Chapter 4

Human Resource
Planning &
Strategic Planning
 SYLLABUS
• Strategy and Workforce Planning: Strategic
Planning and HR Planning: Linking the
Processes , Methods and Techniques of
Forecasting the Demand and Supply of
Manpower

2
 POINTS DISCUSSED
• The nature and importance of HR planning
• The factors affecting personnel planning
• The employee planning process, delineate different
stages in the process and describe each step
• The prerequisites for successful planning and list the
various barriers which render planning ineffective

3
 Nature of HRP
• HRP is a sub-system in the total organisational
planning. Organisational planning includes
managerial activities that set the company’s
objectives for the future and determines the
appropriate means for achieving those
objectives
• Evolving Nature of HRP
– Earlier, HRP was a routine and isolated activity.
But now it is aligned with business strategy
Nature of HRP (Contd.)

Evolving Role of HRP

 Importance of HRP
• Personnel Needs Taken Care Of
• Part of Strategic Planning
• Creating Highly Talented Personnel
• International Strategies
• Foundation for Personnel Functions
• Increasing Investments in Human Resources
• Resistance to Change and Move
• Unite the Perspectives of Line and Staff Managers
• Other Benefits
Factors Affecting HRP
 Factors Affecting HRP (Contd.)
• Type and Strategy of Organisation

Management by William P. Anthony, et al., p. 181.

Source: Adapted from Strategic Human Resource
Continual Strategic Choices in Human Resource Planning
 Factors Affecting HRP (Contd.)
• Organisational Growth Cycles and Planning
• Environmental Uncertainties
• Time Horizon

Degree of Uncertainty and Length of Planning Period

Source: Elmer H. Burack and Nicholas J. Mathis, Human Resource Planning—A Pragmatic Approach to Manpower Staffing and Development, Illinois, Brace-Park Press, 1987, p. 129
 Factors Affecting HRP (Contd.)
• Type and Quality of Information

Source: Leap & Crino, Personnel/Human

Resource Management, p. 161
Levels of HRP Information
 Factors Affecting HRP (Contd.)
• Labour Market
– When one talks about labour supply, the following
deserve due consideration:
• The size, age, sex and educational composition of the
population
• The demand for goods and services in the country
• The nature of production technology
• Employability of the people

• Outsourcing
The Planning Process

The HRP Process

 The Planning Process (Contd.)
• Environmental Scanning
– Economic factors, including general and regional
conditions
– Technological changes, including robotics and automation
– Demographic changes, including age, composition and
literacy
– Political and legislative issues, including laws and
administrative rulings
– Social concerns, including child care, and educational
facilities and priorities
 The Planning Process (Contd.)
• Organisational Objectives and Policies
– Are vacancies to be filled by promotions from within or hiring from outside?
– How do the training and development objectives interface with the HRP
objectives?
– What union constraints are encountered in HRP and what policies are needed
to handle these constraints?
– How to enrich employee’s job? Should the routine and boring jobs continue or
be eliminated?
– How to downsize the organisation to make it more competitive?
– To what extent production and operations be automated and what can be
done about those displaced?
– How to ensure continuous availability of adaptive and flexible workforce?
 The Planning Process (Contd.)
• HR Demand Forecast

Techniques of HR Demand Forecasting

 The Planning Process (Contd.)
• HR Supply Forecast
– Reasons for supply forecast are that it:
• Helps quantify number of people and positions expected to be
available in future to help the organisation realise its plans and
meet its objectives
• Helps clarify likely staff mixes that will exist in the future
• Assess existing staffing levels in different parts of the organisation
• Prevents shortage of people where and when they are most
needed
• Monitors expected future compliance with legal requirements of
job reservations
 Strategic HR Initiatives

Source: Jeffrey A. Mello, Strategic Human Resource Management, p.

140
 HR Plan Implementation

• Recruitment, Selection and Placement

• Training and Development
• Retraining and Redeployment
• Retention Plan
– Compensation Plan
– Performance Appraisal
– Employees Leaving in Search of Green Pastures
– Employees Quitting because of Conflict
– The Induction Crisis
– Shortages
– Unstable Recruits
 HR Plan Implementation (Contd.)

• Downsizing Plan

Source: The Economic Times, dated Dec. 7,

2008
Downsizing Plans in Select Firms
 Managerial Succession Planning
• A typical succession planning involves the following activities:
– Analysis of the demand for managers and professionals by company level,
function, and skill
– Audit of existing executives and projection of likely future supply from
internal and external sources
– Planning of individual career paths based on objective estimates of future
needs, and drawing on reliable performance appraisals and assessments of
potential
– Career counselling undertaken in the context of a realistic understanding of
the future needs of the firm, as well as those of the individual
– Accelerated promotions, with development targeted against the future
needs of the business
– Performance-related training and development
– Planned strategic recruitment, not only to fill short-term needs but also to
provide people for development to meet future needs
– The actual activities by which openings are filled
Human Resource Planning and the Government

• Manpower planning has come to be recognised in India as one of

the adjuncts of socio-economic planning since the early years of
the planning era. Among the noteworthy steps taken by the
Government of India in this direction is the setting up of the
Institute of Applied Manpower Research (IAMR)
• The IAMR was set up in 1962, inter alia to conduct empirical
research in manpower, to provide advisory and consultancy
services to government departments and industry, and to impart
training in methods and techniques of manpower planning
• Training is now a major activity of the Institute
 Requisites for Successful HRP

• HRP must be recognised as an integral part of corporate planning

• Backing of top management for HRP is absolutely essential
• HRP responsibilities should be centralised in order to co-ordinate
consultation between different management levels
• Personnel records must be complete, up-to-date and readily
available
• The time horizon of the plan must be long enough to permit any
remedial action
• The techniques of planning should be those best suited to the data
available and the degree of accuracy required
 Requisites for Successful HRP (Contd.)

• The techniques of planning should be those best suited to the data

available and the degree of accuracy required
• Plans should be prepared by skill levels rather than by aggregates
• Data collection, analysis, techniques of planning and the plans
themselves need to be constantly revised and improved in the
light of experience
• The impact of external forces like technological changes, changes
in labour market compositions and the like needs to be considered
while developing the human resource plan
• HRIS should be used as decision support system and should alert
managers to problems and opportunities
 Barriers to HRP
• People question the importance of making HR practices future oriented
and the role assigned to HR practitioners in formulation of organisational
strategies
• HR practitioners are perceived as experts in handling personnel matters,
but are not experts in managing business
• HR information often is incompatible with the information used in
strategy formulation
• Conflicts may exist between short-term and long-term HR needs
• There is conflict between quantitative and qualitative approaches to HRP
• Non-involvement of operating managers renders HRP ineffective
 Reality Check

How is the intellectual capital of your class or

organisation? How is it evaluated?
 Reality Check

Can you make a comprehensive list of skills a

successful individual should possess? Can you
break them down on occupation/job-wise?
 Reality Check

Can you take inventory of who succeeded

whom in the Indian corporate sector? For
example, Mukesh and Anil succeeded the late
Dhirubhai Ambani, so also Nandan Nilekani
stepped into the shoes of Narayana Murthy.
Proceed on these lines