do on a job in a day. It facilitates the division of work into different jobs. Thus, it is an essential element of effective manpower planning. At managerial levels, accurate job descriptions help in preparation of inventories of executive talent.

Job analysis may be defined as a process of discovering and identifying the pertinent information relating to the nature of a specific job. It is the determination of the tasks which comprise the job and of the skills, knowledge, abilities and responsibilities required of the worker for successful performance of the job. The process of job analysis is essentially one of data collection and then analyzing that data. It provides the analyst with basic data pertaining to specific jobs in terms of duties, responsibilities, skills, knowledge, etc. Thus data may be classified as follows:

  1. Job identification.
  2. Nature of the job.
  3. Operations involved in doing the job.
  4. Materials and equipment to be used in doing the job.
  5. Personal attributes required to do the job, e.g., education, training, physical strength, mental capabilities, etc.
  6. Relation with the other jobs.

The information relating to a job which is thus classified, if examined carefully, would suggest that some information relates to the job and some concerns the individual doing the job. The requirements of a job are known as Job Description and the qualities demanded from the job holder are termed as Job Specification. Thus job description and job specification are the immediate products of job analysis.

The scarcity of talent, difficulty of discovering it and the time required to develop it fully have forced big organisations to think about their manpower in a systematic way. They attempt to know the inventory of man power resources, develop and appraise their executives, draw up management succession plans and calculate .the replacements that will be needed because of retirements and other causes. To understand the nature of the recruitment and development problems, it is necessary to determine the inventory of different skills and talents existing in the organisation. The management must try to develop in advance the talented employees to occupy the managerial positions in the future. It can not longer rely upon finding talented manpower just when it is needed. Systematic steps must be taken in order to ensure that a reservoir of talent within the organisation must be continuous. Thus, the identification of manpower potential within the organisation is a critical factor for the long range success of any organisation.

3. Personnel (Manpower) Forecasting

In order to forecast the number of personnel required at a particular plant, the work-load analysis will have to be done, and on the basis of work-load of the plant, work-force analysis will have to be carried out.

(a) Work-load Analysis: In work-load analysis, the manpower planning expert needs to find out sales forecasts, work schedules and thus determine the manpower required per unit of product. The sales forecasts are translated into work performance for the various departments of the enterprise. In a manufacturing enterprise, one shall first find out the master schedule and then hours in terms of different skills required. Workload analysis is used to determine how many employees of various types are required to achieve total production targets. Similarly, plans are made concerning the amount of work that each other part (marketing department, purchase department, etc.) of the organisation is expected to accomplish during the coming year. It is essential to determine the work-load in some tangible units so that they may be translated into manhours required per unit. Past experience can, of course, be utilized for translating work-loads into manhours required.

To take an illustration, let us assume that the annual production budget of a company is 1,00,000 units. The standard manhours required to complete a unit of the product are 2 hours. The past experience reveals that a worker on an average can contribute about 2,000 hours per year. The work-load may be calculated as under:

Annual Production Budget – 1,00,000 units

Standard Manhours required per unit – 2 hrs. :

Planned Manhours for the year (a x b) – 2,00,000 hrs.

Annual contribution of a worker – 2,000 hrs.

No. of workers required (c/d) – 100

Thus, 100 workers’ are needed throughout the year to meet he production target of 1,00,000 units. But this figure cannot be relied upon fully as the actual production is influenced by many other factors such as availability of inputs and power, breakdown of machinery, strike, lockout, etc. Nonetheless, work- load analysis is quite suitable for short-term projection of manpower requirements. Long-term projections can be made with the help of workforce analysis.

(b) Work-force Analysis: In the above illustration, we came to the conclusion that 100 workers are required to make 1,00,000 units in a year. Assuming that all other factors are favourable, this conclusion is illusory because it is almost certain that all the 100 workers will not be available on all working days because of the two major problems: (i) Absenteeism, and (ii) Labour Turnover. Both these factors operate to rescue the number of workers available. Therefore, it is essential to do the analysis of work-fore in the light of these major problems. In other words, it is necessary to keep a sufficient margin for absenteeism, labour turnover and idle time on the basis of past experience. If it is essential to keep a margin of 20% of the manpower required as per work-load analysis, the company must ensure that it has atleast 120 workers on its payroll to meet the annual production target.

This phase deals with planning how the organisation can obtain the required number of right types of personnel as reflected by the personnel forecasting. In other words, there is a need to prepare programme of recruitment, selection, training, transfer and promotion so that personnel needs of various departments of the organisation are met.

5. Training and Development of Personnel

The preparation of skill inventory helps in identifying the training and development needs of the organisation. Training for learning new skills and for refreshing the memory is necessary not only for new employees but also for existing employees. Executive development programmes have to be devised for the development of managerial personnel.

Management Articles and Institutes

8 processes of human resource planning

Human resource (HR) planning or manpower planning is a continuous process. The human resource manager is required to revise the employment policies from time to time for achieving the best results. Human resource planning/ manpower planning process involve the following steps:-

1. Objectives of human resource planning: human resource planning must be matched with overall organizational plans. It should be concerned with filling future vacancies rather than matching existing personnel with existing jobs.

2. Current manpower stock: Current manpower stock must be continuously maintained by every department. Manpower inventory must have the detailed bio data of each individual . this record not only help in employee development but also in the finding out the surplus/ shortage of manpower.

3. Demand/ supply forecasting: firstly the organization must check the demand of manpower after every one year, two-year so on. For this purpose employment trends to show the number of employees on payroll during last say three years to show the trend.

Replacement needs arise due to the death, retirement or termination of the employees.

Growth and expansion helps in creating a number of positions at work place.

After the demand forecasting it is also important to check the supply of the different type of personnel for this purpose human resource audit, replacement charts can be prepared.

4. Determining net requirement: human resource manager must check the demand and supply of the manpower before deriving at any conclusion.

5. Redeployment and redundancy: in redeployment the surplus employees in one department can be transferred to another department where deficit of employees estimated and in case of redundancy where surplus employees can not be redeployed they can be offered voluntary retirement scheme.

6. Employment programme: here it is required to prepare programmes of recruitment, selection, transfer and promotion to achieve organization goal.

7. Training and development: it is very necessary for the employees to keep them updated in the job they are doing.

8. Evaluation of Human resource planning: after doing all the above steps it is necessary to evaluate the effectiveness of human resource planning.

Thus, the above mentioned steps are important steps for the process of human resource planning.

Steps in the Human Resource Planning Process

Designing the Management System

A crosscutting issue in human resource planning is to ensure that a proper system is in place to handle the process. The overall aim of this system is to manage human resources in line with organizational goals. The system covers human resource plans, policies, procedures and best practices. For example, it should track emerging human resource management trends -- such as outsourcing certain non-core functions, adopting flexible work practices and the increased use of information technology -- and, if appropriate, implement them.

The first step in the human resource planning process is to understand the context of human resource management. Human resource mangers should understand both internal and external environments. Data on external environments includes the general status of the economy, industry, technology and competition; labor market regulations and trends; unemployment rate; skills available; and the age and gender distribution of the labor force. Internal data required include short- and long-term organizational plans and strategies and the current status of the organization’s human resources.

Forecasting Human Resource Demand

The aim of forecasting is to determine the number and type of employees needed in the future. Forecasting should consider the past and the present requirements as well as future organizational directions. Bottom-up forecasting is one of the methods used to estimate future human resource needs by gathering human resource needs of various organizational units.

Organizations can hire personnel from internal and external sources. The skill inventories method is one of the techniques used to keep track of internal supply. Skill inventories are manual or computerized systems that keep records of employee experience, education and special skills. A forecast of the supply of employees projected to join the organization from outside sources, given current recruitment activities, is also necessary.

The final step in human resource planning is developing action plans based on the gathered data, analysis and available alternatives. The key issue is that the plans should be acceptable to both top management and employees. Plans should be prioritized and their key players and barriers to success identified. Some of these plans include employee utilization plan, appraisal plan, training and management development plan and human resource supply plan.

Alfred Sarkissian holds a master’s degree in industrial management. With experience in business and public policy, he has covered intellectual property rights, industrial policy and technology policy for various publications.

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