GURU GHASIDAS VISHWAVIDYALAYA (A CENTRAL UNIVERSITY ESTABLISHED IN 2009) BILASPUR (C.G.

) 495009

DEPARTMENT OF MANAGEMENT STUDIES MASTER OF BUSINESS ADMINISTRATION PROGRAMME (MBA) SESSION: 2012-13 M.B.A. IV Semester SUBJECT: HUMAN RESOURCE PLANNING AND DEVELOPMENT PRESENTATION TOPIC: HUMAN RESOURCE PLANNING IN GENERAL
Submitted To: Submitted By:
DR. HARISH KUMAR
JAYA KUMARI (PROFFESSOR) AALIA AKRAM

TABLE OF CONTENTS
SERIAL NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Conclusion Bibliography CONTENT PAGE NO.

HUMAN RESOURCE PLANNING

INTRODUCTION The employment function of the Personnel or Human Resource Manager is concerned with the task of hiring people to fill current or future job vacancies in the organization. For making the hiring practices most effective, answers must be sought to the following questions: 1. What are the requirements of the jobs to be filled? 2. What kinds of and how much manpower must be hired? 3. What sources of recruitment may be utilised for procurement? 4. What procedures should be adopted to screen the candidates for employment? 5. What is the utility of employment test and interviews in the selection process? 6. What is the place of transfers and promotions in employment and placement? Human Resource Planning (HRP) seeks to place the right employees in the right jobs at the right time and at the lowest possible cost, thereby providing the means for the organization to pursue its competitive strategy and fulfill its mission.

MEANING
According to Decenzo and Robbins, "Human resource planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives. Human resource Planning aims at ascertaining the manpower needs of the organization. Dale S. Beach quoted, "Human resource planning is the process of determining and ensuring that the organization 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. Human resource planning is a continuous

process. It cannot be rigid or static; it is open to to modifications, review and adjustments in accordance with the needs of the organization or the changing, circumstances. In the words of Coleman, "Manpower planning is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization". HRP is a two-phased process by which management can project the future manpower requirements and develop suitable action plans to accommodate the implications of projections. Thus, human resource planning is the process of developing and determining objectives, policies and programmers that will procure, develop and utilize human resources so as to achieve the goals of the organization. HRP improves the organizations ability to create and sustain competitive advantage and to cope with problems, threats, and opportunities arising from change-technological, social, political and environmental.
NATURE OF HUMAN RESOURCE PLANNING i)Human resource planning aims at ascertaining the manpower needs of the organization both in number and kind. ii)It presents an inventory of existing manpower of the organization. An analysis of the inventory of manpower helps in ascertaining the status of the available personnel and to discover untapped talent presently available with the organization. iii)It helps in determining the shortfall (or surplus) of manpower by comparing the total manpower needs with the present supply of manpower. It also helps in projecting future manpower needs. iv)It is concerned with the initiation of various organization programmes depending upon the demand and supply of human resources. If the future needs exceed presently available talent, gap becomes the basis for a programme of employment and training. And, if presently available talent exceeds the future needs, this difference may become the basis for a programme of retirements, discharge, etc. v)Effective human resource planning encompasses the

acquisition, utilization, improvement, and preservation of the organizations human resources.

FACTORS AFFECTING HUMAN RESOURCE PLANS

Human resource management helps to maintain sufficient staff levels for current productivity and projected company growth. A human resources department often makes decisions based on the projected financial return of hiring a candidate. But there are other factors affecting human resource plans that should also be taken into consideration. Labor Force It costs money in relocation fees to bring in qualified employees from out of a company's immediate geographic location. Even transferring employees from other corporate offices can be expensive. The preference for a human resources planner is to reduce costs by hiring candidates from the immediate geographic area. But when the talent pool in the local labor force does not match the needs of the company, that can cause human resources plans to change. Company Budgets The human resources department needs to work within the budgets of the various departments it is hiring for, and that can limit the kind of employees that can be hired. Bad Planning The human resources department works with the managers of all of the other departments to create staffing plans that will sustain the company and allow for future growth. But when staffing projections are not accurate, the plans of the human resources department are affected. Bad planning by departmental managers, such as not projecting how many qualified engineers the production department will need in the coming year, can cause the human resources department to have to scramble to meet the company's needs.

Competition Competition in the human resources field is different than almost any other department in the company. When it comes to finding

the right talent, your company is competing with every other company in the area. If you need logistics people, then you are competing with any other company in the area with a warehouse, regardless of what the company sells.

OBJECTIVES OF HUMAN RESOURCE PLANNING

The major objectives of human resource planning in an organization are as follows: i.To ensure optimum use of human resources currently employed. ii.To avoid imbalances in the distribution and allocation of human resources. iii.To assess or forecast future skill requirements for the accomplishment of the organizations overall objectives. iv.To provide control measure to ensure availability of necessary resources when required. v.To control the cost aspect of human resources vi.To formulate transfer and promotion policies

SCOPE OR PLANNING

ELEMENTS

OF

HUMAN

RESOURCE

The basic activities involved in human resource planning are as under: i.Listing of current manpower or human resources with the organization. ii.Assessing the extent to which the current manpower is utilized to the advantage of the organization. iii.Phasing out the surplus manpower, if any. iv.Analyzing the requirements of manpower in future in the light of expansion plans, retirement of personnel, etc. v.Making manpower procurement plans. vi.Designing training programmes for different categories of manpower. IMPORTANCE OF HUMAN RESOURCE PLANNING HRP systematically attempts to forecast personnel demand, assess supply, and reconcile the two. HRP is a two-phased process by which management can project future manpower

requirements and develop manpower plans. It helps in proper recruitment and selection so that right type of people are available to occupy various positions in the organization. It also facilitates designing of training programmes for the employees to develop the required skills in them. Thus, manpower planning plays an important role in the effective management of personnel. Systematic HRP provides lead time for the acquisition and training of employees to meet future requirements. It is all the more crucial because the lead time for procuring personnel is a time consuming process and in certain cases, one may not always get the requisite type of personnel needed for the jobs. Nonavailability of suitable manpower may result in delays in executing new projects, which ultimately lead to lower efficiency and productivity. To overcome this, an organization must plan out its manpower requirements well in advance so that it could compete effectively with its competitors in the market. Benefits of Manpower Planning
i.

ii.

iii.

iv. v.

vi.

HRP results in reduced labor costs as it helps the management to anticipate shortages and/or surpluses of manpower and correct these imbalances before they become unmanageable and expensive. It is a better basis for planning employee development that is designed to make optimum use of workers skills within the organization. It enables identification of the gaps of the existing manpower so that corrective training could be imparted. Thus, the training programme becomes more effective. Leads to improvement in the overall business planning process. It helps in formulating managerial succession plan as a part of the replacement planning process which is necessitated when job-change plans for managers are formulated. Besides, this exercise would provide enough lead time for identifying and developing managers to move up the corporate ladder. It leads to a greater awareness of the importance of sound manpower management throughout the organisation.

Appraisal of HRP Employment Program Objectives of HRP Training and Program Inventory of Development HR Skills (finding gap) Demand and Supply Forecasting Determine Net HR requirements Redeployment and Redundancy Plan

Fig: HRP Process

vii.

It serves as a tool to evaluate the effect of alternative manpower actions and policies.

THE PROCESS OF HUMAN RESOURCE PLANNING

HRP is a continuous process. The manager responsible for manpower planning has to be concerned with all the steps at all time.

1.Objectives of HRP: The ultimate purpose of HRP is to relate future human resources to future needs to maximize the future return on investment in human resources. HRP must be integrated with the overall organizational plans. HRP should be done carefully as it has got long-term repercussions. The wrong forecast of future requirement and analysis of the available manpower inventory, rectification may not be possible in the short-run. Therefore, manpower planning should be more concerned with filling future vacancies with right type of people. 2.Current Manpower Inventory: Analysis of current manpower supply may be undertaken by department, by function, by occupation, or by level of skill or qualifications. The assessment of demand for the operative personnel presents less problems of uncertainty and current manpower supply can be adjusted accordingly. But projections of manpower requirements for supervisory and managerial levels presents a complex problem because the required talents are not available at a short notice. Therefore, this ascertains the need for the present manpower inventory. This will also help in drawing recruitment and development plans to meet the needs of certain skills in the future.

Systematic steps must be taken in order to ensure that a reservoir of talent is available when vacancies occur. To be sure that available talent has been included, the inventory of various skills in the enterprise should be indexed. Detailed bio-data of each individual included in the manpower inventory must be obtained separately for the purpose of HRP. This record will reveal the scarcity or non-availability of certain talents for which outside sources of manpower may be tapped.
3.Demand and supply forecasting

Demand Forecasting: A proper forecast of manpower required in the future must be attempted. The factors relevant for forecasting are: i.
Employment Trends. The HRP committee at the corporate level should make an examination of number of the employees on the payroll during the past years to know the trend within each group. With the help of this, it would be possible to determine

stability of group and whether it has been expanding or contracting.

ii.

Replacement Needs. The need for replacement arises due to death, retirement, resignation and termination of employees. The examination of replacement needs may relate to specific manpower groups. For some groups like managerial or supervisory, it is very difficult to predict the needs. One of the major difficulties involved is that the management development cycle takes a long time. So the needs for managerial manpower should be anticipated sufficiently in advance. Forecasts of manpower may be based to a great extent on the analysis of historical data. These data must be adjusted in the light of other known information about the future. Certain losses include losses from retirement, physical disabilities and cases of substandard performance. This estimate may also be based upon past experience. An examination of the number of deaths, discharges, releases and quits during the last years may provide a basis for projecting the need for replacement in the future because of these reasons. Another important factor is transfer. This number can be estimated on the basis of a review of the persons promoted or transferred and the records of performance of various employees during the past years.

iii.

Productivity. An important area to which the manpower planning is related is the improvement in productivity. Gains in productivity add to the growth potential and can make possible healthy wage increase. Gains in productivity will also influence the requirements of manpower.

Planning for productivity gains has several aspects. The first and the important one relates to affecting gains by improvements in existing manpower utilization. Current levels of utilization and indications about the needed improvement can be obtained by the

application of various analytical techniques such as activity charts, flow charts, multiple activity charts, activity sampling studies and so on. And, similar approaches aimed at upgrading management performance help secure productivity gains at the managerial level. The second aspect relates to installation of more productive tools, equipments or processes. The HRP experts should attempt to learn about changes with sufficient time to appraise their possible impact on the number and kinds of employees required in the future. The last aspect relates to the matching of skills with the requirements of the jobs. Job analysis techniques facilitate a clear specification of the skills and experience requirements of jobs. The immediate products of this analysis are job description and job specification which have been discussed in a subsequent chapter.
Growth and Expansion. The growth and expansion plans of various plants and divisions should be carefully reviewed to assess their probable effects on the number of employees required. Where the expansion programme is less specific and the time perspective is larger, uncertainties will also be greater. In this world of competition, every organization has its plans ahead of its activities and aims at a better growth rate and diversification of its activities and a better image. All these aims and aspirations result in expansion and growth creating numerous positions. These aims and aspirations can be fulfilled if there is sufficient number of capable persons to handle various positions. v. Work Study. Work study technique can be used when it is possible to apply work measurement to know how long operations should take and the number of labor required. This is also known as 'Workload analysis'. 'On the basis of the work-load of each plant during the forthcoming years, workforce analysis is done. Supply Forecasting: Along with demand forecasting, it is

iv.

important to forecast the supply of different types of personnel. There are two sources of supply of manpower - internal and external. Internal supply comprises of the employees working in the organization who can be promoted or transferred to fill up various jobs when they fall vacant. This would require evaluation of the present personnel abilities, their strengths and weaknesses, so as to gauge their suitability for different jobs. External supply consists of those individuals in the labor force who are potential recruits of the firm. The skill levels being sought determine the relevant labor market. Determining the labor market will also determine the type of recruiting approach must be used. Tools for demand and supply forecasting Demand Forecasting It is the process of estimating the requirement of different kinds of personnel in future. There are three basic techniques of demand forecasting: 1. Managerial judgment 2. Work study techniques 3. Statistical techniques 1. Managerial Judgment The most typical method of forecasting used in smaller companies, or those who do not have access to work study data, is managerial judgment. This requires managers to think about their future workloads and decide how many people they need. It might be done on a 'bottom-up' basis with line managers submitting proposals for approval by the top management. Alternatively, a 'top-down' approach can be used in which company and departmental forecasts are prepared by the top management, possibly acting on advice from the personnel and other departments. These forecasts are reviewed and agreed with the departmental managers. Perhaps the best way of using managerial judgment is to adopt both the 'bottom-up' and 'top-down' approach. 2. Work Study Technique or Workload Forecasting Work study technique can be used when it is possible to apply work measurement to know how long operations should take and

the amount of labor required. This is also known as 'workload analysis'. On the basis of the work-load of each plant during the forthcoming years, workforce analysis is done considering the rates of absenteeism and labor turnover. Work-load Analysis: In work-load analysis, the HRP expert needs to find out sales forecasts, work schedules and thus determine the manpower required per unit of product. The departmental work-loads are converted into man-hours in terms of different skills required. Workloads analysis is used to determine how many employees of various types are required to achieve total production targets. Similarly, plans are made concerning the amount of work that all other departments (marketing department, purchase department, etc.) of the organisation are expected to accomplish during the future. Work-force Analysis Turnover: Absenteeism and other factors operate to reduce the number of workers available. It is necessary to keep a sufficient margin for absenteeism, labor turnover and idle time on the basis of experience. 3. Statistical Techniques: Long range personnel forecasting is more amenable to statistical and mathematical techniques. This has been particularly true in recent years as new mathematical techniques have been developed and high speed computers are used to analyze large amount of personnel planning data. Some of the important statistical tools for forecasting are: a)Ratios and Trend Analysis. The main emphasis is on the ratios which are calculated from the past data relating to number of employees of each category, of production level, sales level, activity level/workload level, and direct employees and indirect employees. Future production level, sales level, activity level/work load are estimated with an allowance for changes in organization, methods and jobs. Future ratios are also estimated when changes are expected in human resources. Then future manpower requirement is calculated on the basis of established ratios.
b)Econometric Models. To build an econometric model for HRP, it is necessary to analyze past statistical data to describe the relationship between numbers of variables in a

mathematical formula. The variables affecting manpower requirement may be identified under heading such as investment, sales or the complexity of the product line. The formula could then be applied to forecasts of movements in these variables to produce a manpower forecast. This is a complex process which is suitable for large organizations.
c)Regression Analysis. This technique is used to estimate the manpower requirements at a future point of time, based upon factors as sales, output, services rendered, etc. Regression analysis is used when dependent and independent variables are functionally related to each other.

d)Bureks-Smith Model. Elmer H. Bureks and Robert D. Smith have developed a mathematical model for personnel forecasting based on selected key variables that affect the organizations overall human resource needs. The basic equation of the model is:

where: En is estimated level of personnel demand in n planning period.

Lagg is the overall turnover or aggregate level of current business activity in rupees. G is the total growth in business activity anticipated through period n in terms of rupees. X is the average productivity improvement anticipated from today through planning period n. Y is conversion figure relating today's overall activity to personnel required (total level of today's business activity by the current number of persons. It reflects the level of business activity per person).

The accuracy of prediction of results by various statistical models are dependent upon the strength of relationships, how accurately these relationships are captured by the model and the degree to which the relationships remain true in the future.
Supply Forecasting

Supply forecasting is concerned with the estimate of supply of manpower. The personnel planner must consider both the external supply and the internal supply. External supply of personnel is important for two reasons. First, the normal separation of employees through voluntary turnover, retirement illness, death and discharge may require that the organization look for employees to replenish lost personnel. Second, organizational growth and diversification require the use of external sources to obtain additional number and types of employees. The internal supply of personnel is influenced by the following factors: (a) existing manpower resources; (b) potential losses to existing resources through labor wastage (c)potential changes to existing resources through internal promotions
(d)effect of changing conditions of work and absenteeism (e)sources of supply from within the firm. The following techniques may be used to anticipate the supply of human resources: i)

Markov Analysis. This method uses historical information on the movement of personnel that takes place during a typical plan period. Data are collected and reviewed for a number of years in order to estimate the likelihood that persons in a particular job will remain in that job or be transferred, promoted, demoted, terminated or retired. These historical flows of personnel (transitions) through the organization are represented by probabilities. The probabilities are arranged in a 'transition matrix' and future personnel-flows are estimated on the basis of the matrix. Simulation: the simulation technique considers alternative flows which are examined for effects on future manpower supplies. Alternative flows reflect the anticipated results of policy or programme

ii)

changes concerning voluntary and turnover, retirement, promotion, etc.

iii)

involuntary

Renewal Analysis: This technique estimates future flows and supplies of manpower by calculating (a) vacancies created, and (b) the j results of decision rules governing the filling of vacancies Goal Programming: It is an operational research technique under which the planner tends to optimize goal. In this case, the goal to optimize is the desired staffing pattern subject to a set of constraints concerning such factors as the upper limits on flows, the percentage of new recruits permitted and total salary budget.

iv)

Sources of Manpower Internal sources of manpower supply will include the output from established training schemes or management development programmes and the inventory of skills and potential that exists within the organization. But the availability of manpower from outside the enterprise is also a vital factor when preparing growth plans. The local factors which can have an important bearing on the supply of manpower are listed below: (i) Population densities within reach of the company. (iii)Current and future competition for labor from other employers. (iv)Local unemployment levels. (v)The traditional pattern of employment, locally, and the availability of people with the required qualifications and skills. (vi)The output from the local educational system and government or other training institutes. (vii)The pattern of immigration and emigration within the area. (viii)The attractiveness of the area as a place to live. (ix)The attractiveness of the company as a place to work in. (x)The availability of part-time labor such as married women. (xi)Local housing, shopping and transport facilities. The macro level factors affecting the supply of human resources

are as under: (i)Trends in the growth of the working population. (ii)National demands for special categories of manpowergraduates, professional staff, technologists, technicians, craftsmen, secretaries. (iii)The output of the universities, polytechnics and professional institutions. (iv)The effect of changing educational patterns-children staying longer at schools, or different emphasis in university or school curricula. (v)The impact of government training schemes. (a)The impact of government employment regulations. 4. Estimating the Net Human Resource Requirements: The human resource planner must compare the demand forecast with the projected internal supply before coming to any conclusion. This should be carried out department and skill-wise to know the deficiencies or surplus of various types of personnel in future. The possibilities of transfer and promotion to higher jobs must also be considered to determine net human resource requirements. 5. Action Plan for Redeployment or Redundancy: The management has to plan for redeployment and redundancy in case of surplus staff position. If surplus is estimated in some jobs/departments, employees can be redeployed where the deficit of employees is estimated. Redundancy plan has to be made if the surplus employees can't be redeployed. It would include the type and number of employees to be retrenched or offered golden handshake under voluntary retirement scheme (VRS), type of help to be extended to retrenched employees in the form of compensation, type of help in getting new jobs outside the organization, priority to the retrenched personnel in filling future vacancies and so on.

Determining Job Requirements of Positions to be Filled: Job analysis is the qualitative aspect of HRP since it determines the demands of a job in terms of responsibilities and duties and then translates these demands in terms of skills, qualities and other attributes. It helps in determining the requirements of jobs and qualifications needed to fill a job. Thus, job analysis is an essential element of effective HRP. Accurate job descriptions help in finding suitable candidates for vacant jobs and developing training programs. 6. Employment Plan: This phase deals with planning how the organization can obtain the required number and right type of personnel. There is a need to prepare programmes of recruitment, selection, transfer and promotion so that personnel needs of various departments of the organization are met timely. 7. Training and Development Program: The preparation of human resource inventory helps in identifying the training and development needs of the organization. Training is necessary not only for the new employees, but also for the existing employees. Executive development programmes have to be devised for the development of managerial personnel. All types of jobs usually require some sort of training for their efficient performance. The talents of the employees are not fully productive without a systematic programme of training and development. Evaluation of Effectiveness of Manpower Planning After the employment and training programmes have been implemented, an appraisal must be made of the effectiveness of manpower planning. Deficiencies in the programme should be pointed out and the catalogue of manpower inventory should be updated periodically. Corrective actions should also be taken wherever necessary to remove the deficiencies in HRP. An appraisal of the existing manpower plans will also serve as a guide in the future. Human resource planning will be said to be effective if it can anticipate the deficiencies of various skills well in time so that steps are initiated for procurement of required human resources. Similarly, if some types of personnel are surplus, they should be adjusted.

HUMAN RESOURCE ANALYSIS

The human resource planners should classify employees by function or department, occupation, level of skill and status. The aim should be to identify resource centers consisting of broadly identical groups for which forecasts of supply need to be made. The analysis of current resources should look at the existing ratios between different categories of staff. Recent movements in these ratios should be studied to provide guidance on trends and to highlight areas where rapid changes may result in manpower supply problems. Labor Wastage Labor wastage should be analyzed in order to forecast future losses and to identify the reasons for people leaving the organization. Plans can then be attached to the problems causing unnecessary wastage and to replace uncontrollable losses. The manpower planner therefore has to know how to measure wastage and analyze its causes. Labor Turnover Index: The traditional formula for measuring wastage is the labor turnover index:
Number of leavers in a specified period (usually 1 year) Average number of employees during the same period

This method is in common use because it is easy to calculate and to understand. This formula can be misleading also. The labor wastage percentage is a suspect if the average number of employees upon which the percentage is based is unrepresentative of recent trends because of considerable increases or decreases during the period in the number employed. Labor Stability Index: Number of employees with one year's service or more X 100 Number of employees one year ago This index provides an indication of the tendency for longer service of employees with the company, and therefore, shows the degree to which there is a continuity of employment. Length of Service Analysis: an analysis is also made of the

average length of service of people who leave. those who leave.

It deals with

Survival Rate: Another method of analyzing labor turnover is survival rate, i.e., the proportion of employees who are engaged within a certain period and who remain with the firm after so many months or years of service. Thus, an analysis of apprentices who have 'finished their time' might show that after two years, ten of the apprentices out of twenty ex-apprentices were still with the company, a survival rate of 50%. Effect of Internal Promotions and Transfers The supply forecast should indicate the number of vacancies that will have to be filled up to meet the demand forecast. Vacancies arise because people leave but the exit of a senior manager any produce a chain reaction of replacements. In a large organization, persistent patterns of promotion or transfer may develop and it may be possible to predict the proportions of employees in particular categories who are likely to be promoted or moved in the future by starting with a forecast of the chain reaction factor. It is also important to determine the impact of factors such as changes in normal weekly hours of work; overtime policies; the length and timing of holidays, retirement policy; the policy for employing part-timers; and shift system.
Succession Planning Succession planning is the process that is used by HR planners to convert information about current employees into decisions about future internal job placements that might be caused by promotions, transfers, resignations, retirements, etc. Owing to the complexities and time-consuming nature of succession plans, succession planning is usually limited to key employees in middle management and top executive positions, and to those employees identified as having long-term potential. By identifying successors to key jobs and high-potential employees, an organization may ensure a steady flow of internal talent to fill important vacancies, whenever required.

Succession planning encourages hiring from within and creating an environment in which employees have careers, not merely jobs, it identifies manpower shortages and skill deficiencies

before vacancies occur. Through special assignments, job rotation and other forms of development techniques, internal candidates may be prepared to accept greater responsibilities of future job openings.

HUMAN RESOURCE ACCOUNTING

Concept of Human Resource Planning Accounting for the human resources deals with the measurement of costs which are associated with recruiting, selecting, training, placing and developing the employees of an organization. This also involves measuring the present economic value of human resources. Human Resources Accounting (HRA) may thus be reckoned as the measurement and reporting of the cost and value of the people as organizational resources. The basic objective underlying HRA is to facilitate the effective and efficient management of human resources as it would provide with the information needed to acquire, develop, allocate, conserve, utilize, evaluate and reward human resources. Besides, HRA also provides feedback of self performance. Human Resource Accounting is intended primarily to be used as a managerial tool. It also has significant use for present and potential investors and other users of corporate financial statements who would be interested to know the value of the firm's human assets. It also provides the organization with a more accurate accounting of its return on the total resources employed.
Benefits of Human Resource Accounting In the field of managerial decision-making, HRA would help in making meaningful choices between various types of investments in human resources and other assets. It would assist the manager particularly with regard to: (b)Direct recruitment vs. promotion. (c)Transfer vs. retention. (d)Retrenchment or relieving vs. retention. (e)Utility of cost reduction programme in view of its possible

impact on human relations.

(f)Impact of budgetary control on human relations and organizational behavior. (g)New dimension added to capital budgeting process which includes human resource investment costs. (h)Consideration of an adequate return on investment in human assets and also a more useful interpretation of return on capital employed. (i)Decision on relocating factories, developing overseas subsidiaries, closing down or streamlining existing units.

DIFFICULTIES IN HUMAN RESOURCE PLANNING

i.Lack of Understanding of Rationale of Planning. There is generally identity crisis and many managers as well as human resource specialists do not fully understand the rationale or purpose of HRP. ii.Insufficient Top Management's Support. In the long-run, human resource planning must have the full support of top management; otherwise it is going to be ineffective. The support from top management is essential to ensure the necessary resources, cooperation and support for the success of human resource planning. iii.Insufficient Initial Effort. Human resource planning might fail because of lack of sufficient initial effort. To be successful, human resource planning should start slowly and expand gradually. Development of accurate skills inventory, and preparation of replacement chart are integral parts of manpower planning. iv.Lack of Coordination with other Functions. To be effective, human resource planning must be coordinated with other management functions. Unfortunately, there is a tendency on the part of manpower planners to become totally absorbed in their own world keeping aloof from the other functional managers. v.Lack of Integration with Organizational Plans. Human resource planning must be based on organizational objectives and plans. This requires development of

good communication channels between organization planners and the human resource planners. In many organizations, such a communication is lacking and the human resource plans are prepared in isolation of the organizational plans. vi.Non-cooperation of Operating Managers. Human resource planning may fail because of non-cooperation between the personnel and other functional managers. Successful human resource planning requires a coordinated effort on the part of human resource planners and the operating managers. vii.Mismatch between applicants and skills In order to ensure effective human resource planning, it is essential to take necessary action to bridge the gap between the present resources and the estimated future needs. Future action should be planned for both short-term and long-term to include: (ii)Better job descriptions and human profiles.
(iii)A hard look at the recruitment and selection policy. (iv)A better scheme for assessing performance and potential of individuals. This need not be a complicated one but should be consistent. (v)An examination of the current training and retraining schemes for all employees. vi)An examination of the conditions of employment which would include pay structure, shift work, working hours, etc.

CONCLUSION
HRP is an important activity of HRM. HRP systematically attempts to forecast personnel demand, assess supply, and reconcile the two. HRP is an on going process where control and evaluation procedures are necessary to guide HRP activities. HRP should be an integral part of competitive strategy. The

most effective approach to staffing, whether adding workers or eliminating them, is to assess staffing needs with a focus on meeting customer requirements and expanding the customer base.

BIBLIOGRAPY Books: Bernardin, H. John. (2007). Human Resource Management: An experimental approach (4th edition). New Delhi: Tata McGraw-Hill Publishing Company Limited. Chabbra, T.N. Human Resourc Management. New Delhi: Danpat Rai Publicaitons.

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