HUMAN RESOURCE

HUMAN RESOURCE PLANNING

PLANNING
Human
Human Resource
Resource Planning
Planning ---- Outline
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.
2. It works best when it is tied to:
a. the organization’s strategic planning
process
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 84%
• Skills inventories 51%
• Computer simulation 10%
• Time series analysis 5%
• Markov analysis 4%
• Delphi technique 3.5%
 HUMAN
HUMAN RESOURCE
RESOURCE PLANNING
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 organization’s objectives, corporate and business level
strategies, HRP is the process of analyzing an organization’s human
resource needs and developing plans, policies, and systems to satisfy those
needs
 HUMAN
HUMAN RESOURCE
RESOURCE PLANNING
PLANNING

• Setting human resource objectives and

deciding how to meet them

• Ensuring HR resource supply meets

human resource demands

 HRP
HRP Process
Process
• Interfacing with strategic planning and scanning the environment

• Taking an inventory of the company’s current human resources

• Forecasting demand for human resources

• Forecasting the supply of HR from within the organization and in the

external labor market

 HRP
HRP Process
Process Cont.
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
Example of
of the
the Basic
Basic Human
Human Resources
Resources Planning
Planning
Model
Model

1 2 Human Resource 3
Organizational Human Resource Feasibility
Objectives Requirements Programs Analysis

4
5
 HRP
HRP Model
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
Example of
of the
the Basic
Basic Human
Human Resources
Resources Planning
Planning
Model
Model

Organizational 1 Human Resource 2 Human Resource 3 Feasibility

Objectives Requirements Programs Analysis

5
 HRP
HRP Model
Model Cont.
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
Example of
of the
the Basic
Basic Human
Human Resource
Resource
Planning
Planning Model
Model

Open new Develop staffing Recruit skilled Recruiting and

product line for new workers training
1 installation 2 3
programs
Open new Develop technical feasible
•Production training programs
factory and
workers Transfers
distribution Transfer infeasible
system •Supervisors managers from because of
•Technical staff other facilities lack of
managers with
•Other managers
4 right skills
Develop
new Recruit Too costly to
3
objectives managers from hire from
and plans 5 outside outside
 Link
Link1:
1: Determine Demand(labor
DetermineDemand (laborrequirements)
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
Link 2:
2: Determine
Determine HR
HR Supply
Supply(availability)
(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 FeasibilityLinks
DetermineFeasibility Links 33 &
& 44

• Capable of being done

 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
Revise Organizational
Organizational Objectives
Objectives and
and Strategies
Strategies
Link
Link 55

“If no feasible HR program can be devised, the organization

must revise strategic plans.”
Shortcomings
Shortcomings of
of the
the model
model -- HRP
HRP in
in Practice
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
Shortcomings of
of the
the model
model -- HRP
HRP in
in Practice
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
HRP should
should be:
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
Human Resource
Resource Forecasting
Forecasting
• Process of projecting the organization’s future HR needs (demand) and
how it will meet those needs (supply) under a given set of assumptions
about the organization’s policies and the environmental conditions in
which it operates.

• Without forecasting cannot assess the disparity between supply and

demand nor how effective an HR program is in reducing the disparity.
 Forecasting
Forecastingas
asaaPart
Partof
ofHuman
HumanResource
ResourcePlanning
Planning
DEMAND Choose human resource SUPPLY FORECASTING
FORECASTING programs

Determine
Internal programs External programs
organizational
objectives •Promotion •Recruiting
•Transfer •External selection
•Career planning •Executive exchange
•Training
Demand forecast •Turnover control
for each objective

Aggregate Internal supply forecast External supply forecast

demand forecast
Does aggregate
supply meet Aggregate supply
aggregate forecast
demand? No

Yes

Go to feasibility analysis steps

 Internal
Internal Supply
Supply Forecasting
Forecasting Information
Information

• Organizational features (e.g., staffing capabilities)

• Productivity - rates of productivity, productivity changes

• Rates of promotion, demotion, transfer and turnover

 External
External Supply
Supply Forecasting
Forecasting
Information
Information

• External labor market factors (retirements,

mobility, education, unemployment)

• Controllable company factors on external factors

(entry-level openings, recruiting, compensation)

 Demand
Demand Forecasting
Forecasting Information
Information

• Organizational and unit strategic plans

• Size of organization

• Staff and Managerial Support

• Organizational design
 Considerations
Considerations in
in Establishing
Establishing aa Forecasting
Forecasting
System
System

• How sophisticated

• Appropriate time frame

• Subjective versus objective forecasting methods

 System
System Sophistication
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
Forecasting Time
Time Frame
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
Subjective VS.
VS. Objective
Objective Forecasting
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
Demand Forecasting Methods

• Delphi Method

• Staffing Table Approach

• Regression Analysis

• Time Series Analysis

• Linear Programming
 Supply
Supply Forecasting
Forecasting Methods
Methods

• Skills Inventory

• Replacement Charts

• Succession Planning

• Flow Modeling/Markov Analysis

• Computer Simulations
Training and Developing a Competitive Workforce
The
The Strategic
Strategic Importance
Importance of
of Training
Training
and
and Development
Development

•• Develop
Developcompetencies
competenciesthat
that
match
matchstrategy
strategy
•• Foster
Fostercohesiveness
cohesivenessandand
commitment
commitment
Training
Training •• Improve
Improverecruitment
recruitmentand
and
and
and retention
retention
•• Improve
Improvecompetitiveness
competitiveness
Development
Development •• Increase
Increaselegal
legalcompliance
compliance
and
andprotection
protection
•• Smoother
Smoothermergers
mergersand
and
acquisitions
acquisitions
 The
The Strategic
Strategic Importance
Importance of
of Training
Training
and
and Development
Development
• Improving Recruitment and Retention
 Career advancement opportunities
 Job training
• Improving Competitiveness
 Increasing productivity
 Improving service
 Implementing new
technology
• Training for Customers
 Learning
Learning Organizations
Organizations and
and
Knowledge
Knowledge Management
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
Training and
and Development
Development Practices
Practices
Within
Within the
the Integrated
Integrated HRM
HRM System
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:
T&D: Key
Key Terms
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
Key Terms
Terms (cont’d)
(cont’d)
• Socialization
Learning how things are done in the organization
Objective is to teach new employees about the
organization’s history, culture and management
practices.
Intense socialization
increases employees’
commitment to the
success of the company.
Components
Components of
of Training
Training and
and Development
Development
within
within an
an Integrated
Integrated HRM
HRM System
System
Evaluating
Evaluating Training
Training and
and Development
Development
Effectiveness
Effectiveness
The
TheHR
HRTriad:
Triad:Roles
Rolesand
andResponsibilities
Responsibilitiesin
inTraining
Trainingand
andDevelopment
Development
Four
Four Components
Components of
of Needs
NeedsAssessment
Assessment
 Setting
Setting Up
Up aa Training
Training and
and
Development
Development System
System
• Creating the Right Conditions:
Insight
Motivation
New skills and knowledge
Real world practice
Accountability
 Training
Training for
for Affective
Affective Outcomes
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,
On-Site, but
but Not
Not On
On the
the Job
Job Training
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
Off the
the Job
Job Training
Training
• Formal courses
• Simulation
Vestibule method: simulates actual job
• Assessment centers
• Role-playing
• Business board games
• Sensitivity training
• Wilderness trips and outdoor training
 Setting
Setting the
the Stage
Stage for
for Learning
Learning

• Clear Instructions

• Behavioral Modeling
 Team
Team Training
Training and
and Development
Development
• Training to develop team cohesiveness
• Training in team procedures
• Training to develop work team leaders
Supporting disagreement
Managing meetings
 Cross-Cultural
Cross-Cultural Training
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
Cross-Cultural Training
Training in
in
International
International Context
Context
• Training for Expatriates
Typically a 3-5 day immersion course in country’s
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
Global Leadership
Leadership Training
Training and
and
Development
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