chapter 5 Human Resource Planning

Human Resource Planning Both a process and a set of plans How organizations assess the future supply of and demand for human resources Provides mechanisms to eliminate any gaps between supply and demand Determines the number and types of employees to be recruited into the organization or phased out of it

Factors Affecting Planning Goals of the controlling interests in the organization Government policies Changing demographics and the future composition of the workforce

Strategic and Human Resource Planning Strategic Planning –an organization’s decision about: What it wants to accomplish (its mission) How it wants to go about accomplishing it HR planning is important for developing a strategic plan HR planning is critical to the implementation of the strategic plan

Strategic Human Resource Management The acknowledgement that HR policies and practices have critical linkages with an organization’s overall strategy Central premise is that HR policies will have direct effects on an organization’s profitability HR must “fit” strategically with the mission of the organization

The Human Resource Planning Process Strategic Planning HR Demand HR Supply Technology forecasts Economic forecasts Market forecasts Organizational planning Investment planning Annual operating plans Annual employment requirements: numbers skills occupation categories Existing employment inventory: After application of expected loss and attrition rates Compared with If none Variances End If Surplus If Shortage Layoff Retirement Termination Overtime Recruitment Contractors Action decisions End End

Four Stages of HR Planning Situation analysis or environmental scanning Forecasting demand for human resources Analysis of the supply of human resources Development of plans for action

Situation Analysis and Environmental Scanning Strategic plan must adapt to environmental circumstances HRM is a primary mechanism to be used during the adaptation process e.g., rapid technological changes in the environment demand employees with new skills an effective HR plan that supports recruitment and selection allows the firm to move quickly to remain competitive

Forecasting Demand for Employees The Expert Estimate Delphi technique Nominal group technique (NGT) Trend Projection Markov chain analysis Regression analysis Unit-Demand Forecasting

Analyzing the Current Supply of Employees Skills Inventory Data summarizing the employee’s past Data summarizing status of present skills Data that focus on the future Management Inventory Maintaining the Skills Inventory Interview Questionnaire Data storage and maintenance

Action Decisions in Human Resource Planning: Shortage of Employees Overtime Training and promotions of present employees Recruitment and training of less-skilled employees Recall of employees previously laid off Use of part-time workers Use of contingent workers

Action Decisions in Human Resource Planning: 4. Demotions 5. Layoffs 6. Terminations 2. Early retirements 3. Creation of work 1. Attrition Surplus of Employees 5

Human Resource Information Systems (HRIS) (1 of 2) Integrated approach to acquiring, storing, analyzing, and controlling the flow of information about an organization Useful in nearly all HRM functions Can increase efficiency and response times of labor/time intensive human resource activities

Human Resource Information Systems (HRIS) (1 of 2) Specialized HRIS applications Integrated HRIS for use by all employees Executive information system (EIS) Succession planning

Safeguarding Privacy in an HRIS (1 of 2) Review information-gathering practices to determine the best way to collect data Limit the information collected to what is relevant to a specific business decision Inform employees about the types of information kept on file and how that information is used Let employees inspect and (if necessary) correct the information maintained on them

Safeguarding Privacy in an HRIS (2 of 2) Keep sensitive information separate from other records Limit the internal use of personal information to those activities where it is necessary Disclose personal information about an employee to outsiders only after the employee consents

Summary (1 of 3) There is no one best method for conducting HR planning Methods and techniques all differ from organization to organization Many companies do not devote enough time and energy to the HR planning process

Summary (2 of 3) An effective HR plan should work in partnership with a strategic plan Human resource planning can be an integral part of the HRM program It is directly related to: recruitment, selection, training, and promotion

Summary (3 of 3) By matching supply and demand, the organization can know: how many people of what type it needs to fill positions from within (by promotion and training) how many people it must acquire from outside (by recruiting and selection)