Human Resources Planning

www.humanikaconsulting.com

“Research from London's school of economics has identified that a company’s culture is eight times more influential on performance variance than a company's strategy or

business plan, yet while over 90% of all organizations have a business plan or strategy, less than 5% have a plan for developing their organizational culture.”

Benjamin Tonna, in Minessence eZine No. 47 —22 Sep, 2011

Organizational Life-cycle

• In the beginning the values are the values of the founders.

• If society values what the organization does as a result if it living the founders’ values then it will become successful and norms will emerge around the founding values in relation to “how-things-are-done-around-here”. It will be a highly cohesive organization.

• The organization’s success could go on for years, however, often complacency sets in.

• During the complacency phase one of two things may happen: (a) the organization loses touch with the values of its founders and strays to some other path which its clients don’t value, or (b) the values of society change and the organization ignores this, continuing to believe that what made it successful in the past will always make it successful.

• After complacency, if no attention is given to the organization’s values, comes decline.

• There are now only three possible destinies for the organization: (i) it ceases to exist, (ii) it continues to barely exist with none of its former glory, or (iii) it gives attention to the values of its founders, its people, its clients and society, and re-invents itself around new values.

Organizational Life-Cycle Stages and HR Activities

Organizational LIFECYCLE

STAGE

HR - LIFE-CYCLE STAGE STAFFING COMPENSATION

TRAINING AND DEVELOPMENT

LABOR / EMPLOYEE RELATIONS

Foundation Introduction Attract best technical and professional talent.

Meet or exceed labor market rates to attract needed talent.

Define future skill requirements and begin establishing career ladders.

Set basic employee-relations philosophy of organization.

Boom Growth Recruit adequate numbers and mix of qualifies workers. Plan management succession. Mange rapid internal labor market movements

Meet external market but consider internal equity effects. Establish formal compensation structures.

Mold effective management team through management development and organizational development.

Maintain labor peace, employee motivation, and morale.

Organizational Life-Cycle Stages and HR Activities (cont’d)

Organizational LIFE CYCLE

STAGE

HR LIFE-CYCLE STAGE STAFFING COMPENSATION

TRAINING AND DEVELOPMENT

LABOR / EMPLOYEE RELATIONS

Stable Maturity Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around.

Control compensation costs.

Maintain flexibility and skills of an aging workforce.

Control labor costs and maintain labor peace. Improve productivity.

Decline Decline Plan and implement workforce reductions and reallocations, downsizing and outplacement may occur during this stage.

Implement tighter cost control.

Implement retraining and career consulting services.

Improve productivity and achieve flexibility in work rules. Negotiate job security and employment-adjustment policies

Human Resources Functions :• Planning,

• Staffing,

• Employee development, and

• Employee maintenance.

Planning,

Staffing,Employee

development, and

Employee maintenance.

7

Strategic Planning

The process by which top management determines overall organizational purposes and objectives and how they are to be achieved

8

Human Resource Planning

The process of systematically reviewing HR requirements to ensure that the required number of employees, with the required skills, are available when they are needed

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Human Resource Planning ProcessExternal EnvironmentInternal Environment

Strategic Planning

Human Resource Planning

Forecasting Human Resource Requirements

Comparing Requirements and Availability

Forecasting Human Resource Availability

Surplus of Workers

Demand = Supply

No Action Restricted Hiring, Reduced Hours, Early Retirement, Layoff, Downsizing

Shortage of Workers

Recruitment

Selection

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HR Forecasting Techniques

• Zero-based forecasting – uses current level as starting point for determining future staffing needs

• Bottom-up approach – each level of organization, starting with lowest, forecasts its requirements to provide aggregate of employment needs

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HR Forecasting Techniques (Continued)

• Mathematical models –Assist in forecasting. Relationship between sales demand and number of employees needed is positive one.

• Simulation – technique with experimenting with real-world situation through a mathematical model

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The Relationship of Sales Volume to Number of Employees

Number of

Employees

500

400

300

200

100

0 10 20 30 40 50 60

Sales (thousands)

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Forecasting HR Requirements

• Estimate of numbers and kinds of employees the organization will need at future dates

• Demand for firm’s goods or services must be forecast

• Forecast is then converted into people requirements

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Forecasting HR Availability

• Determining whether the firm will be able to secure employees with the necessary skills, and from what sources these individuals may be obtained

• Show whether the needed employees may be obtained from within the company, from outside the organization, or from a combination of the two sources

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Surplus of Employees

• Restricted hiring – employees who leave are not replaced

• Reduced hours

• Early retirement

• Layoffs

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Shortage of Workers Forecasted

• Creative recruiting

• Compensation incentives – premium pay is one method

• Training programs – prepare previously unemployable people for positions

• Different selection standards – alter current criteria

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