Personnel Management Notes/Study Material

Posted on Mar 30 2017 - 2:21pm by Preeti

Manpower Planning

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

  1. 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.
  2. Manpower planning is an ongoing process because manpower need of an organization change from time to time.
  3. 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.
  4. 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.
  5. It is not a solitary act rather it is a process involving a series of related activities carried out on a continuous basis.
  6. 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.
  7. 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

  1.  Since manpower planning defines future personnel need, therefore, it becomes the basis of recruiting and developing personnel.
  2. 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.
  3. 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.
  4. 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.
  5. 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:

Example

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:

Example

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.

(iii)     Productivity

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.

(iv)    Absenteeism

  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.

Quantitative Aspect

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.

Flow of Human Resource in an Organisation

Flow of Human Resource in an Organisation

 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.
Markov Analysis
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:

  1. Globalisation

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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

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About the Author

B.Tech Biotechnology,MBA(HR and Marketing), UGC/CBSE NET Qualified

4 Comments so far. Feel free to join this conversation.

  1. prakhar December 14, 2017 at 6:43 pm - Reply

    thanks for providing, such a good material which covers throughout the syllabus

  2. Swa June 29, 2018 at 7:42 am - Reply

    Thanks…,u did a great job..,

  3. boekhoudkantoor March 19, 2019 at 1:56 pm - Reply

    Enjoyed the post.

  4. Hyperpigmentatie April 18, 2019 at 3:51 pm - Reply

    Keep up the good work! Thanks.

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