Manpower planning is a process through which an organisation ensures that right people, at right place and at right time are available. Manpower planning involves determination of future, manpower needs to help management in being proactive. It also help the management in understanding the gap between available manpower and the future needs. This understanding plays an important role in bridging the gap- It is primacy in nature and all other staffing functions follow it. It puts the objectives of the organisation on paper and plans into the number and kind of personnel needed to accomplish those objectives.
According to Geisler
Manpower planning is the process including forecasting, developing, implementing, and controlling by which a firm ensures that it has the right number of people and right kind of people, at the right place, at the right time, doing things for which they are economically most suitable.
According to Decenzo and Robbins
Human resource planning is the process by which an organisation ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiency completing those tasks that will help the organisation achieve its overall objectives.
According to Leap and Crino
Human resource planning includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything must be done to ensure that personnel supply equals personnel demand at the appropriate time in future.
According to Stainer
Manpower planning is the strategy for the acquisition, utilisation, improvement and preservation of an organisation’s human resources. It is aimed at coordinating the requirements for and the availability of different types of employees.
According to Beach
Human resource planning is a process of determining and assuming that the organisation will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved.
Characteristics of Human Resource Planning
- Human Resource planning is forward looking or future oriented. It involves forecasts of the manpower needs in a future time period so that adequate and timely provision may be made to meet the needs.
- Manpower planning is an ongoing process because manpower need of an organization change from time to time.
- Manpower planning is a major responsibility of management. It involves the application of planning process to the human resources. It is not the job personnel department alone. This department only guides and assists operating managers in framing manpower plans.
- HR planning aims at fulfilling corporate strategies and goals through effective utilization of human resources. As such, it is effectively aligned with the business strategies of the organization.
- It is not a solitary act rather it is a process involving a series of related activities carried out on a continuous basis.
- It not only meets the short term requirements of an organization but also determines its long term strategies and future directions from the HR perspective.
- It emphasizes both quantitative and qualitative aspects. The former implies the right number of employees while the later means the right talent required in the organization.
Importance of Manpower Planning
- Since manpower planning defines future personnel need, therefore, it becomes the basis of recruiting and developing personnel.
- We all are facing fast change in corporate sector. It will be impossible to cope up with this change in case of faulty or no manpower planning.
- There may be surplus manpower in some areas and shortage in other areas. An effective manpower planning can only create a balance in such a situation as it is the only way through which manpower needs and availability can be identified much in advance.
- Proper and effective manpower planning will help in coping up with the increasing cost of hiring personnel from reputed universities. It will definitely help in aligning with new situations.
- Manpower planning also helps in developing talents as in today’s competitive world the rate of movement of personnel is quite high. It has been found that replacement cost is much higher than developing the talent of their own personnel. This all can be managed with great effectiveness only with the help of effective manpower planning.
Manpower Planning Process
The major stages involved in human resource planning are given below:
1. Analyzing Organizational Plans
First of all, the objectives and strategic plans of the company are analyzed. Plans concerning technology, production, marketing, finance, expansion and diversification give an idea about the volume of future work activity. It is also necessary to decide the time horizon for which human resource plans are to be prepared. The future organisation structure and job design should be made clear and changes in the organisation structure should be examined so as to anticipate its manpower requirements. It is necessary to study business plans because all manpower plans stem from business plans relating to nature, level and organisation of activity.
2. Forecasting Demand for Human Resource (Manpower Forecasting)
On the basis of corporate and functional plans, and future activity levels, the future needs for human resources in the organization are anticipated. The number of people and the skill levels needed in future depend on the production and sales budgets in a manufacturing enterprise. But the human resource requirements for a given level of operations vary depending upon the production technology, process, make or buy decisions, job contents, behaviour patterns and control systems. It is necessary to make projections for new positions to be created and the vacancies arising in current manpower. Job analysis and forecasts of future activity levels help in human resource forecasting.
Techniques employed in manpower forecasting are as follows:
(a) Managerial Judgment
Under this method, experienced managers estimate the manpower requirements for their respective departments on the basis of their knowledge of expected future workload and employee efficiency. These departmental estimates are then aggregated and approved by top management.This is a very simple and time-saving method. But it is quite subjective and is, therefore, suitable only for small firms. The estimates based on experience can be refined to some extent with the assistance of work study and human resources experts. This method helps in judging the influence of informal group norms on manpower needs.
(b) Work-study Method
In this method, time and motion study are used to analyse and measure the work being done. With the help of such studies, standard time required per unit of work is decided. The following example illustrates this method:
Planned output for next years 50,000 units
Standard hours per unit 2
Planned hours required 50,000 X 2 = 1,00,00
Productive hours per worker in the year 2,000
Number of workers required 1,00,000/2,000 = 50
If the span of control is ten, five (50/10) supervisor will be required to supervise the work .
Work study method is more appropriate for repetitive and manual jobs when it is possible to measure work and set standards. Job method should not change frequently.
(c) Ratio-Trend Analysis
Under this method, ratios (e.g., total output/number of workers, total sales volume/number of sales persons, direct workers/indirect workers), are calculated on the basis of past data. Future ratios are calculated on the basis of time series analysis/extrapolation, after making allowances for expected changes in organization, methods and jobs. Extrapolation or projections is mathematical extensions of past data into a future time period. Moving averages and exponential smoothing can be used for projection. On the basis of established ratios, the demand for human resources is estimated. The following example illustrates this method:
Production level in 2006-07 50,000 units
Number of workers in 2006-07 50
Ratio 5 : 50,000 or 1 : 1,000
Number of supervisors in 2006-07 5
Ratio 5 : 50 or 1 : 10
Estimated production in 2008-09 60,000 units
Number of workers required in 2008-09 60,000 X 1/1,000 = 60
Number of supervisors required in 2008-09 60 X 1/ 10 = 6
If changes in physical stamina, mental ability, values of employees and technology are expected in 2008-09, these estimates should be revised accordingly.
(d) Mathematical Models
A mathematical model expresses the relationship between independent variables (e.g., investment, production, sales, etc.) and dependent variable (e.g., number of employees required).
In other words, various factors influencing manpower needs are expressed in the form of a formula. Several types of models, e.g., regression, optimisation models, probabilistic models can be used. These are complex and appropriate only for large organisations.
Future demand for human resources depends on several factors, some of which are given below:
(i) Employment Trends
Trends in the company’s manpower can be judged by comparing and analysing the staff during the past five years.
(ii) Replacement Needs
These depend on death, retirement, resignation, and termination of employees. These can be assessed on the basis of past experience and retirement situation in future.
Improvements in productivity influence manpower requirements. Better utilisation of existing manpower is one method of securing gains in productivity. Work study-techniques can be used to judge manpower utilisation and improvements therein. Automation and computerisation is another method of productivity improvement. It will influence both the quantity and quality of manpower required in future. Matching of skills with job requirements is the third method. Job analysis techniques are helpful in such matching.
While estimating demand for manpower. the prevailing rate of absenteeism in the company should be considered. The rate of absenteeism can be calculated as follows:
Absenteeism = Mandays lost due to absenteeism/ Mandays worked + Mandays lost
In case the rate of absenteeism is considered unduly high, steps should be taken to reduce it.
(v) Expansion and Growth. The company’s growth plans and expansion programme should be carefully analysed to judge their impact on manpower requirements in future. Steps must be taken in time for procuring and developing the talent required to implement expansion and growth plans without delay.
Manpower planning has two aspects-quantitative and qualitative. Quantitative aspect is concerned with determining the number of employees required in a future period of time. Workload analysis and workforce analysis are helpful in estimating the quantity of manpower.
i. Workload Analysis
Under this analysis, the total workload of each department is estimated on the basis of sales forecasts, work schedules, growth rates, expansion plans, etc. As far as possible, the workload of each department should be estimated in tangible units, so that it can be translated into manpower. On the basis of past experience and work measurement, the total workload is converted into manpower required. Work study technique is used to estimate how long a time an operation would take and the manpower required per unit of output.
ii. Workforce Analysis
All the existing workers are not likely to be available for work throughout the year, due to absenteeism and turnover. It is, therefore, necessary to make a provision for loss of current manpower due to these factors. On the basis of past experience, the factory may estimate that on an average, 5 per cent of the staff will remain absent and another 5 per cent is likely to be lost due to resignations, retirements, deaths, terminations etc. Thus, the actual number of workers required will be 200 + 200/10 = 220 during the year.
In order to estimate accurately the loss of current manpower, analysis of the present workforce is made. Such analysis will involve a detailed study of the past behaviour, performance and retirement date of each and every employee. This analysts is called workforce analysis.
Qualitative Aspect-Skills Analysis
The quality of manpower required varies from job to job. Therefore, the quality of employees required for a job can be determined only after determining the job requirements. To know the requirements of a particular job, a job analysis is made. Job analysis is the process of analysing a job so as to collect all pertinent facts about the job in terms of duties and responsibilities involved in it and the qualifications needed for successful performance of the job. With the help of information obtained through job analysis, two statements, namely job description and job specification are prepared. Job description contains details about the contents of a job whereas job specification or man specification reveals the physical educational and other qualifications and experience required in an individual to perform the job satisfactorily.
3. Forecasting Supply of Human Resource
Every organisation has two sources of supply of human resources-internal and external. Internally, human resources can be obtained for certain posts through promotions and transfers. Human resources flow in and out of organisation due to several reasons as shown in Fig. 5.1. Policies relating to these aspects need to be reviewed regularly to judge their impact on the internal supply of human resources. In order to judge the internal supply of human resources in future, human resources inventory or human resource audit is necessary. This contains data about the current or present human resources.Its main components are as follows :
a) Head Counts i.e. total number of people employed, department wise, skill wise, designations wise, payroll wise, sex wise, etc.
b) Job family inventory, i.e. number of employees in each job, e.g. clerks, typists, cashiers etc.
c) Age inventory i.e. agewise classification of employees,
d) Skill inventory containing data about the education, skills, experience, past performance, work preference and potential/fitness for promotion.
Manpower inventory helps determining and evaluating the quantity and quality of the internal human resources. It reveals what exists in stock of manpower and what can be expected in future. It also indicates the possible shortfalls in comparison with expansion requirements and the future organization structure. Detailed biodata of every employee provides the foundation for a programme of individual development. Some organizations maintain a Manning Table which is a job wise list of employees. Other organizations use Manpower Replacement charts which show the present performance of each employee together with the promotion potential of possible replacements.
It is the probabilistic or stochastic model for forecasting internal supply of manpower. In this model first of all probabilities are calculated for the movement of people from one job to another within the organization or of leaving the organization on the basis of past record. Then forecasts are made of future manpower supply on the basis of these probabilities.
Expected Loss of Manpower
Once the present human resources are assessed, the changes likely to occur therein can be estimated. Potential losses of human resources can arise in the form of resignations, discharges/dismissals, deaths, retrenchments/layoff, terminations, promotions, demotions, transfers, ill health, injury, absenteeism, deputations out, consultancy out. Similarly, additions to human resources may occur in the form of new recruits, promotions, demotions, transfers, deputations in , consultancy in ,acquisition of new skills through training etc. the effect of potential loss and additions can be calculated, on the basis of experience as follows:
Future internal supply of human resources = Present inventory + Potential additions – Potential losses
Thus, future manpower needs of an organization depend on the number of employees required due to loss of current manpower and the additional staff needed due to anticipated expansion of the organization. After estimating the future internal supply of human resources, the external sources of supply are analyzed. Internal factors affecting manpower supply from outside include training facilities, salary levels, company image, growth prospects, interpersonal relations, job challenge etc. external factors consists of working population, unemployment level, education and training institutions, housing and transport facilities, social security measures, technology etc.
4. Estimating Manpower Gaps
Net human resource requirements or manpower gaps can be identified by comparing demand forecasts and supply forecasts. Such comparison will reveal either deficit or surplus of human resources in future. Deficits suggest the number of persons to be recruited form outside whereas surplus implies redundant to be redeployed or terminated. Similarly, gaps may occur in terms of knowledge, skills and aptitudes. Employees estimated to be deficient can be trained whereas employees with higher skills may be given more enriched jobs.
5. Action planning
Once the manpower gaps are identified, plans are prepared to bridge these gaps. Plans to meet the surplus manpower may be redeployed in other departments/units and retrenchment in consultation with the trade unions. People may be persuaded to quit voluntarily through golden handshake. Deficit can be met through recruitment, selection, transfer, promotion and training plans.
6. Monitoring and Control
Once, the action plans are implemented. The human resource structure and system need to be reviewed and regulated. Zero-base budgeting may be used to encourage managers to justify their action plans. An organization operating on a five-year planning cycle may record human resource levels in such a way that it is easy to monitor progress and hold managers responsible.
Monitoring and control phase involves allocation and utilization of human resources over time. Review of manpower plans and programmes helps to reveal deficiencies. Corrective actions should be taken at the right time to remove the deficiencies. Manpower inventory should be updated periodically. Necessary modifications in manpower plans should be made in the light of changing environment and needs of the organization. An appraisal of the existing manpower plans serves as guide in future manpower planning.
The Difference between Personnel Management and Human Resource Planning
The difference between Personnel Management and Human Resource Planning can be understand with the help of following points
- While employing personnel management aims at the written contracts made earlier between management, employees, unions and other associations, whereas, HRM aims to go beyond contracts.
- Personnel Management gives due importance to rules, regulations and norms but HRM gets impatience with stringent rules and works with a broader outlook.
- In case of Personnel Management, procedures are the guide to management action but HRM is completely guided by business needs.
- The relationship between Managers and subordinates in case of Personnel Management is of monitoring type but in case of HRM, it is of nurturing type.
- The most important relation in case of Personnel Management has been considered with labour but in Human Resource Management customers are the most important.
- Leaders in case of Personnel Management are of transactional type but leaders in HRM are of transformational type
- Most of the communication in Personnel Management takes place indirectly as whereas, in Human Resource Planning it is of direct type.
- Selection process in separate and marginal in Personnel Management but integrated and key task in case of Human Resource Planning. Conditions and working culture are is more harmonious in case of Personnel Management as compared to Human Resource Planning.
- Job categories and grades are more in Personnel Management as compared to Human Resource Planning.
- Jobs in case of Personnel Management are designed keeping in view the concept of ‘Division of Labour’ whereas, in case of Human Resource Planning, they are designed keeping in view the concept of “Team Work”
- The focus of attention for interventions in case of Personnel Management is limited to personnel procedures whereas, it is much wider in case of Human Resource Planning and ranges to cultural, structural and personnel strategies.
- In Personnel Management labour is treated as a tool to accomplish the objective and which is expandable as well as replaceable, whereas in case of Human Resource Planning people are treated as assets to be used for the benefit of an organisation, its employees and the society as a whole.
- In Personnel Management interests by organisation are utmost, whereas “mutuality of interest” concept prevails in case of HRM.
- Personnel Management is the earlier concept whereas HRM is the latest evolution of the subject.
Challenges of Manpower Planning
The 1990’s have brought a revolutionary change in the business world. Post liberalisation gave a new impetus to the Indian economy and there was a shift from the command economy to market driven economy, from sheltered market to competitive market; from monopoly to competition; and from domestic trade to global trade. There was a strong call and ardent need for a different approach to HR activities. Necessity is the mother of invention and with this understanding, HR managers had adopted a reactive strategies to people’s problems during the pre-economic liberalisation era. The major challenges are:
Globalisation of business has its strong impact on HRM functions. The HR department is required to cope up with the upcoming challenges of internationalism and find out the solutions by the problems arising out of unfamiliar laws, languages, practices, competitions, attitudes, management styles and work ethics. The employees working ill multinational organisations will have too much of anxiety due to fear of loss of jobs, job changes, new roles, new assignments, transfers to new locations,! changes in remuneration, changes in career possibilities, changes in organisational powers, status! changes in peer groups supervisors, subordinates and above all changes in corporate culture and loss of identity in the company. The success of any merger or acquisition depends upon the effectiveness of HR activities.
- New Organisational Forms
The practice of HRM is shaped by the organisational form in which people are employed. Large production houses have now been replaced by small and medium sized employers. Smaller firms and establishments means a more personalised style and require less complex and sophisticated systems of Personnel Management. Smaller units are less able to sustain specialist Personnel Management function. The HRM contributes a lot in facilitating the processes, which support the development of the enterprise, rather than just administering and controlling them.
- Changing Demographics of Workforce
In this modern scenario when both males and females are working together, the organisations need to accustom to using job moves and physical relocation as an important factor. Another change in the workforce demography relates to the growing number of employees who a young. Dormitories, gymnasium, breakfast, these are the kind of facilities that need to be provided to the young workforce.
4 Changed Employee Expectations
Demographic change has brought a change in employee expectations and attitudes. The traditional ways of alluring the employees like job security, attractive pay, housing etc are no more the only factors of motivation. In this modern scenario, it is very challenging to find out what is that factor which will motivate in particular employee. Innovations computer technology and communications have brought a tremendous change, and as HRM has also changed. It is observed that today’s average worker demands better treatment challenging jobs and career advancement.
- Proactive Strategy to Build up Industrial Relations
There is a huge change at the industrial relations front strikes, lockouts and loss of Mondays are declining considerably. This transformation is the result of socio-economic and political reasons. In this changing scenario, HRM needs to evolve a proactive strategy towards industrial relations, an approach which should enable HR specialists to look into the challenges unfolding in the future and to be prepared to convert them into opportunities.
- Contribution to the Success of the Organisation
Although, it is the responsibility of all the managers but responsibility lies more on HR managers as it is who co-ordinates people’s activities and it is the people who make or destroy organisations. Infact, society’s well-being to a large extent depends inform its organisations, particularly business organisations.
- Established Fact-people are the most Important
There is no controversy or difference any other school of thought which does not realize the importance of people in the organisation. Earlier managers believed structures, strategies and systems. So, the top management must start developing-nurturing attitude towards frontline engineers, encouraging interpersonal relationship and motivating to monitor self.
- Managing the Managers
It is another challenge before the HR Manager. Managers believe they are a class apart and expect remuneration which may be unreasonable and highly expensive. Few managers start taking assuming themselves to be the employer and behave arrogantly with the one whom they feel more smart and ultimately fire them.
- Protect the Interest of Weaker Sections
Another important challenge for HRM is to protect the interest of weaker sections of the society. There are many voices today in the society like: feminist voice, dalit voice, underprivileged voice, minority voice and so on. It becomes the responsibility of HR manager to pay attention towards the voices of the entire workforce and re-examine their policies, practices and values.