Human Resource PlanningHuman Resource Planning

Chapter OverviewChapter Overview

The need for human resource planning Purposes of human resource planning Relation to other human resource

functions The human resource planning process Projecting human resource supply

4.2

Chapter Overview Chapter Overview (cont’d.)(cont’d.)

Forecasting future human resource needs

Comparing forecast needs with projected supply

Planning policies and programs Evaluating human resource planning

effectiveness The HRM audit

4.3

Purposes of Human Purposes of Human Resource PlanningResource Planning

Setting goals and objectives Examining the effects of

alternative human resource policies and programs

4.4

Examples of Examples of Organizational Organizational

GoalsGoals To increase company profits by 10% in the

next fiscal year (profitability) To close 25 retail outlets in the next four

years (downsizing) To bottle 10% more diet pop in the next

year (production) To guarantee one-day delivery of all first-

class mail within the province by 2001 (service level)

4.5

The Human Resource The Human Resource Planning ProcessPlanning Process

Project future human resource supply Forecast future human resource needs Compare forecast needs with

projected supply Plan policies and programs to meet

human resource needs Evaluate human resource planning

effectiveness

4.6

Projecting Human Projecting Human Resource SupplyResource Supply

Assessment of current supply

Skills inventories Analysis of human resource

flows Stochastic models

4.7

Examples of Human Examples of Human Resource FlowsResource Flows

Employees may- stay in the same job- move across to another, but not a higher-level job (transfer or lateral move)- move up to a higher-level job (promotion)- move out of the organization through voluntary termination (resignation) or involuntary termination (lay-off, dismissal)- move down (demotion)

4.8

Typical Data Elements in a Typical Data Elements in a Human Resources Information Human Resources Information

SystemSystemEmployee personal data Salary administrationBenefits information Skills Benefits plans Attendance Employee benefits information Performance/Discipline Dependents Health and SafetyTraining and development PayrollEmployee work data Salary Performance review Job information Employment status information Hire/Termination information Work information

4.9

Forecasting Future Human Forecasting Future Human Resource NeedsResource Needs

Planning for the status quoPlanning for the status quo Rules of thumbRules of thumb Unit forecastingUnit forecasting The Delphi methodThe Delphi method ScenariosScenarios Computer simulationComputer simulation

4.10

Five Steps in the Delphi Five Steps in the Delphi MethodMethod

1.1.An issue, question, or problem is identified.An issue, question, or problem is identified.2. A small group or panel of ten or fewer 2. A small group or panel of ten or fewer

experts is identified.experts is identified.3. Independent judgements about the issue 3. Independent judgements about the issue

are obtained from each expert through a are obtained from each expert through a questionnaire or structured interview.questionnaire or structured interview.

4. An intermediary or facilitator collects, 4. An intermediary or facilitator collects, analyzes, and feeds back information from analyzes, and feeds back information from the first questionnaire or interview to each the first questionnaire or interview to each expert.expert.

5. Steps 3 and 4 are repeated until there is a 5. Steps 3 and 4 are repeated until there is a consensus on the issue or problem.consensus on the issue or problem.

4.11

Sample Questions from a Sample Questions from a Unit Forecasting Unit Forecasting QuestionnaireQuestionnaire

List any jobs that have changed since the List any jobs that have changed since the last forecasting period and any that will last forecasting period and any that will change in the next forecasting period.change in the next forecasting period.

If vacancy can be filled with present If vacancy can be filled with present employees, note whether training will be employees, note whether training will be required. Specify nature of training needs.required. Specify nature of training needs.

What percentage of employees are What percentage of employees are performing jobs up to standard?performing jobs up to standard?

How many employees will be absent in the How many employees will be absent in the next forecasting period because of next forecasting period because of disability, educational, or other leaves?disability, educational, or other leaves?

4.12

Planning for Anticipated Planning for Anticipated ShortagesShortages

Transfer employees to jobs in Transfer employees to jobs in which shortages existwhich shortages exist

Train employees to move up to Train employees to move up to jobs in which shortages existjobs in which shortages exist

Have employees work overtimeHave employees work overtime Increase employee productivityIncrease employee productivity Hire part-time employeesHire part-time employees

4.13

Planning for Anticipated Planning for Anticipated Shortages Shortages (cont’d.)(cont’d.)

Hire temporary full-time employees Hire permanent full-time employees Subcontract work to other firms Forgo increases in production Install equipment to perform some of

the tasks that would be done by workers (capital substitution)

4.14

Ways to Increase Employee Ways to Increase Employee ProductivityProductivity

Offer monetary incentives, e.g. bonuses, for higher productivity or performance levels

Improve employees’ job skills to produce more in less time or at lower cost

Re-design work processes and methods so greater outputs are achieved

Use more efficient equipment so greater outputs are achieved

4.15

Planning for Planning for Anticipated Labour Anticipated Labour

SurplusesSurpluses Close plantsClose plants Lay off some workers permanentlyLay off some workers permanently Give incentives for early retirementGive incentives for early retirement Let the workforce shrink by attritionLet the workforce shrink by attrition Retrain and transfer workersRetrain and transfer workers Shut down plants (or parts of them) Shut down plants (or parts of them)

temporarilytemporarily Lay off workers temporarilyLay off workers temporarily Reduce the work weekReduce the work week Use work sharingUse work sharing Cut or freeze pay and/or benefitsCut or freeze pay and/or benefits

4.16

Evaluating Alternatives to the Evaluating Alternatives to the Problem of Labour ShortagesProblem of Labour Shortages

or Surplusesor Surpluses Determine size of the anticipated

shortages or surpluses Determine the expected duration

of the change in the demand for human resources

Determine the amount of lead time before shortages or surpluses occur

4.17

Information Needed to Identify Information Needed to Identify Appropriate Ways to Deal with Appropriate Ways to Deal with

Labour Surplus/ShortageLabour Surplus/Shortage Financial and human costs and benefits Effects on other organizational

components Length of time to implement the

alternatives and generate desired results

Probability of success in reducing the shortage or surplus

4.18

Programs for Human Programs for Human Resource PlanningResource Planning

Linear programming, e.g. to minimize Linear programming, e.g. to minimize total labour costs within certain total labour costs within certain constraintsconstraints

Goal programming, e.g. setting multiple Goal programming, e.g. setting multiple goals such as increasing profits by 10% goals such as increasing profits by 10% and hiring bilingual salespeople and hiring bilingual salespeople

Computer simulation, e.g. to examine the Computer simulation, e.g. to examine the effects of various programs to reduce effects of various programs to reduce surpluses or shortagessurpluses or shortages

4.19

HRM Auditing ModelHRM Auditing Model

Strategic-Level HRM — determines the effectiveness of HRM functions in the overall strategic plan of the organization

Managerial-Level HRM — determines effectiveness of HRM functions within departments and units

Operational-Level HRM — determines the effectiveness of HRM functions throughout the organization

4.20

Reasons for Conducting Reasons for Conducting HRM AuditsHRM Audits

When labour costs are large or the largest component of total product or service costs

The personnel audit is used to justify the existence of budgets of staff and programs

The personnel audit provides valuable feedback from employees and line managers

The personnel audit may uncover problems such as unqualified HRM staff, lack of HRM policy compliance, or low employee satisfaction