HUMAN RESOURCE PLANNING:

QUANTITATIVE AND QUALITATIVE DIMENSIONS

QUANTITATIVE ASPECT OF HUMAN RESOURCE PLANNING:

● Quantitative aspect focuses on determining the right number of personnel needed for
each job in the organisation.

● It helps in avoiding workforce shortages or surpluses, ensuring optimal utilisation of

resources.

● It involves forecasting the future workforce requirements based on business goals,

expansion plans, and changes in demand.

● The outcome of the quantitative analysis is a workforce plan that outlines the number of
employees needed in various roles and departments.

The quantitative aspect of human resource planning consists of six interrelated areas of activity:

1. DEMAND FORECASTING: estimating future human resource needs by reference to

corporate and functional plans and forecasts of future activity levels.

2. SUPPLY FORECASTING: estimating the supply of human resource by reference to

analysis of current resources and future availability after allowing for wastage.

3. DETERMINING HUMAN RESOURCE REQUIREMENTS: analysing the demand and

supply forecasts to identify future deficits or surpluses.

4. PRODUCTIVITY AND COST ANALYSIS: analysing human resource productivity,

capacity utilisation and costs to identify the need for improvements in productivity or
reductions in cost.

5. ACTION PLANNING: preparing plans to deal with forecast deficits or surpluses of human
resource, to improve utilisation and productivity to reduce human resource costs.

6. HUMAN RESOURCE BUDGETING AND CONTROL: setting human resource budgets

and standards and monitoring the implementation of the human resource plans against them.
Demand forecasts are estimates of future requirements, and these can only be prepared on the
basis of assumptions about the productivity of employees.

DEMAND FORECASTING:
It is the process of estimating the requirements of different kinds of personnel in future. The
basis of human resource forecasts should be the annual budget and long-term corporate plan,
translated into activity levels for each function and department.

There are three basic techniques of demand forecasting:

1. Managerial judgement

2. Work study technique

3. Statistical techniques

MANAGERIAL JUDGEMENT:

It is the most typical method of forecasting used in smaller companies, or those who do not have
access to work study data. It simply requires managers to sit down, 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 work study departments.

WORK STUDY TECHNIQUE

It can be used when it is possible to apply work measurement to know how long operations
should take and the amount of labour required. This is also known as 'workload analysis’. On
the basis of the work-load of each plant during the forthcoming year, workforce analysis is done
considering the rates of absenteeism and labour turnover.

WORK LOAD ANALYSIS

In workload analysis, the human resource planning expert needs to find out sales forecasts,
work schedules and thus determine the human resource required per unit of product. The sales
forecasts are translated into work- performance for the various departments of the enterprise.

Workload analysis is used to determine how many employees of various categories are required
to achieve total production targets. 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 coming year. It is essential to determine the work-load in some tangible
units so that they may be translated into man hours required per unit. Past experience can be
utilised for translating work-loads into man hours required.

For example, let us assume that the annual production budget of a company is 5,00,000 units.
The standard man hours required to complete a unit of the product are 2 hours. Past experience
reveals that a worker on an average can contribute about 2,000 hours per year. The work-load
may be calculated as under:
(a) Annual Production Budget = 5,00,000 units.

(b) Standard Man Hours required per unit = 2 hours.

(c) Planned Man Hours for the year (a x b) = 10,00,000 hours.

(d) Annual contribution of a Worker = 2,000 hours.

(e) No. of Workers required (c/d) = 500.

Thus, 500 workers are needed throughout the year to meet the production target of 5,00,000
units. But this figure cannot be relied upon fully as the actual production is influenced by many
other factors such as availability of inputs and power, breakdown of machinery, strike, lockout,
etc. Nonetheless, workload analysis is quite suitable for short-term projections of human
resource requirements. Long-term projections can be made with the help of workforce analysis.

WORKFORCE ANALYSIS

In the above illustration, we came to the conclusion that 500 workers are required to achieve the
production target of 5,00,000 units in a year. Assuming that all other factors are favourable, this
conclusion is illusory because it is almost certain that all the 500 workers will not be available on
all working days because of the two major problems:
(i) Absenteeism. and (ii) Labour Turnover.

Both these factors operate to reduce the number of workers available. Therefore, it is essential
to do work-force analysis in the light of these major problems which have been discussed later in
the book. In other words, it is necessary to keep a sufficient margin for absenteeism, labour
turnover and idle time on the basis of past experience. If it is essential to keep a margin of 20%
of the human resource required as per workload analysis, the company must ensure that it has at
least 600 workers on its payroll to meet the annual production target.

STATISTICAL TECHNIQUES

Some important statistical tools for human resource forecasting are:

1. RATIO AND TREND ANALYSIS: Under this method, the main emphasis is on the ratios
which are calculated for 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 organisation, methods and jobs. Future ratios are also estimated when
changes are expected in the organisation of human resources. Then future human resource
requirements are calculated on the basis of established ratios.

• These techniques, although crude, are easy to understand and use. Their value depends upon
accurate records and realistic estimates of future activity levels and the effect of improved
performance or changed methods.
2. ECONOMETRIC MODELS: To build an econometric model for human resource planning
purposes, it is necessary to analyse past statistical data and to describe the relationship between
number of variables in a mathematical formula. The variables affecting human resource
requirements 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 human resource forecast. This is a complex process which is suitable for large
organisations.

3. REGRESSION ANALYSIS: This technique is used to estimate the human resource

requirements of an organisation at a future point of time, based upon such factors as sales,
output, services rendered etc. Regression analysis is used when dependent and independent
variables are functionally related to each other. Electronic computers are used to solve the
regression equations and forecast the demand for personnel.

4. 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
organisation's overall human resource needs. The basic equation of the model is:

En = [(Lagg + G) 1/X] /Y

Where,

E= Estimated human resource demand

n = Planning period

Lagg = Overall turnover or aggregate level of business activity in Rupees

G = Total growth in business activity during period n

X = Average improvement in productivity

Y= Conversion figure that relates the present overall activity to the human resource needed

The application of this forecasting model depends heavily on obtaining accurate estimates of
total growth (G), average productivity improvement (X) and conversion rates (Y). In order to
obtain these parameters, simple statistical techniques may be used.

SUPPLY FORECASTING:
Supply forecasting is concerned with the estimate of supply of human resources given the
analysis of current resources and future availability. It considers both the external supply
(candidates for various jobs outside the organisation) and the internal supply (organisation's
current employees). External supply of personnel is important for two reasons. First, the normal
separation of employees may require that the organisation look to employment agencies, colleges
and universities and other sources to replenish lost personnel. Second, organisational growth, and
diversification require the use of external sources, to obtain additional numbers and types of
personnel.

The internal supply of personnel is influenced by the following factors:

1. Existing human resources

2. Potential losses to existing resources through labour wastage
3. Potential changes to existing resources through internal promotions
4. Effect of changing conditions of work
5. Absenteeism.

LABOUR WASTAGE ANALYSIS

Labour wastage should be analysed in order to forecast future losses and to identify the
reasons for people leaving the organisation. Plans can then be attached to the problems
causing unnecessary wastage and to replace uncontrollable losses.

LABOUR TURNOVER INDEX: The traditional formula for measuring wastage is the labour
turnover index:

Number of leavers in a specified period (usually 1 year) × 100

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Average number of employees during the same period

The measurement of labour turnover in terms of the figure may be inflated by the high turnover
of a relatively small proportion of the labour force. Thus, a company employing 1,000 people
might have had an annual wastage rate of 20% meaning that 200 jobs had become vacant during
the year. But this could have been spread throughout the company, covering all occupations and
long as well as short service employees.

QUALITATIVE ASPECT OF HUMAN RESOURCE PLANNING:

Determining the nature of a job, including its functions, duties, and responsibilities, is crucial
after determining the required number of personnel for each role in the organisation. This
analysis helps establish the minimum acceptable qualities necessary for adequate job
performance. This is known as the qualitative aspect of human resource planning.

● Qualitative aspect focuses on specifying the quality of personnel required for different
positions.
● It involves determining the desired educational qualifications, professional expertise,
experience, and psychological traits for each job.
 ● Qualitative analysis ensures that the workforce possesses the necessary skills,
knowledge, and competencies to perform effectively.

The process of determining the nature of the job together with the minimum acceptable
qualifications, aptitude and experience, etc., on the part of personnel required for adequate
performance of the job is termed as job analysis.

JOB ANALYSIS

Job analysis is the process of studying and collecting information relating to the operation and
responsibilities of a specific job. The immediate products of this analysis are 'job descriptions'
and 'job specification’.

JOB DESCRIPTIONS

A job description is an organised, factual statement of the duties and responsibilities: of a

specific job. It is a summary of the tasks, duties and responsibilities. Basically, it indicates what
is done, why it is done, where it is done, and briefly, how it is done. Performance standards flow
directly from a job description, telling what the job accomplishes and the satisfactory
performance accepted in each area of the job description. If employees know what is expected
and what is good or poor performance, then they have a much better chance of performing
acceptably.

JOB SPECIFICATIONS

A job specification is a statement of the minimum acceptable human qualities necessary to

perform a job properly. It lists the various qualifications, skills, and experience an individual
needs to do the job satisfactorily. The job description describes the job; the job specification
describes the person needed for the job. The major use of job specifications is to guide in the
recruiting and selecting of people to fill jobs.

PRISHA GUPTA
ROLL NO. 22BC202