Human Resource Planning

1

Company Values

Competitive Challenges

Achieving Strategic Fit
HR Policy

Environment

Business Strategy

HR Philosophy EXTERNAL

FIT

INTERNAL FIT HR Practices HR System

PGP 2007-09

Ensuring the Fit between HR and Organisation Strategy
 External

Fit (or External Alignment)

Focuses on the connection between the business objectives and the major initiatives in HR.

 Internal

Fit (or Internal Alignment)

Aligning HR practices with one another to establish a configuration that is mutually reinforcing.

PGP 2007-09

Strategic Flexibility
 Organizational

Capability

Capacity of the organization to act and change in pursuit of sustainable competitive advantage.  Coordination flexibility

The ability to rapidly reallocate resources to new or changing needs. Having human resources who can do many different things in different ways.

Resource flexibility

PGP 2007-09

Human Resource Planning (HRP)
 Is

the first component of HRM strategy  All other functional HR activities are derived from and flow out of the HRP process.  Has its basis in considerations of future HR requirements in light of present HR capabilities and capacities.  Is proactive in anticipating and preparing flexible responses to changing HR requirements.  Has both an internal and external focus.
PGP 2007-09

HRP and Strategic Planning

Strategic Analysis

What human resources are needed and what are available? What is required and necessary in support of human resources? How will the human resources be allocated?
Human Resource Planning Strategic Planning

Strategic Formulation

Strategic Implementation

PGP 2007-09

HR Planning Issues
Staffing Questions:
How do we manage staffing in times of recession or expansion?  What impact does technology change, mergers or relocation have on staffing issues?  Do we always have the right people in the right jobs at the right time?  How do we get our human resources: buy them or make them or both?

PGP 2007-09

Major Objectives of HRP
Preventing understaffing and overstaffing  Ensure the organisation has the right employees with the right skills at the right place at the right time  Ensure the organisation is responsive to changes in its environment  Provide direction and coherence to all HR activities and systems

PGP 2007-09

Types of Planning
Aggregate

Planning

Anticipating the needs for groups of employees in specific, usually lower level jobs and the general skills employees will need to ensure sustained high performance.

Succession

Planning

Focuses on ensuring that key individual management positions in the organization remain filled with individuals who provide the best fit for these critical positions.

PGP 2007-09

HRP and Environmental Scanning  Environmental Scanning
 The

systematic monitoring of the major external forces influencing the organization.
     

Economic factors Competitive trends Technological changes Political and legislative issues Social concerns Demographic trends

PGP 2007-09

Scanning the Internal Environment
 Cultural

Audits of the culture and quality of work life in an organization.
How do employees spend their time?  How do they interact with each other?  Are employees empowered?  What is the predominant leadership style of managers?

Audits

 Benchmarking

The process of comparing the organization’s processes and practices with those of other companies.

PGP 2007-09

Human Resource Planning Model
FORECASTING DEMAND

Considerations

Techniques

• Technology • Trend analysis • Financial resources • Managerial • Organizational growth estimates • Delphi technique • Mgmt. philosophy

BALANCING SUPPLY AND DEMAND

(Shortage) Recruitment
Full-time / Part-time

Techniques
• HR inventories • Markov analysis • Skill inventories • Replacement charts • Succession Planning

External Considerations
• Wkforce changes • Mobility • Govt policies • Unemployment

(Surplus) Reductions
• Layoffs • Terminations • Demotions • Retirements

FORECASTING SUPPLY
PGP 2007-09

Forecasting Demand for Employees
Quantitative Methods

Forecasting Demand
Qualitative Methods

PGP 2007-09

Quantitative Approach: Trend Analysis  Forecasting labor demand based on an organizational index:
Select a business factor, e.g. sales, that best predicts human resources needs.  Plot the business factor in relation to the number of employees to determine average labor productivity.  Compute labor productivity for the past five years.  Project human resources demand out to the target year(s).

PGP 2007-09

Example of Trend Analysis of HR Demand
BUSINESS FACTOR
YEAR
(SALES IN ‘000)

÷

LABOR PRODTY 8.34 10.02 11.12 11.12 12.52 12.52 12.52 12.52

=

HR DEMAND
(NO. OF EMPLOYEES)

(SALES/EMPLOYEE)

1999 Rs. 2,935 2000 Rs. 3,306 2001 Rs. 3,613 2002 Rs. 3,748 2003 Rs. 3,880 2004 Rs. 4,095 2005* Rs. 4,283 2006* Rs. 4,446
PGP 2007-09

352 330 325 337 310 327 342 355
*Projected figures

Qualitative Approaches to Demand Forecasting

Management Forecasts

The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs. An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals. The final forecast represents a composite group judgment.

Delphi Technique

PGP 2007-09

Forecasting Supply of Employees: Internal Labor Supply
 Staffing

Tables  Markov Analysis  Skill Inventories  Replacement Charts  Succession Planning

PGP 2007-09

Forecasting Internal Labor Supply
 Staffing

Tables

Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.

 Markov

Analysis

A method for tracking the pattern of employee movements through various jobs.

PGP 2007-09

Hypothetical Markov Analysis for a Retail Company

PGP 2007-09

Internal Supply Forecasting Tools
 Skill

Inventories

Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.

 Replacement

Charts

Listings of current jobholders and persons who are potential replacements if an opening occurs.

PGP 2007-09

An Executive Replacement Chart

PGP 2007-09

Forecasting Supply of Employees: External Labor Supply
 Factors

Supply:

Influencing the External Labor

Demographic changes in the population  National and regional economics  Education level of the workforce  Demand for specific employee skills  Population mobility  Governmental policies
PGP 2007-09

Sources of Information About External Labor Markets
 Department

of Labor publications  State and local planning and development agencies  Chambers of Commerce  Industry and trade group publications  State and local employment agencies

PGP 2007-09

HRP Considerations
Balancing supply and demand

PGP 2007-09

Elements of The HR Plan
Acquisition of personnel  Effective Utilization

  

Development and Improvement
 

redeployment methods improvement training to prevent obsolescence

Retention
   

broad-based training and development performance management systems proper remuneration long-term career planning healthy employee relations good working environment

PGP 2007-09

Requisites for Successful HRP

HRP must be seen as equally vital as business planning Top-management support Periodic review and revision of the forecasting techniques and the forecasts Without long range planning concentration becomes focussed on short-term needs resulting in “crisis management” reactions An excellent and up-to-date HRIS Active involvement of line managers and coordination between line mgrs and HR function

 

 

PGP 2007-09

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