Human Resource Planning

HUMAN RESOURCE PLANNINGHUMAN RESOURCE PLANNING

Human Resource Planning -- OutlineHuman 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

2. It works best when it is tied to:

a. the organization’s strategic planning process

b. all available forecasts (technological, economic, market, etc.)

III. How do you do it?

1. It is a process of comparing human resource supply with human

resource demand.

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?


A. General Comments:

1. Approaches to forecasting:

a. Qualitative:


B. Methods Used for Human Resource Planning:

i. Expert opinionsii. Delphi techniqueiii. “Bottom-up” approach

b. Quantitative (mathematical modeling):

i. Regression analysis / Trend analysisii. Markov analysis

2. Supply Analysis

a. Skills inventories


B. Methods Used for Human Resource Planning:

i. Card systemsii. Human Resource Information Systems (HRIS)

b. Replacement charts / Succession plans

IV. Does anybody really do this stuff?

A. Nkomo (1987) survey of Fortune 500 organizations

Implementation of Human Resource Planning

(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?

B. HRP techniques actually used:

Implementation of Human Resource Planning

• Replacement charts

• Skills inventories

• Computer simulation

• Time series analysis

• Markov analysis

• Delphi technique

84%

51%

10%

5%

4%

3.5%


• 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 organization’s objectives, corporate and

business level strategies, HRP is the process of analyzing

an organization’s human resource needs and developing

plans, policies, and systems to satisfy those needs


• Setting human resource

objectives and deciding how to

meet them

• Ensuring HR resource supply

meets human resource demands

HRP ProcessHRP Process

• Interfacing with strategic planning and scanning the

environment

• Taking an inventory of the company’s 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.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


Organizational

Objectives

Human Resource

Requirements

Human Resource Programs

Feasibility Analysis

1 2 3

4

5

HRP ModelHRP 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



Organizational

Objectives

Human Resource

Requirements

Human Resource Programs

Feasibility Analysis

1 2 3

4

5

HRP Model Cont.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

Example of the Basic Human Resource Planning Model

Open new product line

Open new factory and distribution

system

Develop staffing for new installation

•Production workers

•Supervisors

•Technical staff

•Other managers

Recruiting and training programs feasible

Transfers infeasible because of lack of managers with right skills

Recruit skilled workers

Develop technical training programs

Transfer managers from other facilities

Develop new

objectives and plans

Recruit managers from

outside

Too costly to hire from outside

12 3

4

3

5

Link 1: Determine Demand (labor requirements)

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)

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 & 4Determine 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

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



• 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: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 ForecastingHuman Resource Forecasting

• Process of projecting the organization’s future HR needs

(demand) and how it will meet those needs (supply) under

a given set of assumptions about the organization’s 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

Forecasting as a Part of Human Resource Planning

DEMAND FORECASTING

SUPPLY FORECASTING

Determine organizational

objectives

Demand forecast for

each objective

Aggregate demand forecast Does aggregate

supply meetaggregatedemand?

Go to feasibility analysis steps

Choose human resource programs

External programs

•Recruiting

•External selection

•Executive exchange

Internal programs

•Promotion

•Transfer

•Career planning

•Training

•Turnover control

Internal supply forecast External supply forecast

Aggregate supply forecast

No

Yes

Internal Supply Forecasting Information

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 ForecastingInformation

External Supply ForecastingInformation

• External labor market factors

(retirements, mobility, education,

unemployment)

• Controllable company factors on

external factors (entry-level openings,

recruiting, compensation)

Demand Forecasting InformationDemand Forecasting Information

• Organizational and unit strategic plans

• Size of organization

• Staff and Managerial Support

• Organizational design

Considerations in Establishing a Forecasting System

Considerations in Establishing a Forecasting System

• How sophisticated

• Appropriate time frame

• Subjective versus objective forecasting methods

System SophisticationSystem 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 FrameForecasting Time FrameDepends 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

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

Demand Forecasting Methods

• Delphi Method

• Staffing Table Approach

• Regression Analysis

• Time Series Analysis

• Linear Programming

Supply Forecasting MethodsSupply Forecasting Methods

• Skills Inventory

• Replacement Charts

• Succession Planning

• Flow Modeling/Markov Analysis

• Computer Simulations

Training and Developing a Competitive WorkforceTraining and Developing a Competitive Workforce

Training Training andand

DevelopmentDevelopment

Training Training andand

DevelopmentDevelopment

• Develop competencies that Develop competencies that match strategymatch strategy

• Foster cohesiveness and Foster cohesiveness and commitmentcommitment

• Improve recruitment and Improve recruitment and retentionretention

• Improve competitivenessImprove competitiveness• Increase legal compliance Increase legal compliance

and protectionand protection• Smoother mergers and Smoother mergers and

acquisitionsacquisitions

• Develop competencies that Develop competencies that match strategymatch strategy

• Foster cohesiveness and Foster cohesiveness and commitmentcommitment

• Improve recruitment and Improve recruitment and retentionretention

• Improve competitivenessImprove competitiveness• Increase legal compliance Increase legal compliance

and protectionand protection• Smoother mergers and Smoother mergers and

acquisitionsacquisitions

The Strategic Importance of Trainingand Development




• Improving Recruitment and RetentionCareer advancement opportunities

Job training

• Improving Competitiveness Increasing productivity

Improving service

Implementing new technology

• Training for Customers

Learning Organizations andKnowledge Management

Learning Organizations andKnowledge 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 Officercoordinates activities.

Training and Development Practices Within the Integrated HRM System

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 TermsT&D: Key Terms

• TrainingImproving employee competencies needed today

or very soonTypical objective is to improve employee

performance in a specific job.

• DevelopmentImproving employee competencies over a longer

period of timeTypical objective is to prepare employees for

future roles.

Key Terms (cont’d)Key Terms (cont’d)

• Socialization

Learning how things are done in the organization

Objective is to teach new employees about the organization’s 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

Components of Training and Development within an Integrated HRM System

Evaluating Training and Development Effectiveness

Evaluating Training and Development Effectiveness

The HR Triad: Roles and Responsibilities in Training and DevelopmentThe HR Triad: Roles and Responsibilities in Training and Development

Four Components of Needs AssessmentFour Components of Needs Assessment

Setting Up a Training andDevelopment System

Setting Up a Training andDevelopment System

• Creating the Right Conditions:InsightMotivationNew skills and knowledgeReal world practiceAccountability

Training for Affective OutcomesTraining for Affective Outcomes

• Objective Is to Change:MotivationAttitudesValues

• Example of Objectives Build team spiritEnhance self-confidenceBuild emotional intelligence

(self-awareness, self-management, social awareness, relationship management)

On-Site, but Not On the Job TrainingOn-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 TrainingOff 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 LearningSetting the Stage for Learning

• Clear Instructions

• Behavioral Modeling

Team Training and DevelopmentTeam Training and Development

• Training to develop team cohesiveness• Training in team procedures• Training to develop work team leaders

Supporting disagreementManaging meetings

Cross-Cultural TrainingCross-Cultural Training

• To prepare people from several cultures to work togetherDiversity training

• To prepare a person for living in another cultureTraining for expatriates and

families

Cross-Cultural Training in International Context

Cross-Cultural Training in International Context

• Training for Expatriates Typically a 3-5 day immersion course in country’s

values, customs, traditionsCulture-general assimilator uses scenarios to

teach understanding of cultural differences

• Training for InpatriatesEmployees from other countries

sent to work abroad Need info about culture and

help with relocation

Global Leadership Training and Development

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