Lecture 5 - Human Resource Planning PDF

Human Resource Planning
HRM201-Human Resource Management

Lecture 5
HRM201-Human Resources Management / MNUBS
2/28/2016
Introduction
Human resource planning is a process
by which an organization ensures that
it has the right number and kinds of people
at the right place
at the right time
capable of effectively and efficiently

completing those tasks that will help the
organization achieve its overall strategic
objectives
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Introduction
HR planning must be
linked to the organizations overall strategy

to compete domestically and globally
translated into the number and types of

workers needed
Senior HRM staff need to lead top

management in planning for HRM issues.
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An Organizational Framework
A mission statement defines what business the
organization is in, including
why it exists
who its customers are
strategic goals set by senior management to

establish targets for the organization to achieve
Goals are generally defined for the next 5-20 years.
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Linking Organizational Strategy to HR

Planning
During a corporate assessment,
a company begins to analyze its goals in terms
of whether they can be achieved with the
current organizational resources.
SWOT (Strengths-Weaknesses-OpportunitiesThreats) analysis determines what is needed to

meet objectives
Strengths and weaknesses and core

competencies are identified
HRM determines what knowledge, skills, and abilities are needed by

the organizations human resources through a job analysis.
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Planning
STRATEGIC DIRECTION
mission
objectives and goals
HR LINKAGE
determining organizations
business
setting goals and

objectives
strategy
determining how to attain

goals and objectives
structure
determining what jobs need to be

done and by whom
people
matching skills, knowledge,

and abilities to required jobs
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Planning
Employment Planning and the Strategic Planning
Process
demand for labor
define
organization
mission
establish
corporate goals
and objectives
assess current
human resources
-- - - - - - - - - - - - HRMS:
job analysis
compare demand
for and supply of
human resources
supply of
human resources
Outcomes
demand
exceeds
supply
supply
exceeds
demand
recruitment
decruitment
HR strategic visioning and strategic

planning
Strategic
planning
Providing HR
data, ideas
Asking difficult
questions
Strategic
visioning
Defining a
vision of the
future
(organisation
al and HR)
Strategic
planning
Programme
the vision
HR objectives
targets action
plans
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Linking Organizational Strategy to HR Planning
HR must ensure staff levels meet strategic

planning goals.
An HR inventory report summarizes

information on current workers and their skills
HR information systems (HRIS)
process employee information
quickly generate analyses and reports
provide compensation/benefits support
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Old approach
Traditionally concerned with numbers of employees and

the level and the types of skills in the organization
Demand for employees are influenced by corporate

objectives, strategies and environmental changes.
The Supply was influenced by current employees and

the availability of skills in the labour market.
However this method has become outdated in todays

world
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Old approach
Environment
Organisational
objectives and
strategies
Project
manpower
demand
Analysis of
internal manpower
supply
reconcile
Assess external
manpower supply
Project
manpower
supply
Manpower plans
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11
Modern Approach
There has been an increasing recognition for the need

to plan, not just for hard numbers but for the softer
issues of employees behavior, organizational culture
Increasingly there is a need for organizations to

integrate process of planning for numbers and skills of
employees
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Modern Approach
Environmental influences
Translate vision
where do we
want to be?
Where are
we now?
Strategic vision
Design and use

plans to achieve
transition
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Analysing the Environment

Environment here refers as the context of
organization
Environmental factors that could be analysed
are;
- Social
- Demographic
- Political and legislative
- Industrial and Technological
- Competitors
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Forecasting Stage of HR Planning

Determine Labor Demand
derived from product/service demanded

external in nature
Determine Labor Supply
Internal movements caused by transfers, promotions,

turnover, retirements, etc.
transitional matrices identify employee movements in
different job categories over time to chart historical trends
in companys labor supply
useful for AA / EEO purposes
Determine Labor Surplus or Shortage

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Forecasting future human

resource needs
ORGANIZATION, BEHAVIOUR AND CULTURE
It is difficult to translate the strategic objectives of the

organization and environmental influences in to
qualitative or soft human resource goals.
Managerial judgment, brain storming, structured

checklist or matrices can encourage a more thorough
analysis.
Organization change literature and corporate planning

literature are helpful in this area.
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Employee numbers and skills

(Demand Forecasting)
Objective and subjective methods can be used

for this purpose
Objectives methods include statistical and work

study approaches.
The most common method of subjective

method is managerial judgment
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Statistical approach
This relates to employees number demand to

specific organizational circumstances
Determining factors are production, sales, level

of services ..ext
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Work Study Approach
It is based on a through analysis of task to be

done and time it takes to complete each task.
From this person hours needed per unit of

output can be calculated and standards are
developed for the numbers and the level of
employees required
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Subjective Approach:
Managerial Judgment
It includes judgment of managerial staff,

technical staff and operational staff as well.
It relies on managers estimate of human

resource needs based on past experience and
corporate plans.
It could begin with the bottom up approach with

the managers at the lower level giving
estimates of the skill levels required
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Subjective Approach:
Delphi technique
A special procedure for collection of managerial
opinions.
A group of managers independently and
anonymously answer questions about
anticipated manpower demand.
The answer is fed back to each individual and
the process repeats
This technique is little use at present
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The Delphi Technique

Leader identifies judgment issues and develops questionnaire.
Prospective participants are identified and asked to cooperate.
Leaders send questionnaire to willing participants, who record their

judgments and recommendations and return the questionnaire.
Leaders compiles summaries and reproduces participants responses.
Leader sends the compiled list of judgment to all participants.

Participants comment on each others ideas and propose a final
judgment.
Leader looks
for consensus
Leader accepts consensus judgment as groups choice.
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Current and projected employee

numbers and skills (Supply)
To gain an overview of current supply the following

factors can be analysed singly or in combination:
number of employees analysed by function,
department, occupation of job title, skills, qualification,
training, age, length of service, performance appraisal
results.
Forecasting employee supply is concerned with

predicting how the current supply of employee will
change primarily how many will leave, be internally
promoted or transferred.
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Current and projected employee

numbers and skills (Supply)
The impact of changing circumstances should also be

taken into account when forecasting supply.
Behavioral impacts such as why employee leaves or

the affect of promotion and transfers should also be
considered when forecasting supply
Supply analysis fall in two broad categories, such as

staff leaving and internal movements.
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Calculations used in analysis
Annual Labour Turnover Index:

Leave in Year/Average number of staff in post
during a year * 100= Percentage of waste rate
Stability index:
Number of staffs with one years service at
date/number of employees exactly one year
before*100= stability index
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Calculations used in analysis
Markov Analysis
A mathematical technique used to forecast the
availability of internal job candidates.
Application
It provides a snapshot of movement of people

Can serve as the impetus for change
Forecasting
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Markov Analysis
Year 2015
Total
Year
2014
Job A
Job B
Job C
Job D
Exit
Job A
25
.70
.10
.10
.05
.05
Job B
50
.05
.80
.05
.05
.05
Job C
75
.10
.60
.20
.10
Job D
100
.10
.80
.10
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Markov Analysis
Year 2015
Year
2014
Total
Job A
Job B
Job C
Job D
Exit
Job A
25
.70
(17.5)
.10
(2.5)
.10
(2.5)
.05
(1.25)
.05
(1.25)
Job B
50
.05
(2.5)
.80
(40)
. 05
(2.5)
.05
(2.5)
.05
(2.5)
Job C
75
.10
(7.5)
.60
(45)
.20
(15)
.10
(7.5)
Job D
100
.10
(10)
.80
(80)
.10
(10)
60
98.75
228.75
250
27.5
42.5
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Cohort analysis
A cohort is a homogeneous group of people
Tracks what happen to a group of people with

very similar characteristics who joined the
organisation at the same time.
HALF-LIFE
A figure which express the time taken for half the cohort to
leave the organisation
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Analyses of internal movements

Skills
inventory:
a company
maintained
record of
employees
KSAs
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Succession planning A systematic long-term career
development activity that focuses on preparing high-potential
employees to fill key professional positions
Succession planning includes the

development of replacement charts that
portray middle- to upper-level management

positions that may become vacant in the near future
list information about individuals who might qualify to
fill the positions
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Replacement charts a visual representation of which

employee will replace the existing incumbent in a
designated position when it becomes vacant.
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Downsizing
Downsizing - planned elimination of large numbers of
personnel to enhance organizational competitiveness.
Long-term effects of an improperly managed downsizing
effort can be negative.
4 Reasons for Downsizing:
1. reduce labor costs
2. technological changes reduce need for labor*
3. mergers and acquisitions reduce bureaucratic
overhead
4. organizations change location of where they do
business
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Early Retirement Programs

The average age of U.S. workforce is increasing.
Baby boomers are not retiring early due to:
improved health
fear that Social Security will be cut
mandatory retirement is outlawed
collapse of the financial and housing markets made it
economically unviable to retire
Many employers try voluntary attrition among

older workers through early retirement incentive
programs.
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Employing Temporary Workers

Hiring
temporary workers helps eliminate a

labor shortage and affords flexibility needed to
operate efficiently during demand swings.
3 Advantages:
1.
2.
3.
Temporary workers free a company from

administrative tasks and financial burdens.
Temporary workers are often times tested and
trained by a temporary agency.
Many temporary workers brings an objective
perspective and experience.
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Outsourcing and Offshoring

Outsourcing
uses an outside organization for a broad

set of services.
Offshoring is outsourcing where jobs leave one
country and go to another.
To help ensure the success of outsourcing:
Choose an established, large outsourcing vendor.
Jobs that are proprietary or require tight security
should not be outsourced.
Start small and monitor constantly.
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Discuss
It is worthwhile planning even if you have no

strategy. for what reasons might you agree or
disagree with this statement?
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Answer
The Plan
A plan is usually a list of steps taken to accomplish a goal. A plan tackles questions like
how, when, where, who, and what? A plan is a good thing to have. In fact, it is vital to the
success of almost any effort. However developing a plan should not be the first step in
addressing a task.
The Strategy
A strategy is bigger than a plan. Strategy tackles the question of why? It has a large scope
and looks at the end result as well as the many paths to the desired outcome. A strategy
looks at every possible influencing factor, both seen and unforeseen and comes to terms
with the whole situation, not just one end result.
Plan vs. Strategy
A plan says, Here are the steps, while a strategy says, Here are the best steps. Strategy
speaks to the reasons why, while the plan is focused on how.
In a perfect world the strategy always comes before a plan and shapes the details of the
plan. A strategy is the overarching wisdom that coordinates all of the plans in order to
effectively reach the goals.
The Take Away
Remember, having a plan is essential, but developing a strategy should always come first.
And whatever you do, dont try to fit a strategy around existing plans. Rather, develop the
right strategy and create the appropriate plans around the strategy
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Human Resource Planning

HRM201-Human Resource Management

HRM201-Human Resources Management / MNUBS

it has the right number and kinds of people

at the right place

at the right time

capable of effectively and efficiently

HRM201-Human Resources Management / MNUBS

linked to the organizations overall strategy

translated into the number and types of

Senior HRM staff need to lead top

HRM201-Human Resources Management / MNUBS

who its customers are

strategic goals set by senior management to

HRM201-Human Resources Management / MNUBS

Linking Organizational Strategy to HR

SWOT (Strengths-Weaknesses-OpportunitiesThreats) analysis determines what is needed to

Strengths and weaknesses and core

HRM determines what knowledge, skills, and abilities are needed by

Linking Organizational Strategy to HR

setting goals and

determining how to attain

determining what jobs need to be

matching skills, knowledge,

Linking Organizational Strategy to HR

demand for labor

HR strategic visioning and strategic

HRM201-Human Resources Management / MNUBS

Linking Organizational Strategy to HR Planning

HR must ensure staff levels meet strategic

An HR inventory report summarizes

HR information systems (HRIS)

process employee information

quickly generate analyses and reports

provide compensation/benefits support

HRM201-Human Resources Management / MNUBS

Traditionally concerned with numbers of employees and

Demand for employees are influenced by corporate

The Supply was influenced by current employees and

However this method has become outdated in todays

HRM201-Human Resources Management / MNUBS

There has been an increasing recognition for the need

Increasingly there is a need for organizations to

HRM201-Human Resources Management / MNUBS

Design and use

Analysing the Environment

HRM201-Human Resources Management / MNUBS

Forecasting Stage of HR Planning

derived from product/service demanded

Determine Labor Supply

Internal movements caused by transfers, promotions,

Determine Labor Surplus or Shortage

Forecasting future human

It is difficult to translate the strategic objectives of the

Managerial judgment, brain storming, structured

Organization change literature and corporate planning

Employee numbers and skills

Objective and subjective methods can be used

Objectives methods include statistical and work

The most common method of subjective

HRM201-Human Resources Management / MNUBS

This relates to employees number demand to