5-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

fundamentals of

Human Resource Management 3rd editionby R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 5Planning For and Recruiting

Human Resources

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What Do I Need to Know?

1. Discuss how to plan for human resources needed to carry out the organization’s strategy.

2. Determine the labor demand for workers in various job categories.

3. Summarize the advantages and disadvantages of ways to eliminate a labor surplus and avoid a labor shortage.

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What Do I Need to Know? (continued)

4. Describe recruitment policies organizations use to make job vacancies more attractive.

5. List and compare sources of job applicants.6. Describe the recruiter’s role in the

recruitment process, including limits and opportunities.

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The Process of Human Resource Planning

• Organizations should carry out human resource planning so as to meet business objectives and gain a competitive advantage over competitors.– Human resource planning compares the present

state of the organization with its goals for the future

– Then identifies what changes it must make in its human resources to meet those goals

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Figure 5.1: Overview of the Human Resource Planning Process

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Forecasting

• Forecasting: attempts to determine the supply and demand for various types of human resources to predict areas within the organization where there will be labor shortages or surpluses.

There are three major steps to forecasting:

1. Forecasting the demand for labor

2. Determining labor supply

3. Determining labor surplus or shortage

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Forecasting the Demand for Labor

Trend Analysis• Constructing and

applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year.

Leading Indicators• Objective measures that

accurately predict future labor demand.

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Determining Labor Supply

• Transitional matrix: a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period.

It answers two questions:1. “Where did people in

each job category go?”2. “Where did people now

in each job category come from?

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Determining Labor Surplus or Shortage

• Based on the forecasts for labor demand and supply, the planner can compare the figures to determine whether there will be a shortage or surplus of labor for each job category.

• Determining expected shortages and surpluses allows the organization to plan how to address these challenges.

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Goal Setting and Strategic Planning

• The purpose of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organization’s success in addressing labor shortages and surpluses.

• The goals should come directly from the analysis of supply and demand.

• For each goal, the organization must choose one or more human resource strategies.

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Options for Reducing a Surplus

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Options for Avoiding a Shortage

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Implementing and Evaluating the HR Plan

• When implementing the HR strategy, the organization must hold some individual accountable for achieving the goals.

• That person must also have the authority and resources needed to accomplish those goals.

• Regular progress reports should be issued.• The evaluation of results should not only look at the

actual numbers, but should also identify which parts of the planning process contributed to success or failure.

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Applying HR Planning to Affirmative Action

• Workforce Utilization Review: a comparison of employees in protected groups with the proportion that each group represents in the relevant labor market.

• The steps in a workforce utilization review are identical to the steps in the HR planning process.

• The organization must assess current utilization patterns, then forecast how they are likely to change in the near future.

• If the analyses forecast underutilization of certain groups, then goals and a plan will be established.

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Summary

• The first step in human resource planning is personnel forecasting. Through trend analysis and good judgment, the planner tries to determine the supply and demand for various human resources.

• The next step is to determine the labor demand for workers in various job categories. Analysis of a transitional matrix can help the planner identify which job categories can be filled internally and where high turnover is likely.

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Summary (continued)

• To reduce a surplus, downsizing, pay reductions, and demotions deliver fast results but at a high cost in human suffering that may hurt surviving employees’ motivation and future recruiting.

• To avoid a labor shortage, requiring overtime is the easiest and fastest strategy.

• Internal recruiting generally makes job vacancies more attractive because candidates see opportunities for growth and advancement.

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Summary (continued)

• Lead-the-market pay strategies make jobs economically desirable.

• Internal sources are usually not sufficient for all of an organization’s labor needs.

• Through their behavior and other characteristics, recruiters influence the nature of the job vacancy and the kinds of applicants generated.