Human Resource Planning  Quantitative and Qualitative Dimensions

Human Resource Planning  Quantitative and Qualitative Dimensions

Human resources have a dual role to play in the economic development of a country. On one hand they are the consumers of the products and services produced by the organisations while on the other hand they are one of the factors of production.

Along with capital and other factors of production, human resources can lead to increase in production and economic development. The rate of growth of human resources is determined by two aspects quantitative and qualitative.

Variables Determining the Quantity of Human Resources:

1. Population Policy:

Some population policies operate by influencing the factors responsible for growth such as fertility, marriage and mortality. These are known as population influencing policies.

Another category of policies known as responsive policies are implemented to adjust to observed population trends with the help of programme like health, nutrition, education, housing, etc. The aim of population policies is to achieve an optimum population for enhancing the country’s development.

2. Population Structure:

The structure or composition of the population is determined by two factors, sex composition and age composition.

(i) Sex Composition:

Sex ratio is the ratio of males to females in the population. It is the basic measure of the sex composition of the population of any area. Higher the number of females, higher will be the population growth rate in future.

(ii) Age Composition:

It is the distribution of population by age groups. Age composition is the result of past trends in fertility and mortality. The supply of labor depends on age composition as economically active population falls in range of 15-65 age groups.

3. Migration:

Net migration is another factor which causes changes in the population. Age and sex composition determine the natural growth in population, but for calculating the overall changes in population it is important to consider net migration also.

Net migration = total immigrants – total emigrants

A positive net migration will lead to a rise in population growth rate while negative net migration will reduce the growth rate of population. Migration can be both inter­regional and international.

4. Labor Force Participation:

The population of any country consists of workers and non-workers. The workers are the people, usually in age group of 15-65, who participate in economically productive activities by their mental or physical presence.

These include:

i. Employers,

ii. Employees,

iii. Self-employed persons, and

iv. Those engaged in family enterprises without pay.

The others in the population are the non-workers such as students, infants, elderly, beggars, retired people, inmates of jail or mental institutions, unemployed, etc.

They do not contribute to any productive economic activity. It is the changes in the working population which affect the growth of human resources. The number of people who are unemployed but available for work also impacts the availability of labor.

Qualitative Aspects of Human Resource Planning:

The quantitative dimensions help to ascertain human resources in numbers while the productive power of human resources is assessed by the qualitative dimensions. For example, there may be hundreds of applicants for 20 vacancies, but out of these only a few may meet the quality standards required for the job.

Factors which determine the quality of human resources are:

1. Education and Training:

The quantity and quality of education and training received by human resources impacts their knowledge and skills. Education and training are important for the upliftment of both individual and society. It can be of two types, formal and informal.

Formal education is imparted through schools and colleges while informal education and training takes place through on-the-job training methods. Formal education stresses the transfer of theoretical knowledge, while informal education emphasizes on practical application of knowledge.

2. Health and Nutrition:

Health and nutrition along with education are vital for Human Resource Development. Health and nutrition impact the quality of life, productivity of labor and the average life expectancy.

Health status is determined by:

(i) Purchasing power of people.

(ii) Public sanitation, climate and availability of medical facilities.

(iii) People’s understanding and knowledge of health, hygiene and nutrition.

3. Equality of Opportunity:

Not all segments of people comprising human resources get equal employment opportunities. There is bound to be some discrimination.

The most common forms of discrimination are:

(i) Social discrimination – Discrimination on basis of gender, religion or social standing.

(ii) Economic discrimination – Discrimination based on financial positions or possession of wealth by the sections of workforce.

(iii) Regional discrimination – These are in form of discrimination between rural and urban population or between people belonging to different regions/ states.

Discrimination affects the quality and productivity of the human resources belonging to different sections of the population. The privileged classes get access to best education, nutrition and health facilities while underprivileged are deprived of their right share in the development process. For the overall, well-rounded development of the country’s human resources, effective policies need to be implemented to deal with the problem of discrimination.

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Human Resource Planning – Prerequisites:

i. There should be a proper linkage between HR plan and organizational plan.

ii. Top management support is essential.

iii. Proper balance should be kept between the qualitative and quantitative approaches to HRP.

iv. Involvement of operating managers is necessary.

v. Proper alignment between short-term HR plans and long-term HR plans should be there.

vi. HR plan should have in-built flexibility in order to adopt environmental uncertainties.

vii. Time period of HR plan should be appropriate to needs and circumstances of the organization.

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Human Resource Planning – Relationship with Other Personnel Processes:

From a systems view, human resource planning is 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 labour market and hire employees even though they generally follow a promotion-from within policy.

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 non-human 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.

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.

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Human Resource Planning – Cost Contribution Analysis:

Cost-contribution analysis of human resources is most important in HRP with a view to plan for more effective human resource system. The human resource components necessary to maximize employee contribution to the job and the organisation, and minimize the cost, should be determined in advance with the help of human resource accounting techniques.

The optimum human resource system should be planned and determined as the human resources system is the control system in the organisation because it emphasizes the human contribution which critically influences the organizational effectiveness.

Planning the human resource system includes determining the type of human resource components like creative and innovative skills and abilities, dynamism, leadership qualities, commitment, identification with the organisation, etc., considering the measures to acquire those human resources through recruitment, training and development and adjusting the components.

Similarly, cost of human resource should be streamlined and it should be taken as investment on human resources and not as mere cost. These items include remuneration cost (Pay, allowances, fringe benefits, other indirect costs), recruitment cost (cost of job design, advertising cost, cost for conducting tests, interview, reference checks, medical examination and induction), training costs, etc.

Human Resource Accounting (HRA) envisages capitalization of all expenses like cost of recruitment, training etc. One of the systems of HRA i.e., replacement cost of human asset is an important tool for the formulation of manpower budget and plan for human resources.

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Human Resource Planning – Responsibility:

Human resource planning is the responsibility of the personnel department. In this task, it is aided by the industrial engineering department, the top management and the team of directors of different departments. It is mostly a staffing or personnel function.

The overall responsibility lies with the Board of Directors because, as the manpower planning scheme of Hindustan Lever indicates, “these members are in a position to direct the future course of business, set appropriate goals for the management concerned in the formulation of personnel policies.”

The personnel department’s responsibility is “to recommend relevant personnel policies in respect of manpower planning, devise methods of procedure, and determine the quantitative aspects of manpower planning.”

The responsibilities of the personnel department in regard to manpower planning have been stated by Geisler in the following words:

(i) To assist, counsel and pressurize the operating management to plan and establish objectives;

(ii) To collect and summaries data in total organisation terms and to ensure consistency with long- range objectives and other elements of the total business plan;

(iii) To monitor and measure performance against the plan and keep the top management informed about it; and

(iv) To provide the research necessary for effective manpower and organizational planning.

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