CHAPTER 2 Human Resource Planning (HRP )

HUMAN RESOUCRE PLANNING ( HRP)-IS the process of systematically revirewing human resource
requirements to ensure that the number of employees match nequired skills. It is the proces of matching the
internal and can supplies of People with job openings anticipated ove a specicif period of time . Some
organizations continue to provide lip service to these important functions Nevertheless, presently HRP is
increasingly being recognized component of Human Resource Management

What is Strategic Planning?

Strategic Panning is the determination of the overall organizational purpose and goals and how they are to be
achieved Human resource is the integral component of a strategic plan, which greatly affects productivity and
organization performance After the strategic plans have been formulated, human resources is to be
undertaken. Along these lines, strategies are reduced to specific quantitative and qualitative human resource
plans. The HRD shall determine the total manpower component to execute the planned strategic activities.

The Important Components of the Human Resource Planning

1. Requirement
Forecasting human requirements involves determining the number and types of employees needed. The level
of skills has to be determined and matched with the plan operations. The analysis will reflect various factors
such as production plans and changes in productivity together with the introduction of new technology if
there is any. The HRD, in order to forecast availability must look to both internal and external sources. Internal
sources refer to existing manpower that could be re-assigned to new positions or be promoted to higher
vacant positions. External sources refer to positions that are not available inside the organization and need to
be sourced out

2 Availability
When employee requirements have been analyzed, the firm determines whether there is a surplus or
shortage of manpower. If there is a surplus, ways must be instituted to reduce the number of employees.
Some of these methods include restricted hiring reduced work hours, early retirement of old employees and
the worst is to layoff some employees. If the manpower forecast reveals shortage, the HRD must obtain the
proper quantity and quality of workers outside the organization after exhausting efforts to find from within.
Human reso planning must be continuous, as changing condition could affect the entire reanization thereby
requiring extensive modifications of forecasts.

Aspects of Human Resource Planning

1. Systematie Forecasting of Manpower Needs - On the basis of business conditions and forecasts, manpower
needs are planned and monitored closely.
2. Performance Management- Analyzing, improving and monitoring the performance of each employee and
of the organization as a whole.
3 Career Management- Determining, planning and monitoring the career aspiration each individual in the
organization and developing them for improved productivity
4. Management Development - Assessing and determining the developmental needs managers for future
succession requirements.

Advantages in using the Elements of HR Planning

1. Through a systematic planning of human resources, a company can be better assisted in attaining its goals
and objectives
2. It helps the company determine its manpower needs and provides a method of meeting them.
3. It can be an effective means of planning the development and growth of the employees
4. It can assist in placing the employees properly in jobs where they can maximize the use of their skills and
potentials
5. It can assist the company to attract and retain better qualified employees

Five Steps to Human Resource Planning

1. Determining the workload inputs based on the corporate goals and objectives
Once the company's objectives are known, the operating executives can determine what they are responsible
for in the common endeavor of attaining the corporate goals. The kind and magnitude of workload determine
the organizational structure, the number and quality (skills) of employees needed to man the organization or
department under a desirable level of performance. Several factors that should be considered in determining
work inputs:
1 a. Business Development and Assumptions
b. Corporate planning
c.Economic Forecasts
d. Changes in Mans and Products
e New Product Lines
f. Mergers and Consolidations

2. Studying the jobs in the company and writing specifications

3. Forecasting of manpower needs
a. Determination of the number and skills of people required for the
work.
b Forecasting manpower needs comes next after determining the work
input, and is known as the planned and logical method of determinino both quantitatively and qualitatively
the employees needed to man the work inputs to enable the company to attain its goals.

4. Inventory of Manpower
a. An analysis of the present manpower complement of the company
to determine whether it has enough or less or more personnel (both qualitatively and quantitatively) than
required.
b. This fourth step in the planning process is the inventory (audit) of available current manpower. What
happens in this step is the assessment of the skills, career aspirations, strengths and weaknesses of each of the
current employees and their potentials for promotion. Each is matched against the positions forecasted in
step 3. When the current manpower is matched against forecast of needs, positions are filled either by
promotion, transfer or assignment of qualified personnel taking into account the most effective method of
achieving the corporate goals.
The net result of this operation is that you either find:
1. Enough manpower
2. . Excess in the number of available manpower, but lacking the skills
required
3. cThe number of available manpower is insufficient, and the skills are also inadequate to meet the
needs of the work inputs.

5. Improvement Plans
Determination of the appropriate steps to implement the HRP in order to insure that the company has the
right number and right quality of people, properly assigned to jobs for which they are most useful. This
includes action plans to improve the capabilities of current personne thru training and development. This plan
can be part and parcel of the total development program which covers career planning management
development programs, succession programs, ete.

Planning Techniques in HR Management

1. Skills Inventory
This approach involves the listing of all the skills possessed by the workforce and they are made to relate to
the requirements of the organization This technique requires detailed information of the experience and
training of every individual in the organization.

2. Ratio Analysis
This is a technique wherein the personnel who are promotable to the higher positions are identified together
with their backup or understudy There should be a ratio that will ensure that promotions will not create any
void. To accomplish this, recruitment must support the backup requirements At the same time, training must
be done to develop the backup ratio.

3. Cascade Approach
Under this approach the setting of objectives flows from the top to bottom in the organization so that
everyone gets a chance to make his contribution This approach results in the formulation of a plan wherein
the objectives of the rank and file get included in the blueprint for action. The plan is then a participatory
planning outputs
.4. Replacement Approach
Under this approach, HRP is done to have a body of manpower in the Organization that is ready to take over
existing jobs on a one-to-one basis within the organization. This approach calls for year-round acceptance of
applications for possible replacements.

5. Commitment Planning Approach

This technique involves the supervisors and personnel in every component of the organization on the
identification of manpower needs in terms, skills, replacements, policy, working conditions and promotion so
that human resource in the organization may be up to the challenge of current and future operations. The
units thus become conscious of their needs and aware of the ways the human resource requirements can be
met.

6. Successor Planning Approach

The approach known as successor planning takes into consideration the different components of the old plan
and increase them. Proportionately by the destred expansion rate stated by management as to the total
manpower needs The cost of doing the activities is likewise increased. Any ng scale and viewed in proportion
with other comparable aspects of the personnel staff to get by withou existing plan. This approach also
enables the person turn does not expect much having to a much from m oment which in from the HR staff in
terms of radical change.

Common Weaknesses in Human Resource Planning

1. Over-l'lanning
A plan is likely to fail through an inherent weakness of having covered to many aspects of personnel
management at the very early stage of HRP in the firm or government office.

2. Technique Overload.
The use of so many techniques sometimes leads to the gathering of so much information. Then the techniques
do not get to be applied effectively. This makes the techniques serve as a trap rather than a means for action.

3. Bias for the Quantitative.

There are planners in HRP who sometimes make the mistake of being drawn towards emphasizing the
quantitative aspects of personnel management to the neglect of the qualitative side.

4. Isolation of the Planners.

When top management has a low regard for human resource activities and for the HR staff, they give little
encouragement to HRP activities, ignore the plan and withdrawn support for plan implementation

5. Isolation from Organizational Objectives .

When HRP is pursued for its own sake or for narrow viewpoint of concentrating on HRD, the effort leads to the
formulation of a plan that does not interphase with organizational development.

6. Lack of Line Supervisors' Inputs.

Any plan to develop the personnel and to improve the conditions of work! must use the feedbacks from the
line supervisors, since they are the ones who are handling the personnel in the organization.

Four Basic Terms of Manpower Forecasting

1. Long Term Trend - Long term forecasting is usually done for a period of five years or more depending on the
company operations and customer demands.
2. Cyclical Varial Cuclical Variations - This refers to reasonable and predictable movement that ir over a period
of one year or more. This cyclical movement may be due occur over a period of one year to economic
conditions political instability, peace and order, loss in customer demands and societal pressures. These
variations typically last for one to fiveyears.
3. Seasonal Variations - This is a reasonable prediction change over a period of one year. This covers firms
who manufacture seasonal products and hire temporary workers for temporary increase in demand, like
Christmas and other special occasions.
4. Random Variations - This is one occasion where there is no special pattern and it is quite difficult to predict
or determine. The HR practitioner must be careful in his manpower forecast especially in the hiring of
employees. Along this line, temporary workers are hired instead of regular workforce

Human Resource Forecasting Techniques

1. The Zero-Base Forecasting Approach-It uses the organizations current level of employment as the
starting point for determining future staffing needs. The usual references point is the organizational structure
pattern based on company production forecast on market and customer demands.

2. The Bottom -Up Approach - This forecast uses the progression upward methods from the lower
organization units to ultimately provide the aggregate forecast of employment needs. The starting point is the
number of current employees and the progress in operation requirements as the company improves its
operation to meet increasing customer demand.

3. Use of Predictor Variables - This methods uses the past employment levels to predict future
requirements, Predictor variables are known factors that have an impact on employment Sales volume
determines employment levels. As production increases, demand for manpower increases. It uses regression
analyses to predict one item, which is known as the independent variable (current employment level) through
the other item (sales volume) that is dependent variables.

4. Simulation - It is a technique for the testing of alternatives on mathematical models representing the real
world situation. The purpose of this model is to permit the human resource manager to gain considerable
insights into a particular problem before making actual decisions.

The Important Elements in Strategic Human Resource Planning

1. Organizational Goals - The human resource planning process should be tied up with the organizational
strategic goals. It must rest on solid foundation of information about sales forecasts, market trends,
technological advances, and major changes in processes and productivity. Considerable effort should be
devoted to securing reliable data on business trends and needs in terms of quantity and quality of labor as the
basic input for human resource planning
2. Human Resource Forecast - The second element in the planning process is the forecasting of human
resource needs based on business strategies, production plans and the various indicators of change in
technology and the organization operating methods. Forecasting is usually accomplished by utilizing histor
data and reliable ratios. This includes indirect and direct labor and adjus the same with productivity trends.
The result of this forecast is Sheet of employees in terms of number, mix, cost, new skills and job and numbers
and levels of managers needed to accomplish the Strategic goals. Experience has shown that producing this
ton challenging part in the planning process becau Participative approaches in dealing with business and
technical un several years in the future.
3. Employee Information-The third element in the planning P maintaining accurate information concerning
the composition, and capabilities of the current workto classification, age, gender, status, organiza all of this
forecast is the spread new skills and job categories to accomplish the organizations Planning process because
it requires creative and highly it producing this forecast is the most capabilities of the current workfore
concerning the composition, assignments This information includes job, age, gender, status, organizational
level. rate of pay and functions. Employee information may also include the employee's resume, with such as
skills, education, training career interest and other important personal data that could be used in the
movement or transfer of the employee
4. Human Resource Availability Projections - The fourth element of the human resource planning process is
estimating the number of current employees and those that could be available in the future. By projecting the
past data about the size, organization and composition of the workforce and about turnover, aging, and hiring
availability at a specific future data can be estimated. The result could paint the picture of the organization's
current human resources and how they can be expected to evolve over time in terms of turnover retirement,
obsolescence, promotions and other relevant characteristics.
5. Analyzing and Evaluating Human Resource Gaps -The fifth element in the human resource planning process
is comparing what is needed with what is available in terms of numbers, mix, skills and technologies. The
comparison permits the human resource manager to determine Raps and evaluate where the most serious
mismatches likely appear.
This type of analysis should help management address issues such as:
a. Are there imbalances developing between projected human resources needs and availability?
b. What is the effect of current productivity trends and pay rates on the workforce levels and costs?
c. Do turnover problems exist in certain jobs or age levels?
d. Are there problems of career blockage and obsolescence?

Strategy Evaluation and Control

The final component to the strategic management process is that of strategy evaluation and control. It is
extremely important for the company to constantly monitor the effectiveness of both the strategy and the
implementation process. The monitoringmakes it possible for the company to identify problem areas and
either revise existing structures or strategies or revise new ones In this process, we see emergent strategies
appear as well as the critical nature of human resources in competitive advantage

Human Resource Role in Providing Competitive Advantage

Human resource practices are developed to implement strategies that will make the organization more
effective and will answer the companys competitive advantage HR can provide strategic competitive
advantage in two ways:
1. Emergent Strategies - consist of strategies that evolve from the grassroots of the organization and can be
thought of as what the organizations actually do. Most emergent strategies are identified with the people in
lower level of the management hierarchy. It is usually the lower level rank and file employees who provide
ideas for new markets, new products and new strategies being at the front line of operations. HRM should
make sure that the information is systematically arranged and should contain the data needed.
2. Intended Strategies - are the results of the rational decision-making by the top management as they
develop strategic plans. It is a pattern of plans that integrates an organization's major goals, policies and action
sequences in a cohesive whole. The new focus on strategic HRM role is directed primarily on intended
strategies. The task is to formulate business related issues relevant to strategy formulation and then
development of HR systems that can aid in the implementation of the strategic plan:

Human Resource Information System (HRIS)

HRIS is any organized approach to obtaining relevant and timely information on which to base human
resource decisions. An effective HRIS is crucial to sound human resource decision-making. It is designed to
provide information that is-SMART.

1. Systematic - Information must be systematically arranged and contain the needed data
2. Management-Oriented - The and information are essential tools for effect manpower planning, retention
development, and separation of employ
3. Applicable - The data and information stored in file must be in making human resource decisions Irrelevant
data must be disc Information must be updated from time to time to be relevant manpower needs
requirements. A manager must be able to rely on the des of the information provided
4.Result-oriented- the results from the information and the decisions derived must be both acceptable. The
end results must contribute to greater company productivity and employees satisfaction.
5. Time Bound -Relevant human resource information are necessary for effective aston-making. The need for
timely decisions are crucial to the checave management of human resources
The absence of these characteristics reduces the effectiveness of HRIS and complicates the decision making
proces Conversely, a system processing characteristies enhances the case and accuracy of the decision-making
process. An effective HRIS also produces and forecasts several important reports related to business
operations
1. Routige Reports - These are human resource data summarized on scheduled
Bases like currect manpower status, regular employees. contractual employees supervisors and managerial
employees on a regular payroll.
2. Exception Reports - This information may contain confidential data that are v e only for managerial
decision-making and needs immediate attention. This may pertain to violations of existing company rules and
procedures policies and management programs.
3. On Demand Reports - Management may demand some reports for analysis. This may pertain to
productivity index, individual performance records, and other information that may lead to downsizing, and
other personnel actions.
4. Manpower Forecast-applies to predictive models based on specific situations. This may cover increase or
decrease in manpower requirements due to seasonal demand or increase customer orders. Human resource
managers must be able to provide timely information and ready manpower to answer the need of the
company operations.

Software Application for HRM

The advent of the different HRM Software application has made the human resource managers functions for
decision-making just a click on the computer programs. The major human resource functions are:

1. Staffing Applications - Common applications used in the area of staffing include the following:
a. Applicant recruiting and tracking
b. DOLE reporting requirements
c. Developing a master employee data base
d. Staffing applications for decision-making

2. Human Resource Planning Applications - This involves company specific applications in determining
future employee turnover, growth rate and promotion patterns and other personnel movements. This
includes the following applications:
a. Work-Force Profile Analysis - It refers to work-force labor supply and demand analysis or work-force profile
analysis review.
b. Work-Force Dynamic Analysis -Number of new hires, transfer and promotions, Number still needed in the
future and those employees who are available to fill up job openings in the future.
c. Human Resource Planning for Decision-Making - This application pertains to information about employees
who are about classification of employees for promotions and those departments that lack basic skills for the
job.
d. Performance Management Applications -employee performance ratings disciplinary actions, work-rule
violations and the daily productivity index could now be stored in the computer database as bases for
management decisions.
e. Training and Development Applications - These are used primarily to track down the need for employees
training programs, courses to attend, certified skills and educational qualifications. Career applications assess
the employees' career interests, work values and career goals.
f. Compensation and Benefits Applications. These includes payroll job evaluation, salary planning and
analysis of executive compensation planning and management benefits.
Other Software Applications in HR
1. Use of Job boards and other similar recruitment web-based application – to provide accessibility to
applicants for the job usually communicate job vacancies and applicant processing.

2. Employee kiosks - provide updates in employee status and other pertinent inform ation initiated and
made by the employee themselves via these kiosks.

3. E-learning – facilitate the learning process by providing a just-in-time learning opportunities.

4. Electronic Performance Support Systems (EPSS) - will provide on-line coaching and mentoring services.
5. Salary and Payroll Administration - This is now a link to performance management systems, time and
attendance, and other employee benefits to the pay systems.

6. Telecommuting/Teleworking- Moving the work to the workers inste the workers to work.

7. Internet - an excellent source for finding may types of information related to HRM and for keeping up with
the new developments in the field.
a) Global Hiring On-line
b) Training without a Trainor
c) Policy Making
d) Taking Control of the Grapevine Types of Internet Resources

Two broad functional categories:

a) Conversational Resources - allow users to have conversations with individuals anywhere in the
world.
b) Reference Resources - this include the world wide web and gopher. Hypertext mark-up language, lo
transfer text, sound, graphics and video.

8. e-Enterprise Human Resources - provides a comprehensive solution for managing applicant and
employee information, paying employees, and tracking payroll infor mation that is easy to implement and to
use as it is powerful.

9. Intranets - a private computer network that uses Internet products and technologies to provide
multimedia applications within organizations. It serves as an "information hub" for the entire organization.

10. Client/Server Networks – This central computer called the server, may be any thing from a large
mainframe to a powerful PC. The clients are desktop PCs used by individuals to enter or extract data or to do
analyses. It allows a user to enter a request and receive only the specific data needed.