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HUMAN 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 organizations objectives,

corporate and business level strategies,HRP is the process of analyzing an

organizations human resource needsand developing plans, policies, andsystems to satisfy those needs

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HUMAN RESOURCE PLANNING

Setting human resource

objectives and deciding how to

meet them

Ensuring HR resource supply

meets human resourcedemands

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HRP Process Cont.

Comparing forecasts of demand

and supply

Planning the actions needed todeal with anticipated shortage or

overages

Feeding back such informationinto the strategic planning

process.

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Example of the Basic Human

Resources Planning Model

Organization

al Objectives

Human Resource

Requirements

Human Resource

ProgramsFeasibility

Analysis

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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 betweenorganization's strategic planning process andHRP.

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

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Example of the Basic

Human Resources Planning

Model

Organization

al ObjectivesHuman Resource

Requirements

Human Resource

ProgramsFeasibility

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

coordinated and allows theorganization to meet its human

resource requirements.

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Example of the Basic Human

Resource Planning Model

Open new

product line

Open new

factory anddistribution

system

Develop staffing for

new installation

Production

workers

Supervisors

Technical staff

Other managers

Recruiting and

training

programs

feasible

Transfersinfeasible

because of lack

of managers

with right skills

Recruit skilled

workers

Develop technical

training programsTransfer managers

from other facilities

Develop new

objectives

and plans Recruit managersfrom outside

Too costly to hire

from outside

1 2 3

4

5

6

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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 organizational objectives.

Involves forecasting HR needs based onorganizational objectives

Involves considerat ion o f alternat iveways of o rganizing jobs (job design,

organizat ional design or staf f ing jobs ) Example - Peak production could be handled by

temporary workers or assigning overtime.Machine breakdowns assigned to maintenancedepartment 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 flowing

into, through and out various jobclassifications.

First determine how well existing programs aredoing then forecast what additional programsor combination of programs will do

Need to know capabilities of various programs

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., labor force,labor unions, technology created skillshortages) and internal environmentalconstraints (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 Organizational Objectivesand Strategies Link 5

If no feasible HR program can bedevised, the organization must

revise strategic plans.

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Shortcomings of the model -

HRP in Practice

Oversimplification of planningprocess -Planning does not normallyproceeds till find first acceptable

plan More than one set of HR goals to

satisfy link 1 and more that oneacceptable plan to satisfy link 2 so:

Typically choose the best HR goalfor the strategic plan and the bestprogram to satisfy that HR goal

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Shortcomings of the model -

HRP in Practice

Oversimplification of the benefit of planning isthe specific plans that result

Planning process has value in and of itself

HRP in practice is usually less rational and mayomit one or more of the steps

May lack knowledge required for forecasting

Incorrect assumptions about effectiveness ofHR programs

Does not engage in strategic planning Resistance to change present HR systems

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HRP should be :

Done to guide and coordinate all HRactivities so they work together to supportthe overall strategy

Responsive to internal and externalenvironment

Planning - done in advance

Strategic - linked with higher levelplanning

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Human Resource Forecasting

Process of projecting theorganizations future HR needs(demand) and how it will meet those

needs (supply) under a given set ofassumptionsabout theorganizations policies and theenvironmental conditions in which itoperates.

Without forecasting cannot assessthe disparity between supply anddemand nor how effective an HR

program is in reducing the disparity.

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Forecasting as a Part of HRP

DEMAND

FORECASTING

SUPPLY

FORECASTING

Determine

organizational

objectives

Demandforecast for

each objective

Aggregate

demand

forecast 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 ofproductivity, productivitychanges

Rates of promotion, demotion,transfer and turnover

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External Supply ForecastingInformation

External labor market factors

(retirements, mobility, education,

unemployment) Controllable company factors on

external factors (entry-level

openings, 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 objective

forecasting 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 complexforecasting systems

Organizational objectives the greater the gap between current HR

situation and desired HR situation the moresophisticated the system

Organizational plans and strategies the complex the plans are the more complex

the forecasting system

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Forecasting Time Frame

Depends on degree of environmentaluncertainty

Factors creating uncertainty (shorteningtime frame) many new competitors, changes in technology,

changes in social, political and economic climate,unstable product demand

Factors promoting stability (longer timeframe) strong competitive position, slowly developing

technology, 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 data

base is inadequate

Forecasting horizon is too long forthe available 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