You are on page 1of 57


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
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
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
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
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


(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%

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

• 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 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 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

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

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

Organizational 1 Human Resource 2 Human Resource 3 Feasibility

Objectives Requirements Programs Analysis

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 Develop staffing Recruit skilled Recruiting and

product line for new workers training
1 installation 2 3
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
new Recruit Too costly to
objectives managers from hire from
and plans 5 outside 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
Determine Feasibility Links 3&4
• 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 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
 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

 Planning process has value in and of itself

• HRP in practice is usually less rational and may omit one or more of the
 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 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 as a Part of Human Resource Planning
Choose human resource SUPPLY FORECASTING

Internal programs External programs
objectives •Promotion •Recruiting
•Transfer •External selection
•Career planning •Executive exchange
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


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

• 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

• 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

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
Training • Improve recruitment and
and retention
• Improve competitiveness
Development • Increase legal compliance
and protection
• Smoother mergers and
The Strategic Importance of Training
and Development
• Improving Recruitment and Retention
 Career advancement opportunities
 Job training
• Improving Competitiveness
 Increasing productivity
 Improving service
 Implementing new
• 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
Key Terms (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
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
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:
New skills and knowledge
Real world practice
Training for Affective Outcomes
• Objective Is to Change:
• Example of Objectives
Build team spirit
Enhance self-confidence
Build emotional intelligence
(self-awareness, self-management,
social awareness, relationship
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
Diversity training
• To prepare a person for
living in another culture
Training for expatriates and
Cross-Cultural Training in
International 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 Leadership Training and
• 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