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I am hereby sending some material on Manpower Planning.

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Goals and Objectives of Human Resource Planning

Effective human resource planning can help managers meet organizational subgoals as well as wider objectives such as profitability and the needs of employees in the organiza‑

tion.' For example, effective planning may

1. Serve to stabilize employment levels when demand for a firm's product is variable, thus reducing the firm's unemployment compensation liability costs due to layoffs, providing more job security to the firm's employees, and minimizing the costs of overtime during periods of peak demand.

Figure 3.2 Human resource planning model for any particular job at any particular time.

2. Prevent young college recruits from leaving the firm after expensive training programs because they lack opportunities for promotion.

3. Reduce the problems of managerial succession by permitting plans for replace­ments to be drawn up in advance in case key executives resign or die.

4. Make it possible to allocate financial resources so that departments will have the necessary people to produce the firm's desired output.'

One example of the way in which human resource planning can provide for employment stabilization involves the use of temporary personnel ("temporaries") by organizations. Although such temporaries have been used primarily to fill in for em­ployees when they are on vacation or ill, many businesses are now finding other creative uses for temporaries which can provide cost savings to firms. Guillet has suggested, for example, that planned staffing may result in using temporary sales personnel during the peak Christmas holidays, thereby minimizing costs associated with overtime pay for permanent employees.'

In addition, temporaries may be used "on a long‑term basis when employee turnover is high or production low, especially in tedious or routine jobs."' Using temporaries may provide savings not only in overtime costs, but costs associated with absenteeism, employee turnover, and recruitment problems, and savings on other ben­efits as well.'

Relationship of Planning to Other Personnel Processes

From a systems view, human resource planning is mutually interrelated with many of the organization's other endeavors in personnel management. The strongest relation­ship exists between human resource planning and selection. In fact, all selection efforts really are an integral part of the whole human resource planning process. Organizations that have either stable or increasing human resource needs must go into the external labor market and hire employees even though they generally follow a promotion‑from­ within policy, as we will see later.

In addition, human resource planning is related to both performance appraisal and training and development. Performance appraisals can pinpoint the skills that will be required for employees to move into higher‑level positions via promotion, while training and development efforts may then be designed to provide these skills.

To meet organizational goals, human resource planning seeks to ensure that the organization's demand for individuals at any particular time will be just met by availa­ble human resources. This view assumes that "stockpiling" employees at levels greater than needed and being understaffed are both undesirable. This assumption represents a major difference between planning for human resources and planning for nonhuman resources. Although it is generally unacceptable to stockpile or build inventories of human resources, organizations may find it necessary or desirable to build up raw materials or finished‑goods inventories.

It is unacceptable to hold human resource inventories for three reasons. First, human resources are costly and it may be difficult to justify the expense of excess personnel. As the previous example of the employment of temporaries indicated, there are sounder and more cost‑effective options available to personnel planners in business firms. Second, excess people are not engaged in productive work, and are likely to be bored and frustrated by the lack of anything constructive to do. Such boredom and frustration can create problems because excess people may make unnecessary work for productive people and may even inhibit the firm's total productive efforts. Third, since human resources (particularly skilled and professional people) may be in short supply, taking productive workers out of the economy's labor pool may be considered socially unacceptable.'

It is equally undesirable for an organization to operate with too few employees. As with "stockpiled" employees, individuals may feel frustrated, but in this case because of overwork rather than a lack of productive activity. This situation may also be dysfunctional to an organization's goals. Consider, for example, a department store during the holiday season with a shortage of sales personnel. In addition to the frustra­tions experienced by employees, such understaffing may also result in loss of employee efficiency. Customers may respond to long lines and excessive waiting by taking their business elsewhere, with resultant loss of sales by the organization. Having too many or too few employees may create numerous problems for organizations‑problems that can be reduced or eliminated through effective human resource planning.

Trends in Human Resource Management

Unfortunately, the human resource planning efforts of organizations have often been inadequate by failing to emphasize the truly systematized approach geared toward meeting overall objectives. As Lopez and others have noted:

Some organizations have perceived manpower planning primarily in terms of budget­ing to control labor costs; others have viewed it as a management development technique; still others see it as a table of back‑ups and replacements for current employees; and finally, others have viewed it as a means of establishing a human resources informational system and a personnel inventory. Since each of these approaches is necessarily limited in scope, it is a small wonder that the state of the art in human resource planning has limped along quite slowly.9

Toward More Sophisticated Human Resource Planning

In recent years, both personnel practitioners and researchers have emphasized some of the basic facets of personnel decision making that we stressed in Chapter 1: (1) taking systems and contingency approaches, and (2) developing more sophisticated human resource forecasting and planning models. For example, the growth of equal employ­ment opportunity regulations in recent years has increased the awareness of human resource planners of the effects of external changes on personnel systems.

Two observations are in order regarding these more sophisticated approaches. First, more complex planning systems have generally been used in larger firms. Large organizations generally must undertake complex human resource planning and can afford the higher costs of such approaches. Second, although a wide range of human resource models have been developed, some of these models have ignored so many "real life" personnel variables that they have had virtually no practical application. On the positive side, there have been numerous quantitative models that have been very useful to organizations. This chapter will focus on the basic concepts involved in some of these more useful models.

There are a number of reasons for the recent increase in the use of more sophis­ticated human resource planning models. For example:

Organizations simply have been growing larger and more complex, requiring more sophisticated approaches. This has been especially true in those organiza­tions in which interdependencies have increased."'

The invention and development of the computer has made possible the analysis of complex human resource problems that would previously have been so time‑consuming as to be cost prohibitive or virtually impossible to deal with by manual computations.

"The manpower mix in organizations had gradually come to focus around highly skilled managerial and technical talent."" Such personnel have at times been in short supply, and more of a lead time has been required for their training and development.

Once an integrated, well‑thought‑out human resource planning program has been initiated, managers tend to appreciate its benefits and work together with the firm's human resource specialists in developing viable programs‑"they are more willing to plan in this area, if only they are shown how to begin.""

Problems Inherent in More Sophisticated Human Resource Planning

Despite these reasons for the growth of more sophisticated human resource planning, such approaches have faced a number of problems. First and most obviously, there is an inherent mathematical complexity associated with efforts to model human resource systems. In addition, however, there are two less obvious difficulties: (1) a lack of certainty surrounding human resource needs in the future, coupled with (2) the exis­tence of an acquisition lead time for meeting those needs. Even if an organization's human resource planning experts were completely uncertain about the number of operations researchers that would be needed on July 28, 1998, the organization would face no problems if it could at that future time instantaneously obtain any number of such personnel to meet its objectives."

In actual­ity, however, lead times are needed to recruit and train new personnel, and to train and promote existing employees for new positions or assignments. Acquisition lead times have become more of a problem in recent years because of the needs for more highly skilled managerial and professional personnel. Since this trend is expected to continue in future years, the problem of acquisition lead times creates forecasting difficulties for most organizations."

Finally, human resource plans must be updated more frequently in firms (or in any of their subsystems) in which greater uncertainty exists. As one observer has noted:

Increasing instability and the greater uncertainties associated with certain job require­ments (e.g., research and development or marketing) indicate a requirement for more up‑to‑date information on emerging needs. This manpower data is increasingly sub­ject to change, and organizational needs dictate timely information with appropriate systems support's


John N

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