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CHAPTER
2 Human Resource Planning
CHAPTER’S OUTLINE
Introduction
Meaning of HRP
Planning at Different Levels
Integrated Strategic Planning and HR
Need for Human Resource Planning
Objectives of HRP
Determinants of HRP
Process of Human Resource Planning
Strategies for HR Planners
Benefits of HR Planning
Limitations of HR Planning
Guidelines for Making HRP Effective
INTRODUCTION
Human resource planning is the most important managerial function of an organization. It ensures
three main things:
It ensures adequate supply of human resources.
It ensures proper quality of human resources.
It ensures effective utilization of human resources.
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Human Resource Planning 37
(i) Human resource planning must incorporate the human resource needs in the light of
organizational goals.
(ii) Human resource planning must be directed towards clear and well-defined objectives.
(iii) Human resource plan must ensure that it has the right number of people and the right
kind of people at the right time doing work for which they are economically most suitable.
(iv) Human resource planning should take into account the principle of periodical
reconsideration of new developments and extending the plan to cover the changes during
the given long period.
(v) Human resource planning should pave the way for an effective motivational process.
(vi) Adequate flexibility must be maintained in human resource planning to suit the changing
needs of the organization.
HRP or MPP is essentially concerned with the process of estimating and projecting the
supply and demand for different categories of personnel in the organization for the years to
come.
HR PLANNING AT DIFFERENT LEVELS
Human Resource Planning (HRP) may be done at different levels and for different purposes.
National planners may make a HR plan at the national level whereas the strategists at a company
may make a HR plan at the unit level. The HR Planning thus operates at five levels.
1. HRP at National Level: HRP at the national level helps to plan for educational facilities,
health care facilities, agricultural and industrial development and employment plans, etc.
The government of the country plans for human resources at the national level. National
plans for HR forecast the demand and supply of human resources at the national level. It
also plans for occupational distribution, sectoral and regional allocation of human resources.
2. HRP at the Sectoral Level: HRP at the sectoral level helps to plan for a particular sector
like agriculture, industry, etc. It helps the government to allocate its resources to the
various sectors depending upon the priority accorded to the particular sector.
3. HRP at the Industry Level: HRP at the industry level takes into account the output/
operational level of the particular industry when manpower needs are considered.
4. HRP at the Unit Level: HR Planning at the company level is based on the estimation of
human resource needs of the particular company in question. It is based on the business
plan of the company. A manpower plan helps to avoid the sudden disruption of the company’s
production since it indicates shortages of particular types of personnel, if any, in advance,
thus enabling the management to adopt suitable strategies to cope with the situation.
5. HRP at the Departmental Level: HRP at the departmental level looks at the manpower
needs of a particular department in an organization.
INTEGRATED STRATEGIC PLANNING AND HR
HRP like production planning, financial planning and marketing planning needs to be
comprehensive, unified and integrated for the total corporation. HR manager provides inputs
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38 Human Resource Management
like key HR areas, HR environmental constraints, HR capabilities and HR capability constraints
to the corporate strategists. Corporate strategists further communicate their needs and constraints
to HR manager. The corporate strategic plan and HR plan, thus incorporates both HR and other
functional plans.
Integrated strategic planning involves four steps.
Figure 2.1 shows these steps.
Step I
Development and knowledge of organization’s overall purpose or mission or goals and
objectives.
Ø
Step II
Providing inputs by HR manager regarding key HR areas, capabilities and constraints
of HR and environment to corporate strategists.
Ø
Step III
The corporate strategists in turn communicate their needs and constraints to the HR manager.
Ø
Step IV
Integration of HR and other functional plans.
Fig. 2.1. Integrated Strategic Planning and HR.
Corporate strategic planning involves four time spans.
(i) Long period (5 or more years): Strategic plans that establish company’s vision, mission
and major long-range objectives. The time span for strategic plans is usually considered
to be five or more years.
(ii) Intermediate period (3 years): Intermediate-range plans cover about a three-year period.
These are more specific plans in support of strategic plan.
(iii) Operation period (1 year): Operating plans cover about one year. Plans are prepared
month-by-month in sufficient detail for profit, human resources, budget and cost control.
(iv) Short period (day-to-day or week-by-week): Activity plans are the day-to-day and week-
by-week plans. These plans may not be documented. Table 2.1. presents the link between
strategic plan and human resource plan.
Hence, the strategic plan vs. HR plan can be at four levels:
(i) Corporate-level plan: Top management formulates corporate-level plan based on corporate
philosophy, policy, vision and mission. The HRM role is to raise the broad and policy
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Human Resource Planning 39
issues relating to human resources. The HR issues are related to employment policy,
HRD policies, remuneration policies, etc. The HR department prepares HR strategies,
objectives and policies consistent with company’s strategy.
(ii) Intermediate-level plan: Large-scale and diversified companies organize Strategic Business
Units (SBUs) for the related activities. SBUs prepare intermediate plans and implement
them. HR managers prepare specific plans for acquiring future managers, key personnel and
total number of employees in support of company requirements over the next three years.
(iii) Operations plan: Operations plans are prepared at the lowest business profit centre level.
These plans are supported by the HR plans relating to recruitment of skilled personnel,
developing compensation structure, designing new jobs, developing, leadership, improving
work life, etc.
(iv) Short-term activities plan: Day-to-day business plans are formulated by the lowest level
strategists. Day-to-day HR plans relating to handling employee benefits, grievances,
disciplinary cases, accident reports, etc. are formulated by the HR managers.
Integration of business planning and HRP is shown in Table 2.1 and Figure 2.2.
Table 2.1: Linking Business Planning and HR Planning
Planning Level Business Planning Link Human Resource
and Horizon Process Planning Process
Strategic Corporate philosophy Issues Analysis of issues raised by
planning value system, and analysis external factors
(5 or more years) policies. Employment demand
Goals and objectives. projection
Key success factors. Manpower supply analysis
Product market scope and projection
competitive edge
allocation of resources
Intermediate- Organization evolution. Programming Forecasting total staffing
range planning Programmes required to requirements level.
(3-5 years) implement strategy. Forecasting number of
Deployment of resources. managers and key
Acquisitions, divestments, personnel. Forecasting net
and internal development changes in managers and
of product lines. key personnel year to year.
Planning P/HR support
programmes.
Operational Detailing of programmes Integrated Detailing of P/HR activities
planning to specify actions, control that are incorporated in the
(12 months) responsibilities, cost- requirements one-year business plan
time schedule and
organizational
profitability
Activities Day-to-day and Implementation P/HR day-to-day and week-
planning week-to-week actions to-week assignment in
(daily and plans and work support of the objectives
weekly) schedule and plans of the P/HR
decentralized department.
throughout the
company.
Source: Klatt Murdick and Schuster.
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