LEARNING UNIT 3

Human
Resource
Planning
 HUMAN RESOURCE PLANNING
 A process in which an organization estimate its demands
for labor and to evaluate the size, nature and sources of
the supply that will be required to meet the demand

Intention – to identify areas for action resulting from the

analysis
Examples:
• Developmental planning for strategic leadership – succession planning
• Assess strategic alternatives
Forecast availability of employees with certain critical skills
• Contributions to HRM – developing HR, avoiding shortages,
information for decisions,, budgeting, strategic salary planning –
compatibility with organizational goals and strategies
FACTORS THAT DETERMINE HR PLANS
 HR PLANNING PROCESS
External Environment
Internal Environment
Strategic Planning

Human Resource Planning

Forecasting Comparing Forecasting Human

Human Resource Requirements and Resource Availability
Requirements Availability

Demand = Supply Surplus of Workers Shortage of Workers

No Action Restricted Hiring, Recruitment

Reduced Hours, Early
Retirement, Layoff,
Downsizing Selection
HR Forecasting Techniques
• Judgmental Methods:
 Bottom-up approach
 Top-down forecasting

• Mathematical models :
 Multiple regression
 Productivity ratios
 Staffing ratios.
 Forecasting HR Requirements using
sales as sales demand

Number of
Employees

500

400

300

200

100

0 10 20 30 40 50 60
Sales (thousands)
 Determining the
Relationship Between
Hospital Size and Number of
Nurses

Note: After fitting the line, you

can project how many employees
you’ll need, given your projected
volume.

Size of Hospital Number of

(Number Registered
of Beds) Nurses

200 240

300 260

400 470

500 500

600 620

700 660

800 820

900 860
MANAGING HUMAN RESOURCE SHORTAGE

• Recruitment
• Incentives for retirement postponement
• Rehire retired employees
• Try to reduce turnover
• Overtime
• Subcontract
• Temporary staff
• Re-engineering
 MANAGING HUMAN RESOURCE SURPLUS
Workforce Reduction
Attrition and hiring freezes
 Not replacing departing employees
& not hiring new ones
Early retirement buyouts
 Incentives to encourage senior
employees to leave early
Retrenchment/Downsizing
 Adequate notice & LIFO Concept.
Layoffs
 Employees given unpaid leave until
business improve
 Selected based on seniority/
performance or combination
Outplacement services to support
displaced employees:
 Career counseling, job retraining,
referral assistance, etc.
Workforce Realignment
Causes
 Economic—Decreased demand,
market share
 Structural—technological change,
mergers & acquisitions
Positive consequences
 Increase competitiveness &
productivity
Negative consequences
 Loss of specialized skills and
experience
 Loss of growth & innovation skills
Managing survivors
 Provide explanations for actions
and the future
 Involve survivors in transition or
regrouping activities
HR Strategies for Addressing a Labor
Shortage or Surplus
 The Managerial Pyramid

Time Frame Typical responsibility

HR Director/Division
2-5-10 years Strategic Or function director

HR manager/senior
1 mth-1 year
Tactical/ Personnel officer/
Decision support Senior line manager

Day to day
Operational/ HR officer/ HR
Administrative Assistant Line
Manager
 HUMAN RESOURCE INFORMATION SYSTEM
Goal: Integrate Core Processes into Seamless System
Input Data Types Output Data Uses* Contribute Toward Achievement of:
Job Analysis Employee Tracking
Recruitment Diversity Programs
Selection/Job Posting/ Hiring Decisions Organizational
Employee Referral
Training Programs/E- Strategic Plans
T&D learning/Management
Human Succession
Performance Appraisal
Compensation Resource Compensation Programs
Information Benefit Programs (e.g.,
Benefits
System prescription drug programs)
Safety Human
Health Programs (e.g.,
Health Employee Assistance Resource
Labor Relations Programs) Management
Bargaining Strategies
Plans
Employee Relations
Employee Services

*Certain data are available to employees at work or at home. Examples: supervisors might
access just-in-time training for conducting performance appraisal reviews. Operative employees
might enter time and labor data. All employees may be able to review leave balances, transfer
funds, make benefit elections, set annual performance goals, update personnel data.
 COMPUTER-AIDED MANAGEMENT
 Degree of structure of tasks performed determine the
system to be used:

 Transaction processing system

 Highly structured tasks
 example: handling hourly payroll
 MIS
 Moderately structured tasks
 Example: prepare reports about trends in overtime
 Decision support system:
 Unstructured tasks
 Example: planning to ensure balance of overtime costs & hiring
temporary workers
 MANAGING A HRIS FOR HR PLANNING
A) Determining information needs
 Information provided must support planning
 Information needed to determine future & to evaluate current
status
 Strategic planning – information on the environment
 Tactical & Business level – information about the organization:
structure, culture & budgetary process
 Operational planning – information on movement of employees
& key persons and systems that support movements
 Information base – can be modified and improved upon as
planning evolves
B) Choosing Repositories
 Combination of repositories that allow storage & retrieval of
the most useful information in a cost-efficient manner
 A technology can be a very efficient repository for information
to be used for a specific purpose. Example:
 How to carry out planning
 Tracking & planning for management of HR flows
 Use of outside repositories
 Using information in storage devices of other
organizations
 Hiring consultants for short-term work

C) Promoting effectiveness
 Information delivered - timely, current, accurate, reliable, &
relevant