1. Review of organizational objectives: -The first step in HRP is to review the objectives of the organization. Proper review of the objectives enables the organization to list various activities that are required to achieve the objectives. To undertake the activities, HR managers determines the required workforce in terms of quantity and quality. A proper job analysis needs to be conducted at this stage.
2. HR Requirements Forecast: -The HRD manager forecasts human resource requirements to undertake the various activities. The human requirements forecast must be both in terms of quantity (number of employees)and quality (knowledge, attitude and skills)
3. HR Supply Forecast: -The HRD manager forecasts the availability of manpower. The required manpower may be available within the company, or the required manpower may be available within the company, or they may be required to be hired from the labour market.
4. Comparison: -The HRD manager makes a comparison between HR requirement and HR supply, to find out whether the required personnel is available or not.
5. No Difference: -The comparison between HR requirements and HR supply may indicate differences between HR requirements and HR supply. If human resource requirements are equal to human resource supply, then there are no differences. Therefore, there is no need to take any action.
6. Differences: -The comparison may reveal differences between the human resource requirements and human resource supply. There may be HR surplus, or shortage. Action needs to be taken to deal with the problem of HR shortage or surplus. For instance, if there is shortage, management may hire, provide overtime, etc. if there is surplus, management may terminate, lay off (arrange) etc.
7. Motivating the Manpower: -An important aspect of human resource planning is to motivate the personnel by providing monetary and non-monetary incentives.
8. Monitoring HR Requirements: -The organization needs to monitor the requirement of HR on periodic basis. If required, necessary action is taken.
