Unit 1

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Manpower Planning and Resourcing Unit 1 Sikkim Manipal University Page No.: 1 Unit 1 Manpower Planning Structure 1.1 Introduction Objectives 1.2 Effective Manpower Planning 1.3 Need for Manpower Planning 1.4 Five Steps in Manpower Planning Evaluate Present Manpower Inventory Manpower Forecasting Develop a Manpower Sourcing Plan or Retrenchment Plan Manpower Allocation & Retention Building Requisite Competencies 1.5 Importance of Manpower Planning 1.6 Obstacles in Manpower Planning 1.7 Advantages of Manpower Planning 1.8 Successful Manpower Planning 1.9 Consolidated Demand Forecast Development 1.10 Effective Decision Making 1.11 Gaining Senior Management Support 1.12 Meeting the Organization's Goals and Objectives 1.13 Summary 1.14 Glossary 1.15 Terminal Questions 1.16 Answers 1.1 Introduction According to Eric W. Vetter, manpower planning is a very vital process where the management determines how the organization should move from its present manpower position to a desired manpower position. According to Stainer, manpower planning may be defined as a strategy for the procurement, development, allocation and utilization of an enterprise‟s human resources. We all know that organizations are made up of people. Manufacturing industries need people to operate machines, maintain machines and ensure desired output quality. Service industries need people to serve customers.

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Transcript of Unit 1

Manpower Planning and Resourcing Unit 1

Sikkim Manipal University Page No.: 1

Unit 1 Manpower Planning

Structure 1.1 Introduction

Objectives

1.2 Effective Manpower Planning

1.3 Need for Manpower Planning

1.4 Five Steps in Manpower Planning

Evaluate Present Manpower Inventory

Manpower Forecasting

Develop a Manpower Sourcing Plan or Retrenchment Plan

Manpower Allocation & Retention

Building Requisite Competencies

1.5 Importance of Manpower Planning

1.6 Obstacles in Manpower Planning

1.7 Advantages of Manpower Planning

1.8 Successful Manpower Planning

1.9 Consolidated Demand Forecast Development

1.10 Effective Decision Making

1.11 Gaining Senior Management Support

1.12 Meeting the Organization's Goals and Objectives

1.13 Summary

1.14 Glossary

1.15 Terminal Questions

1.16 Answers

1.1 Introduction

According to Eric W. Vetter, manpower planning is a very vital process

where the management determines how the organization should move from

its present manpower position to a desired manpower position. According to

Stainer, manpower planning may be defined as a strategy for the

procurement, development, allocation and utilization of an enterprise‟s

human resources.

We all know that organizations are made up of people. Manufacturing

industries need people to operate machines, maintain machines and ensure

desired output quality. Service industries need people to serve customers.

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People are the most important part of any organization. It is the people

working in an organization who individually and collectively contribute to the

achievement of the business objectives. One cannot ever overstress the

importance of people to make an organization successful. Manpower

planning managers need to estimate the total number of resources required

for each position or job role correctly. This is no easy task. If you are the

manpower planning manager, you may not know so many things that will

unfold over the course of the year at the beginning of the year like:

How many people will get promoted?

How many people will attrite?

How many people are additionally required to expand the business?

Which part of the business will grow by what percentage?

Which part of the business will decline by what percentage?

Which specific skills sets are going to be short in the market?

Will the manpower budget be adequate?

Manpower planning managers need to estimate the requirement as close to

reality as possible and also ensure hiring for the job role requirements in the

shortest possible time so that the business is not impacted negatively due to

the shortage or absence of resources. And this is what makes manpower

planning an interesting subject.

Definitions

According to K. F. Turkman manpower planning can be defined as an

attempt to match the supply of people with the jobs available in an

organization. Statistical techniques have been used to match the supply of

people with the jobs available.

Bruce Coleman has defined manpower planning has been defined as “the

process of determining manpower requirements and the means for meeting

those requirements in order to carry out the integrated plan of the

organization”.

The website www.businessdictionary.com defines manpower planning as:

“Estimating or projecting the number of personnel with different skills

required over time or for a project, and detailing how and when they will be

acquired.”

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A business definition according to www.bnet.com for manpower planning is

“The development of strategies to match the supply of workers, and the

availability of jobs at organizational, regional or national level.”

Objectives

After studying this unit you will be able to:

Describe the need for manpower planning

State the steps in manpower planning

Summarize the obstacles of manpower planning

Recognize a consolidated demand forecast for manpower

1.2 Effective Manpower Planning

Effective manpower planning is hiring the right number of people and the

right kind of people at the right place and at the right time for doing the right

things. Effective manpower planning helps in achieving the goals and

objectives of the organization.

The concept of manpower implies that employees are resources for

employers. Employees can also be called as „human capital‟. In other words

they add economic value to an organization.

Whether an organization is manufacturing aeronautical equipment, or selling

automobiles, textiles, cosmetics, footwear, computers, or the latest electrical

gadgets, it needs manpower to be successful at whatever it is doing.

Organizations need employees with a certain level of confidence,

competence, training and expertise. Manpower cannot be easily replaced or

substituted in any form or manner.

Let me just pause here for a minute and ask a question. What is it that

makes a human being unique? The answer is quite simple. It is because

each person is an individual and no two people are the same, yes not even

identical twins. They are also different. They are different in their outlook,

their behavior, their thinking, creativity, motivation, enthusiasm,

assertiveness, judgment, intelligence etc. Human beings alone have the

ability to think, grow, feel, show pleasure at achievements, show displeasure

or dissatisfaction etc. All other resources are passive and have no reactions.

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Therefore, effective manpower planning is hiring the right number of people

and the right kind of people at the right place and at the right time for doing

the right things.

1.3 Need for Manpower Planning

Every business requires investments of funds. The art of maximizing returns

from such investments within the framework of law and ethics requires the

right numbers of people are available for the open positions at the right time,

at the right place with the right competencies, attitude and values for doing

the right things.

Imagine your business need 1000 people, and your business always has

300 less resources than required in most months. Will your organization be

able to achieve the goals and objectives it set out at the beginning of the

year? If it does not achieve the goals and objectives planned, it will not be

able to generate the returns the management of the company has made to

its shareholders or directors or investors. If the business is not able to build

and maintain its credibility with various stakeholders, the business starts to

fail.

Similarly if your business needs 1000 people and your business is always

overstaffed by 300 resources then the cost of the additional manpower, the

infrastructure cost for the additional manpower and management costs for

the additional manpower eats away into the profitability of the business,

hence the need for manpower planning.

Manpower planning is done to ensure the health of the business, credibility

of the business and growth of the business. Manpower Planning is thus

helpful to organization in the following manner:

Shortages and surpluses can be identified so that quick action can be

taken wherever required.

All the recruitment and selection programs are based on manpower

planning.

It helps to reduce the labor cost too as excess staff can be identified and

thereby overstaffing can be avoided.

It also helps to identify the available talent in an organization and

accordingly training programs can be drawn out to develop the talent

required.

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It helps in the growth and diversification of a firm or an organization.

Through manpower planning, human re-sources/man/employees can be

readily available and they can be utilized in the best manner.

It helps the organization to realize the importance of manpower

management which ultimately helps in the stability of an organization.

Self Assessment Questions

1. Manpower planning may be defined as a ____________ for the

procurement, development, allocation and utilization of an enterprise‟s

human resources.

2. Effective manpower planning is hiring the right __________ of people

and the right kind of people at the right place and at the right time for

doing the right things.

1.4 Five Steps in Manpower Planning

Manpower planning requires that an estimate of the present and future

needs of the organization should be compared with the available manpower

and future predicted manpower. Appropriate steps are then taken to bring

demand and supply into balance. The outcome of this planning is a well

'thought out' and logical manpower demand plan for varying dates in the

future which can then be compared with the crude manpower supply

schedules. The comparisons will then indicate what steps should be taken

to achieve a balance. The 5 steps in the manpower planning process are:

Evaluate present manpower inventory

Manpower forecasting

Develop a manpower sourcing plan or retrenchment plan

Manpower allocation

Building requisite competencies

1.4.1 Evaluate Present Manpower Inventory

It is very important to evaluate the present manpower status before making

a forecast for future manpower planning. To evaluate the present manpower

status a department by department analysis and a job-role by job-role

analysis is conducted to arrive at the required manpower versus the

available manpower. This is accumulated across the organization at

different levels and departments. The final report will consolidate and state

the required manpower versus the available manpower in terms of the

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quantitative analysis. Another analysis on the qualitative side conducted

similarly shows the competencies required versus competencies available

for each of the job roles. This provides the present manpower inventory.

There may be excess or deficit or in extremely few cases just the right

number quantitatively. The report on the qualitative front may rarely have a

100% match between required competencies versus available

competencies.

1.4.2 Manpower Forecasting

Manpower planning is done based on the manpower forecasts. The

common manpower forecasting techniques are:

(i) Expert Forecasts: This includes formal expert surveys, informal

decisions and the Delphi technique.

(ii) Trend Analysis: Manpower needs can be seen through the past

practice of the firm or organization keeping the principle year as a basis

and a central tendency of measure

(iii) Work Load Evaluation: This depends on the nature of the work load in

a branch, department, or a division in a firm or organization.

(iv) Work Force Evaluation: As production and the time duration are to be

kept in mind, allotments have to be made for getting the total

manpower requirements.

(v) Other Methods: A few mathematical models with the help of computers

are also used to forecast manpower needs.

You will learn more about forecasting in unit 2.

1.4.3 Develop a Manpower Sourcing Plan or Retrenchment Plan

Once the current inventory is compared with the future manpower forecasts

then the manpower sourcing or retrenchment plan is drawn.

The sourcing plan includes recruitment, selection, placement, hiring

temporary staff and outsourcing. You will learn more about the sourcing plan

in unit 6.

The retrenchment plan involves sending show-cause notices to bottom

performers called bottom scraping, asking people to leave the organization

by providing the requisite severance allowance, allowing employees to go

on a sabbatical and finally out-placing employees in other organizations to

reduce the manpower. It is harder to retrench manpower. The need for

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retrenchment could also be minimized by very objectively approving any

additional manpower.

1.4.4 Manpower Allocation & Retention

Manpower allocation helps in managing the impact of deficits and excess in

manpower supply through promotions, transfers and job-rotations.

Enhancing manpower utilization requires managing the dynamics of

leadership and motivation.

Manpower retention would mean taking necessary steps to ensure that the

organization provides a conducive-atmosphere to the employees to perform

and keeps each employee engaged.

1.4.5 Building Requisite Competencies

Once the future manpower forecasts are compared to the current inventory,

there may be some gaps in competencies amongst the available internal

resources for them to qualify for the future manpower forecasts. In such

cases organizations may choose to develop resources through training

programs. A training calendar is designed to ensure competencies of

existing staff are enhanced to meet the future manpower forecasts.

Additional training programs may be designed when organizations are

diversifying or expanding. Training programs may be designed to train

existing resources on the latest improvements and advancements in

technology or the related business subject. Training is provided to improve

the knowledge, skill and capability of the employee.

Self Assessment Questions

3. Manpower allocation is a step in the __________ planning process.

4. Expert forecasts and trend analysis are two types of _____________

techniques.

5. ________ and ________ can be identified and quick action can be

taken in planning.

6. Manpower planning reduces ______ costs as excess staff can be

identified thereby avoid _______.

1.5 Importance of Manpower Planning

The main purpose of manpower planning is to increase the productivity of

the organization and the total value created by the organization in a given

unit of time. It could be a month, quarter, half year or the year. This enables

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the business to become profitable and increases the profit margin. All the

business plans can be achieved only by manpower planning. Else business

plans will never turn into a reality. Manpower planning is done for:

Successful execution of plans

Efficient utilization of resources

Motivating employees

Better human relations

Higher productivity

1.6 Obstacles in Manpower Planning

The major obstacles in manpower planning are as follows:

Non Optimal Utilization of Manpower

The biggest obstacle for manpower planning is the fact that organizations

cannot optimally use their manpower once manpower planning begins.

During manpower planning, the number of resources required for a job is

decided based on the total work load, the process to be followed and the

criticality of the job. Once the analysis is done, it is decided that one person

can only handle a certain portion of the workload and hence for any

additional workload, additional resources need to be hired proportionately.

Over a period of time, the total workload may change, the processes may

change, the criticality of the job may change and new technological

innovations may make the job far easier to accomplish. However when the

same employees are asked to step up the productivity, they resist accepting

any additional workload and resist even deployment of new technology,

hence making it hard for the management to maximize the use of their

manpower. This makes the organizational processes ineffective or inefficient

and hence the organization as a whole becomes ineffective or inefficient

and loses out to competition which may be able to remain lean in terms of

number of resources and highly effective and efficient.

Absenteeism

Every organization has witnessed an increase in absenteeism. This has

lead to errors creeping in the manpower planning exercise. If the plan stated

that 4 employees are required to manage the total workload, increased

degree of absenteeism leads to the partial failure of the manpower planning

exercise.

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Lack of Employable Labor

People are not employable. The slow pace of acquiring business required

competencies by people at large also result in low employee productivity. All

manpower planning is done basis a certain productivity level considered as

a benchmark. And low productivity has negative implications for manpower

planning.

Modern Manpower Control and Review Processes

Any increase in manpower is to be approved by the top most levels of

the management today.

Manpower budgets created on the basis of manpower planning act as

control mechanisms to keep the manpower cost and headcount under

certain defined limits.

Usually the productivity of any organization is calculated using the

formula: Productivity = Output / Input.

Example: 5 products are sold during the day/ 8 hours of effort put in

during the day. i.e., the sales productivity of the employee is

5 products per day.

But a rough guide of employee productivity used today is: Employee

Productivity = Total Production / Total no. of employees

Example: 50 products are sold during the day/12 employees were

responsible for selling 50 products during the day. i.e., the sales

productivity of each employee is 4.17 products per day.

The rate of manpower turnover, exit interviews and absenteeism are

sources of measuring dissatisfaction level of manpower. To eliminate

employee dissatisfaction and to ensure better utilization of resources a

study of the reasons causing the dissatisfaction level is required.

Overtime is paid to employees due to real shortage of manpower,

inefficient management or improper utilization of manpower. Manpower

planning requires a study of the overtime statistics.

The current pace at which business is done today is very fast. Many

organizations either do not have data or are overwhelmed with data. Non

availability and non utilization of the data are also reasons for complicating

the situation. In some organization even the existing technologies available

for manpower planning are not optimally used. This also creates obstacles

in manpower planning.

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Example: Business Scenario for Obstacles in Manpower Planning

(Lack of employable labor)

The entire BPO industry is suffering with this scenario of lack of employable

labor.

In a dynamic business scenario, manpower planning is critical to

organizational growth and stability. It is integral to recruiting, retaining,

retraining and redeployment of talent. Linked to business needs of the

organization, the process of manpower planning is much more complicated

than it seems. Manpower planning involves developing skills and

competencies of existing employees to meet market demands which can

change with time. Manpower planning also requires having a contingent

plan in place in case of any eventuality (talent shortage).

Out of every 100 candidates interviewed only 10 of them are employable.

Majority of them are unemployable by the BPO industry. It‟s a known fact in

the BPO industry. The manpower planning exercise requires BPO

companies to budget for travel to the interiors of the state, travel to other

states. It also needs to budget for providing new joiners with relocation

allowance. It has to make provision for some joining bonuses as well when

the hiring by all companies was at its peak. It decided to lower the level of

hiring and spend additional time on training candidates. It needed to engage

external organizations to evaluate the voice and accent capability or the

potential of the candidate in order to validate its own findings with that of an

independent agency, so that no potential candidate was rejected and no

candidate who was not trainable was hired.

The manpower planning required inclusion of non standard practices to

ensure that the hiring targets were met so as to ensure that migration of

client business processes from other countries to India was as per

committed timelines.

In fact some of the BPO‟s in India also have operations in countries like

Philippines. Due to the inability of the India BPOs to hire in some cases,

work is split up between India and Philippines.

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1.7 Advantages of Manpower Planning

Manpower planning ensures maximum utilization of available resources. It

foresees not only the required number and type of employees, but it also

determines a plan of action.

The major advantages of manpower planning are:

Optimum use of human resources currently employed.

Reduced manpower costs.

Drives optimal productivity of employees which is beneficial both for the

organization and the nation at large.

Keeps the business profitable and afloat.

Provide controls to ensure necessary resources are available as and

when required.

Brings about fast economic developments.

Ensures smooth organizational functioning post major expansion or

retrenchment.

Avoid build up of unnecessary employees and back up employees as

there is a cost attached to manpower.

Avoid unnecessary dismissals of employees.

Helps in estimating salary costs and providing better benefits.

Creates a healthy atmosphere of encouragement and motivation in the

organization.

Facilitates building competencies in the organization through training and

development programs.

Training activities becomes sharply focused.

Enables employees to move to jobs for which their competencies are

best suited.

Creates a career path for employees to get promotions.

Activity 1:

Meet 2-3 employees of 3 BPOs. Ask these employees how many times,

they have been asked to work overtime. What kinds of incentives are

offered to work over time? Do employees really like to work over time or

would they prefer their weekends or holidays instead?

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1.8 Successful Manpower Planning

Successful manpower planning involves only two critical steps.

1. Estimating the demand forecast for manpower accurately

2. Ensuring the supply forecast for manpower meets the demand forecast

Implementation of the five steps in manpower planning described in unit 1.4

in letter and spirit makes the manpower planning successful.

Sometimes department managers or leaders wish to increase their span of

control and hence they project a higher requirement for resources than

required. They also undertake one time assignments that would require a

higher requirement for resources. But on completion of the one-time

assignment they do not let go of these additional resources. The personal

benefit to the leader in the short term is that their CV becomes impressive

due to the huge span of control but over the long term the organization

needs to bear the consequences of living beyond its means. That means,

the organization has a manpower bill which may be as high as 82% of its

overall revenue. This is acceptable in any business because there are other

costs apart from manpower costs and this would mean the business is

making losses as the expenditure far exceeds revenues.

Successful manpower planning is when the manpower costs are closely

following industry benchmarks if not beating them. The outcome of

successful manpower planning is all positions are filled as per the

requirement plan.

Self Assessment Questions

7. The main purpose of manpower planning is to increase the _________

of the organization and the total value created by the organization in a

given unit of time.

8. Non Optimal Utilization of Manpower is one of the ______________ in

manpower planning.

9. Optimum use of human resources currently employed is one of the

major ______________ of manpower planning.

1.9 Consolidated Demand Forecast Development

The manpower planning function conducts an orientation program for the

representatives of all the departments including the HR department. As per

the guidelines issued, the representatives of the different departments

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develop the manpower demand forecast. This demand forecast is then sent

by the representatives of each of the departments to the department head

for approval. The department ahead approves the demand forecast based

on the business needs and the budgets available. The department head

may consult the compensation and benefits team to understand the salaries

or the cost to the company for employees at different levels. Once the

department head approves the demand forecast which can be met from a

budgetary perspective, then the demand forecasts are forwarded to the

manpower planning function. The manpower planning functions

consolidates the demand forecast for manpower received from different

departments. Figure 1.1 illustrates the consolidated demand forecast

development.

Fig. 1.1: Consolidated Demand Forecast Development

1.10 Effective Decision Making

The manpower planning exercise facilitates effective decision making to

take place. All decision making becomes relatively easy when the relevant

data is available. Analysis of the data itself provides inferences and guides

the decision making process. The historical demand forecast and the supply

forecast is reviewed apart from the forecast for the current period and the

future. Learning from the previous manpower demand forecasting exercises

are incorporated in generating the demand forecast for the current period

and the future.

Department representatives are sometimes asked to come back with a

revised manpower demand forecast which needs to be about 20% lower

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than the provided demand forecast. This forces the representatives to think

out of the box to cut down the demand forecast. Usually this happens by

departments identifying the non value-added tasks that were being

performed by different people in the department. The processes are

redrafted to eliminate non value-added tasks; this reduces the total workload

across the department and hence allows for reduction of manpower demand

forecast.

Additionally some companies insist that the demand forecast should be

provided month wise. Should the manpower not be recruited within that

month or the quarter even when additional workload has been created, then

those manpower requirements lapse. This is because the department has

possibly found a way to work without the resource requirement forecasted

earlier. In this manner, organizations ensure the actual manpower level

remains lesser than the demand forecast levels if there is no negative

impact to the business.

We all would have heard that work stretches itself to fit into the available

time frame. If a person is provided 20 minutes to send an email with some

information, it is usually sent within 20 minutes. If a person is provided 1 day

to send an email with some information, it usually is sent just 20 minutes

before the 1 day ends.

Therefore manpower planning exercises engage employees in some

effective decision making for generating demand forecasts.

1.11 Gaining Senior Management Support

Sometimes the department representatives generate a demand forecast but

do not have the underlying assumptions ready for discussion or have not

generated the demand forecast by calculating the workload and hence the

estimated time and resources required. When they seek an approval from

the senior management to forward such a demand forecast to the

manpower planning function, the department heads ask many questions.

If the questions of the department head are not answered satisfactorily then

the department head does not approve the demand forecast. In some other

cases, the number of questions asked is so many and so fundamental that

the representative along with the department managers may withdraw a part

of the demand made initially.

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Hence when generating a demand forecast each manpower requirement

must be generated after due consideration to all possible questions that

maybe asked. Proper justification can be kept ready for gaining the senior

management support. Once the representatives undergo this exercise two

or three times then it becomes easy to gain the support of the senior

management because they understand the preparation required for

generating the demand forecast for manpower.

1.12 Meeting the Organization’s Goals and Objectives

All the checks and balances are built into the manpower planning process

such that it enables the organization to meet its goals and objectives. The

biggest enemy of a business is cost. However, every business needs to

convert this enemy „cost‟ into their friend by being frugal, intelligent in

designing processes with only value added activities, carefully in accepting

responsibilities that fall outside the scope of their defined work. This does

not mean that no will take responsibility for undertaking the out of scope

task. It just means the clients will be approached and told that as per the

contract signed with the organization; these tasks expected by them from

the service provider are out of scope. They could be considered to be

included in the scope for a consideration which will be treated as a new

business opportunity and a fresh presentation will be made and quote

provided for undertaking the activity. This ensures the clients do not receive

any free services and the client is charged only for what they want. It‟s a

win-win for both the client and the service providing organization. Both

organizations are able to meet their respective goals and objectives.

Activity 2:

Read the article on manpower planning in railways written by

Mr. M. K. Durgamani dated 26th April 2009, posted on the

website www.articlesbase.com.

Link http://www.articlesbase.com/human-resources-articles/manpower-

planning-in-indian-railways-886371.html.

Self Assessment Questions

10. __________ generate the demand forecast based on the business

need and the guidelines provided.

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1.13 Summary

Manpower planning is a very vital process where the management

determines how the organization should move from its present manpower

position to a desired manpower position. Manpower planning may be

defined as a strategy for the procurement, development, allocation and

utilization of an enterprise‟s human resources. Human beings alone have

the ability to think, grow, feel, show pleasure at achievements, show

displeasure or dissatisfaction etc.

There are five steps in the manpower planning process. They are:

Evaluate present manpower inventory

Manpower forecasting

Develop a manpower sourcing plan or retrenchment plan

Manpower allocation

Building requisite competencies

The main purpose of the manpower planning is to increase the productivity

of the organization and the total value created by the organization in a given

unit of time.

The major obstacles in manpower planning are non optimal utilization of

manpower; absenteeism; lack of employable labor; and modern manpower

control and review processes.

Successful manpower planning involves only two critical steps. Estimating

the demand forecast for manpower accurately and ensuring that the supply

forecast for manpower meets the demand forecast.

1.14 Glossary

Term Description

Attrite Employees leaving the organization are said to be attritions. Employees attrite from an organization.

Competency Competencies are the measurable or observable knowledge, skills, abilities, and behaviours (KSABs) critical to successfully perform a job.

Demand Forecast

Estimate of expected demand for a product, service or resource over a specified future period.

Forecasting Forecasting is estimating the value of a variable/s at some future point in time.

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Manpower Inventory

The term inventory is often used in relation to counting of physical objects like raw materials, work in progress, finished products etc. It may also include the qualities and the abilities of persons working a company and is then called as manpower inventory.

Procurement The process of acquisition of goods or services required for a company or a person is called procurement.

Retrenchment A cutting down or cutting back of manpower in this context. Reduction of manpower in this context.

1.15 Terminal Questions

1. Explain effective manpower planning.

2. Describe the 5 steps in manpower planning.

3. List the obstacles in manpower planning.

4. Highlight 4-5 key advantages of manpower planning

1.16 Answers

Answers to Self Assessment Questions

1. Strategy

2. Number

3. Manpower

4. Forecasting

5. Shortages, Surpluses

6. Labor, Overstaffing

7. Productivity

8. Obstacles

9. Advantages

10. Department representatives

Answers to Terminal Questions

1. Refer section 1.2

2. Refer section 1.4

3. Refer section 1.6

4. Refer section 1.7

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Mini Case - Keeping Good People: Staffing

Given the current labor market, the costs of recruiting and hiring are

becoming more apparent than ever to organizations. After going through the

difficulty of attracting and hiring talented people, businesses do not want to

lose them to competitions. Difficulty is staffing has created an emphasis on

retaining human resources.

Applied Industries Technologies, a Cleveland-based business, has taken

steps to reduce turnover. Specifically, they have made self-fulfillment - the

process of helping each person reach their full potential - a central value in

the organization. According to CEO John Dannemiller, the company views

its self-fulfillment mission as important as salary and benefits in motivating

talented employees. He attributes a doubling in revenues over the past eight

years and a turnover rate below the industry average to self-fulfillment

programs. Here is a summary of Applied Industrial‟s self-fulfillment strategy:

The company commits to 40 hours of training each year-a significant

amount.

Applied Industrial conducts regular leadership and personality testing.

The test results are used to identify areas of personal improvement and

to measure growth.

The company offers reading lists of management books.

Employees are reimbursed for education expenses.

(Source: Dannemiller, J. C. (1998). How we keep good people. Across the

Board, 35, 21.)

Case Study Questions

1. Assume that you are Applied Industrial Technologies manager working

to orient and hire new employees.

a) How would you orient an employee who accepts a position at

Applied but does not care about the self improvement program? So

far, the employee has met job requirements but does not exceed

higher than the job requirements.

b) What steps could you take in selection to assess whether prospects

would respond effectively to the self-fulfillment program? (Hint: As a

start, consider individual characteristics that might affect a

prospect‟s response to this type of program).

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Sikkim Manipal University Page No.: 19

2. Applied Industrial views its self-fulfillment programs as a retention effort.

It is also a recruitment tool? What, if any, do you think are the differences

between tactics designed to improve retention versus those designed to

improve attraction and recruitment?

Hint:

1. a) By genuinely questioning how much am I interested in my personal

and professional growth in terms of competencies, position and most

of all the respect I get from all stakeholders.

b) Hire people who are keen to learn. Their goal for learning should

supersede their other goals.

2. Retention is attracting at an internal level, recruitment is attracting at an

external level.

Recommended Reading

Prakash A. V. (2000). Manpower Planning and Development. India: ABD

Publishers.

Details of these books are available at www.sapnaonline.com and

www.infibeam.com.

References

Books

Rao S. P. (2010). Personnel and Human Resource Management.

Mumbai: Himalaya Publishing House

Tripathi P. C. (2009). Human Resource Development. New Delhi:

Sultan Chand and Sons

Mahapatro B. B. (2010). Human Resource Management. New Delhi:

New Age International Publishers

Aggarwala D. V., (2008) Manpower: Planning, Selection, Training and

Development. India: Deep and Deep.

E-references

http://www.managementstudyguide.com/manpower-planning.htm

(Retrieved on 13 May 2010)

http://www.buzzle.com/editorials/9-12-2004-59200.asp

(Retrieved on 13 May 2010)

http://www.chrmglobal.com/Replies/1680/1/Manpower-planning.html

(Retrieved on 13 May 2010)