Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.1 Human Resource Planning HRP & MPP – is there a difference? Hard v. Soft HRP HRP is the process for identifying an organisation’s current and future human resource requirements, developing and implementing plans to meet these requirements and monitoring their overall effectiveness

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.2 Demand forecasting Objective methods –Time trends –Ratio analysis –Work study Subjective methods –Managerial judgement –Delphi technique Budgets

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.3 Supply forecasting – quantitative methods Labour turnover index No. of leavers in a specified period Average no. employed in same period Stability index No. of employees with 1 year’s service No. employed 1 year ago Census method Survival rate x 100%

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.4 Supply forecasting – qualitative methods Exit interviews Leaver questionnaires Attitude surveys Risk analysis

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.5 Figure 5.3 Employee ‘movements’ in an organisation

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.6 Reconciling supply and demand If demand exceeds supply: –Increase external supply –Increase internal supply –Reduce demand If supply exceeds demand: –Decrease supply –Discourage retention –Increase demand

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.7 Figure 5.5 HRP – A contemporary approach Source: Adapted from Armstrong (2001) A Handbook of Human Resource Management Practice, p Reprinted with permission of Kogan Page.

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.8 Variants on HRP Micro-planning Contingency planning Succession planning Skills planning Soft human resource planning

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.9 Advantages and disadvantages of HRP Advantages: –Can help reduce uncertainty –Integration of HR policies and practices –Can build flexibility Disadvantages: –Difficult to forecast in turbulent times –Plans are inaccurate due to lack of personnel data and/or clear business plan

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.10 Explanation for lack of empirical evidence of HRP Planning seen as too problematic in changing environment Low organisational priority + weak HR function = inadequate resources Preference for pragmatism Research is over-theoretical and fails to recognise much HRP activity

Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 5.11 HRP and Strategic HRM Planning is critical to strategy because it identifies: –Gaps in capabilities that would prevent successful implementation –Surpluses in capabilities that suggest opportunities for improving efficiencies and responsiveness –Poor utilisation of highly valued organisational resources Lam & Schaubroeck, 1998: 5