Manpower Planning_chapter2

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Manpower Planning Chapter-2 :

Manpower Planning Chapter-2 Mohammed Quadir Mohiuddin Faculty of Human Resource Department of Business Studies Ibri College of Technology Sultanate of Oman

Process of Manpower Planning :

Process of Manpower Planning The major stages involved in manpower planning are as follows: Analysing organisational plans Forecasting demand for human resources (Manpower Forecasting) Forecasting supply of human resources Estimating manpower gaps Action Planning Monitoring and Control Mohammed Quadir Mohiuddin


Mohammed Quadir Mohiuddin


In the first stage the objectives and strategic plans of the organisation are analysed. Plans regarding technology, production, marketing, finance, expansion and diversification give an idea about the volume of future work activity. It is necessary to study business plans because all manpower plans are derived from business plans. An organisation’s plans are based on economic forecast, company’s sales and expansion forecast, and the labour market forecast. Mohammed Quadir Mohiuddin

Analyzing Organization Plans:

Analyzing Organization Plans Each plan can be further analysed into sub plans and detailed plans can be prepared. The future organisation structure and job design (The process of organizing work into the tasks required to perform a specific job) should be made clear and changes in the organisation structure should be examined so as to anticipate its manpower requirements. Mohammed Quadir Mohiuddin

Forecasting Demand for Human Resources :

Forecasting Demand for Human Resources On the basis of corporate and functional plans, the future needs of human resources in the organisation are anticipated. The number of people and the skills required for future depend on the production and sales budgets in a manufacturing enterprise . The human resource requirements for a given level of operations vary depending upon the production technology, process, make or buy decisions, etc. It is necessary to make projections for new positions to be created and the vacancies likely to arise in current manpower. Mohammed Quadir Mohiuddin

Techniques used in manpower forecasting are as follows: :

Techniques used in manpower forecasting are as follows: Managerial judgment Work-study method Ratio trend analysis Mathematical models Workload analysis Workforce analysis Skills analysis Mohammed Quadir Mohiuddin

Managerial Judgement :

Managerial Judgement In this method, experienced managers estimate the manpower requirements for their respective departments on the basis of their knowledge of expected future workload and employee efficiency. These departmental estimates are than aggregated to get the overall estimate for the organisation. This is the simplest and time saving method. However, this method is quite subjective and hence, suitable for only small organisations. Mohammed Quadir Mohiuddin

Work-Study Method :

Work-Study Method Work Study is the systematic examination of the methods of carrying out activities such as to improve the effective use of resources and to set up standards of performance for the activities carried out. Mohammed Quadir Mohiuddin


Work Study Mohammed Quadir Mohiuddin


Under work-study method , time and motion studies are used to analyse and measure the work being done. With the help of such studies, standard time required per unit of work is decided. Example :   Planned output for next year = 50,000 units Standard hours per unit = 3 Planned hours required = 1, 50,000 Productive hours per worker per year = 3000 Number of workers required = 1, 50,000 / 3000 = 50 Thus 50 workers are required Suppose the span of control is 10, than 50/10 = 5 supervisors will be required. Mohammed Quadir Mohiuddin


Ratio-Trend Analysis Under this method, ratios are calculated on the basis of past data. Example: Production level = 50000 units No of workers in 2006 = 50 Ratio = 50:50000 = 1:1000 Estimated Production level in 2007 = 60000 No of workers required = 60000 x 1/1000 = 60 Mohammed Quadir Mohiuddin

Mathematical Models :

Mathematical Models Employment Trends Trends in the organisations manpower can be judged by comparing and analysing the staff during the past five or six years Mohammed Quadir Mohiuddin

Replacement Needs :

Replacement Needs Replacement needs depend on deaths, retirement, resignation and termination of employees. These can also be assessed on the basis of past experience. Mohammed Quadir Mohiuddin

Productivity :

Productivity Improvement in productivity influences manpower requirements. Better utilisation of existing manpower results in productivity. This results in fewer requirements for manpower.   Mohammed Quadir Mohiuddin

Absenteeism :

Absenteeism While estimating demand for future manpower needs, the existing rate of absenteeism in the organisation should be considered. The rate of absenteeism can be calculated as follows: Absenteeism = Mandays lost due to absenteeism Mandays worked +Man-days lost Mohammed Quadir Mohiuddin

Example: :

Example: Mandays lost due to absenteeism = 2 Mandays worked = 28 Absenteeism = 2 / 28 +2 = 2 / 30 = 1/15 = 0.066   Note : Manday - One day's work: the work done by one person in one day Mohammed Quadir Mohiuddin

Expansion and Growth :

Expansion and Growth The organisations growth plans and expansion programme should be carefully analysed to judge their impact on manpower requirements in future. Steps must be taken to getting and developing the talent required to implement expansion and growth plans without delay. Mohammed Quadir Mohiuddin

Workload Analysis :

Workload Analysis Under this method, the total workload of each department is estimated on the basis of sales forecasts, work schedules, growth rates, expansion plans, etc. On the basis of past experience and work measurement, the total workload is converted into manpower required. Mohammed Quadir Mohiuddin

Example: :

Example: Suppose a factory aims to produce 50000 tonnes of cement during 2007. The standard man-hours required to produce one ton is estimated to be 10. On the basis of past experience, the factory estimates that on an average one worker can contribute 2500 hours per year. Mohammed Quadir Mohiuddin


The total workload and the number of workers required can be estimated as follows: Production budget for 2007: 50000 tonnes Standard man-hours required per unit: 10 Planned man-hours required for 2007: 500000 Man-hours available per worker: 2500 Number of workers required for 2007 = 500000 / 2500 = 200 Mohammed Quadir Mohiuddin

Workforce Analysis :

Workforce Analysis   All the existing workers are not likely to be available for work throughout the year, due to absenteeism and turnover. Therefore, it is necessary to make arrangements for loss of current manpower due to these factors. Mohammed Quadir Mohiuddin

Example: :

Example: On the basis of past experience, the organisation estimates that on average, 5 % of the staff will remain absent and another 5% is likely to be lost due to resignations, retirements, deaths, terminations, etc. Mohammed Quadir Mohiuddin


Thus, the actual number of workers required (using the example of workload analysis) will be 200 + 10% of 200 = 200 + 10/100 * 200 = 200 + 20 = 220 Mohammed Quadir Mohiuddin

Skills Analysis :

Skills Analysis   The quality of manpower required varies from job to job. Therefore, the quality of employees required for a job can be determined only after determining the job requirements. Mohammed Quadir Mohiuddin


To know the requirements of a particular job, job analysis is done. Job analysis is the process of analysing a job so as to collect all relevant facts about the job in terms of duties and responsibilities involved in it and the qualifications needed for successful performance of the job. Mohammed Quadir Mohiuddin


With help of information obtained through job analysis, two statements, namely job description and job specification are prepared. Job description contains details about the contents of a job whereas job specification reveals the physical, educational and other qualifications and experience required in an individual to perform the job satisfactorily. Mohammed Quadir Mohiuddin

Forecasting Supply of Human Resources :

Forecasting Supply of Human Resources Every organisation has two sources of supply of human resources – internal and external. Internally, human resources can be obtained for certain posts through promotions and transfers. Human resources flow in and out of an organisation due to several reasons as follows: Inflows : New recruits, Promotions, Transfers. Outflows : Promotions, Transfers, Retirements, Termination, Resignations, Deaths. Mohammed Quadir Mohiuddin


Policies relating to these should be constantly monitored to regularly judge the impact on the internal supply of human resources. In order to judge the inside supply of human resources in future, human resources inventory or human resource audit is necessary. Mohammed Quadir Mohiuddin


This contains data about the present human resources. The major components of Human Resource Inventory are: Head Count : Total number of people employed, department wise, skill wise, designations wise, payroll wise, gender wise, etc. Job Family Inventory : Number of employees in each job, e.g., clerks, typists, cashiers, drivers, managers, etc. Mohammed Quadir Mohiuddin


Age Inventory : It is age wise classification of employees. Skill Inventory : It contains data about the education, skills, experience, past performance, work preference and potential for promotion, etc. Mohammed Quadir Mohiuddin


Manpower inventory helps in determining and evaluating the quantity and quality of the internal human resources. It reveals what exists in stock of manpower and what can be expected in future. It also indicates the possible shortfalls in comparison with expansion requirements and the future organisational structure. Detailed bio data of each employee provides the foundation for a programme of individual development. Mohammed Quadir Mohiuddin


Once the present human resources are assessed, the changes (expected gain or loss of manpower) likely to occur can be estimated. Potential losses of human resources can arise in the form of resignations, dismissals, deaths, layoff, terminations, promotions, demotions, transfers, deputations out, consultancy out, etc. Similarly additions to human resources may take place due to new recruits, promotions, demotions, transfers, deputations in, consultancy in, acquisition of new skills through training, etc. Mohammed Quadir Mohiuddin


The effect of potential loss or gain can be calculated as follows: Future internal supply of Hr = present inventory of Hr + potential additions – Potential losses. Mohammed Quadir Mohiuddin

Estimating Manpower Gaps :

Estimating Manpower Gaps Net human resource requirements or manpower gaps can be identified by comparing demand forecasts and supply forecasts. Such comparisons reveal either deficit or surplus of human resources in future. Deficits tells about the number of persons to be recruited from outside whereas surplus tells about the extra employees to be redeployed or terminated. Mohammed Quadir Mohiuddin


Similarly, gaps can be in terms of knowledge, skills and aptitude. Employees estimated to be deficient can be trained whereas employees with higher skills can be given more enriched jobs to match with their skills.   Mohammed Quadir Mohiuddin

Action Planning :

Action Planning Once the gaps have been identified, plans are prepared to bridge the gaps. To overcome surplus, employees may be redeployed to other departments or may be terminated in consultation with trade unions. People may be persuaded to quit voluntarily through golden handshake. On the other hand, deficit can be met through selection, transfers, promotions, and training plans. Mohammed Quadir Mohiuddin


In case the future supply of human resources from all external sources in estimated to fall short of requirements, the human resource planners should recommend modification of organisational plans. Mohammed Quadir Mohiuddin

Monitoring and Control   :

Monitoring and Control   Once the action plans are implemented, the human resource structure and system needs to be reviewed and regulated. Monitoring and control phase involves allocation and utilisation of human resources over time. Review of manpower plans and programmes helps to reveal deficiencies. Corrective actions should be taken at the right time to remove any deficiencies. Mohammed Quadir Mohiuddin


Manpower inventory should be updated regularly. Necessary modifications in manpower plans should be made in the light of changing environment and needs of the organisation. An appraisal of the existing manpower plans serves as a guide in future manpower planning. Mohammed Quadir Mohiuddin


T he steps that may be taken to monitor and control human resource plans may be as follows: Any addition to the manpower must considered at the top level of management A properly designated system of reporting changes in the manpower should be employed Human resource budgets based on manpower plans may be used to keep manpower within properly defined limits Mohammed Quadir Mohiuddin


Keeping a close watch on overtime worked and casual labour employed Auditing the utilisation of manpower Measuring the efficiency of manpower Finding the level of morale and job satisfaction through surveys and correcting the deficiency Arranging exit interviews for better retaining of manpower Finding out breakeven point or payback period of new employees Mohammed Quadir Mohiuddin


Mohammed Quadir Mohiuddin


Mohammed Quadir Mohiuddin

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