HUMAN RESOURCE PLANNING

Human Resource Planning -- Outline

I. What is it?

II. Why is it important? III. How is it done? IV. Is it really done?

I. What is it?
Human resource planning involves getting the right number of qualified people into the right jobs at the right time.

II. Why is it important?

A. often long lag times to fill positions
B. often influences both turnover and productivity C. the demographic imperative demands more such planning

III. How do you do it?

A. General Comments:
1. It is a process of comparing human resource supply with human resource demand. It works best when it is tied to:
a. the organizations strategic planning process

2.

b. all available forecasts (technological, economic, market, etc.)

III. How do you do it?

A. General Comments:
3. When there are variances, action plans must be formulated, e.g.,
a. for surpluses, will organization use layoffs, retirement incentives, reduced hours, or something else? b. for shortages, will organization use overtime, temporary workers, or recruit new permanent workers?

III. How do you do it?

B. Methods Used for Human Resource Planning:
1. Approaches to forecasting:
a. Qualitative:
i. Expert opinions ii. Delphi technique iii. Bottom-up approach b. Quantitative (mathematical modeling): i. Regression analysis / Trend analysis ii. Markov analysis

III. How do you do it?

B. Methods Used for Human Resource Planning:
2. Supply Analysis
a. Skills inventories
i. Card systems ii. Human Resource Information Systems (HRIS)
b. Replacement charts / Succession plans

IV. Does anybody really do this stuff?

Implementation of Human Resource Planning

A. Nkomo (1987) survey of Fortune 500 organizations

(N = 264 responses)
46% reported no formal HR planning 39% reported some (incomplete) HR planning 15% reported fully integrated HR planning

IV. Does anybody really do this stuff?

Implementation of Human Resource Planning

B. HRP techniques actually used:

Replacement charts Skills inventories Computer simulation Time series analysis Markov analysis Delphi technique 84% 51% 10% 5% 4% 3.5%

HUMAN RESOURCE PLANNING

Right number of people with right skills at right place at right time to
implement organizational strategies in order to achieve

organizational objectives In light of the organizations objectives, corporate and business level strategies, HRP is the process of analyzing an organizations human resource needs and developing plans, policies, and systems to satisfy those needs

HUMAN RESOURCE PLANNING

Setting human resource objectives and deciding how to meet them

Ensuring HR resource supply meets human resource demands

HRP Process
Interfacing with strategic planning and scanning the environment Taking an inventory of the companys current human resources

Forecasting demand for human resources

Forecasting the supply of HR from within the organization and in

the external labor market

HRP Process Cont.

Comparing forecasts of demand and supply Planning the actions needed to deal with anticipated shortage or overages Feeding back such information into the strategic planning process.

Example of the Basic Human Resources Planning Model

Organization al Objectives

Human Resource Requirements

Human Resource Programs

Feasibility Analysis

4 5

HRP Model
Strategic Human Resource Planning
Links 1 & 5: HR objectives are linked to organizational objectives and planning

Designed to insure consistency between organization's

strategic planning process and HRP.

So objectives of strategic plan are feasible and HR programs are designed around what organizational

objectives and strategies require in terms of human

resource goals

Example of the Basic Human Resources Planning Model

Organization al Objectives

Human Resource Requirements

Human Resource Programs

Feasibility Analysis

4
5

HRP Model Cont.

Operational Human Resource Planning

Steps 2,3, & 4

Ensure HRP programs are coordinated and allows the

organization to meet its human resource requirements.

Example of the Basic Human Resource Planning Model

Open new product line

1

Develop staffing for new installation Production workers Supervisors Technical staff Other managers

Recruit skilled workers Develop technical training programs Transfer managers from other facilities
4

Open new factory and distribution system

Recruiting and training programs feasible

Transfers infeasible because of lack of managers with right skills

Develop new objectives and plans

Recruit managers from outside

Too costly to hire from outside

Link 1:

Determine Demand (labor requirements)

How many people need to be working and in what jobs to implement organizational strategies and attain organizational objectives. Involves forecasting HR needs based on organizational objectives

Involves consideration of alternative ways of organizing jobs

(job design, organizational design or staffing jobs)
Example - Peak production could be handled by temporary workers or assigning overtime. Machine breakdowns assigned to maintenance department or handled by machine operators

Link 2:

Determine HR Supply
(availability)

Choose HRM programs (supply)

Involves forecasting or predicting effect of various HR programs on employee flowing into, through and out various job classifications.

First determine how well existing programs are doing then forecast what additional programs or combination of programs will do

Need to know capabilities of various programs and program

combinations

Determine Feasibility Links

Capable of being done

3&4

Requires knowledge of programs, how programs fit together and external environmental constraints (e.g., labor force, labor unions, technology created skill shortages) and internal environmental constraints (skill shortages within the organization, financial resources, managerial attitudes, culture)

Do the benefits outweigh the costs

Difficulty in quantifying costs and benefits

Revise Organizational Objectives and Strategies Link 5

If no feasible HR program can be devised, the organization must revise strategic plans.

Shortcomings of the model - HRP in Practice

Oversimplification of planning process -Planning does not normally proceeds till find first acceptable plan
More than one set of HR goals to satisfy link 1 and more that

one acceptable plan to satisfy link 2 so:

Typically choose the best HR goal for the strategic plan and the best program to satisfy that HR goal

Shortcomings of the model - HRP in Practice

Oversimplification of the benefit of planning is the specific plans that result
Planning process has value in and of itself

HRP in practice is usually less rational and may omit one or more of the steps
May lack knowledge required for forecasting
Incorrect assumptions about effectiveness of HR programs Does not engage in strategic planning

Resistance to change present HR systems

HRP should be:

Done to guide and coordinate all HR activities so they work together to support the overall strategy

Responsive to internal and external environment

Planning - done in advance

Strategic - linked with higher level planning

Human Resource Forecasting

Process of projecting the organizations future HR needs (demand) and how it will meet those needs (supply) under a given set of assumptions about the organizations policies and the

environmental conditions in which it operates.

Without forecasting cannot assess the disparity between supply and

demand disparity. nor how effective an HR program is in reducing the

Forecasting as a Part of Human Resource Planning

DEMAND FORECASTING

Choose human resource programs

SUPPLY FORECASTING

Determine organizational objectives

Internal programs Promotion Transfer Career planning Training Turnover control

External programs Recruiting External selection Executive exchange

Demand forecast for each objective

Aggregate demand forecast Does aggregate supply meet aggregate demand?

Internal supply forecast

External supply forecast

Aggregate supply forecast No

Yes

Go to feasibility analysis steps

Internal Supply Forecasting Information

Organizational features (e.g., staffing capabilities)

Productivity - rates of productivity, productivity changes

Rates of promotion, demotion, transfer and turnover

External Supply Forecasting Information

External labor market factors (retirements, mobility, education, unemployment)

Controllable company factors on external

factors

(entry-level

openings,

recruiting,

compensation)

Demand Forecasting Information

Organizational and unit strategic plans Size of organization Staff and Managerial Support Organizational design

Considerations in Establishing a Forecasting System

How sophisticated

Appropriate time frame

Subjective versus objective forecasting methods

System Sophistication
Organizational size
large organizations require more complex forecasting systems and likely to have the required skilled staff

Organizational complexity
complex career paths and diverse skill requirements lead to more

complex forecasting systems

Organizational objectives
the greater the gap between current HR situation and desired HR

situation the more sophisticated the system

Organizational plans and strategies

the complex the plans are the more complex the forecasting

system

Forecasting Time Frame

Depends on degree of environmental uncertainty

Factors creating uncertainty (shortening time frame)

many new competitors, changes in technology, changes in social, political and economic climate, unstable product demand

Factors promoting stability (longer time frame)

strong competitive position, slowly developing

technology, stable product demand.

Subjective VS. Objective Forecasting

Objective is inappropriate when:

Lack expertise to use objective methods Lack the historical data or HR data base is

inadequate
Forecasting horizon is too long for the available

objective method

Demand Forecasting Methods

Delphi Method Staffing Table Approach Regression Analysis Time Series Analysis Linear Programming

Supply Forecasting Methods

Skills Inventory Replacement Charts Succession Planning

Flow Modeling/Markov Analysis

Computer Simulations

Training and Developing a Competitive Workforce

The Strategic Importance of Training and Development

Develop competencies that match strategy Foster cohesiveness and commitment Improve recruitment and retention Improve competitiveness Increase legal compliance and protection Smoother mergers and acquisitions

Training and Development

The Strategic Importance of Training and Development

Improving Recruitment and Retention
Career advancement opportunities
Job training

Improving Competitiveness
Increasing productivity
Improving service Implementing new technology

Training for Customers

Learning Organizations and Knowledge Management

Learning is recognized as a source of competitive advantage. Knowledge management technologies
Ensure that knowledge from employees, teams, and units is captured, remembered, stored and shared through intranets. Chief Learning/Knowledge Officer coordinates activities.

Training and Development Practices Within the Integrated HRM System

Training and Development (T&D)
Intentional efforts to improve current and future performance by helping employees acquire the skills, knowledge, and attitudes required of a competitive workforce.

T&D: Key Terms

Training
Improving employee competencies needed today or very soon Typical objective is to improve employee performance in a specific job.

Development
Improving employee competencies over a longer period of time Typical objective is to prepare employees for future roles.

Key Terms (contd)

Socialization
Learning how things are done in the organization Objective is to teach new employees about the organizations history, culture and management practices.

Intense socialization increases employees commitment to the success of the company.

Components of Training and Development within an Integrated HRM System

Evaluating Training and Development Effectiveness

The HR Triad: Roles and Responsibilities in Training and Development

Four Components of Needs Assessment

Setting Up a Training and Development System

Creating the Right Conditions:
Insight Motivation New skills and knowledge Real world practice Accountability

Training for Affective Outcomes

Objective Is to Change:
Motivation Attitudes Values

Example of Objectives
Build team spirit Enhance self-confidence Build emotional intelligence (self-awareness, self-management, social awareness, relationship management)

On-Site, but Not On the Job Training

Programmed instruction on intranet or internet Videos and CDs
Interactive video training: Combines programmed instruction with video

Teleconferencing Corporate Universities and executive education

Off the Job Training

Formal courses Simulation
Vestibule method: simulates actual job

Assessment centers Role-playing Business board games Sensitivity training Wilderness trips and outdoor training

Setting the Stage for Learning

Clear Instructions

Behavioral Modeling

Team Training and Development

Training to develop team cohesiveness Training in team procedures Training to develop work team leaders
Supporting disagreement Managing meetings

Cross-Cultural Training
To prepare people from several cultures to work together
Diversity training

To prepare a person for living in another culture

Training for expatriates and families

Cross-Cultural Training in International Context

Training for Expatriates
Typically a 3-5 day immersion course in countrys values, customs, traditions Culture-general assimilator uses scenarios to teach understanding of cultural differences

Training for Inpatriates

Employees from other countries sent to work abroad Need info about culture and help with relocation

Global Leadership Training and Development

Managers need to manage operations in several countries at once Training and development may include:
Expatriate assignments

Action learning projects

Cross-cultural team assignments Classroom training