Human Resource Planning and Alignment

McGraw-Hill/Irwin Human Resource Management, 10/e

© 2007 The McGraw-Hill Companies, Inc. All rights reser


Discuss the

importance of human resources planning in organizations  Describe the critical linkages that exist between strategic planning and human resources planning  Describe how managers forecast demand for and analyze thee supply of employees in the organization  List four forecasting techniques that are used in human resource planning  Define the terms skills inventory, succession planning, and replacement chart  Identify reasons why a computerized human resource planning system could be useful to an organization


Success in

business is dependent on:  Reacting quickly to opportunities  Rapid access to accurate information resource planning (HR planning):  How organizations assess the future supply of, and demand for, human resources  Provides mechanisms to eliminate gaps that may exist between supply and demand  Requires readjustment as labor market conditions change 


5-5 Introduction  If effective utilization of human resources is not a significant goal for the organization:  Employment planning is likely to be informal and slipshod top management values stable growth:  HR planning will be less important than if the goals include rapid expansion or diversification  If .

S. of Labor projects that:  Asians and Hispanics will join the labor force at rates of 44 and 36 percent  White non-Hispanics will increase by 9 percent  Workers 55-64 will increase by 52 percent  Workers 65 and older will increase by 30 percent .5-6 Introduction  The U. Dept.

5-7 Introduction  HR related government policies and regulations:  Equal opportunity and promotion call for more HR planning for women and minorities  The age of mandatory retirement is being raised  Organizations are encouraged to hire veterans and the disabled .

5-8 Introduction  The types of people employed and the tasks they perform determine the kind of planning necessary  HR planning is critical for implementation of the organization¶s strategic plan  HR policies have direct effects on profitability resource management (SHRM) means acknowledging that HR policies/practices have critical links to an organization¶s overall strategy  Strategic human .

5-9 The HR Planning Process  The four phases or stages of HR planning:  Situation analysis or environmental scanning  Forecasting demand  Analysis of the supply  Development of action plans .

5-10 Situation Analysis & Environmental Scanning  The first stage of HR planning is the point at which HRM and strategic planning first interact  The strategic plan must adapt to environmental circumstances  HRM is one of the primary mechanisms an organization can use during the adaptation process a plan to support recruitment and selection. it is impossible to stay competitive  The problems associated with changing environments are greater today than ever before  Success now depends on being a ³global scanner´  Without .

but it involves a great deal of human judgment  The demand for employees is closely tied to the strategic direction that the organization has chosen  Growth  Reengineering  Reorganization .5-11 Forecasting Demand for Employees  This phase of the process involves estimating:  How many employees will be needed  What kinds of employees will be needed  Quantitative tools can help with forecasting.

5-12 Forecasting Demand for Employees  Techniques to help reduce the uncertainty inherent in HR planning:  Expert estimates  Trend projections  Statistical modeling  Unit-demand forecasting effective planning is accurately and freely sharing information  Key to .

5-13 The Expert Estimate  One or more ³experts´ provide the organization with demand estimates based on:  Experience  Guesses  Intuition  Subjective assessments of available economic and labor force indicators  This is the least mathematically sophisticated approach .

5-14 The Expert Estimate  The Delphi technique elicits expert estimates from a number of individuals in an iterative manner  Developed by the Rand Corporation  Estimates are revised by each individual based on knowledge of the other individuals¶ estimates  With the nominal group technique (NGT). individual estimates are followed by group brainstorming  The goal is to generate a group decision that is preferred over any individual decision .

5-15 Trend Projection  This top-down technique:  Develops a forecast based on a past relationship between a factor related to employment and employment itself  Example: Sales levels are related to employment needs .

5-16 Modeling & Multiple-Predictive Techniques  This top-down approach uses the most sophisticated forecasting and modeling techniques  Trend projections relate a single factor. such as sales. to employment  Environmental factors could be gross national product or discretionary income  Or. the organization may be mathematically modeled so that simulations can be run .

5-17 Modeling & Multiple-Predictive Techniques  Markov chain analysis involves:  Developing a matrix to show the probability of an employee¶s moving from one position to another or leaving the organization  The process begins with an analysis of staffing levels from one period to another  Markov analysis can identify the probability of lower employee retention  It does not suggest a solution to the problem .

5-18 Modeling & Multiple-Predictive Techniques  Regression analysis is a mathematical procedure:  It predicts the dependent variable on the basis of factors (independent variables)  With simple linear regression. one dependent and one independent variable are studied  With multiple regression. more than one independent variable is studied .

the forecasts may conflict  This can be resolved by averaging the variances  The Delphi technique or NGT could also be used .5-19 Unit Demand Forecasting  This is a bottom-up approach  Unit managers analyze current and future needs person-by-person and job-by-job  Headquarters totals the unit forecasts  The sum is the corporate employment forecast  If both bottom-up and top-down approaches are used.

the easier it is to conduct a skills inventory .5-20 Analyzing the Current Supply of Employees  This phase of HR planning should answer the question: ³How many and what kinds of employees do I currently have. in terms of the skills and training necessary for the future?´  This involves more than simply counting current employees  The smaller and more centralized the organization.

management development. abilities. and related activities its simplest form.5-21 The Skills Inventory  Both a skills inventory and a management inventory:  Identify the skills. and training employees currently have  Are useful for career planning. a skills inventory is a list of:  Names  Characteristics  Skills  In . experiences.

5-22 The Skills Inventory  Skills inventories vary greatly in their sophistication  Some are as simple as a file drawer of index cards  Others involve expensive and complex computer databases .

5-23 Contents of the Skills Inventory  The only data available to the organization for later use is what was designed into the system Name Present location Date of employment Employee number Date of birth Job classification Skills. knowledge. education Foreign language skill Professional qualifications Licenses and patents Supervisory evaluations Publications Hobbies Salary range .

are:  Employees¶ stated career goals  Geographical preferences  Intended retirement date main categories within a skills inventory:  Data summarizing the employee¶s past  Data summarizing present skills  Data that focus on the future skills inventories are more complex  The  Today. many . but increasingly important.5-24 Contents of the Skills Inventory  Often omitted.

5-25 Maintaining the Skills Inventory  The two principal methods for gathering data: the interview and the questionnaire  The questionnaire is faster and cheaper. the more often updates should be performed  Plans . but can be inaccurate  Some contend that a trained interviewer can complete questionnaires more quickly and accurately for keeping files updated must be made  The more often changes are made and the data is used.

5-26 Maintaining the Skills Inventory  Should data be stored in a manual system or on a computer?  How much does the computer system cost?  How frequently the data will be used?  A computer allows comparative analysis over time inventories are useful only if management uses the data to make significant decisions  Before accessing the data. managers must be trained to avoid abuse of the system  Skills .

5-27 Action Decisions in HR Planning  After the supply of and demand for workers has been analyzed. the two forecasts must be compared  Whenever there is a gap between the two estimates. a course of action must be chosen .

5-28 Action Decisions in HR Planning  If the supply of workers is less than the demand:  It can be filled with present employees who are willing to work overtime there is a shortage of skilled employees:  Train and/or promote present employees  Recruit less-skilled employees  Recall employees who were previously laid off  If .

5-29 Action Decisions in HR Planning  Organizations are using more:  Part-time workers  Subcontractors  Independent professionals  This is in response to:  Intense global competition  Rapid technological change  Fears caused by recent workforce reductions million U. citizens are contingent workers  Over 5 .S.

5-30 Action Decisions in HR Planning  Possible solutions  Attrition to an employee surplus: retirements  Demotions  Layoffs  Terminations  Early  Employees who are considered surplus are seldom responsible for the conditions leading to the surplus .

creation of work.5-31 Action Decisions in HR Planning  Most organizations avoid layoffs by using attrition. and so on  Attrition can be accelerated by encouraging employees to leave early losing workers over the age of 50:  They tend to be healthier than younger workers  They have fewer work-related injuries  They are less likely to change jobs  They take critical skills and experience with them  Drawbacks to . early retirement.

workforce will be 40. the median age of the U. it may be illegal to change them  Promises should .5-32 Action Decisions in HR Planning  By 2010.6 years  Over half the workforce will be protected by the Age Discrimination in Employment Act not be made that can¶t be kept  Once promised.S.

5-33 Action Decisions in HR Planning  If voluntary reductions don¶t eliminate the gap between supply and demand. layoffs may be necessary  Corporations too frequently and quickly turn to layoffs  They fail to consider the consequences  About one-third lay off too many workers  Poorly designed workforce reductions can kill morale .

and control information flow through an organization A highly developed HRIS can increase the efficiency and response times of:  Tracking applicants  Skills inventory  Career planning  Employee service programs .5-34 Human Resource Information Systems  Information is the key to successful HR planning  A human resource information system (HRIS) is an integrated way to acquire. analyze. store.

5-35 Human Resource Information Systems  Computer technology makes it possible to integrate multiple HR needs into a single system:  Enrolling in benefits programs  Processing employee transactions (pay increases)  Using learning modules HRIS developed for use by upper-level executives is called an executive information system (EISs)  Computerized HRISs have allowed organizations to broaden their view of succession planning  An .

5-36 Human Resource Information Systems  Factors that make succession planning for executive level positions more important than ever:  Large numbers of aging executives  Increasingly popular early retirement  Fortune 500 companies anticipate 33 percent turnover among their executives over the next five years  Many companies now realize the critical need for a comprehensive retention plan  This plan may include consulting and part-time assignments .

the easier it can be for unauthorized access theft occurs when:  Someone uses another¶s name.5-37 Employee Privacy. address. social security number. Identity Theft. & HRIS  HRIS makes it easier to invade employee privacy  Danger lies both within and outside the organization  The friendlier the system. or other information:  Without the person¶s knowledge  With the intent to commit fraud or other crimes  Identity .

victims rose from 1. Identity Theft.000 in 2003  Identify theft is a felony under the Identity Theft and Assumption Deterrence Act of 1998  The problem will continue to escalate .S.5-38 Employee Privacy.380 in 1999 to over 210. & HRIS  Identity theft is fast becoming a national problem  Complaints from U.

5-39 Employee Privacy. Identity Theft. & HRIS  The costs of identify theft to the employee are numerous:  Average 175 researching and tracking the crime  23 months correcting credit reports  $800 in out-of-pocket expenses to restore financial health and standing .

5-40 Employee Privacy. Identity Theft. & HRIS  Safeguards to minimize privacy risks in an HRIS:  Determine the best way to collect data  Limit the information collected to what is relevant  Tell employees what information is kept on file and how it is used  Let employees inspect and correct their information  Keep sensitive information separate  Limit internal use of personal information  Only disclose personal information to outsiders with employee consent .

legally The greatest threat to privacy is and ethically.5-41 Employee Privacy. Identity Theft. should be disclosed when employees  How much control employees don¶t retain the right to authorize should have over the release of the release personal information  No federal legislation guarantees employees the right to inspect and amend data in an HRIS . & HRIS  Organizations should carefully evaluate their policies regarding access to HRIS data to determine:  How much information.

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