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?
III. How do you do it?
A. General Comments:
1. Approaches to forecasting:
a. Qualitative:
III. How do you do it?
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
III. How do you do it?
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%
HUMAN RESOURCE PLANNINGHUMAN 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 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
HUMAN RESOURCE PLANNINGHUMAN RESOURCE PLANNING
• 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
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
Example of the Basic Human Resources Planning Model
Example of the Basic Human Resources Planning Model
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
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
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: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
The Strategic Importance of Trainingand Development
The Strategic Importance of Trainingand Development
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