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HUMAN RESOURCE PLANNING

The achievement of corporate objectives through the development of strategies designed to enhance the contribution of people at all times in the foreseeable future. More simply a) Employ the right number of people with the right skills and ability at the right time. b) Monitor how people are used now and will be used in the future and to improve their utilisation. c) Improve peoples performance by training, development and by providing satisfying work.

HUMAN RESOURCE PLANNERS LOOK AT 4 THINGS: 1. Internal Factors 2. The Internal Labour Market 3. The External Labour Market 4. Other External Factors

INTERNAL FACTORS Human Resource planning starts with the organisations corporate objectives: The number of people and the types of skill it will need in the future depend, amongst other things, upon: I. II. III. IV. V. VI. The companys plans for capital expenditure Any new technology it intends to use The new products or services it intends to introduce The new markets it intends to enter Any acquisitions it intends to make The state of the economy and its likely effects on the business.

HR planners will use this information to: estimate the number and types of people that will be required to carry them out. THE INTERNAL LABOUR MARKET HR planners will analyse their existing workforce. The business will want to get the best out of its existing people before it considers employing others. What skills have we got? How many of each do we have? What levels of performance are we getting? Can people transfer their skills to other jobs? Are Trade Unions concerned about this? Promotion Prospects? Age Distribution of the Staff Sex Balance / Ethnic balance Leaving rate / Staff turnover Retirement profile

THE EXTERNAL LABOUR MARKET HR planners will look at: 1. 2. 3. 4. 5. 6. 7. 8. The availability of young people leaving education with relevant training The competition for staff Unemployment level Wage rates The state of the Economy The influence of Trade Unions The State of Technology Availability of training / retraining schemes.

OTHER EXTERNAL FACTORS HR planers also need to think about: I. II. III. IV. V. Availability and Quality of Housing Transport Services Schools Recreational Facilities Social and Cultural Opportunities

The above have become increasingly important in recent years when firms have tried to attract key personnel.

HRM and competitive advantage


The case for HRM: It will make the workers and thus the organisation more competitive (illustrated by the performance of many Japanese companies). It treats everyone as an individual (rather than treating all workers as homogenous) thus each individual is nurtured and developed in pursuit of the organisations objectives. If successful, workers are motivated, committed and do not wish to leave. They are also aware of their role in fulfilling company objectives. Therefore the business will : Incur lower recruitment costs Higher productivity Reduction in faulty products Attract better worker (all these factors should improve domestic and international competitiveness. The case against HRM: It can cause industrial relations problems due to the fact Trade Union recognition is a problem under HRM. This can be damaging to a businesss competitive performance. The firms culture and management style may not be conducive to HR policies. HRM may involve additional costs in the short-term.