UNIT 2:

HR Planning
 Definition
 Human Resource Planning (HRP) is
the process of forecasting the future
human resource requirements of the
organization and determining as to
how the existing human resource
capacity of the organization can be
utilized to fulfill these requirements.
 It, thus, focuses on the basic economic
concept of demand and supply in context
to the human resource capacity of the
organization.
 Objectives of HRP
 To ensure optimum use of human
resources currently employed
 To determine future recruitment level
 To ensure that necessary resources are
available as and when required
 To forecast future skill requirement to
serve as a basis for training and
development programmes
 To create plans, rules and regulations that
meets the local and statewide laws in the
given industry.
 Importance of HRP
 Man-power planning is essential for
determining present and future personnel
needs of the organization.
 It helps the organization to cope with changes
in competitive forces, markets, technology,
products etc.
 It ensures optimum use of available human
resources.
 It provides adequate control measures to
ensure that necessary man-power is available
as and when required.
 It is a continuous process concerned with
planning and development of human resources.
 It is a process of getting the right number of
qualified people into the right jobs at the right
time.
 It is the system of matching the supply of
people internally (existing employees) and
externally (those to be employed in future) over
a given period of time.
 It helps the organization to function smoothly
and successfully not only in the short-period but
also in the long period.
How does HR Planning occur?

Qualitative techniques

(forecast demand)

a. Judgmental
 Delphi Technique
 NGT
 The Nominal Group Technique
A small group of 4-5 people gathers around a table. Leader
identifies judgment issue and gives participants procedural
instructions.

Participants write down all ideas that occur to them, keeping

their lists private at this point. Creativity is encouraged during
this phase.

Leader asks each participant to present ideas and writes them

on a blackboard or flipchart, continuing until all ideas have been
recorded.

Participants discuss each other’s ideas, clarifying, expanding,

and evaluating them as a group.

Participants rank ideas privately in their own personal order and

preference.

The idea that ranks highest among the participants is adopted

as the group’s judgment.
 The Delphi Technique
Leader identifies judgment issues and develops questionnaire.

Prospective participants are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record

their judgments and recommendations and return the
questionnaire.

Leaders compiles summaries and reproduces participants’

responses.

Leader sends the compiled list of judgment to all participants.

Participants comment on each other’s ideas and propose a final

judgment.

Leader looks
for consensus

Leader accepts consensus judgment as group’s choice.

How does HR Planning occur?

Quantitative

(forecast demand)

b. Statistical
 Regression
 Productivity ratios
 Scatter plots
 Time series analysis
Statistical Techniques Used to Project
Staffing Demand Needs
Name Description
Regression analysis Past levels of various work load indicators, such as sales,
production levels, are examined for statistical relationships
with staffing levels. Where sufficiently strong relationships
are found, a regression (or multiple regression) model is
derived. Forecasted levels of the retained indicator(s) are
entered into the resulting model and used to calculate the
associated level of human resource requirements.

Productivity ratios Historical data are used to examine past levels of a

productivity index (P):

P = Work load / Number of People

Where constant, or systematic, relationships are found,

human resource requirements can be computed by diving
predicted work loads by P.
Statistical Techniques Used to Project
Staffing Demand Needs (cont’d)
Name Description
Scatter Plots A scatter plot shows graphically how two variable such as
measure of business activity like sales, and your firm’s
staffing levels – are related. Ex : Assume a 500-bed
hospital expects to expand to 1,200 beds over the next
five years. The director of nursing and the HR director
want to forecast the requirement for registered nurses.
The HR director decides to determine the relationship
between size of hospital and number of nurses required.

Time series analysis

Past staffing levels (instead of work load indicators) are
used to project future human resource requirements. Most
commonly, a time series is a sequence taken at
successive equally spaced points in time. Thus it is
a sequence of discrete-time data.
Determining the Relationship Between
Hospital Size and Number of Nurses
How does HR Planning occur?

3. Are resources available – internally or

externally – to fill those needs?
a. Internal
 Replacement charts and Succession
planning
 Skills inventory
 Computerized HRIS
 Internal Supply
 Skills Inventory is an assessment of
knowledge, skills, experience and growth
potential of current employees to be kept
updated every year. We can assess the
suitability of current employees for future job
requirements.
 Computerized HRIS system provides
valuable information about all categories of
employees in the organization and it can be
used for selection of people based on age,
qualification, knowledge, skills, experience
and past performance.
How does HR Planning occur?
3. Are resources available – internally or externally
– to fill those needs?

b. External – what do you look at?

- try to determine availability of qualified labor
Surplus
 Part-time
 Flextime
 Job sharing
 Work-at-home
 Compressed workweek
Factors Affecting Human Resource Planning
External Factors Internal Factors
Government policies Company strategies
Economic factors HR policies
Level of technology Job analysis
Competition Production/Sales
estimates
Trade Union
 Barriers to Human Resource Planning
 Time-consuming and costly process
 In our country, there is surplus manpower and
managers do not give much importance to
HRP
 Changing Business Environment
 Non-involvement of departmental managers
makes HRP ineffective