Human Resource Planning Scope, Approaches22nd February 2021
Human resource planning is used by organisations to ensure that they have the right number and the right kind of people at the right place and at the right time. Where this process is carried out properly, it brings maximum long-run benefits to both the organisation and the individual employee.
Human Resource Planning is the planning of Human Resources. It is also called manpower planning/ personnel planning/ employment planning. It is only after Human Resource Planning that the Human Resource department can initiate the recruitment and selection process. Therefore, Human Resource Planning is a sub-system of organisational planning.
Definitions “Human Resource Planning is a strategy for the acquisition, utilisation, improvement and preservation of an organisation’s human resource” – Y.C. Moushell
“Human Resource Planning is a process of forecasting an organisation’s future demand for human resource and supply of right type of people in right numbers” – J.Chennly.K
Scope of Human Resource Planning
- It keeps the record of current manpower with the organization.
- Assessing the future requirements of manpower for organization objectives.
- To make the manpower recruitment plans.
- To phase out the surplus employees.
- To make a layout of training programme for different categories of employees.
Need for Human Resource Planning
- Shortage of Skills: These days we find shortage of skills in people. So it is necessary to plan for such skilled people much in advance than when we actually need them. Non-availability of skilled people when and where they are needed is an important factor which prompts sound Human Resource Planning.
- Frequent Labour Turnover: Human Resource Planning is essential because of frequent labour turnover which is unavoidable by all means. Labour turnover arises because of discharges, marriages, promotion, transfer etc. which causes a constant ebb and flow in the workforce in the organisation.
- Changing needs of technology: Due to changes in technology and new techniques of production, existing employees need to be trained or new blood injected into an organisation.
- Identify areas of surplus or shortage of personnel: Manpower planning is needed in order to identify areas with a surplus of personnel or areas in which there is a shortage of personnel. If there is a surplus, it can be re-deployed, or if there is a shortage new employee can be procured.
- Changes in organisation design and structure: Due to changes in organisation structure and design we need to plan the required human resources right from the beginning.
On the theoretical plane there are three options to any educational planner. The first option is to treat the education as consumption goods and demand for education as an aggregate of individual consumer’s demand schooling, and to provide the facilities for education and training according. The second option is to view education an investment goods, evaluate the investments in education at par with investment in education with the rate of return on investment in physical capital. The third option is to considered skilled manpower as basic inputs to the production goods and services within the economy; assess the skill requirements to achieve any predetermined economic growth target, and to gear the expansion of educational system to provide the needed education and training.
There are three approaches to educational planning:
- Social demand approach
- Rate of return approach, and
- Manpower requirement approaches.
Social Demand Approach: The social demand approach lies on the assessment of society’s requirement for education. In principles, it is an aggregate of individuals demand for education in respect of all individuals within the society. It is not always possible particularly in large societies, to assess individual demand for education. In practice, therefore, social demand approach relies on a projection of past trends in demographic aspects of population and the enrollment at the different levels of education.
Social demand approach is thus capable of revealing the number of students with differently types of professional preparations that may be a given target date, based on past experiences. Projections of social demand for education are contingent upon given levels of:
- Income of educated people,
- Taste and references of household for education,
- Demographic characteristics such as fertility and mortality,
- Direct costs of education,
- Student grants, and
- Existing standard of admission to various levels of education.
Added to these constraints, there are the perennial problems associated with the data base on demographic aspects at disaggregated levels such as districts, blocks and villages and data on wastage and stagnation in education, and intensity of utilization of existing educational facilities. Social demand approach thus suffers from the difficulties associated with any futurological exercise.
Rate of Return Approaches: Critics of social demand approach argue that the decision to choose more or less of education, beyond a legal school-learning age, is made by an individual who attaches a positive value to the present and the future benefits of education. Aggregate of individuals demand for education, which is constructed the social demand for education, should then be based exaggerate of individuals assessment of benefits of education-reflecting the social benefits.
This brings us the rate of return approach to education:
Rate of return approach looks upon education as a contributor to productivity and this sense, it is expected to facilitate investment decisions in education whether or not the students should undergo more schooling, or whether or not the state should invest more and expand educational facilities.
Like in the rate of return-on-investment analysis, rate of return on investment in education is used to expand educational facilities until schooling equalizes.
- On the one hand yield of investment in different types of education, and
- On the other hand, yield of investment in education vis-à-vis other sectors of economy.
Manpower Requirement Approach: The fundamental axioms of manpower requirements approach is that there is a definite link between the education and economic growth and that lack of skilled manpower in required number impedes growth. In this approach an attempt is made to forecast future requirements of educated manpower to fulfill a future target of Gross National Product (GNP) or specified targets of industrial production. Based on the forecasts of educated manpower requirement over a specified period, the planners would then indicate the directions of development of the educational sector over the same specific period.
The basic steps involved in this exercise are as under:
- Anticipating the directions and the magnitude of development of each individual sectors of the economy.
- Evolving norms of the employing manpower in each individual sector keeping the view the
- Technological options Present as well as future for each sector of the economy.
- Translating the physical targets for the development of each individual sector into the manpower requirement using the sector specific manpower norms.
- Estimating the educational; equivalents of the manpower requirement.
- Analyzing the implications of estimates of educated manpower requirements for educational development, based on assumptions regarding the enrollment rates, transitions probability and wastage and the stagnation rates at each level of education.
Limitations of the Manpower Requirement Approach:
The first limitation assumes that the educated manpower of different types is used in fixed proportions and that there no substitutions possibilities among the various categories of educated manpower.
The second limitation is that it postulates a definite link between an industrial task and an educational level. Prices, either in terms of cost of producing educated manpower or in terms of salaries and wages of educational people do not play any role in matching demand with supplies of educated manpower in this brand of educational planning. This makes the good sense if formal education and training is the only means of producing educated manpower. If there are alternative ways of producing a given category of skilled manpower, then prices play a significant role and the manpower requirements approach fails to take cognizance of this respect. In the Indian context, even in the case of highly skilled occupation where graduate level engineers are required, it has been observed that over 30 per cent of the manpower do not have the basic minimum qualification. They have reached these levels through on-the-job training and such other informal training, in the requisite skills. Such persons are categorized as “practical” and these practical are to be found in every occupation.
The crucial information in all forecasting exercises is the assumptions about the distant unknown future. Any error in judgment, in this regard, will seriously affect manpower balances at a later date resulting in either excess supply or excess demand. In the context of educational planning, excess demand is relatively easier to manage. Excess supply, on the other hand, leads to serious economic and sociological problems which are often difficult to deal with.