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 organizations 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 organizations objectives, corporate and business level

strategies, HRP is the process of analyzing an organizations
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 companys 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 organizations future HR needs (demand)

and how it will meet those needs (supply) under a given set of
assumptions about the organizations 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 (contd)
Socialization
Learning how things are done in the organization
Objective is to teach new employees about the
organizations 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 countrys
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