CHAPTER 2

STRATEGIC HUMAN
RESOURCE
PLANNING
JANDY T. BONGCAYAT, LPT,PHD
HUMAN RESOURCE PLANNING
(HRP)
 Human Resource Planning (HRP) is the process of systematically
reviewing human resource requirements to ensure that the number
of employees matches the required skills. It is the process of
matching the internal and external supplies of people with job
openings anticipated in the organization over a specific period of
time. Some organization continue to provide lip service to these
important functions. Nevertheless, presently, HRP is increasingly
being recognized as an important component of Human Resource
Management.
WHAT IS STRATEGIC PLANNING?

 Strategic Planning is the determination of overall organizational

purpose and goal and how they are to be achieved. Human
resource is the integral component of a strategic plan, which
greatly affects productivity and organization performance. After the
strategic plans have been formulated, human resource strategic
planning is to be undertaken. Along these lines, strategies are
reduced to specific quantitative and qualitative human resource
plans. The HRD shall determine the total manpower component to
execute the planned strategic activities.
TWO IMPORTANT COMPONENTS OF
HUMAN RESOURCE PLANNING
A. Requirement
forecasting human requirement involves determining the number and
types of employees needed. The level of skills has to be determined
and matched with the plan operations. The analysis will reflect various
factors such as production plans, and changes in productivity together
with the introduction of new technology if there is any. The HRD, in
order to forecast availability must look to both internal and external
sources. Internal sources refer to existing manpower that could be re-
assigned to new positions or be promoted to higher vacant positions.
External source refers to position that are not available inside the
organization and need to be sourced out.
 B. Availability
When employee requirements have been analyzed, the firm
determines whether there is surplus or shortage of manpower. If there is
a surplus, ways must be instituted to reduced the number of
employees. Some of these methods include restricted hiring, reduced
work hours, early retirement for old employees, and the worst is to lay
off some employees. If the manpower forecast reveals shortage, the
obtain the proper quantity and quality of workers outside the
organization after exhausting efforts to find from within. Human
resource planning must be continuous, as changing conditions, could
affect the entire organization thereby requiring extensive modifications
of forecast.
ASPECTS OF HUMAN RESOURCE
PLANNING
1. Systematic Forecasting of Manpower Needs
On the basis of business conditions and forecasts, manpower needs are
planned and monitored closely.
2. Performance Management
Analyzing improving and monitoring the performance of each
employee and of the organization as a whole.
3. Career Management
Determining, planning and monitoring the career aspirations of each
individual in the organization and developing them for improved
productivity.
4. Management Development
Assessing and determining the developmental needs of managers for
future succession requirements.
Advantages in Using the Elements
of HR Planning
 1. Through a systematic planning of human resources, a company
can be better assisted in attaining its goals and objectives.
 2. It helps the company determine its manpower needs and
provides a method of meeting them.
 3. It can be an effective means of planning the development and
growth of the employees.
 4. It can assist in placing the employees properly in jobs where they
can maximize the use of their skills and potentials.
 5. it can assist the company to attract and retain better qualified
employees.
Five Steps to Human Resource
Planning
1. Determine the workload inputs based on the corporate goals and objectives
Once the company’s objectives are known, the operating executives can determine what
they are responsible for in the common endeavor of attaining the corporate goals. The
kind and magnitude of workload determine the organizational structure the number and
quality (skills) of employees needed to man the organization or department under a
desirable level of performance.
SEVERAL FACTORS THAT SHOULD BE CONSIDERED IN DETERMINING WORK INPUTS:
❖ Business Development and Assumptions
❖ Corporate Planning
❖ Economic Forecast
❖ Changes in Plans and Products
❖ New Products Lines
❖ Mergers and Consolidations
2. Studying the Jobs in the Company and writing
the job description and Job Specifications.

3. Forecasting of Manpower needs

 Determination of the number and skills of people
required for the work.
 Forecasting manpower needs comes next after
determining the work input and is known as the
planned and logical method of determining,
both quantitatively and qualitatively, the
employees needed to man the work inputs to
enable the company to attain its goals.
4. Inventory of Manpower
 An analysis of the present manpower complement of the company to
determine whether it has enough or less or more personnel (both
quantitatively and qualitatively) than required.
 This fourth step in the planning process is the inventory (audit) of available
current manpower. What happens in this step is the assessment of the skills,
career aspirations, strengths and weaknesses of each of the current
employees, their potentials and promotability. Each is matched against
the positions forecasted in step 3. when the current manpower is matched
against forecast of needs, positions are filled either by promotion, transfer
or assignment of qualified personnel, taking into account the most
effective method of achieving the corporate goals.
The net result of this operation is that you either find:
❖ Enough manpower
❖ Excess in the number of available manpower, but lacking the skills required
❖ The number of available is insufficient, and the skills are also inadequate to
meet the needs of the work inputs.
5. Improvement Plans
 Determination of the appropriate steps to
implement the HRP in order to insure that the
company has the right number and right quality
of people, properly assigned to jobs for which
they are most useful. This includes action plans to
improve the capabilities of current personnel
thru training and development program which
covers career planning, management
development programs, succession programs,
etc.
Planning Techniques in HR
Management
1. Skills Inventory
This approach involves the listing of all the skills possessed by the
workforce and they are made to relate to the requirements of the
organization. This technique requires detailed information of the
experience and training of every individual in the organization.
2. Ratio Analysis
This is a technique wherein the personnel who are promotable to the
higher position are identified together with their backup or understudy.
There should be a ratio that will ensure that promotions will not create
any void. To accomplish this, recruitment must support the backup
requirements. At the same time, training must be done to develop the
backup ratio.
3. Cascade Approach
Under this approach the setting of objectives flows from the
top to bottom in the organization so that everyone gets a
chance to make his contribution. This this approach results in
the formulation of a plan wherein the objectives of the rank
and file get included in the blueprint for action. The plan is then
a participatory planning output.
4. Replacement Approach
Under this approach, HRP is done to have a body of
manpower in the organization that is ready to take over
existing jobs on a one-to-one basis within the organization. This
approach calls for year-round acceptance of applications for
possible replacements.
5. Commitment Planning Approach
This technique involves the supervisors and personnel in every
component of the organization on the identification of manpower
needs in terms, skills, replacements, policy, working conditions and
promotion so that human resource in the organization may be up to
the challenge of current and future operations. The units thus become
conscious of their needs and aware of the ways the human resource
requirements can be met.
6. Successor Planning Approach
The approach known as successor planning takes into consideration
the different components of the old plan and increase them
proportionately by the desired expansion rate stated by management.
The cost of doing the activities is likewise increased. Any new concern
is set up at a starting scale and viewed in proportion with other
comparable aspects of the existing plan. This approach also enables
the personnel staff to get by without having to ask much from
management which, in turn, does not expect much from the HR staff in
terms of radical change.
Common Weaknesses in Human
Resource Planning
1. Over-Planning
A plan is likely to fail through an inherent weakness of having covered too
many aspects of personnel management at the very early stage of HRP in
the firm or government office.
2. Technique Overload
The use of so many techniques sometimes leads to the gathering of so
much information. Then the techniques do not get to be applied
effectively. This makes the techniques serve as a trap rather than a means
for action.
3. Bias for the Quantitative
There are planners in HRM who sometimes make the mistake of being
drawn towards emphasizing the quantitative aspects of personnel
management to the neglect of the qualitative side.
4. Isolation of the Planners
When top management has a low regard for human resource activities
and for the HR staff, they give little encouragement to HRP activities,
ignore the plan and withdraw support for plan implementation.
5. Isolation from Organization Objectives
When HRP is pursued for its own sake or for a narrow viewpoint of
concentrating on HRD, the effort leads to the formulation of a plan
that does not interphase with organizational development.
6. Lack of Line Supervisor’s Inputs
Any plan to develop the personnel and to –improve the conditions of
work must use the feedback from the line supervisors since they are the
ones who are handling the personnel in the organization
Four Basic Terms of Manpower
Forecasting
1. Long Term Trend
Long term forecasting is usually done for a period of five years or more depending on the
company operations and customer demands.
2. Cyclical Variations
This refers to reasonable and predictable movements that occur over a period of one year or
more. This cyclical movement may be due to economic conditions, political instability, peace
and order, loss in customer demands, and societal pressures. These variations typically last for one
to five years.
3. Seasonal Variations
This is a reasonable prediction change over a period of one year. This covers firms who
manufacture seasonal products and hire temporary workers for temporary increase in demand,
like Christmas and other special occasions.
4. Random Variations
This is one occasion where there is no special pattern and it is quite difficult to predict or
determine. The HR practitioner must be careful in his manpower forecast especially in the hiring of
employees. Along this line, temporary workers are hired instead of regular workforce.
Human Resource Forecasting
Techniques
1. The Zero-Base Forecasting Approach
It uses the organization’s current level of employment as the starting point
for determining future staffing needs.
2. The Bottom-Up Approach
This forecast uses the progression upward method from the lower
organization units to ultimately provide the aggregate forecast of
employment needs.
3. Use of Predictor Variables
This method uses the past employment levels to predicts future
requirement .
4. Simulation
It is a technique for the testing of alternatives on mathematical models
representing the real world situation
The Important Elements in Strategic
Human Resource Planning
1. Organization Goals
The human resource planning process should be tied up with the
organizational strategic goals. It must rest on solid foundation of
information about sales forecast, market trends, technological
advances, and major changes in process and productivity.
2. Human Resource Forecast
The second element in the planning process is the forecasting human
resource needs based on business strategies, production plans, and
the various indicators of change in technology and the organizations
operating methods.
3. Employee Information
The third element in the planning process is maintaining accurate information
concerning the composition, assignments, and the capabilities of the current
workforce.
4. Human Resource Availability Projections
The fourth element of the human resource planning process is estimating the number
of current employees and those that could be available in the future. By projecting
the past data about the size, organization, and composition of the workforce and
about turnover, aging, and hiring, availability at a specific future date can be
estimated.
5. Analyzing and Evaluating Human Resource Gaps
The fifth element in the human resource planning process is comparing what is
needed with what is available in terms of numbers, mix, skills, and technologies.
This type of analysis should help management address issues such as:
a. Are there imbalances developing between projected human resources needs
and availability?
b. What is the effect of current productivity trend and pay rates on the workforce
levels and costs?
c. Do turnover problems exist in certain jobs or age levels?
d. Are there problems of career blockage and obsolescene?
Strategy Evolution and Control

 The final components to the strategic management

process is that of strategy evolution and control. It is
extremely important for the company to constantly
monitor the effectiveness of both the strategy and the
implementation process. The monitoring makes it
possible for the company to identify problem areas and
either revise existing structures or strategies or devise new
ones. In this process we see emergent strategies appear
as well as the critical nature of human resources in
competitive advantage.
Human Resource Role in Providing
Competitive advantage
Human resource practices are developed to implement strategies that
will make the organization more effective and will answer the
company’s competitive advantage. HR can provide strategic
competitive advantage in two ways;
a. Emergent Strategies- consist of strategies that evolve from the
grassroots of the organization and can be thought of as what the
organizations actually do. Most emergent strategies are identified
with people in the lower level of the management hierarchy.
b. Intended Strategies- are the results of the rational decision making
by top management as they develop strategic plans. It is a pattern
of plans that integrates an organization’s major goals, policies, and
action sequences into a cohesive whole.
Human Resource Information
System(HRIS)
HRIS is any organized approach to obtaining
relevant and timely information on which to base
human resource decisions. An effective HRIS is
crucial to sound human resource decision-making.
It is designed to provide information that is - SMART
Human Resource Information
System (HRIS)
Time Bound

Management Oriented

Applicable

Result Oriented

Systematic
a. SYSTEMATIC – Information must be systematically arranged and
contain the needed data.
b. Management-Oriented – The data and information are essential tools
for effective manpower planning, retention, development and
separation of employees.
c. Applicable – The data and information stored in file must be
applicable in making human resource decision. Irrelevant data must
be discarded. Information must be updated from time to time to be
relevant to current manpower needs and requirements. A manager
must be able to rely on the accuracy of the information provided.
d. Result-Oriented – The result from the information and the decisions
derived thereat must be both acceptable to management and the
employee’s concern. The end results must contribute to greater
company productivity and employee’s satisfaction.
e. Time Bound – Relevant human resource information are necessary for
effective decision-making. The need for timely decisions are crucial to
the effective management of human resources.
 The absence of these characteristics reduces the effectiveness of HIRS
and complicates the decision-making process. Conversely, a system
processing all these characteristics enhances the ease and accuracy of
the decision-making process. An effective HRIS also produces and
forecasts several important reports related to business operations.
a. Routine Reports – These are human resource data summarized on
scheduled bases, like current manpower status, regular employees,
contractual employees, supervisors and managerial employees on a
regular payroll.
b. Exception Reports – this information may contain confidential data
that are available only for managerial decision-making and needs
immediate attention. This may pertain to violations of existing
company rules and procedures, policies and management programs.
c. On Demand Reports – Management may demand some reports for
analysis. This may pertain to productivity index, individual performance
records, and other information that may lead to downsizing, and other
personnel actions.
d. Manpower Forecasts – applies to predictive models based on specific
situations. This may cover increase or decrease in manpower
requirements due to seasonal demand or increase in customer orders.
Software Applications for HRM
The advent of the different HRM software applications has made the
human resource manager’s functions for decision-making just a click on
the computer programs. The major human resource functions are:
1. Staffing Application – Common applications used in the area of staffing
include the following:
a. Applicant recruiting and tracking
b. DOLE reporting requirements
c. Developing a master employee data base
d. Staffing applications for decisions-making
2. Human Resource Planning Applications – This involves company specific
applications in determining future employee turnover, growth rate and
promotion pattern, and personnel movements. This includes the following
applications:
a. Work-Force Profile Analysis – work-force and labor supply and demand
analysis, or work-force profile analysis review.
b. Work-Force Dynamic Analysis – number of new hires, transfers and
promotions, number still needed in the future and those employees
who are available to fill up job openings in the future.
c. Human Resource Planning for Decision-making – this application
pertains to information about employees who are about to retire, job
classification of employees for promotions and those departments that
lack basic skills for the job.
d. Performance Management Applications – employee performance
ratings, disciplinary actions, work-rule violations and the daily
productivity index could now be stored in the computer data base as
bases for management decisions.
e. Training and Development Applications – These are used primarily to
track down the need for employee’s training programs, courses to
attend, certified skills, and educational qualifications. Career
applications assess the employee’s career interests, work values, and
career goals.
f. Compensation and Benefits Applications – these include payroll, job
evaluation, salary survey, salary planning and analysis, executive
compensation planning and management benefits.
THE END