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Concept And Definition Of Hrp Business Essay

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Published: Mon, 5 Dec 2016

It is very natural that, the continual positive development of any business owe to its effective planning. Making all the necessary preparations and appropriate arrangements proactively basing upon what is expected to happen in future and performing a series of tasks and activities accordingly in a systematic and organized way is one of the important functions of management, which necessitates an effective and proactive planning process. Proper planning and designing an effective organizational structure by assigning an assortment of responsibilities to the concerned employees may help the business organizations to accomplish their set of objectives. Putting the right person at the right place and at the right time is essentially much important to any business as it comprises of a wide and comprehensive range of activities in relation to “the management of man”. Manpower power planning, not only focuses on the effective utilization of existing human elements but also concern in fulfilling future manpower need of the organizations at the time of need. Man power planning is “the process of determining manpower needs and the means and ways to meet those needs in order to carry out the integrated organizational plan.” It is very much indispensable for any organization to perform the activities efficiently and to produce desired results.

It is an apparently well known fact that, the success of any business highly rest upon the competent people that a business organization posses. Man power planning is considered as crucial functions of human resource management. It gives due importance to the human element than that of material elements and strive to manage and maintain the good will of a business. It endeavours to add to the organizational development and success of the business with due recognition of knowledge, skills, competence, experiences, expertise and talent of the employees. Effective recruitment and selection process follows an effective manpower planning process in fulfilling future manpower need as and when needed by the organisation. That necessitates manpower planning process and put lot of significance to it. At the same time, it contributes significantly to the achievement of organizational objectives by avoiding overstaffing and understaffing. However, although the notion of Human Resource Planning is well established in the HRM vocabulary, in practice, it does not seem to be as key HR activity.

Need for man power planning is continuously driven by many of the factors in the organizations. It is essential when labour turnover is to be determined. There are situations that compel to replace older employees, disabled personnel and people whose medical conditions cause disturbances to usual functioning of the organisation. While executing effectively, man power planning process entails analyzing the requirements of present and future vacancies. These situations usually take place at the time of retirements, transfer of employees or they are upgraded due to promotion. Similarly, manpower planning is inevitable to deal with the situations that arise at the time, when employees avail their leaves or in case of their absences. In order to carry out the assigned task in a planned or intended way business organizations need personnel having necessary qualifications and experience which can be accomplished optimally through a effective man power planning process. Manpower planning is of great importance in identifying the surplus and shortages of the employees. In case of surplus, the man power may be redeployed from one area or activity to another in case of the former, whereas shortages demand providing required personnel.

Man power demand forecasting, manpower supply forecasting and manpower audit are some of the important tasks concerning the process of manpower planning. Manpower demand involves estimating total man power requirements and planning accordingly. Then, the next step in manpower planning process is man power supply forecasting. It comprises of both internal supply forecasting and external supply forecasting. Internal supply forecasting works when the employees are transferred or promoted, while the need of external supply arises from the requirement of new workers when a business expands or there is change in technology or adopts new methods of production. In addition to that the process entails man power audit. Manpower audit is carried out through “Skills inventory”. It provides detail information about each employee. The overall value of an employee in an organization is also determined through skills inventory. For the sustenance of the key workers, man power audit analyses the factors that compels and propels the employees to leave the current jobs and move elsewhere. As a result of which necessary measures may be taken to curb the rate of turnover in the context maximum utilization of Human Resources.

Manpower planning is significant for the best interest of employees as well as for organization. While implementing appropriate selection procedures for the right candidates, Human resource planning undertakes proper recruitment methods and thereby preserves the individual talents of the employees. It focuses on assessing the requirement and the arrangement of training and development programs for the employees in order to equip them with the prerequisites of job. Manpower planning also focuses on the promotion procedures for competent people who can be entrusted with the challenges of advanced tasks. The inefficiencies of the employees are also identified by means of manpower planning process. So that necessary training may be provided leading towards improving employee morale. In this way the manpower planning process improves productivity and efficiency of the employees and their performance may be more effective and they can contribute optimally to the total organizational development. Above all, the success of any business revolves round the quantity and quality of human resources of that particular organisation.

CONCEPT AND DEFINITION OF HRP

HRP is supposed to be an integral part of total organizational planning. The Human Resource Planning includes managerial activities that contribute to set the company’s future objectives .It also determines appropriate means and ways for achieving those objectives. Where as organizational planning facilitates the realization of the company’s future objectives and determines appropriate means for achieving those objectives. HRP is a systematic effort that comprises of three key elements:

Workforce forecast

Manpower assessment

Staffing programme

According to Leon C. Megginson, “Human Resource Planning is an integrated approach to perform the planning aspects of the personnel function. It ensures sufficient supply of adequately developed and motivated workforce to perform the required duties and tasks to meet organization’s objectives by satisfying the individual needs and goals of organizational members.”

Stainer defines manpower planning as “a strategy for the acquisition, utilization, improvement, and preservation of human resources of an enterprise. It is a way of dealing with people in a dynamic situation.”

It relates to establishing job specifications or the qualitative requirements of job determining the number of personnel required and developing sources of supply of manpower. Human resource planning determines the determinants of changing job requirement. Technological advancement that requires introduction of new equipment, product, and process and invariably resulting in changes in jobs and job structure in an organization can be dealt with proper manpower planning. It is therefore, manpower planning is essential for the organization to meet the demands of future job requirements in order to survive and remain competitive. Otherwise, the organizations experiencing the effect of rapid technological change will face the shortages of skilled employees in the absence of effective human resource planning.

HRP can be defined as the task of assessing and anticipating the skill, knowledge and labour time requirements of the organization and initiating necessary action to fulfil those requirements. If the organization is declining, it may need a reduction plan or redeploys its existing labour force. On the other hand, if it is growing or diversifying, it requires finding and tapping suitable sources of skilled labour.

According to Coleman HR planning is “The process of determining manpower requirements and the means for meeting those requirements to carry out the integrated plan of the organization”.

Manpower planning is the “Strategy for acquisition, utilization, improvement and preservation of an enterprise’s Human Resources”. It is the process by which management determines the path for the organization to move from its current manpower position to its desired manpower position in order to carry out integrated plan of the organization.

Vetter (1967) defines ‘Human Resource Planning as the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kind of people, at the right places, at the right time, doing right things resulting in maximum long-run benefits both for the organization and for the individual”.

Human resource planning takes place within the broad framework of organizational and strategic business planning. It involves forecasting the organization’s future human resource needs and planning accordingly to meet those needs. It also includes establishing objectives and then developing and implementing HR programs like staffing, appraising, compensating, and providing training in order to ensure that people with the appropriate skills are available as and when the organization needs them. It may also include developing and implementing programs to improve employee performance or to increase employee satisfaction and involvement in order to boost organizational productivity, quality, or innovation (Mills, 1985b). Finally, human resource planning includes gathering data that can be used to evaluate the effectiveness of ongoing planning programs which will be useful for the planners when revisions in their forecasts and programs are needed.

Human resource planning is the process of systematically reviewing human resource requirements to ensure that the required numbers of employees with requisite skills are available at the time of need. Human resource planning encompasses four elements:

Quantity: No of employees

Quality : Required, skills, knowledge and abilities

Space: for which department, unit and level

Time: at which point of time and how long

Nature and Scope of HRP

HRP includes identifying both present and future needs of various types of employees in an organisation, comparing these needs with the present workforce, and determining the numbers and types of employees to be recruited. Persons can be recruited and selected from outside the organisation or selected out of the organisation’s potential group and fit them into the organisational set up to get the best out of them. While extracting the best out of the employees, the organisation has also a responsibility to protect the interests of employees in terms of their career prospects, adequate compensation for their work, providing the best work environment and developing a culture of interpersonal, intrapersonal, employee-employer relationship and introduce a sense of quality consciousness within everyone to produce the best.

Leading Features of HRP

The leading features of HRP’s are listed below.

It is systematic in approach.

It ensures a continuous and proper staffing.

It checks on occupational imbalances i.e shortages or surplus occurring in any of the department of the organization.

There is a certain degree of flexibility, which is meant for modifications and alterations in accordance with the needs of the organization or to adopt with the changing circumstances. Manpower plans can be done both at micro and at the macro levels.

Thus, HRP is a kind of risk management tool. It involves realistically appraising the present human resources and anticipating the future need as far as possible in order to get the right people into right jobs at the right time.

Underlying Factors of HRP

Undoubtedly, there are a lot many factors that contribute for the increased attention towards human resource planning. Again, environmental forces like globalization, new technologies, economic conditions, and changing characterstics of work forces create complexity and add uncertainty for organizations. Therefore, organizations typically attempt to reduce the interference of uncertainty. While attempting so, formal planning is considered as one common tactic used by organizations to buffer themselves from environmental uncertainty (Thompson, 1967).

Manpower Planning vs Human Resource Planning

Manpower planning or HR planning both can be used interchangeably. HR planning is more broad-based. Human Resources planning refer to planning conducted for all aspects of Human Resources. It takes care of training, employee safety, recruitment, manning levels, Performance Management and so on. But manpower planning basically tends to revolve predominantly around numbers. The number of people required to perform efficiently and productively in order to produce the best results with minimum cost is known as manpower planning. However, these concepts are always evolving and are variously called as manpower planning, personnel planning or employment planning and human resource planning.

Levels of HRP

Human resource planning is done at various levels. The purpose of manpower planning determines its level. However, broadly level of manpower planning falls in the following categories.

National Level: At National level, government of India undertake macro human resource plans for the entire country by anticipating the demand for and supply of human requirements at the national level.

Sectoral Level: Along with central government various state governments of the country also plan human resource requirements for different sectors of the economy. Sectoral level manpower planning endeavours to cater the needs of manpower requirements of some particular sectors like Agriculture Sector, Industrial Sector and Service Sector.

Industry Level: To cater to the manpower needs of a particular industry such as Engineering and Heavy Industries, Paper Industries, and Consumer Goods Industries, Public Utility Industries, Textile, Cement/Chemical Industries and so on and so forth industry level manpower planning is done.

Unit/ Departmental Level: To take care the manpower needs of a particular department in a company such as Marketing Department, Production Department, Finance Department, etc unit or department level manpower planning is conducted.

Job Level: Man power planning at job level fulfils the human resource requirements of a particular job family within a department. For example, the requirement of number of sales executives in the marketing department or customer care people in customer care department is done by planning at the level of Job.

Periods of HRP

Short -Term Human Resource Planning: Short term Human resource planning primarily focuses on designing and implementing the activities like recruitment, selection systems, and training programs to serve short-term organizational needs. Generally such activities involve an element of planning that is future-oriented to some extent. Short-term human resource planning is done to achieve long term objectives of the organisation.

Long-Term Human Resource Planning: Increasingly, long-term human resource planning is done minimum for the period of three years or sometimes beyond that. Long term human resource planning is critical for the effective functioning of organizations. The rapidly changing world and highly competitive marketplace is causing firms to turn their focus on human resources for survival and competitiveness. Effective long-term human resource planning demands integration of the skills and knowledge of the manpower planner and all other executives who are responsible for strategic planning.

Intermediate -Term Human Resource Planning: Human resource planning is a risk averting tool and buffer organizations from future uncertainty. Since, human resource programs such as recruitment, selection, training, and motivation of employees ensures availability of required number of people with appropriate skills at all levels in the organizations and thereby it help to reduce uncertainty. Short term human resource planning is associated with very little uncertainty about which skills and how many people will be needed. For which it is relatively easy to predict supply.

However, due to rapid, turbulent and ongoing changes in today’s business environment, it is difficult to anticipate future by simply projecting past trends. When the focus of planning shifts from short term to intermediate term, what is the requirement of an organisation becomes dominant problem so also the uncertainty related to the question of availability. As a result of which more technical attention is required to be given to the problem of forecasting. To minimise the uncertainty in intermediate term human resource planning, interaction between the human resource planner and line managers is even more critical for making accurate demand and supply forecasts.

PURPOSE, NEED AND OBJECTIVE OF HRP

Purposes of HRP

 The primary function of Personnel planning is to analyze and evaluate the available human resources within the organization. It also determines how to obtain the kinds of needed personnel to staff various organisational positions starting from assembly line workers to chief executives.  Smaller companies have assigned the function of HR planning to the human resource department or personnel department. Larger corporations have separate departments for this function. Personnel planning aims at minimisation of waste in employing people, lessen uncertainty of current personnel levels and future needs, and eliminate mistakes in staffing pattern.  The purpose of Human Resource Planning aims at maintaining the required level of skill by avoiding workforce skill shortages, stopping the profit-eroding effects of being overstaffed or understaffed, preparing succession plans and shaping the optimum future work force composition by hiring the right skill in appropriate numbers.

Need of HRP

Manpower Planning is basically a two-phased process. It analyses the current human resources, makes manpower forecasts and thereby draw employment programmes. Manpower Planning serves organisational purpose in many ways. It ensures optimum use of manpower and capitalizes on the strength of organisation’s Human Resources. Talent reservoir of an organisation is maintained at any point of time. The assigned tasks can be carried out easily if people skills are readily available. All these things can be possible with the help of effective HR Planning that provide information beforehand.

To forecast future requirements and provides control measures: Although planning is considered as the essential process of management, HRP becomes especially critical when organizations go for mergers, relocation of plants, downsizing, right sizing or at time of closing of operating facilities. For example, expansion of scale of operations of any business requires advance planning that can ensure a continuous supply of people with appropriate skill set who can handle the challenges of the jobs easily.

To face the challenges: Human resource planning helps the business to encounter the challenges that occur due to turbulent and hostile environmental forces like technology, social, economic and political factors.

To adopt with technological changes: The change in technology in production, marketing methods and management techniques have been very extensive and rapid. It has profound effect both on job contents and job contexts. These changes may cause problems relating to redundancies, demand for retraining and redeployment, In order to cope with these changes, organisations need systematic manpower planning.

To face Organizational Changes: The nature and pace of changes in organizational environment marked by cyclical fluctuations and discontinuities and the changes in activities and structures affect manpower positions of the organisation and require strategic considerations which necessitate perfect HR Planning.

To determine recruitment/induction levels: A readily available HR plan can provide fairly good ideas about the kind of people are recruited and at what position. This will help in determining the kind of induction the organization require and thus can help to plan induction level successfully.

To determine training level: Human Resource Planning helps in determining training levels in an organisation and lays foundation for management development programmes.

To know the cost of manpower: In cases of expansions or opening up a new factory or if there is a new project organisation would require more number of human resources of different skill set. In those cases, Human Resource Planning helps in estimating the manpower cost. Hence a proper budgetary allocation can be made well in advance for this type of upcoming corporate strategic move.

To assist in productivity bargaining: In case of automation, Human Resource Planning Data helps in negotiating for lesser workers as required for the same amount of the job. The organisation can offer higher incentives to smoothen the process of VRS, voluntary layoffs and so on.

To assess physical facilities: Physical facilities such as accommodation ,canteen, school, medical help, etc. can also be planned well in advance, because a good HRP can assist in solving many problems of the firm, from day to day ones to very strategic ones.

Moreover, Human Resource Planning helps in maintaining the stability of a concern preventing it to incur several intangible costs due to inadequate, improper or lack of HRP. For example, inadequate HRP may cause unfilled vacancies and the resulting loss in efficiency cost a lot to the organisation, particularly when the lead-time is required to train replacements. There are also situations in which employees are laid off in one department on the other hand applicants are hired for similar jobs in another department due to absence of proper HRP. There may be situation of over hiring resulting in the need to lay off effective employees. These are the variety of factors which necessitate Human Resource Planning in an organisation for optimum utilisation of Human Resources.

Objectives of HRP

The objective of human resource planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. Human resource planning is a sub-system of the total organizational planning. It constitutes an integral part of corporate plan and serves the very purpose of organization in many ways. The primary purpose of human resource planning is to prepare for the future by reducing organizational uncertainty in relation to the acquisition, placement, and development of employees .Human resources planning is done to achieve the optimum use of human resources and to have the right types and correct number of employees to meet organizational goals.

Objectives of Human Resource Planning are:

Achieve Goal: Human Resource Planning helps in achieving individual, Organizational & National goals. Since Human resource planning is linked with career planning, it can able to achieve individual goal while achieving organisational and national goal.

Estimates future organizational structure and Manpower Requirements: Human Resource Planning is related with number of Personnel required for the future, job-family, age distribution of employees, qualification & desired experience, salary range etc and thereby determines future organisation structure.

Human Resource Audit: Human resource planning process is comprised of estimating the future needs and determining the present supply of Manpower Resources. Manpower supply analysis is done through skills inventory. This helps in preventing overstaffing as well as understaffing.

Job Analysis: The process of studying and collecting information relating to operations and responsibilities of a specific job is called Job analysis. Job analysis is comprised of job description and job specification. Job description describes the duties and responsibilities of a particular job in an organized factual way. Job specification specifies minimum acceptable human qualities necessary to perform a particular job properly.

Other objectives of HRP are as follows:

To link human resource planning with organizational planning.

To ensure optimum, planned use of currently employees.

To forecast future skill requirements.

To provide control measures in order to ensure that necessary resources are made available as and when required.

To anticipate redundancies and avoid unnecessary dismissals.

To provide a basis for management development programmes.

To deploy the manpower in upcoming new projects.

To enable the organization to identify trouble spots.

To study the cost of overheads.

To decide whether certain activities need to be subcontracted.

To achieve more effective and efficient use of human resources.

To better recruit employees having the necessary skills and competences.

To determine optimum training levels.

To obtain fairly satisfied and developed workforce.

To facilitate the roll-out of strategic plans and missions.

To achieve more effective and equal opportunity planning.

To relieve the organization of unnecessary and unneeded labour.

Human resources planning are human resource administration, quite similar to that of financial planning. But unlike financial planning, there are very few organizations that engage in any form of explicit human resource planning. However, if properly used, human resources planning can increase the prospects of an organization’s management and of its resources by better coping with dynamic situations.

Human resource planning aims at maintaining and improving the organization’s ability to attain the goals by developing strategies, purporting to magnify the contribution of human resources. Objectives of HR planning are to ensure availability of the HR needs of the organization at specified times in the future. It is a systematic approach to help the organization to reach at its business objectives.

TRENDS AND BEHAVIOURAL FACTORS ON HRP

Trends That Impact HRP

 A Personnel planner seeking to study the trends in Human Resource planning should include the following variables: 

The state of the economy of the organisation: The spectrum of economic activity of the organisation which largely depends upon the company’s sphere of operations is a crucial factor that is to be considered while doing HRP. 

 Demographics: The present and future age and sex composition, literacy level of the population of the organisation affect HRP. 

Employee losses or turnover: The retirements, deaths, promotions and resignation affect the current number of individuals employed at every level. 

New skill requirements: Obsolescence of current skills and its effects along with what new skills will be needed due to new technology markets or products affect HRP. 

The availability of materials: The status of the availability of material and direction of materials prices is also considered while doing HRP.  

Technological changes: Rate of change of technology along with technology adoption by the organisation affects manpower planning. 

Social changes: Effect of up gradation of educational backgrounds of the people in a given society and the willingness of people to take lower level jobs affect manpower planning. 

Labour costs: The direction in which the labour cost move is given due consideration while doing human resource planning.

Behavioural Factors on HRP

Behaviour can be defined as the observable and measurable activity of human beings. Activity of human beings under this category shows a great variety. It may include anything like decision making, a mental processor, handling a machine, a physical process. Behavioural factors of HRP include:

1. Understanding Human Behaviour

2. Controlling and directing Behaviour

3. Organisation Adaptation

1. Understanding Human Behaviour: – Understanding human behaviour in the organisation encompasses the following elements.

(i) Individual Behaviour: – It is known as first behaviour of people and provides means for analyzing why and how an Individual behaves in a particular way.

(ii) Interpersonal Behaviour: – It provides means for understanding the interpersonal relationship in the organization. Analysis of reciprocal relationship, role analysis, transactional analysis falls under the umbrella of interpersonal behaviour.

(iii) Group Behaviour: – Group behaviour comprises of group norms, cohesion, goals, procedures, communication, and leadership.

(iv) Intergroup relationship: – Intergroup relationships are in the form of intergroup cooperation and intergroup co-ordination.

2. Controlling and directing behaviour: these are the different factors that need to be taken care of in while controlling and directing people behaviour at workplaces.

(i) Organisational Climate: – it refers to total organizational situations affecting human behaviour i.e how people of an organisation interact with each other at workplace.

(ii) Communication:-free flow of both way communications is inevitable in order to control and direct human behaviour because, it is through communication people come in contact with each others.

(iii) Leadership: – leadership style is also very much crucial and plays vital role in order to control and direct people’s behaviour at workplace.

(iv) Employee empowerment: – It refers to the degree of autonomy provided to people of an organisation so that they can take certain decision on their own without waiting for the supervisor to direct and may be utilized in many ways.

3. Organisation Adaptation: Organisations have to adapt themselves to the environment changes by making suitable internal arrangements like Management of Change.

INFORMATION FOR HRP

Information that forms the basis of Human Resource Planning include statistics of past years data on all aspect of Human Resource programmes. It includes turnover data, recruitment costs, staff numbers both actual and forecasted, budgetary information, safety statistics, and performance appraisal statistics and so on and so forth. Basically, information is gathered taking into consideration of any objective for the year. For example, if organisations seek to reduce turnover, which thereby reduces recruitment and selection costs, need to focus man power plan on retention strategies. To strategise the retention strategies the organisation may go for benchmarking from other successful companies, may seek industry information, take the help of Human Resources Institutes and so on and so forth. After getting information and ways and me


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