Master of Business Administration-MBA Semester 3

MU 0001- Manpower Planning and Resource-4 Credits

Assignment Set- 1

1. What are the five steps in Manpower planning

The five steps in Manpower planning are as follows

1. Forecasting future human resource needs: Organizational goals and objectives serve as a starting point for
forecasting human resource needs. The demand for labour is derived from the demand for an organization’s
goods and services, if other factors are held constant, the increased demand for goods and services leads to an
increased demand for labour. Inversely, a decreased demand for goods and services leads to an increased
demand for labour. Forecasts of the demand for human resources can be short-range, or long-range, depending
on how far the future goals are set, some methods or approaches are more appropriate to short-range
forecasting while others are designed for long-range forecasting.

Any human resource plan, if to effective, must be derived from the long-range plans of the organization.
Unfortunately, human resource planning is often isolated from organizational planning. A common error of
human resource planners is to focus on the organization.

2. Projecting human resource supply: Projections are estimates of the number and kinds of employees that can
be expected to constitute an organization’s workforce at some future point in time. Projections are based on a
careful assessment of an organization’s current supply, plus consideration of employee movement into, through,
and out of organization.

3. Comparing forecast needs with projection supply: The third major step in the human resource planning process
is comparing the forecast needs for human resources with the projections of internal supply. By subtracting the
projected supply from the forecast needs, planners can determine an organization’s employee requirements for a
future point in time. No employee requirements should be determined for each job in an organization as well as
for the organization as a whole.

4. Planning policies and programmes: After net employee requirements are determined, planners generate and
evaluate alternative resource policies and programmes designed to handle anticipated shortages and
programmes designed to handle anticipated shortages and surpluses.

5. Evaluating human resources effectiveness: Organizations should evaluate their human resources planning
efforts to determine their effectiveness in helping to achieve organization’s goals and objectives. Evaluating in
terms of costs, and benefit is difficult, Though planning has definite costs, its benefits are move intangible and
difficult to measure, Nevertheless, an obvious measure of planning effectiveness is how well human resources
needs are anticipated and met.

2. Explain Supply forecasting.

Supply forecasting measures the number of people likely to be available from within and outside the organization
having allowed for attrition (labour wastages and retirements) absenteeism, internal movements and
promotions, and changes in hours and other conditions of work. The forecast will be based on:
An analysis of existing human resource in terms of numbers in each occupation, skills and potential; Forecasting
losses to existing resource through attrition; Forecasting changing to existing resources through internal
promotions; Effect of changing conditions of work and absenteeism; sources of supply from within the
organization; Sources of supply from outside the organization in the local labour markets. Mathematical
modeling techniques aided by computers can help in the preparation of supply forecasts in situations where
comprehensive and reliable date on stocks can be provided. As this rarely the case, they are seldom used.

Analyzing demand and supply forecasts: The demand and supply forecasts can then be analyzed to determine
whether there are any deficits or surpluses. This provides the basis for recruitment, retention, and if unavoidable,
downsizing plans, Computerized planning models can be used for this purpose. It is, however, not essential to
rely on software planning package, The basic forecasting calculations can be carried out on a spreadsheet that
sets out and calculates the number required for each occupation where plans need to be made, as in the
following example:

Number currently employed 70

Annual wastage rate based on past records 10 percent

Expected losses during the year 7

Balance at the end of the year 63

Number required at the end of the year 75

Number to be obtained during the year (5-4) 12

3 .What is the cost approach of HR ACCOUNTING?

There are two major human resource accounting methods;

Human Resource Cost Accounting (HRCA)
Human Resource Value Accounting (HRVA)
Human Resource Cost Accounting (HRCA)

Human resources cost accounting may be defined as the measurement and reporting of the costs incurred to
acquire and develop people as organizational resources. It deals with accounting for investments made by an
organization in acquisition and developing human resources as well as the replacement cost of people
presently employed.
HRCA may be defined as the measurement and reporting of the costs incurred to acquire and develop as
organization resources.
HRCA includes
Accounting for the costs of personnel activities and functions such as recruitment, selection, placement and
training.
Accounting for cost of development people as human assets, also termed as ‘Human Assets Accounting;
The monetary approaches to the measurement of human resources cost may be based upon either historical
cost or replacement cost or opportunity cost. These approaches are discussed as below:

Historical Cost Approach

This approach was developed by Brummet, Flamholtz and pyle. According to this approach, the actual cost
incurred on recruiting, selecting, training, placing and developing the human resource of an enterprise are
capitalization and written off over the expected useful life of human resources. The procedure followed for
human resource asset is the same as that of other physical assets. Any amount spent on training and
developing human resource increases its efficiency, hence capitalized. The amortization of human resource
assets is also done in the same way as that of other physical assets. The asset is written off over its useful life.
If the assets are liquidated prematurely, then it is underwritten and the amount id changed to revenue
account. On the other hand, if it has a longer life than expected, its amortization is rescheduled.

Replacement Cost approach

This approach was developed by Rensis Likert and Eric G. Flamholtz. The cost of replacing employees is used
as the measure of company’s human resources. The human resources of a company are to be valued on the
assumption as to what it will cost the concern if existing human resources are required to be replaced with
other persons of equivalent experience and talent. This approach corresponds to the historical cost approach
mentioned earlier expect that it allows for changes in the cost of acquiring and developing employees in
place of taking their historical cost.
In replacement cost approach, the costs of recruiting, selecting, training, developing, etc. of new employees
to reach the level of competence of the existing employees are measured. Likert has suggested
determination of value of total human organization on the basis of assumption that a similar organization is
to be created from scratch.

4 .Discuss qualitative side of Manpower planning.

Human resource planning is an integral part of the process of setting and meeting corporate objectives.
Explicitly, human resource planning connotes preparation of schedule, indicating the number of employees
of various categories required by the enterprise over a given period of time. As soon as a long-range strategy
or corporate planning is devised, it becomes possible to determine the number of individuals of different
types required over the forthcoming years. Thus, the function of human resource planning is to indicate how
many individuals would be selected, trained, promoted, retried over the forthcoming years and to lay down,
accordingly, an estimate of the personnel facilities.

The manpower managers have to take several factors into account. These are the changing characters of the
business, the rate of retirement and allied issues relating to manpower losses, variations in social and
employment variable, change in the organizational structure and promotion system of the enterprise. This
may also include data for personnel record purposes such as job code, educational qualifications, linguistic
ability, and assessment of performance, training and career history. In addition, the central manpower
record should contain information on advertising research, pre-screening techniques and the validation of
psychological tests. All these types of information systems installed in the central manpower department.

The decision-making process necessitates accurate and readily available information. However, It is very
difficult to ascertain what type of information in view of the changing situations. Despite these difficulties,
attempts may be made to obtain different types of information needed for the human resource planning.
Human resource planning provides information in three dimensions: The estimated manpower
requirements;
The analysis of the external manpower market situation; and The result estimate of manpower availability
An integrated manpower strategy consists of four factors-information relating to demand and supply,
strategic evaluation of requirements, policy decisions regarding the human resources of the enterprise, and
the operation decision related to manpower management.
Every line manager has to perform some form of human resource planning in his department may assist him
to discharge this responsibility, However, some human resource planning has to be performed at the
enterprise level because of several reasons. Different human resource planning techniques demand a high
level of expertise, and it would not be possible for the line managers to use them effectively without the
assistance of the central Human Resource Planning Department. It is advantageous to establish a Central
Human Resource Planning Department and one or two specialists (depending upon the size of the
department) attached with the line manager to assist him in his department.
Human resource planning is a highly complex process. Hence, the role of line and staff personal in this
process should be clearly distinguished Usually, the staff unit is not responsible for estimating the manpower
requirements, The line furnishes this type of information on the basis of estimates of operating levels. The
staff may simply furnish supplementary data such as turnover rates, which may be incorporated in the
ultimate estimations.

In one way or the other, human resource planning is related to almost every other personnel function. This is
because it serves to link organizational goals and objectives to personnel policies and programmes. The
personnel functional job analysis and performance appraisal provide important inputs to the human
resource planning process. Human resource planning is most closely related to those personnel functions
whose purpose is to acquire, develop, and maintain a qualified workforce. These functions include recruiting,
selection, compensation, career planning, and training and development.

5. Write a note on internal sourcing.

The first step is to analyze the availability of suitable people from within the organization, by reference to
assessments of potential and skills database. The latter should contain a regularly updated list of employees
with the sort of skills needed by organization. Decisions are then made on what steps should be taken to
promote, redeploy, and as necessary, provide additional experience and training to eligible staff. Plans can
also be made to make better use of existing employees, which may include flexibility arrangement.

The Recruitment Plan:

This will incorporate:
The number and types of employees required to make up any deficits, when they are needed
The likely sources of candidates – schools, colleges of further education, universities, advertising, the
internet, etc;
Plans for tapping alternative sources such as part-timers or widening the recruitment net to include, for
example, more women re-entering the labour market;
How the recruitment programme will be conducted.

Employer of choice plans

The recruitment plan should include plans for attracting good candidates by ensuring that the organization
will become ‘an employer of choice; This should be achieved by such means as generally improving the
image of the company as an employer (the employer brand) and by offering: Better recruitment packages ;
More opportunities for learning, development and careers;
Enhance future employability because of the reputation of the organization as one that employs and
develops high quality people, as well as the learning opportunities it provides;
Employment conditions which address work-life balance issues by, for example, adapting working hours and
arrangements and leave policies and providing child care facilities or vouchers to meet the needs of those
with domestic responsibilities;
Better facilities and scope for knowledge workers, such as research and development scientists or engineers
or IT specialists;
Golden hellos (sums of money paid upfront to recruits):
Generous relocation payments.

5. Write a note on performance management

Performance management:
Performance management processes provide a means of building relationships with people, identifying
talent and potential, planning, learning and development activities and making the most of the talent and
possessed by the organization. Line managers can be asked to carry out separate ‘risk analyses for any key
staff to assess the likely hood of their leaving. Property carried out performance management is a means of
increasing the engagement and motivation of people by providing positive feedback and recognition. This is
part of a total reward system.

Total reward:
Total reward strategies provide for both financial and non-financial rewards, can contribute to the
engagement and commitment of talented people by demonstrating that they are devalued for their
contribution and by operating fairly and consistently. Paying competitive rates will affect the ability of
organization to attract and retain people but there is a limit to the extent to which companies can compete
with the ‘pull of the market’ as Cappelin (2000) points out. Retention or loyalty bonuses (golden handcuffs)
are used by some companies but again, as stresses by Cappelin, there is limit to their effectiveness as bribes.
If talented people want to go they will go.

Learning and development policies and programmers are essential components in the process of developing
talent – ensuring that people acquire and enhance the skills and competencies they need. Policies should be
formulated by reference to employee’s success profile which are described in terms of competencies and
define the qualities that need to be developed. Employee success profiles can be incorporated in role
profiles.

Learning and development activates are also important means of developing managers and gaining the
enragement and commitment of talented staff by giving them opportunities to grow in their present roles
and to progress to higher level roles.

Career management:
Career management consists of the processes of career planning and management succession. Career
planning shapes the progression of individuals within an organization in accordance with assessments of
organization needs, defined employee success profiles and the performance, potential and preferences of
individual members of the enterprises.

Management succession planning takes place to ensure that, as far as possible, the organization has the
managers it requires to meet future business needs.