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Certificate in Industrial Relations

Manpower Planning versus Human ResourcePlanning

Need for Human Resource Planning

Steps involved in Human Resource Planning

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MANPOWER PLANNING

Manpower Planning is quite an old term used in the HR jargon. John Abraham, views

manpower planning as quantitative, involving forecasting of demand and supply of

labour. By definition Manpower Planning is:

a process through which management determines how an organisation

moves from its current manpower position to its desired manpower position

However, manpower planning would also mean putting the right people in theright place at the right time at the right price, and has been mainly concerned with

the forecasting, control and matching supply and demand of human resources involvingvarious steps.

Manpower Planning has generally been thought as tactical rather than a long term

strategic activity, requiring rational, utilitarian approach (Legge 1995), where people tendto be regarded as costs to the organisation. It was basically involved in reconciling an

organisations need for labour with the available supply in the local and national labourmarket.

However, with changing organisational and market conditions, the termManpower Planning shifted to a more complex term involving lots of other issues than

mere reconciliation of demand and supply of labour. Through the evolution of Personnel

Management to Human Resource Management, labour was not looked upon as being a

cost, rather, a valuable asset to the organisation which, in a way should be nurtured andbecame popular as human resources

Human resources have thus been defined as being:

The efforts, skills or capabilities that people contribute to an employing

organisation to enable it to continue in existence

Although Marchington and Wilkinson argue that the adoption of new style human

resource management led to merely an expansion of the scope of what was previously

called the Manpower Planning , Bramham claims that manpower planning should not beconfused with Human Resource Planning. According to him, HR Planning is a strategic

activity that emphasises employee commitment, creativity, motivation and development.

HR specialists have defined HR Planning as:

the creation of explicit proposals by HR specialists, corporate and line

managers (an sometimes other employees) using specific technologies to enable the

supply or dispensation of human resources necessary for the acceptable

performance and long term survival of an organisation .

The Human Resourcing task would thus comprise of

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acquiring , selecting , supplying , shaping and sometimes dispensing with human

resources in order to enable an organisation to survive and succeed in the long term.

Marchington and Wilkinson, having said that HR Planning is a mere expansion of

Human Resource planning, have however demarcated between soft and hard HumanResource Planning. The table below gives a summary of their views:

HARD HUMAN RESOURCE

PLANNING

SOFT HUMAN RESOURCE

PLANNING

Direct control of employees- regarded as

factors which should be managed tightly.

Indirect control of employees- they should

be increasingly involved in how tasks

should be carried out.

Akin to manpower planning : Meeting the

demand of labour by identifying

appropriate supplies of same in the market.

Widened focus, shaping the culture of the

organisation, fostering a clear integration

between corporate goals and employeevalues, beliefs and behaviours.

Undertaken by personnel specialist in

consultation with line management

Involves HR specialists and line managers

and also sometimes other employees

Related to HR strategies, aiming at

improving utilisation of human resources.

Getting employees accept that theirinterests coincide with those of the

organisation.

Emphasises strategies and plans by gaining

commitment through communication of

company mission, vision, values, plans etc

Need for Human Resource Planning

Human Resource Planning is deemed necessary for all organisations for one or

the other of the following reasons:

To carry on its work, each organisation needs personnel with the

necessary qualifications, skills, knowledge, work experience and aptitude for work. Theseare provided through effective manpower planning.

Since a large number of persons have to be replaced who have grown old,or who retire, die or become incapacitated because of physical or mental ailments, there

is a constant need for replacing such personnel. Otherwise, the work would suffer.

It is also essential because frequent labour turnover which is unavoidable

and even beneficial because it arises from factors which are socially and economically

sound such as voluntary quits, discharges, marriage , promotions; or factors such as

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seasonal and cyclical fluctuation sin business which cause a constant ebb and flow in the

work force in many organisations.

In order to meet the needs of expansion programmes (which become

necessary because of increase in the demand for goods and services by a growing

population , a rising standard of living, which calls for larger quantities of the samegoods and services as also for new goods; the competitive position of a firm which brings

it more business arising from improvements effected in the slump period ; and the rate of

growth of the organisation , human resource planning is unavoidable.

The nature of the present work force in relation to its changing needs also

necessitates the recruitment of new labour. To meet the challenge of a new and changingtechnology and new techniques of production , existing employees need to be trained or

new blood injected in an organisation .

Manpower planning is also needed in order to identify areas of surplus

personnel or areas in which there is a shortage of personnel. If there is a surplus, it can beredeployed, and if there is a shortage, it may be adjusted.

The major objective of human resource planning thus, is to maintain and improve the

organisations ability to achieve its goal by developing strategies that will result inoptimum contribution of human resources.

According to Wickstrom , human resource planning consists of a series ofactivities . These are:

Forecasting future man power requirements either in terms ofmathematical projections or trends in the economic environment and development inindustry, or in terms of judgemental estimates based upon the future plans of a company.

Making an inventory of present manpower resources and assessing theextent to which these resources are employed optimally;

Anticipating manpower problems by projecting present resources intothe future and comparing then with the forecast of requirements to determine their

adequacy, both quantitatively and qualitatively.

Planning the necessary programmes or requirement, selection, trainingand development, utilisation, transfer, promotion, motivation and compensation to ensure

that future manpower requirements are properly met.

Thus it can be noted that manpower planning consists in projecting future

manpower requirements and developing man power plans for the implementation of theprojections. This planning cannot be rigid or static; it is amenable to modification, review

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and adjustments in accordance with the needs of an organisation or the changing

circumstances.

Human resource planning is a doubled edged weapon. If used properly, it leads to

the maximum utilisation of human resources, reduces excessive labour turnover and high

absenteeism; improves productivity and aids in achieving the objectives of anorganisation. If badly used, it leads to disruption in the flow of work, lower production,

less job satisfaction, high cost of production and constant headaches for the management

personnel. Therefore for the success of an enterprise, human resource planning is a veryimportant function, which can be neglected at its own peril. It is as necessary as planning

for production, marketing or capital investment.

Process of Human Resource Planning

The process of human resource planning is one of the most crucial , complex andcontinuing managerial functions which embraces organization development ,

management development , career planning and succession planning .The process hasgained importance with the increase in the size of business enterprises, complex

production technology, and the adoption of professional management techniques. It may

be rightly regarded as a multi step process, including various issues, such as:

DECIDING GOALS OR OBJECTIVES

Human resource planning fulfils individual, organizational, and national goals;

but according to Sikula , the ultimate mission or purpose is to relate future human

resources to future enterprise needs so as to maximize the future return on investment inhuman resources. In fact, the main purpose is one of matching or fitting employee

abilities to enterprise requirements, with an emphasis on future instead of present

arrangements.Objectives may be laid down for both short term and/ or long term basis. For

example short term objective may be to hire 25 persons for training. Long term objective

may be to start a new industry, expand market, develop a new product.

ESTIMATING FUTURE ORGANISATIONAL STRUCTURE AND MANPOWER

REQUIREMENTS

Management must estimate the structure of the organization at a given point intime. For this estimate, the number and type of employees needed need to be determined.

Many environmental factors affect same. They include business forecast, expansion and

growth, design and structural changes, management philosophy, government policy , and

competition.

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Forecasting provides the basic premises on which manpower planning is built.

Forecasting is important for a number of factors such as : coping with business

eventualities ( e.g inflation, wages, prices, costs etc) , expansion and growth of bothbusiness and markets, changing management philosophies as well as technology etc.

Once that the future organisational structures have been established, the next stepis to draw up the requirements of human resources, both for the existing departments

and / or new vacancies. For this purpose a forecast of labour force is needed. Such

information should be gathered from different departments with respect to functionalcategory, amount needed, hierarchy needed etc. In turn, the personnel department will

help in establishing different required criterias for the structure with respect to

qualification, experience etc.

In determining the requirements of human resources , the expected losses which

are likely to occur through labour turnover due to retirements, dismissals, transfers,

promotion etc should be taken into consideration.

It should be noted that for the purpose of man power planning, the main

dimensions to take into consideration are all employee details i.e. age , experience ,qualifications, salary details and also job details i.e. job descriptions, number of jobs in

each department etc.

AUDITING HUMAN RESOURCES

Once the human resource needs are estimated, the next step is to determine thepresent supply of manpower resources. This is known as skills inventory. A skill

inventory form contains details about each employees abilities, work preferences and

other information which indicate his overall value to the company.Once the present manpower resources are established, the human resource departmentcan estimate what changes are expected to occur in the present labour force in the next

few years.

PLANNINGJOB REQUIREMENTS AND JOB DESCRIPTIONS

After having decided how many persons would be needed , it is necessary toprepare a job analysis, which records details of training , skills, qualifications, abilities,

experience and responsibilities, etc, which are needed for a job. Job analysis includes the

preparation of job descriptions and job specifications.

DEVELOPING HUMAN RESOURCE PLAN

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This step refers to the development and implementation of the human resource

plan, which consists in finding out the sources of labour supply with a view to making an

effective use of these sources. The first thing, therefore is to decide on the policy shouldthe personnel be hired from within through promotional channels or should it be obtained

from an outside source. The best policy which is followed by most organizations is to fill

up vacancies by promotion and lower level promotions by recruitment from the labourmarket.

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