Human Resource Planning: Definition, Importance, Characteristics and Process or Strategy
Definition of Human Resource Planning
Although Human Resource Planning means different things to different people, general agreements exist on its ultimate objectives – namely, the most effective use of scarce talent in the interest of the worker and the organization. A few definitions of Human Resource Planning are worth quoting here:
DeCenzo & Robbins: “Human Resource Planning is the process by which an organization ensures that it has the right number and kind of people, at right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”
Thomas Patten: “Manpower planning can be defined as the process by which an organization ensures that it has the right number of people, at the right place, at the right time doing things for which they are economically most useful.”
Dale S. Beach: “Human Resource Planning is a process for determining and assuring 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 provide satisfaction for the individuals involved.”
Conclusion: Human Resource Planning requires a detailed analysis of the present and future to ensure that the organization has the right number of people available. They possess the right kinds of skills to perform the jobs required by the enterprise when the work is needed. In short, Human Resource Planning is the process used by organizations to:
#. Analyze business plans to establish future human resource requirements.
#. Estimate future human resource availabilities.
#. Reconcile requirements and availabilities.
#. Formulate action plans.
#. Contribute to the achievement of business plans and thus to future organizational success.
Characteristics/Features of Human Resource Planning
Based on the above definitions and discussions’ now we can list the basic characteristics/features of Human Resource Planning for our purpose. Some of the important features that describe the basic characteristics of Human Resource Planning are:
1. Ongoing and dynamic process:
Human Resource Planning is an ongoing process because it is not only the plan rather it is also an action plan. It also covers evaluation and control functions. It does not stop anywhere until the organization achieves its objectives till the organization is alive. It is dynamic in nature because its objective is to support organizational strategy. Both the internal and external environment of HRM is dynamic in nature. So, to meet the challenges posed by the environment strategic plan itself is dynamic. Therefore, Human Resource Planning is also dynamic in nature; otherwise, it will have no use.
Human Resource Planning is the balance sheet of many different but interrelated activities of Human Resource Planning. Major activities incorporated in Human Resource Planning are: (a) properly understanding the HR demand and supply. (b) forecasting future HR demand and supply, (c) preparing present HR inventory and HR information system (d) anticipating manpower problems, (e) preparing implementation program (i.e. recruitment to retirement – R2R), and (f) control and evaluation of those activities, etc.
3. Focused on the development of Human Resource:
HR is not merely a plan rather it is also a guideline for Human resource development (HRD) as discussed in the development component of HRM. Major components of HRD are employee training, management development, and career development. Successful implementation of HRD is crucial to the success of many enterprises and to the development of its employees.
4. Goal-directed:
It is not only an organizational goal-directed rather it is equally directed towards the achievement of organizational and employee goals. Human Resource Planning recognizes that “people need organization and organization needs people”.
5. Equally applicable:
Human Resource Planning is equally applicable to all types of organizations (profit-non profit, government-private, national-international, etc). marketing planning or profit/tax planning may not be applicable to social/political organizations but HR planning is necessary even to those organizations.
6. Foundation for human resource activities:
All major HR activities/components of HR (R2R) come under the preview of Human Resource Planning, strategic and flexible HR planning provides a guideline for future HR activities so that strategic objectives of the organization are achieved easily and efficiently.
Human Resource Planning is not separate from corporate planning. It is an integrated part of strategic planning because HRP is directed towards managing HR at all levels of business for implementing the strategy. It is the key component to achieve corporate strategy through efficient, motivated, and committed HR.
8. Hierarchy and time based:
A strategic plan is hierarchical and time-based. To implement strategic planning (long-range/4-5 years) the focus of Human Resource Planning is towards the analysis of HR issues. To implement tactical planning (middle-range/2-3 years) the focus is on forecasting HR requirements. Similarly, to implement operational planning (short-range/up to 1 year) the focus of Human Resource Planning is focused and limited towards an action plan.
Importance of Human Resource Planning/Need for Human Resource Planning
Human Resource Planning is a multi-benefit tool for the organization.
- A proper Human Resource Planning: it leads to the optimum utilization of human resources, improves productivity, and helps in achieving the objectives of an organization.
- Improper or no planning: it leads to disturbance in the flows of work, lower production, less job satisfaction, high cost of production, and consistent trouble for managers.
- For an individual: Human Resource Planning is important because it helps him/her to improve his/her skills and utilize his/her capabilities and potential to the utmost.
- For an organization: Human Resource Planning is important because it improves efficiency and productivity.
Human Resource Planning is considered necessary and important for all organization for one or the other of the following reasons/facts:
1. Supply future personnel needs:
Planning is vital for determining personnel needs for the future. Without Human Resource Planning, the organization can’t get the right person at the right time and at the right cost.
2. Cope with change:
Human Resource Planning enables the enterprise to cope (face) with changes in competitive forces, markets, technology, products, and government regulations. Such changes often generate changes in job content, skill demands, number and type of personnel. Shortages of people may be found in some areas while surpluses in other areas may occur.
3. Tap/retain high talent personnel:
The mix of personnel employed in a great many organizations has shifted toward the high talent occupations-managerial and professional personnel. There is often a scarcity of highly talented people. The lead time required to hire and develop such personnel is long. Much effort has to be devoted to long-range career development, counseling, planned work assignments, and appropriate rewards.
4. Supports strategic planning:
The modern competitive enterprise engages in strategic planning. Top management evaluates the environment in which the organization operates, assesses the strengths and weakness of the enterprise, sets objectives, and determines programs for implementation. Human resource planning is an essential component of strategic planning.
5. Helps to implement equal employment opportunity:
The government’s equal employment opportunity and affirmative action regulations mandate that employers meet agreed goals for the employment and upgrading of protected categories of people in their workforces. Affirmative action programs must be implemented and monitored with regard to hiring, placement, training, compensation, and advancement.
6. Help to win government contracts:
Thousands of companies and not-for-profit organizations sell products and services to the government. To bid for government contracts, a firm must supply detailed information on its manpower resources. To be competitive, it must plan for and develop appropriate human resources.
7. Foundation for human resource functions:
human resource planning provides essential information for designing and implementing human resource functions such as recruitment, selection, personnel movement (transfers, promoting, and layoffs and training and employee development).
Human Resource Planning Process
Human Resource Planning influences the corporate strategy and in turn influenced by it. The Human Resource Planning process may incorporate all the stages shown below figure. The planning process may not always give exact forecasts. To be effective it should be a continuous process with provision for control and review.
1. Understanding the goals and plans of the organization.
2. Assessment of current human resource situation.
3. Human resource forecasts (Demand and supply)
4. Implementation programs (action plan)
5. Audit and adjustment (or control and evaluation).
1. Understanding the goals and plans of the organization:
The planning process is influenced by overall organizational goals and the environment of the business. It implies that the objectives of the human resource plan must be derived from organizational objectives. Human Resource Planning is a part of the overall strategic planning for the entire enterprise. Human Resource managers need data on possible corporate expansion, new products, new plants, and new markets, and so on.
Major steps in the human resource planning process
Know the goals and plans of the organization
Strategic planning: public policy, social trends, economic conditions, technology, market conditions, strengths, and weaknesses of an organization, projected outputs for planning periods.
Current human resource situation
Skills inventory: numbers of people grouped by the job, department, organizational level, location, age, education, in-service training completed, performance.
Human resource forecast
a. Present workforce: project retirements, layoffs, promotions, and quits for planning periods.
b. Demand people: translate plans and forecasts for the organization into demand for employees for planning periods.
c. Comparison of demand with supply: net additions or subtractions found by comparing (a) with (b).
Implementation programs
Recruitment, selection, and placement; performance appraisal; career planning, transfer, promotion, layoff; training and development; motivation and compensation.
Audit and adjustment
Measure implementation progress, compare with a plan, take corrective action. Change human resource plans if enterprise plans are altered, periodically update skills inventory, forecast, and implantation programs.
The existing human resource within the organization constitutes an important input into the development of the overall strategic plans for the enterprise. Furthermore, the output of the planning process explained above provides data on which HR plans and projections can be based. Once the organizational objectives are specified, communicated, and understood by all concerned, the HR department must specify its objectives with regard to HR utilization in the organization.
2. Assessment of current human resource situation.
It is the second step in Human Resource Planning process. In this step, HR planners prepare the inventory of staff present within the organization. It is basically a stock-taking exercise undertaken by HR planners. What stock of human resources does the organization have in terms of their quantity and quality? to answer this question, the human resource inventory has to be prepared.
HR inventory: management inventory/skills inventory
The profile of HR inventory can provide crucial information for identifying current or future opportunities and threats to the organization’s ability to perform. A young, energetic, and skilled workforce is an indication of current or future opportunities for the organization. Lack of adequate skills and talents in the workforce is definitely a threat to the organization’s future.
The items included in the HR inventory are (i) skill composition, (ii) age and sex, (iii) education level, (iv) work experience, (v) training, (vi) performance rating, (vii) languages spoken, (viii) overall capabilities, etc.
The answers to these factors are fundamental to the HR planner which he can get from the HR inventory.
Human resources information system (HRIS):
It is crucial in the process of preparing HR inventory. HRIS provides an excellent database for the HR planners as well as for others. The HIRS facilities, obtaining HR data is a logical, valid, and reliable manner in order to assist in managerial decision making. Modern organizations have now been making the use of computers in managing HRIS. Thus, within no time, complete and organized information can be obtained in the desired format.
3. Human resource forecasts (Demand and supply)
The HR forecast is a determination of the demand for people and of the appropriate types and skills for given time periods in the future such as one, three, and five years. The forecast also requires the preparation of an estimate of the supply of the people who will be available for the selected time periods. HR forecasting is essential to estimate staff requirements at some future time period. Such factors are of two types: (i) the external and internal supply of manpower, and (ii) the external and internal demand for manpower and, comparison of demand with supply (for further details see figure).
4. Implementation programs (action plan):
Implementation requires converting an HR plan into action. A set of action program is initiated as a part of HR plan implementation. Some examples of implementation programs are recruitment, selection, placement, performance appraisal, career development, promotion, transfer, layoff, retirement, training and development, motivation and compensation, etc. (that is R to R).
Practical example:
Shortage of accountants has forecasted: the HR plan indicates both stepped up recruitment and/plus training and upgrading of the present accountant. It requires both recruitment and development programs to be implemented.
5. Audit and adjustment (or control and evaluation)
It represents the fifth and final step in the Human Resource Planning process. For any of the various reasons, the programs for meeting the HR targets may be unable to attain the objectives. Therefore, a system for measuring progress should be set up. Many measures can be used depending upon the specific program being evaluated.
Control and evaluation are also necessary to identify if changes in the HR plans are made necessary because of: (a) changed conditions or (b) because some of the original planning assumptions have gone wrong.
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