BA7204
HUMAN RESOURCE MANAGEMENT
CHAPTER II
THE CONCEPT OF BEST FIT EMPLOYEE
2.1 Concept of Human resource planning:
Human resource planning is important for helping both organizations and employees to prepare for the
future. The basic goal of human resource planning is to predict the future and based on these predictions,
implement programmes to avoid anticipated problems. Very briefly humans resource planning is the process
of examining an organization‘s or individual‘s future human resource needs for instance, what types of
skills will be needed for jobs of the future compared to future human resource capabilities (such as the
types of skilled employees you already have) and developing human resource policies and practices to
address potential problems for example, implementing training programmes to avoid skill deficiencies.
2.1.1 Definition of HRP:
According to Vetter, ―HRP is the process by which management determines how the organization should
move from its current man power position to desired manpower position. Through planning, management
strives to have the right time, doing things which result in both the organization and individual receiving
maximum long run benefits‖.
According to Gordon Mc Beath, ―HRP is concerned with two things: Planning of manpower requirements
and Planning of Manpower supplies‖.
According to Beach, ―HRP is a process of determining and assuming that the organization will have an
adequate number of qualified persons, available at proper times, performing jobs which meet the needs of
the enterprise and which provides satisfaction for the individuals involved‖
HRP is a Four-Phased Process.
The first phase involves the gathering and analysis of data through manpower inventories and
forecasts,
The second phase consists of establishing manpower objectives and policies and gaining top
management approval of these.
The third phase involves designing and implementing plans and promotions to enable the
organization to achieve its manpower objectives.
The fourth phase is concerned with control and evaluation of manpower plans to facilitate progress
in order to benefit both the organization and the individual. The long run view means that gains
may be sacrificed in the short run for the future grounds. The planning process enables the
organization to identify what its manpower needs is and what potential manpower problems required
current action. This leads to more effective and efficient performance.
2.1.2 Nature of Human resource planning:
It is the process of analyzing and identifying the availability and the need for human resources so
that the organization can meet its objectives. The focus of HR planning is to ensure that the organization
has the right number of human resources, with the right capabilities, at the right times, and in the right
places. In HR planning, an organization must consider the availability and allocation of people to jobs
over long periods of time, not just for the next month or the next year1.
HRP is a sub system in the total organizational planning. Actions may include shifting employees to other
jobs in the organization, laying off employees or otherwise cutting back the number of employees, developing
SCE DEPARTMENT OF MANAGEMENT SCIENCE
,BA7204
HUMAN RESOURCE MANAGEMENT
present employees, and/or increasing the number of employees in certain areas. Factors to consider
include the current employees‘ knowledge, skills, and abilities and the expected vacancies resulting from
retirements, promotions, transfers, and discharges. To do this, HR planning requires efforts by HR
professionals working with executives and managers.
2.1.3 Objectives of Human Resource Planning:
1. To ensure optimum utilization of human resources currently available in the organization.
2. To assess or forecast the future skill requirement of the Organization.
3. To provide control measures to ensure that necessary resources are available as and when required.
4. A series of specified reasons are there that attaches importance to manpower planning and
forecasting exercises. They are elaborated below:
To link manpower planning with the organizational planning
To determine recruitment levels.
To anticipate redundancies.
To determine optimum training levels.
To provide a basis for management development programs.
To cost the manpower.
To assist productivity bargaining.
To assess future accommodation requirement.
To study the cost of overheads and value of service functions.
To decide whether certain activity needs to be subcontracted, etc.
HRP is the subsystem in the total organizational planning. Organizational planning includes managerial
activities that set the company‘s objective for the future and determines the appropriate means for achieving
those objectives. The importance of HR is elaborated on the basis of the key roles that it is playing in the
organization.
1. Future Personnel Needs: Human resource planning is significant because it helps to determine
the future personnel needs of the organization. If an organization is facing the problem of either
surplus or deficiency in staff strength, then it is the result of the absence of effecting HR planning.
All public sector enterprises find themselves overstaffed now as they never had any planning for
personnel requirement and went of recruitment spree till late 1980‘s. The problem of excess staff
has become such a prominent problem that many private sector units are resorting to VRS ‗voluntary
retirement scheme‘. The excess of labor problem would have been there if the organization had
good HRP system. Effective HRP system will also enable the organization to have good succession
planning.
2. Part of Strategic Planning: HRP has become an integral part of strategic planning of strategic
SCE DEPARTMENT OF MANAGEMENT SCIENCE
,BA7204
HUMAN RESOURCE MANAGEMENT
planning. HRP provides inputs in strategy formulation process in terms of deciding whether the
organization has got the right kind of human resources to carry out the given strategy. HRP is also
necessary during the implementation stage in the form of deciding to make resource allocation
decisions related to organization structure, process and human resources. In some organizations
HRP play as significant role as strategic planning and HR issues are perceived as inherent in
business management.
3. Creating Highly Talented Personnel: Even though India has a great pool of educated
unemployed, it is the discretion of HR manager that will enable the company to recruit the right
person with right skills to the organization. Even the existing staff hope the job so frequently that
organization face frequent shortage of manpower. Manpower planning in the form of skill
development is required to help the organization in dealing with this problem of skilled manpower
shortage
4. International Strategies: An international expansion strategy of an organization is facilitated to
a great extent by HR planning. The HR department‘s ability to fill key jobs with foreign nationals
and reassignment of employees from within or across national borders is a major challenge that is
being faced by international business. With the growing trend towards global operation, the need
for HRP will as well will be the need to integrate HRP more closely with the organizations strategic
plans. Without effective HRP and subsequent attention to employee recruitment, selection,
placement, development, and career planning, the growing competition for foreign executives
may lead to expensive and strategically descriptive turnover among key decision makers.
5. Foundation for Personnel Functions: HRP provides essential information for designing and
implementing personnel functions, such as recruitment, selection, training and development,
personnel movement like transfers, promotions and layoffs.
6. Increasing Investments in Human Resources: Organizations are making increasing investments
in human resource development compelling the increased need for HRP. Organizations are realizing
that human assets can increase in value more than the physical assets. An employee who gradually
develops his/ her skills and abilities become a valuable asset for the organization. Organizations
can make investments in its personnel either through direct training or job assignment and the
rupee value of such a trained, flexible, motivated productive workforce is difficult to determine.
Top officials have started acknowledging that quality of work force is responsible for both short
term and long term performance of the organization.
7. Resistance to Change: Employees are always reluctant whenever they hear about
change and even about job rotation. Organizations cannot shift one employee from one
department to another without any specific planning. Even for carrying out job rotation (shifting
one employee from one department to another) there is a need to plan well ahead and match
the skills required and existing skills of the employees.
8. Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints
of line and staff managers. Though HRP is initiated and executed by the corporate staff, it
requires the input and cooperation of all managers within an organization. Each department
manager knows about the issues faced by his department more than anyone else. So
communication between HR staff and line managers is essential for the success of HR Planning
and development.
9.Succession Planning: Human Resource Planning prepares people for future challenges. The
‗stars‘ are picked up, trained, assessed and assisted continuously so that when the time comes
SCE DEPARTMENT OF MANAGEMENT SCIENCE
, BA7204
HUMAN RESOURCE MANAGEMENT
such trained employees can quickly take the responsibilities and position of their boss or seniors as
and when situation arrives.
10.Other Benefits: (a) HRP helps in judging the effectiveness of manpower policies and
programmes of management. (b) It develops awareness on effective utilization of human
resources for the overall development of organization. (c) It facilitates selection and training
of employees with adequate knowledge, experience and aptitudes so as to carry on and achieve
the organizational objectives (d) HRP encourages the company to review and modify its
human resource policies and practices and to examine the way of utilizing the human resources
for better utilization.
2.1.4 HRP Process:
HRP effectively involves forecasting personnel needs, assessing personnel supply and matching
demand – supply factors through personnel related programmes. The HR planning process is
influenced by overall organizational objectives and environment of business.
The HRP Process
Environmental Scanning:
It refers to the systematic monitoring of the external forces influencing the organization. The following
forces are essential for pertinent HRP.
Economic factors, including general and regional conditions.
Technological changes
Demographic changes including age, composition and literacy,
Political and legislative issues, including laws and administrative rulings
Social concerns, including child care, educational facilities and priorities.
By scanning the environment for changes that will affect an organization, managers can anticipate their
impact and make adjustments early.
Organizational Objectives and Policies: HR plan is usually derived from the organizational objectives.
Specific requirements in terms of number and characteristics of employees should be derived from
SCE DEPARTMENT OF MANAGEMENT SCIENCE
