The head of a business must assure himself that his

managers , clerks & foremen are the right men for their
work & are doing well
Views of Economist Alfred Marshall in 1890
 It is the process-including forecasting,
developing, and controlling by which a firm
ensures that it has the right number of
people and the right kind of people at the
right places at the right time doing work for
which they are economically most useful.

It is a process by which an organization

should move from its current manpower
position to its desired manpower position
 Manpower planning –quantitative approach which is concerned forecasting demand
& supply of labor.

 In Indian power sector, state level plants are manned by simplest manpower
planning models, where as in organization like NTPC and others in the central
sector, manpower planning integrates with business plan and strategic
considerations to ensure that optimum man power is provided for achieving
competitiveness nationally and internationally.

 HR planning is how to achieve that match of skills, knowledge and behaviours.

 HRP comprises of :
A. Forecasting future demand for HR
B. Forecasting future internal supply of HR
C. Forecasting future external supply of HR
D. Formulating responses to the forecasts
 The paradox often is that even with the
growing unemployment ,there has been a
shortage of HR with the required skills &
capabilities
 Large numbers of employees who retire, die
leave org, or become incapacitated because
of physical or mental ailment ,need to be
replaced by new employees .HRP ensures
smooth supply of workers without
interruption
 Employment-Unemployment Situation
 Technological Change
 Organizational Change
 Demographic Change
 Skill Shortage
 Governmental Influences
 Legislative Control
 Impact of the Pressure Group
 Systems Approach
 Lead Time
 To link manpower planning with the organizational planning
 To determine recruitment levels.
 To anticipate redundancies/uselessness.
 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.
 Both a process and a set of plans

 Provides mechanisms to eliminate any gaps

that may exist between supply and demand

 Process very dynamic by nature

 Requires periodic readjustments as labour

market conditions change
 To recruit & retain the HR of required quantity &
quality
 To foresee the employee turnover & filling up
consequent vacancies
 To meet the needs of the programmes of expansion ,
diversification
 To foresee the impact of technology on work ,
existing employees & future HR requirements
 To asses surplus or shortage of HR & take measures
accordingly
 To maintain congenial IR by maintaining optimum
level & structure of HR
 To minimize imbalances due to non availability of HR
 To estimate the cost of HR
 Corporate level planning (changing market
situation)

 Intermediate level planning (SBU strategy)

 Operations Planning

 Planning short term activities (day to day)

 Labor was organized into hierarchy
 Slave labor to skilled one
 Total projected workforce requirement was 40000
 1st stage – 4000 -quarry workers , haulers and masons
 16 K -20k secondary workers- ramp builders , tool makers
, people supplying food clothing and fuel.
 HRP included:
 No of blocks delivered and installed
 No of trips to the quarry
 Length of work day and work week
 Food and housing need
 Number of salaries
 1. Analyzing: What are the key human
resources information needed?
 2. Forecasting: mathematical projections
Demand versus supply analysis.
 3. Planning: Identification of strategy
 4. Implementing: Executing the new strategy
 5. Evaluating: Feedback on effective of
outcomes.
External environment (Agencies)

 Suppliers of plant and machineries,

 Government policies and labour market ,
 level of technology,
 level of economic development
 International Factors
 Outsourcing Facilities
 Company Policy and Strategy
 Personnel Department
 Job Analysis
 HR Policies
 Trade Unions
 Type & quality of information
 Company ’ s production /operations policy
 Department chart  Work study of the
 Skill matrix department (input ,
 Quality of work output, supplier)
 Competency gap  Current manpower
 Planning work flow
 Performance indicator
 Standard operating
 KRA procedures
 Business Matrix

Matching individual Organizational context

 Labour Market Condition –
 migration trends
 Part time labour

 Macro level factors –

 Unemployment rate
 Government policies
 Demographic factors
 Analyzing the organizational plans(both corporate & unit level)
 Forecasting the overall HR Requirement(Demand/supply)mathematical
projections or judgmental estimates considering economic trends &
industry development.
 Determination of manpower gaps
 Formulating HR plans
 Balancing supply & Demand
 In case of surplus , plan for redeployment ,lay off
 Plan to modify the org plan
 Managerial Judgment approach in small sector and unorganized
industries
 It refers to the interaction between the decision
maker’s perceptual and cognitive processes and
the objective characteristics of the environment.

 HR forecasting refers to the predictions that the

mgrs need to make for demand & supply of
workers at organizational, regional or national
levels.

 Demand analysis identifies the future workforce

requirements needed to maintain the
organization’s mission and goals.
 Influenced by two factors :
 The volume of output
 The level of productivity

 In terms of forecasting need refers to the

number of people required to provide an
ideal level of contribution
 Requirement are the functional composition
of employment adequate enough to produce
goods & services.
 Four dimensions of HR supply are :

 Flow (over a period of time ) & Stock (at a

particular time)

 Quantity & qualitative

 Occupation & education

 Micro and macro

 1.Social demand Approach-assessment of the society’s requirement of
education .
 Demand for education in respect to all individuals within the society.

 2.Manpower requirement approach – project the demand for manpower

at the macro level

 3.Rate of return Approach- net returns on educational expenditure.

 After crossing school –leaning age people attach positive values & future
benefits of education.

 Educational programs which have positive returns are promoted while

others showing negative value are discontinued.

 It is based on the belief that a definite link exists between education &
economic growth.

 Anticipating the direction & magnitude of development of each

individual sector in the economy.

 Evolving norms for engaging manpower in each individual sector in the

economy.

 Translating the physical targets for the development into manpower

requirements using specific manpower norms.

 Estimating the educational equivalents of manpower requirements.

 Analyzing the propositions of estimates of educated manpower

requirements for educational developments : based on assumption rates
at each level of education.
 Four dimensions :

 Population Policy
 Population structure
 Migration
 Labor force participation

 Quality of HR
 Education & training
 Health & Nutrition
 Equality of opportunity

 Quantitative dimensions of HRP considers Human beings

 A)with productive power
 B) without productive power
 Short term/medium and long term
 Policy conditional forecasts
 Onlookers forecasts
 Macro forecasts
 Micro forecasts
 List any jobs that have changed since the last forecasting
period and any that will change in the next forecasting period.

 If vacancy can be filled with present employees, note whether

training will be required. Specify nature of training needs.

 What percentage of employees are performing jobs up to

standard?

 How many employees will be absent in the next forecasting

period because of disability, educational, or other leaves?
 Expert (management) forecasts
 Market Prediction Method
 Ratio –Trend Analysis
 Key Predictive Factors - business factors
 Delphi Technique - decrease subjectivity of
opinion
 Structured Analogies (outcome of similar
situation from the past)
 Work standards data (projected unit of output
converted into established time standards)
 Work force analysis
 Work load analysis
 Job Analysis
1. Manager prepares a description of the
target situation.
2. Selects experts who have knowledge
3. Rate their similarity to the target situation
4. Match the outcomes their analogies with
potential outcomes.
5. Better than unaided judgment.
 Selecting a business factor that best predicts
HR needs
 Plotting the business factor in relation to the
number of employees to determine the labour
Productivity Ratio
 Computing the productivity ratio for the past
5 years
 calculating HR demand by multiplying the
business factor by the productivity ratio
 Projecting HR demand out to the target years
1 An issue, question, or problem is identified.
2. A small group or panel of ten or fewer experts is identified.
3. Independent judgements about the issue are obtained from
each expert through a questionnaire or structured interview.
4. An intermediary or facilitator collects, analyzes, and feeds
back information from the first questionnaire or interview
to each expert.
5. Steps 3 and 4 are repeated until there is a consensus on the
issue or problem.

4.10
5-9

Forecasting techniques

Workforce Analysis: All relevant factors in planning manpower flows

in a firm such as transfers, promotions, new recruitments, retirement,
resignation, dismissal etc are taken into account while estimating HR
needs
Manpower flows in a bank
Promotions out
Transfers In > > Job Hopping
> Transfers Out
> Retirement
> VRS Scheme (Golden handshake)
Recruits In > > Discharge or Dismissal
> Terminations
> Resignations
Promotions In > > Retrenchment
> Attractions in Other Banks, etc.
5-10

Forecasting techniques

Workload analysis: Based on the planned output, a firm tires to

calculate the number of persons required for various jobs.

An example of workload analysis

Planned output for the year 10,000 pieces
Standard hours per piece 3 hours
Planned hours required 30,000 hours
Productive hours per person per year 1,000 hours (estimated on annual basis)
(allowing for absenteeism, turnover, idle time etc.)
No. of workers required 30
If span of control in the unit is 10 per officer, then 3 officers are also required.
 Skill inventory( Head count , job family ,Age ,
Local & non –local, inventory of past
performance & present)
 Replacement charts
 Succession planning
 Analysis of staffing tables
 Markov Analysis
 Turnover analysis (data from exit interviews)
 Wastage analysis and its methods :
1. labor turnover index
2. stability index
3. Cohort Analysis
 Markov Analysis
 Also known as A transition matrix, can be used to
model the internal flow of human resources. These
matrices simply show as probabilities the average
rate of historical movement from one job to another.

 Labor Turnover Rate = Number of Employees left

specified period (Say one year)/ Average Number of
Employees during the same period x 100

 Labor Stability Index = Number of Employees with

one year’s service or more / Number of Employees
one year ago x 100
5-16

Skills inventory: an example

Name : A.K. Sen Date printed : 1-4-2004
Number : 429 Department : 41

Key words Work experience

Word Description Activity F ro m To
Accounting Tax Supervision 1998 2000 Tax clerk ABC Company
and analysis
Book Keeping Ledger Supervision 2000 2002 Accountant XYZ Co.
Auditing Computer Analysis 2002 2003 Chief Accounts TT Bank
records Officer

Education Special Qualifications M e m b e r sh i p s

Degree Major Year Course Date 1. AIMA

MBA Finance 1998 DBF 1996 2. ISTD

B.Com Accounts 1995 Risk Management 1999 3. ICA

C o mp u t e r La ng uag es Position Location Hobbies

Literacy p r e f e r e n ce choice

 Tally French Accounting Kolkata Chess

 Banking Auditing Delhi Football
Software Bangalore Boating

Employees Signature __________ HR Department________

Date _______________________ Date ________________
5-18

Replacement chart
General Manager Key
V. K. Garg Names given are replacement
A/2 candidates
P A to A. Promotable now
General Manager B. Needing development
L. Mathews C. Not suitable to position
B/1 1. Superior performance
2. Above Average performance
Assistant General Manager 3. Acceptable performance
R.K. Arora A/2 4. Poor performance
B.K. Nehru B/3

Division: Division: Division:

Accounting & Planning Manager Technical Advisor
HR Manager
Taxation Manager A.N. Gupta A/1 N.R. Murthy B/3
C.P. Thakur A/1
A.T. Roy C/2 K.P. Rao B/1

Northern Region Central Region Southern Region Manager Eastern Region

Manager Manager A. Subramanyam B/2 Manager
L.C. Srivatsav A/2 S.P. Kumar A/1 B.K. Menon B/1 R. Krishna B/3
A. Thapar C/4 R. Pandey B/3
 Resistance by employers & employees
 Uncertainties – absenteeism, seasonal employment , labor
turnover
 Inadequacies of information system
 Internal Communication
 Forecasting techniques -deficiency
 Time lag between communication of strategic information
 accuracy
 inadequate top management support
 lopsided focus on quantitative aspects.
 Recruitment Plans
 Selection & Promotion plans
 Training Plans
 Appraisal Plans
 Redeployment plans (outplacement, work sharing
,reduced work hours , voluntary retirement, creation
of adhoc projects, employment in sister organization
 Downsizing plans