What Is Human Resource Planning Business Essay


A. Introduction

Human Resource Planning can be defined as a systematic analysis of Human Resource needs in order to ensure that appropriate number of employees with the necessary characteristics and skills are available when they are required. [Mondy et (1996)]

Therefore Human Resource Planning helps the organization to anticipate their future Human Resource requirements and to identify ways and means to meet those needs.

In broader sense Human Resource Planning can be explained as a key component of every organisation's strategic business planning and it identifies, administrate and evaluate the human resources requirements to meet organizational goals. In addition Human Resource Planning assess the availability of qualified resources to meet the organisation requirements and also to ensure competitive advantage Human Resource planning helps to retain the talented employees and also to attract fresh skilled employees in to the organisation.

Human Resource planning can be done on a short (for one year) or long term ( three to five years) basis. This planning process ensures that people will be available with the relevant talents and skills when and where the organization needs them.

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When we look at the Human Resource Management Process, human resource planning is a vital component of it.

Human Resource Management Process

Human Resource Planning




Performance Appraisal


Employee Separation

For this assignment I have selected the organization the Central Bank of Sri Lanka. This is one of the largest organizations in Sri Lanka plays a vital role in the Sri Lankan economy.

Lets now get a glimpse of the Central Bank of Sri Lanka.

Central Bank of Sri Lanka

The monetary authority of Sri Lanka is called the Central Bank and this was established two years after the country's independence which is in year 1950. Central Bank of Sri Lanka was established under the Monetary Law Act No.58 of 1949. Mainly responsible for the conduct of monetary policy in Sri Lanka, the Central Bank also has wide supervisory powers over the financial system in the country.

Following the amendments to the Monetary Law Act in December 2002, The Central Bank of Sri Lanka is a semi-autonomous body which is governed by a five member Monetary Board, comprising the Governor of the Central Bank of Sri Lanka as Chairman, the Secretary to the Ministry of Finance and Planning and three members appointed by the President of Sri Lanka, on the recommendation of the Minister of Finance, with the concurrence of the Constitutional Council.

Since its formation the Central Bank's focus and functions have evolved, in response to the dynamic economic environment. According to the amended Monetary Law Act (MLA) in 2002, the objectives of the Central Bank were streamlined to enable it to pursue its core objectives and to free it of the multiple objectives that were originally assigned to it. The two core objectives of the Central Bank:

a) Maintaining economic and price stability

b) Maintaining financial system stability

a) Maintaining economic and price stability

In simple terms price stability means low inflation. Experience has revealed that when there is low inflation the interest rates are low and thus the economy performs well. An environment such as this allows an economy to reach its desired growth. This kind of situation hamper to an economic growth which is sustainable. Therefore the Central Bank of Sri Lanka with its monetary policy measures tries to maintain economic and price stability.

b) Maintaining financial system stability

Financial system stability refers to the effective functioning of the financial institutions and markets with absence of crisis in banking, currency and balance of payments. Such an environment is favourable for investors and depositors resulting growth in investment and the economy. Thus in order to have a stable financial system, the Central Bank of Sri Lanka tries to maintain a stable macro-economic environment, effective regulatory framework, well organised financial markets, safe and robust payments infrastructure and sound financial institutions.

Apart from the core functions the Central Bank of Sri Lanka is responsible for issuing currency and management in Sri Lanka. It also does the following agency functions.

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i) Employees' Provident Fund Management

ii) Foreign Exchange Management

iii) Public Debt Management

iv) Regional Development

v) Financial Intelligence

vi) Provincial Office Monitoring

Then when we consider the Central Bank of Sri Lanka, it is like the heart of the economy of Sri Lanka thus as mentioned above needs the sufficient employees, with the right blend of talents & skills and performing their jobs according to the organisation needs to make sure that Central Bank caters to the demands of the country.

Therefore it is now clear that Human Resource Planning plays a major role in an organisation.

B. Recruitment & Selection Planning

In general Recruitment and Selection are considered as one process. But in Human Resource Management "recruitment" refers to the process of attracting the right type of applicants to the job position. Then "selection" refers to process of selecting an individual from the pool of applicants and absorbing in to the organisation.

Then Recruitment & Selection Planning is needed to make sure this process is cost effective and also to get the right talent in to the organisation.

Now lets focus on the Central Bank of Sri Lanka in this context.

With "Recruitment & Selection" the Central Bank's aim is to to obtain the best skills required to perform a particular job in the optimum manner while bridging the knowledge and skills gap of the Bank.

In the Central Bank of Sri Lanka's Recruitment Policy, it clearly demonstrate




Normal Recruitment

Staff Class Grade I

a) Determining the competency needs of the Bank

b) Determining the minimum qualifications and experience required to fill the identified skill gaps

c) Advertising the vacancies

d) Holding a written examination and one or more interviews

Non Staff Class Grade II

a) Determining the number of vacancies in the NS Class

b) Determining the minimum qualifications and experience required

c) Advertising the vacancies

d) Holding a written examination and one or more interviews

Minor-Employee Class Grade I/Grade II (Drivers)

a) Determining the number of vacancies in the ME Class

b) Determining the minimum Qualifications

c) Advertising the vacancies

d) Holding a written examination (optional)

e) Holding one or more interviews

Minor Employee Class Grade II (Drivers)

In respect of the candidates for driver vacancies, a driving test is held, in addition to the procedures relating to the requirements of Minor Employee Class Grade I

Lateral Recruitment

a) Appointing a Job Evaluation Committee

b) Justifying the necessity of lateral recruitments by the respective Head of Department

c) Preparing the Terms of Reference (TOR) of the post.

d) Determining the appropriate salary point and the grade on which the prospective employees are supposed to be recruited.

e) Advertising the post.

f) Holding a written examination and one or more interviews."

The above demonstrates how carefully the Bank plans its recruitment and selection as this is a vital process for the smooth function of the organisation. In addition the bank comply with the Sri Lankan labour law when recruiting the employees to the bank.

The important point to note here is that in recruitment & selection, the Bank has the procedure written down carefully thus it is easy to carry out this process in practice.

C. Training & Development Planning

Though in general the words Training & Development are used mostly together, these two words have two different means in the field of HRM.

Training refers to providing the individual employees the opportunity to enhance their knowledge and skills and the levels of competence to perform the tasks of the job effectively and efficiently.

Employee Training can be considered as a short term activity because it aims to provide necessary skills for the employees' to perform the current job.

Then when we consider the Development, according to Walton (1999) "human resource development involves introducing, eliminating, modifying, directing, and guiding processes in such a way that all individuals and teams are equipped with the skills, knowledge and competences they

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require to undertake current and future tasks required by the organization." So this clearly explains that development can be considered as a long term activity for the organisation.

In the Central Bank of Sri Lanka, they have a many training opportunities for the employees as

D. Employee Motivation and Staff Appraisal

Employee Motivation

Simply motivation can be explained as the driving force which help individuals to achieve their goals.

According to Shaun Tyson (2006) "motivation may be defined as an inner force that impels human beings to behave in a variety of ways and is, therefore, a very important part of the study of human individuality".

In early 1900s employees were considered as another input into the production process. But Elton Mayo from 1924 to 1932 (Dickson, 1973) from his Hawthorne Studies researched on employee behaviour and he changed the above thinking of employees and explained that employees are individuals and are not motivated solely by money thus employee behaviour is linked to their attitudes (Dickson, 1973). Therefore "human relations approach to management" was introduced to the world by the Hawthorne Studies, thus the needs and motivation of employees become the primary focus of managers (Bedeian, 1993).

Maslow's need-hierarchy theory, Herzberg's two- factor theory, Vroom's expectancy theory, Adams' equity theory, and Skinner's reinforcement theory are the most popular theories introduced for understanding of motivation. Among these theories Maslow's need-hierarchy theory considered as the most important and primary theory as others were developed analysing the Maslow Theory.

Maslow theory he explains that employees have five levels of needs (Maslow, 1943): physiological, safety, social, ego, and self- actualizing. A major fact that Maslow introduced was that lower level needs had to be satisfied before the next higher level need would motivate employees. In more similar thinking Herzberg's work categorized motivation into major 2 factors: motivators and hygienes (Herzberg, Mausner, & Snyderman, 1959). Motivators are also called intrinsic factors, for example individual achievements and recognition by the organisation, results job satisfaction. Hygienes also called extrinsic factors, for example changes in salary and job security, results job dissatisfaction.

According to Victor Vroom's "Expectancy Theory" he argues that employee effort will lead to performance and performance will lead to rewards (Vroom, 1964). Rewards may be either positive or negative, more positive the reward the employee will be highly motivated. Similarly, more negative the rewards the employee will be less motivated.

Then John Stacey Adams in his "Equity Theory" explains that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs (Adams, 1965).

Finally according to Burrhus Frederic Skinner in his Skinner's radical behaviourism theory simply states behaviour as a function of environmental histories of reinforcing consequences. Those employees' behaviours that lead to positive outcomes will be repeated and behaviours that lead to negative outcomes will not be repeated (Skinner, 1953). Thus the managers should positively reinforce employee behaviours that lead to positive outcomes which will benefit the organisation.

Staff Appraisal

According to Dick Grote, staff appraisal also commonly known as performance appraisal is a method by which the job performance of an employee is evaluated in terms of quality, quantity, cost, and time ideally by the relevant line manager or supervisor.

Staff appraisal is a complete analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training.

In general, following are the aims of a performance appraisal:

* Provide employees a feedback on their performance

* Identify further training needs

* Document criteria used to allocate organizational rewards

* Form a basis for salary increases, promotions etc.

* Facilitate communication between employee and administration

In the Central Bank of Sri Lanka …..

Evaluate the employee motivation and appraisal prgrammes in your organisation

and critically analyse if they are following any of the "motivational

theories".Include your suggestions for improvement relating it to your favorite

motivation theory.Evaluate the relevance of your theory in current times.

Also analyse the staff aprraisal practise, and if it is in lieu with the


E. Management Style

Simply Management Style can be explained as an overall method of leadership used by a manager.

In an organization managers have to perform many duties and play many roles and how they handle various situations will depend on their style of management.

"Management styles are characteristic ways of making decisions and relating to subordinates" Robert Tannenbaum and Warren H. Schmidt (1958, 1973).

According to various studies over the period there are five main Management Styles can be identified and they are as follows;

1) Autocratic Management Style

2) Democratic Management Style

3) Bureaucratic Management Style

4) Paternalistic Management Style

5) Laissez-faire Management Style

Autocratic Management Style

The autocratic style is characterised by a top-down communication model. In some organisations most decisions are made by the top management thus the information is passed from top management to bottom management.

Democratic Management Style

Democratic management is all about consultation and feedback from the employees. This management style allows the employees to take part in decision-making, thus most decisions are agreed by the majority.

Bureaucratic Management Style

Bureaucratic management style involves effectively and efficiently maintaining processes and procedures designed to ensure quality output. In this style comparatively decision-making systems are often costly and slower but can be more reliable and safeguarded against employee or manager abuse, for this reason government organisations prefer bureaucratic management style.

Paternalistic Management Style

In this management style similar to Autocratic style, communication is generally downward, but feedback to the management is encouraged to maintain morale. Due to this fact this style is highly advantageous as it engenders loyalty from the employees, leading to a lower labour turnover, as this style also emphasis on social needs.

Laissez-faire Management Style

Laissez-faire Management style simply means a "delegate" approach to management. Laissez-faire literally means 'let do', and it is based on the simple truth that many employees feel more motivated and committed more when they feel that they are in control and have responsibility. On the other hand managers who follow this management style will be tasked with more subordinates to monitor.

When we consider Central Bank of Sri Lanka most of the managers have adopted …...


Evaluate the management style adopted in your organisation and analyse as to

which school of management do they identify with, and suggest any changes for


REMINDER:our plan has to be clearly supported by literature and you need to

provide references in Harvard style in the text as well.

F. Conclusion

"In uncertain business settings, the significance of strategic human resources planning can become obvious very quickly. A company that reacts to circumstances by cutting staff as a measure to reduce short-term overhead can create unwanted repercussions. What initially looked like a smart and necessary move to economize in lean times can end up costing the company much more in the long-run. The resources that will be needed to subsequently recruit, hire, and train new employees may well exceed any short-term cost savings.

Forward-looking human resources planning typically anticipates future staffing requirements. It can help organizations avoid cost errors. Strategies are formulated to not only anticipate their needs over time, but to consider optimal solutions for the long term and under challenging economic conditions. This approach minimizes the chance of short-sighted and reactive choices being implemented by decision-makers. Organizations with a plan in place, and a keen understanding of their long-range objectives, may instead decide to weather the economic storm and keep trained, talented, and dedicated staff in place for the inevitable business uptrend."


Conclude with an overview of Human Resource Planning in the organisation and

summarise your suggestions and recommendations.

G. References

http://www.cbsl.gov.lk/ accessed on 27th, 28th & 29th March 2011.

Central Bank of Sri Lanka Journals

Staff Interviews on 25th March 2011

Maslow, A. H. (1943). A theory of human motivation. Psychological Review, July 1943. 370-396.

Dickson, W. J. (1973). Hawthorne experiments. In C. Heyel (ed.), The encyclopedia of management, 2nd ed. (pp. 298-302). New York: Van Nostrand Reinhold.

Bedeian, A. G. (1993). Management (3rd ed.). New York: Dryden Press.

Herzberg, F., Mausner, B., & Snyderman, B. B. (1959). The motivation to work. New York: John Wiley & Sons.

Vroom, V. H. (1964). Work and motivation. New York: Wiley.

Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (ed.), Advances in experimental social psychology. New York: Academic Press.

Skinner, B. F. (1953). Science and Human Behavior. New York: Free Press.

Robert Tannenbaum and Warren H. Schmidt (1958, 1973) - How to Develop a Leadership Pattern

Dick Grote: Employee Performance Management Blog - accessed on 2nd April 2009

Essentials of Human Resource Management (Fifth Edition) by Shaun Tyson

Human Resource Management in a Business Context (2nd Edition) by Alan Price

Strategic Human Resource Management, A guide to action (3rd edition) By Michael Armstrong

H. Appendix