CHAPTER 2

HUMAN RESOURCE
PLANNING

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 Chapter Objectives
 Describe the importance of succession
planning.
 Explain strategic planning and the human
resource planning process.
 Describe accelerated succession planning
as an alternative to traditional approaches
 Explain the importance of planning for
disasters.

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 Succession Planning

Process of ensuring that qualified

persons are available to assume key
positions managerial positions once
positions are vacant.

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Accelerated Succession Planning:
An Alternative to Traditional
Approaches
Rather than targeting one or two
people for each senior management
position, develop group of candidates
for undefined executive jobs and
focus on increasing their skills and
knowledge
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 Human Resource Information
Systems (HRIS)

Virtually all HR management functions

can be enhanced through the use of
an HRIS – any organized approach
for obtaining relevant and time
information on which to base HR
decisions

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 HUMAN RESOURCE INFORMATION SYSTEM
Goal: Integrate Core Processes into Seamless System
Input Data Types Output Data Uses* Contribute Toward Achievement of:
Job Analysis Employee Tracking
Recruitment Diversity Programs
Selection/Job Posting/ Hiring Decisions Organizational
Employee Referral Strategic Plans
Training Programs/E-
T&D learning/Management Succession
Human
Performance Appraisal
Resource
Compensation Information Compensation Programs
Benefits System Benefit Programs (e.g.,
prescription drug programs) Human
Safety
Health Programs (e.g., Employee Resource
Health Management
Assistance Programs)
Labor Relations Bargaining Strategies Plans
Employee Relations Employee Services

*Certain data are available to employees at work or at home. Examples: supervisors might access just-in-
time training for conducting performance appraisal reviews. Operative employees might enter time and
labor data. All employees may be able to review 401(k) balances, transfer funds, make benefit elections,
set annual performance goals, update personnel data.
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 Human Resource Planning
 Human Resource (HR) Planning
 The process of analyzing and identifying the
need for and availability of human resources
so that the organization can meet its
objectives.
 HR Planning Responsibilities
 Top HR executive and subordinates gather
information from other managers to use in the
development of HR projections for top
management to use in strategic planning and
setting organizational goals
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Purpose of HR Planning

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 HR Planning Process
 HR Strategies
 The methods used to anticipate and manage
the supply of and demand for human
resources.
 Provide overall direction for the way in which HR
activities will be developed and managed.
Overall
Strategic Plan

Human Resources
Strategic Plan

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HR Activities
Strategic Planning
The process by which top
management determines overall
organizational purposes and
objectives and how they are to be
achieved

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Human Resource Planning
The process of systematically
reviewing HR requirements to
ensure that the required number
of employees, with the required
skills, are available when they
are needed

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 Benefits of HR Planning
 Better view of the HR dimensions of
business decisions
 Lower HR costs through better HR
management.
 More timely recruitment for anticipated HR
needs
 More inclusion of protected groups
through planned increases in workforce
diversity.
 Better development of managerial talent
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 Human Resource Planning Process
External Environment
Internal Environment
Strategic Planning

Human Resource Planning

Forecasting Comparing Forecasting

Human Requirements Human Resource
Resource Availability
Requirements and Availability

Demand = Surplus of Shortage of

Supply Workers Workers

No Action Restricted Hiring, Recruitment

Reduced Hours,
Early Retirement, Selection
Layoff, Downsizing
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 Forecasting HR demand
 Estimate of numbers and kinds of
employees the organization will need at
future dates
 Demand for firm’s goods or services must
be forecast
 Forecast is then converted into people
requirements

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Techiques for forecasting HR
demand
 Zero-based forecasting – uses current
level as starting point for determining
future staffing needs
 Bottom-up approach – each level of
organization, starting with lowest,
forecasts its requirements to provide
aggregate of employment needs

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 Techiques for forecasting HR
demand (Con’t)
 Mathematical models –Assist in
forecasting. Relationship between sales
demand and number of employees
needed is positive one.
 Simulation – technique with
experimenting with real-world situation
through a mathematical model

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 Forecasting HR Supply
 Determining whether the firm will be able
to secure employees with the necessary
skills, and from what sources these
individuals may be obtained
 Show whether the needed employees
may be obtained from within the company,
from outside the organization, or from a
combination of the two sources

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 Forecasting HR Supply
 Forecasting the Supply for Human
Resources
 External Supply
 Internal Supply

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Techniques for forecasting HR Supply
 Forecasting External HR Supply
 Factors affecting external
 Net migration for an area
 Individuals entering and leaving the workforce
 Individuals graduating from schools and colleges
 Changing workforce composition and patterns
 Economic forecasts
 Technological developments and shifts
 Actions of competing employers
 Government regulations and pressures
 Other circumstances affecting
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RESOURCE the workforce
If there is surplus of employees,
HRD should:
 Restricted hiring – employees who
leave are not replaced
 Reduced hours
 Early retirement
 Layoffs
 Termination

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 If there is shortage of employees,
HRD should:
 Creative recruiting
 Compensation incentives, eg premium pay
 Training programs to retrain people
 Different selection standards
 Part time/ contract workers

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