HUMAN RESOURCE

MANAGEMENT
Course Leader Dr. Abera Demsis

1
COPYRIGHT NOTICE
THIS MOTION PICTURE IS PROTECTED UNDER INTERNATIONAL LAWS
AND ITS UNAUTHORIZED DUPLICATION, EXHIBITION, DISTRIBUTION
OR USE MAY RESULT IN CIVIL LIABILITIES AND
CRIMINAL PROSECUTION, PEOPLE APPEARING IN THIS MOTION
PICTURE HAVE GIVEN THEIR CONSENT AND DO SO TO YARDSTICK
INTERNATIONAL PLC ONLY.

Copyright © 2022
Yardstick International College

2
CHAPTER
TWO
Human Resource Planning

3
Defining HRP
● It is the process of systematically reviewing human resource requirements
to ensure that the required number of employees with the required skills
are available when and where they are needed (Mondy, Noe & Premeaux,
2002).
● The process by which managers ensure that they have the right number
and kinds of people in the right places, and at the right times, who are
capable of effectively and efficiently performing assigned tasks.

4
Cont.…
● According to Armstrong (2006), HRP is concerned with forecasting the
future needs of the organization in terms of:
o skills, expertise and competences,
o analyzing the availability and supply of people,
o drawing up plans to match supply to demand and
o monitoring the implementation of the human resource plan.

5
Cont.…
● According to Geisler, “Manpower planning is the process – including
forecasting, developing and controlling by which a firm ensures that it has-
o The right number of people,
o The right kind of people,
o At the right places,
o At the right time, doing work for which they are economically most
useful”

6
Cont.…
● According to Quinn mills & associates, HRP is a decision making process
that combines three important activities, viz.,
o Identifying and acquiring the right number of people with the proper
skills;
o Motivating them to achieve high performance; and
o Creating interactive links between business objectives and resource
planning activities.

7
Importance of HRP
1. Uncertainty Reduction
● HRP offsets uncertainty by predetermining future human resource
requirements.
● It matches demand and supply forecasts to determine future shortages
and surpluses of human resources in terms of quantity and quality.
● Action plans are developed to deal with the problems arising from
shortages and surpluses.
2. Objectives achievement
● HRP focuses on the achievement of organizational goals.
● Demand forecasts for HR are based on the objectives,
strategies and revenue plans of the organization.

8
Cont.…
3. Environmental Adaptation
● HRP assesses current human resources through human resource
inventory and job analysis.
● Existing human resources can be quickly adapted to changing technology,
markets, competition as well as political, legal, economic, social and
cultural forces.

9
Cont.…
4. Effective and Efficient Utilization of Human Resources
● HRP ensures that the organization acquires and retains the quality and
quantity of human resources it requires.
● Existing human resources can be properly placed and deployed to ensure
their effective utilization.
● Human resource costs can be controlled to achieve efficiency through
planning.
● HRP ensures the right number and type of human resources
at the right time doing the right job.

10
 QUESTION TIME
HRP is proof of the function of Human resource management

A. Development
B. Acquiring
C. Maintaining
D. Integrating
CREDITS: This presentation template was created by
Slidesgo, including icons by Flaticon, infographics &
images by Freepik

11
Cont.…
5. Human Resource Development
● Human resource planning anticipates skill requirements for various levels
of human resources.
● This provides adequate lead-time for planning of training and
development programs.
● Training and development experiences often lead to greater employee
satisfaction, lower turnover and lower absenteeism.
6. Control
● HRP sets standards for control purposes.
● It serves as a standard for controlling the quantity and
quality of employees actually deployed.
● This facilitates control of human resource costs as well.

12
Cont.…
In short, if HRP is used properly, it offers the following benefits:
● Creates reservoir of talent;
● Prepares people for future;
● Expand or contract;
● Cut cost; and
● Facilitates succession planning.

13
Uses of Human Resource Planning
● Improve the utilization of human resources
● Match human resources related activities and future organization
objectives efficiently
● Achieve economies in hiring new workers
● Expand the human resource management information base to assist other
human resource activities and other organizational units
● Make major demands on local labour markets successfully
● Co-ordinate different human resource management
programs such as employment equity plans and hiring needs

14
Linking HRP with Corporate/Business Planning
● Strategic planning is a process of defining an organization’s strategy, or direction,
and making decisions on allocating its resources to pursue this strategy, including
its capital and people (http://en.wikipedia.org/wiki/Strategic_planning).
● All organizations need to establish a strategic framework for significant success.
o This framework consists of:
o a vision for your future,
o a mission that defines what you are doing,
o values that shape your actions,
o strategies that zero in on your key success approaches, and
o goals and action plans to guide your daily, weekly, monthly
and annual actions.
● The result of creating a strategic plan is a unified sense of
purpose for the organization.

15
Components of Strategic Planning Process
● Where are we now?
● External Analysis
● Internal Analysis
● Where do we want to be?
● Mission
● Vision
● Core Values/Principles
● Identifying critical/strategic issues
● Goals
● Objectives
● How do we get there?
● Action plan
● Resource allocation (strategy)
16
The HRP Process
● HRP process is influenced by the overall orgnl objectives & the environment of
business.
● Thus, strategic planning must precede HRP.
● HRP translates the organization’s objectives & plans into the number of workers
needed to meet objectives.
● HRP has two components: requirements & availability.
● Forecasting HR requirements involves determining the number & type of
employees needed, by skill level & location.
● These projects will reflect various factors, such as service
/production plans & changes in productivity.
● In order to forecast availability, the HR manager looks to
both internal sources (present employees) & external
sources (the labor mrkt).

17
The HRP Process
● When employee requirements & availability have been analyzed, the firm
can determine whether it will have a surplus or shortage of employees.
● Ways must be found to reduce the no. of employees if a surplus is
projected.
● Some of these methods/programs include: restricted hiring, reduced
hours, early retirements, & layoffs.
● If a worker shortage is forecast, the firm must obtain the proper quantity &
quality of workers from outside the organization.
● In this case, external recruitment & selection are required.

18
 External Environment
Internal Environment

Strategic planning

HR planning

Comparing Forecasting
Forecasting requirements & HR availability
HR requiremnts availability
Shortage of
Surplus of workers
Demand =
workers
Supply
Restricted hiring, Recruitment
Reduced hr,
No action Early retirement,
Selection
Layoffs, Downsizing

19
Forecasting Labor Supply
● Internal Forecasting:
o Replacement Charts
o Skills Inventories
● External Forecasting:
o State Employment Agencies
o Government Reports
o College/University Information

20
Important issues considered in forecasting Human
Resource needs?

21
How to Forecast Personnel Needs
● Project revenues / production first, and then estimate the size of the staff
required to achieve it
● Staffing plans also must reflect:
o Projected turnover
o Quality and skills of your employees
o Strategic decisions
o Technological and other changes
o Financial resources

22
Demand Forecasting
● Statistical approaches
● Judgmental methods
● Other methods

23
Methods to Predict Employment Needs
Statistical approaches
● Trend analysis: studying variations in your firm’s employment levels over the
last few years to predict future needs.
● Ratio analysis: making forecasts based on the ratio between (1) some causal
factor (like sales volume) and (2) the number of employees required (for
instance, number of salespeople).
● Regression analysis/Scatter plot: shows graphically how two variables. such
as
a measure of business activity and your firm’s staffing levels.
are related. If they are, then if you can forecast the level of
business activity, you should also be able to estimate your
personnel requirements.

24
 QUESTION TIME
Which one of the following is NOT the likely action when the
support of workforce is greater than the demand for
employees
A. Recruitment
B. Decruitment
C. Layoff
D. Sub Contracting
CREDITS: This presentation template was created by
E. All Slidesgo, including icons by Flaticon, infographics &
images by Freepik

25
Methods to Predict Employment Needs
Judgmental methods
● Qualitative analysis- Managerial judgment plays a big role

26
When Are Statistical Approaches to Demand
Forecasting Appropriate?
● Stable environment
● Business factor can be predicted with some accuracy
● The relationship between workforce size and business factor remains
constant over time

27
Judgmental Methods of Demand Forecasting
● Group brainstorming
● Sales force estimates

28
Forecasting the Supply of Inside Candidates
● Personnel inventory & development record help track employee
qualifications
● Qualifications inventories
● Manual or computerized records listing employees’ education, career and
development interests, languages, special skills, and so on, to be used in
selecting inside candidates for promotion

29
Cont.…
● Personnel replacement charts
● Company records showing present performance and promotability of
inside candidates for the most important positions
● Position replacement card
● A card prepared for each position in a company to show possible
replacement candidates and their qualifications

30
 Management Replacement Chart
Division vice
president

Vice President Vice President Sales Vice President

Production Finance
Able, j.
Jones, D.. Smith, B.
Required Required development: Required
development: Job rotation into development:
None recommended finance and production None
Exclusive development recommended
course in strategic
PRESENCE PERFORMANCE planning PROMOTION POTENTIAL
Outstanding In-house development Ready now
Satisfactory center-2 weeks Needs further training
Needs Questionable
improvement

31
Dealing with an Oversupply of Personnel
● Freeze hiring ● Use a shorter workweek
● Restrict overtime ● Use pay reductions
● Retrain/redeploy ● Use sabbaticals
● Switch to part-time employees ● Encourage early retirements
● Use unpaid vacations

32
Dealing with an Oversupply of Personnel
● Hire additional workers ● Reassign jobs
● Improve productivity through ● Use temporary workers
training ● Improve retention
● Use overtime
● Add additional shifts

33
Barriers to HRP
● Planners face significant barriers while formulating an HRP. The major ones
are:
1. HR practitioners are perceived as experts in handling personnel matters, but
are not experts in managing business.
2. People question the importance or making HR practices future oriented and
the role assigned to HR practitioners in formulation of organizational strategies.
There are people when needed offer handsome packages of benefits to them
to quit when you find them in surplus. When the task is so simple,
where is the need for elaborate time consuming planning for
human resources.

34
Cont.…
3. HR information often is incompatible with other information used in
strategy formulation. Strategic planning efforts have long been oriented
towards financial forecasting, often to the exclusion of other types of
information. Financial forecasting takes precedence over HRP.

35
Cont.…
4. Conflict may exist between short term and long term HR needs. For
example, there arises a conflict between the pressure to get the work
done on time and long term needs, such as preparing people for
assuming greater responsibilities. Many managers are of the belief that
HR needs can be met immediately because skills are available on the
market as long as wages and salaries are competitive. Therefore, long
time plans are not required, short planning are only needed.

36
Cont.…
5. There is conflict between quantitative and qualitative approaches to HRP.
Some people view HRP as a number game designed to track the flow of
people across the department.
6. Non-involvement of operating managers renders HRP ineffective. HRP is
not strictly an HR department function. Successful planning needs a
coordinated effort on the part of operating managers and HR Personnel.

37
 DISCUSSION POINT
- Why do we need HRP (Human resource Planning)?

(Please discuss your thoughts on the LMS discussion board)

CREDITS: This presentation template was created by

Slidesgo, including icons by Flaticon, infographics &
images by Freepik

38
THANK YOU!

39