Manpower planning is the process of anticipating, identifying, selecting and nurturing what is most useful and beneficial to the organisation. Manpower planning is, therefore, concerned with the optimum utilization of human resources in the organisation.

In fact, this is the primary objective of manpower planning. It is related to current manpower position and desired manpower position and it is related to the quality and quantity of manpower.

According to Bruce P. Coleman, “Manpower planning is the process of determining manpower, requirements and the means for meeting these requirements in order to carry out the integrated plans of the organisation.”

Learn about:-

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1. Introduction to Manpower Planning 2. Meaning and Definitions of Manpower Planning 3. Concept 4. Importance 5. Pre-Requisites 6. Objectives 7. Basis 8. Strategies

9. Process 10. Forms 11. Types 12. Techniques of Forecasting the Manpower Demand 13. Models 14. Manpower Supply from External Sources 15. Usefulness 16. Advantages 17. Problems and Limitations.

Manpower Planning: Meaning, Importance, Objectives, Process, Advantages, Limitations, Advantages  and Problems


Contents:

  1. Introduction to Manpower Planning
  2. Meaning and Definitions of Manpower Planning
  3. Concept of Manpower Planning
  4. Importance of Manpower Planning
  5. Pre-Requisites of Manpower Planning
  6. Objectives of Manpower Planning
  7. Basis of Manpower Planning
  8. Strategies of Manpower Planning
  9. Process of Manpower Planning
  10. Forms of Manpower Planning
  11. Types of Manpower Planning
  12. Techniques of Forecasting the Manpower Demand
  13. Models of Manpower Planning
  14. Manpower Supply from External Sources
  15. Usefulness of Manpower Planning
  16. Advantages of Manpower Planning
  17. Problems and Limitations of Manpower Planning

Manpower Planning – Introduction

Manpower planning is the prime function of staffing. It is an essential requisite for organisational success. Continued supply of able and quality managers and other subordinates is essential for achieving the pre-determined goals of the enterprise. Hence, the need for capable managers and subordinate managers has been increasing day by day. As a matter of fact, owing to growing size of business, increasing competition, rapid technological advances, globalisation, deregulation and other government measures there exists a wide gap between the demand for and supply of well-trained managers.

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The modern enterprise, in general, has been experiencing the shortage of such managers. This has increased the role of manpower planning in an enterprise which, in turn, has increased the burden of existing managers. The manager has to ensure that “a constant stream of subordinate managers is recruited, selected, trained, developed and promoted…”

The manpower plans help to bring supply and demand into equilibrium, as a continual workforce planning exercise, the inputs to which will need constant varying to reflect the actual as against predicted experience on the supply side and changes in production actually achieved as against forecast on the demand side. The plans interact with manpower planning issues at every given stage in all these areas of human resources.

They are recruitment and selection, induction and orientation, training and development, compensation and benefits, performance appraisal and management, industrial relations, promotions, transfers, terminations, staff amenities and welfare, retirement, attrition, redundancy, voluntary retirement and career and succession planning.


Manpower Planning – Meaning and Definitions

Without proper planning, it becomes difficult for a company to develop and progress in a planned and systematic manner. Proper planning, right from the start, and making arrangements keeping in mind the company’s growth path are essential steps for the company’s success.

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Also, the management team should plan effective ways for the staff to perform their tasks in an organized manner as this would enable the human resources of the organization to attain good results. A company will only be able to accomplish its targeted goals if proper planning has gone into allotting every employee of a company his or her responsibility and monitoring the same for best results.

A rational assessment of the human resource requirements of the organization at various levels within the organization and ensuring that recruitment and retention of human resources is in line with the same, keeping in mind employee turnover, can be termed as manpower planning.

The concept of manpower planning, which is also known as human resource planning, in essence, is all about hiring the right candidates, finding out, and monitoring the needs of the employees and identifying ways and means to meet those needs in order to put into effect the plan formulated by the organization. Without manpower planning, the organization would not be able to work effectively.

The main objective of manpower planning is to acquire, utilize, improve, and retain effectively the employees to attain results in the most favorable manner. The main aim of developing a manpower plan is to be able to anticipate issues arising from excess or limited manpower. Besides this, it also helps an organization to hire and retain employees needed and in making complete and efficient use of the workforce. Hence, the personnel manager of each department is expected to develop a manpower plan keeping in mind the entire organization as a part of the corporate plan.

Definitions of Manpower Planning

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The essence of Manpower planning is the right man on the right job and the right job the right man. If a person is appointed at a post requiring more ability than the ability of the person, he will not be able in discharging his duties according to the requirements of the post. Similarly, if a person possessing higher abilities is appointed at a post not requiring that much ability, he will feel dissatisfied with his job and the enterprise will not be able in exploiting his best abilities.

Defining the term Manpower Planning, L.R. Sayles & George Strauss have stated, “Manpower Planning means forecasting prediction of the number of the people whom the organisation will have to hire, train or promote in a given period. Broadly defined, Manpower Planning represents a systematic approach to personnel in which the emphasis is on the inter-relationship among the various personnel policies and programmes.”

According to Bruce P. Coleman, “Manpower planning is the process of determining manpower, requirements and the means for meeting these requirements in order to carry out the integrated plans of the organisation.”

According to Eric W. Vetter, “The process by which management determines how the organisation should move from its current manpower position to its desired manpower position.”

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According to Gordon MacBeath, manpower planning involves two stages. The first stage is concerned with the detailed “planning of manpower requirements for all types and levels of employees throughout the period of the plan,” and the second stage is concerned with “planning of manpower supplies to provide the organisation with the right types of people from all sources to meet the planned requirements.”

According to E. B. Geislhr, “Manpower planning is the process (including forecasting, developing, implementing and controlling) by which a firm assures that it has the right number of people and right kind of people, at the right place at the right time, doing things for which they are economically useful.”

Thus, it may be concluded that Manpower Planning involves the estimation of size and quality of the work force required by the enterprise to accomplish its desired objectives. Manpower Planning has two aspects quantitative and qualitative aspect.


Manpower Planning – Concept

The concept of manpower planning is based on the concept of planning itself. Hence, manpower planning is deciding in advance what is to be done with respect to the supply of managers. That is to say, what kinds of managers are needed in future; how many managers are required; when they are needed; what are the sources of obtaining them; how many managers can be obtained from internal sources; how many managers can be obtained from external sources; etc. Thus, manpower planning is concerned with the demand for and supply of managers and subordinates.

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According to Edwin B. Geisler, “Manpower planning is the process- including forecasting, developing, implementing and controlling-by which a firm ensures that it has the right number of people and right kind of people, at the right place, at the right time, doing things for which they are economically most suitable.”

In this way, manpower planning is the process of anticipating, identifying, selecting and nurturing what is most useful and beneficial to the organisation. Manpower planning is, therefore, concerned with the optimum utilization of human resources in the organisation. In fact, this is the primary objective of manpower planning. It is related to current manpower position and desired manpower position and it is related to the quality and quantity of manpower.


Manpower Planning – Need and Importance

Managerial efficiency in an enterprise may be judged by the extent of the use of the manpower available to get the best possible results. It is only possible by manpower planning. Personnel objectives cannot be achieved without proper planning of manpower in the industry. In order to place the right man on the right job, manpower planning is a must.

Need and importance of Manpower Planning can be explained under the following heads:

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1. Knowledge of the Sources of Supply of Manpower:

Manpower Planning studies the sources of supply of manpower and utilises that sources.

2. Increasing Size of Enterprise:

Increasing size of business and industrial enterprises have made the activities of management to wide so and complicated that the management has to make several changes in its organisational structure. Different employees of different abilities are required for the accomplishment of the objects of enterprise. The objects of enterprise can be achieved easily and more effectively through Manpower Planning.

3. To Make the Programmes of Employees Development:

Manpower Planning helps in estimating the needs of working force for the future. It also helps in determining the abilities of the employees to be recruited in the future. It also helps in estimating the need of training to them. Effective programmes may be prepared on the basis of Manpower Planning for the development of employees.

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4. To Establish Co-Ordination between Labour and Capital:

Manpower Planning helps in establishing, effective co-ordination between labour and capital. It also helps in the earliest possible and best possible solution of labour and capital. It also helps in the earliest possible and best possible solution of labour problems of the enterprise because Manpower Planning provides the labour force of the enterprise in the manner that they agree to co-operate with the management in the accomplishment of organisational objectives.

5. Reduction in Cost of Production:

Manpower planning help in recruitment of best possible workers and employees. It reduces the rate of labour turnover. It also minimises the wastages of the enterprise. It helps the management in maximum exploitation of the resources of enterprise.

6. A Base of Effective Police of Recruitment:

Manpower Planning forms base of preparing planning for recruitment of employees. Such recruitment policy helps in the recruitment of employees at right time.

7. Fulfilment of other Objects:

Manpower planning is also helpful in the fulfilment of some other objects like the implementation of the scheme of modernisation, the expansion of business and, industrial enterprise, the improvement of labour relations, the increase in productivity etc.

Importance of Manpower Planning – Leo Lingham in “Managing a Business”:

1. Quantify job for producing product/service.

2. Quantify people and positions required.

3. Determine future staff-mix.

4. Assess staffing levels to avoid unnecessary costs.

5. Reduce delays in procuring staff.

6. Prevent shortage/excess of staff.

7. Comply with legal requirements.


Manpower Planning – Principles of Implementation and Development of Manpower Planning

Manpower planning is an important programme for the development of an organisation the implementation and development of which need certain prerequisites as follows:

1. Well-Organised Personnel Department:

Manpower planning requires certain facts and figures to forecast the requirements and developments of the personnel. The more accurate are the figures the move accurate will be the planning. A well-organised personnel department can perform this function will.

It collects, records, analyses, interprets and maintains the facts and figures relating to all the personnel’s in the organisation. Thus a well-organised personnel department is a prerequisite for the effective manpower planning so that the required information for the planning may be obtained correctly.

2. Business Objective:

The manpower planning must be integrated with other business policies and therefore business policies or objective as regards profitability, production, sales and development of human resources should be prepared well in advance to spell out the business objectives. Any change in business objectives would certainly affect the manpower planning. Some new offices will be created, some others will be abolished.

It will change the manpower planning altogether and will need further production, training, recruitment, selection and transfer, etc. It can be well understood by an example. Suppose the company decides to introduce computer, system in the organisation. This change in business policy will affect the manpower planning, i.e., the company will have to recruit the computer operators or it will train its existing employees in computer science. It may create the problem of retrenchment and the company man think over problem of adjustment of retrenched employees in some other departments through training for the new responsibilities.

3. Supports from the Top Management:

The manpower planning will be effective only when the management supports it. It is not the responsibility of personnel manager. Personnel manager is a staff personnel and can only advise or guide the top management. He cannot implement the decisions. Action on decisions or suggestions of the personnel manager can be taken only at the initiative of top executives. Thus support of top management is a must, for the effective manpower planning.

4. Determination of other Related Policies:

Other related personnel policies regarding promotion, transfer wages, overtime, fringe benefits, training leaves etc. Should be determined beforehand otherwise manpower planning will be of little use. Thus determination of personnel policies is a perquisite for manpower planning.

5. Fixing Planning Period:

That planning period short term or long-term should also be decided in advance. It depends on the nature of the business and the social, economic and political environment. Long-term planning is preferable for basic and heavy industries. The other industries like consumer goods industries may not resort to long-term plans.

In fixing the planning period, the other important factors are rate of population growth, educational and training facilities available in the country, the cost of training etc. When qualified people are in short supply and the training facilities are inadequate, the shortage may be felt more in expanding industries.

6. Manpower Standards:

In order to avoid the problems of overstaffing and understaffing the optimum manpower standards should be determined on the basis of prevailing standards in similar organisations, past practice and work measurement. These factors will reduce the cost of production and will increase the quality of the production and will help in preparation of manpower plans provided they are feasible and acceptable to the people concerned.

7. Planning Responsibility:

The responsibility of manpower planning for the whole organisation should be assigned to some responsible senior personnel who should be provided all figures relating to the planning. He may be personnel manager or planning manager or some other executives.


Manpower Planning – 6 Main Objectives

Main Objects of Manpower Planning may be described as under:

1. Management of Manpower:

Manpower Planning helps for the selection of required workers and employees according to the requirements of enterprise. Now-a-days, it is very difficult to retrench the employees after their selection. Therefore, it becomes more important that the selection of employees must be made only after careful thought and sound planning. Manpower planning helps in achieving this object.

2. Promotion of Personnel Policy:

Manpower Planning forms a base for to promotion policy regarding promotion, transfer remuneration and termination of employees.

3. To Forecast the Need of Manpower Planning:

The very first and most important objects of Manpower planning is to forecast the need of Manpower of the enterprise for certain time. It also helps in the determination of abilities of the work force.

4. To Maintain the Level of Production:

Manpower Planning reduced the absenteeism of workers, minimises the rate of labour turnover which helps in maintaining the level of production.

5. Prepare Recruitment Policy:

Manpower Planning helps in preparing as sound policy of recruitment. It forms a base for the selection of best possible workers and employees.

6. Other Objects:

Manpower Planning helps in achieving the following other objects also – (i) The schemes of labour welfare may be made more effective, (ii) The cost of labour may be reduced, (iii) Human relations may be cordial and harmonious.


Manpower Planning – 3 Important Basis: Existing Stock of Manpower, Wastage and Future Manpower Requirement

1. Existing Stock of Manpower:

This is first basis of manpower planning and is the starting point of all planning processes. To analyse the existing stock of manpower, one must study the position of total stock of manpower by dividing it into group on the basis of function, occupation, level of skill or qualification. A group wise detailed statement is prepared regarding the number of workers in the group, their age, qualification, date of retirement and chances for promotion etc.

2. Wastage:

The second basis of manpower planning is wastage. For a good planning, appropriate adjustment in the existing stock of manpower should be made for the possible wastage of manpower caused by any foreseeable changes in the organisation. In order to analyse the wastage of manpower, rate of labour turnover and the period of active management, the work should be studied.

Other reasons of wastage may be expansion and modernisation of plant, retirement, promotion, transfer and training of workers etc. In planning the manpower, these factors should be taken into consideration to make the necessary adjustments in the requirement of personnel.

3. Future Manpower Requirement:

After evaluating the existing stock of manpower and analysing the various factors of wastage caused by any foreseeable change in the organisation, we may very easily assess the future requirements of manpower in an industry taking into account the future plans of the company.

Government plans and programmes, employment policy, demand and supply, manpower in future, productivity of labour and other factors of production and replacement needs. One should also take care of the possible changes in the techniques and methods of production in the near future.

The above three factor are the basis of manpower planning. Formulation of personnel and general policies depend upon the manpower planning.


Manpower Planning – 4 Important Strategies that Contribute to an Efficient and Optimal Manpower Plan

There are four important strategies that contribute to an efficient and optimal manpower plan, each of which is explained in detail:

1. Succession strategy

2. Staff development strategy

3. Recruitment strategy

4. Redundancy strategy.

1. Succession Strategy:

Many entrepreneurs pay immense attention to the day-to-day operations of their business and completely ignore the need to spend time planning for a contingency or an unex­pected event for year’s altogether. Doing so often leads an organization to its downfall and hence, for the benefit of an organization, it is best to incorporate a succession strategy right from the start to account for all unexpected occurrences.

Companies should include the succession plan within the strategic plan, wherein the organization plans ways to identify employees who would be provided with better opportunities within the company in case of the separation of a critical employee from his/her job. Succession planning allows the organization to train and develop high level employees such that when the situation arises, they would be able to manage more exigent roles in the company, especially during situations of death, retirement, promotion, transfer, or sudden exit of an employee.

Not having a succession plan, especially in the event of a critical employee’s death, which cannot be controlled, is bound to take a toll on the development of an organization. Having a suc­cession strategy in place allows the organization to have a clear idea about where it would stand in the future. Manpower plans make more sense when succession strategy is incorporated, hence, every company must use this as a vital tool to plan its manpower needs.

How does a succession strategy work?

Personnel managers are responsible for selecting manpower to achieve the goals of a company and hence, it is also their duty to keep a check on the requirements and availability of human resources in each department. It is part of the role of the personnel manager of each individual department to consider every employee in the company to identify who would succeed whom in the case of an unexpected event. The top management then reviews this succession strategy made by personnel managers and then based on the review presented, plan out a succession strategy for the entire organization.

After the succession strategy has been finalized, it is the job of the personnel manager to implement the strategy by assigning respective employees their tasks and organizing skill
enhancement sessions accordingly to make next-in-line employees role-ready. Personnel managers are required to report to the top management team about the progress of the employees who have been assigned under this activity.

2. Staff Development Strategy:

At times, productivity and quality of output suffer as employees assigned to perform certain tasks lack the training and knowledge to be able to perform well. To avoid such an issue, it is the duty of the higher management to fill the needs of the employees by approving the plan prepared by personnel managers to plug this gap. Personnel managers are required to identify skill-gaps and relevant skill-enhancing training sessions required to be able to sort the problem. This ensures that the needs of the workforce are fulfilled, and the output quality and rate of production does not suffer.

How does a staff development strategy work?

An organization’s training and development plan must be prepared by managers if on assessing the employees; it is evident that he or she is in need of additional training. The plan prepared by the manager must not only include the training needs of the employees but must also include accurate details such as costs, logistics, objectives, and outcomes. This plan is ideally submitted to the higher management for approval.

After this plan has been submitted, personnel managers have to coordinate with line managers in implementing this plan. Line managers only recommend that there is a need for additional training but are more concerned about the output of their employees and hence, do not send their employees for the training sessions. It is possible for a personnel manager to coax the line managers into sending their employees for training only if he/ she possess a good degree of drive and the convincing skills.

Developing a staff development committee allows the management team to make certain that the staff development strategy formulated is effective. A technical staff development committee with certain responsibility of technical skills along with the staff development committee is also created in many big corporate firms.

3. Recruitment Strategy:

For many human resource professionals, recruiting the right candidate is the most crucial job for them and literally speaking, half the battle won! If the right candidates are recruited by these professionals, then the organization is bound to achieve its goals. It is due to this that the recruitment process needs to be extremely effective and customized to the needs of the organization. Proper recruitment strategies must be formulated and followed in order to hire the best applicants.

How does a recruitment strategy work?

A recruitment plan includes ways in which the vacant position should be advertised, how the applications must be screened, how the screened applications must be shortlisted, how such candidates must be informed that they have been selected for the interview, how the interview must be conducted, how the appropriate person meant for the job must be selected and lastly, how the hired person must be placed on the job for a probation period.

The recruitment strategy is bound to also give the personnel manager a clear idea about whether the candidate should be hired on a temporary or permanent basis. Based on proper manpower planning, arriving at the recruitment strategy is a must for an organization in order to alleviate the redundancies of an organization. Also, the sense of insecurity among the existing and new staff can be avoided by following a scientific and transparent process.

4. Redundancy Strategy:

The word redundancy means dismissing an employee from his/her job because of certain problems the company might be facing. The issues that arise due to redundancy are not only faced by the employee but the employer also suffers in the bargain. At times, the organization wishes to reduce costs by dismissing few of its inefficient employees.

By following this path, the organization grows its bottom line and saves the organization’s hard-earned money. Hence, planning a redundancy strategy which helps manage the redundancy process and also helps figure out when action is required, well in advance, ensures safety of the organization and prevents it from damage.

Taking a quick decision to implement a redundancy program often hampers the development of an organization and hence, a close scrutiny of the current and future aspects must be carried out. An organization is bound to be benefitted if a few inefficient sources are dismissed from a surplus bunch. Developing a redundancy strategy allows the management team to calculate the excess number of employees that an organization might not require. Due to redundancy, an organization can lose some of its vital employees.

How does a redundancy strategy work?

Before developing a redundancy strategy, having knowledge about whether an organization can or cannot afford to avoid redundancy is a must. Also, answers to whether the process of recruiting candidates will be able to solve the redundancy problem must be found out. Not only this, the possibility of redistributing the excess workforce in place of those who will be retiring in the future should be made known.

Organizations must make sure that they offer counseling sessions to not only the employees who are to be dismissed but also to their family members to offer them solace and help them come out of a state of shock. This strategy of providing counseling is bound to alleviate the harm caused in the redundancy process. The line managers must make sure that they build a good rapport with the existing employees in order to gain their trust and confidence by providing them with appreciation and assurances about their current job in the organization.

Taking all these strategies into account, if the management integrates the strategies of succession, recruitment, and staff development into its manpower plans, it is likely that its manpower continues to be a valuable resource for the organization.


Manpower Planning – 4 Step Process

The need to anticipate and provide for future manpower requirements has made manpower planning a vital function today in the area of staffing or the personnel function. In large organisations, where a personnel department exists, this function is naturally performed by such department as a staff function.

Systematic manpower planning has not yet become really popular even in advanced countries such as France, USA and UK, being practised there only by a few huge companies in large scale industries such as petroleum and chemicals.

The process of manpower planning consists of the following steps:

Step # 1. Studying the Employee Turnover:

From the available stock of manpower, a discount should be allowed for employee turn-over during the period of planning. Employee turnover may be caused by death disability, dismissal, resignation, promotions, transfers etc. The study of employee turnover helps estimating the future needs of the work force. The study of turnover requires a lot of experiences and the records regarding work conditions, morale, job satisfaction, competitive situations, unemployment etc.

Step # 2. Preparing Manpower Inventory:

The main purpose of manpower planning is to avoid the situations of overstaffing and understaffing and for this purpose a stock of existing manpower is to be assessed. Manpower inventory refers to the assessment of the present and the potential capabilities of present employees qualitatively and quantitatively.

It reveals the degree to which these capabilities are employed optimally and helps to identify the gaps that exist or that are likely to arise in the firm’s human resources. Preparation of manpower inventory involves determination of personnel to be inventoried, cataloguing of factual background information on each individual, systematic appraisal of each individual and listing the present and potential abilities and aptitudes of each.

Step # 3. Manpower Plans:

After determining the gaps in manpower, programmes and strategies are developed for recruitment, selection, training transfers, promotion and appraisal so that the future manpower requirements will be met. Development plans are designed to ensure a continuing supply of trained people to take over jobs as they fall vacant either by promotions of recruitment or through training. In this way the shortages or redundancies can be avoided in the long run.

Step # 4. Forecasting Manpower Needs:

Forecasting of future manpower requirements is the most important part or manpower planning. This requirement is forecasted on the basis of production and sales budgets, workload analysis, work force analysis, estimated absenteeism and turnover etc. The future manpower requirement should be forecasted qualitatively and quantitatively. These forecasts depend upon the business objectives. Formal approach to manpower forecasts involves statistical and mathematical projections of labour market trends, product market trends and technological changes.


Manpower Planning – 2 Main Forms: Short-Term Manpower Planning and Long-Term Manpower Planning

There may be two forms of Manpower Planning:

1. Short-term Manpower Planning; and

2. Long-term Manpower Planning.

The details in this regard are as follows:

Form # 1. Short-Term Manpower Planning:

Short term Manpower Planning means to prepare the plans for a period of less than two parts for the convenience- (a) Matching the present employees with their objects, (b) Filling the vacancy with the present staff.

The details are as follows:

(A) Matching the Present Employee with their Job:

The question of matching the present employees with their job arises in the following two conditions – (1) When the ability of present employees is less than the required ability of their posts; or (2) When the abilities of present employees are more than the ability required for their posts.

The Manpower planning in both these conditions is prepared are implemented in the following manner:

1. When the Ability of Present Employees is less than the Ability Required for their Post:

The ability of present employees less than the ability required for their post, any of the following steps may be taken by the management:

(i) To Appoint an Assistant – One way out to solve the problems may be to appoint the assistant for the employees so that both of them may perform the duties of the post jointly and with the co-operation of each other the required standard may be achieved.

(ii) Change in Job – The second way out in this condition is to change the job of the employee and to allot him a job for which he is capable.

(iii) Change in Employees – The easiest way out in this condition is to change the employees from the post for which they are not capable and other employees having required ability may be transferred to that post.

(iv) Termination of Services of Employees – If the employee does not meet the requirement of the post even after getting the training, the only way out is to terminate his service.

(v) Change in both Employee and Job – Under this step, the employees of less ability may be sent for training and the work of that employees may be associated with the work of any other employees.

2. When the Ability of Present Employees is more than the Required Ability of His Post:

If the ability of present employee is more than the ability required for his post and of the following steps may be taken by the management:

(i) Change in Job – The very first step is to change the job of such employees and to allot him a job involving higher responsibilities so that the proper utilisation of his abilities may be made possible.

(ii) To Assign a New Plan – Such employee may be assigned a new plan also.

(iii) To Assign Additional Work – Another way out of this condition is to assign additional work to such employee so that his abilities may be fully exploited.

(B) Filling the Vacancies with the Present Staff:

If any vacancy arises in the enterprise due to any reason. The efforts must be made to fill such vacancy with present staff of the enterprise. It develops ability and responsibility of the employees and increase their morale.

Following precautions must be observed while doing so:

1. The appointment on vacant posts must be made well in advance by estimating the vacancy before it arises.

2. Only the capable persons must be promoted to the vacant post.

3. Arrangements must be made of proper training of their promoted employee if there is any need of it.

4. If there are more than one employee suitable for the vacant post, the employees possessing the maximum qualification and experience must be promoted.

By long-terms manpower planning, we mean a planning of personnel for more than two years. It differs from short-term planning. It is concerned with all jobs and persons at once-with matching complete roster of personnel to total job requirements – It is more concerned with filling future vacancies rather than matching the present incumbents to present jobs.

Form # 2. Long-Term Manpower Planning:

The long-run manpower planning has four following elements:

1. Projecting Manpower Requirements,

2. Manpower Development,

3. Existing Manpower, and

4. Recruitment and Selection.

1. Projecting Manpower Requirements:

The first essential step in projecting the manpower requirements is to forecast the organisation structure. The organisation operates in changing environments and therefore, it is bound to change in future. In matching the change with present job structure, the management must predict the manpower requirements in future.

The following three important factors should be analysed to forecast the manpower requirements:

(i) A Job Analysis should also help in long-term planning – A prediction of what capabilities will be required in the people to perform the job effectively. Such prediction is more important in case of managerial personnel because it takes more time to develop managerial skill. Again, the development of other personnel also depends upon the management abilities.

(ii) The Manpower Requirement in Future will depend upon the expansion or contraction in the size of the organisation – The size of the organisation can be predicted on the basis of the past rate of growth by projecting the trend in the size of sales, capital requirements or manpower stock.

(iii) The Rate of Loss due to known (such as retirement and transfer etc.) and unknown (death, resignation, discharge, leave etc.) factors may be guessed. An accurate forecast can be may help which may be adjusted on the basis of present known circumstances.

2. Manpower Development:

It includes the development of individuals through training to fill up the prospective vacancies so that they can meet the challenges with their full capabilities. It makes the man according to the requirements of the job and thus coordinates the man and the job. Having predicted the future needs of personnel, the existing personnel are trained, if possible, and are appointed as and when necessary to the suitable higher job.

3. Taking Stock of Existing Manpower:

Having projected the manpower requirements, the next step in manpower planning is to take stock of existing manpower and to find out how far the present stock of manpower would fulfill the qualifications of the anticipated jobs or how far they would be developed through training.

For this purpose, a list of present employees should be prepared stating the present abilities of different persons. The list should also state the persons who can be developed within a period of five or ten years either through experience of training to suit the anticipated job requirements.

This process will enable the management to know the present and potential abilities of individuals and their suitability for specific jobs and positions. By the help of this analysis we can estimate the number and type of posts to the filled up in future.

4. Recruitment and Selection:

Once the requirement of manpower is known, the process of recruitment and selection starts to identify the prospective candidates and to stimulate them to apply for job. The recruiting activity may be selective or pre-selective through choosing among various sources of supply, and by the decision as to which candidate should be permitted to go through subsequent screening procedures.

Thus, the above factors are responsible for the long- terms manpower planning. But as the change is the law of nature, the long-term manpower planning is not done once for all times. It should be carefully matched and be amended as soon as it becomes inevitable in the light of changes in the size of the organisation, expansion of market, demand and supply of labour, technical development etc. It reduces the chance of wrong planning.


Manpower Planning – 2 Important Types: The Annual Manpower Plans and Medium and Long Range Plans

Type # 1. The Annual Manpower Plan:

An annual manpower plan for the next financial year may be worked out a few months in advance of the close of the current financial year.

The process followed would be:

1. Preparing a detailed designation-wise inventory of retirements and separations.

2. Carrying out an analysis of the criticality of jobs where, separations were taking place and categorising them into jobs where full replacement was essential, partial replacement sufficed, and where no replacement was required, at least for the year under consideration.

3. Working out a schedule of the additions/modifications to be made to the required manpower for the year on account of commissioning of the old units.

4. Identifying people who could be redeployed for posts that need to be filled.

5. Working out the balance that would have to be not through external recruitment.

6. Checking whether the figure of recruitment thus arrived at fulfils the expectations of minimising external recruitment, and within the guidelines the corporate office may have laid down regarding the numbers to be recruited, fraction of separations to be recouped, or labour productivity targets.

7. In case the recruitment figures worked out are too high, critically re-examining the previous assumptions so as to pare recruitment down to the required level.

8. Fractionalising all data so as to have a one to one correspondence with recruitment categories.

9. Making a separate plan for each specific recruitment category, considering the in-position manpower, additional requirements for new units, reductions due to closing down of old units, changes in manning patterns due to changes in technology/ automation, and identified surpluses.

10. Pinpointing not only the numbers to be redeployed but also the actual people to be redeployed. The attempt would be to match the existing skills with requirements as far as possible. Retraining plan would have to be evolved, if needed.

Type # 2. Medium and Long Range Plans:

Manpower plans for the next 5 years and next 15 years (synchronised with the national 5-year plans) should also be drawn up periodically apart from the annual plans. This exercise should normally be undertaken every 5 years and be available one year ahead of the commencement of the next five-year plan. However, if major changes in the overall plans of the company in respect of expansion/ modernisation, etc. take place at any point of time, the 5-year and 15-year plans should be revised to match the changed circumstances.

It is necessary to use a sound forecasting model for setting long-term policies and targets.


Manpower Planning – 5 Useful Techniques for Forecasting the Demand for the Manpower

For forecasting the demand for the manpower, the following techniques are used:

1. Managerial judgement

2. Ratio-trend analysis

3. Work study techniques

4. Delphi techniques

5. Statistical techniques.

Technique # 1. Managerial Judgement:

In managerial judgement technique, the managers of the various departments come together and after considering the future volume of work decides how many and what type of persons will be needed by the organisation.

There are two different ways in which this technique can be used. In the ‘top-down’ way, the top managers prepare the forecast for the number of employees needed for the unit as a whole and then they discuss these estimates with the departmental heads and their subordinates to see whether any modification is necessary in the estimate prepared by them.

In the second approach, which is known as ‘bottom-up’ approach, the estimates about employees is demanded from the foreman or supervisors of the sections and departments and their heads consider the estimates, make necessary changes and forward them to the top managers for their consideration.

Technique # 2. Ratio-Trend Analysis:

In ratio-trend analysis technique, use is made of certain ratios calculated for the previous period and then they are applied to the future period for determining the number of employees which will be needed by the organisation. The ratios may be ratio of units produced to number of employees or the ratio of sales value to number of employees.

While using this technique, necessary modification in the ratio may be required to be made in the light of changes in the technique and method of production. You will get an idea about ratio-trend analysis method of forecasting or estimating the manpower requirement in respect of foremen.

Technique # 3. Work Study Techniques:

Work study technique is used for demand forecasting when it is possible to fix standard time for producing one unit of the product and the type of labour which is needed for doing that work.

For the unit or for the department a production budget is prepared to decide production of how many units is to be completed. Then, the standard time in terms of labour hours is decided by using work study method. For producing the units as given in production budget how many total labour hours will be needed are calculated.

Then, how many labour hours will be available if one employee is appointed is calculated and while deciding these hours, allowance is made for absenteeism, overtime and idle time on the part of the employee. Total labour hours required for completing the planned production divided by man-hours available per employee will give the number of employees needed.

Technique # 4. Delphi Technique:

In Delphi Technique, a group of experts, who work independently without getting in touch with each other so that options are not influenced, are asked to submit the estimates of manpower required. The members of HRP team who work as intermediaries collect and summarise all the options and with mentioning individual name report the findings to the experts.

In light of the feedback, experts review their estimates and modify them and send back to the members of MRP team who again summarises and submit report. This process continues and experts begin to reach a common ground as their opinions begin to match. The agreement reached by the experts is the final forecast of manpower demand.

It must be remembered that the experts do not have any interaction with each other and the final forecast is reached only through the summarisation and feedback provided by the human resource planning team.

Some organisations make use of sophisticated statistical techniques for forecasting demand for the manpower. Time series analysis, regression analysis and econometrics models are some of the statistical techniques used for this purpose.

When forecast for manpower demand is prepared it should not merely give information about the total number of employees needed in future but the sub division of this total number according to the type or category of the employees should also be given. Thus, how many skilled workers, semi-skilled workers and unskilled workers will be needed, how many employees will be needed to operate machines, to work in the office and to perform various other jobs should become clear to the management from the forecast prepared for manpower demand.

It should be also remembered that while determining the human resources requirements, the expected losses likely to occur through labour turnover i.e., retirements, transfers, deaths, quits, promotions and demotions, disabilities, dismissals, lay-offs and other such separations are required to be considered.

On the other hand, positive changes in the qualities, capabilities gained by the employees resulting from experiences, training, etc., also need to be considered. When new lines of production, new projects are started, that too influences the demand estimates of human resources. All these factors affect the estimation of manpower requirements.


Manpower Planning – Top 4 Models: Proposed by Different Authors

1. Markov Chain Model – Applicable to Limiting Structure of Expanding Manpower System:

Markov chain model was proposed by Young and Vassiliou in 1974. It is applicable to limiting structure of an expanding manpower system. The limiting structure and the relative limiting structure exist under certain conditions which are easily met in practical situations. The model used for manpower planning in the Slovenian armed forces and the administration of the Ministry of Defence is based on Markov chains.

Markov chains are used to model random processes evolving over time. A crucial assumption used is the Markov property which is best described by saying that the process is “memory less”, which means that its future states only depend on the present state rather than its history.

Another assumption which is usually posed is that transition probabilities are time-homogeneous, which means that they are independent of time. Of course, these requirements are often not entirely fulfilled; however, omitting them would result in more general non-homogeneous models that require additional data to estimate the parameters.

A sequence of random variables X1, X2……… Xn, … is a Markov chain if every variable can assume any value from a set S = {s1, s2, …, sm}, whose elements are called states. A particular realisation of the process is then a sequence of values from S. Mathematically we can describe the Markov property by requiring that P (Xn+1 = sj | Xn = si,…, X1 = sk) = P (Xn+1 = sj| Xn = si) = p(n) ij., where n denotes the time points.

This means that the probability that the process will be in state sj at time n+1, given that it is in state si at time n, is p(n) ij. If in addition p (n) ij= pij, for every n, the chain is homogeneous because the transition probabilities do not depend on time.

Markov Analysis is a powerful analysis technique which, used in manpower planning, can help it successfully achieve its goal. Markov chains make it possible to predict the size of manpower per category as well as transitions occurring within a given time period in the future (resignation, dismissal, retirement, death, etc.). More importantly yet, with a Markov chain, one can obtain long- term average probabilities or equilibrium probabilities.

However, to predict manpower supply and demand with accuracy using a macroeconomic model, one needs a vast array of data for each of the many variables used. To collect these data, one must first get hold of sufficiently broad-ranging time series data for each industry. For this reason, a method of this type proves to be inadaptable for emerging sectors undergoing fast-paced growth with only small amounts of statistical data on the industry as a whole and manpower available.

Markov chain model itself could not provide an answer as to how to achieve the desired manpower structure. This problem was successfully addressed here by simulations which is the manipulation of a model in such a way that it operates on time or space to compress it, thus enabling one to perceive the interactions that would not otherwise be apparent because of their separation in time or space.

2. Grinold’s Stochastic Programming Model – Potential Gain of Increased Revenue is Offset by Added Cost of Excess Capacity:

Bartholomew (1982) provide a general review of the application of stochastic modeling to social systems, while Bartholomew and Forbes (1979) developed a more specific application of these principles to the manpower planning problem.

A basic model defines a number of discrete manpower grades, with employees advancing or leaving with fixed transition probabilities. The state of the system is defined as the number of employees in each grade and the system is analyzed as a Markov chain.

Grinold develops a stochastic model motivated by the demand for naval aviators. Anderson (2001) developed a model where demand is driven by a continuous non stationary seasonal process meant to approximate a business cycle. Gaimon and Thompson (1984) developed a model that looks at an organization in terms of cohorts, i.e., employees with the same length of service, using an objective function that measures the “effectiveness” of the organization.

The stochastic models are generally high level abstractions useful for identifying system phenomenon or developing general policies, but are not designed to be implemented as management control systems. The stochastic solution is difficult to find but provides a more realistic picture of the hiring policy; as recruiting becomes more expensive the firm decreases the hiring level and relies more on subcontractors to satisfy peak demand.

The stochastic solution allows for a fine grained analysis of the optimal service level; the degree to which the firm must be positioned to satisfy the extreme values of demand. The model finds that in most cases the potential gain of increased revenue is offset by the added cost of excess capacity. The model selects the combinations of high demand and high attrition that are not profitable to staff. Only in the case of high margins and high spare capacity is it optimal to staff so as to satisfy all demand scenarios.

The process for staffing services via stochastic model is divided into three decision levels.

The three planning “levels” are used as decomposition stages in developing a general staffing model:

i. Policy decisions, including the operating procedures for service centres and for the staff-control process itself.

ii. Staff planning, including hiring, discharge, training, and reallocation of decisions.

iii. Short-term scheduling of available staff within the constraints determined by the two previous levels.

The levels formulates the planning and scheduling stages as a stochastic programming problem, suggests an iterative solution procedure using random loss functions, and develops a non-iterative solution procedure for a chance-constrained formulation that considers alternative operating procedures and service criteria, and permits including statistically dependent demands.

Stochastic model is very complex to handle and because parameters used are more it sometimes become very complex. Stochastic solutions are very reliable but due to its complex nature companies sometimes use optimisation model as a substitute to stochastic model.

3. John Bane’s Simulation Model – Mathematical Way to Get Real Essence of Working in the System:

A simulation is the manipulation of a model in such a way that it operates on time or space to compress it, thus enabling one to perceive the interactions that would not otherwise be apparent because of their separation in time or space.

Simulation Model is a mathematical model, developed to get the real essence of the working in the system. It uses input variables and gives output which is in accordance with the input variables keeping the other parameters constant. It is developed to reality. Simulation modeling is the process of starting with an initial value in each variable and running the set of equations for multiple time increments.

At each time increment, all equations are processed to generate new variable values from the current values. The resulting data for variables at each time increment represents one run of the simulation.

Simulation model is driven by input data and produces output data. Data can come from initial values in the model, user entry or a data file. Output data can be stored in the model or in output data files and used to drive configured charts, graphs and tables. An integrated Data File editor makes it easy to create, view, import data from or export data to other applications.

Examples of simulation models are:

i. Simulation model for pilots for attacking enemy’s territory.

ii. Simulation model for driving schools.

iii. Models to learn different functions of human resource.

iv. Model to mark out the demand graph for a product.

4. Strategic Manpower Planning Model – State of Texas USA:

The model was develop as an example for the various state agencies to follow. It was derived from other models used in a variety of organizations.

Phase I – Set Agency Strategic Direction:

Manpower planning naturally complements and is a follow-up to strategic planning. Just as strategic planning helps agencies map where they are, where they are going, and how they plan to get there, a workforce plan lays out the specific tasks and actions needed to ensure an agency has the resources to accomplish its mission.

One of the main purposes of workforce planning is to ensure that an agency has the necessary workers to support its mission and strategic plan. In Phase I, those responsible for workforce planning should identify the agency’s mission and the key goals and objectives of its strategic plan.

A strategic plan charts the future with broad mission-related targets and milestones. An agency’s vision, mission, and measurable goals and objectives drive the identification of what type of work needs to be accomplished. A workforce plan translates strategic thinking into concrete action in the area of workforce staffing and training needs.

Phase II – Conduct Workforce Analysis:

Analysis of workforce data is the key element in the workforce planning process. Workforce analysis frequently considers information such as occupations, skills and experience, retirement eligibility, diversity, turnover rates, and trend data. Questions to be considered include –

Are there certain occupational groups with increasing worker turnover? Can factors influencing turnover be identified? Has turnover reduced the skill set of a certain occupational group?

Phase III – Implement Workforce Plan:

Implementation brings workforce plan to life. We may need a separate action plan to address the implementation of each strategy in the workforce plan.

Before implementing the plan, agencies should consider:

i. Ensuring that there is executive support for the plan.

ii. Allocating necessary resources to carry out workforce strategies.

iii. Clarifying roles and responsibilities in implementing strategies. This includes identifying who is involved in implementing what and identifying the need for coordination among different parts of the organisation or with different organisation.

iv. Establishing time lines.

v. Defining performance measures/milestones and expected deliverables.

vi. Communicating the plan.

The workforce plan should be implemented in connection with the requirements of the organization’s strategic plan. If the strategic plan changes due to unanticipated customer, leadership, or legislative changes, adjustments to workforce plan strategies may be necessary.

The relationship between strategic planning, performance measurement, and human capital investment made by organisation. Workforce planning supports all three of these areas.

Phase IV – Monitor, Evaluate, and Revise:

Ongoing evaluation and adjustments are imperative in workforce planning and are keys to continuous improvement. Although a workforce plan should cover five years, it should be reviewed annually. If an organisation does not regularly review its workforce planning efforts, it runs the risk of failing to respond to unanticipated changes.

Consequently, organizations should establish a process that allows for a regular review of workforce planning efforts in order to –

i. Review performance measurement information.

ii. Assess what’s working and what’s not working.

iii. Adjust the plan and strategies as necessary.

iv. Address new workforce and organizational issues that occur.


Manpower Planning – Manpower Supply from External Sources

Manpower planner would have to think out the ways and means to get the number and type of personnel as determined by forecasts of manpower needs of a firm. If internal supply is inadequate for this purpose, external sources for supply of manpower should be considered by him.

Whether the required manpower would be available, to the areas where the company is operating, will be thought out first. Then the manpower requirements of other companies should also be given attention. For this, the statistics made available by the Government agencies like unemployment exchanges, can be made use of.

Figures of educational facilities, number of students, studying in colleges, their number in different branches of knowledge, etc., can be most useful to manpower planner.

To plan the necessary course of action. Now, it becomes necessary to implement a manpower plan after estimating manpower needs, supply, etc.

The two estimates seldom match with each other. It would be necessary to bridge the gap between the two estimates. In case of manpower requirements estimate exceeding the estimate of manpower supply, efforts must be done to equate the two by recruitments. The two factors controlling the supply of manpower should be appreciated at this point.

They are labour supply position in the market and the company’s own budget. The distribution of income is made in the budget and thus it puts restrictions on the numbers of persons to be employed. However, provisions are made for finance keeping in view the manpower requirements of the company.

Thus, it is a two-way traffic. While budgeting, manpower requirements should be given consideration and at the time of manpower planning, the company’s budget is to be constantly kept in mind. There should be, therefore, proper cooperation between budget and manpower plans.


Manpower Planning – Usefulness

i. Resource requirement – Manpower planning will give an exact idea about the type and number of employees an organization requires at every stage of the company’s growth and expansion and at what periods of time.

ii. Departmental requirement – Manpower planning gives an idea about the workforce in every department and the stage at which these employees are required in an organization.

iii. Optimal workforce size – Manpower planning gives us an idea about whether there is dire need of additional employees or there is surplus staff at a given point of time. It also provides ways to overcome the issues faced due to either shortage or excess of workforce in the organization.

iv. Market trends – Manpower planning gives us an idea about the changes in the employment market and their effect on the availability of staff.

v. Manpower planning is responsible for a company to develop systematically, without production or service hiccups, by accomplishing all its main objectives.

vi. It is because of manpower planning that an organization is able to hire the right employees meant for the right job at different stages of growth.

vii. The people in the company who decide the progress of an organization are benefitted from manpower planning because it helps select the right strategy, keeping in mind market and manpower constraints and costs.

viii. Manpower planning provides assistance to line managers in figuring out the problems in the management of employees in an organization.

ix. Manpower planning helps the higher management in making decisions that are beneficial for the company and last for a long period.

x. Manpower planning helps identify the future needs of the business well in advance.

xi. Manpower planning allows for the assessment of the long-term effects of the current decisions made by the management.


Manpower Planning – (With Advantages)

The following advantages can be derived from an effective manpower planning:

1. Forecasting of long-term manpower needs to help the manage­ment to forecasting the compensation costs involved.

2. Anticipative manpower needs to develop the existence manpower to fill the future gaps.

3. Man power planning motivates the existing employees and creates favourable psychological climate for motivation.

4. Management succession gets the best constitution from the workers.

5. Better developed manpower reserves results in reduced man­power costs.

6. Manpower planning reveals with the result, training and development programmes, become more effective.

As manpower planning is concerned with the optimum use of human resources, it can be of great-benefit at both the national and the company unit levels. At the national level, it would be concerned with factors such as the population, economic development, provision of facilities for education and geographical mobility and would be the government’s responsibility.

Man-power planning studies can even be undertaken at the trade association’s level for a particular industry. However here we are concerned with the individual company which wants to anticipate its manpower requirements so that it can ensure its smooth working despite expansions.

Manpower planning is a neglected area in the Indian context. Only a handful of companies indulge in this practice. Such companies however do report that it helps them in many ways. Firstly, forecasting ‘of long-term manpower requirements helps them also to forecast the compensation cost involved. Besides, by anticipating manpower needs, they have an opportunity for developing existing manpower to fill the future openings through promotion.

They report that this attitude of encouraging existing employees creates a very favourable psychological climate for their motivation. Manpower planning also enables, through performance appraisals in the manpower management cycle, determination of the weakness of the existing manpower so that corrective training could be incorporated. Thus their training programmes become more effective.

Better developed manpower results in a relative reduction in the manpower costs. Particularly in the area of management succession, manpower planning makes a very useful contribution. Although there is unemployment in India, persons with the requisite skills and particularly managerial skills is still in short supply. It is thus the job of management of good companies to develop such skills in their employees showing potential.

Advantages of Manpower Planning – According to Tony Miller:

Tony Miller lists the following advantages of manpower planning:

1. Manpower planning ensures optimum use of available human resources.

2. It is useful both for organization and nation.

3. It generates facilities to educate people in the organization.

4. It brings about fast economic developments.

5. It boosts the geographical mobility of labour.

6. It provides smooth working even after expansion of the organization.

7. It opens possibility for workers for future promotions, thus, providing incentive.

8. It creates healthy atmosphere of encouragement and motivation in the organization.

9. Training becomes effective.

10. It provides help for career development of the employees.


Manpower Planning – Problems and Limitations

Whilst there are any benefits and uses of manpower planning, there are certain inherent limitations of forecasting itself which makes manpower forecasting a tricky exercise. Thus manpower plans suffer from inaccuracy as it is difficult to prepare long-range forecasts accurately. Changes in economic conditions, marketing conditions technology and labour force conditions tend to make long-range forecasts unreliable. However, there is a greater danger in not forecasting at all.

It is possible to a certain extent to predict with a reasonable degree of accuracy based on experience the future vacancies resulting from deaths, retirements and resignations. However, it is more difficult to anticipate which particular member of the personnel will be required to be so replaced. It is also risky to take action on general estimates of personnel requirements which are not specific enough.

At times, lack of top management’s support frustrates those in charge of manpower planning. Again, inaccuracies are caused when forecasts from several operating divisions are merely totalled together without a critical scrutiny. Thus, the limitations arise both from the uncertainty of forecasting itself, as well as at times from the methods used in manpower planning.

Though manpower planning is an important tool in the hands of management and is quite useful, it suffers from uncertain limitations. These limitations basically arise from the uncertainty of predictions, methods used, etc.

Important limitations of manpower planning are as follows:

(a) The most important inherent limitation of manpower planning lies with the forecasting. Future is uncertain and changes in technology, economic conditions, political situations, working conditions and business environments, etc., cannot always be anticipated accurately and long-range forecasts cannot be made accurately. As the degree of uncertainty varies, so does the style, the scope and efficacy of manpower planning change.

(b) Management can predict as to how many vacancies can be created in future with a reasonable degree of accuracy resulting from retirements. But deaths and resignations of the employees cannot be predicted and hence, it becomes very difficult to anticipate as to which particular employee will be required to be replaced. In that respect, planning may not be done accurately and certain steps cannot be taken as far as new recruitments are concerned.

(c) Another important difficulty in manpower planning arises on account of top management. Sometimes, top management remains reluctant and does not support because of inherent uncertainty. The over cautious approach on the part of the top management may lead to frustration in the personnel concerned involved in manpower planning.