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.
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 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 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 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 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 Model

1 2 3
Organization Human Human Feasibility
al Objectives Resource Resource Analysis
Requirements Programs

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 1 Human 2 Human 3 Feasibility

al Objectives Resource Resource Analysis
Requirements Programs
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 Develop staffing Recruit skilled Recruiting and

product line for new workers training
2 3
1 installation programs
Open new Develop feasible
•Production technical training
factory and
workers programs Transfers
distribution infeasible
system •Supervisors Transfer because of
•Technical staff managers from lack of
other facilities 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 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 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 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 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 SUPPLY FORECASTING
DEMAND
FORECASTING resource programs

Determine
Internal programs External programs
organizational
objectives •Promotion •Recruiting
•Transfer •External selection
•Career planning •Executive exchange
•Training
Demand •Turnover control
forecast 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 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
Training • Improve recruitment and
and retention
• Improve competitiveness
Development • Increase legal compliance
and protection
• Smoother mergers and
acquisitions
 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 (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 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 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
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