Human Resource Planning 641

8/3/2019 Human Resource Planning 641

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HUMAN RESOURCE PLANNING

Right number of people with right skillsat right place at right time to implement

organizational strategies in order toachieve organizational objectives

In light of the organizations objectives,

corporate and business level strategies,HRP is the process of analyzing anorganizations human resource needsand developing plans, policies, and

systems to satisfy those needs


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HUMAN RESOURCE PLANNING

Setting human resource objectivesand deciding how to meet them

Ensuring HR resource supply

meets human resource demands


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HRP Process Interfacing with strategic planning and

scanning the environment

Taking an inventory of the companys

current human resources

Forecasting demand for humanresources

Forecasting the supply of HR from withinthe organization and in the externallabor market


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HRP Process Cont.

Comparing forecasts of demandand supply

Planning the actions needed todeal with anticipated shortage or

overages Feeding back such information into

the strategic planning process.


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Example of the Basic Human

Resources Planning Model

Organizational

Objectives

Human Resource

Requirements

Human Resource

Programs

Feasibility

Analysis

1 2 3

4

5


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HRP 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


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Example of the Basic Human

Resources Planning Model

Organizational

Objectives

Human Resource

Requirements

Human Resource

Programs

Feasibility

Analysis

1 2 3

4

5


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HRP Model Cont.

Operational Human Resource Planning

Steps 2,3, & 4

Ensure HRP programs are coordinatedand allows the organization to meet its

human resource requirements.


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Link 1: Determine Demand

(labor requirements) How many people need to be working and in

what jobs to implement organizational

strategies and attain organizationalobjectives.

Involves forecasting HR needs based onorganizational objectives

Involves consideration of alternative waysof organizing jobs (job design,organizational design or staffing jobs)

Example - Peak production could be handled by temporaryworkers or assigning overtime. Machine breakdowns assignedto maintenance department or handled by machine operators


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Link 2: Determine HR Supply(availability)

Choose HRM programs (supply)

Involves forecasting or predicting effect ofvarious HR programs on employee flowinginto, through and out various jobclassifications.

First determine how well existing programs are

doing then forecast what additional programsor combination of programs will do

Need to know capabilities of variousprograms and program combinations


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Determine Feasibility

Links 3 & 4 Capable of being done

Requires knowledge of programs, how

programs fit together and externalenvironmental constraints (e.g., laborforce, labor unions, technology created skillshortages) and internal environmental

constraints (skill shortages within theorganization, financial resources,managerial attitudes, culture)

Do the benefits outweigh the costs

Difficulty in quantifying costs and benefits


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Revise OrganizationalObjectives and Strategies Link

5If no feasible HR program can be devised,

the organization must revise strategic

plans.


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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 planto satisfy link 2 so:

Typically choose the best HR goal forthe strategic plan and the best programto satisfy that HR goal


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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 effectivenessof HR programs

Does not engage in strategic planning


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HRP should be:

Done to guide and coordinate all HRactivities so they work together to

support the overall strategy

Responsive to internal and externalenvironment

Planning - done in advance

Strategic - linked with higher level


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Human Resource Forecasting

Process of projecting the organizationsfuture HR needs (demand) and how itwill meet those needs (supply) under agiven set of assumptionsabout theorganizations policies and theenvironmental conditions in which itoperates.

Without forecasting cannot assess thedisparity between supply and demand

nor how effective an HR program is inreducin the dis arit .


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Forecasting as a Part of Human Resource Planning

DEMAND

FORECASTING

SUPPLY

FORECASTING

Determine

organizational

objectives

Demand

forecast for

each objective

Aggregate

demandforecast Does aggregatesupply meet

aggregate

demand?

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

forecastNo

Yes


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Internal Supply Forecasting

Information Organizational features (e.g.,

staffing capabilities)

Productivity - rates of productivity,productivity changes

Rates of promotion, demotion,transfer and turnover


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External Supply Forecasting

Information External labor market factors

(retirements, mobility, education,

unemployment)

Controllable company factors onexternal factors (entry-levelopenings, recruiting, compensation)


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Demand Forecasting

Information Organizational and unit

strategic plans

Size of organization

Staff and Managerial Support

Organizational design


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Considerations in Establishing

a Forecasting System How sophisticated

Appropriate time frame

Subjective versus objectiveforecasting methods


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System Sophistication

Organizational size large organizations require more complex

forecasting systems and likely to have therequired skilled staff

Organizational complexity complex career paths and diverse skill

requirements lead to more complex forecastingsystems

Organizational objectives the greater the gap between current HR situationand desired HR situation the more sophisticatedthe system

Organizational plans and strategies

the complex the plans are the more complex theforecasting system


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Forecasting Time Frame

Depends on degree of environmentaluncertainty

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 developingtechnology, stable product demand.


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Subjective VS. ObjectiveForecasting

Objective is inappropriate when:

Lack expertise to use objective

methods

Lack the historical data or HR database is inadequate

Forecasting horizon is too long for theavailable objective method


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Demand Forecasting Methods

Delphi Method

Staffing Table Approach Regression Analysis Time Series Analysis

Linear Programming


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Supply Forecasting Methods

Skills Inventory

Replacement Charts Succession Planning Flow Modeling/Markov Analysis Computer Simulations

Human Resource Planning 641

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