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Steps in Human Resource Planning

Sometime back there was a lot of ad holism in the matter of recruitment of personnel. This was happening because no prior estimates are made about the manpower needs in a continuous way in organizations. Organizational units never used to maintain an up-to-date record of employees – about their service, resignation, termination, recruitment. death, or disablement etc. Especially in small organizations employees do not get sufficient notice about their approaching retirement. Organizations too, are not prepared for their replacements. Organizations used to make ad hoc decisions in the crisis, in the form of granting extensions to the existing members, and causing frustration among those who are aspiring for higher jobs.

Effective human resource planning does not create such embarrassing situations.

In every organization it is necessary to (a) analyze the current manpower supply; (b) tap various recruitment sources whenever and wherever necessary; (c) estimate various factors which generate manpower demands; (d) prepare a rational manpower recruitmeP.t plan; and (e) undertake educational, training and development schemes. All these are related to human resource planning.

HR provides, in general, the structure, impetus and assistance. HRP consists of four basic steps:

  1. Determining the organizational objectives.
  2. Determining the skills and expertise required to achieve the organizational and departmental objectives.
  3. Determining the additional human resource requirements in the light of the organization’s current human resources.
  4. Developing action plans to meet anticipated human resource needs.

l. Determining Organizational Objectives

First of all human resource plans must be based on overall organizational objectives. That is to say, the objectives of human resource planning must be de1ived from organizational objectives.

The organizational objectives indirectly specify the human resource requirements in terms of number and characteristics of employees. Organizational objectives are basically designed to provide an organizational unit and its members a direction and purpose. The objectives are to be stated in terms of expected results. The organizational goal-setting process begins at the top of the organization with a statement of central purpose. Then, the long-range objectives and strategies are formulated based on the stated central purpose for which organization has come into existence. Based on the long term objectives, the short-term performance objectives are specified. The divisional, departmental objectives are then derived from company’s short-term objectives. This process of goal setting is labeled as ‘cascade approach’ to objective setting.

The cascade approach should not be misunderstood as a form of ‘top-down’ planning whereby objectives are passed down to the lower levels of the organization. Actually, the basic idea is to involve all levels of management in the planning process. One advantage of involving all the levels of management in organizational planning is that it leads to an upward as well as downward flow of information during the planning stage. Again, this ensures that the objectives are communicated and coordinated throughout the organization. The cascade approach to goal setting thus involves both the operating and divisional managers in the overall company planning process. The human resource development identifies the particular shortcomings and strengths in the organizational personnel, and provides this information to the management. This information is significant in influencing the overall direction of the organization.

2. Determining the Skills and Expertise Required

Once the organizational, divisional, departmental and individual unit objectives are established, it is the responsibility of the operating managers to determine the skills and expertise required to meet the respective objectives. The key point to note is that the managers should (in addition to the skills and abilities of the present employees) determine the skills and abilities required to meet the objectives. To take hypothetical example, suppose the objective of marketing depa11ment is to increase total sales by 20% (of a ce1tain item). Once this objective has been established, the marketing manager must determine precisely how this objective can be translated into human resources. A logical starting point in this connection is to review the present/current job descriptions. Managers should, then, determine the skills necessary to meet the set objectives. Finally, the manager should translate the needed skills and abilities into types and number of employees.

3. Determining the Net Additional Human Resource Requirements

Having determined the types and number of employees required to achieve the company objectives, the manager must analyze the requirements in the light of the current as well as anticipated human resources of the organization. This requires a thorough analysis of the presently employed personnel as well as forecasting the changes in employment.

Skills inventory. The skill inventory is also called personnel register. This is prepared to determine the net additional requirement of human resources. The Skills inventory provides consolidated information about the organization’s human resources. It provides a running commentary on all employees in the organization. A skills inventory. in its simplest form, includes a list of names, characteristics and skills of the employees in an organization. A more comprehensive skills inventory contains the following information:

  1. Personal data. Age, sex, marital status of employee.
  2. Skills. Educational qualifications. skills, job experience, training etc.
  3. Special qualifications. Membership m professional groups, special achievements.
  4. Salary and job history. Past as well as present, salary date of increment, various positions
  5. held previously prior to the current employment.
  6. Company data. Benefit plan date, retirement information. seniority etc.
  7. Capacity of the individual. Test scores on psychological and other tests, information about health etc.
  8. Special preferences of individuals. Type of job, geographic location etc.

The advantages of preparing a skills inventory can be summarized thus:

  1. It provides a means of quickly and accurately evaluating the skills and abilities that are available in an organization.
  2. It helps in determining the net human resource requirements in the present as well as future.
  3. It helps in taking some crucial managerial decisions – such as accepting a new project, to bid on a new contract, or to introduce a new design or product.
  4. It also aids the management in planning the future employee training and management development programmes.
  5. It helps management in recruiting and selecting new employees.

4. Developing Action Plans

Soon after determining the net human resource requirements, a manager must develop action plans to achieve the desired results. If the net requirements indicate a genuine need for additional employees, plans must be made to recruit, select, induct, and train new personnel. On the contrary, if a reduction in personnel is necessary (of course, it is a rare case) plans must be made to realize the necessary adjustments through attrition, layoffs or discharges. The action plans so developed should utilize the skills of the present as well as newly recruited personnel to the fullest extent possible.