Chapter 4 Human Resource Planning

Falkenberg, Stone, and Meltz

Human Resource Management in Canada

Fourth Edition
Copyright 1999 Harcourt Brace & Company Canada, Ltd.

Chapter Overview
The need for human resource planning Purposes of human resource planning Relation to other human resource functions The human resource planning process Projecting human resource supply

4.1

Chapter Overview (contd.)

Forecasting future human resource needs Comparing forecast needs with projected supply Planning policies and programs Evaluating human resource planning effectiveness The HRM audit

4.2

Purposes of Human Resource Planning

Setting

goals and objectives Examining the effects of alternative human resource policies and programs

4.3

Examples of Organizational Goals

To increase company profits by 10% in the next fiscal year (profitability) To close 25 retail outlets in the next four years (downsizing) To bottle 10% more diet pop in the next year (production) To guarantee one-day delivery of all first-class mail within the province by 2001 (service level)
4.4

The Human Resource Planning Process

Project future human resource supply Forecast future human resource needs Compare forecast needs with projected supply Plan policies and programs to meet human resource needs Evaluate human resource planning effectiveness

4.5

Projecting Human Resource Supply

Assessment

of current supply Skills inventories Analysis of human resource flows Stochastic models

4.6

Examples of Human Resource Flows

Employees may - stay in the same job - move across to another, but not a higher-level job (transfer or lateral move) - move up to a higher-level job (promotion) - move out of the organization through voluntary termination (resignation) or involuntary termination (lay-off, dismissal) - move down (demotion)
4.7

Typical Data Elements in a Human Resources Information System

Employee personal data Benefits information Salary administration Skills Benefits plans Attendance Employee benefits information Performance/Discipline Dependents Health and Safety Training and development Payroll
Employee work data Salary Performance review Job information Employment status information Hire/Termination information Work information

4.8

Forecasting Future Human Resource Needs

Planning

for the status quo Rules of thumb Unit forecasting The Delphi method Scenarios Computer simulation
4.9

Five Steps in the Delphi Method

1. An issue, question, or problem is identified.

2. A small group or panel of ten or fewer experts is identified. 3. Independent judgements about the issue are obtained from each expert through a questionnaire or structured interview. 4. An intermediary or facilitator collects, analyzes, and feeds back information from the first questionnaire or interview to each expert. 5. Steps 3 and 4 are repeated until there is a 4.10 consensus on the issue or problem.

Sample Questions from a Unit Forecasting Questionnaire

List any jobs that have changed since the last forecasting period and any that will change in the next forecasting period. If vacancy can be filled with present employees, note whether training will be required. Specify nature of training needs. What percentage of employees are performing jobs up to standard? How many employees will be absent in the next forecasting period because of disability, 4.11 educational, or other leaves?

Planning for Anticipated Shortages

Transfer employees to jobs in which shortages exist Train employees to move up to jobs in which shortages exist Have employees work overtime Increase employee productivity Hire part-time employees

4.12

Planning for Anticipated Shortages

(contd.)

Hire temporary full-time employees Hire permanent full-time employees Subcontract work to other firms Forgo increases in production Install equipment to perform some of the tasks that would be done by workers (capital substitution)
4.13

Ways to Increase Employee Productivity

Offer monetary incentives, e.g. bonuses, for higher productivity or performance levels Improve employees job skills to produce more in less time or at lower cost Re-design work processes and methods so greater outputs are achieved Use more efficient equipment so greater outputs are achieved
4.14

Planning for Anticipated Labour Surpluses

Close plants Lay off some workers permanently Give incentives for early retirement Let the workforce shrink by attrition Retrain and transfer workers Shut down plants (or parts of them) temporarily Lay off workers temporarily Reduce the work week Use work sharing Cut or freeze pay and/or benefits 4.15

Evaluating Alternatives to the Problem of Labour Shortages or Surpluses

Determine size of the anticipated shortages or surpluses Determine the expected duration of the change in the demand for human resources Determine the amount of lead time before shortages or surpluses occur

4.16

Information Needed to Identify Appropriate Ways to Deal with Labour Surplus/Shortage

Financial and human costs and benefits Effects on other organizational components Length of time to implement the alternatives and generate desired results Probability of success in reducing the shortage or surplus

4.17

Programs for Human Resource Planning

Linear programming, e.g. to minimize total labour costs within certain constraints Goal programming, e.g. setting multiple goals such as increasing profits by 10% and hiring bilingual salespeople Computer simulation, e.g. to examine the effects of various programs to reduce surpluses or shortages
4.18

HRM Auditing Model

Strategic-Level HRM determines the effectiveness of HRM functions in the overall strategic plan of the organization Managerial-Level HRM determines effectiveness of HRM functions within departments and units Operational-Level HRM determines the effectiveness of HRM functions throughout the organization
4.19

Reasons for Conducting HRM Audits

When labour costs are large or the largest component of total product or service costs The personnel audit is used to justify the existence of budgets of staff and programs The personnel audit provides valuable feedback from employees and line managers The personnel audit may uncover problems such as unqualified HRM staff, lack of HRM policy compliance, or low employee satisfaction
4.20