What is Manpower Planning? Discuss the process and importance of Man Power Planning in an organization.

Q. What is Manpower Planning? Discuss the process and importance of Man Power Planning in an organization .

Ans. Manpower planning means planning means deciding the number and type of the human resources required for each job, unit and the total company for a particular future date in order to carry out organizational activities. Manpower planning may be viewed as foreseeing the human resources requirement of an organization and the future supply of human resources and (i) making necessary adjustments between these two and organizational plans and (ii) foreseeing the possibility of developing the supply of manpower resources in order to match it with the requirements by introducing necessary changes in the functions of human resources management.

The process of manpower planning in an organization.

–       Analysing the corporate and unit level strategies.

–       Demand Forecasting: Forecasting the overall human resources requirements in accordance with the organisational plans.

–       Supply Forecasting: Obtaining the data and information about the present inventory of manpower and forecast the future changes in the human resources inventory.

–       Estimating the net manpower requirement.

–       In case of future surplus than plan for redeployment.

–       In case of future deficit, forecast the future supply of manpower from all sources with reference to plans of other companies.

–       Plan for recruitment, development and internal mobility if future supply is more than or equal to net manpower requirements.

–       Plan to modify and adjust the organizational plan if future supply will be inadequate with reference to future net requirements.

–       Degree of uncertainty and length of planning period.

The above points are discussed in details:

Demand Forecasting: The existing job design and analysis may thoroughly be reviewed keeping in view the future capabilities, knowledge and skills of present employees. Further the jobs should be redesigned and reanalyzed keeping in view the organizational and unit wise plans and programmes, future work quantum, future activity or task analysis, future skills, values, knowledge and capabilities of present employees and prospective employees. The jobs generally should be designed and analysed reflecting the future human resources and based on future organizational plans. Job analysis and forecast about the future components of human resources facilitate demand forecasting. One of the important aspects of demand forecasting of the quantity of human resources (skill, knowledge values, capabilities etc) in addition to quantity of human resources. Important forecasting methods are:

1. Managerial Judgment: Under this method, managers decide the number of employees required for future operations based on their past experience.

2. Statistical Techniques Include: ratio   trend analysis and econometric models. Under ratio trend analysis, ratios are calculated for the past data and these ratios are used for the estimation of the future manpower requirements For eg.

–     Present level of production (1-1-2005)                        2000 units

–     Present number of foremen (1-1-2005)                       5

–     Ratio is 2000/4                                                           500

–     Estimated production as on (1-1-2005)                      5000 units

–     Foreman required as on         (1-1-2005)                    5000/500 = 10

Econometric models for manpower planning are built up by analyzing the past statistical data and by bringing the relationship among variables.

Work Study Techniques: Under this method, total production and activities in terms of clear units are estimated in a year. Then man-hours required to produce each unit is calculated, Later the required number of employees is calculated. For eg.

–     Planned operations during 2005                                =                      1,60,000 units

–     Standard man-hours needed to perform each unit in 2005  =          0.25

–     Planned man-hours needed per year in 2005                                    =          40,000

–     Work ability per employee in man-hours in 2005                  =            2,000

–     Number of employees required in 2005                                  =          40000/20000=20

Supply Forecasting

The first step of forecasting the future supply of human resources is to obtain the data and information about the present human resources inventory.

Existing Inventory: The data relating to present human resources inventory in terms of humans components, number, designation-wise and department wise would be obtained. Principal dimensions of manpower planning are:

1. Head counts regarding total, department wise, sex-wise, designation-wise, skill-wise, pay roll wise etc.
2. Job Family Inventory: It includes number and category of employees of each job family i.e. all jobs related to the same category like clerks, cashiers, sub job family i.e. all jobs having common job characteristics (skill, qualification, similar operations) like production engineer (mechanical) and maintenance engineer (mechanical) and broad families like general administration, production etc.
3. Age Inventory: It includes age-wise number and category of employees. It indicates age wise imbalances in present inventory, which can be correlated in future selections and promotions.

Existing inventory at a future date is calculated as follows:

Existing inventory at    =      Present Inventory        +          Potential additions – Potential Losses

A future date                        as on today

Estimating the Net Man Power Requirements: Net manpower requirements in terns of number and components are to be determined in relation to the overall manpower requirements for a future date and supply forecast for that date. The difference between overall manpower and future supply of manpower is to be found out. The difference is the net manpower requirement.

Action Plan for Redeployment, Redundancy/Retrenchment: If future surplus is estimated, the organization has to plan for redeployment, redundancy etc. If surplus is estimated in some jobs/departments, employees can be redeployed in other jobs/departments where the deficit of employees is estimated. The organization should also plan for training or re-orientation before redeployment of employees. Redeployment takes place in the form of transfers. If the deficit is not estimated in any job/department and surplus is estimated for the entire organization, the organization, in consultation with the trade unions has to plan for redundancy or retrenchment.

Recruitment and Selection Plan: Recruitment and selection plan covers the number and type of employees required, when they are required for the job, time necessary for recruitment and selection process, recruitment sources, recruitment techniques to be used, selection procedure to be adopted and selection techniques to be used to subsequently recruiting the required candidates. It also covers the time factor for induction, preliminary training and placement.

The importance of manpower planning in an organization  is :

1. to recruit and retain the manpower of required quality and quantity.
2. to foresee the employee turnover and make the arrangements for minimizing turnover and filling up of consequent vacancies.
3. to meet the needs of the programmes of expansion, diversification etc.
4. to foresee the impact of technology on work, existing employees and future human resource requirements.
5. to improve the standards, skill, knowledge, ability, discipline etc.
6. to assess the surplus or shortage of manpower and take measures accordingly.
7. to maintain congenial industrial relations by maintaining optimum level and structure of human resources.
8. to minimize the imbalances caused sue to non-availability of human resources of the right kind, right number in right time and right place.
9. to make the best use of its human resources and
10. to estimate the cost of human resources.