Course Title: Human Resource Management

Course Code: HRM-333

Program: BBA

Sheet No: 03
 Human Resource Planning

Human Resource Planning (HRP):

 There is a Chinese proverb highlighting the significance of long term perspective of
Human Resource planning: “if you plan for one year, grow paddy, if you plan for one
decade plant tree, but if you plan for one century cultivate human resource.”

 Human resource planning is a strategy for matching future manpower with the
activities of the organization.

 Human resource planning is the process by which an organization ensures that it has
the right number and kinds of people, at the right place, at the right time, capable of
effectively and efficiently completing those tasks that will help the organization
achieve its overall objectives.

 Attempts must be made to match supplies and demands making them compatible with
the achievement of the organization's future needs.

Need for HRP:

 Human resource requires planning because of its four critical features:
1. For higher level of skills, a long period of time is required to get exposed to
full level productivity.

2. More a person achieves higher level productivity the longer he remains on the
job.

3. A person’s mental satisfaction affects his productivity and investment in

human resource belongs to the individual himself/herself who may take his/her
skills wherever he/she goes.

4. Mobility of labor is also mobility of his/her productivity which is under his

control.

 Supply of skilled manpower is scare compared to demand:

1. Demand of skilled manager has been rising due to increased growth process.
Skilled hand is a mobile commodity and can be transferred from one country
to another.

2. According to shafiullah, a company trains a man just to lose him.

3. Many underdeveloped countries accepted financial support from the

developed countries to get their youths trained in superior management know-
 how but many of these youths did not return to their motherland. This is true
for Bangladesh also.

 Human resource planning is also required because of rapid technological changes:

Jobs and job requirements are changing faster pace of technological change is being
accelerated. Directions of technological change have been decreasing the job demand
for unskilled workers. So there is demand for newer skills requiring new training and
remaining.

 Human resource planning minimizes cost of recruitment and training: Training has
a cost. There is also cost of pension, gratuity, provident fund and other fringe benefits.
Higher recruitment cost encourages upgrading from within. As a result, the time
during which an employee’s net contribution are not less than his/her net cost of
employment, he/she is most likely to be retained.

 Increased mobility of human resources has created management problem to retain

qualified employees: There was a time when the banking sector in this country had a
non-piracy agreement, but it did not succeed. At the middle of 1990 when several new
private banks were permitted and these new offered very high salary to allure
executives from their parent banks, the old banks had to give several pay raises in
order to retain their own employees.

 Human resource planning can reduce wastage rate caused by labor turnover or
executive turnover: There are two types of wastage one is voluntary other is
involuntary. Voluntary wastage included departure on account of marriage, running
after more money, more convenient posting, more promotion, better prospect, better
working environment and lucrative facilities. Involuntary wastage takes place through
death, invalidity by illness, etc.

 Profit sharing systems plays the role of a magic: Profit comes out of efficient work.
More profit means more bonuses, more expansion and more growth prospect and also
higher image of the company as a place to work. In Bangladesh default culture has
plagued the banking industry. There are commercial banks which according to
newspaper reports earn crores of taka as profit but do not declare dividend for which
shares are being sold in the stock market at price much below the face value.

Objectives of HRP:
The basic purpose of having a manpower plan is to have an accurate estimate of the number
of employees required, with matching skills requirements to meet organization objectives.
Manpower planning is required to meet the following objectives:
 Forecast Personnel Requirements: In the absence of such plan, it would be difficult
to have the services of right kind of people at the right time.

 Cope With Changes: Manpower planning is required to cope with changes in market
conditions, technology, products, and government regulations in an effective way.
 These changes may, often, require the services of people having requisite technical
knowledge and training. In the absence of a manpower plan, we may not be in a
position to enlist their services in time.

 Use Existing Manpower Productivity: By keeping an inventory of existing personnel

in an enterprise by skill level, training, educational, qualifications, and work
experience, it will be possible to utilize the existing resources more usefully in
relation to the job requirements. This also helps in decreasing wage and salary costs in
the long run.

 Promote Employees in a Systematic Manner: Manpower planning provides useful

information on the basis of which management decides on the promotion of eligible
personnel in the organization. In the absence of a manpower plan, it may be difficult
to ensure regular promotions to competent people on a justifiable basis.

Process of HRP:
 As pointed by Keith Davis, All organizations should identify their short-run and long
run employee needs by examining their corporate strategies.
A. Forecasting the demand for Human Resource
B. Forecasting future supply of human resources

A. Forecasting the Demand for Human Resource:

Most firms estimates how many employees they require in future. The demand for human
talent at various levels is primarily due to the following factors.

1. External Challenges: These challenges arise from three important source:

a. Economic Development: Liberalization, gearing up of banking sector, capital market

reforms, introduction of on-line trading systems etc. have created huge demand for
finance professionals in developing economics.

b. Political, legal, social and technical changes: The demand of certain categories of
employees, and skills is also influenced by changes in political, legal and social structure
in an economy. Likewise, firms employing latest technology in construction, power,
automobiles, software, have greatly enhanced the worth of technicians and engineers
during the last few years.

c. Competition: Companies operating in fields where a large number of players are bent
upon cutting each other’s throat (with a view to improve their market position) often
change their workforce.

2. Workforce Factors: Demand is modified by retirements, terminations, resignations, deaths

and leaves of absence. Past experience, however, makes the rate of occurrence of these
actions by employees fairly predictable.
3. Organizational Decision: The organizations strategic plan, sales and promotion forecasts
and new ventures must all be taken into account in employment planning. If Bengal foods
expect higher demand for biscuits and bread, the long-term HR plan must take this into
consideration

Likewise it if tries to venture into other lucrative fields such as milk based products,
confectionery items etc. the demand for people possessing requisite skills in those areas in the
next couple of years should be looked into carefully.

B. Forecasting future supply of Human Resource:

 Estimating changes in internal supply requires the organization to took at those factors
that can either increase or decrease its human resource.

1. Increase in Internal Supply: An increase in the supply of any units human resources
can come from a combination of three source:

 New hires are easy to predict, since they are self-initiated.

 Transfers in: It is more difficult, however, to predict transfers-in to a unit,

since they often depend on concurrent action in other units.

 Individuals returning from long leaves: this would include absences due to
maternity, study, or sabbatical leaves. This is easy to estimate since they are
usually for some fixed duration- two months, six months, two years, and so
forth.

2. Decrease in internal supply: Decrease in the internal supply can come about through;

a. Retirements
b. Dismissals
c. Transfers-out of the unit
d. Layoff
e. Voluntary quits
f. Sabbaticals
g. Prolonged illness
h. Death

 The easiest to forecast are retirements.

 Voluntary quits, prolonged illness and deaths are difficult to forecast.

 In between the extremes, transfers, layoffs, sabbaticals, and dismissals can be forecast
within reasonable limits of accuracy.

 Layoffs are more controllable and forecast able by management.

  Dismissal based on inadequate job performance, can usually be forecast in the same
methods as voluntary quits.

3. Estimated change in external supply: The previous discussion on supply considered

internal factors. We will now review those factors outside the organization that influence the
supply of available workers.

 Recent graduates from colleges and universities expand the supply of available human
resources.

 Migration into a community represents an addition to supply of external manpower.

 Retraining of displaced employees also helps increase in external supply of

manpower.

Limitations of HRP:
The problem faced by human resource professionals while preparing or administering HR
plans may be summarized thus:
1. Lack of accuracy: Projecting manpower needs over a period of time is a complex one.
It’s not possible to track the current and future trends correctly and convert the same into
meaningful action guidelines. Factors such as absenteeism, labor turnover, and seasonal
trends in demand, competitive pressure, technological changes and a host of other factors
may turn the rest of manpower plans as fashionable, decorative pieces.

2. Absence of support: Planning is generally undertaken to improve overall efficiency. In

the name of cost cutting, this may ultimately help management weed out unwanted labor
of several levels. Management are unwilling to commit funds for building an appropriate
human resources information system.

3. Numbers’ game: HRP, in the final analysis may suffer due to an excessive focus on the
quantitative aspects. The quality side of the coin consisting of employee motivation,
moral, career prospects, training avenues etc. may be discounted thoroughly.

Replacement Chart:
 Skills inventories are the sources of data used in replacement charts. Typically this
information includes name, age, present position, performance rating, experience
rating, experience and an indication of promotion potential.

 Replacement chart summarizes this information in visual form for key managers so
that they can easily identify both the present incumbents and potential replacements for
given positions.

 It helps HR managers the identification of potential problems in succession planning.

Succession Plan:
 Succession planning is concerned with the filling of management vacancies. It stresses
the development of high potential employees and takes a long term view of the
organizations human resource needs. Succession planning makes use of replacement
charts but generally expands on these to include information on current performance,
promo ability, development needs and long term growth potential.

 Succession planning provides the organizations future mangers with the necessary
preparation to successfully fill potential vacancies.

Name: Sharmin Ahmed Division: Pharmaceutical

Location: Chittagong

Age: 49 Marital status: Not married

Dependents: Nil

Date started 3rd June 1982

Present position HR Manager, Chittagong Factory

Promoted 2 April 1986

Current job size grade 8

Previous position compensation and benefits manager appointed 3rd June 1982

Other experience 2 years as executive personnel with Beximco . 2years industrial

relations experience with Liver Brothers

Qualification BBA(IBA),1975, Majors in Accounting and Economics MBA(IBA)

1980, ranked 16th in a class of 41 students.

Professional association Chartered member, Bangladesh Human

Resource Institute.

Current performance rating Superior

Previous performance rating Superior

Promotability At least 2 levels above present position

Experience required needs international exposure and HQ experience in Dhaka.

Requires experience outside HR if to be considered for the position of General Management.

Training and development international management program at university of California.

Comments Sharmin has general management potential. She has expressed interest
in Marketing and in working overseas. Awarded special performance
bonus in 1985, 1988,1989,1990,1993 for outstanding achievement.

Action Transfer to Dhaka within 6 months. Arrange special 12 months project

assignment in marketing at sylhet office and enrolment in international
management program at IBA. List as a candidate for product marketing
manager at Rajshahi office on transfer of present incumbent. High potential
committee to review within 6 months of being transferred to Dhaka.

Executive responsible DMD, Chittagong region. For implementation