Advanced Human Resource Management (MBA 621)

By
Zemenu Bires (PhD)
Assistant Professor of Management

April 2025
Addis Ababa, Ethiopia
 Unit Two
Human Resource Planning
 Definitions!
• According to Vetter, “HRP is the process by which management
determines how the organization should move from its current man
power position to desired manpower position.
 Through planning, management strives to have the right time, doing
things which result in both the organization and individual
receiving maximum long run benefits”.
• According to Gordon Mc Beath, “HRP is concerned with two
things: Planning of manpower requirements and Planning of
Manpower supplies”.
• According to Beach, “HRP is a process of determining and
assuming that the organization will have an adequate number of
qualified persons, available at proper times, performing jobs which
meet the needs of the enterprise and which provides satisfaction for
the individuals involved”.
 Definition….
• Simply HRP can be understood as the process of forecasting an
organization’s future demands for and supply of the right type of
people in the right number.
• In other words, HRP is the process of determining manpower
needs and formulating plans to meet these needs.
  HRP is a Four-Phased Process!
 The first phase- involves the gathering and analysis of data through
manpower inventories and forecasts,
 The second phase- consists of establishing manpower objectives and
policies and gaining top management approval of these.
 The third phase- involves designing and implementing plans and
promotions to enable the organization to achieve its manpower
objectives.
 The fourth phase-is concerned with control and evaluation of
manpower plans to facilitate progress in order to benefit both the
organization and the individual.
 The long run view means that gains may be sacrificed in the short run
for the future grounds.
 The planning process enables the organization to identify what its
manpower needs is and what potential manpower problems required
current action.
 This leads to more effective and efficient performance.
Nature of HRP
Human resource planning is the process of analyzing and
identifying the availability and the need for human resources so that
the organization can meet its objectives.
The focus of HR planning is to ensure that the organization has the
right number of human resources, with the right capabilities, at the
right times, and in the right places.
In HR planning, an organization must consider the availability and
allocation of people to jobs over long periods of time, not just for
the next month or the next year.
HRP is a sub system in the total organizational planning.
Actions may include shifting employees to other jobs in the
organization, laying off employees or otherwise cutting back the
number of employees, developing present employees, and/or
increasing the number of employees in certain areas.
 Cont’d
• Factors to consider include the current employees’ knowledge,
skills, and abilities and the expected vacancies resulting from
retirements, promotions, transfers, and discharges.
• To do this, HR planning requires efforts by HR professionals
working with executives and managers.
Objectives of Human Resource
Planning
1. To ensure optimum utilization of human resources
currently available in the organization.
2. To assess or forecast the future skill requirement of the
organization.
3. To provide control measures to ensure that necessary
resources are available as and when required.
4. A series of specified reasons are there that attaches
importance to manpower planning and forecasting
exercises.
They are elaborated below:
To link manpower planning with the organizational planning
To determine recruitment levels.
To anticipate redundancies.
To determine optimum training levels.
To provide a basis for management development programs.
To cost the manpower.
To assist productivity bargaining.
To assess future accommodation requirement.
To study the cost of overheads and value of service functions.
To decide whether certain activity needs to be subcontracted, etc
• The objectives of human resource planning may be summarized as
below:
Forecasting Human Resources Requirements: HRP is essential to
determine the future needs of HR in an organization. In the absence
of this plan it is very difficult to provide the right kind of
people at the right time.
Effective Management of Change: Proper planning is required to
cope with changes in the different aspects which affect the
organization. These changes need continuation of allocation/
reallocation and effective utilization of HR in organization.
Realizing the Organizational Goals: In order to meet the
expansion and other organizational activities the organizational HR
planning is essential.
 Promoting Employees: HRP gives the feedback in the form of
employee data which can be used in decision-making in
promotional opportunities to be made available for the organization.
Effective Utilization of HR: The data base will provide the useful
information in identifying surplus and deficiency in human
resources.
• The objective of HRP is to maintain and improve the organizational
capacity to reach its goals by developing appropriate strategies that
will result in the maximum contribution of HR.
Why we need for
HRP in
Organizations?
 Major reasons for the emphasis on HRP at the Macro level:
1) Employment-Unemployment Situation: Though in general the
number of educated unemployment is on the rise, there is acute
shortage for a variety of skills. This emphasizes on the need for
more effective recruitment and employee retention.
2) Technological Change: The changes in production technologies,
marketing methods and management techniques have been
extensive and rapid. Their effect has been profound on the job
contents and job contexts. These changes have caused problems
relating to redundancies, retention and redeployment. All these
suggest the need to plan manpower needs intensively and
systematically.
3) Demographic Change: The changing profile of the work force in
terms of age, sex, literacy, technical inputs and social background
has implications for HRP.
4) Skill Shortage: Unemployment does not mean that the labour
market is a buyer’s market. Organizations generally become more
complex and require a wide range of specialist skills that are rare
and scare. A problem arises in an organization when employees
with such specialized skills leave.
5) Governmental Influences: Government control and changes in
legislation with regard to affirmative action for disadvantages
groups, working conditions and hours of work, restrictions
on women and child employment, causal and contract labour, etc.
have stimulated the organizations to be become involved in
systematic HRP.
6) Legislative Control: The policies of “hire and fire” have gone.
Now the legislation makes it difficult to reduce the size of an
organization quickly and cheaply. It is easy to increase but difficult
to shed the fat in terms of the numbers employed because of recent
changes in labour law relating to lay-offs and closures. Those
responsible for managing manpower must look far ahead and thus
7) Impact of the Pressure Group: Pressure groups such as unions,
politicians and persons displaced from land by location of giant
enterprises have been raising contradictory pressure on enterprise
management such as internal recruitment and promotion, preference
to employees’ children, displace person, sons of soil etc.
8) Systems Approach: The spread of system thinking and advent of
the macro computer as the part of the on-going revolution in
information technology which emphasis planning and newer
ways of handling voluminous personnel records.
9) Lead Time: The log lead time is necessary in the selection process
and training and deployment of the employee to handle new
knowledge and skills successfully.
Importance of HRP
1. Future Personnel Needs: Human resource planning is significant because it
helps to determine the future personnel needs of the organization.
2. Part of Strategic Planning: HRP has become an integral part of strategic
planning of strategic planning. HRP provides inputs in strategy formulation
process in terms of deciding whether the organization has got the right kind of
human resources to carry out the given strategy.
3. Creating Highly Talented Personnel: Even though India has a great pool of
educated unemployed, it is the discretion of HR manager that will enable the
company to recruit the right person with right skills to the organization.
4. International Strategies: An international expansion strategy of an
organization is facilitated to a great extent by HR planning.
5. Foundation for Personnel Functions: HRP provides essential information for
designing and implementing personnel functions, such as recruitment, selection,
training and development, personnel movement like transfers, promotions and
layoffs.
6. Increasing Investments in Human Resources: Organizations are making
increasing investments in human resource development compelling the
increased need for HRP.
7. Resistance to Change: Employees are always reluctant whenever
they hear about change and even about job rotation.
8. Uniting the Viewpoint of Line and Staff Managers: HRP helps to
unite the viewpoints of line and staff managers.
9. Succession Planning: Human Resource Planning prepares people
for future challenges.
10. Other Benefits:
(a)HRP helps in judging the effectiveness of manpower policies and
programmes of management.
(b)It develops awareness on effective utilization of human resources for
the overall development of organization.
(c)It facilitates selection and training of employees with adequate
knowledge, experience and aptitudes so as to carry on and achieve the
organizational objectives
(d)HRP encourages the company to review and modify its human
resource policies and practices and to examine the way of utilizing the
human resources for better utilization.
Factors Affecting HRP
 HRP is influenced by several factors.
 The most important of the factors that affect HRP are;
(1)Type and strategy of organization
(2)Organizational growth cycles and planning
(3)Environmental uncertainties- Political, social and economic changes
(4)Time horizons – called a planning horizon i..e., a fixed point of
time in the future at w/c point certain processes will be evaluated or
assumed to end.
(5)Type and quality of forecasting information
(6)Nature of jobs being filled and
(7)off-loading the work/ Outsourcing
HRP Process
• HRP effectively involves forecasting personnel needs, assessing
personnel supply and matching demand–supply factors through
personnel related programmes.
• The HR planning process is influenced by overall organizational
objectives and environment of business.
 Environmental Scanning:
 It refers to the systematic monitoring of the external forces
influencing the organization. The following forces are essential
for pertinent HRP.
 Economic factors, including general and regional conditions.
 Technological changes
 Demographic changes including age, composition and literacy,
 Political and legislative issues, including laws and administrative
rulings
 Social concerns, including child care, educational facilities and
priorities.
 Organizational Objectives and Policies:
• HR plan is usually derived from the organizational objectives.
Specific requirements in terms of number and characteristics of
employees should be derived from organizational objectives.
HR Demand Forecast: Demand forecasting is the process of
estimating the future quantity and quality of people required to
meet the future needs of the organization. Annual budget and long-
term corporate plan when translated into activity into activity form
the basis for HR forecast.
HR Supply Forecast: Supply forecast determines whether the HR
department will be able to procure the required number of workers.
Supply forecast measures the number of people likely to be
available from within and outside an organization, after making
allowance for absenteeism, internal movements and promotions,
wastage and changes in hours, and other conditions of work.
HR Programming: Once an organization’s personnel demand and
supply are forecasted the demand and supply need to be balanced
in order that the vacancies can be filled by the right employees at
the right time.
HR Plan Implementation: HR implementation requires
converting an HR plan into action. A series of action are initiated
as apart of HR plan implementation. Programmes such as
recruitment, selection and placement, training and development,
retraining and redeployment, retention plan, succession plan etc
when clubbed together form the implementation part of the HR
plan.
Control and Evaluation: Control and evaluation represent the
final phase of the HRP process. All HR plan include budgets,
targets and standards. The achievement of the organization will be
evaluated and monitored against the plan.
 Requisites for Successful HRP
HRP must be recognized as an integral part of corporate planning
Support of top management is essential
There should be some centralization with respect to HRP
responsibilities in order to have co-ordination between different
levels of management.
Organization records must be complete, up to date and readily
available.
Techniques used for HR planning should be those best suited to
the data available and degree of accuracy required.
Data collection, analysis, techniques of planning and the plan
themselves need to be constantly revised and improved in the light
of experience.
 Barriers to HRP
1) HR practitioners are perceived as experts in handling personnel
matters, but are not experts in managing business.
2) HR information often is incompatible with other information
used in strategy formulation.
3) Conflict may exist between short term and long term HR needs.
4) There is conflict between quantitative and qualitative approaches
to HRP.
5) Non-involvement of operating managers renders HRP ineffective.
HRP is not strictly an HR department function. Successful
planning needs a co-ordinated effort on the part of operating
managers and HR personnel.
The
End!