System dynamics-based approach to manpower planning: a study of Indian microfinance institutions

Abstract

The purpose of this paper is to analyse the manpower planning process of Indian microfinance institutions (MFIs). The paper describes a model that can assist management of MFIs to deal with the challenges microfinance organisations face in case of manpower planning. In this study, a system dynamics-based model has been developed for manpower planning and the model estimates the requirement of staff members and executives at different levels under various scenarios that will help the organisation in designing effective strategy to successfully manage their human resource strategically. The research methodology is in accordance with the principles of system dynamics. The model has been developed using iThink software and has been validated by computing root mean square error between the actual values of the variables and the model generated values. The study will help the microfinance organisations to plan, manage and strategically focus on manpower planning in its desired direction.