UNIT 12 MANPOWER PLANNING

Transcription

1 UNIT 12 MANPOWER PLANNING Structure 12.1 Introduction Objectives 12.2 Need for 12.3 Objective of 12.4 Process of Demand Forecasting 12.5 Demand Forecasting Techniques Employees Opinion Method Normative Method Component Method International Comparison Method MRP Method 12.6 Techniques of Micro Forecasting Evolving Manning Norms Forecasting Workload Relating Workload to Manning Norms 12.7 Database Forecasting Database for Macro Forecasting Database for Micro Forecasting 12.8 Supply Forecasting Concept of Supply Macro Forecasting Micro Forecasting 12.9 Analysis of Wastage Stability Index Modified Stability Index Reconciling Demand and Supply Summary Terminal Questions Answers Further Readings 12.1 INTRODUCTION is the foundation of attainment of goal of an enterprise. plans are selected courses along which the management desires to coordinate group action. planning or human resource planning is the process by which a management determines how an organization should more from its current. Human resource position to its desired human resource position. In other words may be interpreted as process of preparing a set of decisions on human resources development for action by human resources in future. 223

2 Introduction to Management According to Eric, It is process it management strives to have the right kind of people at the right place, at the right time, to do the things at the right place, at the right time to do the things which results in both the organization and the individual receiving the maximum long range benefit. planning and human resource planning are synonymous. Coleman has defined manpower or human resource planning as the process of determining human resource requirements and the means for meeting those requirements in order to carryout the integrate plan of the organization. Gordon McBeath has divided into two stages. The first stage involving with the detailed planning of human resource requirements for all types and levels of employees throughout the period of plan and second stage is concerned with, of Human Resource of Supplies to provide the organization with the right types of people from all sources to meet the planning requirements. Thus it is clear from the above definitions that consists of projecting future human resource requirements and developing. Human Resource plans/ plans for the implementation of the projections. In other words we can say that is admittedly an essential tool for proper acquiring, utilization and development of the human resource/ resource of an organization. In the corporate field, the tool is still quite new as compared to some other techniques of scientific management and its usefulness has been well tested in several organizations foreign as well as India. However, planning has been neglected in most of the Indian Industries. This aspect is used only for estimating the total requirements of the workers and not with the object of developing the human resource. The action required of human resources/ Resources are primarily of two types:- Availing the employment opportunities generated by the technologies in vogue in the process of economic development, and Evolving new technologies to aid the process of economic development. Investment in health and nutrition, social and economic equity and education have the potential to contribute to resource/human resource development. SAQ 1 What do you mean by manpower planning? 224

3 Objectives After reading this unit, you should be able to understand: the concept and introduction of manpower planning; need for manpower planning; objectives of manpower planning; the concept of manpower demand; the need for manpower demand; the methodologies of manpower demand forecasting at macro and micro levels; the data base required for manpower demand forecasting at macro and micro levels; the concept and dimension of manpower supply; the methods of manpower supply forecasting at the macro level; and the significance of wastage rate and internal flows in the context of micro supply NEED FOR MANPOWER PLANNING The planning for manpower resources is a major managerial responsibility in today s industrial economies. In modern era of industrial nations, with rapid technological change and persistent demands for higher and higher levels of skill manpower planning has achieved a high priority. In other words for achieving the objective o the organization it is necessary to have a skilled manpower rather than unskilled and manpower planning is indispensable and the reasons are listed below: To function and survive an organization needs the manpower with the necessary qualifications, skills, experience and aptitude. To identify losses in terms of requirements, resignation, deaths, dismissals, transfers, promotion etc. To anticipate the quantum and size of labour turnover and to initiate well in advance necessary corrective steps. To cope up with technological changes taking place at a very fast speed in an around an organization and, To ascertain the pockets of surplus manpower or areas of shortages and redeploy the available labour force to correct the imbalance. 225

4 Introduction to Management We further point out the importance of manpower planning which can be also termed as need of, such as: It serves the purpose of a planning and control technique. It accurately estimates the number of personnel required. It provides information about the manner in which the existing personnel are deployed and kind of skills required for different jobs. It helps utilizing the existing more productivity in relation to the job requirements. It determines the recruitment level. It assesses future accommodation requirements. It gives an indication of the lead time available to select and retain the required additional manpower. SAQ 2 Give two reasons for need of manpower planning OBJECTIVE OF MANPOWER PLANNING The main objectives of are as follows: 226 To ensure optimum use of existing manpower. To forecast future requirements for manpower. To provide control measure to ensure that necessary manpower are available as and when required. To link manpower planning with organizational planning. To assess the surplus and shortage of manpower. To anticipate the impact of technology on jobs and manpower. To determine levels of recruitment and training. To estimate the cost of manpower and housing needs of employees. To provide a basis for management development programmes. To facilitate productivity bargaining. To meet the needs of expansion and diversification programmes.

5 SAQ 3 What are the main two purposes of manpower planning? 12.4 PROCESS OF MANPOWER PLANNING The process of Resource comprises of: Anticipating the manpower needs. job requirements and descriptions. Analysing skills to determine the nature of manpower, needed and Choosing adequate sources of recruitment. The following four methods are generally used in determining the personnel requirements. Fixed minimum man specification requirements. Annual estimation of vacancies. Long-range estimates of the vacancies, and Specific position estimates. planning requires an in-depth knowledge of how the human resource system / manpower system operates, with emphasis on the flow (supply and demand) of people into, through and out of the organization. On the supply side, manpower planning requires accurate and current information regarding the qualitative and quantitative factors such as, skills invention and public policy towards manpower resource. On the demand side, attention is paid to such factors as productivity, technological changes, and sales forecast. Supply and demand are continuously balanced within the framework of organizational goals and priorities. A step wise manpower planning process is given below: Demand Forecasting supply forecasting inventory Forecasting the Wastage Reconciling Demand and Supply 227

6 Introduction to Management Demand Forecasting The process of human resource planning /manpower planning begins with the forecasting of manpower demand. This forecasting must be in line with the organizational plan or objectives. The manpower demand forecasting is done in terms of (I) the additional number of employees required (II) category to which the additional employees will belong, and (III) education, knowledge aptitudes, and experience of the employees required additionally. Under this techniques, there are some conceptual issues which need elaboration which are: Forecast Need for Forecast Types of Forecasts, and Data Base for Forecasting Forecast Under the manpower forecasting, there is a need to make a distinction between projection and forecasts. Projection may be defined as the outcome of spontaneous forces or occurring without external causes or we can say that outcome which is expected in the normal course of events without external stimulus. On the other hand forecast refer to a prediction of the outcome when normal course of events are influenced and altered by external forces. Need for Forecast The basic fundamental reason for making manpower forecast is the long gestation lags in the production of skilled professional people. forecast made in advance, that facilitate planning of education/ training in effort to ensure that skilled manpower required are available at the time when they are needed. 228 The second major reason for adopting this method in imperfections in labour market, due to markets for manpower with long lead time for production are characterized by cobweb cycles because of long lags in the supply side and short lags on the demand size or we can say that due to this the labour market may ultimate lead to distortion in occupation, education correspondence, which could either result in huge educated unemployment or people taking those occupations for which they are not adequate prepared. forecasts, would facilitate corrections of labour market distortions. The third reason for adopting this techniques are production of goods and services require various categories of skilled manpower in fixed proportions. If there is any shortage of skilled category of manpower that would adversely affected the production of goods and services within economy. And the manpower forecasts would help to avoid such type of situation by facilitating anticipation of skill shortages and planning skill supplies accordingly.

7 Types of Forecast Types of manpower forecast depending on the purpose for which forecasts are made. Some major types of forecast are briefly described as follows: 1. Short-term forecasts: This forecast are made for a period not exceeding two years. This forecast are made for facilitate estimation of financial provisions for wages/salaries in the projects initiated or likely to be initiated in the immediate future. It is useful in resource allocation among competing programme which is to be implemented in the not too distant future. It is very useful at the Micro level or say company level. 2. Medium-term forecasts: This forecast are made for a two to five years in most countries. It is useful in those offices which are concerned with advising ministers or preparing contingency plans to meet the twist and turns or economic circumstances or international events. 3. Long-term forecasts: Forecasts for a period more than five years are considered as long-term-forecasts. This type of forecasts are very useful in educational planning relating to the high skilled professional categories of manpower. They are also useful in the preparation of corporate plans, incorporating productive changes. Technological changes and major organizational developments. 4. Policy conditional forecasts: This forecasts are determined by the policy towards the factors which influence the demand for manpower and may be based on a rule of thumb, or on professional judgment or on explicitly specified model or any combination of the three. 5. Onlookers forecasts: This forecast derived by assuming that the factors influencing manpower demand behave in the future as they influence in the past. Onlooker forecasts are also obtained with the help of rule of thumb, professional judgment, explicitly specified model or combination of any three. 6. Optimizing forecasts: Under this forecasts the numbers demanded of various categories of manpower are so determine that either the end benefits are maximized or cost of resources for achieving pre-determined end objective is minimized. 7. Macro and micro forecasts: Macro and Micro forecasts are two other types of manpower forecasts and it is important to make distinction between them because the end purposes of these forecast are different and the methodologies employed and data base used are different. Macro forecast are done usually at the national, industry/sector and region/state levels. They are used in: education and training facilities. Decision making for the choice of industry for development. Choice of location, technology and size of organization among industries selected; and 229

8 Introduction to Management Determining order of priorities for creating and or for expending economic and social infrastructure. On other hand Micro forecast are made at enterprise level or department level. This forecast are needed for: recruitment. Promotion and training accordance with the plans for the development of enterprise or department concerned. Under this level of forecast, there is requirement of greater details as well as precise. This forecast are usually expressed in terms of number required for each occupation, source and stage of recruitment and schedule of training. SAQ 4 Which statement is True or False? a) Short term forecasts made for a period not exceeding two years. b) Forecasting the wastage is not a manpower planning process. c) Long term forecasts are very useful in education planning MANPOWER DEMAND FORECASTING TECHNIQUES demand forecasting techniques used at the macro level are as follows: Employees Opinion Method Normative Method Component Method International Comparisons Method Mediterranean Regional Project (MRP) Method Employees Opinion Method Under this method employees are asked to give their assessment of future manpower needs in different categories in their respective establishment. Aggregating over all employees and making allowance for death, retirement, migration and occupational mobility. It is then possible to arrive at future manpower demand by skill category. This method has been widely used in United States, United Kingdom, Canada, Sweden and France. This method particularly useful in the case of highly skilled professional categories of manpower and it has also seen observed that the method has been very useful in making short term manpower forecasts than medium term and long term forecasts. 230

9 Normative Method Normative method uses norms for employing manpower to produce goods and services. The norms are usually expressed as ratios between manpower employed and the volumes (or value) of goods and services produced. These ratios are based on either the existing situation or the desirable situation some examples of ratios are output ratio, employment-fixed capital ratio, teacherstudent ratio and engineer technician ratio Component Method In the component method requirement of any category of manpower are further sub-divided into various components and then a separate norm appropriate to each component is used in arriving at a forecast of manpower requirements for each component. Forecasts for all the components are then aggregated to arrive at an estimate of future manpower requirements for the manpower category concerned. The component approach is basically the normative approach. The difference lies basically in using different norms for different components International Comparison Method International comparison sometimes facilitate use of stable norms. There is a considerable subjective evaluation of international experiences in using the international comparisons method which is not always easy to justify an objective consideration. This method has, therefore, been not very popular MRP Method The MRP method is designed to forecast manpower requirement by educational category so that the forecasts are rendered directly relevant to educational planning exercise. Five steps involved in forecasting manpower requirement by education. The first step is to arrive at the target year projections of GDP determined by an economic plan in case of planned economics. The second step involves the estimation of sectoral contributions of GDP in the target year by major sector such as agriculture, manufacturing, transport and communication, trade and commerce and services. At the third step, sector specific average employment output ratios are applies to sectoral composition of GDP in the target year to arrive at estimates of employment in the target year by sector. In fourth step, sectoral forecasts of employment, thus obtained for the target year are then distributed among a number of mutually exclusive occupational categories using either the base year or any desirable sector occupation distribution. At the final step occupational structure of manpower forecasts relating to the target year are translated into educational structure by applying a 231

10 Introduction to Management standard measure of the level of formal education training required to successfully perform the tasks specified under each occupational title. This procedure gives the net manpower needs not of replacement needs. SAQ 5 What are the main techniques include in manpower demand forecasting at macro level? 12.6 TECHNIQUES OF MICRO FORECASTING There are three techniques/steps regarding micro forecasting in demand forecasting and they are as follows: Evolving manning norms based on an analysis of workload structure. Forecasting workload Relating workload to manning norms Evolving Manning Norms It starts with taking a comprehensive view of the work of an organization which is first divided into functions. The functions are then sub-divided into tasks and work groups associated with each task are then identified. In respect of each group: The levels and number of position at each level. The job descriptions of each position by level, and Performance of incumbents to each position by level vis-à-vis job expectations. 232 are analysed, based on this analysis, number of levels and number of positions required at each level, skill gaps of each position, and their education/training and experience requirement are worked out. forecasting process at the micro-level, therefore, calls for a forecast and analysis of future workload patterns to arrive at appropriate norms.

11 Forecasting Workload If work consists of a single type of activity, then the total output is a measure of the amount of work. In areas such as provision of health care, work load after is a function of population. Population forecasts obtained by demographic technique, in the provision of health care can be treated as workload forecasts. Under this we predict workload of each task separately and aggregate the workloads of all tasks to arrive at a forecast of total workload (work consists of variety of task). If task is many then procedure is very tedious. Hence it may be possible to reduce the dimension of the problem, in this case, where all the tasks are perfectly correlated among themselves. It would adequate to take just one tasks or an average of all tasks for projection purpose but if the tasks are not perfectly correlated, it is still possible to reduce the dimension through the use of these two statistical techniques. Principal Component Analysis Factor Analysis Principal Component Analysis It is a descriptive technique which finds linear transformation of numerous tasks into a smaller number of indices (principal components) such that: the indices are all uncorrelated among themselves, and all the indices together summarise the information contained among the numerous task. Principal components are then projected to arrive at forecasts of workload. Factor Analysis Under it some small number of factors are identified which have the potential to explain the behaviour of numerous tasks then predicting the behaviour of individual factors, it is possible to arrive at forecast of workload under each task and hence the forecast of total workload Relating Workload to Manning Norms If workload is w and productivity of workers p given as the ratio of workload workers can be estimated based on historical data and information on factor affecting productivity, then manpower forecasts in terms of numbers: Numbers required in future = p w. SAQ 6 Under the factor analysis, how we calculate the manpower required in future. 233

12 Introduction to Management 12.7 DATABASE FOR MANPOWER FORECASTING Database has a crucial role to play in manpower forecasting as it determines the methodologies that can be adopted. There is a different database for macro and micro that are as follows: Database for Macro Forecasting For macro forecasting, it would be ideal to have comparable data on the following items over a period of years in the past. Population Statistics Under it population of country by age, sex, education, economic activities, status, migration, martial status, region and rural-urban distribution are needed. Data on Economic Parameters Under it data are required on time series basis are inputs, output, capital, investment, wages, productivity, value added, depreciation by industry, consumption, savings and expenditure on health by income starta of population in rural-urban areas of each region. Information on Technologies Details about existing technologies are needed by industry specifying the implications of each technology for employment, generation and investment. Similar information is also needed on emerging technologies by industry Data Base for Micro Forecasting Under this, a well defined Information System (MIS) is needed at the enterprise or company level. MIS have the following module. Personal Data Module 234 Identification particulars, educational particulars, educational qualifications.

13 Recruitment Module Date of recruitment, grading in aptitude tests, grading in leadership tests, overall grading, job preference and choice etc. Job Experience Module Placement history, grade promotions, tasks performed grade-wise, significant contributions etc. Performance Appraisal Module Performance appraisal at each job held, job evaluation on the basis of job description, communication rating, rating of interpersonal relationships, rating of behaviour in group commitment of corporate goals etc. Training and Development Module Nature of training received at each level, individuals evaluation of effectiveness of training, individual assessment of training needs vis-à-vis currently being performed etc. Miscellaneous Module Record of compensation and benefits received health status information relating personal problems which calls for the attention by the authorities, security needs etc. MIS is developed on the basis of personnel history records of each individuals employee within the enterprise or company and is updated every year. SAQ 7 i) Which data is needed for macro forecasting? a) Population statistics b) Economic parameters c) Information on technologies d) All of these e) None of these ii) MIS needed for:

14 Introduction to Management 12.8 MANPOWER SUPPLY FORECASTING The next step in the process of manpower planning involved is to find out that how much demand of manpower can be met from within. This can be possible through the manpower supply forecasting. The manpower supply forecasting will involve following steps: a) inventory: Inventory helps in determining and evaluating the quantity and quality of the present manpower of an organization. Therefore, through inventory organization comes to know that what exists in the stock in terms of analysis (I) number of employees, (II) the categories to which they belong (III) employees skills, abilities, potentials, age etc. b) Forecasting the wastage: After having analysed the above facts as a part of manpower supply forecast it is necessary to know the possible wastage in the existing stock in the future. These wastages may includes, retirements, deaths, terminations, resignations, deputations etc. The total wastage worked out in the above terms must be deducted out of the existing inventories in order to get the net manpower supply forecast Concept of Supply and labour force are treated often as synonymous, while labour force includes all persons in population who are economically active, manpower refers to all persons in the labour force other than the purely unskilled, manpower is thus the skilled component of labour force irrespective of the level of skill attained. supply is then the totally of manpower employed and manpower unemployed but are seeking jobs. Dimensions of Supply There are four dimension of manpower supply, that are as follows: i) Stock and Flow ii) Quantity and Quality iii) Occupation and Education iv) Macro and Micro i) Stock and flow Flow dimension refers to manpower supply over a period of time say, over a five year plan period. Stock dimension denotes manpower supply at a particular point of time like a target date of an economic plan. ii) Quantity and quality 236 Quantitative dimension of manpower supply indicates the number of persons available with the requisite qualification/skills both employed as well as unemployed and seeking jobs. On the other hand qualitative dimension of manpower supply refers the characteristics of manpower

15 supply such as specialization, level, duration and quality of training length of job related experience and aptitude and motivation are being considered. iii) Occupation and education Occupation is a description of the function role to be played. An occupation does not always indicate education/training/skill requirement to perform the expected. Functional roles where an occupational group is uniquely related to an educational programme, to that all entrants to the occupation must come from the educational programme concerned. supply for that occupation, therefore, consists of all graduates of the educational programme. iv) Macro and micro Macro level manpower supply at any further date consists of current stock of manpower additions to current stock from new entrants to be entrants; and subtraction due to death, retirement, migration, mobility and withdrawal from labour force. Micro level manpower supply comprises external supply caused by recruitment; and internal supply relating from transfers, promotions and rebundancies Macro Forecasting There are two methods of estimation of manpower supply in macro forecasting that are as follows: Direct Method Direct method relies on a census count of person belonging to the category of manpower for which supply is being estimated. It can be usually obtained from the population census. The primary limitation of this method is that the census count are infrequent and because census are infrequent they can be used in any meaningful trend forecasting exercise. Apart from this censuses are known to be subject to enumeration biases such as under count misreporting, and classification biases. In view of these limitations, researcher in the field of manpower have been resorting for direct method. Indirect Method Under this method institutional out turn over the active life span starting from the base period upto the target date is cumulated making adjustments for factors of attrition and labour force participation to obtain on estimate of manpower stock at the target date. Estimation of manpower by the indirect method thus involves the following steps: 237

16 Introduction to Management i) Estimating active life span ii) Determining base period iii) Forecasting annual institutional out turn iv) Estimating attrition rate v) Obtaining cumulated out-turn adjusted for attrition vi) Estimating manpower supply i) Estimating active life span Active life span is defined as the span of life over which an individual is active in any given profession or occupation. Active life span varies with the occupation and it may also vary from individual to individual within an occupation. Hence, active life span is estimated for an average individual in each occupation. For estimating average active life span of any occupation estimates of two parameters namely average age at entry into the occupation; and average age at retirement from the occupation. are required. The span of life from the average age at entry to average age at retirement is then the average active life span. ii) Determining base period stock as of a target date comprises of manpower of all vintages starting from the persons who have just entered to those who are on the verge of retirement. Hence, base period can be determined by subtracting the number of years in the active life span from the target year. For example assuming an active life span of 34 year for accountants (from 21 years to 65 years of age) and target date as 2000 A.D., the base year will be 1966 (i.e ) iii) Forecasting annual institutional out-turn To start with, past trends in enrolments are extraported to cover the target date, using suitable trend forecasting methods, the forecasts of enrolments thus obtained are then converted into forecasts of out-turn, with the help of observed trends in annual rates of completion of the educational level concerned. iv) Estimating attrition rate Attrition in the manpower supply relevant to any category of education may be caused by the following four factors:- 238 Death Retirement Migration Occupation Mobility

17 The joint effect of these four factors is termed as the attrition rate. Among these four factors, impact of occupational mobility is very difficult to estimate. In view of this attrition rate is usually taken to mean, the joint effect of death, retirement and migration only impact of death is estimated, using age specific death rates, effect of retirement is obtained by using a cut off age for retirement. The influence of migration factor is quantified, through detailed education specific migration studies. v) Obtaining cumulated out-turn adjusted for attrition Given the base year manpower supply (S 0 ), manpower supply in the first year after the base year (S 1 ) is determined as: where a = attrition rate S 1 = S ( 1 a ) Y 1 y 1 = Institutional out-turn in the first year after the base year manpower supply in the second year (S 2 ) after the base year will be: S 2 = S ( a ) + Y 2 where Y 2 is the institutional out-turn in the second year after base year, using the cumulation process, manpower supply in the target year (which is say t years after the base year) will be S t = S t 1 ( 1 a ) Y t where S t 1 is the manpower supply in the year prior to the target year. vi) Estimation manpower supply After calculating cumulated out-turn adjusted for attrition the labour force component of the cumulated and adjusted out-turn calculated. Further adjustment to cumulated and adjusted out-turn is therefore, warranted to account for withdrawals from the labour force in respect of persons with the requisite education/training as outline below: supply in the target year = Cumulated out-turn adjusted for attrition Labour force participation rate Micro Forecasting Micro level manpower supply includes external and internal supplies. External Supply Forecasting It arise primarily through recruitment which is necessarily meant to augment internal supply. Another source of external supply is through seconding (or deputing) personnel from other organization which take 239

18 Introduction to Management place largely among government department and parastatals. Hence, given the recruitment policy it is easy to predict the external supply. Internal Supply Forecasting Internal supply within an organization is governed by following factors: Wastage the out movement from the organizational caused by voluntary resignation, death or retirement. Transfer and promotions (Internal movement) Forecasting internal supply is therefore, crucially dependent on analysis of wastage and internal movement. SAQ 8 True/False a) Macro level manpower supply consists of current stock of manpower. b) There are three methods of estimations of manpower supply in macro forecasting ANALYSIS OF WASTAGE As per the British Institute of Management (BIM) under, which express wastage as a percentage of staff in position i.e. learningin a year Annual manpower wastage = 100 Averagemanpowerin position Disadvantages Difficult to access the operational and financial implications of given rate of wastage on this formula. Does not provide any meaningful indication for manpower planning Stability Index An alternative method which takes into account the length of service of the persons leaving the organization termed as stability index Measures the complement of wastage rate as Disadvantages with one year service at time 100 in position at time t This methods indicates only the percentage of manpower who stayed with the organization for one year. It does not directly measure the extent of wastages.

19 Give equal weightage to those who left organization less than one year or more than one year. Thus, this method is not very useful for manpower supply forecasting Modified Stability Index This method is also referred as Bowey s stability index includes everybody employed in the organization and give due weightage to varying lengths of service. The length of service of manpower employed at the time of analysis Bowey' s stability index = 100 Total possible length of service had there been no manpower wastage This method is useful in analyzing the extent of wastage in terms of length of service. However, as in the case of stability index it is not very helpful in manpower supply forecasting. SAQ 9 How we calculate annual manpower wastage under the British Institute of Management? RECONCILING DEMAND AND SUPPLY Another technique in manpower planning by matching the information of demand and supply (after netting the losses) future resources unbalanced can be predicted the entire process of working out the net additional manpower requirement is shown in figure. The process of manpower planning must ultimately result in the formulation of a manpower plan. A typical human resource planning system is as follows: 241

20 Introduction to Management Human Resource System Organizational Plan Human Resource Demand Forecast Number Category/level Specialization Norms Human Resource Inventory Number Category/level Specialization Performance/potential Appraisal Data Age etc. Human Resource Supply Forecast Number Category/level Specialization Age etc. Matching Process Human Resource Wastage Forecast Net Human resource requirement Forecast Net Supply Forecast Resource Gaps (No. Skilled Shortage/ Supplies Net Supply Forecast Implementation Feed Back SUMMARY 242 planning is the process by which management determines how an organization should move from its current manpower position to its desired manpower position or we can say that planning is the process of determining the number and kind of human resources required in and

21 organization for a specific time period in future. It serves as a guide to the management of human resource. In recent years interest in manpower planning has increased due to shortage of certain skills, technological changes organizational change, legislation, union pressure, system concepts and lead time. The main steps in human resource planning include analysis of organizational plans, demand forecasting, supply forecasting, identifying manpower gaps and action planning. The objectives and methodologies of manpower demand forecasting as well as supply forecasting are different at macro and micro level. Under the demand forecasting at the micro level are needed as a basis for educational planning, choice of location of industries, size of industries and technology and determining priorities for creating and/or expanding economic and social infrastructure. The methodologies of macro manpower demand forecasting are often expansive of the nature of techniques and database required. Micro level manpower demand forecasts are made at the enterprise or company level. At this level, the forecasts are needed for planning recruitment, promotion and training. A well defined information system built upon the basis of personnel history record of each individual employee is a pre-requisite for making detailed and precise forecasts at the enterprise or company level. supply has four distinct dimensions: stock and flow, quantity and quality, occupation and education and macro and micro dimension, methods and techniques, and data source may with the dimension considered manpower supply estimation. At the macro level there are two methods of making manpower forecasting: direct and indirect method. While the direct method depends on census count of all persons, indirect method estimates manpower supply by cumulating economically active component of institutional out-turn over the relevant period after making adjustment of all factors causing manpower attrition. supply at the micro level consists of external supply and internal supply. External supply is determined by factors of external origin to the company or enterprise level at which micro manpower supply forecasts are made internal supply over which a company or enterprise has control is governed by wastage rate and the internal flows caused by transfer and promotions. Methods of analysis and forecasting of wastage rate and internal flows are different. Database for micro forecasting is however, a well defined MIS based on personnel history of each individual employee TERMINAL QUESTIONS 1. What do you understand by? Describe its characteristics. 2. Explain the need and importance of manpower planning. 3. Explain the types of Forecast. 4. How the organization will improve the effectiveness of manpower planning. 243

22 Introduction to Management ANSWERS Self Assessment Questions 1. planning is a process of analyzing and organizations human resource needs under changing conditions and developing the activities necessary to satisfy these needs. 2. The two main reasons behind manpower planning are: a) To anticipate the quantum and size of labour turnover in the organization for further needs due to resignation, transfer, promotion etc. b) The other is to identify the losses in terms of requirements resignation, death, dismissals, promotion etc. 3. The purpose of manpower planning are: i) To forecast future requirement of the manpower in the organization. ii) To assess shortage and surplus of the manpower and ensure optimum use of existing manpower. 4. (a) True (b) False (c) True 5. The techniques include in manpower planning forecasting at macro level are: a) Employees option method b) Normative method c) Component method d) International comparisons method, and e) Mediterranean Regional Project (MRP) method. 6. Under the factor analysis, we calculate the manpower required in future through this formula. Number required in future = W/P Where W = Workload P = Productivity of Workers 7. i) d) All of these ii) Micro forecasting 8. a) True b) False learningin a year 9. Annual manpower wastage = 100 Averagemanpowerin position Terminal Questions planning has been defined as the process by which management determines how an organization should move from its current

23 manpower position to its desired manpower position. Through it management strives to have the right number and the right kind of people at the right places, at the right time, doing things which results in both the organization and the individual receiving. According to Beach planning is a process of determining and assuming that the organization will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved. According to Stainer planning is the strategy for the acquisition, utilization, improvement and preservation of an organization s human resources. In other words we can say that manpower planning is the process of determining manpower needs and formulating plan to meet these needs. After analyzing the above definitions, there is following characteristics of manpower planning: a) planning like all planning is forward looking or future oriented. It involves forecasts of the manpower needs in a future time period so that adequate and timely provision may be made to meet the needs. b) planning is an ongoing continuous process because the demand for and the supply of manpower undergo frequent changes. c) planning is an integral part of corporate planning without a corporate plan, there can be no manpower plan. Whether or the manpower plants meets the organization requirements and are in tune with the really depends on how clearly the goals are defined. d) The basic objective of manpower planning is to make optimum utilization of an organization s current and future human resources. In order to maximize the return in investment in manpower resources. It is necessary to relate future human resources to future needs of the organization. e) planning has both quantitative and qualitative aspects means the right number of employees while the other means the right latent required in the organization. f) planning is a two phased process involving calculation about the demand for and supply of manpower, so as to secure an equilibrium between the two. A manpower plan consists of two subplans (a) manpower demand, and (b) a manpower supply plan. g) planning involves study of the manpower environment which influences the demand for manpower and its supply. It also involves study of manpower utilization. 245

24 Introduction to Management h) planning is the primary responsibility of management so as to ensure effective utilization of the organization s manpower. 2. Effective manpower planning offers the following benefits: a) To carry out its work and to achieve its objectives, every organization requires employees with adequate knowledge, experience and aptitudes. planning is helpful in selection and trained well in advance ensures that adequate number of persons are selected and trained well in advance to fill future job vacancies with organization. planning provides the required number and quality of manpower at all times. b) planning identifies gaps in existing manpower in terms of their quantity and talent. Suitable training and other steps can be taken in time to fill these gaps. Existing manpower can be developed to fill future vacancies. c) There is need to replace employees who retire die, resign and become incapacitated due to injury. Provision for replacement of personnel can be made through planning. d) planning facilitates the expansion and diversification of an organization. In the absence of manpower plans, the required manpower will not be available to execute expansion and diversification plans at the right time. e) It helps to reduce wastage of manpower. f) It also helps in judging the effectiveness of manpower policies and programme of management. g) planning is helpful in effective utilization of technological progress. To meet the challenge of new technology existing employees need to be retrained and new employees may be recruited. h) planning is useful in anticipating the cost of manpower which facilitates the budgeting process. It also helps in controlling manpower costs through effective utilization. Through proper planning management can avoid both shortage and surplus of manpower and thereby control labour costs. i) planning helps in planning for physical facilities like canteen, staff quarters, dispensary and school for the staff and their children. j) At the national level, planning facilitates educational reforms, geographical mobility of talent and employment generation. Need for 246 There are following reason for adopting manpower planning:

25 i) Employment situation: Due to increasing number of educated unemployment and acute shortage for a variety of skills requires more effective recruitment and retraining of people. ii) Technological changes: Rapid changes in technology having profound effects on the content and context of jobs. These changes create problems concerning rebundancies, retraining and reployment of personnel. Systematic human resource planning can help to solve these problems. iii) Organizational changes: Rapid changes in environment require changes in organization structure and activities which affect requirement for manpower. plans are needed to meet these new requirements. iv) Shortage of skills: Organizations have become increasing complex and require a wide range of specialized skills. These skills are scarce and problem arise when employees with these skills leave an organization. v) Lead time: Longer lead time is required for selection and training of employees to handle new jobs and technology successfully. This requires long-term manpower planning. vi) Hiring costs: Recruitment and training costs are increasing. Increase in hiring costs encourages upgrading from within the organization, and planned retention through manpower planning. vii) Increased mobility: Investment in manpower belongs to the employee who takes his skills wherever he goes. With increasing mobility, organization find it difficult to retain talented personnel. Effective manpower planning helps to reduce employee turnover. These are reasons for planning. 3. Types of Forecasts Types of manpower forecasts depending on the purpose for which forecast are made. Some major types of forecasts are: i) Short-term forecasts: It is made for a period not more than two years. This forecast are made for facilitate estimation of financial provision for wages/ salaries in the projects initiated or likely to be initiated in future. ii) Long-term forecasts: This forecasts are made for more than five years. It is very useful in educational planning relating to high skilled professional categories of manpower and also useful in preparation of corporate plants technological changes and major organizational development. iii) Policy conditional forecasts: This forecasts are determined by the policy towards the factors which influence the demand for manpower 247

26 Introduction to Management and may be based on a rule of thumb or on professional judgement or on explicitly specified model or any combination of three. iv) On lookers forecasts: Under this forecast assumes that factors influencing manpower demand and behave in the future as they influence in the past. It is obtained through rule of thumb professional judgement, explicitly specified model or combination of any three. v) Optimizing forecasts: Under these forecasts the numbers demanded of various categories of manpower are so determine that either the end benefits are maximized and cost of resources for achieving predetermined and objective is minimized. vi) Macro and micro forecasts: Macro forecasts are done usually at the national industry/sector and region/state levels. They are used in planning education and training facilities, decision making for the choice of industry for development etc. (see details) Micro forecasts are made at enterprise level or department level. It is needed for planning recruitment and promotion and training accordance with the plans for the development of enterprise or department concerned. 4. There are some steps that may be taken to improve the effectiveness of manpower planning are given below: i) Tailormade: plans should be balanced with the corporate plans of the enterprise the methods and techniques used should fit the objectives, strategies and environment of the particular organization. ii) Appropriate time horizon: The period of manpower plans should be appropriate to the needs and circumstances of specific enterprise. The size and structure of the enterprise as well as changing aspiration of the people should be taken into consideration. iii) Adequate organization: planning function should be properly organized. A separate section or committee may be properly constituted within the human resource department to provide adequate focus and to coordinate the planning forecasts at various levels. iv) Top management support: Before starting the planning process, the support and commitment of top management should be ensured. The exercise should be carried out within the limits of a budget. There is no use formulating plans which cannot be implemented due to financial constituents. v) Participation: To be successful manpower planning requires active participation and coordinated efforts on the part of operating executives. Such participation will help to improve understanding of the process and thereby reduce resistance. 248 vi) Information system: Adequate data base should be developed for manpower to facilitate manpower planning.

27 vii) Balanced focus: The quantity and quality of manpower should be stressed in a balanced manner. The emphasis should be on filling future vacancies with right people rather than merely matching existing people with existing jobs FURTHER READINGS Allen, L.A., Management and Organization, McGraw Hill book company, New York. Bartholomer, D.J., Forbes A.F. (1979) Statistical Techniques for, John Wiley & Sons, New York. Beach, D.S. (1975) Personnel The Management of People at Work, McMillan Publishing Co., Inc, New York. Breach, E.F.L. (1985) The principles and Practices of Management, Longmans Green & Co., London. Dayal, I. (1970) New Concepts in Management, Lalvani Publishing House, Bombay. Diwedi, R.S. (1980) Management, Prentice Hall of India, New Delhi. Drucker, P.F. (1954) Practice of Management, Harper & Brothers, New York. Ganguli, H.C. (1982) Structure and Process of Organization, New Delhi, Allied Publishers. 249