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Manpower Planning is the process in which an organization ensures that it has the right number and
kind 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. It involves matching the manpower
demand of the organization either through internal or external resources.

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.


Manpower is regarded as the only dynamic factor of production. Other factors like materials,
methods, machines, money etc. are useless without their effective use by the human resources.
Thus, it is logical that there should be proper manpower planning in the organization to use the other
resources effectively.

• It helps to maintain the required quantity and quality of human resources required for a
smooth & efficient functioning of the organization. It helps to identify shortages, surpluses or
imbalances of manpower.
• Helps in determining future personnel need i.e. avoid surplus or deficiency of manpower.
• It helps the management in making optimum use of the available skills and provides a
platform for employee development.
• It helps the management to foresee the effects of technological changes on the
requirement for human resources.
• It facilitates the identification of corrective training requirements and thus makes the
training and development programmes more effective.
• It helps to develop contingent plans to handle sudden requirements and situations of
• It helps to evaluate the effect of alternative manpower actions and policies.
• It aides in developing manpower plans and strategies aligned to the organization’s
strategic direction and business strategy.
• Its plays an important role in strategic planning. At the beginning of strategic planning,
manpower planning provides a set of inputs into the strategic formulation process i.e. whether
the type and number of people are available to pursue a given strategy. At the end it is helpful in
implementation in terms of resource allocation decisions including those pertaining to structure,
processes and human resources.
• It is the foundation for personnel functions. It provides essential information for designing
and implementation personnel functions, such as recruitment, selection, personnel movement
(transfer, promotion, layoffs) and training and development.
• Helps to control attrition rate.
• It helps to anticipate the cost of salary enhancement, better benefits etc.
• Helps to foresee the changes in values, aptitude and attitude of human resources and to
change the techniques of interpersonal, management etc.
• To plan for physical facilities, working conditions and volume of fringe benefits like canteen,
schools, hospitals, conveyance, child care centers, quarters, company stores etc.
• It gives an idea of type of tests to be used and interview techniques in selection based on
the level of skills, qualifications, intelligence, values etc. of future human resources.
• It helps to take steps to improve human resource contributions in the form of increased
productivity, sales, turnover etc.


• Type and strategy of organization
• Organization’s growth and planning
• Environmental uncertainties
• Level of technology
• Type and quality of forecasting information
• Nature of jobs being filled
• Outsourcing


I. Defining organizational objectives

No. and characteristics of the employees should be derived from organizational objectives.
Once the organizational objectives are specified, the same needs to be specified with regard
to manpower utilization in the organization.

II. Demand forecast-Forecast of personnel needs

Estimating future quantity and quality of people required. Number of people, skills,
experience and levels are estimated to achieve the functional plans. Basis for this can be
annual budgets or business plans translated into activity levels for each function and
department. While forecasting demand both external and internal factors are considered.
Among the external factors are competition, economic climate, laws and regulatory bodies,
change in technology and social factors. Internal factors include budget constraints, sales
plan, org structure and employee separation.

 Managerial Judgement
 Statistical Techniques – ratio analysis and econometric models
 Work study techniques
 Employment trends
 Replacement needs
 Growth and expansion
 Productivity
(I could not go through these methods thoroughly)

III. Supply forecast

Measuring the number of people likely to be available from within and outside the
organization i.e. internal and external resources, no. available at the beginning of the year
after making allowances for absenteeism, internal movement and promotions, estimated
separations through retirement and other conditions of work.
 Existing manpower
 Potential losses – temporary/permanent
 Potential additions

IV. HR programming
Once the manpower demand and supply forecast analysis has been done, the two must be
reconciled or balanced in order that vacancies can be filled by the right employees at the
right time.

In case of future surplus – plan for redeployment, retrenchment and lay-off

In case of future deficit – forecast the future supply of human resources from all
sources with reference to plans of other companies

V. MPP implementation
Implementation phase converts manpower plan into action. A series of action programmes
are initiated as a part of MPP implementation e.g. recruitment, selection and placement,
T&D, retraining and redeployment, retention plan, redundance plan and succession plan.
VI. Control and evaluation of programmes